Pier-André Bouchard St-Amant is President of the University Student Federation of Quebec (FEUQ)
Originally published in french in Le Devoir, Wednesday october 13 2004.
There exists in today’s society a widely recognized fact: the aging population. This demographical problem is brought on by the combination of two main factors: a low birth rate and a low mortality rate. People simply have less kids than they used to and life expectancy being what it is, they also live much longer. On many aspects, this simple fact does have heavy consequences for the province of Quebec: numerous retirements, a shift in the political weight of youth but above all, less tax payers.
Using a simple ratio, we can show the extent of the situation: today, there are 5,1 workers for one public service beneficiary. In thirty years, if nothing changes, there will only be 2,1 workers for that same beneficiary. In budgetary terms, this means higher expenses and fewer revenues ! Not denying those facts, Québec's government is using this demographical situation to justify its latest political and budgetary reforms: notably a large reduction in public spending. Since demographical changes are easily predictable, it is the responsibility of our elected officials to come up with and apply long term solutions. Unfortunately, these solutions are often dismissed since the electoral system in this province seems to reward short term spending and political action that do not go beyond a single mandate.
Prime Minister Charest is using the arguments of economic growth and the size of our tax burden (the highest in North America) to justify his tax cuts commitment.
There exists no statistical evidence that lower taxes raise economic growth. A look at all industrialised countries during the last ten years is enough to show that there is no link between the size of the tax burden (as opposed to the tax mix) and economic growth. Moreover, recent examples of places (the United States under George Bush and Ontario under Mike Harris) where such measures were implemented suggest that tax cuts are not a remedy to economical stagnation, but are more a synonym of higher public deficits.
As for the argument that our tax burden is the highest one in North America, it is true that we have higher taxes when compared to the rest of the continent. However, we must also keep in mind that we have the most affordable public services in North America. A comparison of Québec with the other Canadian provinces can yield some very interesting facts: Lower electricity, college and university tuition, public transportation, childcare, and healthcare costs.
As far as I know, money does not grow in trees. If we cut taxes, we will have to cut spending, raise the price of public services, or borrow which equals to having tomorrow’s people pay with interest for today’s bad decisions. . We can ask ourselves if lower taxes really amount to more money in our pockets. Simply comparing Quebec’s net revenues with those of Ontario, it does appear that we do have, in the end, more money to spend ! [...]
Working together to pull through.
We must understand that Quebec cannot, because of its small population and economical structure, compete with fast growing economies (for instance, India) that rely on cheap labour costs to sell a myriad of cheap products with low added value. It is basically by relying on our expertise in R&D and our capacity to innovate that we will be able to perform and compete on the world stage thus helping Quebec’s people to maintain their current living standards.
This brings us to postsecondary education. We think that blocking potential postsecondary students may, in the end, harm our progress in R&D. Is it necessary to remind the reader that one out of four new jobs created will require higher education?
A University degree costs the province of Quebec between fifteen and thirty thousand dollars per student. Because of their higher revenues, university graduates will pay back up to seventeen times what it costs the province to form them (roughly half a million). Thinking in term of the demographical situation, lowering postsecondary access by raising tuition and cutting in need-based grants and loans is similar to depriving the province of revenues for the years to come. Therefore, it is not irresponsible, as some people claim, to maintain low tuition and a good grant and loan program.
A need also exists for the public and private sectors to anticipate the mass retirements to come. Businesses must implement policies such as progressive retirement packages to prevent or delay mass retirements and keep more workers employed and paying taxes. It also seems in their interest to bolster tutoring and expertise transfers. All these measures should be implemented in every union's collective bargaining agreements, human resources policies, and government policies.
Another good solution is for Québec’s immigration policy to favour highly qualified immigrants. On that basis, international students are good candidates: Not only are they young but since they are educated and trained in Québec they are best suited for jobs here. Therefore, there should be a very energetic, government lead initiative, to attract and keep students from across the world. Currently, only twenty-five percent of them stay here after obtaining their degrees.In that perspective, higher tuition costs for international students that would remain in Québec after graduation is not the best incentive to make them stay.
Québec’s public debt is now 113 billion dollars. Despite the effort to stop annual deficits, our debt is still growing by roughly 2 billion dollars each year. This means that for every loony paid in taxes, 11 cents goes to pay interests. Since taxpayers may become a rarity in the coming decades, it may be responsible to think about paying it back now and use the money saved to maintain our level of public services for the future generations. Repaying the debt is important, but it should not be a pretext to cut in public services. Therefore it should not be implemented without a solid commitment to maintain tax-revenues at their actual level.