Foreign investments:
at the heart of
Greater Montreal's prosperity
According to the firm KPMG, more than 2000 mergers and acquisitions took place in Canada in 2007, with a total value of US $268.6 B. In terms of value, this represents an increase of 50% compared with 2006. Foreign companies purchased 485 Canadian companies, with transactions valued at $132.6 B. The high number of foreign takeovers in Canada over the last few years is due, amongst other things, to the low interest rate and the price escalation of raw materials.
The Conference Board of Canada has examined about thirty major mergers and acquisitions involving Canadian companies over the last thirteen years. The results of the recent study show that these transactions have ultimately had a positive effect on the companies that were purchased and on the Canadian economy as a whole.
Similarly, in a summary of 30 years of research on the subject, Statistics Canada confirmed at the end of 2007 that Canadian companies under foreign control are generally very productive, offer good jobs, pay competitive salaries and are innovation oriented.
In Greater Montréal, there are some 1,250 subsidiaries of foreign companies; that employ more than 133,000 people, i.e. more than one private-sector employee out of ten. In Greater Montréal's three high technology clusters, i.e. aerospace, life sciences and information and communications technology, nearly 30% of jobs are provided by foreign subsidiaries.
Foreign investments therefore appear to be key elements in the development of Greater Montréal's knowledge economy. In the electronic games sector, for example, recent foreign investments, including those made by Ubisoft, Electronic Arts, Eidos, VMC Game Labs, Cyanide, Javaground and Eyetronics, have been a key factor in the extraordinary boom in Montréal as a world level excellence centre. According to provisional data from the Institut de la statisque du Québec, foreign investments represented 42.9% of all Greater Montréal's non-residential private investments in 2007. This is almost one private investment dollar in two! Which goes to prove that it is vital for the metropolitan economic competitiveness to promote attraction, expansion and retention of foreign companies.
Greater Montréal:
Most competitive among the
20 largest metropolitan regions in Canada
and the United States
for R&D operating costs
According to KPMG's "Competitive Choices" study, Greater Montréal offers the most competitive R&D operating costs among the 20 largest metropolitan regions in Canada and the United States. Compared with the average American cities, Greater Montréal's performance posts a cost advantage of 15% in clinical trials, 8.6% in electronic systems testing and 5.1% in biotechnology. The data also show that the metropolis stands out in the software design sector, where it ranks first, with a cost advantage of 5.2%.
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$68 M to provide greater access
to the job market
The Minister of Immigration and Cultural Communities, Yolande James, announced new measures that will enable immigrants to quickly join the job market. A total of $68 M will be invested to implement these measures by fiscal year end 2010-2011, including $22 M in 2008-2009.
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Provincial budget: a new income tax
credit in ICT and assistance
for the manufacturing sector
From a business point of view, the Québec government's budget for 2008-2009, tabled on March 13, 2008, is mainly targeted at the manufacturing sector but also contains some structuring taxation measures for innovative activities, notably in the information and communications technology cluster.
Taxation measures to support innovation activities
- New income tax credit repayable at 30% for the development of electronic business. This measure is for companies that have more than five eligible employees and will end in December 2015;
- R&D income tax credit bonus for private partnerships.
- Companies that are members of a partnership consisting of a public organization and at least two private companies will be eligible for a "private partnership" income tax credit (at 35% covering salaries and equipment);
- $2 M to $3 M increase in R&D expenditure, giving right to the income tax credit enhanced rate.
Measures aimed at encouraging private investments
- Immediate abolition of capital tax for manufacturing companies.
- New 5% income tax credit for investments in manufacturing and processing equipment.
- Accelerated depreciation on manufacturing and processing equipment from the manufacturing sector extended to 2011.
Investments in education
- $1 B investment in higher education by 2012. Québec universities will then be able to:
- Increase their teaching and research capacities to improve their position on the world stage
- Renew teaching staff more easily and allocate teaching grants to the major disciplines (engineering, administration, etc.)
- Improve the visibility and international mobility of their students
- Increase technical and vocational education using new measures that promote training in close partnership with companies. The budget plans investments of $21 M in 2008-2009 and $33 M from 2009-2010.
