Groups laud the budget’s good measures but say it’s not enough
QUEBEC The Quebec government will earmark $1 billion to keep head offices in the province as part of its 2019-2020 budget, money that could be used to support SNC-Lavalin.
“This is giving us the means to take participation in strategic companies, if need be,” Finance Minister Eric Girard said.
“It could be used for SNC-Lavalin, but the program was not designed for SNC–Lavalin,” he said in response to a question from journalists on Thursday.
However, later in the day, Quebec Economy Minster Pierre Fitzgibbon said it’s unlikely the money will be used to support SNC-Lavalin, because $1 billion is a relatively small amount of money when it comes to a company worth $7 billion or $8 billion.
Instead, the money would more likely go to help medium-sized businesses grow faster while staying in Quebec, he said.
Business groups greeted the Coalition Avenir Québec government’s first budget positively — but with some reservations.
“Clearly, this is a budget that reflects a very robust economy, it’s a strong budget,” said Michel Leblanc, the president and CEO of the Chamber of Commerce of Metropolitan Montreal.
In total, the government said it plans to spend almost $3.4 billion to “increase the potential of the economy” over the next four years.
“Quebec is doing well. We want to take it one step further,” Girard said.
Of that money, around $504.6 million is set to be spent during the 2019-2020 fiscal year — although that doesn’t include the $1 billion being set aside to keep head offices in Quebec or a planned $1-billion increase in the capitalization of Investissement Québec.
Programs intended to encourage older workers to keep working longer and to better integrate immigrants into the workforce will see the most spending.
A tax credit for older workers will see the minimum age lowered from 61 to 60 and become more generous for workers age 61 to 64, increasing the ceiling of eligible income to $10,000.
That’s expected to cost $533.2 million over five years.
The government also plans to spend $338.8 million to reduce payroll taxes for small businesses that employ older workers, worth up to $1,250 for workers 60-64 and $1,875 for workers 65 and over.
If Quebec had the same percentage of people over 60 in the workforce as Ontario, that would mean 90,000 additional workers in the province’s workforce, Girard said.
Several business groups said they were pleased with the initiative.
“It’s something that we’ve asked for,” said Martine Hébert, an executive vice-president at the Canadian Federation of Independent Business. “People who are retired or near their retirement period, we have to encourage them to stay as long as possible in the labour market.”
She’s also pleased with the payroll tax relief for small businesses that employ older workers.
But Yves-Thomas Dorval, the president and CEO of the Conseil du Patronat du Québec, said he would have liked to have seen support for larger employers.
“It’s unfair,” he said. Because larger companies do business with small enterprises, “if you don’t take care of the larger employers, you may have an issue with the smaller employers.”
Other sectors say it won’t help them as much.
“That doesn’t necessarily have a big impact on the manufacturing industry,” said Véronique Proulx, the CEO of Manufacturiers et Exportateurs du Québec. “What we need is more workers. If they want to address the labour shortage, they’ll have to do it through immigration and more immigration.”
The government does plan to spend $146 million a year over the next five years to create a “personalized pathway” for every immigrant.
Both labour initiatives target the right things, Dorval said, but “it’s not enough” to solve the labour shortage.
The government is also planning to increase the capitalization of Investissement Québec from $4 billion to $5 billion.
While Fitzgibbon said that would help the agency invest more in startups, most of the details won’t be announced until a planned reform of Investissement Québec is announced in April.
Pierre Emmanuel Paradis, an economist working with the Conseil québécois du commerce de detail, said that has left him with questions.
“How much will be spent? And how much will go to retailers?” he said.
Some business groups would have also liked to see tax cuts.
The government’s fall economic update introduced changes that allow businesses to write off some purchases sooner, in response to tax cuts in the United States.
“We think it’s insufficient, and over the next months we might see that our tax competitiveness is not at the level we want it to be,” Leblanc said.