Saturday, April 28, 2012

Expanding Quebec's Tuition Debate

This was supposed to be a comment on the following post on the Quebec student strikes but for some reason it would not go live. But it works just as well as a standalone piece discussing Quebec's tuition issue.

The importance of tertiary education in an increasingly specialized and globalized world is unquestioned - but so are other public services and a competitive tax system. I don't pretend to know what the right answers for Quebec are but all I can comment on is how precarious of a situation they are in.

Adjusted for price, Quebec has one of the most generous but costly array of government programs across Canada (Figure 1). These programs, which stretch from subsidized day-care to generous pensions to employees to cheap universities, are funded by Canada’s most progressive and onerous tax system (Figure 2), and $8 billion a year in Equalization payments (1). 

Figure 1: Price-Adjusted Per Capita Program Spending, 2008-09

Source: Replication of the calculation from Quebec's report "Le québec face à ses défis" using data from Statistics Canada's Financial Management System, Intercity Price Index and Population.

Figure 2: Comparison of Provincial Personal Income Taxes

Source: BC Budget, Page 131
Note: This data is from February 21, 2012.

What’s not funded by these own-source revenues and federal transfers is accumulated in an ever growing debt – already the highest in Canada using most metrics (Figure 3). Economically, the province has not kept pace with the rest of Canada for years and looking forward, Quebec is not anticipated to grow nearly as fast as the Canadian average for the next decade to come (2) – at least.

Figure 3: Net Debt to GDP Ratios

Source: Calculations based on data from the Department of Finance Canada's Fiscal Reference Tables and Statistics Canada.

The growth of federal transfers, which make up around 20 per cent of Quebec’s revenues, are anticipated to decline fairly significantly (Figure 4 and also see the 2012 Quebec budget). In order to combat this reduction in transfers, the relatively large deficit and growing debt, the most recent budgets announced tax increases and other revenue measures, as well as reductions in program spending. 

Figure 4: Quebec's Projected Revenues

Source: Quebec's 2012 budget

Lastly, the population of Quebec is projected to age faster than the Canadian average (Figure 5) putting further strain on their economy, and therefore revenues, and pressure on their network of social programs.

Figure 5: Proportion of Population Projected to be 65 and Over

Source: Statistics Canada's population projections using M4 scenario.

All this is to say – Quebec is in a bind, stuck between a rock and a hard place - much like many other provinces. While they need to maintain support for tertiary education to improve their competitiveness, this decision has to be balanced with ensuring enough resources to support other social programs that an increasingly aging population relies on, and a fair but competitive tax system in a country that has low-taxed Alberta and a continent that has low-taxed America.

I think the current discussion is too narrow. As with any other discussion on public policy, it has to be expanded to include other economic, social and public policy issues. In a world where priorities are increasingly competing for scarce resources, what is lacking from the current discussion are ideas on how to fund inexpensive tuition. What is lacking are debates on the best use of public dollars. What is lacking is a comprehensive discussion on the value and effectiveness of all public services and which society judges to be worthwhile. The debate has to be expanded to be relevant to Quebec's current situation and useful to find a solution.

As with anything I produce, I encourage you to fact check these arguments which are just my personal opinion. In fact, if anybody is interested, I'm willing to provide the supporting worksheets with all the data.

1) Quebec's 2012 Budget, Page C.22

2) Royal Bank of Canada, & Conference Board of Canada’s Provincial Economic Outlook (Paid subscription required).


Anonymous said...

Anonymous said... - Learn how to turn $500 into $5,000 in a month!

[url=]Make Money Online[/url] - The Secret Reveled with Binary Option

Binary Options is the way to [url=]make money[/url] securely online

Anonymous said...

Wonderful web site. Plenty of helpful information here. I'm sending it to several buddies ans additionally sharing in delicious. And of course, thank you on your sweat!

Here is my web blog ... Anti Wrinkle Cream

Anonymous said...

Appreciating the time and energy you put into your blog and in
depth information you provide. It's nice to come across a blog every once in a while that isn't the same outdated rehashed material.
Fantastic read! I've bookmarked your site and I'm including your RSS feeds to my Google account.

Also visit my homepage; Buy Equinox

Anonymous said...

Ahaa, its good dialogue concerning this article here at this website, I have read all that, so at this
time me also commenting here.

Also visit my web-site: Enduros Male Enhancement Review

Anonymous said...

You ought to be a part of a contest for one of the highest quality sites
on the web. I will highly recommend this site!

My web blog :: Nutra Burn Review

Anonymous said...

Hello, Neat post. There is a problem together with your site in
internet explorer, may check this? IE nonetheless is the market leader and a huge component
to other folks will miss your magnificent
writing due to this problem.

Here is my blog post - Lipo Slim Plus

Anonymous said...

It's in point of fact a nice and useful piece of info. I'm satisfied that
you shared this useful information with us. Please keep us up to date like this.
Thanks for sharing.

Feel free to surf to my blog Weight Loss Slim XS

Anonymous said...

I am in fact grateful to the owner of this site who has shared this wonderful article at at this place.

Also visit my website; Green coffee cleanse reviews

Anonymous said...

When some one searches for his vital thing, therefore
he/she wishes to be available that in detail, so that thing is maintained over

Feel free to visit my web site colo cleanse pro ()

Uttam Kumar Sarkar said...

The HSC CoWorks is a premium HSC tuition service providing regular face to face tuition, weekend study sessions, HSC Study Bootcamps and Mock Trial Exams to students living in Mosman and Bondi Junction and students living in surrounding areas.

Anonymous said...

3D ball animation is absolutely tҺe best ball game that android ɦas to offer to android lovers.
Нence, Android gaming іs picking up among gaming fans.
ӏt's alsο іnteresting tо note that eɑch and everү Android tablet has
its own uniqque set oof features, functions, specifications, pricing, risks
ɑnd benefits.

Feel free tο surf to myy weblog asphalt 7 hack

Anonymous said...

Hi mates, fastidious paragraph and pleasant urging commented at this place, I am
really enjoying by these.

Also visit my blog: Great Thousand Oaks restaurants

Anonymous said...

Јe voudгaі voujs dirtе que c'est constamment du plaisіr de
vous lire

Feel free to visit my web site: film pour adulte

Manfaat Kesehatan Habbatussauda said...

it's aweseome!
visit : Pengobatan Alternatif Tumor Jantung pada Anak dan Dewasa | Ciri-Ciri Jerawat Karena Stres dan Cara Mengatasinya | jenis penyakit kanker yang menyerang wanita