report card on quebec prosperity · chart 1 – gdp per capita at purchasing power parity (ppp),...

Report Card onQuebec Prosperity2013

Legal deposit

Bibliothèque et Archives nationales du Québec

Library and Archives Canada

3rd quarter 2013

September 2013

This publication may be consulted on the website of the Quebec Employers Council at the following address:

cpq.qc.ca

The 2013 Report Card on Quebec Prosperity was produced by the research department of the Quebec Employers Council Coordination and writingNorma Kozhaya TranslationTerry Scott Distribution Patrick LemieuxGeneviève Le May Graphic designOblik Communication-design / oblik.ca

Table of conTenTs

Introduction 5

Choice of indicators 7 Points of comparison 7 A report card 8 Summary of results for 2013 8 Table 1 – Summary for Quebec 11 Table 2 – Summary for the four provinces 12 1 Availability and quality of labour 13

1.1 High school graduation 13

1.1.1 Pertinence 16 1.1.2 Comparison 16

1.2 Graduation rate among university undergraduates 17


1.3 Level of post-secondary education among adults 18


1.4 Proportion of adults who have taken job-related training 20


1.5 Participation rate of older workers 22


1.6 Economic integration of immigrants 24


2 Cost of labour 26

2.1 Employers’ cost of payroll taxes 26


2.2 Minimum wage as a proportion of the median wage 27


3

3 Regulation 29

3.1 Orientation of labour laws 29


3.2 Average number of documents produced per company 31


4 Public finances 33

4.1 Marginal effective tax rates on business investment 33


4.2 Tax burden 35


4.3 Debt level 38


5 Business environment 40

5.1 Average age of investments in highways and roads 40


5.2 Entreprenurial intensity 41


5.3 R&D spending 42


5.4 Patents 44


5.5 ICT investment 45


5.6 Multifactor productivity 46


5.7 Cost of operating a business 48

Conclusion 49

Appendix Details on sources and methodology 50

4

In 2010, the Quebec Employers Council published its first Report Card on Quebec Prosperity revealing Quebec’s main strengths and weaknesses. Despite the recent good performance of our province, which got through the recession in better shape than many other jurisdictions, certain aspects of Quebec’s economic long-term performance leave plenty to be desired compared with that of other Canadian provinces and countries around the world. Whether in terms of the major variable of collective wealth, or of other variables that will be analyzed below in greater depth, Quebec continues to lag behind. Our GDP per capita, which is compared in the following chart with that of three other Canadian provinces and Canada as a whole, as well as that of the United States and other OECD countries, ranks 20th among the 30 provinces and countries.

For some, prosperity should not be measured by only taking the GDP of a society into account, but it should also include a measure of the happiness and well-being of its population.1 We are not contradicting the definition of prosperity – more of a social nature – embraced by many social players in Quebec. But we believe it is not the role of the Quebec Employers Council – representing employers – to gauge the level of happiness or the quality of life of Quebecers. We believe our role is to provide a reference on the economic progress of the province of Quebec.

Our premise is that the more a society promotes the creation and growth of its businesses, the more it encourages job and wealth creation and the high standard of living of its citizens along with it. The GDP per capita, despite its limitations – and for lack of the existence of a more comprehensive index – remains the leading measurable assessment of the well-being of the population of a given state and its ability to pay (notably for public services). We also believe a good number of our fellow citizens – although maybe still not a sufficient number – share this conviction.

And, it is noteworthy that many university studies have found economic prosperity and well-being are two closely linked variables.2

1 Many measures exist to try to evaluate people’s well-being, with each such measurement having its own characteristics and limitations. One of the most widely known is the famed Human Development Index. One of the OECD’s recent indexes is the Better Life Index. See, in particular, the recent analysis conducted by researchers Luc Godbout and Marcelin Joanis, of CIRANO, in the publication Le Québec économique 2011.

2 See notably the Justin Wolfers and Betsey Stevenson study published in the American Economic Review last May. Available at http://users.nber.org/~jwolfers/papers/Satiation(AER).pdf

InTroducTIon

5

Chart 1 – GDP per capita at purchasing power parity (PPP), 2012

Sources: Sources: OECD Stat., Annual National Accounts; United Nations Department of Economic and Social Affairs, Population Division; Institut de la statistique du Québec, Comparaisons économiques interprovinciales; calculations by the Quebec Employers Council.

6

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000

Hungary

Poland

Estonia

SlovakRepublic

Portugal

CzechRepublic

Slovenia

Israel

Spain

Italy

Quebec

Euro Zone

UnitedKingdom

France

Iceland

Finland

Ontario

Belgium

British Columbia

Germany

Canada

Denmark

Sweden

Ireland

Netherlands

Austria

United States

Switzerland

Norway

Alberta

Luxembourg

3 Pour les détails, voir « Méthodologie » en annexe.

The demographic decline now getting under way will pose new challenges and will require in-depth reforms if Quebec is to maintain its standard of living and the social programs valued by its citizens.

In this context of demographic aging and tight public finances, wealth creation should be an absolute priority and is the only strategy open to Quebec to provide its population with the sustainable prosperity and standard of life to which it aspires.

To measure our performance in relation to this quest for prosperity, in 2010 the Quebec Employers Council created the Report Card on Quebec Prosperity, which aims to measure, from year to year, the shift in various indicators that in our view often represent the determinants of wealth creation. There obviously exist other determinants of wealth creation that are not as easy to portray in indicators. For instance, societal and cultural changes come to mind, as do entrepreneurial spirit and the skills and abilities needed to move things forward and to manage projects of varied scope quickly and efficiently.

This 2013 edition of the Report Card updates the previous results, assessing whether there has been progress or decline and providing an overall analysis.

Choice of indicatorsAs mentioned in the first edition of the Report Card, the Quebec Employers Council has chosen the indicators on the basis of criteria focusing on determinants of wealth creation rather than on results, moving as far up the causality chain as the available data allow. These determinants of prosperity include a skilled workforce, a competitive tax environment favourable to investment, and modern infrastructures. This choice of indicators matches the Council’s priority areas, namely the availability of sufficient high-quality labour, its cost, the calibre of regulations, the health of public finances and the quality of the business environment.

Points of comparisonMaking comparisons enables us to avoid the temptation of complacency, a trap we can fall into when we measure ourselves only against the yardstick of our own history. In a spirit of healthy emulation, this Report Card compares Quebec’s performance with that observed in other jurisdictions.

The comparisons are made with the three other most populous provinces (Ontario, British Columbia and Alberta), and with the OECD countries, when possible. As it is with any statistical project, comparisons depend on the availability of data. What we would like to evaluate isn’t always measured by a statistics agency, or isn’t measured on a regular basis or for all members of the relevant reference group. Thus, depending on the indicators, the reference groups will vary while, for the most part, Quebec can be compared with other Canadian provinces and, in many instances, with every, or a selection of OECD countries.3

3 For details, see “Methodology” annexed.

7

A report card As a way of summarizing information, the Report Card gives Quebec a grade ranging from A to D based on its rank in the reference group.4 When the reference group consists of the four Canadian provinces we have selected, the grade simply corresponds to Quebec’s rank among these provinces. When international comparisons are possible, the grade given to Quebec depends on its rank among all the chosen provinces and countries.

We are also establishing a report card on prosperity for the other Canadian provinces to which Quebec is compared. Our intention is to seek a better comparison and to situate the performance of each province in relation to the various indicators considered and on the basis of general economic performance, keeping to the context of the OECD countries to the extent that data are available.

Summary of results for 2013The summary table that follows (Table 1) shows the results for Quebec of the 2013 edition of the Report Card on Prosperity, together with the results for the two previous years. As was somewhat expected, these results do not show much change compared to those for 2012, with significant variations tending to appear only over several years. Some changes are worth noting, however, particularly regarding the availability of labour and the business environment.

Here are the main changes noted this year (more details are provided for each indicator in the corresponding sections of the document):

Availability and quality of labour: Quebec continues to progress in contending with the school dropout rate, showing significant improvement in 2012-13 (the dropout rate declined from 11.1% in 2009-10 to 10.1% in 2011-12, and finally, to 9.4% in 2012-13). While British Columbia and Ontario also improved in this area, Alberta saw its dropout rate rise again this year. Quebec has been doing better than Alberta in this regard since last year. As it did last year, Quebec gets a “C”, rather than the “D” it previously received for the school dropout rate as defined by Statistics Canada. It is also showing signs of progress in terms of graduating from high school within the normal time. The hope is that this rise in the graduation rate in Quebec will coincide with a maintaining or even an improvement in the quality of the diplomas.

Average age of public infrastructure investments: Quebec has made major progress in public infrastructures since 2008, and it now ranks ahead of British Columbia, is practically tied with Ontario, and is behind Alberta. Quebec gets a “B” this year, as it did in 2011, compared to a “C” last year. The gap with Ontario in this area is very slim. One of the challenges that needs to be met in this regard will be continuing to invest in an orderly fashion depending on our financial ability, taking into account the life cycle of the various infrastructures to avoid going back to a problem of under-investment in a few years time. Public investments in infrastructures should continue on a steady pace with the construction of two major projects: a new bridge to replace the existing Champlain Bridge and the reconstruction of the Turcot Interchange in Montreal.

But Quebec still has to keep a close eye on the state of infrastructures in the entire province. It’s important to note here the potential risk of a slowdown on some of the projects that may stem from the implementation of the new provisions of An Act Respecting Contracting by Public Bodies (L.R.Q., c. C-65.1) brought forth by the adoption of Bill 1, Integrity in Public Contracts Act.

