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Is Quebec a distinct society when it comes to inequality?

It isn't exactly a shining beacon of equality, but Quebec does a lot of things better. Those policies are the result of relatively strong unions and social movements.

February 28, 2023

4-minute read

Quebec has long been perceived as a progressive province, but is that reputation deserved? The province does have a number of generous social programs, the fruit of historically strong social movements. However, like the rest of Canada, Quebec remains a profoundly unequal society.

To measure income gaps, IRIS developed the Basket Index, which is the number of baskets, as per the Market Basket Measure (MBM), that households can afford with their income. By calculating the Basket Index for households in Quebec and the rest of Canada based on their after-tax income decile, we find that Quebec is more egalitarian than the rest of Canada in that respect. On average, those in the richest decile in Quebec make 8.7 times more than they need to cover their basic needs, whereas that ratio is at 11.3 for the rest of Canada. In addition, the two poorest deciles in Quebec have access to some additional resources compared to their counterparts elsewhere in Canada. The share of the population that doesn’t manage to cover their basic needs is also smaller in Quebec.

Other indicators suggest that wealth inequality has been less pronounced in Quebec than in the rest of Canada for the past several decades. Take, for example, the Gini coefficient, another measure of inequality. A 2010 study published jointly by IRIS and the Canadian Centre for Policy Alternatives (CCPA) established that between 1988 and 2006 the Gini coefficient was systematically lower (meaning less inequality) for families of two or more people in Quebec versus the rest of Canada. This is also true for the period between 1977 and 2006, when you use after-tax income to calculate the Gini coefficient.

This shows that since the late 1970s, tax measures taken by the Quebec government seem to be more effective in reducing income inequality than those taken by other provincial governments. However, that impact could be even more pronounced if Quebec had not followed the trend of industrialized countries in reducing income tax, which is one of the best tools at governments’ disposal to ensure a more equitable distribution of wealth.

Unionization is another factor that explains, at least in part, the lower inequality in Quebec than in the rest of Canada. Unionization not only helps unionized workers increase their salaries, it also drives salaries up for non-unionized workers. In Quebec, the unionization rate is considerably higher than in the rest of Canada (39.9% versus 28.7% in 2020). It is lower than in 1997, when it sat at 41.4%, but the decrease was less significant than in the rest of Canada, where it was 31.4% in 1997.

Unionization also has a positive effect on gender inequality. In 2020, women in Quebec earned 91.9% as much per week as men. This gap is found systematically even when you control for variables, such as age range, level of education, length of employment, industry, etc. One of the only variables that has a considerable impact is the unionization rate: for unionized workers, the salary gap between men and women was almost non-existent. Quebec’s high unionization rate probably helps explain why the gender income gap is smaller in Quebec than elsewhere in Canada (8.11% in Quebec and 11.27% for Canada as a whole). Other factors that have improved the situation of women in Quebec include the Pay Equity Act, which has been in force in Quebec since 1996 but was only enacted in 2018 in the rest of Canada, and the 2006 introduction of the Québec Parental Insurance Plan, the most generous of its kind in North America.

We should not let these findings about wealth and gender inequality distract us from the much less enviable situation in Quebec when it comes to other matters, such as income inequality for immigrants.

Child care centres are a system of public daycares introduced in Quebec in 1997, and they also play a role in reducing inequality. They help ease domestic duties, make it possible for women to access the labour market, and reduce the cost of living for disadvantaged households. For instance, in 2015, the hourly living wage in Toronto was $18.52, while in Montréal it was $14.25, a difference that is largely attributable to the availability and affordability of public child care centres in Quebec.

We should not let these findings about wealth and gender inequality distract us from the much less enviable situation in Quebec when it comes to other matters, such as income inequality for immigrants. In 2014, a study by the Institut de la statistique du Québec (ISQ) concluded that Quebec had the highest rate of low-income workers among immigrants (11%, compared to 9% in British Columbia and 8% in Ontario). The author of the ISQ study added in an interview that there was nothing surprising about these results, considering that other indicators (unemployment rate, employment rate, job quality and compensation) were generally less favourable for immigrants in Quebec than elsewhere in the country.

Although wealth inequality is less pronounced in Quebec than in the rest of Canada, it remains significant. The poorest decile only has half of what they need to cover their basic needs, whereas the second poorest decile has only just the bare minimum. At the other end of the income scale, Quebec is in line with the rest of Canada and the rest of the world, in that the super rich are sitting on a colossal portion of our collective wealth.

From 1982 to 2017 in Quebec, the income of the richest 1% has grown by 116%, whereas the income of the remaining 99% has gone up by a meager 29%. The skyrocketing income of the 1% is largely due to the outsized growth of salaries and bonuses for directors of companies and public institutions. The practice of recruiting potential directors by offering them compensation above the average of comparable positions has led to a constant increase in salaries. Originating in the private sector, this practice has gradually expanded to Crown corporations, universities and the senior public service. Growth in income for the 1% is also explained by the excessive growth in compensation for doctors. Between 2007 and 2016, Quebec doctors got a 63% increase, compared to a 27% increase in average salaries.

To some degree, Quebec is distinct from the rest of Canada when it comes to inequality. It does a little better in terms of gender inequality and wealth inequality when considering the population as a whole, but it’s a little worse on inequality between immigrants and people born in Canada. In the areas where it does perform better, Quebec has shown that transformative measures really can be impactful in reducing inequality.

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