Le Fonds de solidarité FTQ estime que l'économie du Québec peut sortir de la crise sanitaire en bonne position, mais il ne faut pas baisser la garde.
The Québec economy is going through an awkward phase: recovery tinged with uncertainty. Let's explore a few scenarios in the new business environment.
"We're still in the midst of a global pandemic, but we're learning to live with it," said Dany Pelletier, Executive Vice-President, Private Equity and Impact Investment, Fonds de solidarité FTQ at the 30th Congrès du capital d'investissement in October. Speaking to an audience of Québec entrepreneurs and decision-makers, he added, "Despite the ever-changing challenges, the economy has continued to be resilient and productive." But there's a caveat. "Even if there's reason for optimism, there are still some dark clouds on the horizon and we need to keep an eye on them."
This sums up the uncertainty most businesses face as they head into the first vaccinated winter. Over 75% of Québecers are doubly vaccinated, but not all. Several sectors have bounced back to pre-pandemic activity or even better, but not all. For every encouraging sign in the Québec economy, there's always a nagging "but."
"The situation is unstable because the virus is still with us, but new concerns, such as supply chain issues and inflationary pressure, make the situation even more precarious," continued Pelletier. "As a result, some businesses are thriving, while others are still struggling. The culture, hospitality and travel industries are still fragile and thousands of people in these sectors are still hurting. We simply cannot leave them behind.
The Fonds has benefitted from the resilience of the Québec economy and passed the benefits along to its 3,700 partner companies. In the 2020-2021 fiscal year, the investment fund poured over $1 billion into the Québec economy, in alignment with its guiding principles of proximity, accessibility, attentiveness, and quality business relationships.
During his presentation to the annual venture capital and private equity conference, Mr. Pelletier outlined three ways the Fonds is helping its partners navigate the post-pandemic Québec economy and position themselves for the future.
Challenge 1 - Interest rate risk: beware of over-indebtedness
"Central bank rates could rise, leading to an increase in commercial interest rates, so keep a sharp eye on those debt levels," Pelletier cautioned.
"Even companies with momentum need to be cautious and adjust their financial strategy to sustain growth, while preparing for a potential rate increase," he said.
Challenge 2 - Workplace issues: enhancing the "Employee Experience"
During the current shortage of skilled labour, the employee experience counts as much as the customer experience. Since the Fonds has been entrusted with the savings of 723,000 Québec workers, their well-being has always been one of the Fonds's founding principles and central to its decision-making.
"Every employer is different, but one rule never changes: Employees are the first customers a company must satisfy," Pelletier added. "Work organization, equipment, technology, training, compensation are all ways to attract and retain talented employees."
Challenge 3 - ESG factors: a key aspect of performance
To prepare for the future, companies must act responsibly on environmental, social and governance (ESG) issues.
"A company is not a stranger standing on a street corner. It's a corporate citizen that needs talent and resources," Pelletier continued. "Entrepreneurs must have a project, values and take a stance. They need to realize how they will be viewed by the young people they hope to hire and by their customers, suppliers and investors."
In other words, he believes that performance measures are more than financial.
"Each investment must strive for a two-fold return: financial and social. We're investing our neighbours' retirement savings in the Québec economy. We're proud to take that commitment very seriously."