Québec ranks 17th among OECD countries in terms of economic performance. Its gross domestic product (GDP), which exceeds C$160 billion, represents close to 23% of Canadian production.
Once adjusted to take purchasing power parity into account, Québec's GDP is higher than that of many European countries, including Denmark and Norway. It is equal to the GDP of Finland and New Zealand combined.
Quebecers have one of the world's highest standards of living. Québec ranks 13th among OECD countries in terms of per capita income.
Québec's economy is a dynamic ensemble of industries which evolve in keeping with international economic trends such as market globalization, investment in high-tech and value-added sectors, and orientation of production to highlight Québec's strong points as an international trading partner. Québec's economy is highly diversified and characteristic of the modern, post-industrial era.
Québec has evolved from an economy dependent on resource harvesting and primary processing to an exporter of processed and semi-processed goods. In 15 years, the share of high-technology products in Québec exports has burgeoned from 12.6% to 27%.
Québec's economic performance makes it a leader in fields such as aerospace, telecommunications, metallurgy, and pharmaceuticals.
With a view to establishing a solid industrial base, Québec is taking steps to ensure growth in leading-edge technologies and industrial sectors that are competitive on world markets. Its industrial development strategy is based specifically on clustering firms within a given activity sector. These firms interact and work jointly to hone their competitive advantages and stimulate growth.
Five of the 14 industrial clusters are of international calibre. Their firms maintain close links with their partners, creating synergy that benefits the sector as a whole. The competitive sectors are aerospace; pharmaceuticals; information technologies; electrical energy generation, transportation and distribution equipment; and metallurgy.
Nine other clusters have high growth potential and play significant roles in the development of Québec's regions. They are ground transportation equipment; petrochemicals and plastics processing; biofood products; habitat and construction; fashion and textiles; forestry producs; the environment industry; and the cultural and tourism industries.
In this era of freer world trade, major Québec firms are looking to international markets and, in all proportion, are meeting with success. A number of Québec manufacturers including Bombardier, Weston, Quebecor, Seagram, and Cascades, for example, have improved their ranking among North America's largest companies.
Québec is a leader among technologically advanced nations. It is basing its growth on the development of leading-edge technologies and industrial sectors that are competitive on world markets.
Québec has an abundant supply of hydroelectric power. Hydro-Québec's activities have had a strong ripple effect on the use of new technologies. This government-owned utility was the impetus for the development of Québec's hydroelectric resources and world-class expertise in this sector.
SNC-Lavalin and Monenco, two Québec giants, are among the world's top ten engineering consulting firms.
The innovation and quality of the projects completed by Québec engineering consulting firms and engineering services in hydroelectricity, rural electrification, urban planning, and natural resource development have helped Québec amass internationally recognized expertise.
Like the hydroelectric industry, the Québec telecommunications industry is a leader in its field. Given the complexity of its transportation network and its vast landmass, Québec has successfully met the challenge of telecommunications, and Québec firms in this field have exported $3 billion worth of telecommunications equipment and material.
Québec leads Canada in the aerospace sector with companies such as Pratt & Whitney, world leader in the design and manufacturing of turbines; Spar Aerospace; Bell Helicopter; and Canadair, which manufactures the Challenger, the Regional Jet, a 50-seater jet aircraft for regional transportation, and the CL 415, a water bomber designed to fight forest fires. Canada's aerospace industry, which posts annual sales of $8 billion, employs 60 000 people. Half of this industry is located in Québec, mainly in the Montréal region. It employs 30 000 people in roughly 150 firms and generates $4 billion worth of state-of-the-art products.
The pharmaceuticals industry is supported by a research infrastructure unparalleled in Canada, which has enabled it to grow and become one of the Québec economy's most thriving sectors. Sales for pharmaceutical companies, 95% of which are located in Montréal, totalled $2.5 billion in 1991. Approximately 8000 specialized employees work at 75 firms.
Software engineering and production are booming in Québec and have made major breakthroughs. Some 500 companies are involved in software production and adaptation. The expertise of Québec's designers and programmers is a major asset for this industry. Over 3500 Québec-made software programs are used in health care, manufacturing, retail trade, wholesale distribution, and construction. This is proof of remarkable skill and the capacity to innovate.
