Quebec Budget 2020-2021 – Propulsion Québec welcomes the government's ambition for transportation electrification

Montreal, March 15, 2020— Propulsion Québec, the cluster for electric and smart transportation, welcomes the new announcements in the Quebec 2020-2021 budget regarding transportation electrification. Sarah Houde, President and CEO of Propulsion Québec, attended the unveiling of the budget by Quebec's Minister of Finance, Mr. Éric Girard. Several commitments made will certainly have a positive impact on the cluster's members and will allow this rapidly growing ecosystem to further develop thanks to the support of the Government of Quebec.

Quote

"In the news, there is a growing enthusiasm for electrification, a topic that was at the heart of the Minister of Finance's speech. The various stakeholders in the electric and smart transportation sector can only welcome the recognition by the Government of Quebec of this industry's potential contribution to our economy," said Sarah Houde, President and CEO of Propulsion Québec.

Significant investments for the sector

Several amounts will be allocated to the transportation electrification sector:

• Nearly $1.4 billion granted by March 31, 2026 to the Roulez vert program to continue providing rebates for the purchase of an electric vehicle and the installation of charging stations.
• A significant increase in investments in public transit, with an investment ratio that rose from 27% last year to 33.7% this year, as well as a major sum allocated to large structuring projects in six cities and regions of Quebec.
• $27 million over five years to support research, innovation and commercialization of innovative products in the electric vehicle industry, plus $18 million for the development of the battery recycling sector.
• $90 million to promote the development of critical and strategic minerals notably used in transportation electrification (lithium, cobalt, graphite, etc.).

More broadly, it is important to note the announcement in the budget of several measures encouraging innovation, commercialization and R&D, including:

• The establishment of an incentive deduction for the commercialization of innovations (DICI) for those demonstrating significant economic potential.
• The removal of eligible expenditure thresholds for the three R&D tax credits, thus allowing support of 80 to 100% of eligible expenses related to activities carried out in collaboration with companies.
• Support for innovative projects and SMEs with strong potential, through the creation of a $100-million pre-seed investment fund for the commercialization of innovations from public research, as well as the establishment of the "capital synergy" tax credit, at 30%, aimed at encouraging established companies to invest in the equity of Quebec SMEs.

However, Propulsion Québec questions the relevance of hydrogen investments in Quebec due to the absence of a Quebec transportation industrial base that could benefit from this government support and generate economic spin-offs and jobs here.

Recommendations for future measures

Propulsion Québec will also pay particular attention to investments that have been doubled annually compared to those announced in the 2013-2020 Climate Change Action Plan. Cluster members strongly hope that these will translate into concrete measures in favor of the cluster.

In anticipation of the establishment of future measures, Propulsion Québec recommends:

1. That the Transportez vert and Écocamionnage programs be brought together under a single ministry that will become the one-stop shop for a permanent support program for all types of vehicles, regardless of weight, and that will facilitate the ecological and technological transition for fleet managers.
2. That the government position itself as an exemplary customer by continuing its engagement with Quebec vehicle and technology suppliers and by promoting the electrification of its own vehicle fleets.
3. That the public transit investments announced in the budget be translated into large structuring projects implemented quickly.
4. That the government invest in the development of the entire lithium-ion battery value chain in Quebec, from mineral extraction, through processing, to battery recycling, so that the entire production chain takes place on Quebec territory.
5. That programs enabling the development of riskier but high-potential projects for technology showcases be better funded, both in absolute funding and as a percentage, and that they facilitate the involvement of potential customers alongside product suppliers.
6. That refundable tax credits for scientific research and experimental development (SR&ED) be expanded to include product development.
7. That measures allowing market access validation, notably product demonstration plants, be financially supported.
8. That the government make adequate financing available to transit companies for all aspects of electrification and the implementation of integrated mobility systems for their bus fleets, including charging infrastructure and workforce training.

To consult the Quebec 2020-2021 budget, see this link.