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Its all Greek to Quebec

Jed

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An article from the Calgary Herald dealing with equalization payments between the Feds and the provinces.

Please repost in the correct spot if I have not done this correctly.

I am interested in the opinion of the more financially astute folks on this forum as to the validity of this position.

Subject: It's all Greek to Quebec
Date: Sat, 28 Jan 2012 08:33:52 -0500
Calgary Herald
In Greece , citizens can, on average, retire with a full government pension at the age of 58. In Germany , the citizens expected to help bail out the bankrupt Greeks must work until the age of 67 before they can retire.
Naturally, German citizens are wondering how this can be considered fair. Why should they have to work nine years longer so Greek citizens can live a life of leisure?
What's more, in Germany , most working people pay taxes. In Greece ,
only 20 per cent pay taxes. Again, unfair.
And yet equalization between "have" European Union states and "have not" European Union states continues, even though it's not making things equal -- it's rewarding laziness, leisure and possibly even criminal tax evasion. Why pay taxes if some hard-working Germans will do it for you? Thus the riots in Greece . They believe they are entitled to those entitlements.
Dysfunctional? You bet. We Canadians would never stand for such a thing. Right? Think again.
Equalization in Canada was established to ensure that "have-not" regions could enjoy the same programs as "have" regions and most Canadians wouldn't quibble with that. But that has not happened. In fact, the reverse has occurred. The have provinces have fewer services than the have-nots.
In Quebec -- which opted out of the Canada Pension Plan and administers its own pension plan -- citizens can retire with a full pension at age 62. In the rest of Canada , the age contributors can receive full benefits is 65.
In light of the fact that Quebec received $8.6 billion in equalization payments in 2010-11 out of a total equalization pot of $14.4 billion, it's safe to say that citizens in Canada 's "have" provinces -- British Columbia , Alberta and Ontario -- are paying for Quebecers' early retirement, as theirs is the only province which has such a generous, early retirement benefit.
In other words, equalization is not very equal.
What's more, Quebecers can take advantage of $7-a-day day care, whereas, in most other provinces, $7 wouldn't even buy you an hour of day care or babysitting.
Quebec has a very generous pharmaceutical program unlike any other in the country and Quebec university students pay considerably less for tuition within Quebec than students from anywhere else in the country.
For instance, to attend McGill University in 2010, Quebec students pay $3,475 for tuition and fees. An out-of-province student attending McGill pays $7,008, or $3,533 more than a Quebec student -- more than double! Five of the six cheapest universities in Canada are in Quebec -- but they're only the cheapest for Quebecers. Those same universities are among the most expensive in Canada for non-Quebecers.
Sherbrooke has the lowest university tuition and fees in the entire country -- but again, only for Quebecers, who pay just $2,381. To attend the same university, a non-Quebecer, from Alberta , for instance, must pay $5,914 or $3,533 more than his Quebec colleague. In other words, when that Alberta student works through the summer in Alberta to save up for tuition and living expenses, the taxes he or she will pay will actually help subsidize the Quebec student's tuition.
Lately, Quebecers, like Conservative MP Maxime Bernier, have criticized Quebec 's overreliance on equalization, saying Quebecers are "spoiled children."
But that's got Quebec 's Liberal provincial government fighting back. In its 2010-11 budget document, the Jean Charest government is actually arguing that it should receive even more equalization than it's getting because Alberta 's oil industry is keeping the Canadian dollar high, which in turn harms Quebec 's manufacturing sector. This is not a joke.
"A rise in the world price of a barrel of oil favours provinces that have that resource," states the budget document in Section E.
"However, the rise in the Canadian dollar that accompanies the rising price of oil hampers the exports of the other provinces. An adequate equalization program can mitigate this phenomenon by increasing the revenues of provinces that are negatively affected by the rise in the dollar, without reducing the revenues of provinces that benefit from the higher price of oil."
In other words, Quebec , which received $8.6 billion of the $14.4 billion doled out in equalization this year, is arguing that it's not enough! It wants more and it blames Alberta 's oil industry for its troubles. It's a curious argument since it can be argued that Alberta 's oil industry is literally fuelling Canada 's economy and largely provided the money that was sent as equalization to Quebec in the first place.
In 2007, the last year Statistics Canada figures are available for all provinces, B.C., Alberta and Ontario were the only provinces that paid more into Confederation than they received. Alberta paid a total of $37.064 billion in taxes and transfers to the federal government and the feds returned $17.567 billion in services and programs, meaning that Alberta contributed $19.5 billion net to the rest of Canada.
But Charest, who complained in Copenhagen that Alberta 's oil sands industry "embarrassed" him, is actually making the argument that despite Alberta 's largesse, it's to blame for the trouble Quebec is in.
In short, it's all Greek to Quebec -- and that's frightening.






