GREATER MONTRÉAL A BRAIN POWERED ECONOMY ATTRACTIVENESS INDICATORS 2011-2012
MONTRÉAL INTERNATIONAL’S SERVICES SET-UP OR EXPANSION PROJECT IN GREATER MONTRÉAL? As a one-stop organization, Montréal International (MI) offers a wide range of customized, free and confidential services. The organization relies on the expertise of some fifty professionals, all of whom are specialists in their respective field.
STRATEGIC SUPPORT
SECTORIAL EXPERTISE
Public-private partnership, MI provides foreign companies with valuable assistance for setting-up, expansion or strategic alliance projects. They benefit from expert advice to help them take full advantage of business opportunities that will power the development of their company.
We enjoy a unique expertise in Greater Montréal’s competitive clusters. In addition to coordinating the various services required to the advance promising projects, MI provides foreign companies contemplating a move to the area with information and advice on high technology sectors such as aerospace, life science and health technologies, information and communications technology and cleantech.
OUR MISSION: MI is a non-profit organization created in 1996 as a result of a private-public partnership. Its mission is to contribute to the economic development of Greater Montréal and enhance its international status. MI is funded by some 100 members from the private and institutional sectors, as well as the Governments of Canada and Québec, the Communauté Métropolitaine de Montréal and the City of Montréal.
OUR MANDATES: / Attract, retain and expand foreign direct investment / Attract, retain and expand international organizations / Attract, welcome and retain foreign talent / Promote and reinforce Greater Montréal’s economic attractiveness and international status
KNOWLEDGE OF THE FINANCIAL AND FISCAL PROGRAMS
SITE SELECTION DATA
Companies setting-up in Greater Montréal can benefit from various government programs. MI can provide guidance in identifying the financial and tax incentives that are right for your project as well as various potential funding sources.
MI can provide a full range of comparative key information on Greater Montréal’s business environment (availability of talent, innovation, operating costs, quality of life, taxes, etc.).
INTERNATIONAL MOBILITY
GOVERNMENT RELATIONS
MI assists companies and organizations seeking to hire foreign strategic workers particularly by providing assistance with paperwork and easing the settlement process for these individuals and their families in Greater Montréal.
You will benefit from the privileged relations that we maintain with many federal, provincial and municipal partners, business and financial networks, universities and research centres.
TABLE OF CONTENTS SUMMARY
4
Greater Montréal – A Unique Blend of Creativity, Diversity and High Technology
01 / MARKET ACCESS Greater Montréal – An Integral Part of the North American Market Highlights 1.1 Information on the Area 1.2 Canada – A Natural Springboard to the North American Market 1.3 Greater Montréal – Strategic Transportation Infrastructure
6 7 10 11
02 / WORKFORCE
2.1 2.2 2.3 2.4
12
Greater Montréal – A City with a Human Dimension and a Great Place to Live, Work and Enjoy Life
13 15 17 18
Highlights 6.1 An Exceptional Quality of Life 6.2 Superior Purchasing Power
Greater Montréal – The Most Competitive Operating Costs of Any Large North American Metropolitan Area Highlights Total Operation Costs Labour Costs Facilities Costs Electricity Costs
19 20 21 22 23
04 / TAXES AND INCENTIVES Greater Montréal – A Tax Burden among the Most Competitive in North America Highlights 4.1 Corporate Taxes 4.2 Main Corporate Financial and Tax Incentives
33 34 35 36 37 38
39 40 42
APPENDICES
03 / COSTS
3.1 3.2 3.3 3.4
Highlights 5.1 Solid High Technology Clusters 5.2 A Critical Mass of High Technology Talent 5.3 Major Foreign Investment in High Technology 5.4 An Ideal R&D Environment for Businesses 5.5 A Thriving North American Venture Capital Market
06 / QUALITY OF LIFE
Greater Montréal – A Wide Array of Talent for Business and Industry Highlights Greater Montréal – Canada’s University Capital A Solid and Flexible Labour Market A Multicultural Labour Force A Linguistic Mosaic
05 / INNOVATION
24 25 27
Appendix A: Sample of Announced PrivateSector Industrial Investment Projects Appendix B: Sources Appendix C: Methodological Notes
CREDITS
44 46 48 54
SUMMARY This sixth annual edition of Greater Montréal’s Attractiveness Indicators is designed to meet the information needs of foreign investors contemplating a move to the area. It highlights the latest data on the region’s performance in North America along the six key elements that characterize a business hub:
GREATER MONTRÉAL A BRAIN POWERED ECONOMY 01 / MARKET ACCESS
02 / WORKFORCE
03 / COSTS
An Integral Part of the North American Market
A Wide Array of Talent for Business and Industry
/ A strategic location in North America – under two hours from Boston, New York and Toronto by air, less than an hour from the American border by road
/ The largest pool of university graduates in Canada with over 40,000 new graduates every year
The Most Competitive Operating Costs of Any Large North American Metropolitan Area
/ Direct access to the North American Free Trade Agreement (NAFTA) market and its 460 million consumers / The United States – Greater Montréal’s most important trading partner / Strategic transportation infrastructure, including two international airports and one of North America’s busiest ports.
/ A stable labour market – 1 among large North American metropolitan regions with a 1.7% increase in jobs during the 2008-2010 economic downturn st
/ More than 50% of the population is bilingual (French/English) and nearly 20% master three or more languages / Some 120 cultural communities are present in the area.
/ Total operating costs are 5% lower than the average for other large North American metropolitan areas / A 14% average cost advantage for R&D sectors / Potential for substantial savings particularly for: • Labour • Space • Electricity.
4 / Montréal International
04 / TAXES AND INCENTIVES
05 / INNOVATION
06 / QUALITY OF LIFE
A Tax Burden among the Most Competitive in North America
A Unique Blend of Creativity, Diversity and High Technology
/ The region’s tax burden for R&D companies is the most favourable among large international metropolitan areas due in large part to generous R&D tax credits offered by the governments of Canada and Québec
/ Constant interplay between technology, science, art and culture explains the success, among other things, of Montréal’s high technology clusters, video game industry and creative enterprises such as the Cirque du Soleil
A City with a Human Dimension and a Great Place to Live, Work and Enjoy Life
/ The lowering of the federal corporate income tax rate from 22% to 15% by 2012 means that Canada will enjoy the most competitive corporate revenue taxation rate among the G7 countries
/ Major high technology clusters responsible for one out of ten jobs are: aerospace, information and communications technologies (ICT), life science and health technologies (LSHT) and Cleantech
/ An important array of targeted and highly competitive governmentbacked incentives provide technology companies with stable support.
/ A network of universities with the largest share of research funding in Canada and a broad range of expertise in several hundred research centres
/ Greater Montréal is a cosmopolitan, bilingual and international city, with a distinct personality serving as a bridge between North America and Europe / An excellent quality/cost ratio with superior purchasing power / A safe environment with competitive health and transportation infrastructure / A green city known around the world for its cultural, recreational and sports scene as well as its talent and technology.
/ Effective intellectual property protection backed by international treaties.
Attractiveness Indicators 2011-2012 / 5
01 MARKET ACCESS GREATER MONTRÉAL –
AN INTEGRAL PART OF THE NORTH AMERICAN MARKET
/ A strategic location in North America – under two hours from Boston, New York and Toronto by air, less than an hour from the American border by road / Direct access to the North American Free Trade Agreement (NAFTA) market and its 460 million consumers / The United States – Greater Montréal’s most important trading partner
Port of Montréal
/ Efficient transportation infrastructure, including two international airports and one of North America’s busiest ports.
INFORMATION ON THE AREA1 INFORMAT THE COUNTRY: CANADA / Population: 34.1 million / Real GDP ($2002): $1,200 billion2
THE PROVINCE: QUÉBEC / Population: 7.9 million / Real GDP ($2002): $254.1 billion
THE REGION: GREATER MONTRÉAL / A strategic geographical location – a natural bridge between North America and Europe / Québec’s economic engine with 50% of the province’s population, GDP and jobs: Montréal
• Population: 3.9 million • Real GDP ($2002): $126.8 billion • Jobs: 1.9 million / It consists of 82 municipalities and covers the Island of Montréal, the cities of Laval, Longueuil and the North and South Shores of the St. Lawrence River.
DID YOU KNOW? According to the study, Global Metro Monitor: The Path to Economic Recovery, published in December 2010, Greater Montréal ranked 1st among Canadian metropolitan areas and 2nd in North America for overall economic performance following the great recession3. The area was 27th among 150 metros studied worldwide. Greater Montréal’s performance would seem to be attributable, among other things, to Canada’s sound banking system and the vitality of its port, and aerospace and electronic sectors.
Source: The Conference Board of Canada and Statistics Canada Source: Unless otherwise indicated, $ and ¢ signs refer to CA $ 3 Source: The Brookings Institution, London School of Economics and Political Science and Deutsche Bank Research, City of Montréal 1 2
Attractiveness Indicators 2011-2012 / 7
01. MARKET ACCESS
1.1
NORTH AMERICA CALGARY
VANCOUVER
MONTRÉAL
SEATTLE
OTTAWA
MINNEAPOLIS DETROIT CHICAGO
BOSTON
TORONTO
NEW YORK
CLEVELAND PHILADELPHIA
DENVER
SAN FRANCISCO
WASHINGTON
DALLAS ATLANTA
LOS ANGELES PHOENIX SAN DIEGO HOUSTON
MIAMI
FLIGHT TIME FROM MONTRÉAL BOSTON:
1 H 20
TORONTO:
1 H 20
NEW YORK:
1 H 53
CHICAGO:
2 H 21
LOS ANGELES:
6 H 28
LONDON:
6 H 40
PARIS:
6 H 49
8 / Montréal International
GREATER MONTRÉAL NORTH-SHORE Montréal-Mirabel International Airport
Laval Longueuil
MONTRÉAL Port of Montréal Montréal-Pierre Elliott Trudeau International Airport
SOUTH-SHORE
Attractiveness Indicators 2011-2012 / 9
01. MARKET ACCESS
TERRITORY FORMED BY THE 82 MUNICIPALITIES OF
Medtech, Specialist in Surgical Assistive Robots
“
We wanted to get closer to the North American market, particularly the Northeast. The choice of Montréal is based not only on its cultural affinity with France, but on the fact that it is a video game hub and the visualisation and surgical planning software technology that is of particular interest to us is readily available here. Mr. Bertin Nahum President and Founder Medtech
”
Source: Invest in Canada Source: Invest in Canada 6 Source: Institut de la statistique du Québec 4 5
10 / Montréal International
DIRECT ACCESS TO THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) MARKET / Approximately 460 million consumers and a GDP of US$17 trillion4
A FREE FLOW OF GOODS ACROSS NATIONAL BORDERS / One of the most efficient border inspection systems in the world – usual wait time of less than ten minutes5.
