PQ Faces Reality Check in First week in Power

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Pauline, You've got a lot of splainin' to do!

Let's just say the PQ enjoyed the shortest honeymoon of any newly-elected government in memory, as the government lurched from one disaster to another, proving conclusively that the amateur hour which we witnessed during the election campaign has carried forward into government.

The not ready for prime-time gang had the professional watchers scratching their heads in disbelief as Pauline and her gang made one gaffe after another.

Things started off in the grand PQ tradition of backstabbing as the cabinet named by Marois was deemed unacceptable by a member of her own caucus Noëlla Champagne(who had expected to be named to the cabinet herself) who raised an unseemly ruckus in the Press over the unfairness, in her view, of having no cabinet representation for the Mauricie region, especially since one of Pauline's first moves was the announcement of the closure of Quebec's only nuclear plant which is located in the region.
The loss of 800 direct jobs and perhaps another 1,000 spin off jobs had locals seeing red and the idea that an outsider  from Longueuil, Bernard Drainville would be responsible for economic development in the region was too much of an insult for the local PQ member.
After a public outcry in the region, Pauline backtracked quickly by taking away the responsibility for the  region from Drainville and handing it over to the party whip, Yves-François Blanchet, who doesn't even sit in cabinet.

On Sunday, a protest march was held in support of the nuclear reactor and the mayor of Trois Rivieres denounced the government for making an improvised decision before all the facts were in. Apparently a report is in the process of being prepared dealing with the viability of the plant.

In another mess, the government announced within hours of being elected that the $200 head tax for health services would be abandoned, the shortfall of a billion dollars to be made up by taxing the rich retroactively.

The crap hit the fan when it was revealed that nine months into the year, taxpayers would be required to modify their tax returns to pay for taxes that they never knew were coming.

Now realistically, the hoi-polloi didn't have much sympathy for the richnicks who would have to dig deeper into their pockets to make up the shortfall, but largely ignored in all this were the two other retroactive provisions, that is, the raising of the capital gains tax by 50% and the reduction of tax credits on dividend income. Link

These last two measures, haven't garnered a lot of publicity, but they should, because they affect a lot more people than just the rich. Many retirees live off their investment income that includes dividends paid on the shares that they own in publicly traded companies. Each quarter, when they receive payment from these companies, they dutifully put aside a certain amount of the money they receive to pay the taxes due. Then they are free to spend what is left over.
But now the new government is saying that they owe money because the tax rates have been increased retroactively.
Not really cricket.

As for capital gains, let me make it as simple as possible.

Take the example of a couple which sells a vacation cottage that they own. Because of retirement, it is a luxury they can no longer afford and like most people, they sure could use the money.
The cottage was purchased decades ago at about $10,000 and was sold this last May for $150,000.
According to the old rules, taxes would be owing on 50% of the gain (there are some adjustments to be made, but let's not get complicated.)
In other words the couple would have to add in $70,000 to their income tax return and pay perhaps $30,000 in additional taxes.
After dutifully putting $30,000 aside to pay for the taxes due, they spend the balance fixing up their home, putting on a new roof and making some repairs that have been neglected for too long.
After taking a round-the-world cruise, they gift the balance of the money to their three children, so each can have a little wiggle room in their own family budget.
Life is good....

Imagine their surprise when the accountant phones them in a panic and tells them that due to Madame Marois retroactive increase in taxes on capital gains, they will owe another $15,000 to Quebec come their 2012 tax return in April next year!

"But we spent the money, where are we going to get 15 grand!!"

When all the repercussions became apparent, the financial community went nuts on Nicolas Marceau, the new finance minister, who looked clearly out of his depth.
Our boy wonder finance minister started to back off the retroactive part of his tax hike after both major opposition parties said that they would vote against any such proposal

All this will add a billion dollars to the 2012 deficit, not an auspicious start!

