Montréal, June 3, 2014 – Today the Board of Trade of Metropolitan Montreal released the results of its study entitled: Transferring businesses to the succession: a major issue for the Québec economy and the sustainability of SMEs. This study is the first ever assessment of the overall cost associated with the risk of businesses closing due to a lack of entrepreneurial succession in the next 10 years. According to our estimates, in the worst-case scenario, Québec’s GDP could drop between $8.2 and $12 billion. The study also analyzes the intentions and behaviours of owners as they approach retirement.
“The study released today innovates by focusing on the risk represented by the propensity of business owners not to plan for their succession or to underestimate the complexity and length of the transfer process,” said Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal. “In the context of an aging population, the price we will pay if we fail to improve succession and business transfers could be high. We estimate that between 5,700 and 10,000 Québec businesses are at risk of closing in the next 10 years if they are not successfully transferred. These closings could result in the loss of 79,000 to 139,000 jobs and $8.2 to $12 billion in GDP. This situation has to change.”
“It was only natural for the Fonds de solidarité FTQ to partner with the Board of Trade of Metropolitan Montreal by sponsoring this study since, like the Board of Trade, the Fonds faces daily challenges involving entrepreneurial succession,” said Gaétan Morin, Executive Vice-President, Corporate Development and Investment, at the Fonds de solidarité FTQ. “Since its foundation, the Fonds has invested $320 million with 163 partners to support local business succession. This succession, whether within the family, internal or external, is a process and not an event. It requires planning and support, earlier rather than later. All the players involved, whether economic, financial or governmental, have to work hand in hand to ensure that the resources available converge toward the goal of building tomorrow’s Québec on the solid foundations that are already in place.”
“In addition to providing a situation overview, the study looks at the obstacles to entrepreneurial succession,” Mr. Leblanc said. “These include inadequate preparation of those transferring the business and a lack of support for those taking it over. These results should prompt the Government of Québec to introduce more equitable taxation, particularly in cases of transfers within a family, to reinforce financing programs for consulting for transfer planning and to improve the coordination of organizations and programs for entrepreneurial succession and business transfers.”
Recommendations to address issues with succession and business transfers
- Stimulate entrepreneurial succession and raise owners’ awareness about the issue of planning the transfer.
- Take action for fairer taxation and strengthen the programs to fund transfer planning advisory services.
- Harmonize and coordinate the programs of organizations active in entrepreneurial succession and business transfer.
- Resolve issues specific to the agricultural sector.
To read the study, click here.
About the study
Transferring businesses to the succession: a major issue for the Québec economy and the sustainability of SMEs is a Board of Trade of Metropolitan Montreal study sponsored by the Fonds de solidarité FTQ and conducted in cooperation with Raymond Chabot Grant Thornton as part of the 2014 edition of RDV Relève inc.
About the Board of Trade of Metropolitan Montreal
The Board of Trade of Metropolitan Montreal is made up of some 7,000 members. Its mission is to represent the interests of the business community of Greater Montréal and to provide individuals, merchants, and local businesses of all sizes with a variety of specialized services to help them achieve their full potential in terms of innovation, productivity, and competitiveness. The Board of Trade is Quebec's leading private economic development organization.
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Michelle LLambias Meunier
Advisor, Media Relations
Board of Trade of Metropolitan Montreal
Tel.: 514 871-4000, ext. 4042
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Senior Advisor, Media relations and Communications
Fonds de solidarité FTQ
Tel.: 514 850-4835
Cell: 514 703-5587