THE UNITED STATES – GREATER MONTRÉAL’S LARGEST TRADING PARTNER6 / The value of Greater Montréal’s exports to the United States (US) was over $30 billion in 2007, or nearly 60% of all of Québec’s exports to the US / The value of Greater Montréal’s exports to European Union (EU): almost $6 billion in 2007, or 70% of all of Québec’s exports to the EU U
DIVERSIFICATION OF FREE-TRADE AGREEMENTS ENTS / The signing of free trade agreements between Canada and several everal countries (or groups of countries): es): the European Free Trade Association tion (EFTA), Chile, Columbia, Costa Rica, Israel, Jordan, Panama and Peru. ru.
Montréal-Trudeau Airport
1.2
CANADA – A NATURAL SPRINGBOARD TO THE NORTH AMERICAN MARKET
TWO MAJOR INTERNATIONAL AIRPORTS7 / Montréal-Pierre-Elliott Trudeau International Airport • Main Canadian airport east of the Great Lakes • Natural hub for traffic between North America and Europe • Over 40 airlines, most of which are major North American or European carriers present
/ Montréal-Mirabel International Airport • A 24-hour, all-cargo airport • Some of the best operating conditions in the American Northeast – no curfew, no congestion • Regularly used by some 20 carriers and traffic is growing Nearly 200,000 of metric tons of goods transit through these two airports annually.
• 130 non-stop destinations in Canada, the United States and around the world • Nearly 13 million passengers in 2010, a 6.1% increase over the year 2009.
THE PORT OF MONTRÉAL – ONE OF THE WORLD’S BUSIEST8 / Located on the Saint Lawrence River, 1,600 km from the Atlantic Ocean / The most important container port in Eastern Canada and 9th largest in North America / Served by seven of the world’s ten largest container lines / Recognized for its efficiency in container transfer to and from ships, trains and trucks / Annual cargo volume of 25.9 metric tons in 2010, up by 5.7% over 2009.
DID YOU KNOW? Canada is known for9: / The most favourable business environment forecast for 2011-2015: 1st among G7 countries and 7th among 82 countries (The Economist Intelligence Unit, 2011) / Market access, border management, transportation and communications infrastructure and business environment: 1st among G7 countries and 8th among 125 countries measured on the Enabling Trade Index in 2010 (The World Economic Forum, 2010) / The least amount of paperwork required for exporting goods: 2nd among 125 countries (The World Economic Forum, 2010) / The fewest procedures required for creating an enterprise: 1st among 183 countries (The World Bank, 2010).
Source: Aéroports de Montréal Source: Port of Montréal 9 Source: The World Economic Forum and Invest in Canada 7 8
Attractiveness Indicators 2011-2012 / 11
01. MARKET ACCESS
1.3
GREATER M MONTRÉAL – STRATEGIC TRANSPORTATION INFRASTRUCTURE TRANSPO
02 WORKFORCE GREATER MONTRÉAL –
A WIDE ARRAY OF TALENT FOR BUSINESS AND INDUSTRY
/ The largest pool of university graduates in Canada with over 40,000 new graduates every year / A highly diverse and competent workforce due to the presence of head offices of many local companies and foreign subsidiaries / A stable labour market – 1st among large North American metropolitan regions with a 1.7% increase in jobs during the 2008-2010 economic downturn / More than 50% of the population is bilingual (French/English) and nearly 20% master three or more languages
McGill University
/ Some 120 cultural communities are present in the area.
UNIVERSITY STUDENTS / The Montréal region ranks 2nd in N North America for the number of university unive students per capita / With 11 institutions of higher learning and over 170,000 university students registered each fall1, Gre Greater Montréal has a vast source of qu qualified and creative talent at its d disposal. These institutions offer a v variety of courses and programs in b both official languages as well as in oth others, such as Spanish • Full-service Full-servi universities:
C1 / UNIVERSITY STUDENTS AS % OF POPULATION Top 20 Largest North American Metropolitan Areas, 2008 6% 5% 4% 3% 2% 1%
- Université de Montréal Univ ea po Mo lis ntr éa l De nv er Bo sto Wa n sh ing Ph ton ila de lph ia Sa nD ieg o Ne w Yo rk De tro it Ch ica go Mi am Cle i ve Sa lan nF d ran cis co To ron to Ph oe Lo n ix sA ng ele s Atl an ta Da lla s Se att le Ho us ton
nn
- Concordia University
0%
Mi
- Université du Québec à Montréal U (UQAM)
- McGill University - TÉLUQ (Télé-université) - Université de Sherbrooke Longueuil Campus • Business and public administration schools: - HEC Montréal - École nationale d’administration publique (ENAP) • Engineering and scientific research institutions: - École Polytechnique de Montréal - École de technologie supérieure (ÉTS) - Institut national de la recherche scientifique (INRS - energy/materials/telecommunications, health and urbanization/culture/society).
/ Greater Montréal also has over 120,000 junior college students and more than 50,000 vocational training students every year, receiving the kind of education needed to meet the needs of foreign companies
DEGREES / Greater Montréal is the Canadian metro area in which the largest number of undergraduate and graduate degrees is awarded annually
/ In 2009, over 7,400 or 17% of all graduates earned a bachelor’s, master’s or doctoral degree in a tech-related field2 / In 2009, close to 7,800 students graduated with a bachelor’s, master’s or doctoral degree in some value added fields in business, art, law and social or pure science. This sample represents close to 18% of all university degrees earned.
/ Over 415,000 students earned a degree in the Greater Montréal area between 1998 and 2008. This represented 30% and 60% more than in Toronto and Vancouver respectively. Over 28,000 of them (approximately 7%) were foreign students: a first in Canada.
The following ratios were used to estimate the number of university students and graduates in the Montréal metropolitan area between 1998 and 2009: 70% for the Institut national de la recherche scientifique (INRS), 55% for TÉLUQ (Télé-université), 50% for the École nationale d’administration publique (ÉNAP) and 10% for the Université de Sherbrooke. Additional information is available in Appendix C 2 Data for 2009 is provisional 1
Attractiveness Indicators 2011-2012 / 13
02. WORKFORCE
2.1
GREATER M MONTRÉAL – CANADA’S UNIVERSITY CAPITAL
EXAMPLES OF UNIVERSITY-LEVEL HIGH-TECH PROGRAMS / AEROSPACE • Bachelor’s Degree in Aerospace Engineering3 - The first bachelor’s degree program in aerospace engineering in Québec was offered by the École Polytechnique de Montréal in the 2010 Winter semester - The program was developed in conjunction with partners from the industry (Bell Helicopter Textron, Bombardier Aerospace) and education (Collège ÉdouardMontpetit’s École nationale d’aérotechnique) • Master’s Degree Program in Aerospace Engineering4 - Concordia University offers a master’s-level program in conjunction with other Québec universities (École de technologie supérieure (ÉTS), École Polytechnique de Montréal, Université Laval, McGill University and Université de Sherbrooke), industry (Bell Helicopter Textron, Bombardier Aerospace, CAE, EMS Technologies, Esterline CMC Electronics, Pratt & Whitney Canada, Rolls-Royce Canada and others) and government (the Canadian Space Agency) - Areas of specialization: aerospace propulsion, avionics and control, structures and materials, and space engineering.
Source: École Polytechnique de Montréal Source: Concordia University 5 Source: McGill University 6 Source: Université de Montréal 7 Source: National Design and Animation Centre (NAD) 8 Source: École de technologie supérieure (ÉTS) 3 4
14 / Montréal International
/ LIFE SCIENCE AND HEALTH TECHNOLOGIES (LSHT) • Bachelor’s Degree Program in Biochemistry (major program)5 - Bachelor’s-level program offered by McGill University - Prepares students to conduct and evaluate drug discovery and assessment studies in industrial, academic or government settings • Master’s Degree Program (M. Sc.) in Pharmaceutical Science (with specialization in drug discovery)6 - Master’s-level program offered by the Université de Montréal - Prepares students to conduct and evaluate drug discovery and assessment studies in industrial, academic or government settings.
/ INFORMATION AND COMMUNICATIONS TECHNOLOGIES (ICT) • Bachelor’s Degree Program in 3D Animation and Digital Design7 - Bachelor’s-level program offered by the National Design and Animation Centre (NAD) in conjunction with the Université du Québec à Chicoutimi (UQAC) since August 30, 2010 - A solid and comprehensive as well as practical and theoretical training in 3D animation with specialization in cinema, television or video games • Master’s Degree Program in Software Engineering8 - Master’s-level program offered jointly by the École de technologie supérieure (ÉTS) and the Université du Québec à Montréal (UQAM) - Focused on software or information system development or management.
/ Foreign companies can count on a labour force of 2.1 million individuals to meet their manpower needs / In terms of job growth, Montréal was 1st among North America’s major metropolitan areas during the 2008-2010 economic recession. Total employment grew by an average of 0.9% per year (for a total of 1.7%). These findings are further proof of the quality and diversity of Montréal’s economy / The added-value professional, scientific and technical services subsector, which represents nearly 10% of all jobs in Greater Montréal, grew by over 8% between 2009 and 2010. This increase was due, among other things, to the strong performance of the following subsectors: computer systems design and related services (14.9%), architectural, engineering and related services (9.0%) and management, scientific and technical consulting services (26.7%).
