Quebec’s economy shouldn’t be taken for granted

Quebec’s prosperity and its quite enviable economic situation could be negatively affected if the next government isn’t proactive in promoting economic action geared toward businesses’ productivity and competitiveness.

Opinion letter by Yves-Thomas Dorval, President & CEO, Quebec Employers Council.

Montreal Gazette, p. A8 – August 24, 2018

A common interest in national prosperity tends to work against ideological divisions in the political spectrum and any popular appetite for taking extreme stances on issues. Quebec, relatively, has more than held its own economically, and as we head into an election campaign, we can, by and large, consider ourselves fortunate to live in this province. Not everything is perfect, mind you — as the candidates of the various parties will surely remind us on a daily basis — but as voters we aren’t faced with drastic choices, as recently was the case in certain jurisdictions (very) close to home.

Still, the high level of uncertainty and threats hovering over the global economy require political action geared toward achieving considerable economic resilience, because all indications are we are going to experience some headwinds along the way. Some of the issues are cyclical; others stem from the extreme ideologies put forth by certain heads of state.

The moral of the story? We have to minister to our economy! This means taking great care to ensure our companies’ vitality, upon which depends the resilience of our economy in face of global fluctuations, and thus citizens’ welfare. The idea isn’t to unduly favour the business community with handouts; it’s to put the most favourable conditions in place to make our companies more competitive than those elsewhere.

Despite indicators being favourable thus far, the fact remains that Quebec is faced with historic shortcomings in terms of investment, productivity and technological maturity. While some industrial sectors and certain regions have fared better than others, the overall results are still quite mixed, as attested by our latest Report Card on Quebec Prosperity. At the same time, there is a downside to the good marks we’ve achieved in the area of employment: there is a labour shortage, and it is especially severe in certain regions and sectors.

This is why, over the course of the election campaign, it is of utmost importance the parties not take the province’s economic growth for granted, and in particular, they need to make sure they don’t ignore the challenges posed by the labour shortage.

Drawing on its 2018-2021 economic platform, the Quebec Employers Council recommends putting the emphasis on four basic ingredients needed to stay the course on achieving prosperity: stable and predictable investments in education and continued training; a more competitive tax system for all sizes of businesses (as well as for citizens); aggressive activation of the engines of growth, which are innovation, diversification and globalization; and proper negotiation of our energy and digital transitions.

A prosperous society is one that is productive, but to achieve this, it is important that education and training are prioritized, because our economic and social challenges are going to be best supported by well-educated citizens and by workers who are upgraded in their knowledge and skills. The demographic situation and the job market dictate we no longer have the luxury of even the slightest lapse.

It should be noted that our public finances are in order. They don’t provide us with the opportunity for lavish spending, but they do allow us to provide more room to manoeuvre. We need to achieve a more competitive tax system, not just for the small and medium businesses, but for the larger companies, as well. While they are often taken for granted, they are major purveyors of well-paying jobs, and their operations generate a sizeable amount of economic activity. Currently, labour, innovation and investment are excessively taxed.

The ingenuity and creativity of entrepreneurs are already well established, but they encounter problems with a fiscal, legislative and regulatory structure that is far heavier than in other American jurisdictions. It’s good to start up a business. Maintaining the business and attracting new ones and letting them grow up is even better. Constraints and uncertainties relating to investment need to be removed, thereby enabling our businesses to increase productivity and make them more competitive.

As for the energy and digital transitions, these post formidable challenges to Quebec businesses. But we are well positioned, while some states are still wondering whether they need to go to the starting line of a global race that has already begun. Who wins and who loses will be determined by how successful companies and economies are in conducting this shift.

Quebec’s prosperity and its quite enviable economic situation could be negatively affected if the next government isn’t proactive in promoting economic action geared toward businesses’ productivity and competitiveness. The resilience of Quebec’s economy, on which our standard of living and social growth depends, is intrinsically linked to the vitality of our businesses.

Lire la version française : Élections: bichonner l’économie pour prospérer

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