Chambre de commerce du Saguenay “The key to meeting Quebec’s demographic challenge depends first and foremost on bold tax initiatives” – Michel Tremblay
Ville de Saguenay, 13 June 2007 -
The major demographic and labour force shifts over the next 20 years will put Quebec in a particularly difficult situation. To meet these upcoming challenges, Michel Tremblay, Chief Operating Officer, Personal and Commercial Banking and Wealth Management, speaking today to some 150 entrepreneurs and professionals at the Chambre de commerce du Saguenay, proposed a series of initiatives, including tax incentives.
The projected decline in the labour force means that businesses will have a harder time recruiting employees, while there will be fewer taxpayers to finance social programs in Quebec,” pointed out Mr. Tremblay. He added that we have to address this problem now by implementing, first and foremost, tax measures capable of triggering an increase in the labour force to meet this challenge. We must also encourage higher birth rates and more immigration.
For individuals, this translates into a tax regime with lower income tax rates. The user-pay concept, already common for utilities, would be extended to other consumer expenditures, thereby creating a strong work incentive. For businesses, a tax regime fostering fewer distortions in capital allocation would lead to job-creating investments.
For example, bold tax measures that would allow Quebec to increase its labour force participation rate (the labour force expressed as a percentage of the total population) from 66% to 68%, the same level as Ontario, would add 144,000 people to the labour market. This potential gain would offset 50% of the projected decrease in the labour force by 2026. Moreover, raising the labour force participation rate to be on a par with Alberta, at 74%, would completely reverse the downward trend in Quebec’s labour force.
“In short, we could then break out of the vicious circle we find ourselves in and embrace a virtuous circle: more workers, more quality jobs, more immigrants and less emigration to other provinces,” added Mr. Tremblay.
Mr. Tremblay also explained how National Bank was already preparing itself to meet this challenge that will affect its clients, distribution channels and employees. By adapting to its clients’ needs, especially by creating comprehensive financial solutions and providing leading-edge electronic payment solutions, and by focusing on best human resources management practices, the Bank has the tools it needs to meet demographic and hiring challenges with flying colours.
A copy of Mr. Tremblay’s speech is available on the Bank’s website under Public Statements.
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