Wednesday, November 19, 2008

Quebec and the rest of Canada

I live in Quebec. Presently, I see little impact from the economic tsunami (in Bill Gross of Pimco parlance) here. I see it only in people in the financial services industry. The rest of the province is in a bubble. Politicians talk about increasing already generous social programs. People seem to be spending for Christmas as if nothing special is going on. The housing market is probably the strongest on earth as we are still positive YoY.

If anything, Quebec should be hurting more than other provinces. Our population is older, less educated and our workers work less. To top it all off, we drive away business with regulations and language polies, we have the highest taxes in North America if you make a middle class income and we have a crushing debt load that keeps increasing despite supposedly balanced budgets.

And yet, I don't see much worry here. Much less than in the US or in the rest of Canada.

I suspect that only once unemployment goes up (and it will unfortunately), the Quebec population will wake up! I am very worried about the economic future of my province and by extension, the political future of the rest of Canada. An unhappy Quebec is a problem for all of Canada, as we saw from 1990-1995. The fact that we were in recession around that time is not a coincidence in my opinion. I am surprised that political analysts are not examining what the political fallout of this recession from a national unity perspective.

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