“The financial impact, it will last a long time” – Peter Fitzgibbon

«Les répercussions financières, ça va durer longtemps» - Pierre Fitzgibbon

The time where the CAQ touted the merits of the free market is well and truly over. In the Face of economic difficulties, Québec will be more put shoulder to the wheel – and the hand in the pocket – to ensure the sustainability of the businesses here.

It was three months ago, almost to the day. The government Legault presented a second balanced budget, the State’s coffers swelled.

The COVID-19 was on the horizon, but it did indicate an economic growth of 2 % of gross domestic product (GDP) for 2020.

What is it today? “We’re talking about a deficit representing 3.5 to 4.5 %, or 12 to $ 15 billion by 2020 in Quebec. The return-to-GDP before the COVID, we do not expect that, before the end of 2021,” warns the minister of Economy and Innovation of the city of Québec, Pierre Fitzgibbon, in interview to the Newspaper.

At the federal level, it projects a shortfall of 252 billion, 10 times more than last year. Figures that give the dizziness and cold sweats to the business man that was once Peter Fitzgibbon.

“The financial impact, it’s going to last a long time and it’s going to be a little painful, he acknowledges. But I’m not a pessimist.”

Build on the business side

From the first days of the crisis, his team has relied on the “business” of the plan of recovery of the economy, together with that of the minister of Finance, Eric Girard, and a handful of other ministers.

The conclusion : the world will never be the same, the Quebec not more. It will, therefore, act as never before to revive the economy.

“Our government needs to be more in debt, must become interventionist, the right way. We must not manage the business, but you must do it”, says Peter Fitzgibbon.

This interventionism 2.0 will take many forms. First, several programs of assistance to businesses that were supposed to last more than a few months will be prolonged.

Quebec is considering many of the equity investments in companies, loans, programs that are specifically designed to reduce the impact of the crisis on the GDP and other to stimulate innovation.

Quebec, shareholder

In the case of enterprises in difficulty, such as Aldo Shoes, Reitmans and Lolë, Québec intends to bargain about the government assistance in exchange for a place at the table of decision.

“You could be the owner of a minority of the company, supports the minister, to enable the financial structure to be sustainable. This is one of our issues in Quebec at this time, it is necessary to be able to give money to Québec SMES, to adjust their financial statements.”

In exchange, they will require a clause “Quebec”. “The Quebec government can only get involved in companies that if there is a protection quebec jobs, headquarters, in respect of the tax rules and executive compensation that is reasonable,” insists Mr. Fitzgibbon.

Quebec will also come out the checkbook to the catering, tourism and retail, sectors that are struggling.

Already, Ottawa intends to reduce by 75% the rent of the small businesses affected by the COVID-19 for three months.

What will happen to Quebec? “We have always said we would be there to fill the gaps in the federal programs. We can’t let [these companies] to disappear, especially the restoration that is still closed”, said Mr Fitzgibbon.

A world less globalized

A large part of the effort will be to increase the independence of Quebec in certain sectors of the economy.

As with the blue Basket, which seeks to stimulate the local procurement, the government of Quebec intends to develop other measures for the province to become “a little more self-sufficient” in some respects.

With a trade deficit of almost 23 billion, it is still far from the account.

“We need to be careful because they will always remain a community where exports are important. We want to reduce the gap commercial, but by exporting more and importing less. But for this to work, we need our companies to be more productive”, for example by increasing their automation or digitization, ” says the minister.

Fitzgibbon in the shoes of…

What would you say to a young relative who has lost his job and is struggling to reposition themselves?

I would go where there are opportunities : in the health and digital economy. Health is a noble trade, where the needs are great and will remain so. The digital, because it is the future of our economy.

If you were at the head of an SME caught up in the crisis, what would you do?

The first thing to do is to focus on our comparative advantages over our competitors. A lot of businesses have developed skills with the COVID-19, have learned to better know the market. It is necessary to manage these data and use it.

You are an investor with tens of millions of dollars to inject in Quebec. What sector are you targeting?

(Laughter) The consumer goods. People will want to consume more with the recovery. And there has been a lot of loss of values in these sectors. It is therefore a sector with good opportunities.

Sleepless nights, there is more to having lived these last few months. What is it that prevents you from sleeping at night?

I am concerned about the maintenance of the strategic position of Quebec in the niche areas of economic importance.

I would be very unhappy to see our progress, our comparative advantages (against other provinces and countries) to be reduced as a result of the crisis.

I entered politics to create wealth, to reinvest in education and health care. What scares me is not being able to create the wealth we need.

Why?

Because you can’t tax people more. It is (already) too taxed. And if we lose our edge in aerospace, life sciences… it’s going to me in trouble a lot.

That said, I think that I have some life experience before politics (in business). It creates a boost of confidence.

I think that you can stand out in Quebec, and I would like to think that I’ll be able to help Quebec to stand out in the months and years to come.

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