Marginal effective tax rate (METR): it should be noted that Quebec now gets a “B” instead of a “C” in this category and ranks in the second quartile. This is good news. Quebec’s METR was 14.5% in 2012, continuing its decline since 2009 (19.3%, 17.8% in 2010 and 16.9% in 2011). The progress compared to the OECD countries is due to the reduction in the federal corporate tax rate which has gone from 19% in 2009 to 15% in 2012. Meanwhile, the reason

4 For details, see “Methodology” annexed.

8

for the gap compared to the other provinces is mainly due to improvements in the business tax credit, which went from 5% in 2009 to 10% in 2010. Meanwhile, in British Columbia, transitioning back on the scheduled harmonizing of the sales tax will raise the province’s METR again. The lowering of corporate income tax in Ontario, between 2009 and 2010, and the harmonizing of Ontario’s sales tax with the PST, considerably cut into the advantage Quebec had in this regard. Quebec ranks first among Canadian provinces and 13th on the provinces and OECD countries chart.

Quebec is in an unfavourable position compared to the other provinces in terms of payroll taxes. These taxes help to explain Quebec’s lower salaries and employment rate.

When one considers the overall tax burden supported by companies, the overall portrait is different and Quebec’s situation isn’t any more favourable. According to the Centre for Productivity and Prosperity, the overall tax costs for companies are higher in Quebec than elsewhere in Canada. Even when subsidies received are taken into account, Quebec’s net tax burden remains higher than elsewhere.5 It’s noteworthy that non-residential private investment in the province has improved recently in Quebec. Its share of GDP surpassed that of Ontario in 2011 and 2012. The outlook for 2013 isn’t as promising, however. And the importance of private investment in Quebec continues to be less than the Canadian average.

Data that could not be updatedData could not be updated for three indicators: the proportion of adults who have taken job-related training, the overall tax burden and the average number of documents produced per company. For data on total tax receipts per province, Statistics Canada’s compilation methods have been changed; the latest results are scheduled to be published in November 2014. For the other two indicators, the surveys simply haven’t been done since 2008. We have thus taken last year’s charts.

In the regulatory burden category, we note the impact of new requirements relating to the Act Respecting Contracting by Public Bodies for companies subject to this law. Also noteworthy is the regulatory burden small businesses would have been subject to had Bill 14 (An Act to amend the Charter of the French language, the Charter of human rights and freedoms and other legislative provisions) been adopted.

We suggest presenting new statistics for the other two indicators that weren’t able to be updated:

An alternative measure for employment training is the average length of time devoted to an education activity per province;

Statistics Canada no longer publishes consolidated data on government revenues for every province because of a change in methodology. This makes comparisons difficult, both inter-provincially and internationally. It is reasonable to believe that, among the provinces, Quebec is still the province that imposes the heaviest burden on its taxpayers. Consider the two-point hike in the PST and the health tax, for example. Another measure to assess the relative tax burden in the different provinces comes from the Fraser Institute calculations that are published in its “Tax Freedom Day”. While not perfect, this measure provides a very good approximation. The calculations take into account the various levies in taxes and fees at every federal, provincial and local government level. They include personal income tax at the federal and provincial level, sales tax, fuel tax, property tax, social program contributions, etc. We note that the share from tax deductions on gross revenue is higher in Quebec than it is in the other provinces.

5 Centre sur la productivité et la prospérité http://cpp.hec.ca/cms/assets/documents/recherches_publiees/PP_2012_01_BILAN_2012.pdf

9

Comparison with the other provincesComparing the Report Card for Quebec with that for the other provinces, it clearly shows the connection between the various determinants of prosperity that we have identified and the result as measured by GDP per capita. It is important to point out, for example, that Quebec, which ranks in the third quartile in GDP per capita, obtains an average grade of “C”, whereas Ontario and British Columbia, which rank in the second quartile in GDP per capita, get a “B” average on the indicators as a whole. Alberta, which also obtained a “B” average in our indicators, ranks among the wealthiest OECD economies and is in the upper part of the first quartile in GDP per capita. This outstanding performance is due essentially to the wealth Alberta generates through the exploitation of natural resources. How can it be explained that Quebec, also a province with outstanding natural resource potential, shows such a wide gap with Alberta?

Quebec outperforms the other provinces6 in five of the 21 comparison criteria. This includes the graduation rate among university undergraduates (higher than elsewhere), marginal effective tax rates on business investment (lower), R&D spending (higher), multifactor productivity (higher), and cost of operating a company (lower). Its performance is on a par with the other provinces for the average age of public infrastructure spending and the level of post-secondary education among adults, but it’s disappointing in terms of the 14 other criteria. That’s far too many!

But the basic question that needs to be asked is: is our enviable quality of life, which we can certainly appreciate, sustainable? Is it acquired on credit, or is it dependant on the redistribution of Canadian wealth? One certainty is that the only way to maintain our social gains will be based on our ability to create wealth which can then be redistributed fairly.

6 Or at least two among them.

10

Table 1 – Summary for Quebec

2011 Grade

2012 Grade

2013 Grade

# INDICATOR

Rank among the four

provincess

Rank among the provinces and OECD countries

Grade

Availability and quality of labour C C C

1Percentage of young adults lacking a high school diploma and not attending school

D C 3/4 3/4 C

2Percentage of adult population lacking a high school diploma

B B 4/4 14/39 B

3 Rate of undergraduate degrees B B+ 2/4 2/4 B+

4 Rate of postsecondary education among adults A A 2/4 4/37 A

5AProportion of adults who have taken job-related training

D D 4/4 N.A. D

5B Length of education activities N.A. N.A. 3/4 N.A. C

6 Participation rate of older workers C C 4/4 25/38 C

7 Economic integration of immigrants D D 4/4 4/4 D

Cost of labour C C- C-

8 Employers’ cost of payroll taxes D D 4/4 4/4 D

9 Minimum wage as a proportion of the median wage C C 3/4 15/29 C

Regulation D D D

10 Orientation of labour laws D D 4/4 4/4 D

11 Average number of documents produced per company D D N.A. N.A. D

Public finances C C C

12 Marginal effective tax rate on investment C C 1/4 10/38 B

13A Tax burden C C 4/4 28/38 C

13B Tax Freedom Day 4/4 N.A. D

14 Debt level D D 4/4 4/4 D

Business environment C C C

15 Average age of infrastructure investments B C 2/4 2/4 B

16 Entrepreneurial intensity D D 4/4 4/4 D

17 R&D spending A B 1/4 10/33 B

18 Patents C C 4/4 9/15 C

19 ICT investment C C 3/4 3/4 C

20 Multifactor productivity C C N.A. 14/21 C

21 Cost of operating a company A A 1/4 2/14 A

Average C C C

11

Table 2 – Summary for the four provinces

# INDICATOR Quebec OntarioBritish

ColumbiaAlberta

GDP per capita (PPP) C B B A

Availability and quality of labour C B B B

1Percentage of young adults lacking a high school diploma and not attending school

C B A D

2Percentage of adult population lacking a high school diploma

B A A A

3 Rate of undergraduate degrees B+ A C D+

4 Rate of postsecondary education among adults A A A A

5AProportion of adults who have taken job-related training

D B C A

5B Length of education activities C B A D

6 Participation rate of older workers C B B A

7 Economic integration of immigrants D C B A

Cost of labour C- B- B A

8 Employers’ cost of payroll taxes D C B A

9 Minimum wage as a proportion of the median wage C B B A

Regulation D A C A-

10 Orientation of labour laws D A C A

11 Average number of documents produced per company D A C B

Public finances C C B A-

12 Marginal effective tax rate on investment B C B B

13A Tax burden C C B A

13B Tax Freedom Day D C B A

14 Debt level D C B A

Business environment C B- C B

15 Average age of infrastructure investment B C D A

16 Entrepreneurial intensity D C B A

17 R&D spending B B C D

18 Patents C A A B

19 ICT investment C B D A

20 Multifactor productivity C C N.A. N.A.

21 Cost of operating a company A B C C

Average C B B- B

12

In a context of constantly evolving technology and skilled labour requirements, a jurisdiction’s ability to measure up to competition relies heavily on the skills of its labour force.

1.1 High school graduationWe look at the phenomenon of graduation rates from three angles to draw an accurate picture of the situation:

Chart 2 – Percentage of people aged 20 to 24 lacking high school diplomas and not attending school (2010-2011 to 2012-2013)

0%

2%

4%

6%

8%

10%

12%

QuebecAlbertaCanadaOntarioBritish Columbia

6.1%

5.4%

4.8%

6.2%

7.4%

10.6%

9.4%

6.4%

7.8%

10.3%10.1%

6.3%

8.0%

10.3%

10.7%

2010-2011

2011-2012

2012-2013

Legend

Source: Statistics Canada. Labour Force Survey, data obtained from Jason Gilmore, based on the publication A Note on High School Graduation and School Attendance, by Age and Province, 2009-2010.