9
02. WORKFORCE
100 90 80 70 60 50 40
nto Yo Mo rk ntr Lo s A éal ng ele s Ch ica go Bo sto Va n nc ou Sa ve nF r ran cis Ph co ila de lph ia Atl an ta Da lla Sa nD s ieg o Ho us ton Mi am Mi nn i ea po Wa lis sh ing ton De nv er Ph oe nix Se att le De tro it
WORKFORCE CHARACTERISTICS
North American Metropolitan Areas, 2011
w
/ Greater Montréal ranks 3rd in North America and 5th among 110 major cities for the lowest overall risk related to recruitment, employment and relocation, (Aon Hewitt, Consulting, Global Research Center, 2011)
C2 / OVERALL EMPLOYEE RECRUITMENT, EMPLOYMENT AND RELOCATION INDEX (25 TO 250)9
To ro
EMPLOYEE RECRUITMENT, EMPLOYMENT AND RELOCATION
Ne
2.2
A SOLID AN AND FLEXIBLE LABOUR M MARKET
T1 / CHARACTERISTICS OF GREATER MONTRÉAL’S LABOUR FORCE 2009 -2010
Category
2009
2010
Population 15 years and older (M)
3.1
3.1
1.4%
Labour force (M)
2.1
2.1
2.1%
Jobs (M)
1.9
1.9
2.8%
Unemployment (K)
189.9
181.9
-4.2%
Unemployment rate
9.2%
8.6%
Participation rate
66.7%
67.2%
Employment rate
60.6%
61.4%
Growth 2009-2010
The index consists of five sets of indicators: demographics, education, employment practices, government regulations and talent development,
Attractiveness Indicators 2011-2012 / 15
/ They represent: • Over 1,900 foreign subsidiaries operating some 2,100 facilities • Over 165,000 direct and 100,000 indirect jobs, over 50% of which in facilities with 250 or more employees • 9% of all jobs and 13% of private sector jobs • Over 20% of the region’s GDP ($26 billion in annual expenditures)
Top 20 Largest North American Metropolitan Areas, 2008-2010 4% 2% 0% -2% -4% -6% -8%
ntr éa l To ron to Ho us ton Da Mi lla s nn ea po lis Bo sto n Ph oe nix Se att Wa le sh ing ton Ne w Yo r Sa nD k ieg Ph o ila de lph ia Mi am Cle i ve lan d Ch ica go De Sa nv nF ran er cis Lo co sA ng ele s De tro it Atl an ta
/ Foreign subsidiaries established in Greater Montréal contribute to the development of human capital and growth of Greater Montréal’s international competitiveness
C3 / VARIATION IN TOTAL EMPLOYMENT (%)
Mo
FOREIGN SUBSIDIARY EMPLOYMENT
Quays of the Old Port, Montréal
• An important magnet for investment: in 2009, nearly one out of every three non-residential private investment dollars originated with a foreign subsidiary ($3.3 billion).
16 / Montréal International
Top 20 Largest North America Metropolitan Areas, 2008-2009 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0%
Ubisoft, Montréal
migration / With an international mig 44,000 between balance of nearly 44,00 2009, Greater July 2008 and June 2 Montréal ranks 7th in North America in that category. F From a percentage of total populati population perspective, it comes in 2nd among top North American me metro areas. These numbers un underline the fact that the region is b becoming increasingly attractiv attractive to immigrants and particu particularly foreign strategic talent.
C4 / INTERNATIONAL MIGRATION BALANCE AS % OF TOTAL POPULATION
Attractiveness Indicators 2011-2012 / 17
02. WORKFORCE
/ The richness and diversity of Great Greater Montréal’s workforce is due to the meeting between the Anglophon Anglophone and Francophone communitie communities and integration of over 120 immig immigrant cultural groups
To ron Mo to ntr éa l Mi Sa am nF i ran cis co Ph oe nix Ne w Yo Lo rk sA ng ele s Ho us ton Da lla Wa s sh ing ton Atl an ta Bo sto n Ch ica go Sa nD ieg o Se att le De nv Mi er nn ea po Ph lis ila de lph ia De t Cle roit ve lan d
2.3
A MULTICUL MULTICULTURAL LABOUR F FORCE
A LINGUISTIC MOSAIC
After having led many of our first foreign employees through the steps for obtaining a work permit, Montréal International (MI) has also allowed us to discover many specialists and qualified workers with potentially interesting profiles. Mr. Helmut Herold Regional Director Québec and Eastern Canada REpower Systems
10
Source: Invest in Canada
18 / Montréal International
/ Nearly 20% of Greater Montréal’s residents speak at least a third language. This compares to 11% in Toronto and 9% in Vancouver.
Top 5 Largest Canadian Metropolitan Areas, 2006 60% 50% 40% 30% 20% 10%
To ron to Ca lga ry Va nc ou ve r
a
taw
l
0%
ntr éa
“ ” “ ”
Our Greater Montréal facility provides us with an extraordinary amount of recruitment flexibility because it’s just as easy to find talent here as to bring in American workers or our own European employees, notably from our French subsidiary, willing to work in a bilingual environment.
/ Over 50% of the population is bilingual (French/English) as compared to only 8% in either Toronto or Vancouver
C5 / BILINGUAL POPULATION (%)
Ot
REpower Systems AG Will Be Manufacturing Wind Turbines in Québec
/ In all, some 80 languages are spoken in Greater Montréal, a significant asset when dealing with foreign markets. Over two million residents are fluent in English – 6% more than Vancouver
Mo
2.4
DID YOU KNOW? Canada is recognized10 : / For its post-secondary education attainment level 2nd among OECD countries (International Institute for Management Development, 2010) / For the quality of training provided by its topflight business schools 1st among G7 countries and 3rd among 139 countries (The World Economic Forum, 2010) / For the availability of qualified engineers in its labour force 2nd among G7 countries (International Institute for Management Development, 2010)
03 COSTS
GREATER MONTRÉAL –
THE MOST COMPETITIVE OPERATING COSTS OF ANY LARGE NORTH AMERICAN METROPOLITAN AREA
/ Total operating costs are 5% lower than the average for other large North American metropolitan areas / An average cost advantage of 14% in R&D sectors / Potential for substantial savings particularly for: • Labour • Space
Palais des congrès de Montréal (Montréal Convention Centre)
• Electricity
TOTAL OPERATING COSTS
/ R&D sectors (13.5%) and corporate and IT services (6.6%) enjoy the best cost-advantage over the average for other large North American metropolitan areas / Cost differences are especially evident for R&D sectors primarily because of the competitive cost of scientific and technical talent and tax breaks for R&D related expenses in Greater Montréal. In this regard, tax credits offered by the governments of Canada and Québec represent a major incentive for innovating companies.
C6 / AVERAGE BUSINESS OPERATING COSTS FOR 17 SECTORS1 (MONTRÉAL = 100) Top 20 Largest North American Metropolitan Areas*, 2011 115 110 105 100 95
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/ Greater Montréal has the most competitive operating costs of all of North America’s largest metropolitan areas. All sectors combined, its cost advantage is over 5% lower than the average for the 19 other major North American metros. This represents an enticing advantage for foreign companies looking for greater proximity to their North American customers
Mo
3.1
* Available in the study Note: Exchange rate: CA$1 = US$1
C7 / GREATER MONTRÉAL’S COST-ADVANTAGE (%) OVER THE AVERAGE FOR THE OTHER 19 LARGEST NORTH AMERICAN METROPOLITAN AREAS Sample of Five Subsectors, 2011 25% 20% 15% 10% 5%
Note: Exchange rate: CA$1 = US$1
1
Please see Appendix C for a complete list of these sectors
20 / Montréal International
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LABOUR C COSTS
/ Enterprises stand to benefit from Greater Montréal’s competitive sala salary structure to lower their labour co costs cities / When compared to large US cit Phoenix, such as Boston, Chicago, Pho Toronto, average San Diego, Seattle and Toron high-level occupasalaries for some high-lev 11% lower in tions range from 3% to 1 Greater Montréal
T2 / AVERAGE ANNUAL BASE SALARIES (US$) – EIGHT REPRESENTATIVE OCCUPATIONS Sample of 6 large North American Metropolitan Areas, January 1, 2011
Montréal R&D Director
/ According to KPMG (2011), Greater Montréal rranks 1st among North America’ America’s largest metropolitan areas in term terms of competitive total labour costs (including base salary and stat statutory and other benefits)2. Th They are nearly 4% lower than the 17-sector average / Table T3 lists employer paid statutory benefits in Québec.
Chicago
San Diego
Seattle
Boston
106,980
113,832
118,474
118,982
126,434
127,469
Montréal
Toronto
Chicago
San Diego
Seattle
Boston
Manager
especially signifi/ This advantage is e technology companies cant for high tech for whom labour often represents the cost factor single largest c
Toronto
93,171
99,136
101,526
101,810
108,619
109,187
Montréal
San Diego
Chicago
Seattle
Toronto
Boston
90,254
92,044
93,405
94,324
96,030
99,698
Montréal
Chicago
Seattle
San Diego
Toronto
Boston
91,903
92,067
92,837
94,006
97,786
98,945
Montréal
Chicago
Seattle
San Diego
Toronto
Boston
Software Designer
Aerodynamics Engineer
Industrial Engineer
81,547
83,179
83,905
84,909
86,764
89,297
Montréal
Seattle
San Diego
Chicago
Toronto
Boston
Scientific Researcher
75,206
75,809
76,587
76,785
80,001
82,244
Montréal
San Diego
Toronto
Chicago
Seattle
Boston
72,571
76,422
77,203
77,588
78,801
82,772
Montréal
Seattle
San Diego
Chicago
Toronto
Boston
71,090
73,510
73,991
74,123
75,631
79,321
Computer Systems Programmer
Chemist Note: Exchange rate: CA$1 = US$1
T3 / PAYROLL CALCULATION ($) Province of Québec, 2011
Gross Salary (Annual)(1)(2)
Notes:
125 000
2,217.60
2,217.60
Québec Parental Insurance Plan (employee: 0.537%, employer: 0.752%)
481.28
481.28
481.28
Employment Insurance (employee: 1.41%, employer 1.974%)
872.51
872.51
872.51
Health Services Fund (2.7% if total salary expenditures are less than $1 million)
2,025.00
2,700.00
3,375.00
Commission des Normes du Travail (Labour Standards Board) (0.08%)
51.20
51.20
51.20
Commission de la Santé et de la Sécurité au Travail (Work Health and Safety Board) (service sector rate = 0.60%)
384.00
384.00
384.00
6,031.59 (8.04%)
6,706.59 (6.71%)
7,381.59 (5.91%)
Total cost Please see Appendix C for a definition of the various costs
100 000
2,217.60
Total
2
75 000
Québec Pension Plan (4.95%)
(1) (2)
81,031.59
106,706.59
132,381.59
According to the Act respecting labour standards, vacation pay must be at least 4% of gross wages Statutory holidays (+/- 10 days, or 4% of gross wages) are included in gross salary
Attractiveness Indicators 2011-2012 / 21
03. COSTS
3.2
FACILITIES COSTS
80 60 40 20
Notes:
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Yo rk (2
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Wa s
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/ According to Cushman & Wakefield (2011), leasing costs for industrial space was US$4.90 sq ft/year in Greater Montréal as compared to US$7.00 sq ft/year in the 12 other large North American metros included in the study.