Federal budget: improvement
of taxation measures
The federal government's latest budget, submitted on February 26, 2008, includes some interesting improvements to existing taxation measures. Here are the main highlights:
- Improvement of the R&D tax incentive program:
- Acceptability of R&D activities carried out abroad: tax credit for the remuneration of employees who reside in Canada and carry out R&D work abroad. The permissible expenditure will be limited to 10% of the labour costs in Canada for SR-ED work;
- Administrative improvements to the R&D tax incentive program: a series of administrative measures is proposed to facilitate access to the program, increase its uniformity and its foreseeability, and improve the quality of the request handling process;
- Increased support for small and medium sized companies: increase in the maximum permissible expenditure amount from $2 M to $3 M, and rise in the limit of the phase-out range for taxable capital from $15 M to $50 $. Likewise, the limit of the phase-out range for taxable income will increase from $600,000 to $700,000.
Investments in the
high-tech sectors
Pratt & Whitney Canada is set to launch its most powerful engine in history, the PW810. The development of this family of engines should result in the creation of 200 jobs at the company's Canadian head office in Longueuil, and in Mississauga.
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Thales, the internationally renowned French supplier of onboard electronic equipment for civil and military airplanes, has announced the inauguration of its new premises in Montréal. This new establishment, 50,000 square feet in area, will house its 145 employees as well as its state-of-the-art test bench equipment.
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Eidos, a British company specializing in electronic games, is relocating its quality assurance unit from London to Montréal. This represents an addition of 70 jobs to the Montréal studio. The company is undergoing extensive restructuring and will make Montréal its main worldwide centre for testing games. According to Mr. Stéphane D’Astous, the Montréal studio's CEO, "London has been quick to recognize the talent and low operating costs that can be found in Montréal."
Pfizer Canada, AstraZeneca, the Fonds de la recherche en santé du Québec (FRSQ) and the Ministère de la Santé et des Services Sociaux (MSSS) are injecting $4.35 M into research and education over a period of four years to improve understanding of chronic pain and the effectiveness of diagnostics and treatment. "At AstraZeneca, we have established our pharmaceutical research laboratories on analgesia in Montréal mainly because Québec is a world leader in pain research. This unique partnership gives us the opportunity to collaborate so that we can better identify the causes of chronic pain and offer patients better treatment", explains Dr. Philippe Walker, vice-president of Research, and Director of AstraZeneca laboratories in Montréal.
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Pfizer Canada and the Fonds de la recherche en santé du Québec (FRSQ) are creating the Pfizer-FRSQ innovation fund, the aim of which is to boost public research in human health in Québec and to drive forward commercialisation of innovative projects. Pfizer Canada is injecting $10 M into this project.
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Triad Semiconductor, an American company, is set to open its first subsidiary, Triad MDG, in Laval. Triad MDG will offer both advanced internal analog intellectual property development and design, as well as sales and application engineering support services for the Canadian market. Montréal International has collaborated with Triad Semiconductor during all the key stages of the project. "Greater Montréal is an important centre for the high-tech sector. It is an ideal location for Triad MDG, and we look forward to serving companies throughout Canada and beyond with the cost and time benefits of Triad’s mixed-signal integrated circuits", stressed Mr. Richard Prescott, CEO of Triad MDG.
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Eurocopter, a European company specialising in the manufacture of helicopters for the civil and parapublic market, will continue its expansion in Canada by opening a new plant in Montréal.
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Cryptomathic, a British supplier of safety material solutions, is opening an office in Montréal to meet the increasing interest from North American customers.
Averna, a Montréal company in the electronic testing sector, is investing $2.6 M in the acquisition of part of Mindready's activities. Averna will gain around fifty new employees in Montréal and Ireland.
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Creaform, a 3D digital technology solutions company based in Québec City, is opening a service office in Montréal. This will allow Creaform to offer digital, metrology and inspection services, as well as computer aided design and retro engineering.
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The Adconion Media Group, a German company specializing in Internet advertising, is opening premises in Montréal to allow the company to take a prime position in the Canadian market.
Investments in other
strategic sectors
Alliance Films, the largest independent distributor of films in Canada, is moving its headquarters from Toronto to Montréal after receiving a $100 M investment from the Société générale de financement (SGF).
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Construction has just begun on the $450-M "Lac Mirabel" project. This leisure-tourism and commercial complex in Mirabel aims to be the most impressive in its category in North America.
The Ville de Montréal will receive a $402.8 M budget from the Québec government to revitalize its road network. There will be 55 worksites in progress over the next year in Montréal.
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The Institut national de la recherche scientifique (INRS) is to build its new premises for nanotechnology in Laval. This project represents an investment of $75 M.
Transcontinental, Canada's leading printer, is investing $60 M on renovation and to acquire leading-edge equipment for its Montréal newspaper printing plant, Transcontinental Transmag.
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The École de technologie supérieure (ÉTS) in Montréal has inaugurated a new wing of its main building. This extension, costing a total of $64 M, has benefited from a $57.2 M investment from the Québec government.
