As it nears the end of a near-record year for business aid, Economy and Innovation Minister Pierre Fitzgibbon wants to open its pockets more this year, which will further increase Quebec’s gap with Ontario.
In the fiscal year ending Wednesday, the ministry’s Economic Development Fund (EDF) will have disbursed more than $ 1.4 billion in aid to businesses, the government’s most recent spending budget says. This is 66% more than the $ 848 million allocated in 2019-2020.
The pandemic explains much of the increase. A year ago, Quebec implemented initiatives to help businesses affected by the crisis, including the Temporary Concerted Action Program for Businesses (PACTE).
Even though economists predict strong growth this year, thanks in part to accelerating vaccination, Mr Fitzgibbon does not plan to cut loans and subsidies to the private sector, quite the contrary. In 2021-2022, the Ministry of the Economy plans to grant an additional $ 80 million to businesses for a total of nearly $ 1.5 billion.
In addition, Quebec will invest $ 100 million in the Quebec Business Growth Fund, which will invest in companies “which have either a strong growth potential or a strategic nature”.
Due in particular to the assistance programs put in place for COVID-19 and bad debts resulting from the economic shock of the pandemic, the Ministry of the Economy saw its spending go from $ 1.3 billion in 2018-2019 to nearly $ 2.8 billion in 2019-2020.
Much less in Ontario
In Ontario, the size of the equivalent ministry of Economic Development, Job Creation and Trade is much smaller. In 2019-2020, it spent just over $ 705 million, while Ontario has 72% more inhabitants than Quebec.
However, the neighboring province seems more inclined than Quebec on direct subsidies to businesses. In 2019-2020, the Ontario Ministry of Economic Development thus paid $ 44 million to Honda, $ 25 million to Ubisoft, $ 21.5 million to Ford Motor, $ 17.5 million to Linamar, $ 12.9 million to Open Text, $ 9 million to Sanofi Pasteur and $ 8.4 million to Toyota.
In 2019-2020, the FDE of the Quebec Ministry of the Economy awarded, in total, approximately $ 68 million in subsidies to businesses.
List of companies having received the most assistance
Here is the list of companies that have received the most aid from Quebec since the CAQ came to power
Since taking office in the fall of 2018, the Legault government has drawn heavily from the Economic Development Fund of the Ministry of the Economy to help businesses. Here are the ten biggest beneficiaries.
1. Telesat / MDA 450 M$
- The Legault government has reserved its biggest check for an ambitious satellite project that could create 600 jobs in Montreal and Gatineau. Note that Telesat and MDA will soon collect hundreds of millions of dollars by going public.
2. Kruger 200 M$
- Last month, the forester received government loans and investments totaling approximately $ 200 million. The funds will be used to finance projects of $ 386 million in Sherbrooke and Trois-Rivières. In 2018, just before the CAQ came to power, Kruger received a state loan of $ 105 million.
3. Nordic Kraft 143 M$
- This assistance enabled Chantiers Chibougamau to invest more than $ 300 million to relaunch a pulp mill in Lebel-sur-Quévillon. Due to greater automation than expected, the project will create 270 jobs at at least $ 90,000 per year, or 30 less than announced in 2019.
4. Premier Tech 79 M$
- In 2019, the Rivière-du-Loup company received a $ 4 million grant and a $ 30 million interest-free loan for a manufacturing project. Then, last year, she received a partially forgivable $ 45 million loan for a market diversification and innovation project.
5. Arbec Lumber 72 M$
- This company, jointly owned by the Saputo, has received a major boost from Quebec to deal with the customs duties imposed by Washington in the context of the softwood lumber dispute. Arbec maintains that this is not “government assistance”, but rather a “commercial” loan.
6. Electric Lion 68 M$
- The truck and bus manufacturer has benefited from the PACTE, a special program linked to the pandemic, to the tune of $ 18 million. Lion also received $ 100 million in partly “forgivable” loans from Quebec and Ottawa for its future battery plant.
7. Agropur 57 M$
- The dairy cooperative was entitled to six financial aids (loans and grants) for factories located in Saint-Hyacinthe, Granby and Beauceville. Agropur is currently facing financial difficulties.
8. Alstom 56 M$
- Seriously threatened with closure due to a lack of contracts, the former Bombardier rolling stock plant in La Pocatière will get $ 56 million to modernize, which should ultimately allow between 350 and 400 jobs to be maintained.
9. AppDirect 55 M$
- Even though the IT sector is facing a shortage of workers, Quebec has not hesitated to extend $ 55 million to attract the young Californian company AppDirect, which promises to create 730 jobs in Montreal. One of the grandsons of the late Paul Desmarais is co-owner of the business.
10. Germain Group 38 M$
- Hit hard by the pandemic, several hoteliers have benefited from the PACTE program. The Germain Group and its subsidiary ALT are the largest beneficiaries of the PACTE in this sector.
OTHER BIG BENEFICIARIES
11. Telecon 37 M$
12. Selection Group 35 M$
13. Blackrock Metals 35 M$
14. Uni-Select 35 M$
15. LeddarTech 33 M$
16. AI element 33 M$
17. Flying Whales 30 M$
18. Without 30 M$
19. Life in pink 21 M$
20. CIMA + 16 M$
Notes: Aid can take the form of loans (with or without interest), loan guarantees or grants.
Business assistance from the Ministry of the Economy
- 1381 | Beneficiary companies as of March 31, 2020
- $ 6.6 billion | Value of business loans and other investments as of March 31, 2020
- 51 % | Proportion of the total aid granted in 2019-2020 having been paid to companies with 200 or more employees
- 36 % | Proportion of interest-free loans out of all loans
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