12 Largest North American Metropolitan Areas, 2010
To ro
/ In 2010, Cushman & Wakefield (2011) assessed these costs at approximately US$19 sq ft/year for a Class A building in Greater Montréal’s core business district. This compared to an average US$43.20 sq ft/year in the 11 other large North American metropolitan areas included in the survey
C8 / AVERAGE OFFICE RENTAL RATE (US$/SQ FT/YEAR)
ntr éa
/ Office and industrial space is available at extremely competitive rates throughout Greater Montréal. This is true in the downtown core as well as adjacent locations on the North and South Shores of the St. Lawrence River
Mo
3.3
West Downtown Average rent does not include service charges and local taxes. Except for Los Angeles and New York, the data are for office space located in the central business district. The exchange rate used in the survey: CA$1 = US$1.0063 (December 31, 2010) (1) (2)
C9 / AVERAGE INDUSTRIAL RENTAL RATE (US$/SQ FT/YEAR) 13 Largest North American Metropolitan Areas, 2010 16 12 8 4
Notes:
(2)
22 / Montréal International
)
sto Sa
nF
ran
cis
Bo
Los Angeles County Silicon Valley/San Jose The US average corresponds to the gross rental rate. The exchange rate used in the survey: CA$1 = US$1.0063 (December 31, 2010) (1)
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0
ELECTRICITY COSTS ELECTRIC
THQ, Video Game Industry Leader, Comes to Montréa Montréal
“
Government rnment suppor support, in the form of reimbu reimbursable tax credits and o other incentives, ena enabled Montréal to sstand out as offering the best combination of creative combinat talent an and favourable economic conditions econo among the cities that we amo co considered for our new studio. Mr. Dave Gatchel General Manager THQ Montréal
”
/ In Greater Montréal, a company would have paid 10.09¢/kWh on April 1, 2010 (based on monthly consumption of 10,000/kWh and power demand of 40 kW). Comparable consumption would have cost an average 13.6¢/kWh in the other large North American metropolitan areas surveyed by Hydro-Québec (2010) / Québec’s vast hydroelectric resources, combined with its state-of-the-art transportation and distribution network, ensure safe and competitively priced energy for companies operating in the Greater Montréal area.
/ Electricity rates are among the most competitive and stable in the world thanks to a hydroelectric asset base that shelters them from oil or natural gas price fluctuations / Hydro-Québec is a Crown corporation that ensures the distribution, transportation and production of electricity across the province. Hydroelectricity, a clean and renewable form of energy, accounts for 98% of its power production3.
T4 / AVERAGE ELECTRICITY RATES (¢/KWH – TAXES INCLUDED) – SMALL POWER BUSINESS CONSUMERS 10 Largest North American Metropolitan Areas, April 1, 2010
Small Power Business Consumers Power
40 kW
Consumption
10 000 kWh
Utilisation Factor
35% 6.43
Seattle Houston
6.58
Montréal
10.09
(1)
Chicago(1) Miami(1) Toronto
10.79 11.77 12.08
Detroit(1)
12.68
San Francisco(1)
18.98
Boston
19.21
New York
24.16
(1)
Note: Hydro-Québec calculated these estimates. Actual cost could vary depending on use. The exchange rate used here: CA $1 = US $0.9926 (April 1, 2010) Source: Hydro-Québec, 2010 (1)
3
Source: Hydro-Québec
Attractiveness Indicators 2011-2012 / 23
03. COSTS
3.4
04 TAXES AND INCENTIVES
A TAX BURDEN AMONG THE MOST COMPETITIVE IN NORTH AMERICA
/ The region’s tax burden for R&D companies is the most favourable among large international metropolitan areas due in large part to generous R&D tax credits offered by the governments of Canada and Québec / The lowering of the federal corporate income tax rate from 22% to 15% by 2012 means that Canada will enjoy the most competitive corporate revenue taxation rate among the G7 countries
Downtown, Montréal
/ An important array of targeted and highly competitive governmentbacked incentives provide technology companies with stable support.
24 / Montréal International
CORPORATE TAXES CORPORA TOTAL TAX BURDEN
Mr. Louis Frenette President and CEO Danone Canada
”
• 87% lower than the US average mainly because of generous tax credits offered by the governments of Canada and Québec.
• 40% lower than the US average.
C10 / TOTAL TAX INDEX, AVERAGE FOR R&D SECTORS (AVERAGE FOR US CITIES = 100) Top 20 Largest North American Metropolitan Areas*, 2010 120 80 40 0
ntr éa l To ron to Ph oe Mi nix nn ea po lis De tro it Bo sto n Mi am i Atl an ta Ne w Yo Ph rk ila de lph ia Ch ica go De nv Wa er sh ing ton Sa nD ieg o Se att l e St. Lo Lo s A uis ng ele s Da lla s Ho Sa us ton nF ran cis co
“
Montréal réal Internation International’s involvement greatly contributed to br bringing the DanActive p project to fruition in the Montréal area. Their support helped us obtain the financial aid need needed to ensure the implementation of our implem investment project. inve
/ Greater Montréal’s corporate tax burden is the lowest in North America and 4th lowest among the world’s largest metropolitan areas. This is based on a 17-business sector average
Mo
Danone Expands Its Boucherville Facility
/ Greater Montréal ranks 1st in North America and 2nd among the largest international metropolitan areas for the lightest tax burden for R&D companies
* Available in the study
Attractiveness Indicators 2011-2012 / 25
04. TAXES AND INCENTIVES
4.1
CORPORATE TAX RATE / Greater Montréal has one of one most competitive tax rates in North America.
T5 / COMPARATIVE CORPORATE TAX RATES – MANUFACTURING AND NON MANUFACTURING COMPANIES Sample of Canadian Provinces and American States, 2011
Manufacturing Companies Effective Tax Rate (%) Federal
Provincial/ State
City/ Some States
TOTAL
Outside the city of reference --
Ontario
16.50
10.00
--
26.50
Québec (Montréal)
16.50
11.90
--
28.40
--
Texas
31.50
1.00
--
32.50
--
Massachusetts
28.96
8.25
--
37.21
--
Illinois
28.82
8.65
--
37.47
--
New Jersey
28.70
9.00
--
37.70
--
California
29.03
8.84
--
37.87
--
New York
26.39
7.10
10.05
43.54
36.69
Non-Manufacturing Companies Effective Tax Rate (%)
26 / Montréal International
Federal
Provincial/ State
City/ Some States
TOTAL
Outside the city of reference --
Ontario
16.50
11.50
--
28.00
Québec (Montréal)
16.50
11.90
--
28.40
--
Texas
34.65
1.00
--
35.65
--
Massachusetts
32.11
8.25
--
40.36
--
California
31.91
8.84
--
40.75
--
New Jersey
31.85
9.00
--
40.85
--
Illinois
31.91
9.50
--
41.18
--
New York
29.00
7.10
10.05
46.15
39.62
4.2
MAIN CORPORATE FINANCIAL AND TAX INCENTIVES1
RESEARCH/INNOVATION/ HIGH TECHNOLOGY
T6 / EXAMPLE ($): SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT (SR&ED) TAX INCENTIVE PROGRAM, 2011
R&D Tax Credit
Canada / The Government of Ca currently offers a 20% tax credit Government of Québec and the Governme refundable tax credit a 17.5% refundab / Together, these two measures R&D-related taxes by more lower R&D-re than 50%
Assumption: • Private, foreign-controlled company • 20 eligible employees @ $50,000/year • 100% of employee work related to eligible activities • Subcontractor: $200,000 • Equipment: $150,000 Québec 1,000,000
Wages
1,000,000
Prescribed proxy amount @ 65%
650,000
Subcontractors(1)
200,000
Equipment
150,000
Québec SR&ED tax credit(2)
Federal tax credit @ 20% and Québec tax credit @ 17.5% Notes:
National Research Council Canada (NRC)
Federal
Total
100,000
-192,500 1,807,500
1,100,000
361,500
192,500
554,000
Only 50% of the amount paid to a subcontractor is eligible for the Québec tax credit. In Québec, only R&D-related wages are considered eligible for the R&D tax credit; expenditures for materials, equipment and overhead are not covered (2) In calculating the combined credit, the federal tax credit is reduced by the provincial tax credit receivable (1)
1
Sources: the City of Montréal, Deloitte, Emploi-Québec, Industrial Technologies Office, International Financial Centre Montréal, Investissement Québec, Ministère du Développement économique, de l’Innovation, de l’Exportation du Québec, Montréal International, National Research Council Canada, Québec Film and Television Council, Raymond Chabot Grant Thornton
Attractiveness Indicators 2011-2012 / 27
04. TAXES AND INCENTIVES
/ The governments of Canada and Québec have been offering R&D tax credits since the mid mid-1980s
RESEARCH/INNOVATION/HIGH TECHNOLOGY (CONTINUED)
Refundable Tax Credit for the Development of e-Business / Offered by the Government of Québec
T7 / EXAMPLE ($): COMBINED PROVINCIAL REFUNDABLE TAX CREDIT FOR THE DEVELOPMENT OF E-BUSINESS (CDAE) AND FEDERAL SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT (SR&ED), 2011
/ Eligibility period: March 14, 2008 to December 31, 2015 / 30% refundable tax credit for wages paid to eligible employees / Limit of $20,000 per employee, per year / To be eligible for this tax credit, information technology and human resource services activities must fall under the following North American Industry Classification System codes (NAICS): • 334110 - Computer and Peripheral Equipment Manufacturing • 334220 - Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Assumption: • Private, foreign-controlled company • 20 eligible employees @ $50,000/year • 100% of employee work related to SR&ED and CDAE eligible activities Federal
Québec
Wages
1,000,000
1,000,000
Prescribed proxy amount @ 65%(1)
650,000
Québec CDAE credit(2)
0
Federal SR&ED credit @ 20% and Québec CDAE credit @ 30% Notes:
(1) (2)
1,650,000
1,000,000
330,000
300,000
Total
630,000
Limited by the company’s other expenses The CDAE does not include R&D expenses
• 417310 - Computer, Computer Peripheral and Pre-Packaged Software Wholesaler-Distributors • 443120 - Computer and Software Stores • 511210 - Software Publishers • 51821 - Data Processing, Hosting and Related Services • 541510 - Computer Systems Design and Related Services • 561320 - Temporary Help Services
Bell Canada
• 561330 - Professional Employer Organisations
28 / Montréal International
Refundable Tax Credit for the Production of Multimedia Tit Titles
T8 / TAX CREDIT CALCULATION FOR THE PRODUCTION OF MULTIMEDIA TITLES, 2011
/ Offered by the Government of Québec / Since December 19, 2002, include: eligible categories include • Category 1: Titles produced p without being part of a commission and destined for commercial commercia markets
Category 1 Multimedia Titles
Category 2 Multimedia Titles
Basic credit
30% of eligible labour costs
26.25% of eligible labour costs
Bonus for titles available in French
7.5% of eligible labour costs
N/A
37.5% of eligible labour costs
26.25% of eligible labour costs
TOTAL
• Category 2: Other multimedia titles
T9 / EXAMPLE ($): COMBINED PROVINCIAL TAX CREDIT FOR MULTIMEDIA TITLES AND FEDERAL SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT (SR&ED), 2011
Assumption: • Private, foreign-controlled company • 20 eligible employees @ $50,000/year • 100% of their work related to multimedia production and SR&ED eligible activities • Company specialized in multimedia production • The multimedia titles were not commissioned and are available in French Federal
Québec
Wages
1,000,000
1,000,000
Prescribed proxy amount @ 65%(1)
650,000
Tax credit for the production of multimedia titles(2)
0
Federal SR&ED tax credit @ 20% and provincial tax credit for the production of multimedia titles @ 30% Notes:
(1)
1,000,000
330,000
375,000
705,000
Limited by the company’s other expenses The refundable tax credit for the production of multimedia titles does not include R&D expenses
Ubisoft, Montréal
(2)
1,650,000
Total
Attractiveness Indicators 2011-2012 / 29
04. TAXES AND INCENTIVES
which production / For titles on w began after June 12, 2003, are calculated as shown credits ar in table T8.
