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- Quebec’s economy has many strengths: great education, a bilingual workforce, plentiful clean energy, abundant resources, a safe environment, political stability and others.
- Quebec must provide better financial support to growing SMEs in order to increase the number of large corporations the province produces.
- The digital transformation of work, business and life, in general, is in its infancy and advancing. AI, blockchain and data analytics are all advanced technologies that companies are adopting in order to reduce wastage, accelerate production and improve profitability.
The top 1% of Canada have so much power, wealth and influence. This comes with great responsibility, so they must use that power for the greater good as well. If they collaborate and prioritize social responsibility, they can make a huge impact in Quebec, Canada and the world.
What are Quebec’s main economic strengths and weaknesses?
Quebec possesses some tremendous advantages. Firstly, our workforce is excellent thanks to its bilingualism and the training it receives in our technical schools and universities. These institutions churn out bilingual individuals who are huge assets for the economy. From a clean energy point of view, electrification is a natural next step in Quebec, not a forced one. Quebec has an abundance of natural resources and uses them responsibly, while taking into account the impacts on future generations. Quebec is safe and has a strong healthcare system as well as political stability; it is a great place to live.
As the CEO of a company that has 53,000 clients across Quebec and over 100,000 across Canada, I am truly impressed by the creativity of Quebecois entrepreneurs. Bombardier, CGI, Couche-Tard and Saputo are great examples of Quebec companies that have made their mark globally. Other Quebec companies also offer incredible products with the potential for international markets.
“Canada, Quebec and Montreal score very high on the jurisdiction attractiveness lists, but in terms of our productivity per person, foreign direct investment, investment into modernization and robotics, and other key metrics, we lag behind.”
The reason Quebec has so many inspirational companies is that they have had access to funds. Quebec’s small and medium enterprises (SME) need the same funding as those who aspire to the world stage. Quebec represents over 20% of Canada’s population, but only 7% to 8% of its publicly listed companies. About 20 years ago, there existed a tax-incentivized financial product that allowed an individual to invest in a publicly traded company and obtain a tax credit. This enabled companies, especially SMEs, to access funds that they could not have otherwise. Such a tax-driven incentive program would again be endorsed, on the condition that small businesses not have to face exaggerated and costly bureaucracy and red tape.
The biggest challenge for Quebec is its labour shortage. Working with SMEs, we often hear that Quebec needs to be wise and not rush into decisions around immigration. Automation and digital transformation are going to massively change the labour market requirements. I was a university professor for 18 years and I consider education to be the best card to have in your back pocket. So, when brilliant people like researchers, PhDs, doctors and so on are willing to come here, I think we should welcome them and incentivize them to stay. A highly educated individual is more likely to find a place within our country. From a mobility point of view, I believe that we have to review our criteria for recruiting for professions. Employment statistics in Quebec are at their highest since the time they began being measured. We should be more open-minded in accepting equivalencies and integrating professionals into the Canadian mainstream, so long as the public is assured of their equivalent professional quality.
How attractive is Quebec when it comes to foreign investments?
Organizations and corporations are accountable to boards, management committees and stakeholder interests. A mining company in iron ore can run the same business from Labrador, Quebec or Ontario. There are jurisdictional differences in taxation, access, roads, rail or shipping lines in each of the three locations, so its decision will vary depending on the province.
Investors in these companies are looking for full transparency and clarity in terms of jurisdictional information. They want a strong legal environment so that they have recourses in the event they encounter problems. They want stability in the business, tax and legal ecosystem so that they can predict, model and plan for the future. For example, if royalty costs in one province change three times in 18 months but have been stable for the last 30 years in the neighboring jurisdiction, investors and companies will move to that province. These are some of the key decision-making elements in addition to a strong labour pool and efficient, evolved and accessible financial markets.
“We should be more open-minded in accepting equivalencies and integrating professionals into the Canadian mainstream.”
In general, Canada, along with Scandinavian countries and a few others, is listed at the top of the global country attractiveness list. However, in the Organisation for Economic Co-operation and Development (OECD) countries, our performance lags behind our attractiveness. Canada, Quebec and Montreal score very high on the jurisdiction attractiveness lists, but in terms of our productivity per person, foreign direct investment, investment into modernization and robotics, and other key metrics, we lag behind.
One key point in relation to our attractiveness to foreign investment is our access to the US market. New York, Georgia, New Jersey and Montreal are the major ports on the East Coast. One of Canada’s great geographic advantages is our ability to access the center of the United States through the St-Lawrence seaway and into the Great Lakes. This unique ability to transport cargo into the US is a great competitive advantage for Canada. At some point, we will also have ships moving through the northern access, which is another great advantage for linking east and west quickly, efficiently and ecologically. These competitive advantages cannot be replicated at any cost by anyone.
How would you assess start-ups’ and SMEs’ access to capital in Quebec?
