$900 million in new money to increase the Fonds’ investments
Montréal, April 22, 2016 – In a speech today to the members of the Board of Trade of Metropolitan Montreal, Gaétan Morin, President and CEO of the Fonds de solidarité FTQ, unveiled the results of the strategic planning dedicated to Québec’s economic growth.
“By 2020, the Fonds de solidarité FTQ will invest an additional $1.4 billion to further support critical sectors of our economy. Of this amount, $900 million will be new money that we will raise by selling shares and bonds we hold on large markets. This new capital, added to what the Fonds invests annually, will bring our total investments to $3 billion by 2020. Building on its renewed partnership with the federal government and the trust showed by its earliest partner, the Government of Québec, the Fonds begins the next chapter of its history,” said Mr. Morin.
“By further supporting the development of socio-economic infrastructure, Québec-based public companies, innovation and certain areas of excellence, the Fonds is clearly committed to Québec’s growth,” continued Mr. Morin.
“The Fonds de solidarité FTQ’s additional investments in key sectors of the Québec economy is very good news for metropolitan Montréal’s business community. By further reaffirming its social and economic leadership, the Fonds is demonstrating why it was important to support the reinstatement of the federal tax credit. These efforts bore fruit and allow the Fonds to increase its support to start-ups and innovation, all the while creating thousands of quality jobs in Montréal. In particular, the Board of Trade underlines its support for investments in socio-economic infrastructure such as schools, student residences and libraries as they are key assets in supporting youth education”, said Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal.
The Fonds will help bridge the infrastructure gap
The Fonds will deploy $400 million to fund small- and medium-sized real estate socio-economic infrastructure projects such as schools, student residences, libraries and sports complexes. Projects will be developed in partnership with cities, school boards and governments.
Investments will be made by the Fonds immobilier and a local private developer, who will jointly own the assets. Unlike public-private partnerships, cities or school boards will lease the buildings, and their employees will be responsible for daily maintenance. The Fonds and its partners will own the buildings. Due to the leverage effect, this new business model will generate $2 billion in new project.
“This new initiative reflects our ability not only to adapt to Québec’s new needs, but also to help offer quality services to the public,” explained Mr. Morin.
The Fonds will increase its support of Québec’s flagships
The Fonds will also invest $500 million to buy blocks of shares in publicly-traded Québec businesses.
“We have no illusion that this strategy will enable the Fonds to prevent a takeover bid or block a transaction on its own. We all know that this is a complex problem that encompasses several issues such as governance and business performance. But the Fonds wants to send a signal. A signal to call local capital to action and increase the ownership of shares in Québec businesses by Québec interests,” said Mr. Morin.
The Fonds will further drive innovation
To drive innovation within businesses, the Fonds will adopt three new initiatives.
The first, launched last month, is a new partnership with the CRIQ, called Solution Innovation, that will provide financing to businesses that wish to innovate in order to increase their competitiveness and productivity.
The Fonds has also partnered with Manufacturiers et Exportateurs du Québec to go on a regional tour, during which we will meet with entrepreneurs and identify the challenges and the specific ways to drive innovation in their businesses.
Lastly, the Fonds will target its portfolio companies that wish to innovate and could benefit from personalized support. The Fonds will continue to support them with direct investments as well as investments in venture capital funds.
The Fonds will further support four sectors of excellence
The Fonds will put more efforts into supporting four sectors of excellence: aerospace, agrifood, forest products and life sciences. Alone, these sectors represent close to 600,000 jobs and generate over $38 billion in economic activity. They also account for 36% of Québec’s exports.
The Fonds already has extensive experience in these sectors, having invested close to $1.7 billion in them over the years. However, these sectors, for which Québec is internationally renowned, need to be consolidated and, in some cases, revitalized.
About the Fonds de solidarité FTQ
The Fonds de solidarité FTQ helps drive our economy. With net assets of $11.2 billion as at November 30, 2015, the Fonds is a development capital fund that channels the savings of Quebecers into investments in all sectors of the economy to help create and maintain jobs and further Québec’s development. The Fonds is a partner, either directly or through its network members, in more than 2,550 companies. With more than 600,000 shareholder-savers, the Fonds helps create, maintain and protect more than 176,000 jobs. For more information, visit www.fondsftq.com.
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Information:
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Patrick McQuilken
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