Quebec Strikes Again!

[Smallc]

I don't know. The federal government claims that they put in $16.3B less than they contribute. I can't verify they, but I have no reason to doubt it. Alberta and Ontario are large net contributors.

[madmax]

Total Transfers to quebec

Transfers 9.333b

SpecifcPurpose Transfers 6891b

This is where your figure comes from

16billion

MInd you here is Albertas Tranfers

transfers 1.2b

Specific Purpose 3.05b

As there are other transfers which never get teh publicity as much as the that are based on the two highest provinces.

regardless Total quebec payments to federal government..

$30Billion from the above listed federal taxes....

No Province receives more from the Federal Government then it pays into the Federal Government.

However some Provinces Receive MORE of there monies back from the feds via the transfer formula which works similar to our own Personal Progressive Income tax formula.

Thus if I may Thus people/corporations in Quebecerx can pay almost as much in federal taxes as Albera when its booming, but would receive more back. This is based on the population size and services required provided by the federal government in order to maintain the federation....which you already know.

You have been debunking the Transfer myth, for years.

So here its is in laymans terms.

Say I run a business and you run a business.

I make $300,000 in sales and you make $300,000 in sales.

We both paid 50% on our taxes ...

However if one business has more expenses and writeoffs it receives more monies back in tax returns.

Transfers are like a tax return and you know how the formula works regarding the transfer and provinces. Now you know how much income each province sends the feds.....

Regardless, the transfer payment red herrring is ALWAYS going to be brought up, cause....

Its easier to believe the myth then explain the truth and how it functions.

And its easier for people to deny the truth and sell the myth if its of a political advantage.

Thus, when Danny Williams got the Feds to STOP taking Oil Revenues, like the deal in Alberta...he wanted the same deal....He knew NFLD would jump to a have Province as the monies would go directly to the province and they could provide the services without the aid of federal transfers. Had these monies continued to go to the FEDS, NFLD would continue to be protrayed as HAT IN HAND getting their monies back in transfers.

Previously, Ontario had the wealth to Pay the feds and provide services to all its population without the need for transfers. And thus the Federal Government had been the NET BENEFACTOR from the richest most populated province.

Thus, when one looks at WHO has WHOs handout, one can argue that the Federal Government is the one with its hand out and not the Provinces...

But thats an argument for a different day..

In the meantime, the PQ are falling in thepolls..

[madmax]

I will edit the above later lol.. night shift brain...

[Smallc]

No, that's not what I'm talking about. What I'm talking about is net contribution and net withdrawal. Quebec gets, when you consider transfers, payments to individuals, federal services in the province, federal salaries in the province, etc., $16.3B more than Quebecers pay in federal taxes to Ottawa, according to Ottawa.

[TimG]

No Province receives more from the Federal Government then it pays into the Federal Government.

While superficially true what you forget is the money sent to Ottawa is used to pay for things which benefit Quebequers - things an independent Quebec will still have to pay for. Furthermore, when people throw around figures like 13 billion they are not suggesting that the Federal Government writes 13 billion dollar check but that Quebec disproportionately receivers more benefits from federal programs than other provinces.

If you look at the charts here you will see that Quebec provides on 18% of the federal government revenue but receives 22% of the spending. The difference is 13 billion in 2009:

http://thoughtundermined.com/2012/07/22/a-closer-look-at-federal-revenues-and-expenditures-by-province/

This 13.6 billion is a real short fall that will have to made up by an independent Quebec.

Aside: the only reason that almost all provinces receive more than they pay is because the federal government is running a deficit. Once the budget is balanced then some provinces will have to pay more to cover Quebec's outsized share of the benefits so you can argue that Quebec benefits at the expense of the rest of the country.

Edited March 20, 2014 by TimG

[Smallc]

2009 was a bad year to use though, as the stimulus and the deficit skews things. Almost any other year, Ontario would be a net contributor, as would BC.

Edited March 20, 2014 by Smallc

[August1991]

No, that's not what I'm talking about. What I'm talking about is net contribution and net withdrawal. Quebec gets, when you consider transfers, payments to individuals, federal services in the province, federal salaries in the province, etc., $16.3B more than Quebecers pay in federal taxes to Ottawa, according to Ottawa.

The argument among those who desire to make Quebec a sovereign country is that the federal government spends billions for things that Quebecers don't want.

In short, Quebecers may receive billions in equalization but Quebec taxpayers also buy stuff that they don't want/don't need. For example, submarines. Or, Indian Affairs. Or a Trans-Canada highway. Or subsidies to car makers. Or oil exploration.

