Supplementary Statement to the 2002-2003 Budget:
Reinforcing the measures to support economic development
and job creation

Québec, March 19, 2002 - In reinforcement of the measures to support economic development and job creation, the Supplementary Statement to the 2002-2003 Budget tabled today by Deputy Prime Minister and Minister of State for the Economy and Finance Pauline Marois contains elements designed to intensify the transition to a knowledge-based economy, support regional development and modernize the operation of the financial sector.

"The Québec economy has withstood the difficult economic situation well because it is much stronger and more diversified than before. Our businesses have demonstrated impressive vitality and consumers have shown great confidence. Our government's voluntary economic policy has also been instrumental in this, and we intend to continue our efforts by targeting, in particular, sectors with high growth potential," Ms. Marois indicated.

$118 million for biotechnology

The introduction of new measures to support the biotechnology sector is, without contest, a major component of the Supplementary Statement for intensifying the transition to a knowledge-based economy. Thus, a new capitalization loan program (Bio-Levier) with a $100-million envelope will be implemented as of this year. The program will have a leverage effect by providing biotech companies with financial support, for product development and marketing, matching the contribution of private investors.

According to certain forecasts, the global market for products and services linked to the biotechnology sector should expand 30% annually, to reach a total of more than $500 billion in 2009. It is one of the sectors of the new economy with very high growth potential. "Québec has numerous assets that position it favourably in the biotechnology sector: several world-class research centres, an advantageous corporate environment and many high-performing businesses. However, these businesses sometimes have difficulty obtaining the funding they need to develop and market their discoveries. With the Bio-Levier program, we are giving them the leg up they need to continue growing in Québec," Ms. Marois explained.

Furthermore, two new biotechnology development centres will be created?one in Sherbrooke, specializing, notably, in the life sciences, and the other in Saint-Hyacinthe, which already boasts numerous businesses in the agri-food and veterinary medicine fields. Both these centres will receive the same tax benefits as the Centre de développement des biotechnologies de Laval, which is currently under construction. These include a refundable tax credit on wages paid, a five-year tax holiday and refundable tax credits for eligible specialized equipment. In addition, a refundable tax credit of 40% will be granted to businesses with respect to new employees who carry out manufacturing and commercialization activities. These fiscal measures represent a government investment of $9.5 million over the next three fiscal years.

To promote the establishment of a functional foods and nutraceuticals development centre in the Capitale-Nationale region, the government will grant a refundable tax credit of 40% on the wages of new employees who carry out manufacturing and commercialization activities, devoting $8 million over three years to this measure.

Other measures geared to the new economy

To encourage the start-up and expansion of new-economy businesses, innovation centres will be set up in Québec City and Montréal. The Québec City innovation centre will be established on the territory of Parc technologique du Québec métropolitain, whereas the Montréal centre will be located on the territory of Technoparc Saint-Laurent and Technopôle Angus. Tax assistance consisting of a five-year, 40% tax credit on the salaries of new employees will primarily target innovation technologies such as information, production and materials technologies.

An amount of $15 million will also be allocated for the continuation of the Technology Showcase Assistance Program, which helps businesses market innovative products or processes they have developed.

$8 million more for the Gaspésie—Îles-de-la-Madeleine region

In addition to the measures provided for under the resource regions strategy, the government is allocating another $8 million over two years in order to sustain tourism development and encourage economic diversification in this region, which is grappling with specific difficulties. "To date, we have invested over $300 million in the resource regions to create close to 3 000 jobs and maintain 2 000 others. However, the situation is still difficult in the Gaspésie region, which is why we must do more," the Minister stressed.

Modernization of the regulatory structure of the financial sector

The Minister also announced her intention to follow up on the report of the Task Force on Financial Sector Regulation. "I met with the heads of the regulatory bodies in the financial sector to obtain their comments on the directions proposed in the report. The creation of a one-stop service for both consumers and the industry, as well as the repositioning of the Québec financial industry on the North American market, are essential. I will propose the creation of the Agence nationale d'encadrement du secteur financier, and soon table a bill to that end. I will act on the directions proposed by the task force by integrating certain adjustments that take into account the specificity of the practices of Québec professionals in the insurance sector," affirmed the Minister.

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Source: Nicole Bastien
Press Officer
Office of the Deputy Prime Minister and
Minister of State for the Economy and Finance
Tel. (418) 643-5270 or (514) 873-5363
www.finances.gouv.qc.ca

Information: Jacques Duval
Direction des communications
Ministère des Finances
Tel. (418) 691-2252