THINK AUSTERITY
In keeping wi
th the provincial government’s quest to clean up Quebec’s perpetual fiscal mess—paying down debt and eventually balancing the budget—the government is on a mission to make everyone pay, one way or another: reducing pensions, re-negotiating long-standing contract agreements, raising taxes… anyway it can find money to fix its deficit problem the government will be sniffing…
So the weekend of March 6 some economic brains at Sherbrooke University recommended that the government increase the provincial sales tax, a trial balloon perhaps, but music to any government’s ear, especially in Quebec City; it would mean more taxpayers’ money in provincial coffers. One thing is certain if that recommendation comes to fruition in the 2015-16 provincial budget; it would be a discordant sound to taxpayers’ ears. Right now it’s verging on 10 per cent. The thinking might be why not round it off.
Here’s the economists’ reasoning for increasing the sales tax: it will “create jobs.” (Sounds like that swamp land joke), as well as encourage Quebecers to work.” In other words get off welfare and get one of the new jobs. More importantly and propitiously, an increased sales tax will be “[buffered] by off-setting personal income tax cuts…
Higher sales tax equal jobs… where? In a province where they’re always at a premium—what with stringent language laws, and the perpetual independence/separation/referendum question always discouraging investors and job creation?
According to recent Statistics Canada numbers within the last 12 months, 44,000 jobs (a 1.1 % increase) were created in Quebec, but mainly part-time and lower-wage. And the unemployment remains stable at 7.4%. An increased provincial sales tax will address that.
And someone echoed the old mantra the other day, “Quebecers (the highest taxed jurisdiction in North America) are groaning under the weight of increasing taxes…”
Have you been feeling the pain?
In the meantime, in keeping with the government’s austerity agenda it’s a case of “Take this medicine, it tastes bad, but it’s good for you. Or if you prefer the needle, “You won’t feel a thing.”
[Ideology notwithstanding] the Fraser Institute put the spotlight on what we’re perpetually up against in Quebec. Read a March 6 Montreal Gazette article, “What Quebec’s 2015 budget should address,” by Charles Lammam and Hugh MacIntyre.
For one, it essentially puts a damper on the notion of a higher sales tax as a catalyst for “job creation.” As we all know and have lamented for years, Quebec taxes are already too high.
Here’s a morsel, “[…] Quebec’s economic malaise stems partly from shaky government finances – high debt levels and uncompetitive taxes…”
And this gall, “In recent years, Quebecers have been hit by an onslaught of tax increases including income taxes, sales tax, payroll taxes (higher QPP rates), health taxes, mining taxes and corporate income taxes. The average Quebecer bears one of the heaviest tax burdens in Canada with a total tax bill from the federal, provincial, provincial, and local governments consuming 44.7 per cent of income…”
Here’s the punch line, which we’ve known for decades, “Such uncompetitive tax rates make it harder to attract and retain skilled workers and investment. More broadly, they discourage entrepreneurship, economic dynamism and general prosperity.” And don’t forget that cloud of political uncertainty that perpetually hangs over the province vis-à-vis the sovereignty-independence and language question.
But none of that will ever faze any Quebec government; whenever the government wants money, it goes to the people. Just think Hydro Quebec.
Late last year we got news that Hydro Quebec will be asking the Quebec Energy Board (the government) for a rate increase. As usual, Hydro asks for a lot then settles for a lower percentage increase – this year it’s 2.9 per cent, lower than what it requested, but still double the current 1.5 % rate of inflation. It’s the modus operandi. That’s nothing more than an attempt to appease consumers. Hydro Quebec is always on our side.
If you’re a [disgruntled] customer you already know the deal: one reason is that “Hydro needs extra money to help develop its wind farm project. (According to a news story, “Hydro will spend up to $800 million to buy wind energy, which no one in the province needs…” according to a radio commentator. In other words, it has surplus energy, which it sells to neighbours down south). Nevertheless, be prepared to dig deeper.
After racking up record profits of $2-4.3 billion in 2014 according to some reports, based on a major increase which went into effect on April Fools Day of that year, Hydro comes calling again for another hike which kicks-in in 12 days on “stupid people day.” Whatever Hydro wants, the Energy Board will invariably say Oui! Consumers have no other option.
And what’s to complain about? Hydro Quebec customers pay “the lowest rates in North America…” That said, beware, if you don’t pay your bill the state’s energy cash cow has no qualms about rectifying the problem with a débranchement. In 2014 close to 70,000 were done.
Talking about austerity, the STM is another outfit that gouges public transit users annually. Six or so months of prior notice is given (for what will inevitably be a fare increase) always under the pretext of “[…] improving the service…” Then on January 1, Happy New Year courtesy of the STM, $2.50 more s’il vous plait. I call it a New Year’s gift to public transit users, apparently in return for “improved service… [because] we have the cheapest fares in Canada…in North America,” according to the primary STM English-speaking flag waver, Marvin Rotrand. I still look for him whenever I finally force my way onto a mobile sardine tin of a #105 bus. Problem is, we’re forever waiting for delivery of the “improved service.”
Don’t know which is worse and frustrating, waiting for better service, or for that Hors Service… En Transit and finally an overcrowded #105 bus on its way to Vendome metro station.
Anyways, with all the ‘good news’ provincial human ATMs who for various reasons have decided to not join the exodus have received so far this year, as we just shake our heads in desperation and dig deeper… remember: these are austere times.
All we’ll do is grunt, groan, grin and bear the pain of the constant “taxing and gouging…” as someone said recently. But in the end we always accept; we’ve been conditioned to be willing recipients and consumers (of various and increasingly expensive government products and services) seemingly with no recourse.
But here’s the upshot: increased sales tax, Hydro, Gaz Met, whatever you consume, once we’re given the bad news we’re promised “good, even better…” in return. Financial masochists that we are, we just enjoy the pain.
P.S. In keeping with the provincial government’s austerity agenda with a view of balancing the provincial budget, remember a few weeks ago there was an item in the news broaching the idea of a salary increase for MNAs? The amount varied between 14% and 30 %. The story had a one-day expiry date, but don’t think for one minute that it’s dead.
With increases for all the basics of life so far this year, which is just about everything imaginable, politicians (who use their power and positions to do things to make their lives convenient) are buffering themselves. Which is why the seed was planted, but it wasn’t allowed the time to germinate; the powers-that-be quickly figured out that citizens cannot be asked to tighten our belts while politicians are pondering on laying the groundwork to loosen theirs in order to gorge themselves at taxpayers’ expense.
Take heed, if you have any money left, I bet you at some point this year there will be another story that MNAs salaries will be increased, courtesy of taxpayers – the inflation buffer if you will – but certainly not by the numbers mentioned.
So what about us tax-paying, human ATMs, don’t we have domestic budgets to balance, don’t we need an inflation buffer too?
