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Quebec’s relative poverty cannot be denied, the Montreal Economic Institute states

Montreal, May 9, 2006 – Not only is Quebec less wealthy than its neighbours but, contrary to a widely held view, it is not more egalitarian either, the Montreal Economic Institute says.

Although certain indicators appear to suggest that living standards in Quebec are comparable to Ontario levels, economist Norma Kozhaya says these numbers should be taken with a grain of salt since they are offset by other, more objective data that put Quebec in a less favourable light:

  • Quebec still has the highest unemployment rate among the Canadian provinces, apart from three of the Atlantic Provinces, with a rate of 8.5% in March 2006 compared to 6.3% in Canada as a whole and 6.1% in Ontario.
  • In 2005, 6.8% of the Quebec population was drawing social assistance, compared to the Canadian average of 5.2% and the Ontario level of 5.4%.
  • The net worth of Quebec households (their assets minus their debts) was $61,300 in 1999 compared to $101,400 in Ontario. These results are influenced by the fact that people in Quebec are far likelier to rent rather than own their dwellings.

Moreover, Quebec is outperformed by the other provinces in productivity per worker and productivity per hour worked. With no increase in productivity, there can be no improvement in living standards.

“These indicators all reflect a relatively weak economic performance,” Ms. Kozhaya writes in an Economic Note published today. “Chronically higher numbers of unemployed persons, social assistance recipients and tenants in Quebec show clearly that living standards generally are not as high as in the other provinces.”

Greater social solidarity?

To those who say these figures do not take account of Quebec’s more equal distribution of wealth, Ms. Kozhaya responds that the ratio of households with incomes that fail to meet essential needs is 12% in Quebec, barely below the Canadian average (13%) but slightly above the Ontario figure (11%).

The assertion that Quebec is a more egalitarian society than the rest of Canada simply does not stand up to scrutiny, Ms. Kozhara argues.

“Quebec has relatively fewer wealthy people,” she adds. “The proportion of taxpayers with incomes above $100,000 is 2.2% in Quebec compared to 4% in Ontario. Whether or not Quebec society shows greater solidarity, having fewer wealthy people means there is less wealth to redistribute.”

This Economic Note, titled Quebec’s relative poverty, is available on the Institute’s Website.

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Information and interview requests: Patrick Leblanc, Communications director, Montreal Economic Institute, Tel.: (514) 273-0969 (office) / (514) 571-6400 (cell) / E-mail: pleblanc@iedm.org

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