Availability and quality of labour

1

13

Chart 3 – Graduation rate by student cohort, based on high school entry year, Quebec

50%

55%

60%

65%

70%

75%

80%

20062005200420032002200120001999199819971996199519941993199219911990

Graduation rate after 7 years



Legend

73.4%

63.8%

71.4%

Source: Diplomation et qualification par commission scolaire aux Québec, Édition 2012, Gouvernement du Québec Ministère de l’Éducation, du Loisir et du Sport, 24 mai 2012 http://www.mels.gouv.qc.ca/sections/publications/publications/SICA/DRSI/Dipl_Qual_sec2012.pdf

14

Chart 4 – Percentage of the population from ages 25 to 64 lacking a high school diploma, 2010

Sources: Statistics Canada, Education Indicators in Canada: An International Perspective, No. 81-604-XWF in the Statistics Canada catalogue, Table A.1.2. OECD, Education at a Glance 2012: OECD Indicators, Table A1.2a.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

CzechRepublic

SlovakRepublic

British Columbia

Ontario

Alberta

United States

Poland

Estonia

RussianFederation

Canada

Sweden

Switzerland

Germany

Quebec

Slovenia

Finland

Israel

Austria

Norway

Hungary

Korea

Luxembourg

Denmark

EU-21 average

UnitedKingdom

OECD average

NewZealand

Netherlands

Ireland

Australia

France

Chile

Belgium

Iceland

Greece

Italy

Spain

Brazil

Mexico

Portugal

Turkey

15

1.1.1 Pertinence

The rate of high school completion is a central component in assessing the performance of educational systems. In Quebec, a high school diploma or vocational studies diploma is the minimum required to benefit from the development, training and specialization tools that all citizens will need throughout their lives.7 The social and economic consequences of non-graduation are serious. Early school leaving jeopardizes Quebec’s economic strength by depriving Quebec of skilled workers. According to economist Pierre Fortin, the difference in lifetime earnings for a worker with a high school diploma, plus additional health care costs, comes to about $460,000, with this cost assumed both by the individual and by society as a whole.

Chart 2 shows the percentage of young people from ages 20 to 24 who have no high school leaving diploma and who are not attending school. This is how Statistics Canada defines the notion of “dropouts.” It allows for comparisons between Quebec and the three other Canadian provinces used here as references.

Chart 3 shows the percentage of students in a cohort who have obtained high school diplomas either five years or seven years after this cohort’s age of entry to high school. It takes account of the educational system’s ability to get students to graduate within a time considered normal.

Chart 4 shows the percentage of adults who lack a high-school diploma.

1.1.2 ComparisonEach of the three statistics shown in the previous charts indicates a facet of our high school system’s performance.

The first statistic shows an improvement in Quebec’s performance. Compared to the three provinces of reference, Quebec, for the last two years, is no longer the one with the highest drop-out rate, measured from the percentage of people aged 20 to 24 who do not have a high-school diploma and who are not attending school. This result is encouraging.

The second statistic rounds out the first one. It shows that barely six Quebec students out of 10 complete their final year of high school within the normal time and that fewer than three-quarters of them graduate in seven years.

Quebec = C (indicator 1)

The inter-provincial comparison in the first chart bumps Quebec up to a “C”, since it has been doing better than Alberta for the last two years, although it is still behind Ontario and British Columbia. The second chart does not allow for a comparison but we see signs of progress, however modest, in terms of earning a high-school diploma within the required time frame.

Quebec = B (indicator 2)

Quebec has the worst showing among the four Canadian provinces in the percentage of the working-age population who lack diplomas. In a sense, this statistic shows Quebec’s historic lag with regard to the rest of Canada. But the comparison with OECD countries and provinces, in Chart 4, earns Quebec a grade of “B.”

7 Here we are citing the Groupe d’action sur la persévérance et la réussite scolaires au Québec report, ``Savoir pour pouvoir : entreprendre un chantier national pour la persévérance scolaire``, 2009

16

Comment:It is encouraging to note there has been a bit of an improvement in Quebec’s performance for the second straight year in terms of staying in school (the drop-out rate went down from 11.1% in 2009-10 to 10.1% in 2011-12 and finally to 9.4% in 2012-13), as it did in British Columbia, while Ontario’s percentage has remained stable since 2009 and Alberta had a big setback in this regard. But Alberta’s result might be the flip side of the coin, in the sense it may reflect the strong economic activity in the province, which isn’t compensated by appropriate measures aimed at young people so they can graduate with a diploma. Meanwhile, it is to be hoped this rise in high-school graduates would coincide with the maintaining or even an improvement in the quality of diplomas.

1.2 Graduation rate among university undergraduates Chart 5 – Bachelor’s degrees and other undergraduate diplomas awarded as a percentage of the population aged 22 in 2010 and 2011

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

AlbertaBritish ColumbiaQuebecCanadaOntario

Legend

2011

2010

2011

2010

All disciplines

Six groups of disciplines

Sources: Statistics Canada, CANSIM 477-0020 and 051-0001; Quebec Employers Council calculations.

17

1.2.1 Pertinence

This indicator measures our ability to bring part of each cohort of young people to gain undergraduate degrees.

For each province, chart 5 shows two rates. In the first one the numerator covers degrees awarded in all disciplines. In the second the numerator covers degrees awarded each year only in six areas of study: physical and life sciences and technology; mathematics and computer and information sciences; architecture, engineering and related services; agriculture, natural resources and et conservation; health, parks, recreation and fitness studies; business, management and public administration.

The denominator is the reference-year population at age 22, the age at which a student would obtain an initial undergraduate degree when following the normal educational path. The numerators include, of course, degrees awarded to persons under or over age 22. Considering that few people acquire more than one undergraduate degree and that the distribution of degrees based on the age of those obtaining them is stable over time, it is appropriate to compare the annual number of degrees awarded with the size of a cohort.

1.2.2 Comparison

Quebec = B+ (indicator 3)The number of bachelor’s degrees and other undergraduate diplomas awarded in all disciplines in 2011 – the last year for which data is available – equals 31% of the cohort of Quebecers who were 22 years old that year. That ranks Quebec second among Canadian provinces, behind Ontario (37%) – which collects much higher tuition fees, however. For the six areas of study, Quebec is almost in a tie with Ontario (with 16.8% and 16.2% respectively).

The proportion of graduates for all diplomas and for the group of six disciplines was down slightly in 2011 compared to 2009 and 2010, and this was true in both Quebec and Ontario, while it was the opposite trend in Alberta.

1.3 Level of postsecondary education among adults

1.3.1 Pertinence

This statistic measures the quantity of the best educated workers a society has available each year. Unlike the previous statistic showing the graduation rate by cohort, it covers the entire adult labour force. This statistic, like the preceding variable on the proportion of people lacking high school diplomas, can be expected to vary only marginally from year to year.

1.3.2 Comparison

Quebec = A (indicator 4)As in 2012, and like the other reference provinces, Quebec ranks in the top quartile of OECD countries under this indicator. Among the provinces, it is ahead of Alberta, behind Ontario and tied with British Columbia.

18

Chart 6 – Percentage of the population from ages 25 to 64 who had reached the tertiary level of education, 2010

Sources: Statistics Canada, Education Indicators in Canada: An International Perspective, No. 81-604-XWF in the Statistics Canada catalogue, Table A.1.1; OECD, Education at a Glance 2011: OECD Indicators, Table A1.3a.

0% 10% 20% 30% 40% 50% 60%

Ontario

Russian Federation

Canada

Quebec

BritishColumbia

Alberta

Israel

Japan

United States

Korea

New Zealand

Ireland

Australia

United Kingdom

Finland

Norway

Luxembourg

Belgium

Switzerland

Estonia

Poland

Sweden

Denmark

Iceland

Netherlands

OECD average

France

Spain

EU-21 average

CzechRepublic

Chile

Germany

Portugal

Greece

Turkey

Slovenia

Hungary

Austria

SlovakRepublic

Mexico

Other tertiary

University

Legend

19

1.4 Proportion of adults who have taken job-related trainingChart 7A – Proportion of persons from ages 25 to 64 who had taken job-related training, 2008 (same chart as last year)

Source: Statistics Canada, Access and Support to Education and Training Survey (ASETS) for 2008, No. 81-595-M-079 in the Statistics Canada catalogue, Table A.1.4.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

QuebecBritish ColumbiaCanadaOntarioAlberta

43.3%

38.3%

36.0%35.5%

28.2%

20

Chart 7B – Average amount of minutes per day devoted to an education or training activity by workers aged 25 to 64

Source: Statistics Canada. General Social Survey on time use – 2010.

1.4.1 Pertinence

Career-long learning is seen as a pillar of a knowledge-based economy. This learning goes beyond preparing young people for the labour market: it recognizes the value for citizens in acquiring key skills and updating their abilities throughout their careers. Participation in learning activities is thus a pertinent indicator of workforce quality.

ASETS, a Statistics Canada survey, gathered information on two aspects of career-long learning: education and training. Education encompasses learning activities provided through formal educational systems and, after primary, secondary and postsecondary studies, leading to acquisition of an official university or college diploma. Added to this is job-related training, which encompasses structured learning activities such as courses, workshops, private lessons and guided on-the-job training that do not lead to an official diploma.

0 min.

1 min.

2 min.

3 min.

4 min.

5 min.

6 min.

AlbertaQuebecCanadaOntarioBritish Columbia

21

1.4.2 Comparison

Quebec = D (indicator 5-A)

Quebec = C (indicator 5-B)In 2008, Quebec ranked fourth among the four Canadian reference provinces for the proportion of adults taking part in professional training activities.

The General Social Survey on time use records the average amount of time per day that a working or non-working adult devotes to a training activity.

