High staff turnover in government
Did you know that the Ministère des Finances du Québec is also suffering from a labor shortage? That it struggles to keep some employees despite good benefits and tenure in government?
This year, the turnover rate at the MFQ is 13.8%, the highest in four years. In 2019-2020, before the pandemic, this rate was 10.2%. In particular, the Department lacks accountants, and it has difficulty retaining young people who begin their careers there after university.
“An increase in the number of departures in the organization is expected for the next few years. Efforts must therefore be invested to curb this trend, by offering employees a positive experience that will retain and mobilize them,” it is written in the MFQ plan.
The MFQ is not the only one to suffer from the shortage. In fact, 16 of the 21 departments have seen their turnover rate increase over the past two years. The Treasury Board Secretariat (TBS) has the highest voluntary departure rate, at 23.6% in 2021-2022 (latest year available), followed by the departments of Tourism (19.9%) and Family ( 19.8%).
Last but not least, the Treasury Board Secretariat explains to me that the shortage hurts. “Exit interviews have revealed that these are mainly carried out among employees who have worked for the Secretariat for less than three years,” wrote the TBS to me, which says it is working on retention, in particular by offering training and prospects for internal career progression.
The lowest rate goes to the Ministry of Revenue, with only 8.6% turnover (see the table listing all the ministries at the end of the column). The comparative rate includes employees who voluntarily leave their position for another employer or who essentially retire.
Heavy IT bill in sight
The government’s revenue collection system, which is over 40 years old, is outdated. And the Ministry of Finance plans to replace it, we learn from the strategic plan of the Ministry. Translation: another big IT bill is coming to the government.
According to the strategic plan, “the management of government revenues, receipts and accounts receivable is supported by an obsolete accounting system, designed in the 1980s. Process optimization has not been possible for fifteen years” . Oh boy!
The revenues of all government departments and budgetary agencies are managed by this same system, called SYGBEC-revenues. This is the sister system to the one that was replaced for the expenditure side, called SYGBEC-dépenses.
However, the replacement of SYGBEC-dépenses has cost the government a fortune in recent years.
The ultimate implementation of the new SAGIR system, which notably manages employee payroll, took several years and cost 1.28 billion rather than the 83 million originally planned, according to a survey by the Montreal Journal.
When will we do the income component? The Department plans to “define new government business processes in revenue, revenue and accounts receivable management by March 31, 2025,” the strategic plan states.
At the Ministry of Finance, I am told that “the opportunity file is being drafted, in collaboration with the Ministry of Cybersecurity and Digital. The replacement solution has not yet been identified. The cost estimate will depend on the choice made by the government”.
To be followed carefully.
The tax is lower… in Quebec!
Furthermore, in its strategic plan, the Ministère des Finances undertakes to maintain Québec’s advantage in terms of corporate taxation. An advantage ? Yes yes, you read that right.
Quebec seeks to ensure that the METR for investments is considerably lower than elsewhere. The what ? The METR, or “the marginal effective tax rate”.
Unlike the statutory corporate income tax rate, the METR incorporates into its calculation, for investing companies, tax measures favorable to investment. Examples ? The additional capital cost allowance of 30% or the investment and innovation tax credit (C3i).
The METR was 8% in Quebec between 1999 and 2022, compared to a Canadian average of 13.4%, which represents a difference of 40% in favor of Quebec, according to the MFQ.
In its plan, the Department undertakes to maintain this gap between 20% and 40% within four years.
Good to know…
Make the “old” work
In addition, the Ministry has set itself the task of increasing the employment rate of 60-69 year olds from 37% in 2022 to 39% by 2027.
In his last budget, Eric Girard announced that from 1er January 2024, contributions to the QPP will be optional from the age of 65, so as not to penalize the oldest who would like to continue working.
In May, Treasury Board President Sonia LeBel announced that teachers eligible for retirement who agree to stay on full-time for the next school year will receive a check for $12,000.
Other measures could be put forward by the government to achieve this objective, although no specific measure is mentioned in the strategic plan.
Quebec desperately needs its experienced workers to stay the course. In 2022, the employment rate for 60-69 year olds in Quebec was 37%, compared to 43.8% in Ontario.
The astonishing catch-up of Quebecers
As we know, Quebeckers are even less wealthy than Ontarians, at least when we rely on GDP per capita.
We also know that Quebec has caught up in recent years, with the gap in real GDP per capita with Ontario falling from 16.4% in 2018 to 13.8% in 2022. GDP per capita reflects of the standard of living.
What we do not know is whether this catch-up will continue. However, the strategic plan tells us that the government believes it can reduce the gap between Quebec and Ontario from 13.8% today to 10% in 2027, a decrease of approximately one percentage point each year.
François Legault is not the only one to make a hobby of it. Twenty-two years ago, in the very first strategic plan of the Ministère des Finances, it was mentioned, with regard to this same GDP per capita: “Quebec has caught up since the Quiet Revolution, but the gap to be filled [avec l’Ontario] remains high at 23%. »
That was in 2001. The Minister of Finance at the time, Pauline Marois, had not set any specific catch-up target. All the same, we were 23% behind then, and we are now at 13.8%, on our way to 10%.
All the same…
Come on, happy holidays everyone!