RESEARCH/INNOVATION/HIGH TECHNOLOGY (CONTINUED)
Tax Holiday for Foreign Researchers and Experts
Laval Biotechnology Development Centre (LBDC)
/ The Government of Québec established a tax holiday for foreign researchers. It became permanent in 1996 and was extended to cover foreign experts in 1999
/ A Government of Québec program designed to bring biotechnology businesses together at designated facilities adapted to their needs
/ It consists of a five-year Québec income tax exemption allowing eligible individuals to deduct the following: • 100% of their wages for years 1 and 2
National Research CouncilIndustrial Research Assistance Program (NRC-IRAP) / For over 60 years, assistance for small and medium businesses (SME) to build their innovation capacity
/ Since March 31, 2004, financial aid granted to companies involved in biotechnology innovation has been standardized / It consists of refundable tax credits (see table T10)
/ Partnership with over 100 regional organizations and 1,000 private suppliers allowing SMEs to connect with individuals and organizations capable of providing them with assistance.
• 75% for year 3 • 50% for year 4 • 25% for year 5
Strategic Aerospace and Defence Initiative (SADI) / Close to $900 million invested by the Government of Canada between 2007 and 2011 / In its 2011 budget, the Government of Canada announced that it would ensure stable funding for SADI following a 12-18 month consultative review / Repayable contribution equal to 30% of a strategic R&D project’s eligible costs for Canadian aerospace and defence industries.
Program for the Attraction and Retention of Research Investment (PARIR) / Developed by the Government of Québec as part of the 2007-2010 Québec Research and Innovation Strategy and carried over into the 2010-2013 plan / Aimed at establishing and developing private research activities in Québec / Provides grants that can cover up to 15% of the expansion or construction of research facilities and 15% of related equipment costs.
T10 / LAVAL BIOTECHNOLOGY DEVELOPMENT CENTRE (LBDC) TAX CREDIT PROGRAM, 2011
Item
Conditions
Duration
Wages of an eligible employee
30% of wages paid to eligible employees ($11,250 limit per employee)
Up to 10 years (until December 31, 2013)
Eligible material
30% of the cost of eligible specialized material acquired or leased by the corporation (3 years)
3 years (purchase) 5 years (lease)
30% of eligible leasing fees
5 years
Specialized facilities
30 / Montréal International
/ A variety of solutions for over 10,000 SMEs annually: technical and business advice, financial assistance, market intelligence and national and international networking and linkage services
/ Applicable to new eligible corporations dedicated to the commercialization of intellectual property developed in Québec universities and public research centres / To be eligible, a company must have been (or be) incorporated in Canada between March 19, 2009 and April 1, 2014 and have started to carry on an eligible commercialization business within 12 months of its incorporation
WORKFORCE Financial Assistance for Job Creation and Training / Since 1998, Government of Québec technical and financial assistance has been available to help businesses meet their need for new talent / This assistance can consist of: • Up to 25% of eligible costs for the implementation of a training program • Up to 50% of costs incurred for the creation of a human resource department / A special fund exists for job-creation “major economic initiatives”. To be eligible for and benefit from, among other things, the above mentioned contributions, a company must: • Submit a project that will have a significant impact on regional employment or one that comes on the heels of a major investment, or
T11 / TERMS OF REFERENCE FOR THE TAX HOLIDAY FOR THE COMMERCIALIZATION OF INTELLECTUAL PROPERTY, 2009
Exemption Duration Eligible corporations
Eligible activities Eligible intellectual property
- 100% on corporate income - First ten years following incorporation - Established in Québec - Incorporated in Canada - Must derive at least 90% of income from commercialization activities - The making of goods whose value stems from intellectual property - The selling of goods whose value stems from intellectual property - Intellectual property developed in Québec universities and public research centres
INVESTMENT Strategic Support for Investment (PASI) / A program created by the Government of Québec in 2004 / Assistance in the form of interest-free loans, equity-type loans, loans with interest repayable through royalties, contributions repayable through royalties or loans guarantee – a non-repayable contribution is also a possibility
/ The minimum amount required is $5 million for investments and $2 million for product development projects; the Government of Québec’s Economic Project Support Program (PSPE) remains an attractive option for projects worth less these amounts / Government financial assistance shall not exceed 50% of a project’s total cost / Duration of financial support shall not to exceed 10 years.
/ Two types of eligible projects: • Investments • Development of unique products / Some targeted sectors: manufacturing, software publishing, call centres and waste recovery and processing / A loan guarantee can cover up to 70% of an investment’s net loss.
• Create 50 new full-time, lasting jobs over a 24-month period.
Attractiveness Indicators 2011-2012 / 31
04. TAXES AND INCENTIVES
Tax Holiday for the Commercialisation of Intellectual Property
REAL ESTATE
FINANCE
FILM
PR@M-Industry
Refundable Tax Credits for International Finance Centres (IFC)
Tax Credit for Film Production Services
/ A program created in 2008; its eligibility period ends on December 31, 2012 / The City of Montréal offers owners of non-residential buildings a five-year general property tax rebate on the increase in property value resulting from the construction, conversion or expansion of an industrial building
/ Created in 1986 by the Government of Québec and amended in its 20102011 budget
/ How it works:
/ An IFC must have at least six employees
• A subsidy paid over a period of five years as follows: 100% 100% - 100% - 80% - 80% • An annual subsidy ceiling of $1 million • A three-year deadline for project completion after the eligibility date • Eligible activities include: manufacturing (in general); film and video production; information system design; packaged software design; call centres; head offices (and related activities); physical science, engineering and life science R&D; architecture, engineering, specialized design and environmental consulting services; the performing arts and theatre and museum operation.
/ Provides an annual refundable tax credit of 30% on wages paid to eligible employees
/ Employees must work full-time for the IFC and 75% of their duties must be devoted to carrying out qualified international financial transactions (QIFT) / A refundable tax credit is allowed up to a maximum of $20,000 per employee, per year / Foreign specialists employed by an eligible corporation operating an IFC can claim a deduction on their Québec income tax for a period of five years – the annual deduction is: 100% for years one and two, and 75%, 50% and 37.5% for years three, four and five, respectively.
/ Tax credits available for this sector from both Canada and Québec since 1998 / A Government of Québec 25% refundable tax credit and a Government of Canada 16% tax credit2 / At the provincial level, it currently applies to all eligible production costs incurred within the province nce (all-spend concept) / At the federal level, it applies es to eligible labour costs / Québec adds a 20% tax ax credit enhancement for digital gital special effects (VFX) and computer omputer animation (on extended eligible gible labour3) – filming in front of a green screen is included in the e credit enhancement / Total tax credits edits for production services can amount to 44%.
DID YOU KNOW? Canada is known4 / For its sound banking system 1st among 139 countries (The World Economic Forum, 2010) / For its ranking on the Access to Capital Index 1st among 122 countries (The Milken Institute, 2010)
In calculating the combined credit, the federal tax credit is reduced by the provincial tax x credit receivable Foreign workers hired by a Québec company can be eligible for the assistance program m 4 Source: Invest in Canada 2 3
32 / Montréal International
05 INNOVATION
GREATER MONTRÉAL – A UNIQUE BLEND OF
CREATIVITY, DIVERSITY AND HIGH TECHNOLOGY
/ Constant interplay between technology, science, art and culture explains the success, among other things, of Montréal’s high technology clusters, video game industry and creative enterprises such as the Cirque du Soleil / An industrial economy built on high technology clusters such as aerospace, information and communications technologies (ICT), life science and health technologies (LSHT), and cleantech / A critical mass of workers in higher knowledge sectors (1 out of 10 jobs) / A network of universities with the largest share of research funding in Canada and a broad range of expertise in hundreds of research centres
Canadian Space Agency
/ Effective intellectual property protection backed by international treaties.
5.1
SOLID HIGH TECHNOLOGY CLUSTERS
AEROSPACE / Over 40,000 jobs in 230 companies / Over $11 billion in annual sales / Nearly 70% of all research and development expenditures in Canada / Main leaders: Air Canada, Bell Helicopter Textron, Bombardier Aerospace, CAE, Esterline CMC Electronics, General Electric, Goodrich, Héroux-Devtek, Honeywell, L-3 Communications MAS, MDA Space, Messier-Dowty, Pratt & Whitney Canada, Rolls-Royce Canada, Sonaca Montréal, Thales Canada and Turbomeca Canada / Cluster secretariat: Aéro Montréal
www.aeromontreal.ca
LIFE SCIENCE AND HEALTH TECHNOLOGIES (LSHT)
INFORMATION AND COMMUNICATIONS TECHNOLOGIES (ICT)
/ Over 43,000 jobs in 620 organizations, including 150 research centres
/ Nearly 120,000 jobs in some 5,000 companies
/ Nearly half of Canada’s biopharmaceutical industry and most of its basic and clinical research are concentrated in Québec and the Greater Montréal area
/ A critical mass of enterprises in five major sectors: computer services, entertainment, interactive and digital content, manufacturing, software and telecommunications and wireless technologies
/ The Canadian headquarters of some 20 multinational pharmaceutical companies are located in Montréal / Main leaders: Algorithme Pharma, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Merck, Novartis, Pfizer, Pharmanet, Sanofi and Theratechnologies / Cluster secretariat: Montréal InVivo
www.montreal-invivo.com
CLEANTECH / Over 400 innovative companies in Québec in energy (34%), water (16%), waste (16%), air (13%), land (13%) and other (10%) technologies / Some 200 research organizations and university chairs / Over $220 million in research investment between 2000 and 2007 / Cluster secretariat: Écotech Québec
www.ecotechquebec.com
34 / Montréal International
/ Because of the spectacular growth of the video games industry, ustry, the interactive and digital content ntent and entertainment segmentt experienced the greatest expansion nsion of any ICT sector / Main leaders: Accenture, ure, Autodesk, Bell Canada, Compuware, uware, Dassault Systems, DMR/Fujitsu, ujitsu, Eidos, Electronic Arts, Ericsson, Funcom, CGI, GFI, IBM,, Morgan Stanley, Positron, SAP, P, Telus, THQ, Ubisoft, Videotron, and Warner Bros. Interactive ve Entertainment / Clusterr secretariat: TechnoMontréal
www.technomontreal.com w.technomontreal.com
Pratt & Whitney Canada Inaugurate Inaugurates Its Global Test Fac Facility in Mirabel
“
/ Greater Montréal ranks 7th in North America for high-tech job concentration1.
