Commenting on a column on the wealth gap between Quebec and Ontario, a reader — Antoine Caron — approaches the issue from the angle of poverty. He emphasizes having read a few years ago that “the segment of the population representing 25% of the poorest in the United States was poorer than the same segment in Ontario, itself poorer than the same segment in Quebec.”
Canada uses the market basket measure (MBM) as the official Poverty Line. According to Statistics Canada data taken from the 2021 census, Quebec, with its score of 6.4% in 2020, was the only province where the poverty rate was lower than the Canadian average of 8.1%. In Ontario, it was 8.3%. “In Quebec, the cost of maintaining a modest basic standard of living was lower than that of other regions of the country,” summarizes the federal agency.
We can also approach the question from the angle of the minimum wage. In an analysis published at the beginning of May, the Research Chair in Taxation and Public Finance at the University of Sherbrooke (CFFP) concluded in its interprovincial comparison of the situation of households working on minimum wage that, relative to the coverage of needs basic, in the eight cases studied, it is in Quebec that the rate reached is the highest. “Except for the couple without children where only one spouse works at minimum wage, the resulting disposable income makes it possible to cover the cost of basic needs as measured by the MPC, therefore 7 times out of 8. Coverage of the MPC is 100% or more 6 times out of 8 in New Brunswick and 5 times out of 8 in British Columbia. This number of times is 3 or 4 in the other provinces,” she adds.
To paraphrase the Institute for Socio-Economic Research and Information, “in Ontario, the rich are richer while the poor are poorer and have more difficulty meeting their basic needs.” IRIS indicated in March that by adjusting income to the price level, we see that Quebec’s purchasing power is just above that of Ontario in 2022. There was therefore no significant difference between the two provinces last year in terms of living standards. He took up the approach of the economist Pierre Fortin consisting of going beyond the sacrosanct, but how limited, GDP per capita to adjust everything according to the difference in the price level between the two provinces.
International comparison
In a previous column on this theme, it was mentioned that in an international comparison the data will be adjusted according to a purchasing power parity index. The economist and professor emeritus of UQAM carried out the exercise of applying such an approach to the provinces, as can be done for the countries of the euro zone, to thus take into account the purchasing power differential of the Canadian dollar in the different provinces. What he called interprovincial purchasing power parity. Thus, instead of measuring a production gap of 14% favoring Ontario, we instead see that the purchasing power, even the standard of living in Quebec was higher than that of Ontario in 2022.
Moreover, IRIS had “fun” in addressing the productivity gap, which in official statistics appears to be lower and with lower growth in Quebec than in Ontario. In this comparison game, the Institute calculated what the productivity of Quebec’s workforce would be if the industrial structures were the same. “The result is clear: if the work carried out in Quebec was concentrated in the same sectors as Ontario and the Quebec workforce maintained its current productivity in each of the industries, Quebecers would be as productive overall, or even more productive. than Ontarians. »
Conclusion: “the comparison we make shows that it is not labor productivity that differs between the two provinces, but rather the configuration of the economy.”
More broadly, in the third edition of its overall portrait unveiled in February and based on 55 indicators forming a definition of collective well-being, G15+ concluded that Quebec compares favorably among 12 jurisdictions in the world, including Ontario. . For this grouping of organizations covering a broad spectrum of civil society, Quebec should demonstrate more ambition by broadening the comparison beyond Ontario and drawing inspiration from benchmarks other than the level of wealth and GDP per capita to guide its actions. “The Quebec model stands out positively internationally,” which obviously does not prevent “many challenges remaining to be addressed here.”
We can take the comparison further, inspired by a study by the CFFP. In the human development index published by the United Nations Development Program, out of a total of 130 countries, Canada ranks 15th.e position, while Quebec included in the comparison ranks 16e place.
For its part, the OECD publishes the “Better Life” index for each of its 38 member countries as well as Brazil, Russia and South Africa, therefore a total of 41 countries. By weighting the different themes to obtain a composite index, the most recent version of the index places Canada at 10e position. “The analysis by theme or indicator was slightly to the advantage of Canada compared to Quebec. » But among the provinces, Quebec comes in 4e position, slightly surpassing Ontario.
Finally, in the global happiness index published by the United Nations Sustainable Development Solutions Network, out of a set of 130 countries, Canada ranks 13th.e position, while Quebec ranks 8e place.
To compare…