Few First Nation people live in Quebec so the federal budget for Indian Affairs is largely a slush fund for ROC, paid by all taxpayers.

Finally, neither Quebec taxpayers nor Canadian taxpeyers would have such waste as Mirabel. If the Quebec government could decide its own air transport policy, maybe there would be less waste...

Edited March 20, 2014 by August1991

[TimG]

In short, Quebecers may receive billions in equalization but Quebec taxpayers also buy stuff that they don't want/don't need. For example, submarines. Or, Indian Affairs. Or a Trans-Canada highway. Or subsidies to car makers. Or oil exploration.

These factors are taken into account with the numbers that are quoted. i.e. the bulk of Indian Affairs budget is spent outside of Quebec and is allocated to the province in question. The trouble is these items are swamped by other line items such as EI or OAS payments where Quebec receives a much larger share of the spending than its share of the population.

You complain about oil exploration credits but ignore the massive electricity subsidies that Quebec hands out by selling hydro at below market rates to Quebequers. Rates that would be hard to maintain when the bulk of Quebec Hydro's assets would be stranded in the 'semi-autonomous Cree state' (one aboriginal group have already announced its intention to secede from Quebec in the wake of any referendum and Quebec has no moral or legal authority to stop them).

Also 70% of the Federal Budget consists of debt interest or direct transfers so the scope for 'efficiency gains' is very small - especially since separatists promise to keep employing civil servants that lose their jobs because they live in Quebec post referendum.

I realize that you will probably dismiss these points because you prefer the fantasy that separatists create to reality so I will point out the obvious: what politician has ever delivered on promises in the last 50 years? what makes separatist politicians so special that they can deliver on their promises in a landscape where every other politician fails?

Edited March 20, 2014 by TimG

[westguy]

madmax - Are you suggesting that Quebec is the only one of the ten provinces that makes excessive contributions? I highly doubt that. If Quebec separates, they will lose the vast amounts given top them by the Feds and ROC and they will become a third world country that speaks French in a world of anglo

[guyser]

If Quebec separates, they will lose the vast amounts given top them by the Feds and ROC and they will become a third world country that speaks French in a world of anglo

Third world country huh?

You can only wish. Your dream btw will not come true.

[madmax]

Great discussion, makes me happy to see the MLW posters attack this subject with healthy debate rationall thought and yes opinion too...

Tim G. I agree with both your posts, and your link uses the same data i was viewing from stats can, in the report.

SmallC, yes 2009 would skew most anyones data, however, I must say, Ontario will continue on a long slow steady decline, unfortuneately as it has been economically rudderless for years and I don't see that changing.

Westguy, No I am not suggesting that Quebec is the only Province that makes "excessive contributions" your words. I am saying Quebecers Contributes monies to the feds, no different than any other person/corp in any other province, and it receives more of its contribution back. Thus all Provinces technically are the same. And I would only disagree that without the tranfers that Quebec would become a 3rd world basketcase. And to one of your other comments.

the return of Transfer payments are NOT unfair, unless you personally believe that Canadians are not equal.
A Canadian individual and corporation pays federal taxes regardless of the province they live in.

Guyser2, You are wrong, just because, I cringe whenever we are in agreement.

[westguy]

madmax- Quebec has received approx $250m from transfer payments which monry comes from the ROC. Despite that, they are in debt for approx. another $250m . I doubt if the international community will look favorably on the Quebecers, hence I suggest that quebec risks becoming a third world country

[guyser]

... hence I suggest that quebec risks becoming a third world country

Hmm, they would fit in right behind Norway in rank of Economies.

Norway is a third world country? Who knew?

If you want to discuss what Que would have to do to streamline and or adjust living stadards and govt intervention, have at it.

[madmax]

How much Quebec receives in transfer payments and how much it is in debt/ deficit are mutually exclusive. Quebec could run a budget surplus and still receive transfer payments. "Fiscal capacity and fiscal need are not equivalent to measures of fiscal revenue and expenditure, as making them so would induce perverse incentives to subnational governments to reduce fiscal effort."

Transfer Payments have been explained many times

I don't intend to repeat either myself or Smallc, who has posted on this topic for many many many years on this forum regarding transfer payments.

No Province in Canada would be considered a 3rd World Country

[westguy]

I disagree and suggest that the ROC is subsidizing daycare($7/day) and post secondary tuition ( $2500.yr) and who knows what else; when the ROC cannot afford those same benefits. Would you please explain just how Quebec will be able to provide those benefit s w/o the largesse of the ROC AND pay their debt. I believe that Norway is better than solvent as they have wisely handled their oil revenue and not at all a third world country. As for your last stamen in your last message Quebec would not be a province of Canada if they separated.

