The Quebec economy and climate change: A sector-by-sector overview

With its target of net zero emissions by 2050, Quebec intends to participate in the joint effort to reduce greenhouse gas emissions. The province will need to make profound changes in order to successfully transition to a carbon-neutral economy. However, even if we eliminated the emission of all greenhouse gases now, their lifetime in the atmosphere would maintain global warming for at least a century, leading to amplified climate stresses and shocks. A significant proportion of businesses and organizations in different sectors of the economy are or will be impacted, to varying degrees, by climate change and Quebec’s transition to carbon neutrality. In a context of deep transformation, it is becoming increasingly important to understand the consequences (positive and negative) of climate change on the economic system and identify the economic sectors to target in order to make the province’s economy more resilient to climate change.

1. To present a methodology to quickly identify strategic industries for the climate resilience of Quebec’s economy and those of its regions 

2. To generate a summary of the economic weights and levels of climate change preparedness of ten strategic industries

3. To make recommendations to guide future research on climate change adaptation and support Quebec’s economic sectors and regions

4. To develop visual materials and information on the status of climate change adaptation for ten strategic industries

• Literature review on the categories of industries, methods for prioritizing sectors and conceptual frameworks for vulnerability analysis in order to propose a methodology to identify strategic industries for the climate resilience of the economies of Quebec and its regions

• Literature review to summarize the status of the provincial and regional economies and the level of climate change preparedness of a selection of ten strategic industries in order to produce sectoral portraits in the form of a summary sheet 

• Identification of the main parties with influence on the business ecosystems of the ten selected industries, compared to the organizations participating in the Ouranos projects during the 2014-2019 scientific program, in order to offer insight into the involvement of stakeholders

The methodological approach draws on various industry categorizations (e.g., Quebec’s Ministère de l’économie et de l’innovation, North American Industry Classification System) and conceptual frameworks for sectoral vulnerability analyses, including that of Yamasaki et al., 2012.

Ten industries were selected by sorting them according to three hierarchical criteria (Table 1):

Together, these ten industries accounted for about 50% of Quebec’s employment and GDP in 2019. When the share of GDP is broken down between the three main production sectors (primary, secondary and tertiary), Figure A shows that they cover all of the GDP from the primary sector (4%) and 19% of total GDP from the secondary sector (23%), but only 24% of total GDP from the tertiary sector (72%).

Figure A : Share of Quebec's total GDP covered by the 10 strategic industries selected in 2019.

Industries such as agriculture, fisheries and food, transportation, information and communications technology (ICT), energy, financial services and insurance are essential services for the province as well as regional economic drivers. Those identified by the Government of Québec (2020) as being the most vulnerable to climate change (tourism, forestry, agriculture, energy) are included. However, new industries were added to this list and are linked to secondary and tertiary industries (mining and forestry processing, food, financial services and insurance, and ICT).

General findings

From the sectoral portraits, also available in the form of summary sheets, some general observations can be made: 

• Knowledge is fragmentary and is relatively more advanced for industries in which climate change directly affects primary production and, to some extent, human physical health and transportation infrastructure. The information available for the secondary and tertiary sectors analyzed is still very limited. Even for industries with more advanced climate knowledge, few economic studies have been conducted to understand the extent of the financial, environmental and social costs (tangible and intangible) across Quebec and for regional structures. 

• There is insufficient preparation and it is essential to identify the most damaging hazards for strategic industries. Preliminary results show that most of the industries studied are not prepared to deal with climate issues. 

• There is a lack of data on the impacts and effects. Although increasingly recognized as significant material and financial risks to the economy as a whole (Warren and Lulham, 2021), the cascading and cumulative risks of climate change are poorly documented, both within industries and within the economic system here and abroad. 

• There is a need for a regional approach. Quebec’s vulnerability analysis must have a regional perspective in order to adjust adaptation solutions to reduce risks or seize opportunities based on the needs and economic characteristics of communities. 

• A significant amount of the work remains to be done in terms of mobilizing networks to make changes in each economic sector. Knowledge needs to be shared on key climate hazards, the amount of exposure and adaptive capacity. This pooling of knowledge will ultimately lead to a better understanding of sectoral, regional and cross-border interdependencies. 

In light of these findings, a number of recommendations were made to guide climate change adaptation research and support decision-makers and economic sectors in Quebec and its regions.

Recommendations

1. Mobilize and further engage economic networks to build a common vision of the vulnerability of economic systems affected by climate change and their interdependencies 

2. Pool multidisciplinary skills to generate integrated approaches, acquire knowledge on vulnerability and resilience, and enhance the capacity for action 

3. Disclose the risks and opportunities that industries face in securing investments and providing services to the public 

4. Through research and mobilization, document the hazards and combinations of greatest concern for Quebec’s economic sectors in order to guide and secure the public and private investments required for adaptation science 

5. Implement adaptations while taking the complexity of the economic system into account, as well as cascading effects and cross-sectoral and cross-border dependencies 

6. Measure and monitor adaptation progress to enable proactive adjustment and share examples of successful adaptation 

This portrait, although limited, offers avenues for reflection to better understand all the risks, cascading effects and cross-border impacts on Quebec’s economy. It aims to unite our forces to develop a more comprehensive assessment of the situation and thus identify the risks and opportunities related to climate change. 

As a next step, at-risk industries and regions could be identified through broader stakeholder engagement and more detailed knowledge. These actions would make it possible to better understand problematic hazards and their combinations for at-risk industries and support a certain prioritization of risks for Quebec and its regions.

Annabelle Lamy