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Concordia University is planning to invest $40 M in an extension of its Loyola campus. Amongst other things, this investment will go towards significant improvements to its sports facilities.
Transcontinental, has announced a $20 M investment to acquire leading-edge equipment for its Montréal South Shore printing plant, Transcontinental Interweb, to be able to continue offering its clients quality newspapers and commercial print products, including catalogues and magazines.
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The Ville de Montréal has announced an investment of $9 M for revitalizing urban infrastructures in the Saint-Viateur East area. According to a study on real estate and economic potential, private investments in renovation, building construction and additional housing potential will total almost $250 M.
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Galaxie Presse, a French company specialising in thr production of TV reports and documentaries, is establishing its corporate base in Montréal. Montréal International has acted as coordinator for this project and has organised a meeting between the top managers of the company and the Ville de Montréal. This new subsidiary, called Galaxie Communication, plans to create around twenty jobs. "Montréal represents the gateway to the North American market and has been chosen for its international and multicultural renown, its highly qualified workforce and its unique living environment in North America," said Mr. Bernard Vaillot, President and CEO of Galaxie Presse.
Tecsult, a Montréal-based engineering firm, has accepted a takeover bid from the American company Aecom Technology. It will now become the leader of Aecom development companies in Québec and the world excellence centre of the Group for hydroelectricity and dams.
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The next Canadian Grand Prix will benefit from a new press centre thanks to an investment of $2 M from the Québec government.
1600 new
aerospace jobs
Several studies are predicting an increase in turnover of more than 5% per year within the aerospace industry for a period of up to 20 years. The aerospace industry will create 1600 jobs in Québec in 2008, of which 1430 will be in Greater Montréal, according to the recruitment plans of 221 companies polled by the Comité sectoriel de main-d'oeuvre en aérospatiale (CAMAQ). At this rate, the industry should pass the mark of 49,000 workers in Québec and 45,500 in Greater Montréal this year.
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A new aerospace
research centre
The aerospace industry will have a new research centre for developing super materials. This centre is a joint initiative of the Canadian national research council (CNRC) and McGill University. Its mission is to create a new generation of materials, surface treatments and high-performance manufacturing processes capable of meeting the highly demanding requirements of the aerospace field. The centre's activities will be geared toward the manufacture of mechanically and thermally resistant light parts using a new ultra high-speed powder spraying process. The centre has received financial support from the federal and provincial governments totalling $8 M.
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Job growth: Greater Montréal is the most
high-performing metropolitan region
in the north-east of the continent
With a job growth rate of 2.5% in 2007, Greater Montréal ranks first among the five largest metropolitan regions in the north-east of the continent, ahead of Boston, Washington, Philadelphia and New York. Within North America, metropolitan Montréal is ranks fourth among the twenty most populous urban centres in Canada and the United States.
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A record for
Montréal port
The great increase in container traffic has seen the Montréal Port Authority (APM) reach a new record of 26 million tons of goods handled in 2007, an increase of 3.6% on 2006. The CEO of the MPA, Mr. Patrice M. Pelletier, is convinced that the transport of containers will be a key element in a strategy that will help the port remain the preferred gateway to the East of North America.
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Strategy for
workforce mobility
The Québec government and the professional associations will work together to establish a strategy for workforce mobility, for both the rest of Canada and for outside the country. The government will support the work of the professional associations by providing a specific fund of $5 M. This fund, available until April 2009, should enable the 45 professional associations to implement reference tools to facilitate the recognition of skills among workers trained outside Québec.
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School of Management
renews its EQUIS accreditation
The UQAM School of Management (ESG UQAM) has announced the renewal of its European Quality Improvement System (EQUIS) accreditation. This recognition puts it among the Top 100 management schools worldwide and the Top 6 in Canada. EQUIS is a seal of quality that identifies the best international vocational management schools in the world.
First annual convention for the
Gay and Lesbian international
chamber of commerce
The Gay and Lesbian international chamber of commerce will hold in Montréal from April 24–26, its first annual general meeting, which will be run in parallel with the annual congress. More than 100 business leaders from 13 different countries will meet to discuss various economic challenges and to create strategic partnerships.
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International organization
FAST established in Montréal
The recently founded FAST (Finance Alliance for Sustainable Trade) has decided to base itself at the World Trade Centre in Montréal with the help of Montréal International. FAST represents financial institutions with social involvement, agricultural producers of sustainable products and other players within the agricultural supply chain. They will work to improve the financing of Sustainable Small and Medium companies (SSME), primarily by facilitating access to loans.
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