Prologue

Though hearings began last year, in the midst of the Maple Spring, revelations regarding dubious links between the construction business, the mafia, and political party funding started making steady headlines in 2009, thanks to investigative journalism at Radio-Canada (Enquête), La Presse, Le Devoir, and the bygone Rue Frontenac.

A public inquiry was first requested in April 2009 by Sylvie Roy, a MNA elected under the banner of the ADQ, now dissolved into the CAQ. The Liberal Party was in its third mandate, and Jean Charest had absolutely no intention of giving in. Over the course of two years, he consistently refused to set up a public inquiry, favouring instead the formation of police squads. First came Marteau in October 2009, then an anti-collusion unit (UAC) within the Ministry of Transport the following February, and finally UPAC a year later to oversee both and to coordinate other (non-public) inquiries.

Act I: Duchesneau

The inquiry was finally set up in 2012. When former head of UAC Jacques Duchesneau spoke of a 70% rate of dirty money in provincial party politics, everybody thought the figure too big. It was simply outrageous: it must have been an exaggeration!

His first coup de théâtre had been to leak his report as head of UAC because he was concerned that it would never be made public otherwise. He repeated his conclusions —adding the literally incredible figure— at the inquiry, under oath. With this spring’s revelations, columnists have started writing that it might not be such an exaggeration.

It is worth pointing out that after being the inquiry’s first star witness in June 2012, Duchesneau ran for the CAQ in the following August’s elections. He is probably now the most prominent MNA of the new right-wing party.

Act II: Zambito

Jean Charest had timed his final bid to be reelected premier so that the elections would be over before the inquiry’s hearings started again in the fall of 2012. He might have lost his gamble, but after initial discussion of the Italian mafia’s different factions and modes of operation, it became clear that Charest had no other choice. Lino Zambito took the stand and implicated public servants, engineers, the former head of Montréal’s executive committee, as well as past Liberal ministers.

Construction entrepreneur Zambito joined Montréal’s mafia-led sewage cartel. He explained how collusion was facilitated by some of the city’s public servants, who shared privileged information about upcoming contracts and approved false extras in return for cash and other forms of gifts.

During the course of the fall, with testimonies from a number of public servants, it became clear that business was conducted in the public sector much as it was in the private sector, with the public servants seen as “donneurs d’ouvrage” (owners providing work) to be cajoled. City employees showed little allegiance to their true employer, the city of Montréal, as presiding judge France Charbonneau frequently pointed out.

Zambito also revealed that a fake billing scheme was necessary to provide cash to engineering firms. This spring’s testimonials confirmed that political parties were the money’s final destination. Construction entrepreneurs, to maintain good relations with the provincial government, were also attentive to ministers’ needs, delicately underscoring for instance then-deputy premier Nathalie Normandeau’s fortieth birthday by sending a bouquet of forty roses to her office. How touching!

Act III: Montréal

Witnesses from all hierarchical levels at the city of Montréal paraded before the commissioners, all the way up to former head of the executive committee Frank Zampino and former mayor Gérald Tremblay. Both claimed their innocence, in very different atmospheres, but the overall picture we are left with is that Zampino was the mastermind, closely involved in the contract-splitting schemes for both construction and engineering firms.

Zampino’s sidekick appears to have been Bernard Trépanier, chief fundraiser for the mayor’s political party, the now-dissolved Union Montréal. People in the industry called him “Mr. Three Per Cent” for the tax he collected on contracts granted to firms, but party officials say there were no such kickbacks. A number of witnesses have suggested that Trépanier just pocketed the money for himself.

As for mayor Tremblay, he probably did not know, but also did not seem like he was trying to. A plausible hypothesis links his hands-off attitude to his former position as minister in the provincial government, a job much less involved in day-to-day operations than that of mayor.

Act IV: Laval

Next up was Laval, Québec’s third largest city, the island just north of Montréal. The Commission turning its gaze onto Gilles Vaillancourt’s kingdom effectively put an end to his twenty-year near-dictatorship. Again, the contract attribution process was rigged, but this time, the mayor was in full control. He has even been accused of leading a criminal organization under gangsterism charges!

In addition, Vaillancourt’s legal adviser testified that virtually all of the city counsellors —the entire council was under Gilles I’s control— had received cash (collected from engineers) to reimburse their political contributions. The revelation of this large-scale “prête-nom” or frontman scheme led to Laval being put under trusteeship because Vaillancourt’s successor had participated, like the vast majority of the current city council.

Provincial scenes

The issue of provincial-level political contributions was broached upon many times. Engineers explained that they were contacted by fundraisers from both major parties (the Liberal Party and the PQ). The widespread frontman scheme required for sectoral financing was first documented by Québec solidaire in March 2010 and is now investigated by the Chief Electoral Officer (DGE), which believes it could reach $13M.

What the construction business has to gain by funding provincial political parties remained nebulous until party organizer Gilles Cloutier came to the stand. Engineer after engineer explained that they contributed to municipal elections to get contracts, but when questioned regarding their contributions at the provincial level, they all referred to a vague notion of “just in case”. No collusion at the Ministry of Transport, they all said, singing to the eerily same tune.

Cloutier detailed the specifics of the “networking” opportunities offered by a governing party’s fundraising events: participation provided privileged access to ministers, who had the power to accelerate bureaucratic processes. Hence, Cloutier got engineers to come to his events by telling them that they could lobby on behalf of their municipal clients, making sure that grant would go through, or to get that long-awaited environmental permit. Access to decision makers in turn gave engineering firms a competitive edge when vying for municipal contracts.

