The attrition of Quebec’s head offices: Looking for greener grass
The government and certain commentators continue to be alarmed by the phenomenon of head offices leaving Quebec. In the age of telecommuting, this fight can seem to be a rearguard action, but it is actually a symptom of a deep-seated problem, namely the unattractiveness of Quebec for investors, who find that the grass is greener elsewhere.
Instead of calling upon the patriotism of shareholders, the government could follow a recipe for attracting and retaining head offices that has proven itself around the world: reduce companies’ administrative, regulatory, and fiscal burdens, and reduce the cost of labour.
The fact that the Canadian Federation of Independent Business (CFIB) is presenting its 11th consecutive annual Red Tape Awareness Week shows that this prohibitive aspect of the business environment is not taken seriously enough by the authorities that caused it. Will we need to wait for the 20th edition for them to act?
Head offices are generally occupied by a company’s highest earners. Progressive income taxes and higher payroll taxes create an incentive to move to friendlier fiscal climes.
If the government wants to cultivate the Quebec garden, it has to pull out administrative and regulatory weeds, and keep the fiscal goat from devouring the vegetable patch.