Optimism buoys City of Laval’s economic recovery plan

City focuses on key industries and businesses in post-COVID-19 strategy

With a high wind of optimism blowing through its sails, the City of Laval is moving ahead this week with a sweeping new economic development strategy designed to give a badly needed boost to the city’s waning economy in the uncertain aftermath of the COVID-19 pandemic.

Dubbed ‘Laval, capital of opportunities’ by the Demers administration, the primary focus of the campaign is to provide support to entrepreneurs and business owners during the economically-challenged post-pandemic period.

COVID-19 fallout

Despite setbacks from the COVID-19 pandemic, officials wilth the City of Laval have tabled an optimistic plan for the region’s short and longer-term economic recovery.

In a statement issued by the City of Laval prior to Demers’ official presentation of the policy during the monthly city council meeting on Tuesday, city officials acknowledged that Laval has been as impacted by the fallout from COVID-19 as any other municipality in Quebec or around the world.

According to the city, six out of 10 businesses in Laval find themselves currently in “precarious” financial circumstances, ranging from moderate to severe, based on an evaluation conducted by E&B Data and numerical information provided by Statistics Canada for the Montreal Metropolitan Community (CMM).

Non-residential tax affected

“This precariousness generates a significant risk, notably with regard to non-residential property tax,” states an outline of the recovery strategy provided by the city. It further notes that Quebec is expected to be the most impacted province in the country, with a Gross Domestic Product falling by 8 per cent in 2020, compared to Ontario and Saskatchewan which are each expected to lose 7.5 per cent GDP.

More troubling, according to findings provided by the Institut de la statistique du Québec, is that unemployment in the City of Laval rose from 4.1 per cent – as measured this past February when COVID-19 hadn’t yet taken a hold in Canada – to 14.2 per cent in May when the pandemic was well underway.

Facing the consequences

“The government had to put the economy on pause in order to slow the spread of the novel coronavirus while trying to avoid over-burdening the health system,” Mayor Marc Demers says in the preface to a document outlining the recovery plan.

“With an equal amount of courage, we must now face the consequences of the confinement on our economic health. We are currently going through a crisis without precedent, with effects that are devastating on employment and the Gross Domestic Product of the whole region.

A two-phase recovery

“Our corporate citizens, our workers and enterprises are terribly in need of support to get through this difficult period, while adapting to new realities and becoming confidently and audaciously part of the economy of tomorrow,” adds Demers, noting that the new economic development strategy will be deployed by the city over the coming months and years.

The city is taking a two-phase approach to the recovery: first they want to stimulate Laval’s economy to generate immediate results and wealth; and second they want to develop more sustainable projects which would become the basis for long-term economic progress.

Councillor Stéphane Boyer, vice-president of the City of Laval’s executive-committee who is also responsible for economic development dossiers, suggests that significant support for businesses must be prioritized if there is to be an economic recovery.

Business a priority

“The City of Laval is working relentlessly to provide aid directly to those most affected by the current situation,” he said in a statement. “While new paradigms are emerging, such as social distancing, ecological transition, food and medical security and automation, we must take a second in-depth look at ways of thinking in order to seize all the opportunities when they become available.”

According to the strategy outline, the Canadian and Quebec economies are only expected to begin improving sometime in 2021, with relaxation of confinement rules this year contributing to a rise in economic performance in the second half of 2020. But at the same time, it is expected that governments will gradually decrease their interventions.

Unemployment high

The city’s outline notes that the federal deficit, which stood at $24.9 billion in 2019-2020, will stand at $252.1 billion by fiscal year 2020-2021. As well, it points out that the fallout from unemployment will be even more severe than it was during the three most recent economic crises in 1981-82, 1990-92 and 2008-2009.

Between February and May this year, unemployment in Laval rose from 4.1 per cent to 14.2 per cent. The City of Laval recently revealed that it anticipates an eventual $60 million post-COVID-19 deficit. Officials at the City of Laval’s economic development department analyzed the municipality’s commercial and industrial sectors and came up with a list of sectors where growth or economic shrinkage are predicted.

Focusing on some sectors

On the positive side, computer software design, scientific research and food production and distribution emerge as areas where gains are already being made. However, retailing, tourism, entertainment and aerospace have lost a lot, although two of the three were on the decline already.

Other areas of Laval’s industrial sector seen as potentially productive going forward include pharmaceuticals, plastics (used in face mask and shield manufacturing), as well as engineering and architecture.

The City of Laval says it is budgeting up to $20 million for the recovery plan, only around $6.3 million of which will come out of the city’s own coffers. The remainder would come from federal and provincial programs and subsidies. The strategy would be deployed over a period of 18 to 24 months.

City to use ‘virtual currency’

A particularly fascinating aspect of the recovery plan is the city’s decision to begin using a type of “virtual currency” – similar to Bitcoin and other emerging digital moneys – as a tool to promote local buying.

Whereas perks and points programs have been used in the past by credit card companies and retailers to encourage client support, a digital currency exists through computer “blockchain” technology, which allows them to operate independently from national currencies like the Canada or U.S. dollar or the EU Euro.