“We’ve been receiving calls from more and more foreign institutional clients wondering ‘What’s going in Quebec?’” writes the bank’s chief economist and strategist Stéfane Marion.
Marion says the question is relevant as foreign investors hold a third of the province’s debt, compared to 20 percent in Ontario.
Despite Quebec having comparable figures in terms of COVID-19 cases and ICU hospitalization as other industrial countries, he says, it has enacted much stricter public health measures than the rest of North America.
As a result of these restrictions, the National Bank has had to reduce its outlook for Quebec’s real GDP growth in 2022 by more than half a percentage point.
“So what is prompting our authorities to such stringency?” asks Marion.
“An inadequate vaccination campaign? On the contrary. Our clients’ eyes widen when we tell them that more than 85 percent of Quebec’s population has been vaccinated at least once ... and 90 percent of adult Quebecers are twice vaccinated, a percentage that many countries would envy.”
Marion then goes into data-backed criticism of Quebec’s planned financial penalty on those who are unvaccinated, saying if the government’s logic applies, those who are older and unvaccinated should pay even more, since they are the group most represented in hospitalizations.
“In the circumstances, we doubt punitive measures would be effective in clearly and durably relieving pressures on our health care system, especially since we know little about the socio-demographic make-up of the unvaccinated and the true vaccinable population.”
Marion says if 282 COVID-19 patients in the ICU can slow an economy of 8 million people, “we have a health-care capacity problem that may require an injection of public funds,” and to that end, he recommends the revival of the Health Contribution that ended in 2017.
The economist concludes by warning that an inadequate health-care system should not “become a structural obstacle to economic growth when COVID-19 comes under endemic management.”
