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April 20, 2010 - No. 74 - Supplement

Quebec Budget Reveals a Government
in Contradiction with Its People and Society


Protests by Quebeckers against the anti-social, anti-worker nation-wrecking of the Charest government, from 2005 to the present. From left to right: "Let's liberate ourselves from the Liberals"; "Favouring the rich -- a disturbing and unacceptable policy"; "Charest: the multinationals are ready to close Quebec..."; "Education for the benefit of all generations."

The Liberal Party in Power in the Quebec National Assembly presented its 2010-2011 budget, March 31. The budget contains various initiatives, which fall into four main categories:

1) widespread increases in individual taxation including user fees for social programs and public services;

2) a declaration to reduce social programs and public services;

3) an assertion that the government refuses to bargain with public sector workers and will instead dictate terms of their working arrangements, including wages and benefits;

4) an ideological and political assault on what is broadly considered the Quebec social fabric.

Missing from the budget are initiatives to fulfill the government's social responsibilities towards the people and Quebec society. The budget contains no determination of the main problems and contradictions confronting the Quebec people and society and any proposals for their resolution. The budget contains no sense that the government even knows what problems are plaguing the people and society. Especially glaring is the absence of any discussion or proposals as to how the government will lead in strengthening the socialized economy, which is in crisis. The socialized economy is the only source of social product to meet the needs of the people, the general interests of society and specifically to fund social programs and public services.

Social programs, public services and enterprise and a healthy growing Quebec standard of living are the backbone of the Quebec economy and social fabric. Their growth and strength are the greatest antidote to the destructive private business cycle. The Quebec budget has it backwards by attacking the economy's backbone, its social programs, public services and enterprise, and the people's standard of living. The proposals to increase individual taxation and user fees for social programs and public services will transfer value away from the working class and middle strata and out of the economy into the hands of the international financial oligarchy, resulting in a lower standard of living and a weaker economy more prone to crisis.

The government's tax and user pay proposals are regressive. They violate the progressive trend of history that governments, to meet the needs of the people and general interests of society, should claim the revenue they require directly from public and private enterprises and not indirectly from individuals.

Budget Proposals for Increased Individual Taxation

Budget proposals for increased individual taxation are the following:

Quebec sales tax (QST)
* One percent increase January 1, 2011 to 8.5 percent
* One percent increase January 1, 2012 to 9.5 percent
* Combined with the GST, the total tax on most goods and services will be just under 15 percent in 2012.

Increasing the Quebec sales tax, which is mostly paid by individuals, will amount to an additional sales tax of $400 million in 2010-2011, $1.9 billion in 2011-2012 and $3.1 billion in 2012-2013.

The total Quebec sales tax (not including GST and other consumption taxes) will be $14.920 billion in 2012-13.

Note: The total estimated Quebec tax on corporations in 2011 = $4.046 billion. This tax amount from corporations is even less than the $4.589 billion received from just three government enterprises -- Hydro-Québec, Loto-Québec, Société des alcools du Québec. Just imagine the enormous public revenue if Quebec had vibrant and diverse public enterprises in forestry, mining, metallurgy, steel, food, pharmaceutical, hospital supplies, other manufacturing and the wholesale/box store sector.

Fuel Tax Increase

The budget includes a hike of one cent per litre in the fuel tax as of April 1, and similar annual increases of one cent a litre for three years after that. Total fuel tax estimate for 2010-2011 = $1.837 billion.

The budget also allows Quebec City and Montreal to levy an additional $0.015/litre fuel tax "to generate funds for public transit and infrastructure."

Note: Total expenditure in 2010-2011 on transportation, which includes roads and urban transit = $2.788 billion. Capital-centred accounting calculates investments in transportation as a capital expense but unlike a factory capital expense, the accounting method considers the public value invested in transportation as somehow lost or non-returnable to the economy in the form of transferred-value as it is used up or amortized. This of course is impossible or rather disinformation. The amount invested in public infrastructure is indeed returned to the socialized economy but it is mostly seized in a hidden way by the monopolies and other businesses operating in Quebec. A certain percentage of transferred-value from public infrastructure (including education) should appear on the annual balance sheets of monopolies as part of their gross income. This transferred-value from public infrastructure should be returned to the public treasury so that it can be reinvested but this is not done. The flow of value through the socialized economy is mystified to obscure the reality that the state provides the rich and their monopolies with the means to protect and enlarge their empires and for a privileged class to become richer at the expense of the working class, middle strata and society.