 

Dog Walker

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I wonder how much tax money Ottawa collects from Quebec citizens vs. the amount of money it sends back as equalization payments.
Quebecers pay the highest taxes in Canada. We pay income taxes to both Ottawa and Quebec. We pay the GST of 5% and a PST of 9.5%.
None of the oil used in Quebec comes from Alberta; it is all imported from overseas, and is taxed by both Ottawa and Québec. Gas prices in Montreal last week reached about $1.44 per litre.
Users of the Québec Prescription Drug Plan pay premiums which are payable when they complete their Provencal income tax forms.
The Quebec daycare plan is paid for by another tax deducted from the pay checks of all Quebecers (QPIP).
That article makes it sound like Quebecers are getting a free ride from the rest of Canada. That is certainly not the case and I have the holes in my wallet to prove it.
 

ballz

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Dog Walker said:
I wonder how much tax money Ottawa collects from Quebec citizens vs. the amount of money it sends back as equalization payments.
Quebecers pay the highest taxes in Canada. We pay income taxes to both Ottawa and Quebec. We pay the GST of 5% and a PST of 9.5%.
None of the oil used in Quebec comes from Alberta; it is all imported from overseas, and is taxed by both Ottawa and Québec. Gas prices in Montreal last week reached about $1.44 per litre.
Users of the Québec Prescription Drug Plan pay premiums which are payable when they complete their Provencal income tax forms.
The Quebec daycare plan is paid for by another tax deducted from the pay checks of all Quebecers (QPIP).
That article makes it sound like Quebecers are getting a free ride from the rest of Canada. That is certainly not the case and I have the holes in my wallet to prove it.

That's completely missing the point of the article.

The point is, Quebec collects all these equalization payments as a have-not province, yet has more than the apparent "have" provinces. They spend money out the @$$ on social programs that they clearly can't afford. Guess who's paying for those social programs? The provinces that don't have those social programs. Why don't they have those social programs? Probably because they're paying for Quebec's.

If Quebec, with it's obscenely high tax rates, can't afford to pay for a retirement age of 62, for a daycare plan, etc., then it shouldn't have them. It's called being fiscally responsible. It shouldn't just collect more money (in other words, tax the rest of Canada) in order to pay for the things it *wants.* Equalization payments were supposed to help have-not provinces meet their *needs,* not give them everything they *want.*

The article, IMO, has hit the nail right on the head. The comparison of Quebec and Canada, and Greece and the EU, is something I hadn't considered before.

Dog Walker said:
I wonder how much tax money Ottawa collects from Quebec citizens vs. the amount of money it sends back as equalization payments.

Ottawa gets the exact same amount of federal taxes from Quebec citizens as it does any other citizen. Your province has chosen to tax higher at the *provincial* level, and it's the *provincial* government that gets those tax revenues, not the federal government. If you don't like the tax rates in Quebec, talk to the provincial government about it, Ottawa has nothing to do with it.
 

larry Strong

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:goodpost:

Read this:

http://ideefederale.ca/wp/wp-content/uploads/2011/03/if-imbalance-final.pdf
 

George Wallace

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ballz said:
......... If you don't like the tax rates in Quebec, talk to the provincial government about it, Ottawa has nothing to do with it.

