For a second year in a row, Quebec is extending more than $4 billion to stimulate the recovery of an economy that has been greatly disrupted over the past two years, relying essentially on an increase in business productivity to counter the labor shortage artwork.
Last year will have been one of upgrading. Quebec’s GDP grew by 6.3% in 2021 after falling by 5.5% the previous year. For its part, the labor market is back to what it was before the pandemic.
However, to ensure the continuation of the post-pandemic economic recovery, the government wants to reduce the impact on businesses of the labor shortage. To do this, it relies on aid that aims to increase their productivity.
More than half of the sums allocated to the recovery—2.2 billion dollars—aims to obtain productivity gains. These amounts will be injected into research and development, the digital shift, new technologies and an increase in exports.
For more information on the Quebec budget
The government is also announcing that the investment and innovation tax credit (C3i) will be extended for one year, until January 2024. This measure aims to encourage companies to digitize and modernize their equipment. An envelope of 600 million is also planned for innovative companies, including 500 million reserved for investment capital funds.
Why favor an increase in productivity rather than recruitment? During the presentation of the budget, the Minister of Finance of Quebec, Eric Girard, pointed out that 80% of the increase in wealth would go through an increase in productivity while 20% would come from an increase in the number of workers.
To a lesser extent, the government will rely on the integration of immigrants into the job market to counter the labor shortage: 290 million will be injected over the next five years to facilitate their entry into the market. work.
Regions, culture and forecasts
Almost all of the remaining funds will go to regional development. Of the $1.5 billion allocated to the regions, $627 million is earmarked for the agricultural and agri-food sectors via food processing and food self-sufficiency projects, as well as amounts earmarked for fisheries.
For the recovery in culture, the government is advancing 258 million over five years, including 72 million “to mitigate the effects of COVID-19” and 157 million to “make the cultural environment shine”. Additional investments of $125 million to support cultural projects such as the redevelopment of the Musée d’art contemporain de Montréal or the Espace Riopel project are also planned.
Presented as “prudent” and resulting from “responsible management”, the budget is based on growth forecasts revised downwards due to the economic slowdown resulting from health measures at the start of the year. The government forecasts growth of 2.7% in 2022 and 2% in 2023.