Faced with disappointing economic growth, the Parti Québécois government will inject $2-billion of public funds into Quebec’s economy in a bid to create 43,000 jobs by 2017.
The government plans to lure investors with cheap electricity, renovate the province’s schools, introduce new tax credits and invest in the North’s infrastructure to spur $7.6-billion in public and private investments over the next four years.
“We need to take shock action to stimulate this too timid recovery,” said Premier Pauline Marois, who was flanked by eight cabinet ministers as she unveiled the job policy at the Caisse de dépôt et placement du Québec’s Montreal office.
Called “Putting Jobs First,” the policy is Ms. Marois’s response to critics of her government’s lacklustre jobs record. Since the PQ was elected a year ago, a mere 5,000 jobs were created in Quebec. Unemployment stood at 7.9 per cent in August, compared to 7.1 per cent nationally.
The action plan that will make hammers resonate across Quebec is widely perceived to be the PQ’s economic platform for an election campaign the minority government could launch as early as this fall. Ms. Marois said questions on whether the jobs policy had more to do with her political calendar than with the economy were “unfair.”
“If employment was truly their obsession, as they now claim, it should have been apparent from day one,” said Harold Fortin, spokesman for liberal Opposition leader Philippe Couillard, who will respond to the PQ’s jobs policy on Tuesday. The Liberals said during debate about the government’s controversial Charter of Values that they want to shift the focus to the economy.
The action plan, which Finance Minister Nicolas Marceau called “ambitious,” reads like a small budget.
The government plans to use surplus electricity to offer 50 terawatt-hours at below-market rates to attract investment in targeted fields: value-added production in natural resources, electric transport, green technology and manufacturing, data centres and information technology. The amount is equal to one and a half times Montreal’s annual electricity consumption.
“We couldn’t sell that electricity so easily on export markets, so we might as well use it,” Mr. Marceau noted.
Quebec will also give the go-ahead to renovation projects that can be started immediately in schools, recreational facilities and provincial parks, many of which are decrepit after years of improper maintenance. About 900 schools will be renovated.
The government also wants to build new infrastructure in the North, despite falling commodity prices. “We still want to prepare for the future,” Mr. Marceau said. Quebec will also repair the highway into the James Bay region at a cost of $100-million and open a small airfield in the Otish mountains area, near Stornoway Diamond Corp.’s mining operations.
The government will offer a new tax credit to homeowners for energy-saving renovations or converting oil furnaces to more efficient, cleaner systems in the next 12 months. It will cover 20 per cent of eligible expenses above $2,500, up to $10,000.
Quebec will target small businesses by improving the manufacturing tax credit for the acquisition of machinery and equipment, and create a 25-per-cent tax credit for small and medium-sized enterprises that invest in their IT systems.
The initiatives will cost $33-million this year, and top $400-million per year after that. Mr. Marceau said the additional government revenues from the economic activity will mitigate the costs. When those revenues are taken into account, the policy’s price tag decreases to $625-million over four years. Over seven years, however, the province would pocket a $295-million surplus, Ms. Marois said. In the meantime, Mr. Marceau plans to reshuffle the government’s spending so that the new jobs policy will not weigh on its finances.
“Quebec can’t afford $2-billion worth of new measures. We just don’t have that money,” said François Legault, the Coalition Avenir Québec Leader.