Poll Tax for Health Care

The budget proposes an annual poll tax for health care that must be paid by every adult. The health care poll tax begins in 2010 at $25, increases to $100 in 2011 and rises to $200 in 2012. In addition to the health care poll tax, the Liberal Party in Power is floating a health care user fee proposal of $25 per visit to a doctor or medical institution.

The health care poll tax and user fee are part of a massive disinformation campaign as to what are the problems confronting public health care delivery. Public health care has never been truly public in the sense of free from private profit. The health care system is a source of immense private profit for the pharmaceutical and medical supply monopolies and others such as those companies engaged in supplying contract-workers. The draining of value from the health care system by the monopolies represents the greatest contradiction that must be resolved but the government does not even recognize the problem. Instead, the health care poll tax is designed to drain even more money away from the people to be handed over to the private health care monopolies.

The budget brags about public money to be spent on health care "technological and computer infrastructures and the implementation of promising new technologies." The pressure on public health care comes from the fact that it is not truly public and free from private profit from the basic production of necessary material inputs, including construction and financing, pharmaceuticals and other medical supplies, up to the delivery of services. The government budget is silent on this very real problem and contradiction between public and private, and instead has mounted a diversionary campaign to make the people pay a health care poll tax and user fee. The disinformation campaign does not highlight the fact that investments in health care are positive for society and the people but rather the government speaks endlessly of high health care "costs" without identifying that those "costs" mostly originate from private enterprise sapping value from the health care system and that health care private enterprise is the culprit that must be restricted.

User Fees

User fees for all public services except daycare will be increased annually according to the cost of living and what the government determines as "fair" and in line with "the cost of products and services." The Liberal Party in Power speaks of charging "fair user fees" as a "cultural revolution" for Quebec. For example, the daily rate for adults charged by the Société des établissements de plein air du Québec for access to national parks will immediately be raised from $3.50 to $5.50. This "cultural revolution" is in fact a counterrevolution backward from the concept of universality of access for all to their public institutions and services regardless of ability to pay.

Tuition Fee Increase


Montreal, April 1, 2010: "Our education is not for sale."

The budget announced that the "government will raise university tuition fees as of fall 2012." This proposal is in line with the user pay mentality of the Party in Power and is part of its cultural counterrevolution. The concept that education is a right has long been part of Quebec's social fabric not in the sense that it has been achieved but that for society to progress it must move toward a guarantee of that right, which means of course universal free public education from daycare through university without any restrictions regarding ability to pay. The proposal to increase tuition fees also obscures the economic reality that monopolies benefit from educated youth and use them to strengthen their empires but refuse to acknowledge that fact and make available social product produced by Quebec workers within their empires for investments in public education. This denial by the monopolies and government that investments in education, health care and other social programs are necessary for the functioning of a modern economy and the blossoming of society marks the ruling elite as obstacles to the progress of Quebec. The rich and their monopolies present themselves as unique, unitary islands within a chaotic global market, a surrounding economic sea of

"Education is a right,
not a luxury"

competition and danger that cannot and should not be tamed with the human factor/social consciousness in control. Officially, they do not even recognize Quebec society but only its existence as a market. Of course, such assertions are for public posturing for they know that they would not survive an instant without the protection and care of a highly organized monopoly capitalist state machine and the material blessings produced by the entire working class not just their "own" workers.

The proposal to raise tuition fees is part of the campaign to wreck public education and make its delivery a private enterprise from daycare through university. This campaign to privatize education is in direct contradiction with the reality of modern Quebec as a socialized economy and nation that requires modern socialized public institutions and enterprises under the conscious control of the actual producers, the working class and middle strata, to move forward in the twenty-first century.

Price of Electricity to Rise

The budget speaks of an annual increase of 3.7 percent in the price of electricity for Quebec individuals and small and medium business beginning in 2014-15 and subsequent increases tied to the cost of living. Large industrial customers are specifically excluded from these price increases.

