The Quebec government hopes to have closed the productivity gap between itself and neighbouring Ontario as soon as 2027, a senior Investissement Québec executive told The Logic.

Officials had previously estimated it could take until 2036 to close the gap, but Mia Homsy, vice-president of labour and business intelligence at Investissement Québec, said Grand V, a three-year, $4.5-billion productivity plan, would help Quebec catch Ontario in just three years.

Grand V includes term loans of at least $250,000 with up to a four-year moratorium on repayment, as well as 100 hours of technical support from Investissement Québec experts. Though it will focus on “strategic, high-value-added sectors”—including aerospace, food and aluminum production and artificial intelligence—Grand V is open to all Quebec-based businesses save for cryptocurrency and media services, among other exceptions. 

“We will also help companies in low-productivity industries to become more productive,” Homsy said, adding that manufacturing industries will likely be more prevalent among Grand V’s clients, given the relative ease of automating labour-heavy processes.

The province’s labour productivity increased by just over one per cent between 1981 and 2022, nearly 20 per cent lower than Ontario and 31 per cent lower than the OECD19 group, according to a 2023 Centre sur la productivité et la prospérité report, which says the productivity shortfall endangers the province’s ability to sustain itself.

In 2021, Premier François Legault said it would take until 2036 for the province’s lagging productivity to catch up with Ontario. Quebec has made gains on its neighbour since 2017, in part because Ontario’s own productivity level has dipped. 

Grand V, the Quebec government’s third productivity-related initiative since 2020, will have yearly benchmarks to hit, which will be documented in Investissement Québec’s annual report, Homsy said. 

The Centre sur la productivité et la prospérité (CPP), which is associated with the HEC business school in Montreal, has cast doubt on the government’s ability to spend its way to higher productivity. Despite 25 years of economic interventionism, the CPP report says the province has less private investment, exports and a higher rate of “zombie companies”—low-productivity businesses that survive on government subsidies—than other Western economies. “It’s not going to work,” CPP director Robert Gagné said of the Grand V initiative.  

Editor’s note: The headline of this story has been updated to reflect that the comments were made by Investissement Québec.