Our priorities

Context and main regional development challenges in Quebec
Priorities
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Context and main regional development challenges in Quebec

The Quebec economy faces many challenges in the new year, and the Agency needs to adapt to meet these challenges. High energy prices, a stronger dollar, increased foreign competition from emerging markets and a slower economy highlight many of the conditions expected for the next year. Placed within an already slightly unfavourable context arising from such factors as an aging population, low population growth and language barriers, these challenges will be difficult for many regions of the province to overcome. Full text

Priorities

In its efforts to achieve the strategic outcomes it has set, namely enterprises' competitiveness and the vitality of communities, the Agency will continue over the next year to promote innovation and the knowledge economy in the regions of Quebec, with particular emphasis on regions experiencing difficulty adjusting to the new global economy. Full text

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Mandate, strategic outcomes targeted and total related expenditures over the next three fiscal years

Context and main regional development challenges in Quebec

The Quebec economy faces many challenges in the new year, and the Agency needs to adapt to meet these challenges. High energy prices, a stronger dollar, increased foreign competition from emerging markets and a slower economy highlight many of the conditions expected for the next year. Placed within an already slightly unfavourable context arising from such factors as an aging population, low population growth and language barriers, these challenges will be difficult for many areas of the province to overcome.

As expected, 2004 produced results slightly lower than Quebec had seen in recent years. Although slightly higher than the 2003 results, both gross domestic product (GDP) and employment grew more slowly in 2004 than the averages since 1997. The forecasts for 2005 are expecting these lower trends to continue, with Quebec posting results slightly below the national average. Many of the factors that fuelled Quebec's boom (e.g., construction starts, manufacturing sector) from about 1998-2002 have now reversed their trend as a result of the rising Canadian dollar and stronger competition from new emerging markets (China, India).

The good news is that employment is expected to grow at the same pace as in 2003 and 2004, or approximately 1.5%. With the employment count at an all-time high of over 3.7 million, Quebec's higher-than-national-average unemployment rate should continue its downward slide. Quebec's rising participation rate in the labour market has drastically reduced the historical gap between itself and Ontario.

Quebec exports have been faced with a variety of hurdles in the past few years, which continue to cause problems for the present. With exports accounting for over 30% of the Quebec economy and 85% of Quebec exports destined for the American market, international factors, especially those originating south of the border, can play an important role in the well-being of the Quebec economy. Not only must Quebec producers face competition from new entrants into the domestic market, but they must also be able to compete successfully in foreign markets. Quebec has some room to improve in this regard. In fact, the regions of the United States where Quebec has penetrated the most, the Northeast, Southeast and Southwest, are no longer the most dynamic regions of the U.S. The Pacific Northwest and Central Plains have become a much more dynamic market, and offer lots of potential if Quebec producers are able to penetrate these regions as well.

Quebec has a fairly strong enterprise-university research link, with a substantial portion of private research funds being applied to university-based activities. This sharing of information between public education and private enterprise helps ensure a strong community of technology-minded persons, and this in turn helps promote and invigorate technology businesses, encouraging them to innovate even more.

As the economy has become further entrenched in knowledge fields and technology has become the key to production in almost every sector research and development (R&D) and innovation play important roles in creating enterprises better equipped to compete through productivity gains. However, the fact remains that a significant portion of manufacturing in Quebec is carried out by SMEs, which in turn tend to be less responsive in implementing the latest technology and undertaking research to improve the production process. In this regard, Quebec continues to lag behind Canada as a whole in terms of productivity. Quebec enterprises must confront this productivity gap in order to remain competitive, and not only in the manufacturing process, but across the whole range of the production line, from management decisions concerning hiring and training, to acquisition and mastery of strategic, technological or commercial intelligence.

To learn more about Quebec's economic situation, see the 2003 edition of Quebec Economy, Analysis of Trends, published by Canada Economic Development.

Priorities

In its efforts to achieve the strategic outcomes it has set, namely enterprises' competitiveness and the vitality of communities, the Agency will continue over the next year to promote innovation and the knowledge economy in the regions of Quebec, with particular emphasis on regions experiencing difficulty adjusting to the new global economy.

The Agency's priorities contribute to the attainment of government priorities as set out in the last two Speeches from the Throne. In fact, innovation is central to the government's plan for making Canada's economy even more competitive on the international scene. The government's strategy for supporting a healthy economy involves, among other things, enhancing Canada's capability to generate and implement new ideas.

The government also foresees a Canada where all regions can benefit from the 21st-century economy. In this perspective, the Agency guides and works with the regions experiencing difficulty adjusting to the global economic context.

Priority #1: Innovation and knowledge economy

Concerning its Innovation—Knowledge economy intervention priority, the Agency will intervene to:

• foster the development, perfection, testing and experimentation of new or improved products or processes
  
  
• improve productivity
  
  
• foster commercialization of innovation
  
  
• elicit the startup and expansion of enterprises in innovative or new economy-related niches
  
  
• foster the dissemination and sharing of the products of research.

Over the next three fiscal years, the Agency aims to contribute to:

• increased profitability posted by 60% of SMEs receiving assistance for an innovation project
  
  
• improvement of the competitive position on the markets of eight out of ten SMEs receiving assistance for an innovation project
  
  
• increased sales by seven out of ten SMEs receiving assistance
  
  
• reinforcement of innovation support networks and infrastructure in the regions.

The commitments under the Innovation – Knowledge economy priority also apply in regions experiencing adjustment difficulties.

Priority #2 : Regions experiencing adjustment difficulties

With respect to its priority to intervene vis-à-vis Regions experiencing adjustment difficulties, in a manner geared to their development challenges and potential, the Agency intends, among other things, to:

• reinforce local capability to take charge of local development
  
  
• foster the development of small enterprises of local and regional scope, including social economy enterprises
  
  
• foster the establishment of strategic enterprises, that is, enterprises operating in areas of activity that are promising for a region, for instance in its efforts to diversify.

Over the next three fiscal years, the Agency aims to contribute to:

• development and establishment of local and regional development strategies
  
  
• design, implementation and completion of local and regional development projects
  
  
• pre-startup, startup or expansion of 2,500 small enterprises of local and regional scope
  
  
• attraction of more than 2.5 million foreign travellers to the different regions of Quebec.

In addition, the Agency will be contributing, in particular, to the development and growth of economic activity in new, promising niches.

For more information on the Agency's priorities, we invite you to refer to the 2005-2006 Report on Plans and Priorities.This document outlines and explains the results targeted by the Agency, the priorities adopted to achieve these results and the plans to be followed to realize these priorities. Also outlined in this document are the indicators used to measure and report on the results obtained.