A study released earlier this year by KPMG shows once again that Quebec cities, and Quebec as a whole, offer domestic and foreign investors definite competitive advantages and conditions conducive to sustained growth.
“In manufacturing, R&D, aerospace and life sciences, Quebec holds undeniable advantages and offers costs that are among the most attractive within the G7 countries, and that has been confirmed by the KPMG study,” said Alain Paquet, chairman of the Commission des finances publiques and MNA for Laval-des-Rapides. “This study confirms that Quebec’s advantages stem mainly from its education system, its network of infrastructures, its entrepreneurial spirit and its exceptional openness to the world.”
According to A.T. Kearney, Canada is one of the top 10 destinations for offshore activities by large corporations. Canada ranked eighth overall in A.T. Kearney’s 2004 Offshore Location Attractiveness Index but placed second in terms of people skills and business environment.
The study also found that Canada has a lower cost environment than the United States, similar or even superior education and infrastructure levels, and higher information technologies (IT) employee retention rates.
Emerging Industries
David Lesage, economist for POLE Quebec Chaudiers-Appalaches, which promotes Quebec City, said that during the past 15 years, the economy of the Quebec City region has emerged from being service-oriented to one diversified in industries such as applied technologies and life sciences.
New uses in applied technologies have resulted in innovative wood products and plastics.
“In life sciences we are seeing new pharmaceuticals and value-added foods,” he said. “These strengths attract new investments.”
A recent POLE study determined that of the 150 foreign companies located in the region, 100 are from the United States.
The Quebec City region represents the seventh most populated metropolitan area in Canada, yet offers one of the highest concentrations in R&D in the country.
One of the most distinguished research institutions in the province is Laval University.
Montreal also benefits from its concentration in R&D, which has led to a cluster of companies in life sciences, thanks in part to McGill University.
Executives with DiaTech Oncology, a Brentwood, Tenn.,-based clinical pathology laboratory that offers a technique to help physicians determine the most effective drugs to combat cancer tumor cells in individual patients, recently announced plans to locate in Montreal.
“At the time, we were contemplating other North American cities like Toronto, but our commercial realtor urged us to consider Montreal,” said Garry Latimer, CEO of DiaTech. “In the end, the city exceeded our expectations.”
Quebec was quickly put on the company’s shortlist of ideal locations.
“Once the company had inspected McGill University’s incubator laboratory space, the management team made its decision within a week to move here,” Latimer said. “The benefits were crystal clear. We immediately saw the collaborative opportunities with a leading university, a great campus location and world class scientists. It was a perfect fit for us.”
Other luring factors included Quebec’s strategic location, with access to North American and European markets, and attractive tax incentives.
Manufacturing
Quebec benefits from traditional manufacturing investments as well.
U.S.-based Owens-Illinois recently decided to invest nearly $30 million to rebuild one of the two furnaces at its glass container facility in Pointe-Saint-Charles, near Montreal.
Owens-Illinois specializes in the manufacture of packaging products and owns more than 140 plants worldwide. The company currently employs 650 people in Montreal.
Helping to encourage the investment was Hydro-Quebec.
“Our strategy is not to go after large electricity users, although we have aluminum smelters expansion in Quebec,” said Robert Jean, manager of Industrial Promotion for Hydro-Quebec. “We present the advantage of our electricity rates in projects where electricity has some importance but is only a part of the whole.”
Aerospace Sector
Aeroports de Montreal (ADM) is playing a role in drawing business expansions to Montreal, particularly in the region’s aerospace industry. This sector employs more than 35,000 workers in hundreds of companies throughout the region.
ADM is the local airport authority responsible for the management, operation and development of Montreal-Trudeau and Montreal-Mirabel international airports, the latter of which is being developed as a primary cargo airport.
Mirabel is home to world leaders, including Bombardier Inc., L-3 Communications, which recently acquired the Military Aviation Services business of Bombardier Inc., General Electric and Turbomeca.
“There is still plenty of space available for companies that wish to benefit from proximity to the world leaders established there,” said Guy Landry, director for prospection and industrial development for ADM.
A quality work force and low operating costs make Mirabel especially attractive.
KPMG’s Competitive Alternatives report recently pointed to the Montreal region as offering the lowest operating costs of any major city in North America, Europe and the Asia-Pacific region.
Means the article is accessible only to our magazine subscribers.
