Sunday, March 20, 2016

The Economy

For many, Quebec's economy is seen as the biggest obstacle to our ability to become independent. This section does not seek to demonstrate that Quebec is an economic paradise with no difficulties on the horizon. All states of the world, even the most powerful, face challenges of their own. If Quebec is not an economic paradise whose horizon is free from difficulties, nor is it the economic dunce that some try to portray it as. We have everything it takes to become not only a viable independent state but a more prosperous one.

To begin with, we must remember that we have abundant resources that will allow us to easily transition from our current situation to an independent Quebec. Our mining sector ranks among the top ten producers in world. The main minerals being mined in Quebec are iron, gold, copper and zinc. We also produce titanium, silver, magnesium and nickel as well as many other metals and industrial minerals, including diamonds. And that's just the beginning: 60% of our mineral potential remains unexplored. Forestry is also a sector that can contribute to our development.

We also have large reserves of drinking water. Within the context of global warming, this resource will become increasingly important. Moreover, hydro-power also puts us in an enviable position in this regard, allowing us to attract energy-intensive industries or for export in the case of rising electricity prices. In a similar vein, the St. Lawrence River is an important strategic resource since its waterway reaches the heart of North America. As an independent country, we would be able to regulate traffic and impose regulations and tariffs that seem most appropriate to us without having to account for Ontario's needs. Currently, the bulk of maritime traffic through the St. Lawrence is directed to the Great Lakes without any real benefits for us. The benefits are primarily for the Toronto area.

Finally, our main wealth is, and should remain, our brains. Quebec scientists, artists, athletes and innovators are already bringing Quebec to the world. Having a population that is three times as bilingual and seven times more trilingual as anywhere else on the continent also represents an important economic asset for us.

For any state, possessing wealth - natural or otherwise - is not enough, it must be able to develop competitive industries and companies. It must also be able to protect its strategic interests, that is to say, the competitive advantages it has over other states in certain industries. Like other nations of the world, we too must defend our strategic interests. However, our interests do not always coincide with those of Ottawa. By remaining a province of Canada, we are entrusting an important part of our economic levers to another nation which often has other objectives.

First of all, the industries that get support from the Canadian and Quebec governments are not the same. On the one hand, there is the oil and automobile industries, and on the other, there is renewable energy, aerospace and forestry. When the automobile industry based in Ontario experienced difficulties in 2009, the Canadian government invested $10 billion to help maintain jobs, but when at the same time, similar difficulties were felt in our forestry industry, it was essentially our government in Quebec that came to its aid. As for oil, $1.4 billion are invested each year by Ottawa (over $60 billion since 1970). Meanwhile, Hydro-Québec had to be financed almost exclusively by our government and has never had the benefit of any significant Canadian funding.

Oil prices are another example of the divergence between our economic interests and those of Canada. Low oil prices are good for our economy, but they hinder Canadian growth. The fact is, we do not have an oil industry, the benefits to our economy are at best indirect. The disadvantages, however, are extremely obvious because high oil prices lead to a strong Canadian dollar, which hurts our exports. An estimated 55,000 jobs in Quebec's manufacturing sector were lost in recent years due to the strong dollar. Furthermore, significant costs are to be anticipated for the implementation of Canada's goal for reducing greenhouse gases since Quebec, one of the greenest provinces in Canada, will end up having to pay for Alberta's pollution. Worse still, Ottawa has spared no expense in promoting the tar sands in Europe and lobbying to prevent it from being labeled as dirty energy. In contrast, it in no way defended our hydro-power when in 2010 the US Congress decided to consider hydroelectricity from Quebec as not being clean energy.

Our economic weakness as a province of Canada can also be seen in the area of ​​international trade agreements. The global economy is governed by a multitude of trade agreements concluded between independent states. Canada rarely negotiates and signs these agreement with our interests in mind, but rather with those of the larger Canadian economy (mainly that of Ontario and Alberta). The recent free trade agreement with the European Union demonstrated this once again. During the final negotiations, the Canadian government offered Europe the import 17,000 tons of cheese in exchange for the opportunity to export 50,000 tons of Canadian beef. As European farmers are more subsidized than ours, this deal will greatly harm our cheese industry, which represents 60% of the Canadian total. Obviously, the beef industry, based mainly in Alberta, is satisfied with this outcome.

Everyone makes choices according to their own interests. We can't blame Canadians for wanting to defend their economic interests here and abroad. But then why should the people of Quebec have to justify their determination to defend their own economic interests? Unfortunately, it is almost impossible for us to adequately defend these interests as a province of Canada.

As an independent country, we could better use the money we currently send to Ottawa. The Government of Canada spends billions in areas that are of no interests to the majority of Quebecers. Examples are numerous: intensive military spending, subsidies to oil, the Senate, the Governor General, the monarchy, etc. Under military spending, Canada has more than doubled its funding in the last 14 years ($10.1 billion in 1998-1999 to $21.7 billion in 2013-2014). Canada's 2008-2028 defense plan will cost $490 billion. Therefore, Ottawa will require us to spend almost $113 billion on the military while we are being forced to cut spending on health and education. The plan includes more than $33 billion for the purchase of new ships for the Royal Canadian Navy, of which not a penny will be spent in Quebec, despite the fact that the Lévis shipyard is one of the world's best.

Among these examples of forced expenditure must be added the purchase of more than a billion dollars a year of services paid by Quebec to Ontario via the Government of Canada. Since the majority of the Canadian public service is established on our neighbor's territory, they largely benefit from the money we pay in taxes. Independence would enable us to bring home the bulk of this economic activity.