Act V: Québec?

It’s not as big as the corruption we’ve seen in Montréal and in Laval, but it still is damaging to both the Liberal Party and the PQ. And that’s just what we know so far. Indeed, the perks of participating in fundraisers —just a 5-minute chat with a minister?— don’t seem to be worth all the money that was being pumped into provincial parties, not to mention the fact that engineers were solicited for donations outside of events as well.

For further inquiries into the provincial ramifications of sectoral financing, we’ll have to wait next fall: the Commission breaks for the summer in a week’s time. However, engineers mentioned that the same sort of fake-billing used at the municipal and provincial levels provided cash for the federal level.

Illegal funding and the favours to be expected in return are thus far from being Québec-specific problems. When will Canadian investigative journalism uncover enough to force a federal Charbonneau Commission? Or is this not being questioned elsewhere because it’s legal? To be continued in our next post…

This article was written by Marie Léger-St-Jean, research associate at IRIS—a Montreal-based progressive think tank. 

So with all of this talk about populations, thresholds and signatures, it is perhaps an opportune time to both recognize the tremendous efforts of the organizers of the petition and to also question the current referendum system as currently constituted. Indeed, contrary to the City’s recent request, if anything the threshold for signatures should be lowered. 

To briefly summarize, the Regina Water Watch Coalition seeks to force a City-wide referendum on the proposed Private-Public Partnership (P3) for the City of Regina’s new wastewater treatment plant.

(I do not want to dwell here on the wealth of evidence that illustrates all of the potential flaws of the P3 model, which has been forcefully argued by others, for instance see here and here).

In order to force such a referendum, petitioners are required under the Cities Act  to gather signatures equalling 10 percent of the population of the city requesting the referendum. For the City of Regina, with a 2011 census population of over 193,000, petitioners are thereby required to gather close to 20,000 signatures in order to initiate a referendum.

That all seems pretty straight forward. Of course, the threshold for initiating popular democratic mechanisms such as referendums or recalls should be high so as to ensure we are not inundated with regular votes on every conceivable issue. That’s why we elect representatives. However, with the wastewater issue potentially triggering the first City-wide referendum in almost twenty years, is the threshold perhaps too high?

There are reasons to question the current rules of the referendum system as currently constituted. The most compelling is that the only persons that can currently sign petitions for referendums (and vote in the subsequent referendum) are adult citizens who are residents of the City. If that is the case, then shouldn’t the threshold for initiating a referendum be a percentage of voters rather than total population? Depending on who you consult, Regina is thought to have between 193,000 to a little over 200,000 persons residing in the city. But according to last year’s municipal elections, only 158,315 of them were registered voters. Ten percent of that number would be a little under 16,000, a number already far surpassed by the Regina Water Watch petition. To put it another way, with only 51,103 votes cast for mayor last year, if the Water Watch petition was a mayoral candidate, it would be running a close second to Mayor Fougere’s 21,685 total votes in the 2012 election.

It seems disingenuous to base thresholds on total population, but then restrict who can actually participate to a smaller segment of that population. The current system should either base its thresholds on the persons who can actually vote, or better yet, allow all residents of the City – regardless of age or citizenship status – to have a say in what happens to their city.

Simon Enoch

6. Consume more intelligently

To curtail consumption costs whilst still ensuring improved food quality, Alternatives économiques suggests reducing the number of intermediaries between clients and local food producers. Indeed, we must encourage the large-scale implementation of organic baskets and public markets. In addition, collective gardening allows for greater individual autonomy in the face of the food system’s hypercommodification.

Nonetheless, modern life requires consuming much more than just food. A major part of personal income is geared towards buying a myriad of objects which, be they expensive or cheap, have an insignificant lifespan. Yet public authorities have a lever with which they can operate on planned obsolescence. Indeed, Alternatives économiques suggests forcing longer warranties (5 to 10 years) to apply to expensive products. This simple proposal seems like the best protection against ever more widespread built-in obsolescence. So good is the idea that it seems surprising that we don’t hear more about it.

7. Reduce working time

Europe has experimented a lot to reduce unemployment rates and stimulate job creation. At the beginning of the 2000s, Germany reduced its minimum wage to allow companies to hire more employees. As a consequent, the country’s working poor numbers increased. The Netherlands encouraged the development of part-time jobs. In practice, the policy fostered considerable gender inequalities because women are now stuck in part-time jobs whilst men benefit from stable jobs.

France introduced the 35-hour workweek between 1998 and 2002 to spread out the workload. According to Alternatives économiques, it created of 2 million jobs between 1998 and 2001 and increased the overall payroll amount by 20% without lowering companies’ profits. However, this model generated much dissatisfaction amongst disgruntled workers whose income dropped when their workweek went from 40 to 35 hours.

To avoid such problems, the magazine suggests changing the timescale: reducing working time by 10% not on a weekly basis, but over a number of years. Hence, for each 5 years of work, an employee would be granted a 6-month sabbatical leave.  This proposal has the advantage of better responding to the aspirations of workers who would like to travel more or need a bit of a rest, especially as retirement is being pushed back in Canada.

IRIS asks, as does André Gorz: why choose? Why not cut back working time by 10% for everyone and leave it up to companies and their workers to implement it according to their own needs and capabilities? Who cares if it’s by the week, by the month or on a yearly basis?

