The year 2023 was not a gift for the members of François Legault’s government, so we understand them to have welcomed with unfeigned joy a credible study demonstrating that they were, let’s be frank, champions.
The study on purchasing power unveiled at the beginning of January by tax specialists from the University of Sherbrooke does not skimp on the figures. From 2019 to 2023, Quebecers of all categories — alone or with family, young or old — have become richer. They have overcome the inflationary challenge and escalating mortgage rates and today find themselves with more money in their pockets than four years ago.
How is it possible ? Thanks to the salary increases obtained in the private sector from employees who, thanks to the labor shortage, are more valuable than ever. Thanks to the increase in federal generosity, particularly in terms of family assistance. But Quebec is doing better than all our Canadian neighbors, because the combined effect of widely distributed checks, the automatic increase in a series of social contributions and, yes, the entry into force of tax cuts raises the Quebec portfolio far above the fray.
When the Chair on Taxation and Public Expenditures compares the Quebec case to that of other provinces, the Legault government beats them all, except British Columbia. When compared with OECD countries, Quebec does better than all the others, except Latvia and Lithuania. Quebecers have therefore successfully defied inflation, whereas if you have the misfortune of being French, American, German, Finnish, Swede, Japanese, English or, worse, Greek, you have become poorer.
Having always believed in – and sometimes defended against all odds – the Quebec model, I do not doubt the accuracy of these calculations. For example, it was shown that the average Quebec citizen resisted the recession caused by the 2008 financial crisis better than most Westerners. Our social safety net is more robust, the willingness of our governments to help us in cold weather is more prompt and more effective.
I still have a little difficulty reconciling these results with two others.
First, a Léger survey from December revealing that in 2020, 5% of Quebecers had spent an entire day without eating, because there was nothing left in their fridge. In 2023? Double: 10%. In 2020, 10% of Quebecers ate less than they were hungry due to lack of money. In 2023: 18%.
Then, the “2023 Hunger Report” published in October by food banks. We learned that from 2019 to 2023, they served 19% more meals, helped 74% more people and provided 98% more emergency assistance or food baskets. The number of people helped each month — every month — increased from 235,000 in 2019, or 3% of the population, to 870,000 in 2023, or 10%.
How can we explain the gap between the results of tax experts and the reality observed in food banks? The general director of the organization which brings together the banks, Martin Munger, has a hypothesis. He does not dispute the validity of the study. For the most deprived, it only measures the purchasing power of Quebecers who are in the 25% income bracket, starting from the bottom. He has the impression that the banks’ customers are below and that the study does not reflect their distress.
When questioned, Luc Godbout, holder of the Chair, defends his methodology. As I had already bothered him on this subject during his previous report, which only calculated the median income, he enriched the study with the 25e 50e and 75e income quintiles. I thank him for that, but don’t bother him any less with my questions. He swears to me that we cannot, statistically, say that Quebecers who earn less have seen their purchasing power decline. His team calculated that a single person receiving social assistance saw their purchasing power increase from a base of 100 in 2019 to 110 in 2022, then fall back to 99 in 2023. The figures are similar for a couple. If this person didn’t go to the food bank in 2019, we don’t see why they would go there in 2023.
But she’s going! Bank customers must demonstrate their poverty with proof of low income, otherwise, no basket! While the number of social assistance recipients is decreasing, the number of social assistance recipients who use banks is increasing! Munger also notes a steady increase in low-income workers. Its statistics also indicate a slight increase in people who… own their home. The housing crisis, he adds, is one of the factors most often cited by users.
The economist Mario Jodoin, a specialist in the labor market, deduces that the inflationary shock is much greater among modest tenants who have had to change accommodation and undergo a radical increase than among those who simply renewed their leases with a modest increase. “Even among homeowners, the difference is huge between those who finished paying their mortgage or who got a fixed rate just before interest rates rose and those who did not. »
To summarize: we must applaud the Legault government for its anti-inflationary efforts. I am not one of those who doubt his good will. However, the indicators used to shout “mission accomplished” have a blind spot. Sherbrooke tax experts would help us if they also estimated the evolution of purchasing power in quintile 5 and quintile 15, therefore among the poorest.
But unless we quickly find a solution to the housing crisis or convince the Bank of Canada to deflate its key rate, we must invent remedies to specifically cushion the shock suffered by those forgotten by the anti-inflation shield, tenants and modest owners. . And only relax the effort when the food banks are deserted.