Saturday, April 3, 2010

Many protest bad news Quebec budget.

Raising taxes is probably much better than cutting services although increased fees often are regressive in that they are not related to income and may impact those with low incomes most. What we will likely see soon are more cuts to the social safety net plus an increase in income inequality as high post recession unemployment results in lower wages. This is from the Toronto Sun.

Thousands protest Quebec budget

MONTREAL - It was a sign of the coming fiscal storm: thousands of people poured into the streets of Montreal to protest Quebec's bad-news provincial budget and prompted a police intervention.

As governments everywhere try to tackle deficits after an era of heavy stimulus spending, Thursday's demonstration could be a warning of what's ahead in the post-recession era.

Police in riot gear fended off a crowd outside the Quebec finance minister's office.

Old Montreal's business district was awash in chanting, placard-waving demonstrators against a budget that will pile new costs on Quebecers, including a sales-tax hike and a historic health fee.

But Finance Minister Raymond Bachand was unapologetic in defending his budget, saying it's time Quebecers accepted that public services aren't free.

"Every adult benefits from the health system, perhaps every adult should pay for the health system," Bachand said Thursday after giving a speech to the Montreal Chamber of Commerce.

"Nothing is free."

The finance minister said he understands the public outrage, but predicted it will soon dissipate.

Bachand hopes his budget will impel a cultural revolution in the province, a change he insists Quebec taxpayers had better get used to.

The debt-ridden province is banking on new fees to pull its books out of the red.

Tuesday's budget hit Quebec's already tax-weary residents with increases to the provincial sales tax, fuel tax, electricity rates, and tuition.

The province will have the country's highest sales tax, jumping to 9.5 per cent in 2012 following another hike of one percentage point set for January 2011. That doesn't include the federal GST of five per cent.

No comments: