Study finds Quebec's industrial strategy limits growth, calls for urgent reform
The Centre for Productivity and Prosperity – Walter J. Somers Foundation has unveiled the fourteenth edition of “Productivité et prospérité au Québec – Bilan” just before the announcement of a budget that is expected to be largely in deficit.
This study delivers a clear verdict: Quebec's industrial policy has not succeeded, acting as a significant brake on the province's economic growth.
“For 25 years, Quebec's approach to economic development has remained the same,” states Robert Gagné, director of the Centre and co-author of the study.
He elaborates, “The government actively promotes the development of sectors it deems promising and passively seeks to preserve jobs in businesses that are not conducive to productivity, innovation, and investment. The result is an uninspiring economic environment that tends to limit economic growth instead of accelerating it, with the consequences we observe today.”
The study highlights the failure of Quebec's dated industrial policy, which, despite billions of dollars of public investment over the past quarter-century, has seen all related economic indicators remain in the red.
The reluctance of the business sector to embark on necessary productivity-enhancing activities further compounds the problem, as reported on Newswire Canada.
Jonathan Deslauriers, executive director of The Centre for Productivity and Prosperity and co-author of the study, raises additional concerns over the policy's current impact.
“It is no longer just a question of wasting public funds. By the choices it imposes, Quebec's industrial policy interferes in the process of reallocating resources in the economy, essentially because this policy responds to the needs of a long-gone era,” he asserts.
With an urgent need for policy reform, the researchers advocate for a thorough and critical review of Quebec's economic development strategies.
“The government must urgently conduct a complete and uncompromising diagnosis of its approach to economic development, economic interventions for which there is currently no valid census, let alone rigorous evaluations of their effectiveness,” Gagné emphasizes.
He warns that without significant changes, Quebec risks only narrowing the gap with economies like Ontario, which itself is losing momentum on the international stage.
