Provincial government pledges “COVID-like” loans for businesses to reach new markets if tariffs hit.
The Caisse de dépôt et placement du Québec (CDPQ), an institutional investor and pension fund manager, has launched a support program designed to boost the productivity of Québec businesses and help them pivot to new markets as the prospect of a trade war with the United States (US) looms.
CDPQ plans to launch a contest for technological projects “in the coming weeks” and provide funding to the winners.
The new program will focus on providing capital, technology, and networking opportunities.
CDPQ said it would provide flexible financing on top of its existing programs to fund businesses’ investment projects “without increasing debt or immediately diluting their capital.”
The amount of financing available through the program was not listed. BetaKit reached out to CDPQ for more information but did not hear back by press time.
Through a partnership with Québec City-based applied AI startup and CDPQ portfolio company Vooban, program participants will be given support for integrating technologies such as automation, robotics, and artificial intelligence (AI). CDPQ plans to launch a contest for technological projects “in the coming weeks,” and provide funding to the winners.
The CDPQ also said it would connect participating businesses with networking opportunities to “explore new markets to diversify their client base, suppliers or operations.”
The announcement comes as Canadian companies brace for the possibility of a trade war with the US. Though a 30-day reprieve was announced Monday, a 25-percent tariff on Canadian goods imported into the US—and an equivalent retaliatory tariff from Canada on American-made goods—could go into effect as soon as March 4.
“Whether or not the tariffs materialize, it’s time to leverage all the know-how of our companies to drive Québec forward. CDPQ will be there to finance productivity-boosting projects and help companies diversify their markets,” Charles Émond, president and CEO of CDPQ, said in a statement.
In an interview on Radio-Canada’s Téléjournal, the CEO said the more efficient and productive Canadian businesses are, “the more indispensable we will be” to the US. Émond added that CDPQ will not be withdrawing its US investments.
Québec-based startups are already feeling the impact: textile manufacturer SRTX made temporary layoffs Wednesday, while Canadian consumer-goods startups warned retaliatory tariffs could wipe out parts of their businesses.
The Québec government also indicated it would boost support for businesses should the US impose tariffs on Canadian goods in March. Premier François Legault said yesterday that his government would provide short-term loans through Investissement Québec (IQ), similar to a COVID-era program.
Legault’s government has been subject to scrutiny in the media for its robust level of financial support to the business sector, which totals over $15 billion in loans, subsidies, and direct investment to startups and enterprises since 2018.
Richard Chénier, general manager of the government-supported non-profit Québec Tech, took to LinkedIn to share his vision for how Québec should respond to the tariff threat.
Chénier proposed nine measures to increase innovation in the province, including implementing a rule requiring companies of a certain size to adopt Québec technology, rolling out incentives for the creation of corporate venture capital funds, and dedicating half of incentive budgets to attracting US companies to the north.
“It’s time for a change,” Chénier wrote. “If this crisis doesn’t bring about the long-awaited transformations, we will have missed a huge opportunity.”
Feature image courtesy CDPQ.