And as Laurel told Hardy throughout their movie franchise;
"Well, here's another fine mess you've gotten me into"

As for following through on the promise to abolish the tuition fee increases, the Marois government didn't think to, or dare to abolish those measures that the previous Liberal government put in place as a carrot for the students to stop their protests.
Those measures increased the amount of money available for bursaries and loans to ease the pain of higher tuition fees, but with no tuition fee increase, the money became just another perk for the students and in the end, the entire fiasco actually puts the government further and further into the hole!

Then of course were two PQ members that got themselves into some controversy, right off the bat.

"André Villeneuve, the Parti Québécois MNA for Berthier, who also owns a construction company, said Friday he has asked the Charbonneau Commission into corruption in Quebec’s construction industry to supply him with the licence plate number and the time a vehicle belonging to Plancher Mirage André Villeneuve inc. was seen parked at the mall where assassinated Mafia kingpin Nicolo Rizzuto would hold court." Read the rest of the story.

While the stunned Villeneuve denied any relationship with the mob, the vehicle in question was far from home, and no explanation was offered as to why it was there.
So far, he is being given the benefit of the doubt, but questions still linger.

In another case of skeletons in the closet, Minister of the Environment Daniel Breton denied being a member of the lobby group Sortons le Québec du nucléaire despite his name being listed as being a member of the advisory board on the group's website .

Within hours of the controversy, his name was removed from the website, but not before I grabbed a Before/After screen shot.


Now the minister vehemently denied his involvement in the group but alas his denials weren't credible.
Michel Duguay, the Sortons le Québec du nucléaire coordinator, gave an impromptu interview to TVA where he asserted that he had been working with Mr. Breton for four years and that Mr. Breton was and still is a member of the group. Link{fr}

Somebody's lying and I don't think it is Mr. Duguay!

In another shot aimed at the new government, the board of directors of the association of Quebec's Chamber of  Commerce blasted the new government in a news release: 

FCCQ calls on Quebec government to open dialogue with business community on economic growth

"The board of directors of the FCCQ finds it regrettable that major decisions made so far by the new government are contrary to this spirit of dialogue and cooperation.

• Major decisions have been announced in a hasty manner, without consultation with the communities or businesses most directly affected and without the least assessment of their effects on the economy.
• A major tax increase has been announced, particularly on capital gains, which is actually an undue tax on success, even for small investors.
• Measures that effectively maintain or increase provincial revenue have been abolished without identifying areas where spending will be reduced.
• Even before the findings of strategic environmental studies are known, major reservations are being expressed about the possible exploitation of natural gas and even certain oil fields, when these sources could create a great many jobs and revenue for the province.
• Draconian changes have been announced to the conditions imposed on natural resource development companies, and there is a good chance that this may halt the economic recovery that has begun in many of Quebec's natural resource regions.
• The Ministry of Economic Development, Innovation and Export, which had succeeded in establishing ongoing communications with companies throughout Quebec in supporting their efforts to promote business growth, both locally and internationally, is being dismantled. Read more

 I think that just about sums it up....

Then there was the partisan appontment of:

"Nicolas Girard, who was Parti Québécois MNA for Montreal’s Gouin riding for nearly eight years until his defeat in the Sept. 4 election by Françoise David, co-spokesperson for Québec solidaire, was named by the PQ cabinet on Wednesday as president and CEO of the Agence métropolitaine de transport....

In order to make room for Mr. Girard, Madame Marois let go Paul Côté, interim president of the AMT, someone described by interim Quebec Liberal leader, Jean-Marc Fournier as “very competent.”

BEFORE: "Partisan nominations by the Charest government are a scandal!" AFTER "Gulp!"

Who says a minority government can't wreak havoc?

All this controversy in the first few days of power.
Is all this just teething problems or a taste of the future and is Pauline destined to follow in the footsteps of France's new president François Hollande, whose popularity has plummeted just four months after the election as voters realize their huge mistake? Link

Time will tell....