With nearly one out of ten workers employed in knowledge sectors, the region compares favourably to such major US centres as Dallas, San Diego and San Francisco.
C11 / HIGH TECHNOLOGY JOB CONCENTRATION (%) Top 20 Largest North American Metropolitan Areas, 2009
This facility reinforces reinforc Pratt & Whitney Canad Canada’s position as an aerospac aerospace leader and helps to expa expand the role of Québec an and Canada as a global hu hub in the industry. This wil will be one of the largest flight testing centres of civil aviation engines in North America.
”
12% 9% 6% 3% 0%
Pratt & Whitney Canada
05. INNOVATION
Mr. John Saabas President Pratt & Whitney Canada
15%
Se att le Bo sto Wa n sh ing ton Sa nD ieg o Da Sa lla nF s ran cis co Mo ntr éa l To ron Mi to nn ea po lis Ph o en Lo ix sA ng ele s Atl an Ph t a ila de lph ia St. Lo uis Ch ica go Ne w Yo rk De tro it Mi am i Ho us t Riv on ers ide
5.2
A CRITICAL MASS OF HIGH TECH TECHNOLOGY TALENT
1
High-tech job concentration: number of high-tech jobs divided by the total number of jobs in the region. Please see Appendix C for more methodological detail
Attractiveness Indicators 2011-2012 / 35
5.3
MAJOR FOREIGN INVESTMENT IN HIGH TECHNOLOGY
FOREIGN INVESTORS2 / Montréal International’s (MI) foreign investment data demonstrate the importance of aerospace, Information and communications technologies (ICT) and life science and health technologies (LSHT) in Greater Montréal / From 2006 to 2010, MI has helped to attract over $3 billion in foreign investment, 80% of which was in one of the three main high-tech sectors
C12 / FOREIGN INVESTMENT BY HIGH TECHNOLOGY SECTOR ($M - %) Montréal International Results, 2006-2010
ICT ($1,819M - 58%) OTHER ($726M - 23%) LSHT ($305M - 10%) AEROSPACE ($275M - 9%)
2
Please see Appendix A for a partial list of private sector investments announced in 2010-2011 for Greater Montréal
36 / Montréal International
La vitrine, Montréal
/ These three areas represent 40% of the 165,000 jobs generated by Greater Montréal’s 1,900 foreign subsidiaries.
PRIVATE SECTOR AND UNIVERSITY-BASED RESEARCH / According to the Institut de la statistique du Québec, the private sector spends more than $3.5 billion annually on in-house R&D / Several well-known multinationals conducting R&D in the area are listed among RE$EARCH Infosource’s Top 100 companies with the largest R&D budgets in Canada in 2009. Included among them are BCE, Bombardier, CAE, Ericsson, GlaxoSmithKline, IBM, Novartis, Pratt &Whitney, Sanofi and Telus / Montréal’s main university-based research centres had over $5 billion in research funds at their disposal between 2005 and 2009. This represented nearly 20% of the total for the entire country: a first in Canada.
C13 / UNIVERSITY RESEARCH FUNDING ($M) Top 5 Largest Canadian Metropolitan Areas, 2005-2009 6,000 5,000 4,000
RESEARCH CENTRES / The following lists some of Greater Montréal’s main research centres that work in partnership with the private sector and reinforce its expertise: • Aerospace: Canadian Space Agency, McGill University’s Aerospace Materials and Alloy Development Centre, NRC Institute for Aerospace Research, Aerospace Technology Manufacturing Centre, Centre technologique en aérospatiale du collège Édouard-Montpetit, Consortium for Research and Innovation in Aerospace in Québec (CRIAQ) • LSHT: University hospital research centres, Montréal Heart Institute (MHI), INRS-Institut ArmandFrappier, Institut de recherches cliniques de Montréal (IRCM), NRC Biotechnology Research Institute (BRI) • ICT: Centre de recherche informatique de Montréal (CRIM), Centre de recherches mathématiques (CRM), Centre for Advanced Systems and Technologies in Communications (SYTACom), INRS-Énergie, Matériaux et Télécommunications (INRSEMT), Microsystems Strategic Alliance of Québec (ReSMiQ).
INTELLECTUAL PROPERTY PROTECTION / The Canadian Intellectual Property Office (CIPO) lists several legal measures relating to the creation of intellectual property: • The Government of Canada grants intellectual property protection up to a maximum of 20 years after the day on which a patent application was filed • Several countries, including Canada, have signed the Paris Convention for the Protection of Industrial Property. This treaty recognizes a right of priority, which means that an application filed in one of the signatory countries shall bear the same filling date as the others provided that the applicant submit a request in all of the other countries within 12 months of the initial filing date. By virtue of the Paris Convention, a company can file an application first in a foreign country, then in Canada • A patent application can also be filed in Canada by virtue of the Patent Cooperation Treaty and it shall be valid in any of the 137 member-countries. This procedure is simpler because an applicant need not file separately in every country.
3,000 2,000
Mo
ntr éa l To ron to Va nc ou ve r Ot taw a Ca lga ry
1,000
Attractiveness Indicators 2011-2012 / 37
05. INNOVATION
5.4
AN IDEAL R R&D ENVIRONMENT FOR BUSIN BUSINESSES
5.5
A THRIVING NORTH AMERICAN VENTURE CAPITAL MARKET
/ In an economy centred on high technology clusters, access to venture capital is essential for stimulating innovation.
DID YOU KNOW? Greater Montréal is the source of many innovations. Here are 12 compelling examples3:
/ Sensio Technologies led the way in making the 2010 FIFA World Cup available in live 3D in theatres around the world
/ In April 2008, CAE designed and built the first A380 simulator for Airbus, which obtained a D level certification, the highest awarded for flight simulators
/ Object Research System (ORS) designed ORS Visual, a software solution that allows the review and analysis of images generated by different medical scanning devices
/ In April 2009, a team at the Université de Montréal’s Institut de recherche en immunologie et en cancérologie (IRIC) succeeded in producing a large quantity of laboratory stem cells from a small number of blood stem cells obtained from bone marrow
/ Effenco’s patented Head system can convert new and used trucks into hybrid vehicles and generate a 15% to 25% reduction in fuel consumption per vehicle
/ Genia Photonics has developed a new generation of fibre-optic based pulsed laser system that offer the capability to switch rapidly between imaging, diagnostic and treatment functions
3
/ Over $5 billion in venture capital was invested in the region between 2000 and 2010. This represented 20% of all Venture Capital funding in Canada. It is worth noting that Greater Montréal’s life sciences sector attracted almost 35% of this money: a first in Canada.
Source: MONTRÉAL F1RST, 2011
38 / Montréal International
/ Longueuil-based D-BOX Technologies designs and manufactures leading edge high technology motion systems mainly suited to the needs of the entertainment industry / Caprion Proteomics developed CellCarta, a unique proteomic platform for profiling proteins in solid tissues and plasma and predicting drug treatment effectiveness
/ Greater Montréal ranked 2nd for the largest amount of investment money among Canadian metropolitan areas in 2010 with a total of $292 million or 26% of the total for the entire country.
/ The City of Montréal’s BIXI is the world’s first self-serve, solar energy powered bicycle system / René Roy, professor and researcher in the Department of Chemistry of the Université du Québec à Montréal (UQAM), and his team developed and marketed a synthetic vaccine for meningitis and pneumonia / The Montréal company, gsmprjct°, invented an interactive electronic high resolution telescope, Tellscope, which is currently installed on the 124th-floor observatory of the world’s tallest building, the Burj Khalifa, in Dubai / To decontaminate underground water, Golder Associates installed a reactive barrier in the soil, made up of shafts into which they injected iron powder suspended in a liquid mixture consisting of, among other things, soy milk and food additives.
06 QUALITY OF LIFE GREATER MONTRÉAL – A CITY WITH A HUMAN DIMENSION AND A GREAT PLACE TO LIVE, WORK AND ENJOY LIFE
/ Greater Montréal, a cosmopolitan, bilingual and international city, with a distinct personality serving as a bridge between North America and Europe / An excellent quality/cost ratio providing its workforce with superior purchasing power
St-Denis street, Montréal
/ A cultural, recreational, sports and green city whose talent and technology are recognized around the globe.
Attractiveness Indicators 2011-2012 / 39
AN EXCEPTIONAL QUALITY OF LIFE
A COSMOPOLITAN AND BILINGUAL CITY OPEN TO THE WORLD / Today’s Montréal is a cultural mosaic with an urban environment that is unique in North America. Located at the crossroads between Europe and North America, its social fabric has been enriched over time by an influx of people and cultures from around the world / Nearly one-third of the City of Montréal’s population was born outside of Canada / The metropolitan region welcomes approximately 40,000 immigrants every year, making it Canada’s 2nd most important destination for newcomers to the country / Over 50% of the area’s population speaks both French and English / Nearly 20% masters at least three languages.
C14 / QUALITY OF LIFE (MONTRÉAL = 100) Top 20 Largest North American Metropolitan Areas*, 2010 105 100 95 90 85
co uv er To ron t o Mo ntr éa l C a Sa n F lgary ran cis co Bo sto n Ch i Wa cago sh ing ton Ne w Yo rk Se att le Pit tsb urg Ph h ila de lp Lo s A hia ng ele Mi s nn ea po lis Da lla s Ho us ton Mi am i De tro it St. Lo uis Atl an ta
In 2010, Greater Montréal ranked 3rd in North America on an index measuring overall quality of life
Va n
6.1
* For which data were available
A SAFE CITY Greater Montréal is one of the safest areas in North America. It is a community in which one can get around peacefully. Its public places, particularly in the downtown core, overflow with activity day and night. During the festival season, thousands of people gather in the city’s streets, squares and parks to celebrate peaceably.
