I am from Québec and the last few years weren’t great politically for us.
It feels as if we’re floating on scandal over scandal, day after day.
At the same time, I started to associate with the Québec Compassionate right, which is quite a change for a former social-democrat like I was.
In high school, I joined the Parti Québécois and discovered Social Democracy. I didn’t join because I was a separatist, but rather because the Parti Québecois caucus tried to save my high school diploma and I was grateful. But that’s a story for another day…
So, Social Democracy. It’s the idea that Capitalism, while it’s the engine that drives economic growth, it shouldn’t be also the engine that drives social growth. That some industries shouldn’t be left to the open economic market and rather, should be managed by the government for the good of the population.
For example, in Québec, we have Hydro-Québec which is our electricity company. By having a government agency, Hydro-Québec built massive dams that the private industry would have been unable to finance but which not only reduced the cost of electricity in Québec, but did so with green energy.
We also have many government owned investment agencies that help finance Québec companies with loans or by buying shares.
I was a firm believer in Social Democracy. Let the companies compete freely on non-social industries (commerce, heavy industry, services), but have an hand in critical social ventures either with potentially negative impact, like lottery and alcohol, or with important social impacts like healthcare, music festivals, medial payments coverage on car insurance, education, etc..
I still think that the government should, in theory, be involved in most socially important industries and yet, I now think that for many of those social industries, the private sector should be involved.
Why the sudden change of heart?
First, let me say that I didn’t become a savage capitalist who believe that the poor are lazy. On the contrary, I still firmly believe in the objectives of social democracy.
It’s in the means to achieve it that I had a change of opinion, and all because of one word: corruption. It’s not for nothing that Maclean’s named Québec the most corrupt province
The recent Commission Charbonneau opened our eyes on corruption in cities, but even before it was assembled, there were corruption rumors affecting Québec.
List of corruption suspicions reported over the last few years (but not necessarily proven):
- On the quality of asphalt (so the streets would be repaired more often)
- On the attribution of snow removal contracts
- On the attribution of road construction contracts
- On the attribution of the construction of sidewalks
- On the management of pot-hole filling contracts
- On the approval of extras in almost any government project
- On the inspection of many contracts given by the government
- On the attribution of hospital construction contracts
- On the design and execution of hospital construction plans
- On the attribution of permits for private subsidized daycare contracts
- On the sale of city owned land well under their value
- On the purchase of land by the city well over their value
- In some cases, on the sale of some city owned land to friends of the mayor at a major rebate, only to be bought again a few years later several times it’s original price
- On zoning changes
- On the sale of city owned lands with bad zoning, only to zone them more favorably later increasing the value
- On municipal elections
- On financing provincial elections
- Possibly on the construction of a mass transit line
- In the appointment of judges
- In the selection of telecommunication companies for the government
- In the management of software development contracts
- In the attribution in pretty much every type of contracts for the government
- In the attribution of major grants to companies
We notably learned that it costs 30% more to build a road than anywhere else in Canada, but on top of it, we later learned that a lot of the asphalt used was sub-standard so we have the rebuild them more often, as mentioned above! It’s no wonder our roads are so filled with pot-holes.
And I am pretty sure that I forgot many,
Where does it comes from?
Maclean’s almost racist article tries to paint a picture of ingrained inevitable corruption due to the culture of Québec citizens, but I disagree.
I think the problem stems more in that the bigger the government, the more risk of corruption occurs, and the wider the risk of corruption occurs, the higher the risk of organized corruption in which even the organized crime gets an hand on.
Does this mean that social democracy is doomed? Not at all…
I think that the government should enforce social democracy with strict regulations on the social industries it deems important, and let free enterprise eliminate corruption.
Let’s see one example
In Québec, hospital are government owned and operated (except for University hospitals), but clinics are generally (with a few rare exceptions) privately owned by doctors.
Any doctor may rent commercial space to establish a clinic. Once open, the clinic itself will get some money for each medical visit made by any doctor at the clinic, and the doctor himself of course, will be able to charge the government for every visit from a patient.
But the patient “pays” with his health insurance card (in other words, it’s free for the patient). Some clinics made improvements like being able to make appointments by phone or online, or by hiring a nurse to help patients while they wait for the doctor, etc…
Near my current residence, there was a clinic with only 2 doctors, both of which were generally unpleasant, often unhelpful and the clinic was rarely open as they failed to attract new doctors and the doctors themselves failed to keep their patients. The clinic had a small waiting room with bad lighting and an always angry receptionist who yelled at patients who dared to ask any questions on waiting time. Without any surprises, it closed.
But what about road construction?
Right now, it costs 30% more to build a road, they break down faster due to poor asphalt, they are badly repaired for potholes (though Montreal is taking clear steps with GPS tracking of pothole repairs) and as a result, we have some of the worst roads in North America.
If instead, roads were managed like a clinic, we could give the construction contract to a firm on a long term basis.
Imagine a road which costs 5 million dollars to built, and 1 million dollars to maintain over 20 years, or $300,000 per year.
Instead of paying 5 million upfront, the city could pay a firm for 20 years to maintain the road for a yearly cost. Imagine the lowest bidder is $320,000. This means that the company has a year to (re)build the road to last, but will only receive $320,000 per year to maintain it according to clear guidelines.
If they build a very durable road, they might only have to fix a few pot holes. If they skim on the build quality, they might have the rebuild it during the contact.
If they go bankrupt or default, the city wins as they only paid a portion of the contract.
In the long run, I am not 100% sure that the city would pay a lot more out of it’s pockets than in our current corruption filled world. It certainly would save interest on it’s debt by paying over 20 years instead of upfront, and would ensure good quality roads.
To ensure that costs remain low, it’s own blue collar workers should be allowed to bid on any such projects (something currently banned) with revenues from successful bids used to increase their numbers, making them more competitive in the long run.
Any remaining corruption between private firms would be reduced by competition from blue collars.
Of course, I am being naive, I know that costs would be higher due to the financing aspect, and I also know that many small companies wouldn’t be able to bid due to the lack of access to capital to do the original construction.
But I am sure there are solutions there too, like perhaps paying the first 5 years upfront, or a loan from the city itself guaranteed by the owners of the construction company.
The key part, in my mind, is to make the successful bidders financially responsible for their work so they can’t botch the job, while eliminating the fast cash grab required for corruption to occur.