How poor is Quebec?

Answer 1

Quebec is not poor in the literal sense. The thing is that it has a very high public debt but also offers very expensive public services which explain partially that debt. While many says those services are paid by the payment transfers it is only true for a quite small percentage of total expenses*. Quebec has the second highest GDP in Canada along the second largest population in Canada. While the GDP per capita is slightly under the national average it does not have a strong meaning if you take account of the distribution of wealth. Although there are less millionaires and even less billionaires in Quebec than there are in Ontario or Alberta for example there is also much less poverty than in many other so called rich provinces. Long story short the riches are less rich but the poor are less poor in some way. The province is also the one with the highest taxation rate. Added together GST and TVQ (Quebec sales tax) are to 14.96%. That means every thing a Quebecer buys he pays more than people in other provinces. He buys a $1000 TV he pays it $1149.60 while in Alberta he would pay it about $1070$. It means Quebec government has a very high revenue and can invest that money in public services, lower the every day cost for the population, and in development. When a Quebecer goes to hospital he pays precisely $0 for any diagnosis, treatment, surgery he may receive but in reality he pays much more taxes on his salary and like I said earlier on the products he buys. It means that in Quebec you pay for services a price that is based on your personal wealth and not on the real value of those services. In some way the rich pay for the poor. Is this good or is this bad? Well the answer may differ a lot according to who you ask and this is mostly a question of values more than facts and numbers.

So finally is Quebec poor (at all)? No Quebec is not poor. People there are quite wealthy, unemployment rate is very low and investments from the other provinces or other countries are stable. However, yes there is an "however" Quebec has a very high debt which is caused by many different things like expensive public services, over-estimation of Stock Market, bad management of banks, undeclared work and so many other things and this may cause the province to hit a wall in a near or middle ranged future but as a matter of fact Quebec is a very economically stable place and it will probably get over it easily. It got over many social crisis without a major recession so I guess even if it turns very left-winged or even separate from Canada, Quebec will stay in a pretty stable economic state (I'm talking about long term here because of course economy fluctuates a lot on the short term) as long as there is no natural disaster or bloody civil war (which would be quite surprising).

So to conclude Quebec has many issues but it is not "poor".

*Transfer payments are not direct transfer from one or more provinces to one or more provinces. Many misinformed people believe that it works that way: Alberta -> $ -> Quebec -> Free healthcare, low tuition fees, ... But in reality the way it works is more like that (read carefully it's going to be much more complicated that the last one): Salary -> All Canadian working population from every provinces -> $ GST -> Ottawa - > Evaluation of which provinces according to the amount of money transferred from provincial government to federal government and what needs they have will receive more and less money -> $ -> Beneficiary provinces (in that case Quebec which sends about $45G in GST to Ottawa, receives $39G of which is invested in federal services and then get a $8G equalization payments subvention. That means Quebec really enjoys only $2G of the $8G it received) -> Quebec receives the $ -> It is invested in public services by paying the officials, the doctors, the teachers, etc. -> From those salaries are taken taxes either provincial and federal -> Taxes -> $ -> Ottawa -> and it goes back to step one. So in fact equalization payments are mostly superfluous. As a matter of fact abolishing them would make most provinces richer.

http://www.stat.gouv.qc.ca/donstat/econm_finnc/conjn_econm/TSC/index_an.htm