One of the strengths of Québec's software engineering firms lies in their ability to design bilingual and even multilingual versions of their products.
In the current context of freer international trade, Québec boasts a qualified labour force whose skill and versatility give its businesses a marked advantage. Over 50% of the Québec work force has postsecondary or university training. Businesses can count on a competent labour force and subcontractors both in heavy industry and high-technology fields.
Educational institutions adapt their programs to meet the dictates of the market and technological change. Emphasis is placed on ongoing training and professional upgrading. Interaction between education and industry helps transmit know-how which increases productivity and improves output quality.
Québec workers are active in several leading-edge fields, such as avionics and telecommunications. The service sector accounts for 74% of all employees, while the manufacturing industry accounts for 22%.
Fifteen thousand strong, small and medium-sized businesses (SMBs) in Québec represent over 60% of all manufacturing firms. Over 3200 of them export their products and they can be found in all industrial sectors. Thanks to their capacity for adaptation, SMBs play a key role as tools for technological development, both in research and marketing. Many large companies rely on their services as suppliers of specialty products and as subcontractors in heavy industry and high- technology.
Québec promotes the growth of small business through assistance programs and tax measures adapted to their needs.
In recent years, Québec has been investing in R&D at a rate that is eight times greater than the growth of its GDP, and three times that of the rest of Canada.
By channelling 1.68% of its GDP into research, Québec has joined the ranks of the world's technological leaders as recognized by the OECD, along with nations such as Belgium and Denmark.
Industry has become the main investor in R&D in Québec. It has significantly boosted its contribution, which accounts for over half of the total rise in R&D investments. Businesses are carrying out research and development activities while taking advantage of favourable conditions, including government assistance, support from universities and public and private laboratories, and active partnerships with SMBs. By developing the industry's strengths, R&D enables businesses to be competitive on world markets.
The number of people involved in industrial R&D has grown rapidly, more than doubling since 1980. Today, Québec has access to a pool of industrial researchers that is proportionally greater than in the rest of Canada.
Industrial research in Québec is internationally acclaimed in four main industry clusters: information technologies, aerospace, transportation, and pharmaceuticals.
R&D expansion through the combined efforts of universities and industry is moving full speed ahead. This type of partnership is becoming popular in Québec. More than half of industrial funding for university R&D in Canada comes from Québec.
Québec sells over 40% of its goods and services outside its borders. Its international exports account for approximately 20% of its GDP, a proportion three times that of the United States and twice that of Japan.
Over the past decade, exports of Québec commodities have grown rapidly and steadily. Between 1983 and 1993, the value of exports more than doubled.
On international markets, Québec is among the world's top thirty importing and exporting nations, and ranks in the top ten for exports of about twenty specific products. The OECD classes it among the world's leading twenty importers and exporters.
Under the North American Free Trade Agreement (NAFTA), Québec has emerged as a major North American trading partner. The United States' eighth most important trading partner, it sells over US$21.8 billion worth of goods on this market, outranking the United Kingdom, France, South Korea, and Italy as a supplier.
The United States is Québec's main export partner. Between 1983 and 1993, the value of exports shipped to the US almost tripled, from $10.4 billion to $27 billion. Although shipped mainly to the central northeastern and Atlantic regions and the New England states, Québec exports are gradually finding their way into other dynamic US regions, such as the Southwest.
Québec's main exports are telecommunications equipment, newsprint, aluminum, automobiles, airplanes, lumber, wood pulp, and copper. Close to 80% of these exports (a value of $27 billion) are shipped to the United States, especially the Atlantic region, the Midwest, and New England.
After the United States, Western Europe is Québec's most important trading partner, receiving 12% of its exports. Asia ranks third with 4.2%.
Québec is a leader on international markets in terms of products from the aluminum, newsprint, and asbestos industries. Québec is the world's top exporter of aluminum and asbestos, and ranks second for newsprint.
For the past ten years, high technology has ranked high on Québec's list of export commodities. Telecommunications material and equipment, automobiles, airplanes, and airplane parts and engines are among its top ten exports. This performance can be explained by the solid growth rate of these products on international markets between 1983 and 1993.
