Losses from the main pandemic business relief program could triple further and thus exceed $200 million, Economy Minister Pierre Fitzgibbon said on Monday.
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The Journal revealed that these losses have already reached more than $70 million. These are sums that the government has lent to companies that have become insolvent such as Groupe Sélection, Forex, Effenco and La Renaissance des îles.
“It is clear that with the headwind we have at the moment, it will be more difficult. So I expect there are other situations, unfortunately. There will be [d’autres] losses,” Mr. Fitzgibbon said on 98.5 FM.
The minister estimated that the losses could reach “triple” what they are now, which would mean that Quebec would have to write off more than $200 million under the Concerted Temporary Action Program for Businesses (PACTE).
He maintained that when this program was set up in March 2020, he estimated that the losses could reach “10 to 15%” of the sums lent and guaranteed.
Over $1 billion in aid
The government has allocated $1.24 billion to 1,479 companies under the PACTE. About $580 million of that was in the form of loans and the rest in loan guarantees.
“People may have forgotten, but the pandemic was very serious for SMEs. Many people criticized us for not helping enough, ”recalled Pierre Fitzgibbon.
In 2022, no less than 1,945 Quebec companies found themselves in a situation of insolvency, including 1,624 that went bankrupt. This is 27% more than in 2021.
And for the past few months, the number of companies going insolvent has exceeded pre-pandemic levels. In January, no less than 157 Quebec companies declared bankruptcy.