>:D

Or emigrate to the ROC.
 

Bam

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Comparing Québec to greece is actually a myth. Québec's debt rate is not even close to the greek one. Nor are many other economic factors.
Another thing, it's not that quebecers work less, they have a smaller pay check than other workers from other provinces for the same amount of time and work.

Also, Québec can maintain most of the important services even without equalization. Many of those services are paid by quebecers simply with high taxes. Just our sales tax makes more than 12 billion. I don't know how good is your french but this explains most of it.

http://www.budget.finances.gouv.qc.ca/Budget/2011-2012/fr/documents/TransfertsFederaux.pdf


As for Charest, I don't know he would complain...political strategy? Anyway,  he's actually building plan Nord wich is a big resources investment plan for quebec's economic future(mineral mines, oil plants and transformation plants in northen quebec)
 

PuckChaser

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Bam said:
Also, Québec can maintain most of the important services even without equalization. Many of those services are paid by quebecers simply with high taxes. Just our sales tax makes more than 12 billion.

Then why is there constant complaining about how they need more money in equalization payments? You make it sound as if Quebec would flourish if we cut off the $6 Billion they get every year. If thats the case, I can think of a few provinces that could use the money better, and not dump it into unaffordable social programs.
 

ballz

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Bam said:
Also, Québec can maintain most of the important services even without equalization.

THEN DO IT!

You can post all you want, when you receive 8.6 billion in equalization payments and still run a deficit, you're not going to pull the wool over my eyes and tell me you have your finances in order.

As for Quebec's debt not being as bad as Greece's, of course it's not, how could it be? Greece doesn't receive a bailout every single year like Quebec does.

The article seems to ask "why does Quebec continue to have these crazy social programs, early retirement, etc, despite the fact that it can't pay for them without the rest of Canada's help?" The answer is so blatantly clear, because we keep letting them.
 

armyvern

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Please don't take their equalization payments away from them until I get the hell out!!

Despite being deployed last year, I just figured out my taxes at the Quebec rate (9erD got posted here while I was deployed, thus I am a Quebec resident this year) and at the Ontario rate (for shits and giggles). 1500 and change difference in my refund between the two provinces for 4 months of "taxable work". This province is retarded.

I can only imagine what the other working inmates of this province are forced to fork over with no tax-free tour and no equalization. I won't be sad to get the hell out of here.

1500 less on my refund divided by 7 dollar per day babysitting = Canada should not have to support this utopian place.
 

George Wallace

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The humourous, or sad, fact of this, is the ugly head of the Separatist Movement who want to take Quebec out of Confederation, and we keep crying "NOooooooo".  They still want all these benefits, use of the Canadian Dollar, etc., yet no part of Canada.  Sounds worse than WELFARE to me.

Anyone remember the members of the FLQ who we caught and sent off to Cuba in a Herc?  They are all back.  Some have made very good livings off the ROC.  One has even become a staunch Federalist.  Once Quebecer's get out of Quebec, they usually see life through a completely different light.  Quebec politicians never really leave Quebec (mentally, not physically).

This is a story of the "Thirty-year old child living in the basement of their parent's house".  They need a swift kick in the butt to get their heads on straight.
 

Remius

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Although this was published last year it offers an interesting counter point. 

http://www.unlimitedmagazine.com/2011/04/why-everything-your-uncle-says-about-transfer-payments-is-wrong/
 

George Wallace

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Crantor said:
Although this was published last year it offers an interesting counter point. 

http://www.unlimitedmagazine.com/2011/04/why-everything-your-uncle-says-about-transfer-payments-is-wrong/

Does it really offer a counter point or just clarify how this takes place?  In the end Albertans are taxed and watch their tax dollars (along with the rest of Canadians) go to Ottawa who then passes subsidies to provinces like Quebec and the Maritimes.  Quebec has the potential and resources.  It should not be a "HAVE NOT" province, nor should Newfoundland, if we want to sidetrack.

