The Quebec government is merging all of its venture capital funds, start-up money and business assistance programs under one roof called the Quebec Economic Development Bank, the cornerstone of a new industrial and manufacturing strategy to be unveiled next fall.
The bank will be a new joint stock company whose mission will be to intervene in the economy to boost regional development as well as specific sectors such as mining, oil exploration and other private investment projects. It will replace Investissement Québec, the government's current economic development agency, and merge under its management other government-sponsored capital funds such as the Northern Development Fund. The new bank will largely be run by the current employees at Investissement Québec and will operate on a mandate similar to the agency it is replacing.
Minister for Industrial Policy Élaine Zakaïb said the bank will become a one-stop centre in every region of the province for businesses seeking government assistance to expand or launch new investment projects.
"Our bank is one of the pillars of government intervention in economic development. The other will be our industrial and manufacturing policy. The Development Bank will become the financial arm of this policy," Ms. Zakaïb said at a news conference on Wednesday.
The Quebec Employers Council, which represents the largest businesses in Quebec, applauded the initiative but warned the government against using the new bank to compete against financial institutions and private venture capital funds.
"We need to be cautious and not overestimate the public sector's ability to play a role in managing risks which really constitutes the strength of the private sector," the president of the Quebec Employers Council, Yves-Thomas Dorval, said in a press release. Similar concerns were raised by the Montreal Chamber of Commerce.
The new development bank will oversee $7.7-billion in funds that will be divided into three subsidiaries. Most of the money will be invested in existing companies that need capital to expand or develop new products, but funds would also be set aside for startup companies as well as joint ventures in mining and oil exploration projects. Oil reserves discovered in the Gulf of Saint Lawrence, as well as in the regions of Gaspé and Anticosti Island, may prove to be promising investments.
Finance Minister Nicolas Marceau foresees that with the bank's assistance, new entrepreneurial initiatives will be made possible. For instance, the Parti Québécois government is encouraging the startup of new mines such as the extraction of lithium concentrates, which could be processed in the province and used to build batteries to power the province's public transportation system.
"The priorities include the emergence of new areas of activities linked to renewable resources and the electrification of transportation, which are promising areas where Quebec can become a leader," Ms. Zakaïb said.
However, Quebec's insistence on using the term "bank" may become a bone of contention with Ottawa. The federal government has full jurisdiction over banks. But the minister insisted she wasn't creating a chartered bank but an economic development tool for the province. "Ottawa has its economic development bank, so what is good for the Maple Leaf should be good for the Fleur-de-lis," Ms. Zakaïb said. "Let's call a cat a cat. It's an economic development bank."
But it wasn't quite the bank Premier Pauline Marois had promised. When she first launched the idea in the election campaign last August, the PQ Leader demanded that all the funds invested and managed by the federal Business Development Bank of Canada in Quebec be turned over to the province. The Marois government has since backtracked on its threat to confront Ottawa.
"For the time being this is the way we are doing it. We have the tools to economically sustain all the regions of Quebec," the minister said.