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The Government Recognizes the Economic Importance of Foreign Businesses

February 7, 2013

While rereading the 2013-2014 budget of the Québec government, I was pleased to find a section on the advantages of foreign direct investment. I would like to share it with you because, by including such a section in the budget, the current government has shown that it is open to foreign investment. Such information often fails to reach the general public. So, here is an excerpt from page 26 of the 2013-2014 budget paper entitled Investing for our prosperity.

The advantages of direct foreign investment

A source of innovation

Direct foreign investment in Québec supplements investment by Québec companies and increases the available capital. In addition, this source of capital often leads to improved productivity gains, since foreign companies investing in Québec generally have higher productivity and new management practices. The resulting increase in competition encourages Québec companies to innovate and to use technologies more efficiently.

Foreign companies investing in Québec are often large corporations or multinationals. They are more oriented toward research and development, as well as innovation. By bringing new technologies with them or by developing them in Québec, they make possible certain technology transfers to Québec industry.

An impact on local businesses

Direct foreign investment also plays an important role in the growth of suppliers, in the development of cutting-edge industries and in strengthening strategic subsidiaries.

The arrival of major international players brings with it jobs and investment in cutting-edge technologies. It facilitates exchanges and networking with local SMEs. It helps to attract still more businesses.

Having world-class players in proximity can serve as a lever for Québec businesses because their demand for supplies opens up all sorts of opportunities. By securing a foothold in the supply chain of international firms, Québec businesses can gain access to markets around the world.

Francis Langlois, Analyst, Economic Research Division

Source: 2013-2014 Budget, Gouvernement du Québec

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