Pre-budget consultations, 2010-2011 - The advisory committee on the economy
and public finances unveils concrete solutions to spend more effectively and
better fund our public services

MONTREAL, Jan. 27 /CNW Telbec/ - After having described the situation of public finances, the advisory committee on the economy and public finances released today a second document in which it identifies ten concrete initiatives to spend more effectively and better fund our public services.

Ten concrete initiatives

The members of the committee believe that a great deal can be done to meet the challenges facing us without calling into question the basket of public services Québec offers. The committee has identified initiatives such as:

    - a clear choice between the centralized approach and regionalization in
      the management of our health and education systems;
    - generalization of activity-based funding in the health sector;
    - development of the opportunities offered by competition in the health
      sector, mirroring what is already done in the education sector;
    - application to commercial government corporations - beginning with
      Hydro-Québec - of quantified performance requirements, defined on the
      basis of a comparison with results from other jurisdictions;
    - adoption of comprehensive budget rules defining multi-year and sector-
      based targets;
    - implementation of systematic program performance assessment process;
    - establishment of an assessment process for the basket of public
      services in the health sector, making full use of the future Institut
      national d'excellence en santé et services sociaux;
    - effective application of the Act to provide for balanced budgets in the
      public health and social services network to hospitals and CSSS;
    - raising fiscal levies if needed through consumption taxes rather than
      income tax;
    - greater application of user fees, applying the principles and the
      process defined in the Policy for the Funding of Public Services.

Four simple principles

The committee bases its proposals on four simple principles:

    - Program performance assessment must be generalized and depoliticized.
    - Good management must be encouraged, poor management sanctioned and
      competition must be allowed.
    - We must define an efficient tax system and thus reduce the negative
      impacts of all taxes on economic development
    - We must rely more extensively on user fees.

Lessons we must learn from

By learning from what has been done elsewhere, in some cases for a long time, it is possible to reduce the cost of services or provide more for the same cost. In the health sector, there are very specific examples of ways of doing things that aren't cost-efficient i.e. not giving us our money's worth. That is also true in the education sector, as well as in large commercial corporations like Hydro-Québec.

At the same time, we can improve the funding of our public services by defining an efficient tax system that does not compromise our economic development, and by making greater use of user fees to fund public services, as is done in countries offering significant services that are collectively funded.

For the committee, we can spend more effectively and better fund our public services provided we make the right choices and take action.

The advisory committee

The Minister of Finance set up the advisory committee on the economy and public finances last October 26 as part of the 2010-2011 pre-budget consultations. The Minister of Finance announced at the time that was forming a committee of independent experts, consisting of Pierre Fortin, Robert Gagné, Luc Godbout and Claude Montmarquette, that he would co-chair along with Robert Gagné.

                             AND PUBLIC FINANCES

Robert Gagné (co-chairman)

With a doctorate in economics from the Université de Montréal, Robert Gagné is a professor emeritus at HEC Montréal and the director of the Centre sur la productivité et la prospérité. He specializes in applied econometrics, industrial organization and public policy. In recent years, Mr. Gagné chaired the Task Force on Tax Assistance for the Resource Regions and the New Economy and co-chaired the Advisory Committee on the Fiscal Imbalance of the Council of the Federation. In 2002, he was appointed a regular member of the Centre interuniversitaire sur le risque, les politiques économiques et l'emploi (CIRPÉE) and, since 1999, has been a fellow of the Centre interuniversitaire de recherche en analyse des organisations (CIRANO). He has focused on researching issues relating to business productivity, resource optimization and issues relating to the transportation sector.

Pierre Fortin (member)

Pierre Fortin holds a doctorate in economics from the University of California, Berkeley, and a master's in mathematics from the Université de Montréal. He is professor emeritus in the economics department of the Université du Québec à Montréal (UQAM). His research focuses chiefly on economic growth, monetary and budgetary policy, social policy and the economy of Canada and Québec. He is a member of the Royal Society of Canada and of the science council of the Canadian Institute for Advanced Research. He has been President of the Canadian Economics Association, a member of the panel of economic advisors of the Minister of Finance of Canada and senior economic advisor to the Premier of Québec.

Luc Godbout (member)

Luc Godbout holds a doctorate from the Université Paul-Cézanne-Aix-Marseille III. He is an associate professor at the Université de Sherbrooke. He specializes in taxation and public finance. In recent years, he has, in particular, been a member of the Task Force on Tax Assistance for the Resource Regions and the New Economy, in addition to contributing to the Commission on the Fiscal Imbalance. He is also a researcher with the Research Chair in Taxation and Public Finance of the Université de Sherbrooke. His research has focused in particular on the consequences of the aging of Québec's population on public finances. Since 2006, he has co-directed four books published by the Presses de l'Université Laval. Lastly, M. Godbout is the author of a monthly column entitled "Les public finances sous la loupe" in La Tribune newspaper.

Claude Montmarquette (member)

Claude Montmarquette holds a doctorate in economics from the University of Chicago. He is currently professor emeritus and holds the the Bell - Caisse de dépôt et placement du Québec chair in experimental economics at the Université de Montréal. He is President and CEO of the Centre interuniversitaire de recherche en analyse des organisations (CIRANO) where he heads the public policy research group. Claude Montmarquette has been a visiting professor at many foreign universities and is a regular participant at a large number of conferences and seminars around the world.


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SOURCE Ministère des Finances

For further information: For further information: Jacques Delorme, Technical Support Advisory committee on the economy and public finances, (418) 528-7382

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