The economics of Quebec’s ‘Charter of Values’

"It was worse than a crime; it was a mistake." That famously cynical quote is credited to Talleyrand, who said it after his boss, Napoleon Bonaparte, did something that was both legally questionable and politically damaging.

“It was worse than a crime; it was a mistake.” That famously cynical quote is credited to Talleyrand, who said it after his boss, Napoleon Bonaparte, did something that was both legally questionable and politically damaging.

The quote came to mind after Quebec Premier Pauline Marois unveiled the so-called Charter of Values last week. Not only do some top legal minds think it violates the Canadian Charter of Rights, but plenty of people think it may end up turning wide swathes of the Quebec populace away from the sovereignty movement.

Marois may win a few extra seats in rural Quebec thanks to the charter – a poll last Friday said the Parti Quebecois was up three points compared to the last election – but she probably wasn’t planning to go down in history as the Parti Quebecois leader who scared away any remaining minority voters in Quebec who were thinking about voting “Yes” in a future referendum.

The proposed law bans Quebec government employees from wearing, among other things, Jewish yarmulkes, Sikh turbans and a variety of Muslim head coverings. This will include not just bureaucrats but also daycare workers and liquor store clerks. Although positioned as a “secularization” measure, the law goes much easier on traditional Christian symbols. Crucifixes will still be allowed, as long as they aren’t too big, as will Christmas trees in public buildings, Christian prayers at city council meetings and various other Christian traditions like swearing on a Bible in court.

The Charter of Values is likely to end up being an economic mistake too. Quebec has a big provincial debt, a sluggish economy and a rapidly aging population. It won’t help Quebec’s economy if the Charter of Values ends up encouraging young Quebecois to move to Ontario or Alberta, or discourages immigrants from choosing Quebec.

The 2011 census showed that Quebec already has one of the older populations in Canada, with seniors forming 16 per cent of the population. It’s only 11 per cent in Alberta and nine per cent in the Yukon. Nor is the current trend in the right direction for Quebec. From 2006 to 2011, working-age Quebecois as a percentage of the population fell. It increased in Ontario and all the western provinces.

Slightly older but more detailed Statistics Canada data from 2006 also have bad demographic news for Quebec. Its fertility rate was below the rate required to replace the population, meaning that attracting immigrants is crucial. The percentage of immigrants choosing Quebec has been lower than its share of the national population for many years. And it had a net outflow of citizens to other provinces from 1991 to 2006.

Some of the Maritime provinces have similarly challenging demographic statistics, but none of them are introducing a Charter of Values that sends a strong signal to minorities that they aren’t welcome.

Lakeridge Hospital in Toronto immediately tried to capitalize on the controversy. They put a big ad in the McGill student newspaper with a photo of a smiling young woman wearing a doctor’s coat, a stethoscope and a headscarf. The money line read: “We don’t care what’s on your head. We care what’s in it.”

Over 20 per cent of Canada’s population was born abroad. Visible minorities make up an ever larger share of the population. As the chief human resources officer of any large Canadian company will tell you, you are making a big mistake if you ignore this pool of talent.

Human resources executives at Quebec companies are undoubtedly horrified by what Premier Marois is doing.

There are several different ways all of this can harm Quebec economically. First, it becomes harder for employers in Quebec to attract talent; especially in high-value job families where workers tend to be mobile and have lots of choices. And it’s not as if Quebec’s low taxes and rapid economic growth were already making it the hot choice on the university recruiting circuit.

This then makes Quebec companies less competitive. Companies are more likely to expand their operations in other provinces where talent is easier to find. Nor is it helpful to attract talent if your local hospital is suffering staff shortages and long waiting lists.

Premier Marois may dismiss the impact of this kind of thing as small. But if you multiply it by a few companies and few thousand high-value jobs a year, and then stretch it out over the years, the cumulative impact becomes noticeable. Aging, or even worse, shrinking populations have a more powerful negative impact on economic growth than most people realize. Quebec will have lower tax revenue to repay its big debt, build infrastructure and provide high quality public services. It will have fewer working-age citizens for each senior.

On top of that, there are feedback loops. If Quebec grows more slowly, has worse infrastructure and below-average public services, then more entrepreneurs, capital and talent will choose greener pastures.

We’ll never know the exact impact this will have, just like it is hard to quantify the negative impact Quebec saw in the 1970s when all those head offices moved to Toronto after the language laws were introduced.

Premier Marois seems somehow to have adopted a policy that is morally detestable, legally questionable, bad politics and economically damaging. You have to wonder what bon mot Talleyrand would have thought up at her expense.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Twitter @hallidaykeith