"C" Economic Grade a Wake-up Call for Quebec

Quebec's "C" ranks below most provinces and major developed countries in How Canada Performs report card

OTTAWA, May 15, 2014 /CNW/ - Quebec gets a "C" grade for its economic performance, giving it a below-average ranking compared to other provinces and developed countries, according to The Conference Board of Canada's "How Canada Performs: Economy" analysis that for the first time, compares the 10 provinces and 16 advanced countries.

Released today, and building on previous "How Canada Performs" analyses, the Economy report card is the first of six to be produced over the next year on Canadian and provincial socio-economic performance.

"These results are a wakeup call. Quebec has suffered a decline in its grade for per capita income since the early 1980s, and has been a "D" grade performer since the mid-1990s," said Glen Hodgson, Senior Vice-President and Chief Economist. "It is now in the company of Japan, France, the U.K., and some other European countries that have experienced weak economic growth for the past two decades."

HIGHLIGHTS

•     In the short term, Quebec's economy should see a modest boost in growth in employment and income.
•     Labour productivity is a key indicator for which Quebec gets a low grade. 
•     Quebec fares poorly on greenfield foreign direct investment (FDI) in both directions.

In the short term, Quebec's economy should see a modest boost in growth in employment and income. Quebec got an "A" grade on employment growth and a "B" grade in GDP growth in 2013, a reflection more of the weaknesses in peer countries than in its own strength. Like Ontario, Quebec should see relatively higher real GDP growth this year thanks to rising demand from the key U.S. market and a slightly lower dollar.

Despite the short-term economic lift, without structural reform, Quebec's grades suggest modest long-term prospects.

Labour productivity is a key indicator for which Quebec gets a low grade. Productivity is the single most important determinant of a country's prosperity over the longer term, as it is a measure of how efficiently goods and services are produced. Quebec gets a "C" grade on productivity growth and its labour productivity level is below the national average and below every peer country except Japan.

Quebec fares poorly on greenfield foreign direct investment (FDI) in both directions. Greenfield FDI is investment that expands an existing business or creates a new business (as opposed to a merger or acquisition). The size of the Quebec economy would suggest that it should be a bigger player in both attracting inward FDI and investing in other countries (outward FDI). Quebec gets a "D-" grade on outward greenfield FDI—ranking behind all international peer countries—and a "D" on inward greenfield FDI.

The Conference Board and HEC Montréal have launched l'Institut du Quebec to examine the challenges—including economic ones—facing Quebec and will offer ideas and recommendations based on new analysis.

How Canada Performs is an ongoing research program at The Conference Board of Canada to help leaders identify relative strengths and weaknesses in Canada's socio-economic performance. The How Canada Performs website presents data and analysis on Canada's performance compared to peer countries in six performance categories: Economy, Innovation, Environment, Education and Skills, Health, and Society.

This is the first year that provincial and territorial rankings are included in the analysis.

The Education and Skills report card will be released in June.

SOURCE: Conference Board of Canada

Yvonne Squires, Media Relations, Tel.: [phone] ext. 221
E-mail: [email protected]