Let's just stick with the "Thirty-year old child in Mommies and Daddies basement".    >:D


 

MJP

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George Wallace said:
nor should Newfoundland, if we want to sidetrack.

NFLD no longer receives equalization payments
 

Edward Campbell

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Two points:

1. For better or worse equalization, in some form, is enshrined in the Constitution ~ we can fiddle with the formula but, unless we amend the Constitution (an idea which is not popular in Canada because it has HUGE unforeseen consequences) we cannot rid ourselves of the principle; and

2. As the article Cantor posted says, the problem is not, necessarily, with wanting and trying to be fair, the problem is that we do not measure the results. Absent a sensible performance measurement system we are just pissing billions and billions of dollars up against a wall that stretches from Cape Breton to to the Manitoba/Saskatchewan border.

 

Bam

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PuckChaser said:
Then why is there constant complaining about how they need more money in equalization payments? You make it sound as if Quebec would flourish if we cut off the $6 Billion they get every year. If thats the case, I can think of a few provinces that could use the money better, and not dump it into unaffordable social programs.

Complaining is what politicians do. Québec is not flourishing, nor is it stagging but you have to take in account that economy goes up and down in certain sectors and part of this money is used to invest in certain areas to get out of the "poor" zone. Equalization exist for more than 50 years and in all those years wich at some points, Québec was out of the poor zone and actually paid to ther provinces.

Didnt the CPC want to change the formula?
 

Rifleman62

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McDinky figured out the Quebec formula long ago and is applying it in earnest now.

ERC:
......the Constitution ~ we can fiddle with the formula but, unless we amend the Constitution (an idea which is not popular in Canada because it has HUGE unforeseen consequences ......

Canada should grow up and amend the Constitution. Take the pain (to some), gain to others.

ERC has got my vote to represent sane Canadians at the table.
 

Sadukar09

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E.R. Campbell said:
Two points:

1. For better or worse equalization, in some form, is enshrined in the Constitution ~ we can fiddle with the formula but, unless we amend the Constitution (an idea which is not popular in Canada because it has HUGE unforeseen consequences) we cannot rid ourselves of the principle; and

2. As the article Cantor posted says, the problem is not, necessarily, with wanting and trying to be fair, the problem is that we do not measure the results. Absent a sensible performance measurement system we are just pissing billions and billions of dollars up against a wall that stretches from Cape Breton to to the Manitoba/Saskatchewan border.
Quebec never formally endorsed the 1982 constitution.  >:D

You can see where this is getting to.
 

MJP

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Sadukar09 said:
Quebec never formally endorsed the 1982 constitution.  >:D

You can see where this is getting to.

But are still bound by it so it is a moot point. 
 
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fraserdw

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Bam said:
Equalization exist for more than 50 years and in all those years wich at some points, Québec was out of the poor zone and actually paid to ther provinces.

Are you sure, I have been unable to find any point at which Quebec was a net payer.  Can you specify dates and a source?
 

ballz

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Rifleman62 said:
ERC:
Canada should grow up and amend the Constitution. Take the pain (to some), gain to others.

Not sure of Mr. Campbell's feelings on equalization, but personally I'm not against equalization payments. It benefits Canada as a whole. Alberta might be paying them now, but that wasn't always the case, and receiving equalization payments from other provinces helped Alberta become the economic powerhouse it is now. In my experience, Albertans memory is very short when it comes to that.

Equalization payments are a part of a Federation of provinces working together, and really no different than having a welfare system, which is necessary and good. However, Quebec has no interest in "working together," only how much they can maraud the rest of Canada for their own gain.
 
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