Colleague Michel Girard knocked me out yesterday. And depressed. However, by publishing a very interesting and informative column. The question under debate: is Quebec on the path to becoming as rich as Ontario?
François Legault has placed this catch-up at the center of his priorities. Let’s say we came from afar. At the end of the Charest years, Quebec was no longer just behind Ontario, Quebec had become the poorest province in Canada, behind the Atlantic provinces.
After five years in power, when he summarizes his results, François Legault maintains that the catch-up with Ontario is well underway. When we look at average household income, disposable income or GDP per capita, it is true that the gap is narrowing.
Take this last measure for example, Ontario was ahead of Quebec by 16.4% when the CAQ came to power. Today, this gap is reduced to 13.7%. We are far from the mark, but still in the right direction.
What my colleague Girard highlights is that these are annual measurements. We are catching up a little with Ontario in terms of wealth created or income earned in a year.
- Listen to the money column of economist Francis Gosselin via QUB :
Building a heritage
But being richer than your neighbor, in practice, is not about earning more this year, it is about having greater accumulated wealth, greater heritage.
Imagine that 2023 was your best financial year ever. Salary increase, overtime, you earned $135,000! Great!
Your neighbor is a rich annuitant who does not generate a penny in work income. Despite everything, it is very likely that if you add up his dividend income, the progress of his investments, the increase in value of his real estate, he has become much richer than you.
This is exactly what is happening between Quebec and Ontario. The average wealth of the Ontario household is $1.1 million compared to $700,000 for the Quebec household. The gap has even widened since 2018.
For what? Because during the decades when Ontarians’ incomes were higher, they accumulated investments, in the bank or the stock market. Their investments have increased in value. More of them own homes, which increase in value.
Impossible mission?
The conclusion is that to really catch up with Ontario, to join them in terms of total heritage, the task is more than colossal. Our average annual incomes would need to exceed those of Ontario for an entire generation. At least.
Quebec has self-sabotaged itself economically through socializing policies and high taxes.
Today we are killing the Northvolt project. The Ontario equivalent, Volkswagen, was built without problems and a complementary factory was about to be set up on the neighboring land.
Money doesn’t buy happiness, someone will tell me? Yet we demand services as good and roads as beautiful as in Ontario.