8. Fight inequalities from below

To bridge the gap between the rich and the poor, Alternatives économiques suggests using taxation: tax the wealthiest to directly improve the lot of the least well off. The idea is far from new and seems hard to implement in Québec, as demonstrated the Parti québécois government last fall. In fact, Statistics Canada’s most recent data clearly shows that the highest earning 1% are bringing in more and more money but paying a diminishing share of taxes.

Alternatives économiques asks if we shouldn’t instead focus on the bottom of the social ladder. IRIS has recently shown that Québec social welfare’s lack of generosity blocked out beneficiaries from the means of getting out of poverty. But where to start? Should we concentrate on welfare, should we go further? In a recently published brochure, our colleague Eve-Lyne Couturier reviewed guaranteed income plans: their main advantage is to benefit everyone whose income is too low to make a decent living.

9. End tax avoidance

In a context of diminished revenue, we cannot allow for the income of the wealthiest to disappear abroad. As a recent collaboration between big media outlets from around the globe revealed, tax havens are a central component of today’s world economy.

According to Revenu Québec, tax avoidance robs the province of $3.5G annually, an imposing number considering its budget. Both Québec and Ottawa have increased efforts to nail culprits, but the priority seems set on catching tobacco smugglers and small restaurant owners. That would be truly worrying. Obviously everyone has to pay their income tax, but isn’t the government of Québec letting the big fish get away by concentrating on catching the smaller ones?

10. Control public spending

As mentioned with regard to healthcare in the previous post, if revenues stagnate, public spending cannot increase too quickly. Alternatives économiques is far from promoting austerity, but it maintains that certain government expenditure items should be reviewed.

In Québec, new public administration policies significantly increase surveillance and index production structures. As public entities freeze hiring staff responsible for offering services, they employ a greater number of managers to measure what the former do. This is where obsessing over management leads to: forgotten public service primary mandates and increased public spending.

Alternatives économiques tackles the issue of French spending in national defence, which also arises in Canada. Is foreign military intervention the priority? Investing in expensive war equipment is even harder to justify when facing the perspective of degrowth and stagnation than it is in a period of growth. If on top of that investments come with an aura of waste and scandal, they become simply indecent.

Conclusion

All in all, there is no shortage of ideas: we can definitely think outside the box of growth. Obviously, the preceding suggestions are for the most part little explored research avenues. We stand to gain much from discovering them more. This perspective allows us to start thinking without growth, and that’s what’s most important. It removes the old ‘continual growth of income’ reflex when conceiving and evaluating public policies. That’s certainly more easily said than done, but if we start now, we just might eventually get used to it.

This article was written by Simon Tremblay-Pepin and Bertrand Schepper, researchers with IRIS—a Montreal-based progressive think tank. 

Fittingly, the French periodical Alternatives économiques published this month a feature entitled “A better life without growth” which brought to the fore 10 proposals towards improving our lives now that the end of growth is either desirable, either inevitable. These suggestions are very interesting, easy to implement, and more people should hear about them really. They are meant to decrease individuals’ expenses in order to lessen the urge to accumulate money. We will go over each one and adapt it to the situation in Québec.

A word of warning before we look into these different avenues. The term degrowth is sometimes understood as ‘gross domestic product (GDP) reduction’. We prefer a different understanding, one rather like agnosticism in the face of the ‘growth at all costs’ economic dogma. The point is not to harbour hatred towards an indicator that others celebrate. On the contrary, we suggest rethinking economics beyond the GDP growth imperative. Some of the public policies presented below could very well increase the GDP whilst others could have either a negative or a neutral impact upon it. However, we are not concerned with such calculations here. We wish instead to understand how to lead better lives in a world with finite resources without further destroying it.

1. Decrease accommodation costs

In a context in which the relative revenue is fairly stagnant, we can no longer forge ahead without acting upon expenses. Alternatives économiques reminds us that in France one of the greatest household expenditures is accommodation costs. Québec is no different: according to the Institut de la statistique du Québec (ISQ), home-owners spent 17% of their revenue on their lodgings in 2009 whilst tenants spent 21%. A study authored by IRIS has shown that these expenses are especially consequential for those with the most modest means.

How can these costs be cut in Québec? A number of proposals have been put forward, some of which are detailed in the recently unveiled report of a popular inquiry in which took part one of our researchers. The people at Alternatives économiques suggest expanding the legislative control over rent prices to newly built housing. In Québec, rent increases should first be more tightly regulated. Currently, the Régie du logement’s guidelines are only suggestions carrying no legal weight. Consequently, average rent increases surpassed both inflation and the Régie’s guidelines up to 2012. The upward trend now seems to have slowed down. Is this only temporary? Is this a forewarning of major problems in real estate? It’s hard to tell.

Rental control is not the only means by which the government can reduce the housing expenditure-to-income ratio. For years, there has been talk in Québec of setting up a lease registry. It could reduce rent hikes when apartments change hands. To truly act on rent prices, the government should build social housing and perhaps even convert private rental housing into social housing.

2. Spend less on heating

If house heating is an important issue in France, it is a vital one in Québec. Heating is not just for comfort’s sake, it’s a matter of survival. Does that mean that we need to let heating go out the window, and money with it? How can we make sure that we don’t waste energy?

One solution seems obvious: to favour what the French call “thermal renovations”. In short, we should make sure that each and every house, apartment, office, and institution is well insulated and saves energy. For rental housing, the landlord or landlady has no direct incentive to undertake these renovations, since he or she does not benefit —financially or comfort-wise— from the renovations. It’s up to the state to intervene and encourage these renovations.