The section in the budget on the pricing of electricity reveals the monopoly capitalist outlook of the Liberal Party in Power and its contempt for the people. The monopolies are considered the source of wealth not the working class harvesting through hard work the bounty of Mother Earth. The people are ridiculed as anti-conscious consumers that must be reminded through higher prices to conserve what the monopolies supposedly provide. The budget reads, "The low rate (for electricity) has caused Québec consumers to undervalue this precious resource. There is little incentive for Quebeckers to improve their energy efficiency."

Then, revealing the government's double standard when it comes to the monopolies, the budget says, "Industrial customers paying the large-power rate ('L') will be exempt from the increase in the price of heritage pool electricity.... For these customers, which include 150 large industrial companies, electricity accounts for a large portion of production costs."

Why is it that individuals and small and medium sized business supposedly "undervalue this precious resource" and have little "incentive to improve their energy efficiency" yet 150 of the largest monopolies where "electricity accounts for a large portion of production costs" do not need such unseemly prodding such as higher prices to be conscientious citizens but on their own initiative in spite of an extremely low price of electricity are happily righteous creatures leading us forward to a bright green future? This mindset is the one that wants to turn over all the human and material resources of the nation to the monopolies to make them competitive in the global market and hope that somehow wealth will trickle down to us humble folk and life will be just rosy. Does the government even live in Quebec? Do they not know these 150 largest monopolies and what they have done to the Quebec economy and society during the latest economic crisis? Right at this moment the people of Montreal are mounting a challenge to one of these monopolies called Shell and are fighting for it not to close their refinery. What of the antics of the forestry monopolies and on and on. No. this Liberal Party in Power spouts inanities such as, "Many of these companies are located in the regions, where their contribution to the economy and employment is vital. Higher electricity costs would considerably reduce their profitability and could even cause some of them to close."

Does the government think we are idiots? Of course "these companies located in the regions" are "vital" "to the economy and employment." They are mostly the only game in town! That is one more reason why the monopolies must be restricted in their wrecking activity and brought under the control of the people and a socially responsible government. Restricting monopoly right includes turning "the 150 large industrial companies" into public enterprises if that is what it takes to force enterprises to serve the regions and Quebec's socialized economy and society and not their own exclusive narrow interest to protect and expand their private empires.

In sum, it is estimated that the budget's proposed taxes and user fees will amount to individuals paying $10 billion more annually to the government. Canadian Press estimates, "A family of four earning $70,000 will pay $650 more in 2011, and $1,250 more in 2012. A single person earning $40,000 will pay $365 more in 2011, and $1,250 more in 2012."

These regressive tax measures amount to a direct transfer of wealth away from the working class and middle strata. The annual social product in Quebec is mainly divided into claims by workers and the middle strata, claims by governments and claims by owners of capital. A transfer of social product away from the claims of workers and middle strata will directly reduce their standard of living, as it will eventually end up as claims by the owners of capital, especially in this climate of downgrading social programs and public services. The government's tax and user pay proposals are regressive. They violate the progressive trend of history that governments, to meet the needs of the people and general interests of society, should claim the revenue they require directly from public and private enterprises and not indirectly from individuals.

This budget is a fight between the people and owners of monopoly capital over claims on the social product produced by Quebec workers. It is an effort by international finance capital to reduce the claims of Quebec workers and middle strata, lower their standard of living, and shatter the social fabric of the nation with a cultural counterrevolution. This attack on the claims of workers and middle strata is taking place all over the world such as in Greece where the international oligarchy has put tremendous pressure on the people. Everywhere one of the phoney excuses is the debt and deficits that are creations of monopoly capital from which it profits whether they are growing or being reduced. This Quebec budget is an attack on the people and society. It reveals the Liberal Party in Power as a government in contradiction with the people and society.

To be continued: This article on the budget will continue with discussion on the other three main initiatives of the government -- the declaration to reduce social programs and public services; the assertion that the government refuses to bargain with public sector workers and will instead dictate terms of their working arrangements, including wages and benefits; and, the Party in Power's ideological and political assault on what is broadly considered the Quebec social fabric. The article will then discuss what is missing from the budget statements of the Liberal Party in Power such as any initiatives to fulfill the government's social responsibilities towards the people and Quebec society and lead the people in resolving the contradictions that have emerged spontaneously with the development of a modern Quebec.

(Source: Budget Plan 2010 click here (PDF); Budget Speech 2010 click here (PDF). All uncited quotations and figures are from these two government documents.)

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