Quebec's move to a social democratic society includes subsidized day care.
OTTAWA – Quebec could be headed for a fiscal collapse similar to that now faced by Greece if it does not re-examine its social programs, says a new study by the Institute of Marriage and Family Canada.
"There are real reasons to be concerned about the sustainability of the rather ambitious Quebec welfare state," say the authors of A Quebec Family Portrait released Nov. 7.
"Without substantial fiscal restructuring, the province may not be able to afford to maintain the extensive social benefits it currently offers families."
Quebec's debt-to-GDP ratio is 94 per cent, according to an estimate by the Desjardin Group, putting it right behind Japan, Italy, Greece and Iceland, the study says. Canada as a whole is not doing well either, with a 69.7 per cent ratio and ranking 13th.
"Since the Quiet Revolution in the 1960s, Quebec has embarked on a radical experiment in social and economic transformation, which has changed the face and character of that province forever," say the study authors, Paul Malvern, Andrea Mrozek and Catherine Benesch.
"Many areas of Quebec life have shifted and family life has changed dramatically as evidenced by lower marriage rates, higher rates of cohabitation and low fertility rates."
In 50 years, Quebec has gone from being a traditional, religious society with an agricultural and resource-based economy to "a modern, secular, social-democratic state modeled upon Western European lines with a highly diversified and increasingly high-tech economy."
The authors say reformers created a "large and highly-interventionist state that reaches into all aspects of society" to accomplish such radical social change.
"From the beginning, this state has sought to change the way Quebecers live, work and think - by promoting greater equality and inclusion and by imposing an uncompromising secularism (that at times has smacked of intolerance towards religion and traditional modes of living)," they write.
Quebec has "often led the way" in wealth redistribution and the development of innovative social programs. For low-income Quebecers, the highly progressive tax system is a blessing and as many as 40 per cent of Quebecers pay no income tax at all.
The study did note some positive signs.
One is an increase in the fertility rate to 1.74 children per woman in 2008, although that is still well below the replacement rate of 2.1.
Another is good education outcomes relative to other provinces, although the authors say these show signs of slipping.
A third is the indication the province fared better during the recession than other provinces.
However, it did cite a number of worrisome trends.
Those trends include: the highest tax rates in Canada; the lowest marriage rates - only 2.9 per 1,000 people compared with the 4.4 rate for the rest of Canada; the highest cohabitation rates – 34.6 per cent compared with 18.4 in the rest of Canada; and a coming demographic winter as the Quebec population is aging more rapidly than elsewhere in Canada.
Quebecers also increasingly depend on government to raise their children, the study says. The provincial day care system now has 50 per cent of children in institutional day care, up from 10 per cent in 1994.
The authors warned that unless Quebec restores a marriage culture, families will find it harder to recover if austerity measures bring cutbacks to programs they depend on.
"If the Quebec experiment in social engineering is ever to unravel, the cause will almost certainly involve fiscal woes flowing from the constant need to refill government coffers, combined with the same low fertility levels experienced by most Canadian jurisdictions," the authors say.
"Still, in some ways, Quebec's family portrait is not that different from the rest of Canada, only further along the road."
The study is available at www.imfcanada.ca.