Energy waste is not only caused by badly insulated housing. There are also some people who do overconsume energy. They suffer little consequence given the relatively low price of electricity in Québec. IRIS suggested a few years ago to improve on the Hydro-Québec tariff escalation to do a better job at targeting spendthrifts. However, such a measure would be hard to implement without previous thermal renovations. Indeed, without them we face the risk of penalizing the worst off.

3. Transform cities

In Copenhagen, bicycle trips make up half of all transportation, claims Alternatives économiques. It has an effect on the environment, obviously, but also on household budgets and on people’s health. Living a simpler life also means decreasing (or putting an end to) car use.

Of course, initiatives like Montréal’s BIXI are a step in the right direction, but we have to do more and it really isn’t that expensive. Alternatives économiques suggests limiting the maximum speed downtown to 30 km/h and re-organizing zoning to prevent megastores from developing.

Creating new bike lanes and ensuring that they are secure could be added to the list in Montréal. And while we’re at it, why not develop a coherent system throughout the cycle network? It should well-built, well-marked, and well-indicated. And why not throw in a website and a smartphone app to make the whole thing even easier to use? There are many bike paths in Montréal that remain completely unknown to a number of cyclists. Dare we add that the snow could be cleared from the lanes and paths in the wintertime? But we should be mindful that it could lead to rows.

Recently a one-way electric carsharing pilot project was launched. It’s probably another step in the right direction. Yet wouldn’t it be nice to transform more streets into pedestrian malls (Saint-Denis between René-Lévesque and Sherbrooke or Sainte-Catherine between Berri and Papineau — both arteries are already closed off for most of the summer)?

In Québec’s other cities, is there no way to intelligently develop and encourage both public transit and active commuting? If there are no viable alternatives to the car, people certainly won’t voluntarily forsake it. We’ll also need to look into how inter-city transport networks —currently in the hands of regional oligopolies— can be cheaper and more functional, but that’s a debate for the longer term.

4. Curb healthcare expenses

If we’re gonna leave growth behind, we also need to forsake state revenue growth. If that’s going to be the case, we can’t allow health costs to explode. Yet it’s happening worldwide: in Québec, in Canada, in France, and in the US. How can we reduce those costs?

In Québec, IRIS and others have been suggesting for a long time that we should tackle the cost of prescription drugs, which are the highest-increasing healthcare costs. Is a universal drug plan a good idea? Probably. What about a public entity in the drug sector like the one called for by Québec solidaire and Option nationale? Probably another good idea: it should certainly be researched more extensively.

Yet let’s be clear: even if drug costs increase rapidly, they’re not the most significant expenditure in healthcare. Doctors and hospitals, now that’s what’s most expensive. The people at Alternatives économiques face an important taboo: physicians’ pay. Isn’t it time for Québec to tackle it as well? The fee-for-service pros and cons should certainly be thoroughly outweighed and alternatives considered further.

Unsurprisingly, Alternatives économiques brings up the topic of prevention. But everyone is in favour of motherhood and apple pie, that’s the problem. In Québec, how many governments have already announced that they were allegedly shifting to health prevention? To truly prevent diseases, the government has to take action in areas in which it generally refuses to take up too much space: the production of goods, industrial agriculture and its harmful effects, housing quality matters, etc.

5. Break down monopolies and oligopolies

Alternatives économiques denounces the way major players can impose their prices onto consumers through lack of competition. The authors speak of a monopoly in distribution in France. In Québec, the same applies, particularly in the food sector.

However, the truly damaging oligopolies in Québec are probably those in telecommunications and in banking. A few big players bring in big bucks at the expense of small consumers. With regard to telephony, Canada is one of the most expensive countries worldwide for cellphone plans. When it comes to the cable sector, Québec is home to private regional monopolies (Cogeco and Vidéotron), the worst combination ever: a single player, with the sole goal of making money, and captive customers.

On the banking side, listing all the disadvantages of the sector’s oligopoly would be too long: let’s just mention constantly increasing banking fees, interbank ATM service fee agreements, constant pressure to increase credit, a decisive influence on economic policies, prohibitive credit card interest rates, etc. That being said, the alternatives to the banking oligopoly are not easily found nor implemented in the short run.

This article was written by Simon Tremblay-Pepin and Bertrand Schepper, researchers with IRIS—a Montreal-based progressive think tank.

It is worth first remembering that, in 2012, the people of both France and Québec rid themselves of right-wing governments and replaced them with centre-right (or left-wing neoliberal) political parties. In both cases, a fierce debate regarding rich tax exiles ensued.

In France, the controversy led Gérard Depardieu to play the pathetic role of the poor overtaxed rich man who has no other choice, we are meant to believe, but to live in exile. Complaining that the new François Hollande government had humiliated him, the famous French actor took refuge in a democracy where “success, creation, talent, anything different” are not “grounds for sanction”, i.e. Russia.

In Québec, the PQ government was initially resolved to increase taxes for the wealthy, but that only held for a few days. Soon enough, Minister of Finance Nicolas Marceau returned to being “reasonable” and limited the scope of a measure which would have rendered income tax more progressive.

However another debate was opened up on both sides of the Atlantic in the wake of Depardieu’s follies: the one regarding film funding. Producer François Maraval stepped into the polemic in which the Russophile actor was already bogged down and denounced French actors’ excessive pay.

According to the figures he disclosed, a well-known French actor would receive a fee between €500,000 and €2 million when shooting in France, but would generally settle for a much smaller fee, between €50,000 and €200,000, when he appeared in an American movie, though the market is considerably larger.

