Recovery objective: electrify Quebec's economy

Montreal, May 29, 2020. Propulsion Quebec, the cluster for electric and intelligent transportation, and its members raise their hand to contribute to the economic recovery, leveraging the unique strengths that characterize the electric and intelligent transportation industry in Quebec. The crisis related to COVID-19 has health and economic repercussions whose extent is still difficult to quantify. It is nevertheless necessary to think about the rebirth of the Quebec and Canadian economies; transportation can serve as a major lever to meet this challenge.

A sector oriented toward the future

Through strategic investments in electric and intelligent transportation, Quebec and Canada give themselves the means to take giant steps on societal priorities such as combating climate change and improving mobility. Quebec would thus bet on a strategic industry that offers significant financial returns and an improvement in the trade balance.

Companies in the sector have undeniable competitive advantages to contribute structurally to the sustainable and strategic recovery of the province's economy:

• Companies operate in a sector of exponential growth, with prospects for an exceptional medium-term recovery ^[1];
• Companies are present throughout the transport value chain so their development has a major leverage effect for the entire economy;
• Companies are present throughout Quebec's territory, which has structuring effects in several regions and municipalities;
• This sector offers wages higher than the average for Quebec ^[2]
• Companies have developed cutting-edge expertise thanks to talent and intensive research investments, which is reflected in distinctive patents and allows us to help strengthen unique niches of expertise worldwide;
• This sector helps raise Quebec's productivity by introducing new technologies and state-of-the-art production equipment into the traditional transport sector as well as into the manufacturing sector;
• A study carried out for Propulsion Quebec by KPMG in 2020 shows that this sector generates significant economic impacts. The value added to Quebec's economy from each additional million dollars of production ranges between $448,000 and $862,000 and supports between 4.8 and 8.6 direct and indirect jobs ^[3];
• This sector relies on Quebec's clean natural resources: hydroelectricity and critical and strategic minerals.

Essential support from the Quebec government

To carry the voice of its members, Propulsion Quebec submitted to the provincial and federal offices responsible for economic recovery, the environment, transportation, and public procurement a Memorandum full of concrete proposals to position the electric and intelligent transportation industry at the heart of government recovery plans.

Here is the summary of the recommendations :

1. Launch a project of the City of Sustainable Mobility to bring strategic stakeholders together in a single location and thus foster synergies to accelerate innovation, experimentation and support for commercialization for electric and intelligent transportation;
2. Modify public procurement rules and practices to favor the purchase of electric vehicles and solutions for smart mobility. The purpose of this proposal is to prioritize Quebec content, positive environmental impacts, innovation and the total cost of ownership rather than the lowest bidder at acquisition;
3. Provide more structural support to private companies that wish to electrify their fleets, by enhancing incentives for purchases of medium and heavy electric vehicles and by merging the Écocamionnage and Transportez vert programs to group them under a single ministry. This measure will maximize sales for our companies, while improving Quebec's trade balance;
4. Strongly encourage continued research and development to maintain Quebec's strategic lead in several niches and to support the traditional transport industry in its massive conversion to new technologies. Access and award conditions for collaborative research funding programs could be temporarily relaxed to avoid delays to dozens of projects involving Quebec companies and researchers;
5. Accelerate the integration of artificial intelligence in the field of transportation by focusing on integrated mobility (MaaS or Mobility as a Service) and the digitalization of vehicles' embedded intelligent systems;
6. Make Quebec a leader in the lithium battery sector by quickly putting in place an integrated strategy that will enhance Quebec's capabilities at all stages of the value chain, from the extraction to the refining of critical materials through the production of battery components and cells, and up to the recycling of end-of-life batteries;
7. Attract foreign investment in order to identify opportunities that could arise in the short term, in all aspects of our sector ranging from the battery sub-sector to manufacturers of electric and intelligent equipment and vehicles.

The electric and intelligent transport sector is mobilizing and proving itself to support essential services during the crisis.

Several members of Propulsion Quebec were able to contribute to the collective effort to fight COVID-19 through various initiatives: by producing personal protective equipment, such as the 40,000 visors produced by Bombardier, by making their fleet of electric vehicles available for transporting healthcare personnel and goods, as companies like Netlift, Communauto, Bixi and Taxelco, or by organizing transportation solutions to support local merchants, like the startup Courant +. This young company, with the support of Jalon MTL and Coop Carbone, has set up a partnership with the City of Montreal and the Business Development Corporations in order to meet essential delivery needs by relying on electric cargo bikes to transport the goods of local merchants in several neighborhoods of Montreal. An activity beneficial on several levels: no noise, no pollution, and merchants who can continue their activities.

These initiatives, made possible through cooperation among various governmental and municipal actors, demonstrate the ability of players in the electric and intelligent transport sector to adapt and respond to societal and economic needs for a green recovery of Quebec's economy.

Information :
Sébastien Verret, TACT
581 996-1346
sverret@tactconseil.ca

^[1] A 2018 KPMG study estimates that the growth of annual global sales of electric vehicles (all types combined) will be multiplied by 26 by 2030. A study by Marcon in 2019 for its part estimates that the growth prospects are exceptional for the vehicles in which Quebec currently stands out. By 2050, it is expected that the total number of cars in the entire North American fleet will decline in favor of intelligent, electric and shared transport. The number of vehicles that will be electric and/or intelligent will increase to more than 100 times its current number, rising from 1.4 million to 155.2 million over the next 30 years, which will represent 57.3% of all electric and/or intelligent vehicles in circulation in 2050. Growth in categories of medium and heavy electric and/or intelligent vehicles will be even more pronounced since these vehicles are practically nonexistent at present. In short, our various studies allow us to anticipate that the share of the total land vehicle fleet that will be electric and/or intelligent will reach 70% of the total fleet in 2050.

^[2] A KPMG study carried out in 2019 revealed that wages in our sector are 16 to 58% higher than the industry average.

^[3] The sectors stimulated by the development of the electric and intelligent vehicle sector generate significant economic impacts in Quebec.

• The value added for each million dollars of production in sectors related to vehicle manufacturing as well as their parts and other electrical components ranges between $448,000 and $652,000, while supporting 4.8 to 6.1 jobs. The average for the manufacturing sector is $537,000 and 5.0 jobs supported.
• On the services side, the design of applications, software and embedded systems generates value added amounting to $805,000 for each million dollars injected into the sector, while the impacts reach $862,000 for research and development services. These two sectors support respectively 8.3 and 8.9 jobs per million dollars of production. These impacts compare favorably to those of the economy as a whole, which amount to $768,000 and 8.6 jobs supported.