Quebec Studies

International Economic Issues of a Sovereign Quebec

Quebec Studies (2001), 31, (1), 61–75.

Abstract

61 International Economic Issues of a Sovereign Quebec* By Fredric C. Menz Clarkson University Horst Feldmann University of Tübingen The separation of Quebec has been a real threat to Canada since the Parti Québécois (PQ) was first elected to govern Quebec in 1976.* Since that time, there have been two referenda held in Quebec on the sovereignty issue. The first referendum was held in 1980 and a majority of the citizens of Quebec voted against a mandate to negotiate "sovereignty-association" with Canada. The second referendum was held one year after the PQ had regained the government in 1994 following the failure to ratify the Meech Lake Accord in 1990 and defeat by referendum of the Charlottetown Accord in 1992. Sovereignty was defeated again but by a very narrow margin, with 50.6 percent no and 49.4 percent voting yes. Opinion polls show that public support for sovereignty within the province has declined somewhat since the 1995 referendum. In most recent polls, support for sovereignty refuses to go much beyond 40 percent.2 In March 2001, Quebec Premier Lucien Bouchard quit politics after failing to reignite separatist zeal. His successor, former finance minister Bernard Landry, has been a committed sovereigntist all his political life and few in Quebec doubt that he will call a new referendum if he sees a chance of winning. As opinion polls also show, a fresh push for sovereignty by Quebec nationalists could find high levels of support among the critical group of young and middle-aged francophone Québécois (Warn 2001). Thus, Quebec sovereignty remains a real possibility and a very important Canadian issue. This paper provides an overview and non-technical discussion of the most important international economic policy issues that Quebec would face if it were to become a sovereign nation. We also discuss some of the basic economic research on these issues and the economic policy questions that would confront Quebec. The paper is written on the assumption that there would be a majority vote in favor of sovereignty in Quebec, that the rest of Canada would accept this outcome, and that Quebec's separation from the Canadian confederation would subsequently occur. We focus attention on two issues. The first part of the paper considers possible different forms that economic associations among countries can take and their applicability to a relationship between Quebec and other sovereign nations. The second part discusses the scope for and the effects of macroeconomic policies if Quebec were to become a sovereign nation. While the specific form of political relationship between an independent Quebec and Canada is unknown, we assume that Quebec would be faced with the same economic issues and choices that typically face small sovereign economic entities. This is not a paper about the implications of Quebec sovereignty on the Canadian federation, the possible economic consequences of sovereignty for Quebec, or on relations between Quebec, Canada, or other countries, particularly the United States.3 We also do not consider questions arising from the separation process itself, such as what to do with the accumulated public debt or Québec Studies, Volume 31, Spring/Summer 2001

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Author details

Menz, Fredric

Feldmann, Horst