During the last five financial years of the Economic Development Fund (FDE), the CAQ government of François Legault was forced to inject a total of $3.6 billion to replenish this government fund.
Reporting to the Ministry of the Economy, Innovation and Energy (MEIE), the Economic Development Fund is, according to the ministry: “the vehicle favored by the government to carry out structuring interventions for the benefit of economic development of Quebec. Management of the FDE is entrusted to Investissement Québec.
The problem with the FDE: every year for the past five years, said fund has not made the slightest profit with its thousands of investments and loans made in companies. On the contrary!
Moreover, here, for each of the last five financial years of the FDE, completed under the leadership of former superminister Pierre Fitzgibbon, the amount of financial losses that the Legault government had to make up:
– Fiscal Year 2023-24: $658.23 M
– Fiscal Year 2022-23: $475.03 M
– Fiscal Year 2021-22: $194.34 M
– Fiscal Year 2020-21: $474.72 M
– Exercice 2019-20: 1,78 G$
That said, the government’s total contributions of $3.6 billion to the FDE which were used to fill these five annual deficits include:
– an amount of $2.55 billion as a financial contribution from the government to compensate for the annual deficits of the FDE and to reimburse it for losses incurred on its financial interventions;
– an amount of $1.03 billion as the government’s contribution to provisions for losses.
At the discretion of the government
Let’s be clear! The FDE is also the public investment fund through which the government in power invests at its discretion in various companies that it considers promising, despite major risks.
We saw this, among others, with the enormous investments (of $1.3 billion under Philippe Couillard and $700 million under François Legault) in the C Series superplane that Airbus acquired for a pittance before selling it. convert to A220.
Same thing with the recent investments of $510 million by the Legault government in the Northvolt Six adventure.
lame ducks
If the FDE is in such a deficit, it is because its portfolio probably contains a ton of lame ducks and a large number of investments turn out to be little or not profitable.
Let’s take the FDE’s latest fiscal year 2023-24. Of the total expenses of $935 million, income from investments amounted to barely $277 million. Hence, the deficit of $658 million, which the Legault government had to fill to allow the FDE to balance its financial year.
Let’s think about it for two minutes: the FDE’s investments brought in income during the last financial year a little less than 30% of the expenses it costs the FDE to administer its portfolio. It is the government which assumes 70% of the costs out of its own pocket. You have to do it!
The programs
Here are the various financial assistance programs for businesses offered by the FDE.
– Share capital investments under the Investissement Québec Act
– ESSOR program: loans, advances, grants
– Support programs for the retention of strategic businesses and emergency aid: loans, advances, grants
– Innovation Program: grants
– Marketing and export support: subsidies
– Economic development: subsidies
– Social economy support program: subsidies
– Support program for the development of tourist attractions: loans, advances
– Impulsion PME program: loans, advances
Investments
Here, for each of the last five financial years of the FDE, is the number of financial interventions carried out with companies, followed, in parentheses, by the total amount of authorized financing.
– In 2023-24: 1,853 interventions ($2.05 billion)
– In 2022-23: 2,165 interventions ($2.25 billion)
– In 2021-22: 3,394 interventions ($2.5 billion)
– In 2020-19: 1,565 interventions ($2.4 billion)
– In 2019-20: 472 interventions ($884 million)
At the end of the last fiscal year, March 31, 2024, the FDE portfolio had a value of $6.1 billion. It included 3994 financial interventions with 3159 companies.
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