{"id":3813,"date":"2023-03-16T02:00:37","date_gmt":"2023-03-16T06:00:37","guid":{"rendered":"https:\/\/cpp.hec.ca\/en\/?p=3813"},"modified":"2023-03-15T14:48:01","modified_gmt":"2023-03-15T18:48:01","slug":"productivity-and-prosperity-in-quebec-2022-overview","status":"publish","type":"post","link":"https:\/\/cpp.hec.ca\/en\/productivity-and-prosperity-in-quebec-2022-overview\/","title":{"rendered":"Productivity and Prosperity in Quebec \u2013 2022 Overview"},"content":{"rendered":"

Without a fundamental reform of Quebec\u2019s many business-support programs, it will not be able to meet the government\u2019s objective of matching Ontario\u2019s standard of living by 2036; worse yet, the province may well enter the same downward spiral that has afflicted the Canadian economy as a whole since 2015. This is the main conclusion of Productivit\u00e9 et prosp\u00e9rit\u00e9 au Qu\u00e9bec<\/em> –<\/em> Bilan 2022, <\/em>the latest edition of the annual overview of Quebec\u2019s productivity and prosperity, released today by the Centre for Productivity and Prosperity \u2013 Walter J. Somers Foundation (CPP)<\/a>.<\/p>\n

\u201cPoor productivity has always been the Achilles\u2019 heel of Quebec\u2019s economy,\u201d says Robert Gagn\u00e9, CPP Director and co-author of the study. \u201cEven though the province has made some headway in recent years, simply focusing new business-support policies on productivity will not be enough to maintain these gains. In the short term, Quebec is in danger of hitting a wall if it doesn\u2019t bring in reforms. Basically, its strategy continues to aim at the wrong targets, and so will remain just as costly and ineffective as it has been for 25\u00a0years now.\u201d<\/p>\n

\u00a0<\/strong>The misguided goal of job creation at all costs<\/strong><\/p>\n

The CPP\u2019s annual overview condemns the way that job creation remains the central tenet of the province\u2019s economic development strategy. In 2021, the Quebec government granted some $2.4\u00a0billion in tax credits to businesses, proportionally twice as much as similar credits in Ontario.<\/p>\n

\u201cThe problem isn\u2019t just the huge amounts,\u201d explains Jonathan Deslauriers, Assistant CPP Director and co-author of the study. \u201cOver 80% of the Quebec government\u2019s tax support for businesses is still aimed directly or indirectly at stimulating employment rather than competitiveness. Not only is this strategy inadvisable at a time of labour shortages, but it also tends to reinforce the harmful effects of federal competition-management policy, by favouring large companies rather than helping businesses of all sizes to become more dynamic.\u201d<\/p>\n

The government must give serious thought, and soon, to eliminating the emphasis on protecting jobs. \u201cThis way of looking at economic development has never served Quebec\u2019s interests,\u201d adds Gagn\u00e9. \u201cSince it didn\u2019t know when and how to reform its strategy, the government ended up granting billions to large companies that would have done what it wanted in any case. Meanwhile, smaller firms were neglected. In the end, Quebec\u2019s constantly lagging productivity is no surprise, despite the billions injected by the state. The government is preaching to the choir, without really supporting SMEs, even though they are the heart of the Quebec economy.\u201d<\/p>\n

Essential reform that has to focus on competition<\/strong><\/p>\n

If Quebec wants to reach the goal it has set itself for 2036, it will have to learn to take advantage of the benefits of competition to stimulate businesses\u2019 competitiveness. \u201cQuebec\u2019s economic development strategy has clearly derailed, but no one really seems to know how to get it back on track,\u201d says Gagn\u00e9.<\/p>\n

Consequently, the HEC Montr\u00e9al researchers suggest a fundamental reform of the province\u2019s fiscal strategy, with the goal of limiting government intervention. \u201cRather than constantly offering new income tax credits, and refundable ones at that, the government would get better results by reducing businesses\u2019 tax burden and giving them more room to manoeuvre so that they can thrive in a healthy competitive environment,\u201d offers Gagn\u00e9. \u201cIn the end, the economy as a whole would benefit! Companies would be more competitive, more profitable and hence better able to survive. Some of them might well make gains on foreign markets and, more important still, Quebec consumers would have access to higher-quality goods at competitive prices.\u201d<\/p>\n

In the authors\u2019 view, Quebec cannot afford to wait before launching this reform. \u201cLike Canada as a whole, Ontario has been losing ground in comparison with the main Western economies. This gap is even likely to widen in years to come, according to Finance Canada forecasts. So the Quebec government\u2019s goal of reaching parity with Ontario by 2036 will absolutely have to be a minimum\u00a0\u2013 otherwise Quebec may fall even further behind in economic terms,\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 2022 Overview<\/a>, Centre for Productivity and Prosperity (CPP) \u2013 Walter J. Somers Foundation, HEC Montr\u00e9al, March 2023 (in french only)<\/p>\n<\/div>

Read the publication<\/span><\/a><\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":4,"featured_media":3811,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,7],"tags":[],"class_list":["post-3813","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-productivity-and-prosperity-in-quebec","category-publications"],"_links":{"self":[{"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts\/3813","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=3813"}],"version-history":[{"count":5,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts\/3813\/revisions"}],"predecessor-version":[{"id":3821,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/posts\/3813\/revisions\/3821"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/media\/3811"}],"wp:attachment":[{"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/media?parent=3813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/categories?post=3813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cpp.hec.ca\/en\/wp-json\/wp\/v2\/tags?post=3813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}