Maraval claims that it is futile to place the blame on actors, but urgent to change the system which makes possible such excess. The money being pumped in and directed to renowned French actors comes from the indirect subsidies of private TV channels, he says. In France, it is mandatory for “television services” to invest 3.2% of their sales figure in film production, a legal disposition which stems from the idea of a “cultural exception”.

Producers absolutely have to submit themselves to the requirements of this unusual source of funding. Otherwise there would not be enough money to bring film projects to fruition. The biggest names in the game must be cast so that once a movie leaves the big screen and appears on television, audiences tune in.

Producer and distributor Maraval considers that though TV channels’ contributions should not be abolished, actors’ income must be capped. If they are not, movies will keep on costing too much, he believes, and even French films which are met with great success will still fail miserably from an economic standpoint.

Just as Depardieu was moving East to Mordovia, where he will peacefully continue his “personal degeneration” as Mordovian minister, ironically nearby the prison camp where is held one of the Pussy Riot singers, the debate regarding film funding travelled West and entered Québec.

*****

In the past, Québec has developed policy to support the cultural scene in the name of the principle of cultural exception and film industry support was considered within this context. In the last year, some have put into question this approach entirely.

Mr Vincent Guzzo, president of both Cinémas Guzzo (a greater-Montréal mainstream movie theatre chain) and the Association des propriétaires de cinémas du Québec (APCQ), first expressed concerns about Québec cinema at the end of 2012. Mr Guzzo renewed the attack in 2013, armed this time with a poll which allegedly proved that Québec movie goers wanted to see more jokes on the province’s silver screens.

According to Mr Guzzo, the problem with Québec movies came from this incurable propensity to produce “whiny” movies instead of movies “people want to see”. That, at least, is the line of argument he was pursuing in January in the capital’s tabloid, the Journal de Québec:

“The people of Québec, they say that they’re sick and tired of their everyday problems and preoccupations and, when they go see a movie, it’s to be distracted and to forget about their daily lives for two hours. […] Too many similar movies are being made. We’ve forgotten that cinema is a popular art form. It’s neither a painting by Picasso nor the Grands Ballets canadiens [Montréal’s ballet company].”

Vincent Guzzo rested his crusade upon the 2012 sales statistics for Québec cinema and its 4.8% market share, the lowest percentage since 2000. It is indeed much lower than the 13% achieved in 2003, the year of the irresistible Seducing Dr Lewis and the unstoppable Barbarian Invasions. But it is also twice the level of 1991 (2.7%). In any case, there is no evidence that the last year’s result is part of a downward trend.

The following graph shows how the share of moviegoers coming in to watch Québec films evolved since 1995 (the 2012 decline is missing from this graph).

Source : Observatoire de la culture et des communications du Québec, Statistiques sur l’industrie du film et de la production télévisuelle indépendante, p. 37

The upward trend over the entire period is quite obvious. As a point of comparison, in Canada, the share of domestic English-language films barely exceeds 1% of the market. Maybe “whiny” Québec cinema isn’t that unpopular after all?

Many stakeholders stepped up to the plate and replied to the president of the APCQ. Amongst these, director Philippe Falardeau (Oscar nominee Monsieur Lazhar) responded more specifically to the accusation of wasting “taxpayer money” in “grant movies that are always complaining about something.” His rebuttal was rigorously logical: (1) it’s impossible to predict what will become a commercial success (and thus what “people want to see”), (2) big productions are not profitable even though producers and distributors earn a lot of money, and (3) all movies receive grants, from the smallest to biggest productions, and sometimes, it’s the smaller productions that end up costing less to the taxpayer.

From a strictly financial point of view, he adds, Mr Guzzo’s logic would have led to make the mistake of refusing to fund the scenarios of Incendies and Monsieur Lazhar, two projects which ended up being lucrative. And that does not even take into account the fact that Québec cinéma is far from having wasted its year 2012 by standards which lie beyond the box-office. Indeed, the last year could even have resulted in a greater international esteem.

Marc-André Lussier, a film journalist for the Montréal daily La Presse, underscored the paradox, weakness in market share versus success in “personal” productions. The three consecutive years of Oscar nominations serve as a great proof in point, along with the log jam in good Québec movies at the Jutras, Québec’s movie awards. The celebrated Bernard Émond’s latest movie (All That You Possess) was only nominated in one category and Évelyne Brochu was not even nominated for her stunning performance as lead actress in Inch’ Allah because the competition was too strong. The same assessment applies to documentaries.

In contrast, the Société de développement des entreprises culturelles (SODEC), without being as ridiculous as Mr. Guzzo, used the term “yellow alert” following last year’s crop of Québec cinema. The public corporation had in fact already revised the evaluation criteria for films. If it had not, Rebelle, which represented Canada at the Oscars this year, would have be classified as a “failure” with its $150,000 box-office receipts.

In April, the Ministry of Culture asked SODEC to set up a working group to tackle the issues and challenges of Québec cinema. The leading figures designated to sit on the committee will have until the fall to reflect. The group’s lack of representativity fuelled some critiques whilst some regretted that the group was not mandated to thoroughly revise the Cinema Act.

*****

Back in the days of René Lévesque and the first PQ government, Québec moviemakers thought that they could found their own variant of the Third Cinema, a sort of non-aligned cinema (independent from both Hollywood and European cinema). They were inspired most notably by Argentine filmmaker Pino Solanas. A presence of a nationalist government gave directors high hopes.

Despite a bill by Gérald Godin which intended, amongst other things, to establish a royalty on profits, threats of a boycott from the American film industry and the fast approaching elections persuaded the government not to act out and to refrain from using the tougher provisions of the new Cinema Act.

The Liberals won the following elections and, in 1986, vice-Premier Lise Bacon signed an agreement with Jack Valenti, CEO of the Motion Picture Export Association of America, yielding to the latter rights over the distribution of English-language films. This agreement sealed the end of Québec filmmakers’ dream of guaranteeing the development of auteur cinema, which becomes a secondary concern of the SODICC, the predecessor to SODEC, centered on entertainment and good old drive-ins.

Québec cinema still managed to survive, but the Valenti-Bacon agreement remains relevant to the current debate between Québec’s independent distributors and the concentration of big distributors in the wake of the recent merger between Entertainment One (eOne) and Alliance Films. The former claim that without support from the state, that essential link —distribution— would end up giving out, affecting the entire Québec production. In contrast, Seville Pictures (a Montréal-based eOne subsidiary acquired in 2007) defend themselves by ensuring that they will keep on investing in the development of Québec cinema.

To conclude, the analyses of some stakeholders calling upon Québec’s film industry to move more towards reproducing Hollywood formulas hardly hide their own interests and are show little consideration for its international successes. Québec cinema is nevertheless faced with a number of challenges and some mechanisms should certainly be revised, such as those which place control over film distribution in Québec into the hands of oligopolies.

The entire film scene, including in France, would be well-advised to keep an eye on the free-trade negotiations currently underway between Canada and the European Union, which could shortly be expanded to include the United States. Québec actually exerted pressure on France to keep an exemption in the texts of the agreement which are under negotiation. It would be surprising if the demands of film industry’s superpowers did not include dropping definitively the principle of cultural exception.

This article was written by Guillaume Hebert, a researcher with IRIS—a Montreal-based progressive think tank. 

Well the main change is that Bill 85 will reduce statutory protections for workers and undermine collective bargaining rights. That means that workers will have less protection in regards to work breaks, overtime, holidays, scheduling etc. In addition, given new employee categories contained in the legislation, many workers that were previously protected by a collective agreement may find that they no longer are.

Wait, this sounds very un-modern doesn’t it? When did workers in Saskatchewan last have the pleasure of not being protected by the eight-hour-day? That would be 1947,  a time most people would agree is not exactly “modern” (rural electrification would wait until 1949). Okay, so removing statutory protections for workers isnt really a modern idea, it’s actually pretty antiquated. What about Bill 85′s stance on collective bargaining, surely this must be a modern concept? When were Canadian workers last denied the terrible freedom to collectively bargain on their own behalf? That would be 1937, prior to the successful strike by the United Auto Workers at the General Motors’ plant in Oshawa, Ontario and prior to the invention of the colour television.

(Okay, granted Bill 85 is not overturning the principle of collective bargaining, it’s just restricting what workers will be covered by it).

But the thrust seems undeniable doesn’t it? This isn’t the modernization of labour relations – it’s a return to the past when workers enjoyed less protections, less rights, and less power in the workplace. The government’s proposed labour legislation could be called lots of things – antique, primitive, ancient, retrograde, even antediluvian – but modern certainly isn’t one of them.

Simon Enoch

Let’s start with a small yet important clarification: all mining royalty regimes must deal with the cyclical nature of metal markets, which periodically increase and then decrease. When metal prices are high, mining companies naturally tend to generate more profits than when prices are low. These fluctuations obviously affect royalties.

Profit-based royalties

Profit-based royalty regimes are rather simple. They levy royalties on corporate profits at the end of the year. Québec’s current regime, which has been in effect for a number of years, allows the government to claim 16% of mining companies’ profits. Such regimes have two aims:

1- To encourage the industry to invest, since as long as mining companies are only setting up shop and exploring, they do not have to pay mining royalties.

2- Not to penalize mining companies if the market price of mineral resources is low.

The regime however also brings a number of disadvantages for taxpayers, especially when resource prices are low. Furthermore, a host of tax measures in Québec ensure that mining companies pay much less royalties than they should, or that they don’t pay any at all.

Finally, when mining companies are not making any profits, they do not have to pay royalties and end up removing wealth from the ground without compensating the state. Québec’s auditor general criticized the situation by bringing attention for instance to the fact that, between 2002 and 2008, 40% of mining companies on average were not paying any royalties (p. 2-14 and 2-15). The situation did not improve in 2011, since half of operating mines in the province did not pay any royalties. Hence, this regime travesties the very essence of mining royalties, which should compensate future generations for no longer having access to the resources.

Another huge disadvantage is the fact that it is impossible for the state to keep track efficiently of the rhythm at which resources are leaving the land. Royalties should logically constitute an indication of the quantity of resource extracted, but this is not the case with profit-based royalties.

Ad valorem royalties

Ad valorem royalty regimes are also pretty simple in theory. First calculate the total value of metals and minerals the mining company extracted and then tax a percentage of this gross production value.

If, as suggests the Institut de la statistique du Québec’s estimate for 2011 (p. 6), the mining companies develop $8.2G, a 10% royalty rate on the production value would allow the province to benefit from $820M in royalties. As a comparison, in 2012, Québec received only $388M in royalties, and this was the highest amount levied in a decade.

Mining entrepreneurs consider this regime extremely disadvantageous since royalties are levied as soon as mining production occurs, without regards to profit. Hence, all operating mining companies pay royalties, even those which are operating at a loss for whichever reason.

