Can we afford a strong health and social service system? – Part 2

When it comes to investing in public services, the political class is quick to dish up the same old phony pragmatism: there’s no money in the coffers (apart from the occasional band-aid measure) and money doesn’t grow on trees. In the first article in our series “Can we afford a strong health and social service system?” we looked at the state of public finances to rebut the first claim. This time we consider the revenue sources our government could draw upon to ensure better funding of the public health and social service system.

When it tabled its budget on March 21, the Legault government delivered on its promise to lower taxes. This vote-chasing move, which will deprive the Québec state of $1.7 billion annually, is twice as advantageous to the wealthy as to middle-class taxpayers. With this ill-advised budgetary move, the government has voluntarily reduced its own revenues. From here on in the government will be even less equipped to ensure funding of services for Quebecers, which will mean greater reliance on private service providers. Citizens will have to pay directly from their pockets for services they can no longer receive free of charge, funded by their taxes.

Citizens will have to pay directly from their pockets for services they can no longer receive free of charge, funded by their taxes.

Yet there were other budgetary approaches the government could have pursued to meet the challenge of rebuilding the health and social service system, which includes improving employee working conditions. There’s a shortfall of nearly $1 billion between actual funding in 2022-2023 and what should have been injected into the system to ensure access to quality services.¹

Rather than cutting taxes under the pretext of mitigating the effects of the inflation crisis, the government should be more concerned with increasing its budgetary leeway in order to truly meet the needs of Quebecers. Fortunately, there are many ways to do this.

Stop putting money in the Generations Fund

Suspending payments to the Generations Fund would be a good place to start – not just partially, to fund tax cuts as the CAQ government did, but completely, in order to redirect the money into funding services for Quebecers. Think that might be irresponsible? The fact is, the Fund has reached and even exceeded its initial debt reduction targets, which leaves nearly $4 billion that could be redirected elsewhere!

Stop overcompensating physicians

Consider too that Québec currently overcompensates physicians by as much as $1.5 billion, but still can’t manage to give every Quebecer access to a family doctor. The CAQ promised to deal with this problem back in 2018 by recovering roughly $1 billion. Seven years later, a meagre $149 million has been identified in recurring savings.² So we still have a long way to go. Unfortunately, the government capped its ambitions at $240 million in final savings, thus failing to remedy either the unfair overcompensation or the inadequate allocation of resources to health and social services.

There’s a shortfall of nearly $1 billion between actual funding in 2022-2023 and what should have been injected into the health and social service system to ensure access to quality services.

A bold approach to taxation

At a more basic level, the government should also reform the tax system in order to generate new revenues and control its spending. The Coalition Main rouge, to which the APTS belongs, has identified $14 billion in potential new revenue streams. This money could be used to provide better funding for services, improve working conditions for employees, and reduce social inequalities. Abolishing the capital gains tax credit for individuals (except on property designated as a principal residence) would save the government more than $1 billion annually, as would a review of fiscal measures for businesses. And the fight against tax evasion and tax avoidance would give increase Québec’s revenues by nearly $700 million per year.

We think these various proposals are all a better way to ensure a successful reform of the health and social service system than the premier’s populist tax cuts!

Source of the figure: APTS, Les clés d’un budget profitable à tou·te·s, brief submitted to Finance Minister Éric Girard as part of the 2023-2024 pre-budget consultations, 2023.

To learn more about APTS demands at the pre-budget consultations, read our brief Les clés d’un budget profitable à tou·te·s.

Can we afford a strong health and social service system? – Part 2