[madmax]

Federal Taxes from Quebec support Farm subsidies in Alberta.

All Canadians pay into the same pot.

Regardless.....

it is also untrue that equalization allows Quebec to afford services that are impossibly generous for Alberta. The equalization formula tells us that the Alberta government could collect twice as much revenue as Quebec (including its equalization payments) if both provinces had identical tax rates. In other words, Alberta could easily afford tuition rates lower than those in Quebec, and plenty more besides, if it was willing to pay for them.

Can we eliminate this “injustice?” Sure. One option is to shut down some of our industries to bring economic output and unemployment rates closer to the national average. Alternatively, all Albertans could take a voluntary pay cut to bring our salaries in line with those of other Canadians. Or, we could ask the federal government to implement a special “Alberta” set of tax rates—so that we can pay lower taxes than all other Canadians to compensate us for being richer than the rest of the country.

The bottom line is that Albertans contribute more to confederation because our economy is strong. Someone earning $100,000 pays more taxes than someone earning $50,000. Alberta is simply home to more 6-figure salaries.

Because of that wealth, the Alberta government could afford to provide social services that would make Quebec’s seem miserly by comparison. But Albertans have chosen a different path. If Quebecers wish to keep tuition low, enjoy $7-a-day daycare while paying high taxes that risk discouraging economic growth, that’s their decision to make. Besides, would you want to trade places?

This brings us to another misunderstanding about equalization. Its purpose is not to ensure a uniform level of provincial government services across Canada, but rather to ensure that provinces have the ability to provide comparable services at comparable tax rates. Each province can choose how much—and on what—to spend, but they have to pay for those choices. Yes, Quebec has more generous social programs than Alberta. It also has taxes that most Albertans would consider appallingly high.

[hitops]

it is also untrue that equalization allows Quebec to afford services that are impossibly generous for Alberta. The equalization formula tells us that the Alberta government could collect twice as much revenue as Quebec (including its equalization payments) if both provinces had identical tax rates. In other words, Alberta could easily afford tuition rates lower than those in Quebec, and plenty more besides, if it was willing to pay for them.

This assumes that the tax rate itself has no effect on prosperity, which is nonsense. Low taxation is one of the reasons WHY a lot of people want to be there and consequently generate wealth.

So yes Alberta could raise it's tax rate to Quebec levels......and drive people away, lowering the overall tax base.

[westguy]

madmax-bullshit

[overthere]

I live in Alberta, but when I retire some day I will have to move to Quebec to take advcantage of both provinces tax regimes and social contracts.

[madmax]

madmax-bullshit

LMAO... great reply westguy.

[madmax]

This assumes that the tax rate itself has no effect on prosperity, which is nonsense. Low taxation is one of the reasons WHY a lot of people want to be there and consequently generate wealth.

So yes Alberta could raise it's tax rate to Quebec levels......and drive people away, lowering the overall tax base.

Not saying you are wrong or right, merely its a choice the Provinces elected officials make based on the will and desire of the public.

Alberta still has 4Million people to go before equaling Quebecs Population. And Alberta has major infrastructure challenges to meet that growth. When Alberta can sustain 8 million people is yet to be determined.

So, to be clear, I agree with what you are implying. but the outcome remains unclear. As Albertas wealth is in natural resources, which no matter how long they last, there is a finite timeline, which lower taxes will not cure nor will higher taxes.

[Argus]

No, no I dont. Neither do you or anyone else outside of Quebec.

Been over this thing a hundred times in other threads.

And the argument is as silly and rife with pettifoggery as usual. We pay taxes to the federal government, and thus whatever the government does with that money, we pay for. If the government gives it to Quebec that's our money it's using. It has no other source.

[Argus]

Hmm, they would fit in right behind Norway in rank of Economies.

Norway is a third world country? Who knew?

If you want to discuss what Que would have to do to streamline and or adjust living stadards and govt intervention, have at it.

You cannot compare Quebec's existing economy to Norways when so much of the money in Quebec is coming from TROC and would disappear in the event of separation.

Norway has a huge budgetary surplus last year. Quebec? Even with the billions in transfer payments they have a large deficit.

[PIK]

I live in Alberta, but when I retire some day I will have to move to Quebec to take advcantage of both provinces tax regimes and social contracts.

And land is cheap.

[westguy]

well said Argus