Business groups beg Quebec’s finance minister to address labour shortage in economic update

Business groups in Quebec are imploring Finance Minister Eric Girard to address the province’s crippling labour shortage in his economic update expected this afternoon.

“The biggest restraint to restarting the economy and balancing Quebec’s budget is the labour shortage,” Véronique Proulx, CEO of the Quebec Manufacturers and Exporters Association, told CBC in an interview.

Proulx estimates manufacturers in the province have lost $18 billion over the last two years due to the shortage.

“They’re losing international contracts because they’re not able to deliver on time, some have chosen to let loyal customers go because they’re unable to supply them anymore,” Proulx said.

Charles Milliard, president of the Quebec Federation of Chambers of Commerce, said in a statement Wednesday that the labour shortage was “slamming the brakes” on the entire economy.

“The government has a golden opportunity to reassure Quebec entrepreneurs about the labour shortage, and it must seize it,” Milliard said.

Proulx said the labour shortage existed well before the pandemic and the CAQ government hasn’t taken it seriously enough.

“We don’t see the numbers improving. Before the pandemic, in manufacturing only we had 19,000 vacant positions. Now we’re at 25,000,” Proulx said.

Overall, Quebec has about 200,000 vacant positions across the economy.

Incentives for older workers

Both Milliard and Proulx said encouraging older skilled workers to remain in the workforce and enticing retired workers to return are key strategies.

Proulx said right now there’s a tax credit offered to retired workers who rejoin the workforce, but she said it’s not enough.

“When you combine the federal and provincial tax credits it’s about $4,000. Is that enough for someone who’s retired to go back to work? I don’t think so,” Proulx said.

Milliard said the Quebec Pension Plan actively discourages workers from returning to the workforce.

He said retired workers only have the choice to suspend their pension and return to the workforce for up to six months after their initial retirement.

He called this six month period “arbitrarily short and unnecessarily rigid.”

“It encourages permanent and irreversible retirement when the government finds itself in a context where the participation rate of experienced workers should be increased,” Milliard said.

He also said workers who’ve started receiving Quebec Pension Plan benefits who return to work should be exempt from making further contributions to the plan.

Increased immigration

Proulx said a longer term fix would be for the province to increase the number of new immigrants allowed to come to Quebec each year.

Business leaders were puzzled when the CAQ government slashed the number of immigrants by 20 per cent when it was first elected in 2018, just as the labour shortage was beginning to hurt.

In 2019 about 40,000 new immigrants were allowed in, down from 50,000.

Last month, the provincial Immigration Ministry increased the target back to about 50,000, and promised to process thousands more applications that were stuck in backlog in the system.

Proulx said the target should be 70,000 a year.

“Immigration is critical to have an impact on labour shortages. The government is telling us it’s not the only solution — it’s true, but it has to be part of the solution,” Proulx said.

Last spring Girard said he hoped to have Quebec emerge from the pandemic and return to a balanced budget in 2027-2028.

The provincial deficit for this year is projected to be $12.3 billion, although Girard has suggested that that number will  decrease.

CBC