EXCEPTIONAL PUBLIC SERVICES / Health Services • Montréal’s workforce benefits, among other things, from Québec’s health insurance plan, a universal system ensuring free medical care to all permanent residents and Canadian citizens living in the province • Québec’s prescription drug insurance plan covers 70% of medication costs for individuals not covered by private insurance.
40 / Montréal International
• Montréal has an efficient and well we coordinated public transportation transportat system that includes trains, metro, buses and bicycles, thereby there contributing to the region’s regio sustainable development: developme - 427 million trips annually, an 209 million of which via wh the metro - 4 metro lines, line 68 stations extending over 70 km - A self-serve bicycle service: self-s BIXI, a Québec original adopted by several major cities such s as Boston and London - A bike path network of 450 km and growing
BIXI, public bike system, Montréal
• The Société de transport de Montréal won the American Public Transportation Association’s 2010 Outstanding Public Transportation System in North America award.
A RICH AND VARIED CULTURAL LIFE Montréal has developed a vibrant and unmistakably contemporary culture recognized and appreciated both locally and internationally, making it a first-rate cultural destination. Enthusiasts of festivals, sporting events, theatre, film, music and museums have a wide variety of activities to choose from year round
NATURE AND THE OUTDOORS To live in Montréal also means being close to wide-open spaces and many lakes, rivers and mountains where one can readily enjoy swimming, fishing, skiing and other recreational sports.
Warner Bros. Games Montréal, The Hollywood Giant’s New Studio
“
Montréal International’s (MI) support was vitally important in terms of contacts and strategic advice. MI also worked side-by-side with us on everything related to obtaining aid from the Strategic Support for Investment Program, tax credits and work permits for several employees. “Montréal is a vibrant city that nurtures the creativity of its artists and designers. That’s why newcomers from all over the world integrate so easily here. We have the opportunity to draw on a pool of incredible talent in a very favourable environment, a factor that we stressed with MI.
”
Mr. Martin Carrier Vice President Studio Head Warner Bros. Games Montréal
Attractiveness Indicators 2011-2012 / 41
06. QUALITY OF LIFE
/ Public Transportation
6.2
SUPERIOR PURCHASING POWER
A LOW NET TAX CONTRIBUTION From a tax perspective, Greater Montréal residents are subject to the rules in force in Canada, Québec and their local community. Québec’s low payroll taxes and generous social benefits position the province favourably among G7 countries in terms of personal taxation
C15 / NET TAX CONTRIBUTION2 (AS % OF WAGES) OF A SINGLE PERSON EARNING APPROXIMATELY $66,000/YEAR Québec and G7 Countries, 2008
C16 / NET TAX CONTRIBUTION (% OF WAGES) OF A COUPLE WITH TWO CHILDREN EARNING APPROXIMATELY $66,000/YEAR Québec and G7 Countries, 2008
50% 40% 40% 30%
• Sales or rental prices are 50% lower in Montréal than in many of the world’s largest cities / Childcare Greater Montréal has the lowest childcare costs in North America. There exists a partially subsidised program for children under the age of 5. These places are available at $7.00 per child, per day.
Ja pa Qu n éb ec ite dS tat es Ca Un na ite da dK ing do m Fra nc e Ita l y Ge rm an G7 y av era ge
• Greater Montréal ranks 1st among Canada’s metropolitan areas in terms of competitive home sales price1
0% 0%
Un
/ Housing
10% 10%
Ja pa n Ca na ite da dK i Un ngdo ite m dS tat es Qu éb ec Fra nc e Ita ly Ge rm an G7 y av era ge
Such items as housing, food, clothing and education cost less in Greater Montréal than in the world’s other large cities
20% 20%
Un
A FAVOURABLE COST OF LIVING
30%
/ Education • Public education is free in the Greater Montréal area. Quality education, from kindergarten through junior college, is available free of charge to all Québec residents and children of foreign workers holding a Québec work permit • University tuition is one the lowest in North America
- This amount compares to an average of $5,700 paid in the other major Canadian metropolitan areas3 - In the United States, annual tuition for a fulltime university student enrolled in a four-year program ranges between an average of US$7,605 and US$27,2934.
- When averaged out for all degree levels, a fulltime Canadian student paid $2,500 in tuition in the Greater Montréal area for the 2010-2011 academic year.
Source: Canada Mortgage and Housing Corporation The net tax contribution is based on personal income tax, individual social insurance contributions ontributions and benefits paid to the individual 3 Source: Statistics Canada 4 Source: The College Board 1 2
42 / Montréal International
Montréal ranked 10th among 73 world cities in 2010 for the purchasing power of its residents5.
C18 / COST OF LIVING, INCLUDING RENT6 (NEW YORK = 100) Sample of North American Metropolitan Areas and G7 Capital Cities, 2010 110 100 90
C17 / AVERAGE RENT (NEW YORK = 100) FOR A FOUR-ROOM FURNISHED APARTMENT
70
50
Mo
100 80
C19 / DOMESTIC PURCHASING POWER7 (NEW YORK = 100)
60
Sample of North American Metropolitan Areas and G7 Capital Cities, 2010
20
/ The level of confidence that its people have in the protection afforded to persons and property and the fairness of the judicial system 1st among G7 countries (International Institute for Management Development, 2010)
60
120
40
Canada is known for8 :
/ Equal opportunity 1st among G7 countries (International Institute for Management Development, 2010)
80
ntr éa Be l rlin Ro me To ron to Lo s A Paris ng e Lo les nd o Mi n Ch ami ica go To Ne kyo w Yo rk
Sample of North American Metropolitan Areas and G7 Capital Cities, 2009
DID YOU KNOW?
/ Its ranking on the human development indicator 2nd among G7 countries and 8th among the countries surveyed. The indicator is based on life expectancy at birth, mean years of schooling and gross national income per capita (United Nations, 2010).
130
Be rlin Ro me M Mo iami ntr éa C Lo hica l sA g ng o ele s Pa Lo ris nd To on ron to To Ne kyo w Yo rk
0
110 90 70
Lo
sA
ng
ele Mi s am Be i Mo rlin ntr Ch éal ica To go ron Lo to n Ne don w Yo r To k ky o Pa ri Ro s me
50
Source: UBS Cost of a basket of 122 goods and services weighted according to Western European consumer habits Domestic purchasing power is based on the net hourly wage divided by the price of a basket of goods and services including rent 8 Source: Invest in Canada 5 6 7
Attractiveness Indicators 2011-2012 / 43
06. QUALITY OF LIFE
LOW NET TAX CONTRIBUTION + LOW COST OF LIVING = HIGH PURCHASING POWER
APPENDIX A SAMPLE OF ANNOUNCED PRIVATE-SECTOR INDUSTRIAL INVESTMENT PROJECTS (EXCLUDING MERGERS AND ACQUISITIONS)
GREATER MONTRÉAL, Q2-2010 TO Q1-2011
Name of the Montréal Subsidiary (Parent Company if Different)
Amount Announced ($M)
Type of Investment
Industry
Activity
Parent Company’s Country of Origin
Pratt & Whitney Canada
1,000
Expansion
Aerospace
Plane and helicopter engines
United States
Pratt & Whitney Canada
360
Expansion
Aerospace
Plane and helicopter engines
United States
Rolls-Royce Canada
225
Expansion
Aerospace/Energy
Gas motors and turbines
United Kingdom
BatHium Canada (Bolloré Group)
176
Expansion
Cleantech
Lithium metal polymer batteries (LMP®)
France
Ultra Electronics-Tactical Communication Systems (Ultra Electronics)
92
Expansion
Information and Communications Technologies
Solutions for high-reliability tactical telecommunications
United Kingdom
Phostech Lithium (Süd-Chemie)
80
Expansion
Cleantech
Lithium iron phosphate batteries (LFP)
Germany
General Electric Canada
64
Expansion
Aerospace
Plane engines
United States
Mechtronix Systems Inc. (MWC)
60
Expansion
Aerospace
Flight simulators
Canada
Danone Canada
50
Expansion
Agri-food
Fresh milk products and yogurt
France
Molson Coors Canada
47
Expansion
Agri-food
Beer
Canada/United States
Thales Canada
43
Expansion
Aerospace
Flight control systems
France
44 / Montréal International
Amount Announced ($M)
Type of Investment
Industry
Activity
Parent Company’s Country of Origin
Macdonald, Dettwiler and Associates
42
Expansion
Aerospace
Space robots and satellite information missions
Canada
Dornier Seaplane Company
35
Greenfield Investment
Aerospace
Seaplanes
United States
Pfizer Canada
22
Expansion
Life Science and Health Technologies
Pharmaceuticals, consumer health products, animal health
United States
Barry Callebaut Canada
21
Expansion
Agri-food
Cocoa and chocolate products
Switzerland
Scientific Games Canada
20
Expansion
Entertainment
Diversified gaming/ lottery tickets
United States
Fayolle Canada
13
Greenfield Investment
Construction
Road works, civil engineering and building and heritage
France
Liebherr Canada
9
Expansion
Aerospace
Aerospace equipment
Switzerland
Aeroconseil Canada
N/A
Greenfield Investment
Aerospace
Aviation engineering and services
France
Playfish (Electronic Arts)
N/A
Greenfield Investment
Information and Communications Technologies
Social gaming
United States
AKKA Group North America
N/A
Greenfield Investment
Aerospace
Technology and engineering consulting services
France
Luxell Technologies
N/A
Greenfield Investment
Aerospace
Products and services for the defence and aerospace industries
Canada
Medtech
N/A
Greenfield Investment
Life Science and Health Technologies
Surgical assistive robots
France
Otsuka Canada Pharmaceutical Inc.
N/A
Greenfield Investment
Life Science and Health Technologies
Pharmaceuticals
Japan
REpower Systems Inc.
