Quebec government ends controversial corporate loan-forgiveness program

QUEBEC CITY — Quebec’s new Parti Québécois government has announced the immediate termination of its predecessor’s controversial forgivable-loan program, marking a significant shift in the province’s approach to corporate subsidies and economic development.

Economy and Energy Minister Stéphane Paquet confirmed November 9 that the government will no longer issue forgivable loans to businesses, ending a program associated with former Coalition Avenir Québec economy minister Pierre Fitzgibbon.

Introduced in 2019 and administered through Investissement Québec, the program allowed companies to receive government-backed loans that could be forgiven if specified conditions were met.

Approximately $1.1 billion in subsidies were distributed through the mechanism, which attracted criticism over transparency and the concentration of financial assistance among selected companies.

Paquet said the new government intends to move away from discretionary corporate assistance and toward a broader economic framework emphasizing tax reductions, regulatory simplification and support for small and medium-sized businesses.

The government will honour existing financial commitments but will stop issuing new forgivable loans.

The decision represents one of the first major economic policy changes introduced by Premier Paul St-Pierre Plamondon’s administration following the Parti Québécois victory in the October 5 provincial election.

Paquet, a former chief executive of Montréal International, has been tasked with reshaping Quebec’s industrial-development strategy and improving the competitiveness of its business environment.

The government maintains that the new approach will improve transparency in the allocation of public funds and reduce preferential treatment for individual corporations.

The policy change comes as Quebec businesses face continued uncertainty stemming from international trade tensions, operating costs and economic pressures, including the effects of American tariffs.