Canada’s highly resilient banking environment enabled it to handle the 2008 financial meltdown successfully. We also have many large publicly-sponsored, labour-sponsored, and pension-sponsored funds. Quebec’s SMEs represent 99.8% of our businesses. 60% of the jobs and 60% of GDP. SMEs do not have access to patient funding in the form of equity. There is less long term, patient funding in all of Canada than the San Francisco Bay Area. Canada possesses genius in artificial intelligence (AI), data analytics and blockchain, but has seen few unicorns. We have gazelles, which are fast, high-growth organizations. For example, Louis-Philippe Maurice sits on my board. He is the founder of Busbud, which sells bus tickets all over the world; it gets over 3 million hits a month on its website. With 60 people in the Mile End district, they are able to sell tickets out of over 1,000 jurisdictions throughout the world. Busbud is loyal to its origins in Quebec and did have serial successful rounds of financing which include local partners.
Since the Montreal Stock Exchange was consolidated in Toronto, many financial players either moved to Toronto or were consolidated by banks. Montreal does have an opportunity to bring back some of those big financial players; we have the right foundation through our high calibre finance graduates, who sometimes go to London, New York or Toronto. Quebec has to seize the opportunity made possible by the digital transformation of the financial ecosystem because it possesses the required expertise in these fields. This constitutes an undeniable opportunity for us. I support FinTech and InsuranceTech initiatives. They stand to catapult Quebec into the future of finance.
How is technology and digital transformation affecting the Quebec economy, and how do you see it evolving?
My organization has enormous financial investments, both internally and externally, in new markets, new services and new ways of doing things. These include portals, enterprise resource planning (ERP) systems, blockchain, cloud-based accounting fintech, AI, data analytics, and more. Our clients need help with accessing new markets, improving productivity, using imaging, robotics and AI, automating transactions, and more.
This shift to more technology-driven work and business is a global issue, not specific to Canada or Quebec. Firms like mine need to redefine their clients, focus and predict their future requirements. The digital transformation is in its infancy right now. The cloud, AI and analytics can access massive data in a structured environment. Whether that data comes in the form of an x-ray, words on legal documents, digitized telephone conversations or images coming through visual recognition, it is relevant across all industries. All advanced technologies are now starting to converge. Our businesses are also starting to use a variety of new technologies, whether they are transforming steel or transferring knowledge. For example, AI is being used by clients to reduce their scrap and wastage in wood manufacturing. The technology takes 16,000 images of the same 2×4 in the span of 1/100thof a second, makes decisions, then spins the wood around and cuts it at a certain spot to maximize its usage. The pace of AI adoption is surprisingly fast, but we still have a long way to go. Companies which do not embark on the 4.0 transformation risk being left behind or being targets for acquisition.
“The pace of AI adoption is surprisingly fast, but we still have a long way to go. Companies which do not embark on the 4.0 transformation risk being left behind or being targets for acquisition.”
We sell trust. Our clients approach us and stay with us because they trust us. Part of the trust comes from the reliability of our auditing practice. Blockchain has the potential to add legitimacy to transactions in an automated way. The auditing process therefore moves towards auditing the algorithm and ensuring that it does what it says. Once it does what it says, it has tremendous traceability and added legitimacy. There is a lot of work required to get to that stage and regulation with be put in place. For example, when banks start using blockchain technology for their transfers and wires, they will be sending the first clear signal that it is accepted as a technology. Blockchain also has the potential to challenge some of our company’s business lines. Audits of smaller businesses might become redundant in the future because governments and banks rely on legitimacy of blockchains. That is unlikely to apply to publicly listed companies with wide dispersion of shareholders. Our company wants to be able to offer blockchain software as a service because it is a space we already occupy. This is why we launched Catallaxy.
What advice would you give to young entrepreneurs looking to make their mark in the future economy?
It is so important to find mentors at all stages of your career. If I have smart people who are better than I am in different trades or skills, I will sit them at the table, listen to them, ask lots of questions and be open to changing my opinion. I still have a mentor today. It is great to be able to talk to somebody who is not in the business every day, who can sometimes de-dramatize the situation or point me in a direction only because the individual lived a similar situation in the past.
“Young people today must be purpose-driven and develop their own mantra; one they live by, both professionally and personally.”
Secondly, many of my decisions are based on a gut feeling – our instincts do not lie to us. I started my career by answering three questions: “Am I having fun in what I am engaged in?”, “Do I add value?” and “Will it be lucrative?” Today, if I don’t like the people involved in it, I reject the idea. Young people today must be purpose-driven and develop their own mantra; one they live by, both professionally and personally. For example, if tackling climate change is the mantra, the young person needs to embody it in their daily life. No leader today is credible without a position on climate change. If many people have similar mantras, we will see real change over time. There will be no future without fighting for our planet. Diversity of backgrounds, religions, races as well as ideologies is another mantra young people should follow in setting up teams. It makes for better decision-making.
“Positions on climate change and diversity are two of our greatest challenges and can no longer be postponed. Corporations should use their power for the greater good.”
I would also give advice to those who have already achieved great success in their careers: The top 1% in Canada have so much power, wealth and influence. Such power comes with great responsibility. They must use their power for the greater good. If they collaborate and prioritize social responsibility, they can make a huge impact in Quebec, Canada and the world. Positions on climate change and diversity are two of our greatest challenges and can no longer be postponed. Corporations should use their power for the greater good. If they collaborate and prioritize social responsibility, they can make a huge impact in Quebec, Canada and the world.