In November, Quebec announced a $1.1-billion personal income tax reduction. Some argued that the reason the government could afford to reduce the tax burden was that it had reduced spending on health and education, and that these sectors had been starved by years of cuts. According to these critics, the money used to lower income taxes should have been re-injected into public services.
However, both health care spending and education spending have increased considerably in recent years.
From 2008-2009 to 2016-2017, health care spending went from $30.6 billion to $36.4 billion, while education spending (excluding the post-secondary sector) went from $12 billion to $13.4 billion. These increases are expressed in constant 2016 dollars, and so take inflation into account. They outstrip population growth in the case of health care, and student population growth in the case of education.
If it were true that spending itself has a direct impact on the quality of services, we should have observed a generalized and notable improvement in recent years, but we haven’t. Indeed, a recent poll shows that 71 per cent of Quebecers believe that the additional amounts injected over the past 10 years in health and education have not yielded results. Why?
Health care and education budgets increase to fund not just new programs, but also the working conditions negotiated in collective agreements. They are also the result of choices made by the government in the delivery of public services.
In education, for example, additional spending in recent years stems primarily from the reduction in the number of students per teacher, payments to pension plans, the automatic progression of teachers up the pay scale and the growing number of students with special needs. A substantial part of the spending increase therefore has nothing to do with improving the quality of services delivered.
Several commentators have nonetheless concluded that reducing taxes was not urgent because of the crying need observed in public services. Yet it is the organization, the management and the performance of these sectors that are at issue, much more than their funding.
When comparing the results achieved by the educational systems of different countries, the level of public spending is not always a good indicator of the quality of services. One study of 31 European countries found that the level of public spending had “only a small amount of influence” on the effectiveness of the school system. The level of autonomy of schools has much more of an impact.
In health care, too, performance does not depend on how many billions are spent. For example, the U.S. health care system is by far the most expensive in the world, but it is regularly ranked last among industrialized countries.
Quebec, which has the worst emergency rooms in the Western world, would do well to heed the words of the province’s Health and Welfare Commissioner: “The system’s difficulties do not seem to be related to an insufficient budgetary envelope or to a lack of human resources, and even less to a lack of material resources. They instead appear to be related to the organization of care and services and the distribution of financial and human resources.” Disturbingly, the Health Department has decided to abolish this watchdog that had been a source of internal criticism.
Pitting tax cuts against the quality of public services in health care and education presents a false dilemma. Over the years, enormous sums have been poured into these two systems, with questionable results at best. Before injecting additional resources, it would behoove the Quebec government to re-examine the way it delivers public services; otherwise, there is no reason to believe that it will obtain different results. In the meantime, there is no doubt that the money used for tax cuts now finds itself in better hands.
Germain Belzile is a Senior Associate Researcher at the MEI, Patrick Déry, Public Policy Analyst at the MEI. They are the authors of “Health and Education: Spending Has Continued to Grow” and the views reflected in this op-ed are their own.