Quebec is experiencing a rare moment in economic policy: a consensus is emerging. On Monday, Ms. Fréchette joined MM. Milliard and Saint-Pierre Plamondon in saying that government intervention in the economy needs to be rethought. Following the tabling of Mr. Girard’s budget on Wednesday, the business community criticized the “scattershot approach” to business investment. In short, from the political class to the business community, the diagnosis is converging. The way the government intervenes in the economy needs to be rethought.
The current debate over government interventionism is welcome. But it would benefit from going further, because the real question is not whether the government should intervene more or less. It’s how it can intervene better.
The Ingredients of Successful Intervention
Around the world, government intervention has been instrumental in building thriving industries. Semiconductors in Taiwan, electric vehicles in South Korea, and the canola industry in Canada would not exist in their current form without it. These success stories share three key ingredients. They target sectors where the country holds a real competitive advantage and commit to them for the long term; they establish permanent coordination mechanisms between industry and government; and they align all public levers around common objectives.
These ingredients put Quebec’s recent setbacks into perspective. What explains failures such as Northvolt and Lion Électrique is not the industrial strategy behind them, but rather insufficient due diligence on these specific investments, combined with an unfavourable global context. The coordination of financial tools with Quebec’s manufacturing strengths in this same sector has supported several companies, including SMEs, that are now positioning our workers and our regions in the fast-growing global markets for energy storage and critical minerals.
The good news is that the proposals emerging from political parties can be compatible with this approach. Concentrating support on SMEs, increasing the share of public contracts going to Quebec businesses, better directing the significant funding of Investissement Québec—all of this is heading in the right direction. But these measures will achieve their full impact only if they are guided by an overarching vision for each sector. Because suggesting a reorientation of investments toward SMEs is not sufficient in itself. We first need to identify the strategic sectors where Quebec can distinguish itself in order to know which SMEs to support, which value chains to invest in, and which public contracts to prioritize.
Concrete Examples in Quebec
The electrical equipment sector offers a compelling example. Quebec is about to roll out one of the most ambitious energy infrastructure programs in its history: Hydro-Québec’s 2035 Supply Plan alone calls for some $200 billion in investments. Quebec already has a network of specialized manufacturing SMEs in electrical equipment: transformers, transmission line components, and control systems. With a targeted industrial strategy, these companies could not only meet domestic demand but develop the expertise and capacity needed to export to other markets undergoing rapid electrification. Without this coordination, a significant share of the value created by these public investments risks flowing elsewhere.
In public procurement, Ms. Fréchette proposed this week raising from 47% to 60% the share of contracts awarded to Quebec businesses, favouring local wood, steel, and aluminum. It’s a good idea. What would make it even more transformative is embedding it within a sectoral roadmap that simultaneously coordinates investments in smelter decarbonization, specialized workforce training, responsible procurement standards, and the development of export markets. With this kind of coherence, we move from one-off support to building a genuine competitive advantage.
The Next Government’s Mission
We must not confuse the need to better target government intervention with a call to withdraw from the economy. The question is where to start. In the first months of its mandate, the next government—regardless of its political stripe—should bring together the key players in each strategic sector, map the Quebec businesses that form the backbone of these value chains, and focus public investment and the regulatory framework where they will act as a lever for private investment.
We have the resources, the energy, and the know-how to carve out an enviable place in tomorrow’s economy. Simply reducing government intervention in the economy would be the wrong lesson to draw from recent years. The real opportunity is to develop an industrial strategy that does what was missing: tie every public dollar to a sectoral roadmap, build on the strengths of our local businesses, and ensure that Quebec’s massive energy investments create wealth here, not elsewhere.