If there really is a crisis, no one's likely to do much about it

Liberals are in no position to take doomsday advice from a Toronto bank

Le «modèle québécois»

First Premier Jean Charest, then former premier Lucien Bouchard's "Lucides" tried in vain to convince Quebecers of the need to make sacrifices to head off a financial and demographic crisis facing our province. Are we more likely to heed similar advice from a Toronto-based bank?
This week, the economics department of the TD Bank Financial Group published a special report saying Quebec's standard of living is at risk from an aging population, rising health costs and increasing international competition.
"The scope and pace of reforms remain too slow to achieve meaningful results," TD Economics said, noting this province's labour force will begin to shrink in only six years. "A greater sense of urgency is required."
Among the measures it proposed were increases in hydro rates and tuition fees and the introduction of user fees for some public services. The payoff from closing the "prosperity gap" between Quebec and the rest of Canada would be an increase of at least $8,000 a year in this province's average household after-tax income.
But the publication of the report comes only two weeks after an election campaign in which there was little evidence of a sense of urgency about the need to address the province's demographic and financial problems.
After winning the 2003 election, Charest claimed to have received a mandate to reduce the size and cost of government, as proposed in writing in the Liberal platform.
But only 32 per cent of the eligible voters had cast their ballots for the Liberals. And it turned out that most of the electorate, fickle lot that it is, refused to be bound by the platform on which the government was elected - that is, other than the parts promising them tax cuts and the elimination of hospital waiting lists.
By the fourth year of the government's term, opposition from public opinion as well as special-interest groups forced Charest to retreat from his intention to "re-engineer" government.
Some observers saw Quebec swinging to the right in the March 26 election, in which a total of 64 per cent of the valid votes went to the Liberals and Mario Dumont's Action democratique du Quebec.
But after the election, neither of the two right-of-centre parties made a claim similar to Charest's in 2003.
The need to reduce the size and cost of government had not been an issue in the campaign. And the only new austerity measure that received any attention was the proposal of both the Liberals and the ADQ to increase university tuition fees, as well as bursaries for needy students.
The platforms of both the Liberals and the ADQ provided for government spending to continue to increase, though both parties would limit the rate of growth. The Liberals would continue to allow spending to increase by up to four per cent a year, while the ADQ would cap it at three per cent.
The ADQ platform provides for possible increases in rates for hydro, as proposed by both the Lucides and TD Economics, and for other services, but does not indicate by how much. The Liberal platform does not mention rate increases.
Both parties seem to have recognized that public opinion isn't ready for austerity measures. In January, the CROP polling firm published an analysis of its survey results suggesting Quebecers rejected such debt-reduction measures as cuts in spending, increases in hydro rates and tuition fees and medical user fees.
As well, a minority government facing a possible early election doesn't have the classic option of frontloading unpopular but necessary measures into the first two years of its term to give the voters time to get over them.
The Liberals and the ADQ might combine to raise tuition fees, since students usually don't bother to vote anyway. But with the Liberals needing to re-build in French Quebec and the ADQ to consolidate its breakthrough on March 26, don't expect them to buck public opinion and heed the rest of the bankers' advice.
You can read the Liberal platform in English at www.plq.org, and the ADQ's in French at www.adq.qc.ca.

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