After the results of this survey, we note the average amount of time Quebec workers devote to education activities ranks Quebec third among Canadian provinces. It is also noteworthy that Canada does not perform overly well, according to fairly similar measures at the international level. The average length of time spent on informal professional training is 2.45 minutes, compared to an average of 3 minutes for OECD countries.

Comment:While according to ASETS (which has little to say about the intensity of training activities), Quebec doesn’t perform well in relation to the proportion of adults taking part in professional training activities, the new data shown in the Report indicates that it does a bit better in terms of average time devoted to training.

1.5 Participation rate of older workers

1.5.1 Pertinence

The participation rate measures supply on the labour market. In recent decades, the higher labour market participation rate among women has had the greatest influence on the labour supply in quantitative terms. At present, the participation rate among older workers is likely to determine the extent to which Quebec will face labour shortages in the future.

Chart 8 shows participation rates for three age groups between 55 and 69. We focus here on the 55-to-59 age group, however, because we believe workers in this age group are more likely to continue working or to look for jobs.

1.5.2 Comparison

Quebec = C (indicator 6)Quebec has a participation rate of 69.8% among people from ages 55 to 59, just about at the same level as last year (69.5%). It remains in the third quartile among the provinces and OECD countries as a whole. It also ranks fourth among the four Canadian provinces. Considering the increased life expectancy, it’s important that workers be encouraged to stay in the labour market longer and contribute more to economic activity as well as to their pension funds.

Comments:It should be noted that Quebec’s overall participation rate, at 77.4% of the population from ages 15 to 64, ranks it in 10th place among the 37 provinces and OECD countries, which is in the second quartile. This is due in particular to the female high participation rate. We should recall here that the number of hours worked in Quebec is lower than elsewhere in Canada, an observation made by former Quebec premier Lucien Bouchard, which stirred considerable debate.8

8 The average number of hours worked per year by an employed person in 2011 was estimated at 1,674 in Quebec, compared to 1,747 in Ontario and a Canadian average of 1,737.

22

Chart 8 – Rate of activity per age group, 2012

Sources: Statistics Canada. Labour Force Survey (LFS), CANSIM 282-0002; OECD Stat. Data on the job market by age and sex – Indicators

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Turkey

Slovenia

South Africa

Greece

Poland

Luxembourg

Belgium

Italy

Hungary

Mexico

Austria

Portugal

Europe

Spain

Korea

Quebec

OECD Countries

Chile

Slovak Republic

United States

France

Australia

Israel

Canada

United Kingdom

Ontario

British Columbia

Netherlands

CzechRepublic

Japan

Estonia

Finland

Germany

Norway

Alberta

New Zealand

Denmark

Switzerland

Iceland

Sweden

Ages 55 to 59

Ages 60 to 64

Ages 65 to 69

Legend

23

1.6 Economic integration of immigrantsChart 9 – Ratio between unemployment rates among the immigrant population and the Canadian-born population, 2008-2011 and 2009-2012 averages

Sources: Statistics Canada. Labour Force Survey (LFS); CANSIM 282-0102.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Alberta

BritishColumbia

Canada

Ontario

Quebec

Alberta

BritishColumbia

Canada

Ontario

Quebec

Alberta

BritishColumbia

Canada

Ontario

Quebec

Very

rec

ent

imm

igra

nts

(5 y

ears

or

less

)R

ecen

t im

mig

rant

s (5

to

10 y

ears

)E

stab

lishe

d im

mig

rant

s (m

ore

than

10

year

s)

Average 2008-2011

Average 2009-2012

Legend

24

1.6.1 Pertinence

The ratio between the unemployment rate among people born outside Canada and the unemployment rate of the Canadian-born population helps evaluate the success of immigrants’ economic integration and the employability of immigrants entering the economy.

In an ideal world, this ratio would be 1, meaning that the immigrant population would have neither more nor less difficulty than the Canadian-born population in finding jobs.

1.6.2 Comparison

Quebec = D (indicator 7)Chart 9 shows that the unemployment rate of the immigrant population remains higher than that of the Canadian-born population. The unemployment rate among the immigrant population settled in Quebec for five to ten years, for example, is double the rate for the native-born population.

The ratio between rates declines with length of presence in Canada. This trend illustrates the fact that economic integration occurs over time.

However, regardless of the length of settlement in Canada, Quebec shows the highest ratio between rates. Quebec is where immigrants face the greatest difficulty in achieving economic integration.

Comments:In 2012, we note an increase in the unemployment rate among recent immigrants compared to natives (the unemployment rate among immigrants went from 9.6% in 2011 to 12.4% in 2012), which raises the average over last year. Among very recent immigrants, this unemployment rate remains stable. Immigrants who have been here for a long time are the only group that has improved its situation, although not back to what it was in 2008. That being said, the government’s efforts to encourage the retention of foreign students and temporary workers are steps in the right direction that should be noted. Incidentally, Quebec has just initiated new changes regarding the selection of immigrant people; the effects of this in relation to job market needs will have to be closely monitored. We hope the results appearing in future report cards will be positive.

25

2.1 Employers’ cost of payroll taxesChart 10 – Employers’ cost of payroll taxes on a nominal salary of $40,000, 2013

Source: Quebec Employers Council calculations.

2.1.1 Pertinence

Payroll taxes are added to the nominal salary to form total cost of labour from the employer’s standpoint. In labour-intensive industries, payroll taxes may represent a substantial cost factor. For companies able to choose where to set up their facilities, this factor may influence their decisions. Payroll taxes also have a negative effect on workers’ wages, job creation and economic growth, in addition to inflating prices to cover these additional costs.

2.1.2 Comparison

Quebec = D (indicator 8)Among the four Canadian reference provinces, Quebec is where payroll taxes are by far the highest, pushing up total labour costs due in particular to contributions to the Health Services Fund. While some people like to think the salaries paid are lower in Quebec in order to factor in these payroll taxes, it would appear the overall tax effect is still more negative in Quebec.

$40,000

$41,000

$42,000

$43,000

$44,000

$45,000

$46,000

$47,000

Alberta British ColumbiaOntario Quebec

Labour Standards Commission (Que. only)

Vocational training act (Que. only)

Employment insurance, parental insurance

Employment insurance, parental insurance

Occupational health and safety

QPP/CPP

Legend

Cost of labour

2

26

Comments:The tax gap between Quebec and the other provinces remained about the same as last year. Quebec Pension Plan contributions continue to rise in Quebec to inject money into the system, and the Quebec Employers Council approves of this, provided the increases aren’t used to fund new pensions or enhance existing ones.

Along with these obligatory payroll taxes, you have to add various other voluntary contributions by employers, which are part of the overall remuneration, such as contributions to a pension plan (regular contributions or contributions to fund actuarial deficits) and group insurances.

Moreover, we note a disadvantage that is starting to be created between payroll costs in the United States and in Canada, and even more so in Quebec. According to Bureau of Labor Statistics figures, the average unit labour costs per employee in manufacturing rose to $35.53 US in the United States in 2011 compared to $36.56 US in Canada.9

2.2 Minimum wage as a proportion of the median wage

2.2.1 Pertinence

The minimum wage level results from arbitrage between the goal of reducing wage inequality and family poverty, on the one hand, and the aim of avoiding excessive reductions in demand for labour and thus jobs at the bottom of the wage scale. A minimum wage that is too high will have the effect of reducing demand for unskilled jobs, or will push some of those jobs onto the black market. What matters is not so much the absolute level of the minimum wage but rather its level in relation to the wage scale in each jurisdiction, expressed in the median wage. According to economist Pierre Fortin, a one-percentage-point rise in the ratio between minimum wage and average wage will cause the loss of about 8,000 jobs in Quebec, with more harmful effects when the minimum wage rises beyond 48% of median income. Moreover, since two-thirds of minimum wage jobs are held by people from ages 15 to 24, a minimum wage that is set too high may become an incentive for early school leaving. We should also remember that the higher unemployment generated by an excessive rise in the minimum wage may be one of the causes of unskilled workers going on social assistance when facing few job options. Even if increasing the minimum wage is well intentioned, it has a number of economic consequences, with effects that sometimes run counter to the goals.

2.2.2 Comparison

Quebec = C (indicator 9)Quebec has given itself Canada’s highest minimum wage in relation to the provincial median wage, putting it in fourth place among the four reference provinces. This results both from the level of the minimum wage, ranking second behind Ontario, and the Quebec median wage, which was the lowest among the four provinces. In international terms, Quebec’s relative minimum wage was the 12th lowest among the 26 countries considered, putting it in the middle of the pack. Adding in the provinces, Quebec ranks 15th among the 29 economies considered.

9 Source: International comparisons of hourly compensation costs in manufacturing, 2011 http://www.bls.gov/news.release/pdf/ichcc.pdf

27

Chart 11 – Minimum wage as a percentage of the median wage of full-time employees, 2010 and 2011

Sources: Statistics Canada Labour Force Survey (LFS), CANSIM 282-0070; Statistics Canada, Perspectives on Labour and Income: Minimum Wage, publication 75-001-X; OECD Stat, Labour market, Income.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Turkey

France

New Zealand

Slovenia

Latvia

Portugal

Australia

Greece

Belgium

Hungary

Lithuania

Ireland

Romania

Netherlands

Quebec

United Kingdom

SlovakRepublic

Canada

Ontario

BritishColumbia

Poland

Spain

Luxembourg

Korea

Estonia

Japan

United States

Alberta

Czech Republic

2011

2010

Legend

28

Creating competitive and long-lasting businesses relies on efficient regulation. Comparisons in this area are far from simple. However, in Quebec, many laws and regulations are complex and restrictive, sometimes more so than elsewhere in Canada and other countries, in particular those pertaining to construction, language and human capital. The variables shown in the following table are those truly setting Quebec apart from the other provinces in the area of labour relations.

