Premiums at Investissement Québec | No need for yield to touch your bonus

Investissement Québec (IQ) could break its golden rule and its premiums would not be threatened. Its mission has been so widely extended that yield has become an evaluation criterion among many. Governance specialists believe that rebalancing is necessary. But, for the Legault government, everything is beautiful.

What does this government investor do? Investissement Québec offers financing solutions (lenders/participation) to businesses in addition to managing Quebec’s help programs. It is a state -owned company. There is therefore a return objective in his law.

But since its coming to power, the Legault government has considerably widened the role of IQ from 2019. Essentially, we are talking about support for companies, whether, for example, in terms of technological transformation, improvement of their productivity or diversification of their export markets.

All this places the government’s financial arm between the tree and the bark. On the one hand, he must continue to generate yield, while on the other, he must try to meet the new demands of his shareholder – the Quebec government.

This extended mandate is therefore reflected in the way in which the organization’s performance is assessed to determine whether or not its employees deserve annual premiums. Annual performance is only one of the ten criteria found in two main categories – organizational performance and economic development.

The yield – the profits paid into the boxes of the State – is found for example alongside the “customer experience”, the “number of technological support projects aimed at an innovation advancement” and the “value of funded projects targeting the increase in productivity”.

To review

Among the experts interviewed by The pressLuke Bernier is one of those who believe that we are rasting too wide.

“My impression is that we invented a formula [pour les primes] Until management is satisfied, said the professor at the University of Ottawa University of Public and International Affairs. It is in IQ’s mission to make money too. The current model needs to be redesigned. »»

IQ’s yield has been under the spotlight for three years. After a negative yield of 4.8 % in 2022-2023, the performance was only 2.6 % the following year to then be almost zero (+0.3 %) in 2024-2025.

This will not prevent the organization from sharing bonuses of 11.6 million this year.

IQ’s replica? Over five years, the performance reached 6.2 %, beyond the loan rate of the Quebec government, which the Crown Corporate estimated at 2.2 %. In other words, the golden rule is always respected.

But beware: this situation is largely due to the 25 % yield recorded in 2021 in the wake of the postpandemic stock market. From now on, this result will no longer be counted in the five -year portrait of IQ. The state -owned company therefore has bread to board to avoid being in contradiction with the spirit of its law – that is at least to cover the government’s loan costs.

In his opinion, performance indicators where we assess the number of supported projects and companies can encourage IQ to simply say yes to a request in order to achieve its performance objectives.

Too wide?

For example, in 2024-2025, the value of “financed projects aimed at increasing productivity” was quantified at 4.6 billion, beyond the target of 3.7 billion. In terms of “reduction in the environmental footprint”, the projects funded reached 2.9 billion (target of 1.4 billion).

There is a volume effect, recognizes the chief of the financial management of IQ, Laurent Naud, taking care to add that beacons have been established.

“We have identified the sectors where we wanted to make volumes and focus on them,” he explains to The pressby referring to slots such as productivity, innovation, the environment, in particular. We really came to specify it [dans les critères d’évaluation]. We took this turn towards specific elements related to our mission. »»

In Quebec, the Legault government persists and signs: IQ’s mandate goes beyond annual return. The office of the Minister of Economy, Innovation and Energy, Christine Fréchette, says that the “primary role” of her financial arm is to “support our businesses in their growth”.

“Investissement Québec is at the service of the innovation and productivity of our businesses, regional economic development and the attraction of investments,” said one in a declaration.

Nevertheless, the context is “complicated”, believes Michel Magnan, professor and holder of the Governance Chair Stephen A. Jarislowsky at the John-Molson management school of Concordia University.

There is the concept of economic development, but the Ministry of Finance is expecting a dividend, underlines the expert. With a sum of 13 million in 2024-2025, we are far from the 194 million which were in the budget lodged last March.

Read the article “almost zero yield, almost 12 million in bonuses”