Quebec unveils $117.5 million in assistance to stimulate biotechnology sector

The Quebec government has introduced a $100-million loan fund to encourage provincially based biotechnology firms to secure non-Quebec sources of financing. The fund was part of a biotechnology stimulation package included in Quebec’s March 26 mini Budget, which many view as little more than a public relations exercise to take credit for the economic upswing now taking hold in North America.

The new measure is intended to inject $200 million in financing into the Quebec biotechnology sector, thereby accelerating development and enhancing the province’s profile as a biotechnology centre.

The new fund — the Loan Capitalization Bio-Leverage Program — is to be spent in FY02-03 and it kicks in at $7 million per project to a maximum of $20 million. At least 20% of the financing secured by a firm must come from non-Quebec sources, which presumably include the rest of Canada. Once they qualify, the province will provide an interest-free loan with a pay-back period of 10 years. The approved projects must be 50% financed by equity, meaning qualifying projects can be up to $40 million.

There is a possibility the loan program will be renewed on an annual basis but this could not be confirmed.

Other measures of the biotechnology stimulation package include $9.5 million for a new biotechnology development centres in Sherbrooke and Saint-Hyacinthe. These will be designated zones modelled on a similar area in Laval where biotechnology firms will be reimbursed for 40% of salary costs up to a maximum of $15,000 per employee for up to six years. The same level also applies to eligible specialized equipment.

The package also provides $8 million for nutraceutical firms in the Quebec City region, offering a 40% credit for salary costs of eligible knowledge workers and equipment.

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