3.1 Orientation of labour lawsChart 3 – Labour relations, comparative table

Quebec Ontario AlbertaBritish

Columbia

Companies under federal jurisdiction

Compulsory union membership in the construction industry

Yes10 No No No N.A.

Compulsory secret vote for union accreditation

No11 Yes Yes Yes No

Obligation to be a union member to take part in a strike vote

Yes No No No No

Possibility of using replacement workers in a strike or lockout

No Yes Yes No Yes

10 For employees covered under the Act respecting labour relations, vocational training and workforce management in the construction industry and its regulations (Act R-20).

11 Note that in Quebec, with the adoption of Bill 33 in the construction industry, the decision to join a labour union must now obligatorily be done by mail.

Regulation

3

29

3.1.1 Pertinence

Certain aspects of the laws governing labour relations will generally differ from one province or country to another. But the fact remains that, over all, each province and country establishes a legal framework for labour relations giving an advantage either to employers or to unions. This orientation may have repercussions on the number of labour conflicts and on economic variables such as investment and employment.12 For example, studies have shown that restrictions on the use of replacement workers are associated with lower rates of employment and investment.13 This prohibition also raises the probability of strikes and contributes to making them longer. In addition, allowing union accreditation by secret ballot reduces the number of strikes.14

It might be relevant to note here that, during the 1981-2010 time frame 36% of work stoppages in Canada occurred in Quebec and most of the stoppages were strikes. The percentage of lockouts went from 22% during the decade of 1981-1990 to 15% during the 2001-2010 span15. It was 17% in 2011.

3.1.2 Comparison

Quebec = D (indicator 10)Among the four provinces in the reference group, Quebec is also the province with the legal framework that is perceived as the most advantageous for unions, bearing in mind the chosen criteria. Quebec is the only province where workers must be unionized to be able to work in the construction sector when the type of work is subject to specific provisions of the law.16 And accreditation mechanisms allow some unions to exert a quasi-monopoly in certain trades.

Comments:In general, there haven’t been any legislative changes in this area, except for the abolishing of union placement, which has been replaced by a reference service managed by the Commission de la construction du Québec. This change, brought about by the adoption of Bill 617, came into effect in September 9, 2013.

Other measures contained in the law include the obligation to consult with contract providers on contract renewals in order to solicit their comments and suggestions and the requirement imposed on the associations to show more rigour and transparency in its financial reporting.

Obviously, these changes were not enough to change the overall value of this indicator in the short term.

12 For a review of these repercussions, see in particular: http://expertise.hec.ca/centre_productivite_prosperite/2010/03/01/limpact-economique-de-la-legislation-du-marche-du-travail-2/ and http://www.cdhowe.org/pdf/commentary_304.pdf

13 John W. Budd. “The Effect of Strike Replacement Legislation on Employment,” in Labour Economics, 7(2), March 2000, pp. 225-247; John W. Budd and Yijang Wang, “Labor Policy and Investment Evidence from Canada,” in Industrial and Labor Relations, 57 (3), April 2004, pp. 386-401.

14 Dachis Benjamin and Robert Hebdon. The Laws of Unintended Consequences: the Effect of Labour Legislation on Wages and Strikes, C.D. Howe Institute Commentary, No. 304, June 2010, http://www.cdhowe.org/pdf/commentary_304.pdf.

15 http://www.travail.gouv.qc.ca/fileadmin/fichiers/Documents/Forum_2012/Suzanne_Therien.pdf16 For employees covered under the Act respecting labour relations, vocational training and workforce management in the construction industry and its

regulations (Act R-20).17 Bill 6 An Act concerning the date of coming into force of certain provisions of the Act to eliminate union placement and improve the operation of the

construction industry, approved in December 2012.

30

3.2 Average number of documents produced per companyChart 12 – Average number of documents produced by companies, by region, 2008 (same chart as last year)

Source: Statistics Canada. Analysis of Regulatory Compliance Costs, April 2010.

3.2.1 Pertinence

Administrative tasks and the burden of paperwork are obstacles that have long been denounced by business owners. Public administrations must thus seek to adapt their tax and regulatory systems to bring the cost of compliance down to a minimum. Here again, comparisons are not simple.

23

25 2526

0

5

10

15

20

25

30

QuebecBritish ColumbiaCanada PrairiesOntario

29

31

3.2.2 Comparison

Quebec = D (indicator 11)The 2008 survey shows that Quebec companies produce an average of 29 documents to comply with their tax and regulatory obligations, as opposed to an average of 25 in Canada and 23 in Ontario.

The average number of documents to be produced depends heavily on company size, measured by the number of employees. Thus, at the Canadian level, a company with one to four employees must produce an average of 25 documents, whereas a company employing between 20 and 99 workers must produce an average of 72 documents.

It should be noted in terms of time devoted to filling out forms Quebec ranks a bit above the Canadian average (19 hours compared to 16 in Ontario and the Canadian average of 18 hours).

Comments: Since we do not have any update for this data, we have again inserted last year’s chart. Also noteworthy is the publication in Quebec, in 2011, of the report of the Working Group on Regulatory and Administrative Simplification. The Quebec Employers Council was a very active participant in the working group’s initiatives. The implementation of recommendations submitted by the working group should help to relieve some of the administrative burden for businesses in the analyzed areas. But new regulations that are adopted or planned might nullify the estimated potential gains.

As an example, while the newly modified Act respecting contracts of public bodies has some good objectives, it also has its share of administrative problems. Bill 14, An Act to amend the Charter of the French language, the Charter of human rights and freedoms and other legislative, might also increase the regulatory burden of companies with 25 to 49 employees, as well as imposing new requirements to companies currently subject to the Charter of the French language. The same is true for the environment, mining operations and other areas of endeavor.

32

4.1 Marginal effective tax rates on business investment

4.1.1 Pertinence

The marginal effective tax rate (METR) on business investment is an indicator of the impact of the tax system on new investment. It represents the effect of all charges and tax rules influencing the return on invested capital. It takes account, in particular, of the capital tax, the sales tax, the corporate income tax, amortization rules and rates, and accounting methods for inventories.

Business decisions by local companies, as well as decisions by multinationals on where to locate, are based in part on relative tax burdens in the various jurisdictions considered.

4.1.2 Comparison

Quebec = B (indicator 12)Quebec’s METR in 2012 was 14.5%, continuing its downward trend since 2009 (19.4 %), mainly through the tax credit on investment, which ranks it first among Canadian provinces and 10th in terms of the provinces and OECD countries.

Comments:The federal corporate tax rate, which has been gradually reduced from 2007 to 2012, has contributed to the lowering of the effective tax rate on investment in the four provinces. We also note the corporate tax rate in Ontario fell to 11.5% in 2011. Ontario froze this tax for 2012 (when it was scheduled to drop to 11% on July 1, 2012, and to 10% on July 1, 2013) in its plan to return to a balanced budget.

The lowering of this tax rate between 2009 and 2010 and the harmonizing of Ontario’s provincial sales tax with the GST considerably lessened the advantage Quebec had in this regard. Conversely, in British Columbia, going back on the planned harmonizing of the sales tax will raise the METR in that province again. The Canadian provinces saw their METR significantly reduced, largely due to the decrease in the federal corporate tax, which went from 22.12% in 2007 to 15% in 2012.

Public finances

4

33

Chart 13 – Marginal effective tax rates on business on investment, 2011 and 2012

Sources: The data used as the basis for this chart are taken from various studies by Jack Mintz and his co-authors. Mr. Mintz is among those who have devised the method for comparing marginal effective tax rates. Detailed references are found in the appendix.

2012

2011

Legend

Turkey

Chile

Ireland

Estonia

Greece

Slovenia

CzechRepublic

SlovakRepublic

Iceland

Poland

Quebec

Israel

Alberta

Hungary

Canada

Belgium

Luxembourg

Netherlands

BritishColumbia

Mexico

Ontario

Switzerland

Finland

Denmark

Sweden

New Zealand

Portugal

Italy

Norway

Germany

Austria

Australia

Spain

UnitedKingdom

Korea

Japan

France

United Stated

0% 5% 10% 15% 20% 25% 30% 35% 40%

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4.2 Tax burdenChart 14-A – Tax receipts as a proportion of GDP, 2009 (same chart as last year)

0% 10% 20% 30% 40% 50%

Denmark

Sweden

Italy

Belgium

Norway

Austria

Finland

France

Hungary

Netherlands

Quebec

Luxembourg

Slovenia

Germany

Estonia

CzechRepublic

UnitedKingdom

Ontario

Iceland

Canada

Poland

BritishColumbia

New Zealand

Israel

Spain

Portugal

Greece

Switzerland

SlovakRepublic

Ireland

Alberta

Japan

Australia

Korea

Turkey

United States

Chile

Mexico

35

Chart 14-B – Tax Freedom Day

Source: Fraser Institute

4.2.1 Pertinence

The tax burden indicator compares all tax receipts collected by public administrations in a jurisdiction to its GDP. It represents the overall tax burden borne by all taxpayers, whether individuals or corporations. It takes into account all tax charges on taxpayers in each tax jurisdiction (central, regional and local governments). Consolidated data is available only for 2009. This indicator shows the extent of government presence in the economy. A rigorous study that appeared in the American Economic Review in 2010 clearly showed that a smaller government presence in the economy, combined with a suitable legislative framework, leads systematically to a higher rate of economic growth.18

4.2.2 Comparison

Quebec = C (indicator 13-A)

Quebec = D (indicator 13-B)Among the four reference provinces, Quebec imposes the heaviest burden on its taxpayers, all categories combined. At the international level, Quebec ranks 25th among 35 countries, with a tax burden of 38.4%.

