(Radio-Canada: Alberta and Quebec)
As Canada’s second-largest major province, Quebec uniquely suffers from economic and business woes not seen in the other provinces. While the province is favourable to a host of social factors such as childcare, generous welfare benefits, affordable housing compared to the other major provinces, and a culture that focuses on living rather than working; Quebec continues to stab itself with policies that hold back its full potential.
The economic story of Quebec follows a simple concept, a stream of uncertainty spanned over decades due to unneeded political endeavours from both the federal and provincial governments.
The Zeitgeist of Quebec's Referendum Era
Quebec is well within its rights to protest and initiate referendums to challenge its place in the Canadian federation. Quebec has a deep history with Anglophone Canada, one that is showcased time and time again by the lack of consideration the dominant ethnolinguistic Anglophones have shown toward the Francophone minority. Rightfully, Quebec has developed a unique culture within Canada that is hostile towards any attempt at undermining their due rights and freedoms as Quebecois.
At the same time, however, extreme political endeavours like secession from a country cause great uncertainty within the business community. The field of trade and commerce is especially susceptible to political stunts that lead to reductions in investments. Even prior to Quebec’s first referendum on secession, major businesses such as Sun Life, Royal Bank, and the Bank of Montreal had announced the transfer of their head offices from Montreal to Toronto. This period of exodus was due to the newly elected Parti Quebecois under René Levesque in November 1976 passing Bill 101 in August of that year. The bill essentially stipulated that businesses in Quebec would have to conduct their operations solely in French. Many major businesses in Montreal at the time conducted their operations in English, as they still had to market to the broader Anglo-North American market. As a result, federal officials at the time indicated that 140 major head offices had left Montreal from 1975 to 1977, including many pharmaceutical, insurance, and banking corporations.
At the time, a major business leader and president of Smith, Kline & French Canada Ltd., William Robson, said: “Some personnel from our competitors are applying to move with us. The last firm out of Quebec will be the biggest loser.”
After the 1980 referendum, which saw Quebeckers strongly opposing Quebec seceding from Canada with 60% voting against, reports at the time indicated that 200,000 Quebeckers left the province during that period. On top of labour flight, Quebec’s business exodus began to accelerate in the 1980s after the referendum, with the shift starting in in the 1960s as provinces like Ontario and British Columbia started to pick up economic steam.
The 1995 referendum sparked similar fears. Major business leaders at the time, such as Power Corporation president Paul Desmarais and Bombardier Inc. (a major Quebec-based company) head Laurent Beaudoin, believed that a "Yes" victory for secession would cause the downfall of Quebec business interests.
Yet again, just as in 1980, the 1995 referendum for Quebec to seperate as a sovereign state was rejected by a slim margin; the results were 51% to 49% against sovereignty. However, the damage to Quebec's business interests was already done. The province had gone through two referendums, the passage of language laws, a political landscape plagued with nationalism, and worries that another referendum could happen again in the future. Overall, the Quebec business exodus costs the province $2 billion a year.
The Federal Government vs. Quebec
On top of the already controversial referendums, Canada has also gone through two failed attempts at amending its Constitution. Quebec, along with other provinces, spearheaded the movement toward further decentralizing the Canadian federation by increasing the transfer of powers, funding, and sovereignty to the provinces.
Each time Quebec partakes in constitutional challenges, secession attempts, or any attack against the federal government. The federal government reciprocates through attempts to either appease or threaten Quebec. Recently declassified reports have suggested that the federal government in the 1970s and 1980s possibly attempted to conjure plans for businesses to disinvest and/or pull out operations in Quebec. In the modern era, the federal government has taken the passive route of appeasing Quebec through a hands-off policy approach, essentially letting Quebec do what it wants under its jurisdiction.
The CAQ in Quebec has responded surprisingly well to the federal government’s modern approach. The Premier of Quebec, Francois Legault, has expressed that his government would never initiate another referendum in Quebec, citing the political and economic costs of such a move. As former PM Pierre Trudeau had noted, ‘while focusing the political debate on Ottawa would unite Parti Quebecois [and thereby Quebec], economic issues could divide it.’ Such is the case in modern-day Quebec, economics has divided Quebec nationalism more than any federalist politiician.
Although nationalism in Quebec should never be underestimated, the likelihood of another referendum diminishes as time goes on. No matter how nationalistic Quebec is, its residents understand that their political adventures have had permanent consequences for their economy.
How to do Nationalism Right: The Alberta Success Story
However, provincial nationalism and autonomy isn't something that is unique to Quebec, or even Canada for that matter. The province of Alberta demonstrates a success story within the Canadian Federation on how to balance business/economic interests with nationalistic ventures. Out of all provinces, Alberta boasts the highest GDP per capita, the highest human development index rating, some of the lowest taxes (largely subsidized by oil windfalls), and relatively affordable housing compared to the major provinces of Ontario, British Columbia, and Quebec.
Alberta prides itself on being the Conservative bastion of Canada, but related to its fiscal conservatism is its willingness to appeal to business interests. More than a business beacon, perhaps Quebec should be looking to Alberta for ways to stand up against the federal government in the modern era. Rather than fighting the federal government on only values, combining the power of values with economic strength would provide Quebec the leverage it needs to secede.
For Quebec to be more like Alberta, it needs to understand that business interests are as important as culture. Culture can only go so far in providing the income and wealth comfort that a good economy provides. People want financial leeway, and a thriving economy is the only real way to ensure people are rich and plentiful. Compared to Ontario, Canada’s economic engine, which hosts 40% of its population, Alberta exceeds Ontario’s GDP per capita at $84,000, compared to Ontario’s $63,000 and Quebec’s $57,000. Moreover, Quebec's HDI compared to other major provinces is also lacking. As of 2021, Quebec has the 9th highest HDI index, Alberta ranks first, and BC and Ontario rank second and third respectively.
No province in Canada can argue against the uniqueness of Quebec’s culture, likewise, Alberta’s culture is similarly not one to scoff at either. But the difference is that while Quebec’s economy has had trouble attracting and developing investments, Alberta's has thrived with its favourable tax incentives, the lowest business tax rate in the country, and a government that is willing to invest in social programs just like every other province.
Contrary to popular Canadian belief, increasing income and business taxes isn’t the only way to fund government coffers for social programs. If enough businesses and business growth occur in your province, the amount of economic activity should just about make up for the lost income and business taxes you’ve forgone. Indeed, a 2003 TD Financial Group study on Alberta found that the province is the only jurisdiction in Canada that provides similar levels of wealth as the US but with Canadian quality of life through generous social programs.
The result is more money in people's pockets, all while the people of Alberta become richer in both wealth and culture.
