Thank you very much, Mr. Chair.
Ladies and gentlemen, members of the Standing Committee on Finance, thank you for your invitation. I am particularly happy to be here today.
I have now been in the position for three months, and this is a great opportunity to start a dialogue with you. I will take this time to draw a brief portrait of the situation in Quebec, and talk about what CED is doing, as well as its results and priorities.
First, allow me to outline CED's mandate, which involves supporting the regions of Quebec by focusing on their potential and by giving special attention to those regions where economic growth is slow or opportunities for employment are scarce.
This role is at the heart of the mandate given to the Minister of Innovation, Science and Economic Development, and the minister responsible for CED is first, to help businesses grow, innovate, and export so they can create good quality jobs; second, to make strategic investments that build on competitive regional advantages; and third, to support the transition of communities reliant on a single industrial sector.
Our challenge is to tailor our actions to the specific realities of each region. To do this, we rely on our 12 business offices located throughout Quebec to make sure the needs of businesses and the regions are well served. As you know, Quebec is an economy of small and medium-sized enterprises. We have over 257,000 of these, which together generate about 50% of the province's GDP; 80% of these SMEs have fewer than 10 employees.
There are three types of regional economy and dynamics in Quebec: resource-based, manufacturing, and urban. However, all of these regions, whatever the type, are facing certain key challenges: an aging labour force, a shortage of entrepreneurial carry-over; a decrease in productivity; a shift to digital, which is sometimes difficult; the development of new markets, which can also be hard work; and, of course, attracting skilled labour.
Among Quebec's advantages are a highly skilled workforce, but often not large enough; an abundance of natural resources; world-class research infrastructure, universities and technology clusters; and access to numerous markets.
Our main program at CED—the Quebec Economic Development Program, the QEDP—allows us to promote innovation in all regions, stimulate the creation of jobs and foster growth and prosperity. It is a flexible program that basically enables us to do three things.
First, we take care of business development and entrepreneurship support. CED is able to intervene by, among other things, providing assistance for start-up, growth and commercialization. We have a number of examples. The first one that comes to mind is the Kinova company that created JACO, the robotic arm that helps people with reduced mobility. In 2006, this company was incubated and, in 2009, CED helped with the commercialization of its product. In 2013, we also helped the company expand and increase its productivity, enabling it to repatriate its production from Asia to Quebec.
CED is therefore active in businesses and in regional export promotion organizations. It also plays a role through research centres, incubators and accelerators.
Second, QEDP allows us to support the economic development of the regions by facilitating the mobilization of local stakeholders and the promotion of regional assets, be they tourist attractions, their natural resources or localized specialization. I'm thinking of the Lower St. Lawrence with its maritime aspect.
Third, QEDP allows us to strengthen the community economy. This support, provided on an ad hoc or targeted basis, helps communities that are grappling with certain difficulties diversify their economy. That is our main program.
We also have the community futures program (CFP), which allows us to work with the community futures development corporations (CFDCs) and community business development centres (CBDCs) in rural areas where businesses are typically very small and where every job counts.
CED does not work alone. On the federal level we have many collaborators and they include the BDC, the NRC, for instance.
We also work very closely with our Quebec partners, the main economic government departments, lnvestissement Québec, and others such as the industrial clusters, municipalities, universities, and many more.
Now let me tell you a little about our results.
Over the past few years, CED has contributed to the renewal of Quebec's business pool thanks to its support of 115 start-up projects. Statistics Canada confirms that CED's support has helped increase the earnings, number of jobs and productivity of enterprises, and that the businesses we help are better off than the companies in the control group.
How have we done this? In 2015-2016, for instance, CED approved $218 million in grants and contributions. If we go back to April 1, 2012, when the QEDP was implemented, the amount was over $1 billion in authorized assistance and over 2,700 approved projects. Forty per cent of the funding we provided went to projects in communities with low growth potential representing around 20% of the population.
I will say a few words about the future. The Government of Canada has made the commitment to promote innovation, foster business growth, and build a clean economy.
To be sure we hit the nail squarely on the head, CED launched a dialogue in 2016 on the economic development of Quebec. This engagement strategy has allowed us to talk with over 1,000 participants, who were all eager to give their time to let us know what is important to them in terms of economic development. They said that we had to continue to support technology and equipment modernization, support incubators and accelerators, support businesses and their diversification as well as the economy of communities
The flexibility of our programs is crucial to business growth. Supporting the regions so that they can build on their competitive advantages is still a must.
The last budget also put key emphasis on the challenges of climate change and calls upon the agencies to double their efforts in this area.
CED is tackling this priority head-on by increasing to $25 million per year the assistance it provides to SMEs to help them develop and adopt clean technologies.
In terms of the growth of businesses, CED is implementing in Quebec the new accelerated growth service to support businesses whose potential is very high in terms of growing and innovating more quickly and being recognized worldwide in their field.
Of course, CED will continue to foster growth in the regions through its activities.
In a nutshell, that is what we are working to achieve.
That is the end of my presentation. I would be happy to take your questions.