Commentaires :

Family Person living alone

Alberta

British Columbia

Ontario

Quebec

Legend

0%

10%

20%

30%

40%

50%

18 Christina D. Romer and David H. Romer, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” American Economic Review, June 2010, Vol. 100, No. 3, pp. 763-801

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Comments:As we noted in the introduction, since Statistics Canada didn’t release consolidated tax data this year we are using another measure to assess the relative tax burden in the various provinces, emanating from the Fraser Institute’s calculations and published in its “Tax Freedom Day”. While not perfect, this measure provides a good approximation of an overall tax burden in the provinces. The calculations take into account the various withholdings in income tax, taxes and fees at every government level: federal, provincial and local. They include personal income tax levies at the federal and provincial level, sales tax, fuel tax, property tax, social contributions, etc. The examples shown are for an individual and a middle-income family.

We note the share of tax deductions on gross income in 2013 is, in both examples (46% for a family and 48% for an individual) is higher in Quebec than in the other provinces.

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4.3 Debt levelChart 15 – Gross debt, net debt and accumulated deficits as a percentage of GDP, 2011 and 2012

Sources: Institut de la statistique du Québec. Comparaisons interprovinciales; Quebec department of finance.

-30% -20% -10% 0% 10% 20% 30% 40% 50% 60%

Alberta

BritishColumbia

Canada

Ontario

Quebec

Alberta

BritishColumbia

Canada

Ontario

Quebec

Alberta

BritishColumbia

Canada

Ontario

Quebec

Gro

ss d

ebt

Net

deb

tA

ccum

ulat

ed d

efic

its

2011

2012

Legend

-20%

-7%

-1%

34%

25%

34%

17%

38%

37%

50%

6%

24%

49%

43%

55%

38

4.3.1 Pertinence

The ratio between the financial commitments of public administrations and GDP measures a government’s ability to meet its public financial obligations. It also helps infer the likelihood of a heavier tax load or lower public spending in coming years.

There is some debate about whether to select gross or net financial commitments, in other words commitments net of financial assets (net debt) in judging the financial situation of public administrations. We regard both concepts as important. We should recall, though, that gross debt is the amount on which interest has to be paid and on which there lies a risk of higher interest rates when maturing securities are refinanced, and this can quickly push up the debt service cost in public finances.

Finally, a third concept that allows you to evaluate the size of the debt and the government’s financial situation is that of accumulated deficits. Accumulated deficit debt is calculated by subtracting from the gross debt financial assets, net of other liabilities and non-financial assets. In other words, it represents the difference between the government’s assets and liabilities. This debt concept represents “bad debt”, that which does not correspond to any asset.

4.3.2 Comparison

Quebec = D (indicator 14)In 2012, Quebec ranked fourth among the provinces with a gross debt representing 55% of its GDP, a net debt of 50% and accumulated deficits of 34%. In the coming years, mainly because of demographical reasons, Quebec will be facing a slowdown in its economic growth and a more marked rise in certain expenses than other provinces and OECD member countries. Thus, the government will have to be highly vigilant about controlling its debt. And Quebec is already in a relatively high tax rate and tax situation, and this is even before the impact of the aging of the population is felt. Thus, as of now it will be difficult to generate more tax revenue without significantly affecting the economy.

Comments:According to the three debt concepts, Quebec ranks last among the four provinces that are considered.

Another interesting issue, which has already generated much debate and has been the subject of estimates, is comparing the debt of a province such as Quebec to that of other countries. This is an especially striking issue in the current context, with the situation of some of the European countries being a source of major concern. But international comparisons on the level of public debt pose a number of methodological challenges, notably the inclusion of every level of government, and the accounting of amounts due to public pension plans (such as the RRQ and CPP). In fact, the OECD issues a warning in this regard:

“Data regarding financial commitments […] are not always comparable between countries because of the different definitions and handling of the debt components in every country.”19

The existence of future liabilities can also distort debt comparisons (if a country is likely to have to inject major sums of money into its banking system, for instance).

All of which makes a comparison of the debt of a province such as Quebec even more difficult to do.

But if we want to compare Quebec on the international scale, it would rank 11th among the OECD’s most indebted states in terms of net debt to GDP for the year 2010, according to some estimates.20 So, Quebec would not be as bad off as Greece, but in as good a position as Finland or Norway. But as we previously mentioned, the anticipated demographic challenge, increasing international competition and an already heavy tax burden cause us to be ever cautious.

19 OECD, OECD Economic Outlooks, vol. 2010, No. 1, pg. 37820 Many analysts have weighed in on the issue in recent years. Here we are using the estimate by Jacques Léonard and Stéphane Gobeil

http://www.souverainete.info/docs/L-avenir-financier-du-Quebec--n-est-pas-si-sombre.pdf. The net debt would represent about 50% of GDP (including the municipalities, excluding the net liability of public employees’ pension plans and considering a portion of the 19% federal debt corresponding to Quebec’s share in the Canadian GDP). Economist and blogger Martin Coiteux also seems to corroborate this figure in the current economic and political context of a province of Quebec in Canada. The situation might be different in another context. http://martincoiteux.blogspot.ca/2012/03/dette-dun-quebec-hypothetiquement.html

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5.1 Average age of investments in highways and roadsChart 16 – Average age of investments in highways and roads, 1961-2012

Source: Statistics Canada, Investment and Capital Stock Division

5.1.1 Pertinence

The quality of public infrastructure, roads in particular, are among the basic conditions for economic development. Investing in infrastructure is how governments contribute most effectively to economic growth. The average age of infrastructure is a representative statistic of its state of health.

10 years

11 years

12 years

13 years

14 years

15 years

16 years

17 years

18 years

19 years

201220092006200320001997199419911988198519821979197619731970196719641961

British Columbia

Alberta

Ontario

Quebec

Legend

Business environment

5

40

5.1.2 Comparison

Quebec = B (indicator 15)The average age of Quebec’s road network was 12.5 years in 2012. Quebec thus ranks second, by ascending order of average age, among the four Canadian provinces chosen for purposes of comparison, behind only Alberta in this category, and just ahead of Ontario for one of the first times in 30 years. However, it must be noted that the gap with Ontario is very slim.

The average age of Quebec’s roads and highways network started to go down – improve, in other words – in the mid 1990s, and recent investments have allowed this trend to accelerate so that the gap with Ontario is now very small.

5.2 Entrepreneurial intensityChart 17 – Measurements of entrepreneurial intensity, 2012

Source: Statistics Canada, CANSIM 282-0012.

0

20

40

60

80

100

120

140

160

180

200

Number of establishmentsin relation to population

Business owners and self-employed workersin relation to total employment

Alberta

British Columbia

Canada

Ontario

Quebec

Legend

Out

of 1

,000

41

5.2.1 Pertinence

Entrepreneurial action is a necessary condition for wealth creation and prosperity, and this is even what triggers them. Entrepreneurs are people who develop and innovate.

The intensity of entrepreneurial action in an economy can be measured using two statistics.

First, the pool of business owners and self-employed workers lays the groundwork for companies to emerge. The ratio of entrepreneurs and self-employed workers to total employment is a rough measure of the intensity of entrepreneurial culture in an economy.

Second, the ratio of the number of companies, with or without employees, to population also measures entrepreneurial intensity in a society, and focuses more specifically on the effect of entrepreneurial action: the creation of businesses.

5.2.2 Comparison

Quebec = D (indicator 16)Whether in terms of the pool of entrepreneurs or of the number of companies, Quebec again this year ranks fourth among the reference provinces. Efforts to develop entrepreneurship must be accentuated, but it is understandable that this is a relatively long-range task. But we need to avoid introducing any new restraint that would discourage entrepreneurship.

Comments:We should note that this weakness in entrepreneurship has also been documented in other forms by studies from the Fondation de l’entrepreneurship. These studies show, for example, fewer intentions to create businesses in Quebec than elsewhere in Canada. In 2013, 14.8% of Quebecers said they intended to create a new business or take over an existing one; this compares to 21.2% in the rest of Canada.21

Other troubling data concerns the proportion of company owners in Quebec who intend to increase their business activities over the next three years. The proportion is in the 33% range, compared to 44% in the rest of Canada. This tends to indicate entrepreneurs “would appear to have less of an ambitious fibre which ensures a more significant business pool that is intent on growth.”22

According to journalist Pierre Duhamel, while self-employed workers “are business owners, they are not employers, and thus not real entrepreneurs“ , so they must be excluded, along with businesses that have fewer than five employees 23. This is certainly an interesting argument. With these exclusions, Quebec would no longer rank fourth. Combined with the data we show in chart 17, it leads us to conclude that Quebec would lag significantly behind in terms of the number of self-employed workers and businesses of fewer than five employees. So, does the situation tend to discourage efforts to go into business as an independent worker or the owner of a SME? Whatever the case, companies of five or more employees have most likely already been micro-businesses. In this overall issue, it’s important to consider the various aspects related to entrepreneurial intensity.

