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Louis the First of Quebec

GB Geo-Blog

Louis the First of Quebec

Canada must be the only country, with the possible exception of Belgium, that financially supports a political party – the Bloc Quebecois – whose sole objective is to break up the country. Indeed, we are probably the only country that pays for the leader of such a party, who sees himself as Louis I of Quebec, to go on an “Evita” tour to proclaim that the separation of Quebec is imminent.

Since the breakthrough of Rene Levesque almost 35 years ago, the threat of Quebec separation has hung over the rest of Canada. Undoubtedly there will be another vote on separation – this seems to be a game that can only end when there is a positive vote in favor.

Sadly, separation would not improve the economic lot of Quebecers, despite the claims of a small group of elitist leaders. The driving force appears to be the egotistical needs of these leaders to prance among other world “leaders” and to further entrench themselves as the ruling aristocracy of Quebec.

Separation based on culture and language is just another manifestation of tribalism, and I have argued before that tribalism is a major contributor to conflict, the abrogation of human rights and poverty. We do have a free society and if people choose to go down this path, they have every right to do so. However, the debate should be based on facts and solid arguments, not the half-truths and gibberish generally espoused by the leaders of separation in Quebec.

There is little evidence that small countries have the wherewithal, unless they are fortunate to have ample and relatively cheap reserves of oil and gas, to prosper. This appears to be even more the case for small countries without resource wealth that have split from a larger country or political entity.

If Quebec chooses to separate, $8 billion plus would no longer flow from the rest of Canada despite the arguments of the leaders in Quebec. Canada would not make any fiscal concessions in negotiations. There no longer would be a political need to accommodate Quebec.

Would Quebec introduce its own currency? If so, we should expect a significant depreciation of the currency, increasing the prices of imports and making vacations in Florida much more expensive.  Furthermore, interest rates would be considerably higher as investors demanded a larger default risk premium. Mortgage rates in Quebec would easily top 10%.

On the other hand, if Quebec decided to use another currency – the Canadian dollar or the US dollar – Quebec would lose complete control over monetary policy. And there would be no chance whatsoever that Quebec would be given any voting rights in the operations of either the Bank of Canada or the Federal Reserve.

As well, Quebec likely would seek to join either the GATT or the NAFTA. In doing so, Quebec Inc., the partnership among the Government of Quebec, the Caisse and the business elite, would be increasingly challenged. It would be highly unlikely that Canada or the US or the EU would tolerate the protectionist policies of Quebec Inc.

The head offices of a number of major corporations likely would be transferred out of Quebec. Moreover, the language of business increasingly would become English. Do Quebecers actually believe that companies in Canada or the US would oblige them to do business in French? Absurd!

I could go on, but it should be apparent that in the financial and economic spheres, life most likely would be worse for Quebecers, especially the average Quebecer. But then again Louis I and his entourage do not really care about the average Quebecer. They are not part of Louis’s society.

The opinions expressed in this blog are personal and do not reflect the views of either Global Brief or the Glendon School of Public and International Affairs.


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