QUÉBEC, Nov. 20, 2012 /CNW Telbec/ - "The government is focusing on
private investment as a means of accelerating economic growth,"
declared the Minister of Finances and the Economy, Nicolas Marceau, in
tabling the Québec government's 2013-2014 budget. "A prosperous economy
is without a doubt the best path for making life easier for everyone.
The time has come for private investment to take over from public
investment. Public investment plays a key role, but Québec taxpayers
clearly cannot do more. Efforts to create conditions conducive to
private investment must therefore be stepped up. This budget takes
initiatives to that end."
A new tax holiday for large investment projects
The Minister announced two major measures to maintain and enhance the
appeal of Québec's tax environment for private investment. The first
measure is a new tax holiday for large investment projects. The tax
holiday for investments, or THI, will apply to businesses with new
projects of $300 million or more that are approved within the next
three years. The projects must be in one of the eligible strategic
sectors: manufacturing, including mineral and wood processing,
value-added distribution centres, and data processing and hosting.
This measure gives businesses a ten-year holiday from corporate income
tax and from contributions to the Health Services Fund with respect to
their investment projects.
Extension of the tax credit for investments
The second measure announced by the Minister is the extension of the tax
credit for investments, available to all regions, for two years, that
is, until December 31, 2017. In addition, the rates of the tax credit
will be raised by five percentage points for businesses in certain
"As a result of the tax credit, 3 000 businesses in all regions of
Québec, including more than 2 500 SMEs, will be able to invest in
cutting-edge machinery and equipment, enabling them to boost their
productivity and carve out a place for themselves on markets," the
Creation of the Banque de développement économique du Québec
The Minister also announced the creation of the Banque de développement
économique du Québec to help Québec businesses obtain flexible
financial and technical support tailored to their needs.
"The creation of the Banque will improve the government's economic
development efforts. Better coordination will optimize government
support, and it will be simpler for businesses to obtain assistance.
The Banque will be a driving force for all regions of Québec.
Businesses will have easier access to the full range of available
services, from assistance to financing solutions," explained the
The Banque will manage the regionalized development fund, which will
have an annual budget of at least $500 million for development in all
These recurring amounts will be augmented by the allocation of a total
of $250 million to the two economic diversification funds, intended to
support the Mauricie and Centre-du-Québec regions and the Asbestos
"I am working with the Minister for Industrial Policy and the Banque de
développement économique du Québec, Élaine Zakaïb, on the
implementation of these projects," affirmed the Minister.
Support for free trade with the European Union
The Minister noted that a revival in exports is necessary in order to
sustain economic growth. To facilitate access to foreign markets, the
government will actively participate in talks on the free-trade
agreement with the European Union. "The agreement will give Québec
businesses new opportunities in a market of 500 million people."
Industrial strategy for green technology development and transportation
In noting that the manufacturing sector is a pillar of our economy and a
symbol of Québec's inventiveness, the Minister announced that "to
support investment in a strong, modern manufacturing sector, the
government will adopt an industrial strategy that will give special
attention to SMEs. This policy will build on existing niches of
excellence in Québec, and on the development of green transportation
and energy, a promising avenue for the future."
To support the greening of industry, the Minister also announced the
creation of a $200-million fund for the development of clean technology
and electric transportation.
Support for the biopharmaceutical sector
"Over the years, Québec has introduced conditions favourable to the
development of the biopharmaceutical sector. However, in recent years,
the business model of the industry has undergone a sea change. Québec
government support needs to be adapted to this new context, the
objective being, as always, to promote research activities in Québec,"
affirmed the Minister.
He noted that the 15-year rule implemented in 1994 was a significant
factor in the growth of Québec's biopharmaceutical sector. However,
large pharmaceutical companies are changing their ways and outsourcing
research, leading to the closure of several research centres and,
consequently, a significant decrease in research spending in Québec,
not to mention the loss of high-value-added jobs. In this context, the
15-year rule no longer meets its objective of fostering research in
Québec. It is therefore being abolished.
To support research activities in Québec, the Minister announced that
the research and development tax credits for large biopharmaceutical
companies will be raised from 17.5% to 27.5%. The government is also
providing matching funding of $125 million over five years for research
partnership projects with pharmaceutical companies in the major areas
of Québec's strengths.
"In so doing, we ensure that companies in this sector continue their
development and the creation of quality jobs in a leading area of
innovation in Québec," affirmed the Minister.
A national research and development policy
Investing in innovation is central to the government's economic vision.
The government wants to make Québec one of the most innovative
societies in the world—a society that allocates at least 3% of its GDP
to research and development. To that end, the Minister of Higher
Education, Research, Science and Technology, Pierre Duchesne, will
announce a national research and innovation policy in 2013. Its
objective, among other things, will be to capitalize on the results of
public research for all Quebecers.
To facilitate the shift to this future national policy, the government
will set aside $69 million to enable activities under the Québec
Research and Innovation Strategy, which ends in March 2013, to continue
in 2013-2014. This funding will continue contributing to the overall
funding of research and development in higher education, the value of
which is over $2 billion a year in Québec.
Exploitation of our natural resources for the benefit of all Quebecers
"Our mining potential is immense, and several companies, both Québec and
foreign, want to develop it. However, the subsurface belongs to all
Quebecers. We will therefore make changes to the regimes that establish
the framework for developing these non-renewable resources, so that
Quebecers derive the maximum wealth from it, and the environment and
communities are protected. We want to bring in these changes in an
orderly and responsible manner to ensure the stability of the mining
sector. We will consult the industry and the stakeholders concerned
about this issue, so that everyone benefits from the changes that will
be made," stressed the Minister.
"With the collaboration of the Minister of Natural Resources,
Martine Ouellet, we will continue the work in order to propose a regime
that optimizes Quebecers' return on these resources."
Promoting the forest sector
The Minister also said that exploitation of our natural resources must
be a tool of economic development for all regions of Québec. The
government therefore intends to promote local processing of natural
resources. To that end, it will adopt a wood charter to promote the use
of wood in value-added products.
The Minister stressed that the increase in the tax credit for
investments will also support the forest sector. To ensure the
assistance is available more rapidly, he announced that Investissement
Québec and, when it is created, the Banque de développement économique
du Québec, will finance 85% of the value of the tax credit in advance.
"I also want to serve notice today that it is my intention to call on
the federal government to finally do its part, that government having
committed a profound injustice by abandoning the forest industry, its
workers and the communities affected by the crisis."
Lasting prosperity for all
"Our economic vision is founded on the conviction that investment is
necessary to ensure wealth creation for the Québec nation. In the
government's economic vision, Québec must offer a stimulating business
environment favourable to projects that create wealth and jobs, and
guaranteeing entrepreneurs predictable government action with no
surprises. To accelerate growth, the government must take action to
promote private investment and innovation in strategic sectors. The
government pledges to maintain a competitive tax system in Québec that
promotes private investment. We are laying today the groundwork for
sound, long-lasting prosperity for all," the Minister concluded.
SOURCE: Cabinet du ministre des Finances et de l'Économie
For further information:
Assistant Chief of Staff and Press Relations Officer
Office of the Minister of Finance and the Economy