5.3 R&D spending

5.3.1 Pertinence

Spending on research and development (R&D) is an indicator of the effort taken to innovate and prosper. When more resources are devoted to R&D, there is a greater chance of making technological breakthroughs and benefiting the entire economy through spinoffs.

21 In 2012, the corresponding figures were 8% for Quebec and 11.8% for the rest of Canada.22 Fondation de l’entrepreneurship. Indice entrepreneurial québecois 2013, April 2013. 23 Pierre Duhamel, « L’increvable mythe du retard entrepreneurial du Québec »

http://www.lactualite.com/opinions/le-blogue-de-pierre-duhamel/lincrevable-mythe-du-retard-entrepreneurial-du-quebec / consulted August 5, 2013

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5.3.2 Comparison

Quebec = B (indicator 17)Quebec spent 2.4% of its GDP on R&D in 2010 (intra-mural R&D spending), putting it first in Canada and 10th among the 33 provinces and countries compared.

Chart 18 – Intra-mural R&D spending as a percentage of GTP, 2009 and 2010

Source: Institut de la statistique du Québec. Science, technologie et innovation, « R-D ensemble des secteurs »..

0% 1% 2% 3% 4% 5%

Israel

Finland

South Korea

Sweden

Japan

Denmark

United States

Germany

Austria

G8 total

Quebec

OECD total

Australia

France

Ontario

Slovenia

Belgium

EU-27 total

Netherlands

United Kingdom

Canada

Ireland

Norway

Estonia

Portugal

CzechRepublic

Luxembourg

BritishColumbia

Spain

Italy

Hungary

Prairies

Turkey

Poland

Slovakia

Chile

2010

2009

Legend

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5.4 Patents Chart 19 – Number of inventions patented per billion US dollars (PPP) in intramural R&D spending, 2009 and 2010

Source: Institut de la statistique du Québec. Science, technologie et innovation, « Brevets d’invention ».

5.4.1 Pertinence

Although patents do not take account of all innovative activity, they remain one of the few measurable and comparable indicators.

The ratio of patented inventions to spending on research and development is an indicator of the efficiency of this spending in terms of patents obtained.

0 50 100 150 200 250 300 350

2010

2009

Legend

Italy

Norway

Denmark

France

Sweden

UnitedKingdom

Quebec

Germany

Finland

Alberta

G8 total

Canada

BritishColumbia

United States

Ontario

Japan

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5.4.2 Comparison

Quebec = C (indicator 18)As we have seen, Quebec spent 2.4% of its GDP on R&D in 2010, compared to 2.2% for Ontario, 1.5% for British Columbia and 1.8% for Canada as a whole. Despite this major effort, Quebec’s ability to obtain patents from the United States Patent and Trademark Office (USPTO), in relation to its spending, was below the figures for Ontario, British Columbia and Canada as a whole. It is in the third quartile for this indicator. It would tend to indicate there is a significant gap in research investments and innovation. Any government intervention should take this into consideration.

5.5 ICT investment Chart 20 – Information and communication technology (ICT) investment per worker, 2011 and 2012 (in 2007 chained dollars)

Sources: Statistics Canada, CANSIM 310-003 and 310-004; Centre for the Study of Living Standards, ICT database.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

British ColumbiaQuebecCanadaOntarioAlberta

$3,202

$3,060 $3,096

$2,692

$3,219

$2,816

$2,545

$2,282

$2,409

$2,165

2012

2011

Legend

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5.5.1 Pertinence

Investment in information and communication technology (ICT) includes three components: computers and related equipment, software, and telecommunications equipment. Comparing this investment with the number of workers helps show the intensity with which a country’s workforce is ICT-equipped.

According to many studies, there exists a causal link between companies’ ICT investment and their productivity.24 It is also clear that this value-creation potential from information technologies can be felt fully only in the presence of complementary investment, especially in human capital.

5.5.2 Comparison

Quebec = C (indicator 19)Quebec ranks third among the four Canadian provinces in the reference group.

Comments:It is interesting to note here that while Quebec still ranks third among the provinces, the gap between Quebec and the Canadian average is relatively smaller than it was. Also noteworthy is that while we do not have the data for all of the OECD member countries, we do have it for the United States, a comparative country against which Canada lags quite a bit behind. In 2011, the ITC investment per worker in Canada, adjusted to purchasing power parity (PPP), was just 58% of the American level.

5.6 Multifactor productivity

5.6.1 Pertinence

Multifactor productivity measures efficiency in the use of factors of production, namely labour and capital, to produce a certain level of goods and services. This indicator reflects, to some extent, technological innovation and innovation in work methods and work organization in an economy.

The measurement should be distinguished from that of labour productivity, which simply measures GDP per hour worked.25

5.6.2 Comparison

Quebec = C (indicator 20)Quebec ranks 14th out of the 21 economies for which calculations are available. It is important for public policy to promote greater innovation and a greater contribution from innovation and productivity to economic growth. This contribution is all the more necessary in that the contribution from labour will be declining due to demographic factors.

24 Benoit A. Aubert et al. Productivité et technologies de l’information, Centre sur la productivité et la prospérité, HEC Montréal, 2009.25 Quebec ranks 21st among 36 countries and provinces in terms of productivity per hour worked, close to its ranking in GDP per capita.

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Chart 21 – Average annual contribution of multifactor productivity to GDP growth between 1995 and 2011

Sources: Conference Board; Statistics Canada; Desjardins. Études économiques.

-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Italy

Spain

Belgium

Denmark

New Zealand

Canada

Ontario

Quebec

Switzerland

Australia

United Kingdom

Netherlands

France

Sweden

Ireland

Austria

United States

Finland

Germany

Korea

Japan

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5.7 Cost of operating a businessChart 22 – Index of the operating cost of a business in 19 sectors (United States = 100) (same chart as last year)

Source: Competitive Alternatives 2012 Cost Model Detailed Comparison Report. Online: http://www.competitivealternatives.com/results/locationmenu.aspx

0 20 40 60 80 100 120

Japan

Australia

Germany

United States

Italy

Alberta

BritishColumbia

France

Ontario

Canada

Netherlands

United Kingdom

Quebec

Mexico79,0

94,25

94,5

94,7

95

95,4

96,1

96,55

96,65

97,9

100,0

100,1

103,7

109,4

2010

2012

Legend

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Quebec = A (indicator 21)KPGM’s Competitive Alternatives study measures the impact of 26 significant business cost elements in various cities in 14 countries. The study includes the mature countries of Australia, Canada, France, Germany, Italy, Japan, Mexico, The Netherlands, United Kingdom and the United States and the BRIC countries (Brazil, Russia, India, China). We are only showing the comparisons relating to Quebec with the aforementioned mature countries for the sake of comparison with last year and with other Report Card indicators that are not usually compared to the data of BRIC countries. The study also compares non-economic type data linked to the business attractiveness and competitiveness of cities, such as the quality and cost of living. The study examines 19 sectors of activity in the businesses.

Comparisons are based on after-tax start-up and operating costs, conducted over a 10-year span, taking also into consideration tax rates, labour, rent, transportation and energy costs.

Since this study is only done every two years, we are showing the same chart as last year.

While this is a first-rate and interesting study, it must be noted that it considers a limited number of countries and 19 sectors.

According to the study, the province of Quebec, represented by Montreal and Quebec City, ranks second behind Mexico among all of the countries surveyed for having

ConclusionThe comparisons produced for this study show the need to mobilize for greater prosperity in Quebec. This is why the Quebec Employers Council has developed an inspiring initiative which is aimed at aligning the vital forces in Quebec in an effort to implement the conditions needed to achieve this prosperity, which are primarily a good grasp of the issues and strong support to the wealth creators in the province of Quebec. But this wealth can only be a sought-after and attainable objective provided it benefits the people who invest in it and society as a whole.

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Sources and definitions

1 Availability and quality of labour

Table 5 – The six areas of study used in the second statistic numerator (as defined in the Classification of Instructional Programs (CIP), Canada, 2000).

05Business, management and public administration

52. Business, management, marketing and related support services

30.16 Accounting and computer science

44. Public administration and social service professions

06Physical and life sciences and technology

40. Physical sciences

26. Biological and biomedical sciences

30.01 Biological and physical sciences

30.18 Natural sciences

30.19 Nutritional sciences

30.24 Neuroscience

41. Science technologies / technicians

07Mathematics and computer and information sciences

27. Mathematics and statistics

30.08 Mathematics and computer science

11. Computer and information sciences and support services

30.06 Systems science and theory

25. Library science

08Architecture, engineering and related services

04. Architecture and related services

30.12 Historic preservation and conservation

14. Engineering

15. Engineering technologies / technicians

46. Construction trades

47. Mechanic and repair technologies / technicians

48. Precision production

09Agriculture, natural resources and conservation

01. Agriculture, agriculture operations and related sciences

03. Natural resources and conservation

10Health, parks, recreation and fitness studies

51. Health professions and related clinical sciences

60. Dental, medical and veterinary residency programs

31. Parks, recreational, leisure and fitness studies

Appendixdetails on sources, definitions and methodology

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1.2 Graduation rate among university undergraduates

Among types of diploma, the category of “bachelor’s degrees and other undergraduate diplomas” includes bachelor’s degrees, first professional degrees and applied degrees. It excludes university preparatory courses or pre-bachelor’s courses, undergraduate certificates or diplomas, and undergraduate licences.

In this statistic, data in the numerator are taken from Statistics Canada Table 477-0020, which gives the number of university degrees, diplomas and certificates awarded by level of study, and the Classification of Instructional Programs, Primary Grouping (CIP_PG) by province.

