Quebec’s budget looks to fuel digital transformation, overlooks skills gap

Quebec Government

Quebec Finance Minister, Eric Girard, delivered the 2019-2020 provincial budget at the National Assembly on Thursday, marking it the first budget of the Coalition Avenir Quebec government. The budget is allocating $709 million total to stimulate innovation in the province.

“Access to highly-skilled talent remains a key area of concern for Quebec’s rapidly expanding tech sector.”
-Pierre-Philippe Lortie

Investissement Quebec’s capitalization will be boosted to $5 billion, a $1 billion increase, in order to enable the corporation to use its own equity to expand its transactions with businesses, mainly through loans and equity participation. The new budget also commits a total of $1 billion for the growth of businesses and the retention of head offices in the province. An additional $100 million will be used to support Ivado Labs, Scale.AI, the Montréal Institute for Learning Algorithms, and Prompt-Quebec.

“We intend to prove the economic growth forecasts wrong, as we are firmly convinced that Quebec can do more and can do better to close the wealth gap with our neighbours,” said Girard. “It is an ambitious goal and we will achieve it by stimulating private investment, increasing workforce availability, and bolstering productivity.”

Funding Quebec’s digital transformation

An additional $329 million will be used to accelerate the adoption of artificial intelligence. Of that, $12.5 million will be directed toward the training offered in artificial intelligence, and $38 million will be used to attract AI researchers to Quebec.

Around $65 million is being assigned to facilitate the integration of artificial intelligence in businesses and public organizations, support the upgrading of knowledge and skills of instructors and consultants, support businesses designing applications based on artificial intelligence, and increase the integration of artificial intelligence applications. Those same funds are being used to increase Quebec’s computational power and provide premises with the necessary equipment to house high-performance calculators.

Quebec will use $34.5 million to match potential federal government funds for the acquisition of equipment, hoping to will allow Quebec businesses to have the necessary resources to use new infrastructure.

In order to back technologies that support artificial intelligence, the province is allocating $79.3 million. This amount is set to fund research chairs affiliated with the Université de Sherbrooke to help attract the world’s best researchers, promote applied research, as well as provide public research centres and businesses with access to world-class infrastructure – such as a quantum computer and equipment for manufacturing electronic and photonic components.

Another use of the budgeted $79.3 million is to offer Quebec a micro-nanotechnology device design and manufacturing department. The government said this will support Quebec’s educational institutions and businesses, by giving them access to software and manufacturing processes for designing prototypes, and by supporting specialized incubators and accelerators.

Did Quebec overlook its skills gap?

The 2019 budget contains several measures aimed at boosting Quebec’s pool of workers, such as tax credits for workers aged 60 and over. The government is hoping this incentive will encourage an untapped pool of 89,000 Quebecers to return to the labour market. Additionally, the government has pledged a $146 million annual commitment to smooth the integration of immigrants into Quebec’s labour market, which will include providing immigrants with French lessons.

But what the government may have failed to address in this year’s budget was the skills gap in Quebec. According to a study from the Canadian Federation of Independent Business, Quebec had 117,000 vacant private-sector jobs at the last quarter of 2018. That same study also found that Quebec had a labour vacancy rate of 4.1 percent, higher than any other province in Canada.

Related: BC high schools launch cybersecurity program focused on bridging skills gap

“Quebec innovators welcome the measures in Budget 2019 that focus on wealth generation in the 21st-century economy, however access to highly-skilled talent remains a key area of concern for Quebec’s rapidly expanding tech sector,” said Pierre-Philippe Lortie, director of government and public affairs for the Council of Canadian Innovators (CCI) Quebec. “Quebec’s long-term economic prosperity relies upon having large, globally competitive technology firms headquartered here in Quebec, and we look forward to the government further outlining its plan to help Quebec-based companies succeed in the 21st century data-driven economy.”

Innovative projects

Within Quebec’s $709 million innovation budget, $320 million will be earmarked to invest in innovative projects, namely, to develop strategic sites for innovative businesses, increase genomics research, and support the Quebec consortium for industrial bioprocess research and innovation.

In a statement, the Ministry of Finance said a number of municipalities in Quebec contain sites with strong potential that are underdeveloped because of the significant work required to upgrade them. Therefore, the $320 million will be provided over five years to decontaminate strategically located sites, with $100 million earmarked for site decontamination in Montréal East and $50 million for Quebec city.

The government is setting aside $100 million over the next four years for decontamination, public infrastructure construction, and for the acquisition of “strategically-located land with demonstrated economic development potential in various municipalities.”

“Investing within our businesses here at home, across all sectors, is what will make Quebec stronger,” said Louis Têtu, vice-chair of the CCI Quebec. “We applaud initiatives in the budget that will help fuel investment and risk-taking in the local tech sector and build the next Quebec tech leaders, and also measures that help Quebec businesses across all sectors invest in innovation and digital transformation. Putting our intellectual property and talent to work here at home is what will build prosperity and support an owner’s economy.”

Two new agencies created

The government is intending to take action to improve the management of information technologies and acquisitions with the creation of Infrastructures technologiques Quebec, a new organization with the mission to ensure the development, operation, and optimization of shared technological infrastructures.

This new organization hopes to help accelerate the digital transformation of departments and agencies by avoiding the duplication of solutions, and building on the expertise developed by the Center de services partagés du Quebec.

The budget also announced the creation of the Government Acquisition Centre, which will be devoted to consolidated purchases, increasing volume and generating additional savings. The centre will be responsible for consolidated purchases from all departments and agencies, including the health and education networks, starting in January 2020.

Feature image courtesy Wikipedia Commons

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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