PING!
Posted on 03/28/2007 2:35:49 PM PDT by GMMAC
Harsh realities hit home in Quebec
Election a 'real wake-up call,' Jarislowsky says
Sean Silcoff, Financial Post
Published: Wednesday, March 28, 2007
Laurent Verreault is chief executive of one of Quebec's most successful firms, Groupe Laperriere et Verreault. To compete, GL&V -- a global leader in technology that separates liquids and solids for mining, pulp-and-paper and water treatment facilities -- does some things a bit differently. Its corporate office is in Montreal, but the CEO works from his Florida condo. His three vice-presidents are in the U.K. and India; his son Richard, the president, is in the United States. GL&V outsources most of its manufacturing and is a "virtual company," Mr. Verreault says.
The good news for Quebec is that it remains the official home of this dynamic growing firm. The bad news: Just 270 of GL&V's 2,500 employees are in Quebec. A decade ago, most of its staff was based in the province. Look around Quebec and its new corporate stars, such as Gildan Activewear Inc. or the newly merged Domtar Inc., look like GL&V: The head offices are here, but most of the jobs are elsewhere.
After all, why would you create jobs in an underproductive, overtaxed and highly unionized province when "I can hire an engineer in India for $7,000 a year?" as Mr. Perreault bluntly puts it.
With Monday's historic election, Quebecers seem to have woken up, finally, to a few harsh realities that many in the business community have warned about for years.
The election of a minority centrist Liberal government with a right-of-centre Action democratique du Quebec led by Mario Dumont as official opposition -- and the worst result for the separatist Parti Quebecois since the 1970s -- showed that middle- class Quebecers accept that things need to change, and that the two parties that have run the show for the past 30 years need to wake up or die. "The right wing took power in Quebec," said Jean-Marc Leger, president of Leger Marketing. "It will be a more conservative province."
For the past four decades, Quebecers have looked inward, accepting the "Quebec Inc." model of heavy state engineering as an article of faith and forever battling the merits of federalism versus separatism. Voters this week turned the page.
"I'm very happy to have this [election result] happen," said Stephen Jarislowsky, chairman of Montreal investment firm Jarislowsky Fraser Ltd. "It's a real wake-up call."
Those changes couldn't come soon enough; Quebec is in no shape to weather the forces of globalization or the demographic crunch it is about to face. Quebec has one of the lowest birth rates in North America and its workers retire, on average, 18 months earlier than those in the rest of Canada. The provincial debt is $13,719 per capita, 51% above the average of other provinces. That will worsen if interest rates rise. Taxes on income and dividends are higher than the Canadian average; and by 2012, Quebec will be one of just two provinces to charge capital tax on borrowings by companies. More Quebecers are unemployed and on welfare than the national average. With 40% of its workforce unionized, Quebec is well ahead of the rest of Canada.
But Quebec governments have been unable or unwilling to make tough decisions; tuition fees were frozen for a decade, and the province's utility charges absurdly low electricity rates. Government intervention continued on a large scale.
Despite toning down his fiscal conservatism slightly this campaign, Mr. Dumont nonetheless pledged to ease labour regulations, balance budgets, pay down debt and cut taxes. He is in favour of raising tuition fees and hydro rates. And he addressed what he called "the major problems of Quebec society," which few politicians would have dared to do a few years ago.
Calls for tighter fiscal management and controls have slowly emerged recently; each year, the message seems to get a bit more palatable. Lucien Bouchard was all but hounded out of the PQ because the tough medicine he tried to deliver as premier was unacceptable to the left-wing 1960s idealists who form the core of the party.
Liberal leader Jean Charest found stiff opposition to his 2003 campaign pledge to cut taxes, shrink government and cut corporate welfare once in power, and he shrunk away from his promises. Two years ago, a group of 12 prominent Quebec citizens calling themselves the "Lucides" -- including Mr. Bouchard -- urged Quebecers to face the unpleasant fiscal realities. Now, that message has been heard, after Mr. Dumont delivered it across the province in ways that seemed to get through to the average voter. So, now what?
The ADQ will undoubtedly push Mr. Charest to table "a right-wing budget," Mr. Leger said, with more tax cuts and money for health and education. A strong show by the Conservatives in the coming federal election in Quebec would likely bolster the cause for change.
Beyond that, however, Quebecers should gird for an epic battle. Change is harsh and controversial and bruising, as fiscal conservative reformers from Margaret Thatcher to Mike Harris learned.
Claude Montmarquette, a University of Montreal economist and member of the Lucides, said, "If we have two voices, instead of one [bringing the message], it will be easier to do."
The prospect of two effigies burning, instead of one, may spread the political pain, for Mr. Dumont and Mr. Charest.
From his perch at the frontier of the globalization movement, Mr. Verreault sees that they have little choice. "People used to be protected by government.
Today those barriers are gone. I don't think the government has done a good job explaining that to people.
ssilcoff@nationalpost.com
© National Post 2007
PING!
Gimme a Molsons.
One virtual Molsons coming right up.
MMMmmmm. That was good. I hope it was good for you too.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
I usually drink Ex when I'm in Quebec. For some reason Molson's beers made in Quebec are better than those produced elsewhere in Canada. Well, that's my story for why I drank so much of it when I was skiing in Quebec last month, anyway :)
Which stresses how strange it is that on a conservative forum (FR) there are only 7 posts on this subject/thread.
8-)
Come on down to the Lake of the Ozarks in Missouri this summer and I will show you mass consumption. I'll find a couple of good beers to serve, too.
I'll raise a glass! Cheers. The Libs, the Bloc, the NDP, the Greens are all in disarray. Here is to a Conservative majority. I can hardly wait for that live thread.
Bump to that!
Creemore Springs is a favorite of mine. Very tasty. Possibly too good for large scale consumption, although at regular beer prices...
Blech. And I don't believe it, either. I rarely see anyone drinking Bud. The American beer I do see especially younger people swilling all the time is Coors Light - which I also prefer over Budweiser. Neither is very good, though, IMO.
Blech is right, Buttgeiser is the #1 beer?
Quebec is more a province of Labatt.
In another week, the election will be forgotten, and others will resume explaining to you that Canadians (or, in this case, Quebecois) are socialist.
The LIEberal party of Quebec is not conservative by any stretch of the imagination. Action Democratique is centre-right. Charest is a former federal PC leader who defected to lead the Quebecois LIEberals, and the PC's were middle-left masquerading as right.
I'm pleased that the PQ were trashed in this election, but let's not exaggerate the results.
Coors Light is the number 2 selling beer in Canada. Bud is number 1. Labatts contract brews the bud and Coors owns Molson.
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