Because of its size, Québec has developed a modern, efficient transportation and communication network. Road and rail systems link all of Québec's regions and major Canadian and US cities. There are a dozen deep-water ports, open year-round, along the St. Lawrence. This infrastructure is complemented by three international airports and approximately one hundred local and regional airports.
Montréal is a hub of international air transportation, thanks in part to the presence of major transportation equipment manufacturers. It is the only city in the world that manufactures all aircraft components without exception, and it is also the international capital of civil aviation. Three major international organizations have their head office in Montréal: the UN's International Civil Aviation Organization (ICAO); the International Air Transport Association (IATA); and the International Society of Aeronautical Telecommunications (SITA).
Dorval and Mirabel international airports on the outskirts of Montréal accommodated nearly 9 million passengers in 1993, while 700 000 used Québec City's Jean-Lesage airport.
Québec is a key North American maritime site. One-third of Canada's marine traffic navigates via its ports, which are open year-round. Sept-Īles, Port-Cartier, Montréal and Québec City are among the largest. They compare favourably with ports on the Atlantic coast of the United States.
Québec's railways, part of Canada's rail system, are linked to the United States for passenger travel and freight shipping.
Two Canadian companies operate 85% of Québec's rail system: Canadian National (5000 km) and Canadian Pacific (2200 km). Via Rail Canada, a government-owned enterprise, is responsible for passenger transport in Québec's main regions.
Ground transportation is facilitated by 60 000 km of roads, nearly 2000 km of which are highways linking Québec to the rest of Canada and the United States and making rapid freight delivery to North American clients possible. The extent of the road network and the demanding climate have forced Québec engineers to become road surfacing experts. They are recognized the world over. Automated assessment of road conditions and the development of new road surfacing materials, such as fibre-reinforced concrete, are two major Québec breakthroughs.
Québec has an up-to-the-minute telecommunications system. The telephone network, recognized for its efficiency, is linked to computer data and fax transmission systems. The quality of these networks has made Montréal the main processing centre for overseas calls from Canada, and one of the first in the world to use digital telephone connections.
Financial markets play a key role in Québec's economic vitality, and Montréal is recognized as a major international centre in this field. Québec is home to seven of Canada's ten charter banks, and 25 foreign banks. Eleven foreign banks have their Canadian subsidiary or head office in Québec.
The Mouvement Desjardins, a federation of savings and credit union cooperatives, is an outstanding financial success story. At the end of 1993, it controlled assets of $75 billion, credit unions and insurance companies included, making it the largest Québec-owned financial institution.
Forty-five mortgage and trust companies and 435 insurance companies also stimulate Québec's economic activity. In addition, the Montréal business community has created a new concept: international financial centres (IFC). The IFCs are active in a wide range of international transactions, such as banking services for non-residents, portfolio management for foreign clients, and financial backing for projects outside Canada.
The Montréal Exchange, the first stock exchange in Canada to have implemented an options market, is also unique in that it offers a fully integrated market, that is, one where equity, options and futures can be traded. The total value of share transactions stood at $32.4 billion in 1994, compared with $7 billion ten years earlier.
The Caisse de dépôt et placement, an innovative financial tool created by the State, administers retirement funds and public insurance plans and ensures that they yield a profit. Its portfolio stood at $47 billion in 1993. Quebecers can contribute through the Caisse to companies' share capital.
Unlike other Canadian provinces, Québec administers and collects its own taxes on the income of individuals and corporations. Its taxation system enables foreign investors to benefit from the same advantages as Québec businesspeople. Companies set up in Québec enjoy one of North America's lowest taxation rates on profits. Various measures are used to promote investments, research and technological innovation.
The North American Free Trade Agreement (NAFTA) between Canada, the United States, and Mexico came into force on January 1, 1994. Under this pact, which adds numerous advantages to those of the Free Trade Agreement (FTA) already in force between Canada and the United States, most customs tariffs (depending on the commodity) will gradually be phased out. Resources, agriculture, manufacturing, and financial industries and services are covered by NAFTA.
This means that all of North America is now a potential market for Québec-produced goods and services. Like Québec businesspeople, foreigners who invest in Québec will benefit from the advantages of this accord which opens up new prospects for the future.