1.3 Levels of postsecondary education among adults

This indicator measures the proportion of adults from ages 25 to 64 who have reached the postsecondary education level (also called tertiary). This level includes undergraduate and postgraduate studies at university. It also included some lower undergraduate studies, such as CEGEP in Quebec.

The group of adults from ages 25 to 64 changes marginally from one year to the next, with one cohort entering and another one leaving each year, among the 39 cohorts included in this group. To this demographic factor is added the incidence of diplomas obtained after age 24.

1.4 Proportion of adults who have taken job-related training

Job-related training comprises structured learning activities such as courses, workshops, private lessons and guided on-the-job training that do not lead to obtaining an official diploma. The denominator comprises all adults from ages 25 to 64 but consists almost entirely of those holding a job. The reference period runs from July 2007 to June 2008.

In 2010, the General Social Survey sampled Canadian households on their time use. The measurement included the length of time related to education activities: full-time courses, other courses, televised credit courses, special conferences, homework or school work, recreation-related courses, personal development, meals/snacks at school, travel to get to the training centre, trips to the library, other learning activities, safety procedures during a pedagogical activity. By considering only the population aged 25 to 64, the survey targeted the working population or individuals who were no longer students.

1.5 Participation rate of older workers

The participation rate is the number of people who are part of the labour force, expressed as a percentage of the population aged 15 or more. The labour force consists of civilians, living outside institutions, aged 15 or more, who held a job or were unemployed during the reference week.

The participation rate for a given age group corresponds to the labour force in this group expressed as a percentage of the population of this group.

1.6 Economic integration of immigrants

The rates are annual. The population covered is from ages 25 to 54.

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2 Cost of labour

2.1 Employers’ cost of payroll taxes

See in this regard the publication from the Quebec Employers Council, “Payroll Taxes: The Quebec Disadvantage,” May 2009 http://www.cpq.qc.ca/assets/files/dossiers/2009/dossier0509_en.pdf

The following document was used to update the rates: http://www.aon.com/canada/fr/attachments/thought-leadership/pub_guidecanavantagesociaux2013.pdf

2.2 Minimum wage as a proportion of the median wage

Minimum wages are those that came into force in the Canadian provinces and that were in force in the OECD countries in 2011. These rates are expressed as a percentage of the median wage of full-time workers in the provinces and the OECD countries. According to the OECD, median wages are preferable to mean wages as a basis of international comparisons of relative minimum wages because they take account of differences in wage spreads between countries. Although figures for the Canadian provinces are available for 2012, we are using the 2011 figures to allow for comparison with the OCED countries, for which the 2011 figures are the most recent.

3 Regulation

3.1 Orientation of labour laws

Accreditation – The country has two systems for obtaining union accreditation: automatic accreditation through the signing of membership cards, and accreditation following a compulsory vote by secret ballot. However, in both systems, the first step in the union accreditation process is proof of support for a union within the bargaining unit.

Under the system of automatic accreditation through the signing of cards, adopted by four of the 10 provinces (Quebec, New Brunswick, Manitoba and Prince Edward Island) and under federal legislation, union accreditation is granted if a majority of the employees represented by a bargaining unit sign membership cards.

Even in places that have adopted automatic accreditation through the signing of cards, the law allows a vote to be held when a certain threshold of signed cards (obviously lower than for automatic accreditation) is reached.

Under the system of accreditation through compulsory vote by secret ballot, employees who support the union sign a membership card. If the number of signed cards is high enough (each province sets a minimum percentage), a vote is held by secret ballot to determine whether the union can be accredited.

Replacement workers – Employers subject to the Canada Labour Code may make use of replacement workers during a strike or lockout. They are forbidden to do so, however, if their set aim is to undermine the union’s ability to represent workers rather than to meet legitimate negotiating goals. Companies subject to the Canada Labour Code employ about 10% of Canadian workers, particularly in banking, telecommunications, rail and air transportation, and interprovincial trucking.

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3.2 Average number of documents produced per company

The Statistics Canada Survey of Regulatory Compliance Cost asks respondents to identify, count and report the total number of documents produced for the intention of public administrations.

The Survey covers only the 12 regulatory requirements that are thought to have the biggest impact on the majority of SMEs in Canada: withholding at source; records of employment; T4 summaries and individual T4 slips (including RLZ-1 forms and RL forms in Quebec); workers’ compensation remittances; workers’ compensation claims; federal and provincial corporate income tax statements; corporate instalment payments; company registration; Statistics Canada compulsory surveys; municipal licences and operating permits; provincial licences and operating permits.

This triennial survey was conducted in 2005 and 2008. The survey does not provide specific figures for Alberta, which is included with the other two Prairie provinces.

This survey on the cost of regulatory compliance takes account only of the administrative dimension of the cost of compliance, measuring the time required to fill out the forms and the cost of internal and external resources used for this purpose. It thus takes no account of the economic cost of the regulations that affect the business environment in which companies operate.

4 Public finances

4.1 Marginal effective tax rates on business investment

Data provided in Chart 13 was derived from: Chen; Duanjie and Jack Mintz “2012 Annual Global Tax Competitiveness Ranking – A Canadian Good News Story”, The School of Public Policy, SPP Research Papers, Volume 5, Number 28, September 2012.

4.2 Tax burden

The table used in previous editions of the Report Card (CANSIM 384-0004) has not yet been updated: the most recent data is from 2009. Statistics Canada should be updating this table in the fall of 2014.

The source for the data in Chart 13-B is “Tax Freedom Day” http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/tax-freedom-day-2013.pdf

5 Business environment

5.1 Average age of investments in highways and roads

Public engineering infrastructure includes five primary components: roads and highways, bridges belonging to governments, water supply systems, the water drainage network and wastewater treatment facilities. The road network is by far the largest category among these components.

Statistics Canada surveys annual investments for each province in the five categories of public engineering infrastructure and their average age. This infrastructure may be under federal, provincial or municipal ownership.

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The statistic shown represents the average age of investments in the highway and road networks, which is not the same as the average age of the roads themselves. Thus, an investment made in 2000 to renew a highway is included in the average, regardless of the age of the original highway.

The data from which Chart 16 was drawn were published initially in the study Age of Public Infrastructure: A Provincial Perspective, No. 11-621-MIF2008067 in the Statistics Canada catalogue. The data for 2012 were obtained following a request to Statistics Canada.

5.2 Entrepreneurial intensity

In the first statistic, the numerator comprises the owners of incorporated businesses, with or without paid help, the owners of unincorporated businesses, with or without paid help, and self-employed workers.

The second statistic deals with the number of commercial establishments surveyed by the Statistics Canada Business Register.26 Several commercial establishments may belong to the same company, and each company has at least one commercial establishment. But with the data on the number of establishments only being available up to 2010, we are showing the statistic on the number of businesses per 1,000 Canadian inhabitants.

5.4 Patents

“A patent indicator corresponds to the number of patents issued by a particular bureau. This helps in measuring the inventiveness of regions and in comparing them with one another. However, the use of a specific bureau’s indicator leads to a bias favouring the share attributed to inventors and patent-holders in its jurisdiction, given that, in proportion to their innovation activities, they make more patent applications in their national bureaus compared to foreigners. This overrepresentation of countries in their national bureaus makes it difficult to choose a good patent indicator for purposes of international comparison.”27

Thus, by choosing the United States Patent and Trademark Office (USPTO) as its reference bureau, the indicator underestimates the performance of European countries, which favour the European Patent Office (EPO). However, this choice is appropriate in comparing Canadian provinces with one another.

5.6 Multifactor productivity

Multifactor productivity corresponds to the share in real GDP growth that cannot be attributed to growth in hours worked or in capital. Études économiques Desjardins produced estimates of this multifactor productivity for Quebec and Ontario in a September 2009 article, “La clé de la prospérité pour l’économie du Québec – Rehausser la productivité afin d’amoindrir les effets du choc démographique.”

26 Source of details: Industry Canada. Small Business and Tourism Branch. Key Small Business Statistics, July 201027 Government of Quebec. Institut de la Statistique du Québec. Compendium d’indicateurs de l’activité scientifique et technologique au Québec,

2010 edition, page 236.

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Methodology

As we mentioned at the beginning, the Report Card gives Quebec a grade ranging from “A” to “D” based on its rank in the reference group. When the reference group consists of the four Canadian provinces that were selected, the grade simply corresponds to Quebec’s rank among these provinces. When international comparisons are possible, the grade given to Quebec depends on its rank among the provinces and countries taken together. More specifically, the provinces and countries as a whole are divided into four groups: if Quebec is in the first quartile, it obtains an “A”, if it in the second one it obtains a “B”, in the third one a “C”, and, if it is in the last quartile, it gets a “D”.

The total grade in each category or field is the average of the grades for the underlying indicators and may be adjusted upward. For example, the average of a “B” and a “C” is a “B-”.

The OECD welcomed four new members in 2010, bringing the total number to 34. Estonia, which ratified the convention on December 9, 2010, is the most recent member. The other new member countries are Chile, Israel and Slovenia.

To achieve comparisons with the greatest possible number of developed economies with which Quebec is in more or less direct competition, we incorporated all available data for the various countries in the 2012 Report Card. Where possible, we recalculated the figures for the previous year and reassessed Quebec’s rating to avoid having Quebec’s relative position deteriorate or improve solely due to the addition of new data.

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