Article content continued

Then normal changed. Persistently sluggish growth in the world economy dragged down revenue growth, and the effects of population aging on expenditures — health spending in particular — began to manifest themselves. Successive Quebec governments, Liberal and Parti Québécois, introduced a series of tax increases in an ultimately unsuccessful effort to close the gap.

The explanation is, of course, political will.

One of the tax increases was effectively a gift from Stephen Harper’s federal Conservative government. When the Goods and Services Tax rate was reduced from seven per cent to five per cent, the Quebec government responded by increasing its Quebec Sales Tax was increased by two percentage points. This manoeuvre increased Quebec government revenues by $3 billion, with no net effect on Quebecers’ tax load.

There were other tax increases. The tax on gasoline and diesel was increased by 1 cent per litre a year over the four years 2010-2013, the top marginal personal income tax rate was increased and the “Health Tax” — which was effectively an increase in income taxes — was introduced.

Put together, these added up to tax revenues that were about $6 billion higher than what they would have been otherwise. When the Couillard government came to power, Quebec’s own-source revenues — that is, not including transfers from the federal government — were $77.8 billion, so tax revenues were roughly 7 per cent higher now than they would have been without those tax measure. That was a revenue increase on the order of 1.5 per cent of Quebec’s GDP, and it still wasn’t enough. Worse, tax fatigue had set in.