I believed that Quebecers had remained creative, innovative, inventive. Like Joseph-Armand Bombardier or Guy Laliberté, from Cirque du Soleil.
Unfortunately, this is not what the general director of the Quebec Innovation Council, Luc Sirois, said during his presentation at the Congress of the Association of Quebec Economists (ASDEQ).
A Council survey finds that innovation is stalling. The proportion of companies that have carried out innovation projects over the past 12 months in the Montreal region is significantly lower than those in Toronto and Vancouver.
And according to the study, Quebec’s overall research and development (R&D) spending has been in almost constant decline for 20 years. They represented 1.7% of GDP in 2001, compared to only 1.3% today.
Ontario and British Columbia also declined, but these two provinces have clearly reversed their downward trend since 2015, which Quebec has not done.
Over the past 20 years, R&D has declined by 25% in Quebec (as a proportion of GDP), compared to 3% in Canada as a whole. Meanwhile, the United States saw a 37% jump and Germany saw a 24% jump. The average increase in industrialized countries is 32%.
“It’s an unsuspected crisis. There is a change to be made,” said Luc Sirois, who also bears the title of chief innovator of Quebec.
This Quebec and Canadian deflation is not without repercussions. Because innovation is one of the pillars of productivity, on which our standard of living depends.
Canadian productivity deficiencies have been on everyone’s lips for some time. On Thursday, for example, on the sidelines of its annual meeting, the president of Power Corporation, Paul Desmarais Jr., spoke of an economic emergency, and urged governments, businesses and workers to turn the situation around1.
Concretely, companies that innovate benefit, according to the study. Not only does innovation reduce costs and increase exports and revenues, but it also serves as a labor attraction.
Why this decline in innovation? The reasons are diverse. The decline of the Canadian manufacturing sector has something to do with it, with R&D being very present there.
Luc Sirois also talks about the changes in our economy, the importance of having strong, locally owned businesses. “The distribution centers of large foreign companies don’t do R&D,” he says.
We could also talk about the modification of the rules in the pharmaceutical sector, in addition to the aging of entrepreneurs, who do not always consider it necessary to innovate before retirement.
“In companies undergoing takeover, innovation explodes,” says Mr. Sirois, giving the example of Biscuits Leclerc.
To remedy the situation, the chief innovator is talking about better targeted tax aid, for example towards strategic sectors or businesses with high potential.
The simplicity of the financing process would also be greatly appreciated by innovators. The study also suggests placing more emphasis on applied rather than fundamental research and having better university-business collaboration. Added to this in particular is the improvement of the skills of managers.
Leap in the well-being of Quebecers
The news wasn’t all bad at this convention. An economist from the Institute of Statistics of Quebec (ISQ), Sarah-Roy Milliard, came to explain that Quebec has experienced notable progress in social matters.
For 15 years, Quebec has seen an increase in the employment rate and median income, combined with a decline in the proportion of low incomes and the level of serious crime.
Quebec also has more high school graduates among 25-34 year olds (80.5%), more women in politics (35.4%), and the graduation gap has been reduced between advantaged and disadvantaged students. Added to this is an increase in life expectancy, to 82.5 years.
Certain elements darken the portrait. The proportion of the population aged 12 and over declaring themselves to be in good mental health has declined, from 75% in 2015 to 66% in 2021. Consolation: this proportion has dropped to 57% in the rest of Canada.
Other less positive points: Quebec’s economic indicators, although improving, are generally less good than in the rest of Canada (value of infrastructure, financial capital, etc.).
THE challenge: the environment
Furthermore, Quebec faces challenges that will increase over the coming years. First, there is aging, which will exert very significant pressure on the health system, particularly on home care, explained economist Pierre-Carl Michaud.2.
But it is the environment which constitutes, by far, the most worrying challenge, since the transformations will affect all other dimensions, social or economic.
The portrait of the researcher from the University of Quebec in Outaouais Jérôme Dupras reminded the 200 delegates of this.
The professor of ecological economics first explained that at the current rate, Quebec will have reduced its greenhouse gas (GHG) emissions by 19% in 2050, while the main countries have agreed to then be carbon neutral. , a reduction of 100%3. It will take major personal, social and economic changes to get there.
This accelerated warming, among other things, will have a profound impact on biodiversity. According to projections, 49% of protected areas will be subject to changes of 80% of their species over the coming years, explained Mr. Dupras, also bassist for Cowboys Fringants4.
These upheavals in biodiversity will have impacts on pollination, fish stocks, agricultural and forestry productivity, among others.
The researcher also demonstrated, using interactive maps, that current agricultural subsidies for the environment have no effect, because they are far too small. Moreover, their bureaucratic cost is so heavy for farmers that they are unattractive.
“We must have the courage to change the paradigm,” concludes Jérôme Dupras.
1. Read the article “The Desmarais clan sends a strong message about the decline in our productivity”
2. Consult the column “Senior care: four times more services for the same bill”
3. The Quebec government’s Green Economy Plan would reduce GHG emissions by 40% by 2050, according to the presentation.
4. At the recent world summit in Montreal, there was talk of protecting 30% of our territory (land, waters and oceans). However, protected areas are currently around 18% in Quebec, and again, this is the part that was easy to protect, namely in the North, thanks to the Crees and the Inuit, points out Jérôme Dupras.