Losses from the key pandemic relief program for businesses could further triple, exceeding $200 million, Economy Secretary Pierre Fitzgibbon said on Monday.
• Also read – Private Sector: More than $70 million in pandemic aid has gone up in smoke
The Journal revealed that those losses have already reached more than $70 million. These are sums that the state has lent to insolvent companies such as Groupe Sélection, Forex, Effenco and La Renaissance des îles.
“It is clear that with the headwind we are currently facing, it will be more difficult. So I assume that there are unfortunately other situations. There will be [d’autres] Losses,” Mr Fitzgibbon said on 98.5 FM.
The minister estimated that losses could reach “triple” what they are now, meaning Quebec would have to write off more than $200 million under the Concerted Temporary Business Action Program (PACTE).
He claimed that when this program was set up in March 2020, he estimated that losses could reach “10 to 15%” of the amounts 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 loans and the rest in loan guarantees.
“People may have forgotten, but the pandemic has been very serious for SMEs. A lot of people criticized us for not helping enough,” recalled Pierre Fitzgibbon.
In 2022, as many as 1,945 Quebec companies were in a bankruptcy situation, including 1,624 that filed for bankruptcy. That is 27% more than in 2021.
And in recent months, the number of corporate bankruptcies has exceeded pre-pandemic levels. In January, no fewer than 157 Quebec companies filed for bankruptcy.