In addition, many Canadian programs or departments spend far less in Quebec than its economic or demographic weight would merit. As an independent country, we will stop paying for the Canadian Wheat Board, which mainly benefits the West. We will also cease to pay for the Canadian nuclear program, whose expenditures are mainly made in Ontario. Canada has 22 nuclear reactors, 20 of which are in Ontario. Quebec only had one, Gentilly, which will be closed for economic reasons. As an independent country, we will stop paying for Fisheries and Oceans Canada, whose expenses are incurred mainly in British Columbia and the Maritime provinces.

Another striking example is the system of Canadian tax credits that punishes us for some of our social choices. For example, our child care program costs us $149 million in tax credits because child care costs are lower in Quebec than is the rest of Canada. The situation is the same for tuition, we choose to keep our tuition low to promote access to school. The Canadian system, organized around the reality of other provinces, deprives Quebec students of $100 million in unused Canadian tax credits.

We must also consider the significant savings that would be achieved by eliminating the duplication of government. As an independent country, we would not have to pay for two Ministries of Finance, Health, Revenue, Natural Resources, International Relations, etc. Canadian officials of these ministries spend a lot of time administering parallel programs that could be streamlined or eliminated if control is passed to Quebec. One of the most absurd examples of such duplication is that of the Canadian Ministry of Health, which employs 9079 staff but only manages one hospital.

To add to all this, several studies have been done on the effects independence would have on the public finances of Quebec. The latest was done by Stéphane Gobeil who clearly showed that the savings would be in the order of $7.5 billion whereas the costs would be of $5.5 billion. So as an independent country, we would save about $2.0 billion in the first year. In the past, other studies on this issue have all demonstrated the benefits of independence. In 1994, Jacques Parizeau ordered a study on costs and revenues of independence from the Minister for Restructuring, which indicated that we would have saved nearly three billion in 1995. In 2005, François Legault's "Budget of the Year 1" estimated that independence would generate more than five billion dollars in surplus.

With the savings generated by independence, our room for maneuver would be wider, allowing us more choices. For example, a more interventionist government could invest in our strategic sectors, a more conservative government could lower our taxes, while a more left-wing government could reinvest in health and education.


Conclusion


Overall, being a province of Canada does not benefit us economically. We have all the potential to become a rich nation, free and prosperous. Already as a simple province, we have a modern and diversified economy which compares favorably with that of many sovereign countries. However, to face the economic challenges ahead and to bring about solutions that truly meet our needs, we need to decide our own economic future. Our political subordination, however, leaves us with very little leeway. Independence will not bring paradise on earth. We will still have to deal with a number of economic issues like natural resources management, public finance management, defending our economic interests, fighting against poverty, improving living conditions, etc. The difference is that we will have all the tools that allow us to face these challenges. We will, in short, have the power to put into action our own economic vision and undertake projects that fit that vision.




5 comments:

  1. The more I read about the independence movement in Quebec and listen to its leaders, the more I understand why Quebec will never become independent....Independence has nothing to do with economics...but a specific ethnic group(meaning, language,its history,culture...)and whether that group is proud and confident enough to take its seat in the general assembly...and whether that ethnic group is willing to undertake the struggle to attain its independence...

    The independence of Quebec has to do with the French-Canadian...French is their language and I support this, however, do not expect others that arrive here after their arrival to understand what is going on here, when the French-Canadian does not understand its political situation...fo example, why did the people of Louiseville elect someone who did not speak French...or even more ridiculous, why would a group of people vote for the political party, which through its policies, burnt half of its village down?

    Independence does not wait for referendums, and anyway, French Canadians are the majority, why can they not easily win the referendum?

    This is something their leaders never discuss, but blame it on the "ethnic" vote? If being the majority, the French-Canadians cannot win, for me, they are also an ethnic group... Or, more recent, how can president of an institute for sovereignty, when asked, "what currency, will Quebec have?", he answer is pitiable if not disgusting!!! Tabernacle!!! An independent state has its own currency, otherwise, it is not independent osti!!!!

    So, this is why Quebec will never become independent....this makes me very,very,very sad and it makes me miss even more my hero PIERRE FALARDEAU!!

    Thank you for giving us the space to comment.

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    Replies
    1. What exactly is your point? I can't quite figure it out. You keep saying that Quebec independence is about a specific ethnic group, which is false. It is about a specific North American nation or culture that counts people form many ethnic groups.

      You then go on to talk about things like "the people of Louiseville elect someone who did not speak French" as some kind of shame... I don't really know what you're talking about but I assume you mean the election of Ruth Ellen Brosseau in Berthier—Maskinongé. That's easy to explain. In the British parliamentary system, you can't vote for the head of state separately from your local representative.

      Anyway, it's easy to understand that your nation is not free when you live in abject poverty and oppression. It's more difficult to understand when you live in a first world country and have a lot of personal freedom. The fact is many people are willing to sacrifice national self-determination for individual freedom and/or wealth. It's not unique to Quebecers or "French-Canadian".

      You seem to be implying that since a strong majority of francophones have not been convinced to support independence then it is silly to try to persuade non-francophones. This, I think, is based on a common misconception about my blog, that is, the idea that I am trying to persuade non-francophones to support independence. That is not the purpose of this blog. The purpose is simply to present the Quebec sovereignist perspective (or at least my interpretation of it) to non-francophones. The intended audience could be a new immigrant to Quebec or it can be someone in Uzbekistan who is simply curious.

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    2. Bagels : "Independence has nothing to do with economics"

      In all civilizations and all ages, the purpose of one nation dominating others is always economic : to steal, to enslave, to use and to exploit the others and their territories. That has always been and still is the reason forthe invasion and occupatikn of Canada and the three centuries of imperialistic domination the current masters have brought to all those who were here before the anglos.

      Indépendance is, first and foremost, economic.

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  2. Is the English version of the Livre qui fait dire OUI already out ?

    ReplyDelete