For some, such a system would damage Québec’s “international competitiveness” as a mining jurisdiction since such a tax measure would “have a dissuasive effect” and discourage investment on the territory. However, from citizens’ point of view, it is a fairer regime which, in addition to minimally complying to the definition of what a royalty should be, gives the state a continuous income in exchange for private companies extracting and shipping public resources.

The PQ regime

The new regime tabled at the beginning of the week is a mixture of both approaches. The mining companies will have to pay the highest amount between the two following options:

- A tax on the “output value at the mine shaft head” (gross production value minus certain production and transformation expenses), with a 1% rate if the output value falls below $80M and a 4% rate otherwise.

- A progressive tax on the profit margin (“operator’s mining profit divided by its gross value of annual production”).

The regime should allow mining royalties to go up by 15% by 2020. The mining cycle could indeed have moved into the booming phase by then. The level of royalties will nevertheless remain below the rates which the PQ promised during the election campaign, i.e. 5% of gross production value in addition to a 30% tax on excess profit. The promised regime would have allowed to double the level of royalties.

On the plus side, the processing allowance will be enhanced to encourage the local processing of resources. To this is added a 10-year tax holiday for large investment projects, a measure which applies to primary, secondary, and tertiary processing projects within the mining industry.

Even though these are steps in the right direction, the government leaves the decision whether or not to transform in Québec within the hands of the private company. After a simple cost-benefit analysis, it will decide if the fees and tax incentives related to processing are more advantageous here or elsewhere. In contrast, requiring that a certain percentage of minerals be transformed on Québec land would have been a more efficient measure to ensure local transformation.

In the end, the PQ’s system certainly constitutes an improvement in comparison with the current regime, of which the premisses were laid in 1925. The new regime will allow the government to minimally collect royalties from all mines operating in Québec in addition to encouraging greater transparency regarding the amount of minerals extracted and the tax revenue generated. This regime nonetheless is far cry from what the PQ had promised and it ends up not being as fair as originally intended for the taxpayer.

It is also worth reflecting on how much a royalty regime reform can actually compensate for the costs associated with the environmental damage, both past and future, caused by mining activities. These costs cannot only be valued in monetary terms.

The present tax reform was obviously not aimed at questioning the suitability of Québec’s extractive model in the face of the current environmental crisis. It is nevertheless interesting to remark that the absence of such questioning in the public sphere is only symptomatic of a free mining regime: mining entrepreneurs are lords of the manor, any and all mining activities are authorized, and they considered to be the best way to use the land.

This article was written by Bertrand Schepper and Laura Handal, researchers with IRIS—a Montreal-based progressive think tank. 

For youth 15-24, it was up from last April – to 20.9% – so more than 1 in 5 youth are looking for work and can’t find it. In Ontario, it’s closer to 1 in 4, and in PEI it’s 1 in 3.

If we look at the participation rate of youth aged 20 to 24, we see that it’s actually fallen by 2 percentage points since the trough of the recession in July 2009. During the recovery, young people have been leaving the labour force.

The employment rate for the 20 – 24 age group in April 2013 was exactly the same as the employment rate in July 2009, and 4 percentage points lower than in October 2008. That represents a gap of nearly 100,000 jobs.

Considering the growing number of unpaid internships, which the U of T Student’s Union recently pegged as high as 300,000, the labour market is not a friendly place for young workers.

To top off the dismal labour market, our social safety net is failing young workers too. Only 13% of unemployed youth aged 15-24 qualified for EI in 2012. As usual, the coverage is worse for women who are more likely to be found in precarious employment. Only 7% of unemployed young women qualified for EI in 2012.

Unreal.

Angella MacEwen is a Senior Economist at Canadian Labour Congress and a Research Associate at the Canadian Centre for Policy Alternatives.

1. He’s Number Two: Stephen Poloz was widely acknowledged in economic and political circles as the second-best choice for the top job at the Bank of Canada. So the surprise was not that he was chosen. The surprise was, Why Not Tiff Macklem? Will someone please find out and tell the rest of us?

2. Doctrinaire [or not?] on Inflation Targeting: He thinks it’s “sacrosanct.” Having studied with monetary policy guru David Laidler at the University of Western Ontario, and been part of the Bank of Canada team that brought inflation targeting to a neighbourhood near you, he got the religion all right. Believers are more inclined to see a “rising inflation” problem that isn’t there. The hazard: Pulling the rising-interest-rate trigger too soon and choking off recovery.

But, like his predecessor Mark Carney, he thinks the central bank should continue being “flexible” on inflation targets. Which are “sacrosanct.” It’s a fine and fuzzy line, unknowable in advance – even to Mr. Poloz.

3. Willing to Commit Stimulus: A “stay the course” assurance is appropriate for Day One. The question is: For how long? For whose benefit? There is legitimate debate over what is more important guidance for setting interest rates – grease the wheels of commerce, or help steer away from over-reliance on borrowing? Raising interest rates have equivalently conflicting impacts: Helps savers and reduces pension liabilities, but slows economic expansion and job creation. Up, down or sideways, clear objectives for interest rate setting are helpful. (See the recent “dual mandate” clarity in the U.S. – unemployment has to fall below 6.5 per cent before the central bank stops stimulating the economy).

4. Not Willing to Commit Noise: “Great,” says Finance Minister Jim Flaherty. This may not last. Even Mr. Carney’s cross-talk with the government over pesky issues like “dead money,” soaring household debt and inequality came later in his mandate.

