Montréal, October 22, 2014 – Montréal International (MI), Greater Montréal’s economic development agency, today presented its recommendations at the public hearings of the Québec Taxation Review Committee. The recommendations are based on an analysis of the four main programs that make Greater Montréal attractive to businesses, i.e., tax credits for R&D, film or video production services, the development of e-business, and the production of multimedia titles. Such tax credits account for two-thirds (67%) of the total tax credits ($1.9 billion) the Québec government paid to businesses in 2013.
“Montréal is known internationally as a creative city that has carved itself a niche in high value-added sectors such as video games, visual effects, information technology, aerospace, and life sciences and health technologies. As more and more regions around the world compete for such industries, which are key to boosting job creation in Greater Montréal, the government must continue to support growth in those sectors of excellence while striving for a balanced budget,” said Mrs. Dominique Anglade, President and CEO of Montréal International.
Ms. Anglade also pointed out that the entire province stands to benefit from Greater Montréal’s economic growth. “The Montréal metropolitan area accounts for more than half of the GDP and three-quarters of high-tech jobs in the province, which are better paid than the average. As long as Greater Montréal stays competitive, it will continue to drive Québec’s economy and generate the highest tax revenues for the province. Low operating costs along with market access and the availability of strategic talent are the main attractiveness factors that help us draw foreign investors to the region,” she added.
MI’s report contains seven recommendations:
- Redirect R&D tax credits to high-tech industries (e.g., aerospace, clean technologies, information and communications technologies, life sciences and health technologies, advanced manufacturing) and commercialization. This strategy could lead to significant savings.
- Keep the tax credit for the development of e-business at its current rate of 24% of eligible salaries up to $20,000 per employee, while closely monitoring industry trends and developments.
- Keep the tax credit for film or video production services as is, while closely monitoring industry trends and developments.
- Bring the rates for multimedia tax credits back to what they were before the June 2014 budget.
- Reduce the number of tax credits and avoid spreading resources too thinly.
- Ensure tax credits are stable and predictable.
- Improve tax credit management.
To read Montréal International’s full report and recommendations, click here.
About Montréal International
Created in 1996, Montréal International (MI) is the result of a private-public partnership. Its mission is to contribute to the economic development of Greater Montréal and enhance its international status. Its mandates include attracting foreign direct investments, international organizations and international strategic workers as well as promoting the competitive and international environment of Greater Montréal. Montréal International—a non-profit organization—is funded by the private sector, the governments of Canada and Québec, the Communauté métropolitaine de Montréal (Montréal Metropolitan Community) and the City of Montréal.
Since its creation, Montréal International has helped to attract $10.6 billion in foreign direct investments to Greater Montréal. From these investments, 52,000 jobs have been created or maintained. To date, MI’s activities have also allowed almost half of some 60 international organizations to establish themselves in the city and attract and retain more than 9,000 international strategic workers.