No, The Student Protest Is Not Just About Tuition

The ongoing -- perhaps growing -- student strikes in Quebec have brought into focus the most pressing question in this period of austerity: is the only solution to current economic challenges to cut public services and raise "user fees" such as post-secondary tuition? The answer to this question has as much a consequence for student strikers as it has for workers and Canadians from coast to coast.

Just as there are reasonable alternatives to cutting public services at any level of government in Canada, there are also many viable alternatives to raising Quebec's tuition fees that should be considered. But these, unfortunately, have been successfully kept out of the realm of public discussion over the course of this strike.

The most obvious is a higher tax rate on the super rich. Why is it, for instance, that under Quebec's current tax scheme, someone who earns $85,000 per year pays the same rate of tax -- 24 per cent -- as someone who earns ten times more or $850,000? After all, someone who earns $40,000 is subject to a lower 16 per cent rate of tax, so why does the same progressive bracketing approach not apply to the other end of the wage spectrum?

In Ontario, the two per cent surtax on income above $500,000 negotiated between the Liberals and the New Democratic Party as part of the deal to pass the 2012 budget is expected to generate nearly $500 million dollars annually. A similar measure in Quebec would likely go a long way towards resolving the structural university deficit, pegged by the government in 2009 at around half a billion dollars.

Another option kept out of discussion is corporate taxes. In 2011, Quebec eliminated the corporate tax on paid-up capital, denying itself hundreds of millions of dollars in revenue each year. Or take the general corporate income tax rate, which, at 28.4 per cent, means that Quebec has one of the lowest rates in North America. Many readers might be surprised to learn that this statutory corporate tax rate is lower than in California (40.75 per cent), Florida (38.58 per cent) and Texas (35.65 per cent). In fact, American subsidiaries in Québec remitting profits to the U.S. must also remit the difference between the lower Québec/Canada corporate tax rate and the higher U.S. rate to the Internal Revenue Service, so Quebec is effectively passing up revenue to a foreign government.

Certainly, the argument that corporations should pay for universities via taxes is particularly strong, given that they benefit immensely from a skilled workforce. After all, would any of the big pharmaceutical companies in Quebec have even considered locating in the province if there were no talented researchers to hire?

And what about mining royalties? Quebec is extremely well endowed with raw materials and natural resources, but are citizens getting a fair share of that wealth? In 2011, MiningWatch Canada and Québec meilleure mine observed that the province "still ranks near the bottom of the heap in the collection of mineral royalties," and that it "was only paid $114 million on revenues of over $5.6 billion." It is no coincidence that only a couple of months after Premier Jean Charest went on his province-wide dog and pony show to sell off Québec's immense northern riches, through his Plan Nord, students went on strike over plans to raise tuition fees.

In the context of the strike, where one stands on the above public financing options is certainly important, but it is ultimately of secondary significance. What is more more significant is that the strikes have created an opportunity for a mainstream debate not only in Quebec, but across Canada, about what the responsibilities of large corporations and the wealthy in society must be.

Over the last decade, regrettably, governments in Canada have been unwilling to entertain this kind of discussion. Take, for example, the recent Drummond Commission established by the Ontario Liberals. Its carefully crafted mandate to assist the government with balancing the budget did not allow for a review of the revenue-generation side (i.e., the tax system) of the public financing equation. It is not surprising, then, that the Commission concluded that cutting services and jobs is the only way to cut the deficit.

It is this kind of austere logic, presented as inevitable, that Quebec's striking students are railing against. Indeed, contrary to what is claimed repeatedly in the mainstream press, students are not saying that they should not pay their "fair share" for education and let the province sink into debt. Rather, unlike the super rich, who tend to be unequivocally opposed to higher income tax rates (i.e., paying more), students are saying that they should pay for their education through a progressive tax system once they enter the workforce. And this is not a particularly radical idea.

In many parts of the world, including many countries in Europe, post-secondary education is zero or close to zero. In Sweden, in fact, a small controversy broke out in 2010 when the government decided to introduce tuition to non-Swedish/non-European Union (EU) students; local and EU students would not be affected.

By striking and holding their ground for more than a hundred days now, Quebec's students have forced a discussion of public financing options that have heretofore either been suppressed from public discussion or characterized as socialist delusions. For the students' remarkably insightful proposed solutions, we must be thankful. And for their remarkable achievement in arresting society's attention, we are truly indebted.

Original Article
Source: huffington post
Author: Larry Rousseau