The 2024–2025 Québec budget, titled “Health | Education Priorities,” reflects the government’s commitment to substantially increase investments in these two critical sectors, which together account for 59% of program expenditures, while reviewing certain existing financial assistance programs.
In this budget, we identify three key takeaways that reveal the government’s priorities regarding the economy and innovation:
- minor and very specific additions to key initiatives, notably regarding the mandate of innovation zones, the “Accès Entreprise” measure (Québec), and business succession
- optimization of tax incentives, including three payroll-based tax credits that will have an impact on IT talent
- changes to the appropriations allocated to the Ministry of Economy, Innovation, and Energy (MEIE) indicating an expanded mandate for Investissement Québec
A range of budgetary allocations to support key sectors
Funding for major entrepreneurship and innovation programs—namely, the Quebec Entrepreneurship Plan (PQE) and the Quebec Strategy for Research and Investment in Innovation (SQRI2)—continues. The additional measures, which are included in the 2024–2025 budget, reflect the priority the government places on certain key sectors. These sectors include emerging technologies, aerospace, tourism, and the bio-food sector, which is receiving funding to create a new investment fund designed to facilitate young entrepreneurs’ access to land ownership.
Although the 2024–2025 budget does not specify the upcoming announcements regarding innovation zones, an additional $125 million over 5 years is earmarked to equip certain innovation zones with industrial laboratories in order to accelerate the commercialization and transfer of innovation. Furthermore, in terms of major investments, the fund Natural Resources and Energy Capital, which aims to support the exploitation and processing of natural resources, the energy transition, and the production of green energy, will receive an additional $500 million in funding.
Among other funding allocations for entrepreneurship, the budget includes an additional $22.6 million for 2025–2026 to maintain services forBusiness Access Québec aimed at supporting businesses in their growth within the Québec RCMs, as well as $9 million over three years in addition to the PQE to support the re-entrepreneurship Quebec businesses and ensure the next generation of entrepreneurs.
Finally, the budget includes measures to support regional growth, or that of certain key regional sectors, including the aluminum industry and the forestry sector, as well as a $16.8 million increase over four years for the PSupport Program for Regional Initiatives in the Capitale-Nationale Region to support the implementation of tourism, economic, and cultural projects.
With a view to optimizing certain tax relief measures
Another major trend in the 2024–2025 budget involves optimizing government operations to achieve savings of 2.9 billion over five years. This optimization will result from efforts to streamline resources at major government-owned enterprises, including Hydro-Québec, Loto-Québec, the Québec Liquor Corporation, the Société québécoise du cannabis, and Investissement Québec, as well as a review of tax incentives for companies in the IT sector.
In short, three payroll-based tax credits, namely the tax credit for the development of e-business (CDAE), the tax credit for multimedia production (CTMM), and the tax credit for film production services (CSPC), will be revised to yield savings of $874.5 million by 2028–2029.
Without going into detail about the planned revision of these tax credits, the goal will be to address the existing inequity among technology companies whose employees are part of the same MAIN IT workforce pool. Furthermore, the government hopes that removing the salary cap for the CDAE and CTMM will encourage companies to locate high-value-added activities in Québec.
It should be noted that some of the funding allocations for health care are related to innovation, such as the planned acceleration of the health care system’s digital transformation through the introduction of the Digital Health Record, and increased investment in prevention and innovation to better respond to pandemics. Finally, to retain and attract talent, $370 million over five years has been allocated to strengthen support and service offerings aimed at attracting, ensuring the success of, and retaining these future graduates in higher education institutions.
Toward an expanded mandate for Investment Québec to support businesses
If we look more specifically at the budget allocated to the Ministry of Economy, Innovation, and Energy (MEIE), we see a continuation of the spirit of government efficiency, as the budget for Québec shows a decrease of 228 million. The Ministry’s budget will go from a projected 1,824 million for 2023–2024 to 1,596 million for 2024–2025.
Looking more closely at the funds allocated to the MEIE for 2024–2025, there is an increase of $117 million for initiatives related to Program 4 – Economic Development Fund is planned, a program concerning the administration and disbursement of financial assistance granted by Investment Québec. The budget cuts for the MEIE are expected to affect primarily the amounts allocated to:
- Strategic industries and major economic projects (decreasing from $95 million to $62 million)
- Regional economic development and entrepreneurship (decreasing from $256 million to $211 million)
- Support for organizations and projects (decreasing from $210 million to $168 million)
Although it is possible that the funds allocated to Program 4—Economic Development Fund—are intended for various existing programs currently managed by Investissement Québec, we can anticipate that certain business assistance programs will be supported by Investissement Québec, a trend that has been ongoing since the expansion of this economic development agency’s mandate.
This budget is consistent with the measures already announced as part of existing government strategies, and we did not expect an increase in existing budget allocations. We look forward with great interest to the next steps regarding the SQRI.2, the upcoming revision of the PQE, as well as announcements regarding the next innovation zones.
We will continue to advocate with the government of Québec to ensure that we address the three issues we currently identify in the innovative entrepreneurship business ecosystem: the lack of early-stage funding, the information gap, and the mental well-being of entrepreneurs.
In fact, these are the three issues we raised during the 2024–2025 pre-budget consultations, and we will continue this work throughout the year.