The Legault government has just boosted the borrowing capacity of Investissement Québec (IQ) by $3.3 billion to allow the state-owned company to provide even more assistance to businesses.
IQ will be able to borrow up to $4.87 billion by March 31, 2025, a recent executive order stipulates. This new borrowing regime replaces the one that had been in effect since 2020 and which gave the government corporation the right to borrow $1.56 billion.
“The $3.3 billion increase in the borrowing plan […] is mainly explained by the significant increase expected in the portfolio of Investissement Québec over the next three years, ”says in an email a spokesperson for the institution, Isabelle Fontaine.
“With the expanded mandate that the government has given to Investissement Québec, financial interventions […] plans to deploy to support the economy through 2025 require a higher borrowing regime,” she adds.
By the end of March 2021, IQ had already borrowed more than $1.1 billion, more than double the borrowings in force a year earlier and ten times those in place two years earlier.
IQ generally borrows from the Ministry of Finance at very advantageous rates. Note that some of the new borrowings will be used to repay previous borrowings.
the most generous in the country
To finance this support for IQ, the government can either borrow in turn or draw on its reserves.
As of March 31, 2021, IQ held nearly $1.8 billion in business loans and nearly $1.9 billion in equity investments in businesses and investment funds. This is respectively 19% and 45% more than the previous year.
To this must be added the approximately $2.3 billion in business loans and $500 million in investments held by the Ministry of the Economy at the end of March 2021.
“Quebec already has the palm of being the most subsidizing government in the country. We don’t need to put in $3.3 billion more,” reacted Renaud Brossard of the Taxpayers’ Federation.