MONTREAL—In a country where productivity and prosperity are hot topics, Quebec often takes a beating. Despite decades of major interventions by the province to reverse the trend, it remains stubbornly less productive and less prosperous than neighbouring Ontario and much of the OECD. So now the provincial government has a new plan—and $4.5 billion to spend over the next three years.

That plan, called Grand V, is the brainchild of Investissement Québec, the investment arm of the Quebec government. It’s a program of loans, support services and technical guidance for Quebec businesses large and small. Its stated aim is, basically, to make Quebec more productive and prosperous.

It’s a bold gambit. And a controversial one. One expert I spoke to this week was so sure it wouldn’t work that he didn’t just speculate about its failure—he said, with utter certainty, that it would fail. And as experts go, Robert Gagné is a good one. He’s the director of the Centre sur la productivité et la prospérité, or CPP, which has spent the last 15 years comparing Quebec’s ability to generate wealth to neighbours near and far. In a report earlier this year, Gagné and his colleagues once again found what they’ve found nearly every year since 2009: Quebec is less productive and less prosperous when measured against the usual suspects.

When I called up Gagné for his verdict on Grand V, and the $4.5 billion the Quebec government is about to throw at the problem, I could practically hear his shoulders shrug. “It’s not going to work,” he said in a gravely gait, chuckling warily before reinforcing the thought. “I know it’s not going to work.”

Gagné’s certainty is instructive. The CPP is part of HEC Montréal, the business school that’s trained generations of mostly francophone business elites, the Centre sur la productivité et la prospérité has been pointing at Quebec and Canada’s faltering productivity long before it became a 600-pound beaver. In the mad governmental scramble to throw money at the problem, Gagné sees a costly repeat of past initiatives that did very little to fix the problem. In fact, they might have made things worse.

Quebec’s latter-day productivity woes, Gagné points out, are in line with a general trend affecting the entire country. Yet few if any other North American jurisdictions intervene in their own economies to the extent of Quebec, and the legacy is damning. “Despite billions of dollars of public funds injected into the province’s industrial policy over the past 25 years, the Quebec government has failed to reverse the effects of the long decline of its economy,” reads the 2023 CPP report.

Quebec, like Canada, saw its standard of living fall between 1981 and 2022; the province now ranks below the national average, as well as the likes of Italy and Ontario, among other OECD jurisdictions. It is middling in per capita net market income and basement level in disposable income—even among its middle class.

None of this is a reflection on Quebecers themselves, who have a long history of working more hours than the average citizen of an OECD country. The difference is in part what our provincial government has chosen—and not chosen—to invest in. To wit: forestry, textiles, pulp and paper and other low-tech, low-productivity industries, the vast majority of which receive outsized subsidies in the name of regional development. 

Meanwhile, the government’s practice of subsidizing salaries, even in these times of labour shortages, has resulted in an artificial increase in wages. Overall, the province has among the lowest private investment levels in the OECD—which Gagné attributes to the glut of public money swishing around.

There is a similarly destructive tendency to keep investing in otherwise failing businesses, resulting in a comparably higher number of “zombie companies” limping along on government largesse than in Ontario. And Quebec’s biggest neighbour is nothing short of an abiding obsession for Premier Francois Legault.

Then there’s Investissement Québec. Under Legault, its budget has doubled, its mandate widened and its aversion to risk slackened, just as it has fallen further under the government’s thumb. Nevertheless, in the eyes of the Centre sur la productivité et la prospérité, Investissement Québec opaque, largely rudderless and given to scattershot investment in promising-sounding niche markets. 

“I have no idea in which niche markets they’re investing. Only the bureaucrats in Quebec City know for sure,” Gagné told me when I asked for examples. I suggested Quebec’s EV battery sector. He didn’t disagree.

That said, Quebec has inched closer to Ontario-level productivity over the last six years. It’s worth remembering, too, that GDP is a blunt tool. One need only look to the U.S., home of outsized GDP levels, for proof that productivity doesn’t necessarily buy happiness—or political stability, for that matter. Still, there is a long history of government intervention in the Quebec economy, and that history hasn’t been kind.

Martin Patriquin is The Logic’s Quebec correspondent. He joined in 2019 after 10 years as Quebec bureau chief for Maclean’s. A National Magazine Award and SABEW winner, he has written for The New York Times, The Guardian, The Walrus, Vice, BuzzFeed and The Globe and Mail, among others. He is also a panelist on CBC’s “Power & Politics.”