Question Period Note: Challenges related to the economic context

Challenges related to the economic context

• Due to its in-depth knowledge of the issues facing Quebec SMEs and communities, Canada Economic Development for Quebec Regions is able to respond to their specific realities and changing needs – in collaboration with local players and Quebec authorities.
• SMEs are coping with rapidly changing economic circumstances. That's why Canada Economic Development for Quebec Regions supports SME productivity, innovation and market development, helping them integrate globalized value chains, overcome labour scarcity, embrace decarbonization and make a positive impact in their communities.
• Community vitality is at the heart of the mandate of Canada Economic Development for the regions of Quebec. Its interventions are aimed at bringing to fruition the projects of businesses and the ecosystems that support them, so that they can participate fully in the economy and meet the challenges of diversification and adaptation that they face.

Present in all regions of Quebec through its twelve business offices, Canada Economic Development for Quebec Regions makes strategic investments that enable businesses and communities to seize opportunities and prosper.

• The economic uncertainty on the international scene, including geopolitical tensions and protectionist policies, increases the importance of the resilience of the supply chains in which SMEs offer their products and services.
• Thanks to a normalization of inflation and expected reductions in borrowing costs, the Quebec economy is now returning to growth. This growth will be driven primarily by demographics, residential construction and exports.
• Quebec's economy has historically been resilient to economic shocks, particularly because of its industrial diversity. However, major structural challenges remain, including low levels of business investment and the delay in productivity, persistently high borrowing costs, a labor market characterized by labor shortages, and a large imbalance in the housing market.
• The Quebec economy has always been resilient to economic shocks, notably because of its industrial diversity. However, major structural challenges persist, including low levels of business investment and the resulting lag in productivity; borrowing costs that remain high in spite of everything; a labor market characterized by a scarcity of labor; and a major imbalance in the housing market.
• More specifically, in terms of productivity, Quebec and Canada lag chronically behind Europe and the United States. Innovation, and in particular the adoption of new technologies, is essential to productivity and business growth in export markets.
• Also, given the aging of the population, the challenge of labor scarcity persists; in addition to recourse to foreign workers and immigration, automated solutions are one of the main responses of companies.
• Quebec's regions also face different challenges in terms of economic development, depending on their industrial structure, economic dynamism and specific competitive advantages.
• Urban regions remain key drivers of the Quebec economy, with key industries such as aerospace, information and communication technologies, life sciences and clean technologies.
• The long-term growth of manufacturing regions will go hand in hand with the technological modernization of this important sector for Quebec. Resource regions, on the other hand, face additional challenges related to demographics, remoteness and lack of infrastructure.
• Finally, the impact of climate change remains a growing concern for the Quebec economy. The contribution of SMEs to achieving greenhouse gas reduction targets is essential, notably through the adoption of eco-responsible business practices and strategic investments in clean technologies.
• That said, CED's mandate is to focus on the conditions for creating growth, with an emphasis on less vitalized regions in need of support. CED achieves this by understanding the realities on the ground, offering support adapted to the circumstances, and investing a greater proportion of its funds in less vitalized regions.

Canada Economic Development for Quebec Regions supports the vitality of communities and helps entrepreneurs bring their business projects to fruition, at every stage of their development, in order to foster their growth and meet economic challenges through interventions tailored to their needs, through its regular programs as well as special initiatives.