{"id":3083,"date":"2020-12-15T04:00:27","date_gmt":"2020-12-15T09:00:27","guid":{"rendered":"https:\/\/cpp.hec.ca\/en\/?p=3083"},"modified":"2022-02-28T15:20:51","modified_gmt":"2022-02-28T20:20:51","slug":"productivite-et-prosperite-au-quebec-bilan-2020","status":"publish","type":"post","link":"https:\/\/cpp.hec.ca\/en\/productivite-et-prosperite-au-quebec-bilan-2020\/","title":{"rendered":"Productivity and Prosperity in Quebec \u2013 2020 Overview"},"content":{"rendered":"

\u201cAt a time when the COVID-19 pandemic confronts Quebec with the most serious economic crisis in its contemporary history, its inability to improve its productivity and hence to generate wealth is a cause for concern,\u201d says Robert Gagn\u00e9, Director of the Centre for Productivity and Prosperity \u2013 Walter J. Somers Foundation (CPP). It is already coping with a structural problem that is widening the gap between the province and the main Western economies, year after year, and now must deal with the consequences of an unprecedented economic shock. This is the premise of the 11th<\/sup> edition of Productivity and Prosperity in Quebec \u2013 Overview<\/a>, <\/em>released today by the CPP.<\/p>\n

A historic shock<\/strong><\/p>\n

The annual CPP Overview<\/em> starts by noting that in the first six months of 2020, Quebec\u2019s GDP plunged by 15.5% when the brakes were applied to the provincial economy. Of the 20\u00a0industrialized countries Quebec is compared with, only Spain, Italy and France suffered more serious declines during this period.<\/p>\n

\u201cAlthough Quebec has been particularly hard hit by the pandemic, the shock in terms of public finances will be largely softened by its government\u2019s responsible management of the budgetary balance over the past five years,\u201d notes Jonathan Deslauriers, Executive Director and co-author of the study. \u201cOn the other hand, the pandemic may well leave an indelible imprint on the country\u2019s finances.\u201d According to the latest forecasts, the deficits accumulated by all Canadian public administrations for 2020\u20132021 are likely to approach 20% of the national GDP, making Canada the country that took on the most debt to weather the crisis.<\/p>\n

Not surprisingly, the federal government is largely responsible for this situation. The latest economic update calls for its program spending to increase by 71% during this fiscal year, to about $15,900 per capita. As a result, Ottawa will be faced with the largest budgetary deficit in its contemporary history, of $382\u00a0billion. With the deficits accumulated before the crisis to finance short-term economic growth, the federal government will have added $476\u00a0billion to its consumer debt since 2015, for an overall increase of 76%. \u201cIf borrowing conditions were to tighten up, the recovery could prove long or painful for future generations,\u201d emphasizes Deslauriers.<\/p>\n

\u00a0<\/strong>Some recommendations<\/strong><\/p>\n

While the Quebec government managed to ride out the first wave thanks the margin of manoeuvre it gained in recent years, it is not out of the woods. \u201cFar from it,\u201d maintains Gagn\u00e9. \u201cThese efforts allowed the province to improve its public finances on paper, true, but in practice the deficit when it comes to maintaining its infrastructure continues to threaten intergenerational equity. The government will have to proceed carefully, as otherwise its actions to support the recovery could well disrupt the fragile balance between passing along a higher bill to future generations as it accumulates further deficits, or once again neglecting the province\u2019s infrastructure.\u201d<\/p>\n

The authors suggest that the government give itself more room to manoeuvre by liquidating the Generations Fund. This would reduce the impact of the next two deficits on the debt, and at the same time free up funds for repairing the province\u2019s infrastructure.<\/p>\n

To stimulate the recovery, rather than attempting to respond to the crisis through passive measures to support all industries and all jobs regardless of their viability or growth potential, the Quebec government should focus on the three pillars of productivity: education, innovation and investment. In this way it will succeed in fostering a lasting recovery, while tackling the structural problem that has been hindering the province\u2019s economic growth for too long now. \u201cThe Quebec government\u2019s recent economic update has set the tone \u2013 now it remains to be seen whether it will manage to hold this course,\u201d concludes Gagn\u00e9.<\/p>\n

\n

To read more : Deslauriers, Jonathan, Robert Gagn\u00e9 and Jonathan Par\u00e9, Productivity and Prosperity in Quebec \u2013 2020 Overview<\/a>, Centre for Productivity and Prosperity (CPP) \u2013 Walter J. Somers Foundation, HEC Montr\u00e9al, December 2020<\/p>\n<\/div>

Read the publication<\/span><\/a><\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":4,"featured_media":3629,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-3083","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-productivity-and-prosperity-in-quebec"],"_links":{"self":[{"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts\/3083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/comments?post=3083"}],"version-history":[{"count":2,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts\/3083\/revisions"}],"predecessor-version":[{"id":3683,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts\/3083\/revisions\/3683"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/media\/3629"}],"wp:attachment":[{"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/media?parent=3083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/categories?post=3083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/tags?post=3083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}