5. Hasn’t Committed Monetary Policy Lately: Mr. Poloz was part of the braintrust at the Bank of Canada that brought in inflation targeting (circa 1990). Since he left in 1994, monetary policy has become significantly more critical to global economic health – and more complicated. Quantitative Easing (QE) helps create inflation expectations in a system that is dogged by business’s ongoing “crisis of confidence,” a result of spluttering aggregate demand around the world. QE has hosed the global economy with a jaw-dropping $8.9-trillion, aimed at getting business to do more business. We’re told it can be “unwound” if it becomes inflationary. How and when, nobody knows for sure.

There’s something to be said for outsider thinking, and it’s true he is just one person in a vast machine of expertise. But Mr. Poloz has a lot of catching up to do. Or does he? Monetary policy isn’t just about what you do. It’s partly about what you say. The governor sets the tone. And the tone has just changed.

6. Trade, Not Aid: The mandate of the Bank of Canada is to stabilize the domestic economy. There are about 2.5 million businesses in Canada. Roughly 20,000 of them have multinational dealings. The Canadian economy relies on Canadians’ purchasing power, which drives 56 per cent of gross domestic product.

The Harper government has focused on trade as the way to save our collective economic bacon, rather than bolstering the domestic economy and consumer-led recovery. The Harper government also prefers trade over aidin international relations. Mr. Poloz’s background emphasizes trade and export-oriented businesses as the primary engine of the economy. Business isn’t the only thing that makes the world go round, but the government’s choice of Mr. Poloz strengthens this powerful message track.

7. Don’t Do Policy. Do Business: The Harper government keeps walking away from international policy initiatives on taxation, climate change,security, global health; the list goes on. Mr. Macklem was well connected to the international policy community through the G20 and Financial Stabilization Board. But Mr. Poloz brings a big Rolodex of powerful international business contacts to the game.

8. Too Much Focus on Business? Maybe. Time will tell. The bigger concern is maintaining an arm’s length from the concerns of the governmentdu jour. Independence and expertise is what’s really sacrosanct in central banking. There is an ocean of know-how at the Bank of Canada. This appointment makes that seem irrelevant. The antipathy to technocrats and expertise is a leitmotif with the Harper government. The concern is that this sidelining of the best and brightest at the central bank (and elsewhere) may trigger a brain-drain that hobbles the public service. Maybe that’s the point.

9. We Don’t Do Optimism, We Don’t Do Pessimism, We Do [Sur?]Realism: Mr. Carney was known for quip, but not spin. He didn’t shy away from naming the challenges facing Canada’s economy. From census cutbacks to silencing our scientists, there is a troubling trend to simply not reference problematic issues. Markets may be just as emotional as they are rational, but message control on thorny economic indicators like jobs, incomes and uneven growth won’t help decision-making.

Good luck Mr. Poloz. You’ve got a tough act to follow, and the role of your life to play. It will define an awful lot of stories along the way.

This piece was first published in the Globe and Mail’s Economy Lab

I commit sociology.

And not just as a one-off.

You might say—all right, I will say it—that I’m a repeat offender. In fact, I’m practically addicted. Scarcely a minute can go by without my synapses looking for their next fix.

That might not be a politically correct admission. After all, this is tough-on-crime Canada, where such wanton disregard for Father-Knows-Best-ology and doing the “right” thing (and not in that perilously-close-to-committing-sociology Spike Lee kind of way) seems almost, well, unpatriotic.

I have to admit that, recently, I tried to cut back for health reasons. I was concerned that my frequent indulgences were resulting in elevated levels of anxiety and an uncontrollable, (even pathological?) urge to flip though the latest report from the Parliamentary Budget Office—for fun, and some basic background information.

I know, right? Subversive.

So I figured some radical (whoops, sorry!)—immediate intervention might be required to take me from critically aware (boo!)…to certifiably, awesomely acquiescent (boo-ya!).

I PVR’d Don Cherry’s biopic Keep Your Head Up, Kid.

I made Canadian Weather my homepage.

I practiced saying “gosh, you’ll have to ask my husband” and “your father’s right, kids.”

But then while taking out the recycling the other evening I inadvertently read a newspaper headline and, wouldn’t you know it, I fell off the wagon. Just like that.

Turns out, I’m one of those people—maybe you are, too—who just can’t kick the habit.

It might have something to do with the “Question Authority” sticker that for years adorned the fridge in my childhood home (although I’m not sure if I just retroactively accused my parents of a thoughtcrime). Or the simple fact that mom (a teacher) and dad (a lawyer) were both professionally and personally invested in myself and my siblings understanding why things happen. Not just that things happen.

You know. Sort of like checking the list of ingredients and perhaps the “best before” date rather than assuming just because something’s on the supermarket shelf it’s good for you. After all, asking a few pointed questions is a basic skill that we teach kids as part of Streetproofing 101. Cause if someone says they’re a friend of your parents it ain’t necessarily so.

In spite of rumours to the contrary, committing sociology is not just a casual pastime of select and pampered pseudo-intellectuals. Questioning, analyzing, contextualizing—these are all fundamental responsibilities of citizenship, residency, and participation in democratic society.

People who commit sociology serve to disrupt those in positions of power who insist that (the official version of) history is seamless, that independent thought is akin to insubordination, that resistance (or, you know, critique) is, if not futile, at the very least suspect.

Inconvenient? Most definitely. But you know–I’ll take an inconveniently informed, questioning electorate over a sociologically-averse, easily-satisfied one any day.

You might say it’s something I’m committed to.