N/A
Greenfield Investment
Cleantech
Wind turbines
Germany
SITA
N/A
Expansion
Aerospace
Communications and IT solutions for air transportation
Switzerland
Société Générale Canada
N/A
Expansion
Finance
Banking and insurance services
France
Source: Montréal International
Attractiveness Indicators 2011-2012 / 45
APPENDIX A
Name of the Montréal Subsidiary (Parent Company if Different)
APPENDIX B SOURCES
Charts
Sources
1
US data: US Department of Education, Institute of Education Sciences, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), 2010 Canadian data: Ministère de I’Éducation, du Loisir et du Sport du Québec and Statistics Canada Postsecondary Student information System, 2010
2
Aon Hewitt, Consulting, Global Research Center, Highlights of the 2011 People Risk™ Index Ratings, Organization Risks Related to Recruitment, Employment and Redeployment, 2011
3
US data: Bureau of Labor Statistics (BLS), Local Area Unemployment Statistics, 2011 Canadian data: Statistics Canada, Labour Force Survey (LFS), 2011
4
US data: US Census Bureau, Metropolitan and Micropolitan Statistical Area Population and Estimated Components of Change: April 1 2000 to July 1, 2009 (CBSA-EST2009-alldata) and Combined Statistical Area Population and Estimated Components of Change: April 1 2000 to July 1, 2009 (CSA-EST2009-alldata), 2010 Canadian data: Statistics Canada, Annual Demographic Estimates: Subprovincial Areas, 2005-2010, 2011
5
Statistics Canada, 2006 Census
6 and 7
KPMG, Competitive Alternatives Interactive Cost Model, 2011
8
Cushman & Wakefield Research, Office Space Across the World 2011, 2011.
9
Cushman & Wakefield Research, Industrial Space Across the World 2011, 2011
10
KPMG, Competitive Alternatives 2010, Special Report: Focus on Tax, 2010
11
US data: Bureau of Labor Statistics (BLS), Quarterly Census of Employment and Wages (QCEW), 2010 Canadian data: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), 2010
12
Montréal International, 2011
13
Statistics Canada, Financial Information of Universities and Colleges 2008-2009, 2010
14
Mercer Human Resource Consulting, Quality of Living Worldwide City Rankings 2010 – Mercer Survey, 2010
15 and 16
Luc Godbout, Suzie St-Cerny and Chantal Amiot, Année d’imposition 2008: Une charge fiscale nette plus faible et des impôts sur le revenu plus élevés qu’ailleurs, est-ce possible? Working paper 2010/03, Chaire de recherche en fiscalité et en finances publiques Université de Sherbrooke, March 17, 2010
17
UBS, Prices and Earnings: A Comparison of Purchasing Power Around the Globe, 2009
18 and 19
UBS, Prices and Earnings: A Comparison of Purchasing Power Around the Globe, 2010
46 / Montréal International
Sources
1
Statistics Canada, Labour Force Survey (LFS), 2011 (From the Horace+ extranet network)
2
Economic Research Institute, Inc., 2011
3
BDO Canada, 2011
4
Hydro-Québec, Comparison of Electricity Prices in Major North American Cities, Rates in Effect April 1, 2010
5
Investissement Québec and Raymond Chabot Grant Thornton, 2011
6, 7 and 9
Deloitte, Tax Incentive Programs in Québec – IT, January 2011 and Québec eBusiness Development Tax Credit, March 2011, 2011
8 and 10
Investissement Québec, 2011
11
Ministère des Finances du Québec, Budget 2010-2011, Plan budgétaire, 19 mars 2009, 2009
APPENDIX B
Tables
Attractiveness Indicators 2011-2012 / 47
APPENDIX C METHODOLOGICAL NOTES C1 / BENCHMARK METROPOLITAN REGIONS To enhance the objectivity and accuracy of the economic analysis presented in these pages, the metropolitan areas used here were chosen on the basis of population size. Thus, the 20 largest North American metropolitan areas by population were used for comparative purposes on most indicators. Statistics Canada’s demographic data were used to identify Canadian metropolitan areas and
US Census Bureau estimates, American cities. When Canadian and American data were either not available for the same time period or not comparable, comparisons were based on Canada’s five largest metropolitan areas or Montréal alone. The geographical units generally used throughout this document were the Canadian Census Metropolitan Area (CMA) and the US Metropolitan Statistical Area (MSA) and Combined Statistical Area (CSA).
The term “North America” takes in only the United States and Canada; Mexico was not included. The terms “Metropolitan Montréal”, “Greater Montréal” or “Montréal” refer to the Montréal CMA. When historical data were not available for a given metropolitan area, the next closest statistical universe was used.
TOP 20 LARGEST NORTH AMERICAN METROPOLITAN AREAS BY POPULATION July 1, 2010 for Canada and July 1, 2009 for the United States
Metropolitan Area
Statistical Definition
New York
Combined Statistical Area
Population 22,232,494
Los Angeles
Combined Statistical Area
17,820,893
Chicago
Combined Statistical Area
9,804,845
Washington
Combined Statistical Area
8,440,617
Boston
Combined Statistical Area
7,609,358
San Francisco
Combined Statistical Area
7,427,757
Dallas
Combined Statistical Area
6,805,275
Philadelphia
Combined Statistical Area
6,533,122
Houston
Combined Statistical Area
5,968,586
Atlanta
Combined Statistical Area
5,831,778
Toronto
Census Metropolitan Area
5,741,419
Miami
Metropolitan Statistical Area
5,547,051
Detroit
Combined Statistical Area
5,327,764
Phoenix
Metropolitan Statistical Area
4,364,094
Seattle
Combined Statistical Area
4,158,293
Montréal
Census Metropolitan Area
3,859,318
Minneapolis
Combined Statistical Area
3,604,460
Denver
Combined Statistical Area
3,110,436
San Diego
Metropolitan Statistical Area
3,053,793
Cleveland
Combined Statistical Area
2,891,988
48 / Montréal International
Since Montréal ranks 16th for population among the 20 largest North American metropolitan areas, it does not always compare well on volume indicators. All things being equal, the larger a metropolitan area’s population, the greater its chances of developing a critical mass of businesses, students, jobs, etc. At times, intensity is as important as volume when assessing an area’s attractiveness. Thus, in this report, some indicators measure both volume and intensity (per capita or per job).
C3. ADDITIONAL METHODOLOGICAL INFORMATION 01. Market Access VALUE OF GREATER MONTRÉAL’S EXPORTS The data presented in Section 1.2 on Greater Montréal’s exports were derived from those of the Institut de la statistique du Québec and were estimated from the following administrative regions: Lanaudière, Laurentides, Laval, Montérégie and Montréal.
02. Workforce CANADIAN UNIVERSITY DATA The university data compiled for this report were those for institutions located in the Greater Montréal area. For institutions with only partial operations in the Greater Montréal area, namely the Université de Sherbrooke, École nationale d’administration publique (ENAP), lnstitut national de la recherche scientifique (INRS) and Télé-université (TÉLUQ), ratios were used to estimate the size of their Montréal-based student body. Even though these numbers were established on the basis of information collected from the region’s universities, the estimates presented in this report may differ from each university’s official statistics because data supplied by the Ministère de I’Éducation, du Loisir et du Sport du Québec were also used. The objective was to provide as accurate an approximation as possible of the actual number of students and graduates in Greater Montréal between 1998 and 2009.
THE PEOPLE RISK INDEX Aon Hewitt’s Highlights of the 2011 People Risk™ Index Ratings, Organization Risks Related to Recruitment, Employment and Redeployment is a global survey assessing comparative people risk by location in relation to workforce recruitment, employment and redeployment. It looks at five major types of indicators: demographic, government support, education, talent development, and employment practices.
NET INFLOW FROM INTERNATIONAL MIGRATION In Canada and the United States, the net inflow from international migration was established between July 2008 and July 2009. According to Statistics Canada, international migration represents movement of population between Canada and a foreign country accompanied by a change in the usual place of residence. A distinction is made between immigrants, emigrants, returning emigrants, net temporary emigrants and net nonpermanent residents. According to the US Census Bureau, net inflow from international migration includes international migration of USand foreign-born persons. More specifically, it consists of: (a) the net inflow of international migration of foreign-born persons, (b) the net migration inflow between the United States and Puerto Rico, (c) the net migration of US-born persons and (d) the net movement of armed forces personnel between the United States and foreign countries.
Attractiveness Indicators 2011-2012 / 49
APPENDIX C
C2 / TYPES OF INDICATORS ANALYSED: VOLUME AND INTENSITY
0.3 Costs
TOTAL LABOUR COSTS
04. Taxes and Incentives
TOTAL BUSINESS OPERATING COSTS
In addition to wages, labour costs include, according to KPMG, the following:
CORPORATE TAX BURDEN
These data were taken from KPMG’s biennial comparative study, Competitive Alternatives, published in 2010, but updated by Montréal International based on KPMG’s Competitive Alternatives Interactive Cost Model. This study compares business competiveness in over 100 cities in 10 countries: Australia, Canada, France, ltaly, Japan, Germany, Mexico, the Netherlands, the United Kingdom, and the United States. It measures the combined impact of 26 significant cost components that are likely to vary by location, as applied to 17 different business operations over a 10-year period (aircraft parts, auto parts, biomedical R&D, clinical trials management, electronics assembly, electronics systems development, food processing, medical devices, metal machining, pharmaceutical products, plastic products, precision components, shared services centres, software design, specialty chemicals, telecom equipment and web and multimedia content development). For more information on the survey, please go to the Competitive Alternatives 2010 website at http://www.competitivealternatives.com.
50 / Montréal International
/ Statutory plans: government pension and health plans, unemployment insurance and workers compensation; and / Other benefits: paid time not worked (holidays and vacations), private health insurance and other discretionary benefits.
AVERAGE ELECTRICITY RATES These data are based on a survey conducted among 16 companies and estimates prepared by Hydro-Québec and subsequently validated, for the most part, with the respondents (source: Hydro-Québec, 2010).
ln its Competitive Alternatives 2010 – Special Report: Focus on Tax, KPMG assessed the general tax competitiveness of 95 cities in 10 countries in the 17 following industries: aircraft parts, auto parts, biomedical R&D, clinical trials management, electronics assembly, electronics systems development, food processing, medical devices, metal machining, pharmaceutical ision products, plastic products, precision components, shared services centres, hemicals, software design, specialty chemicals, b and telecom equipment and web opment. multimedia content development. KPMG also assessed the e average tax load for three types s of R&D companies: biomedical R&D, clinical trials management and electronic systems development and testing. The total tax burden urden of a company in a given city includes ncludes the sum of three components, s, namely corporate income tax, other corporate taxes and statutory labour costs. osts. Corporate income tax (at the national, tional, regional and local levels) is a function of a company’s sector and geographical ographical location. Other corporate taxes axes include, among others, capital, sales, property and other miscellaneous taxes. Salary taxes include statutory plan costs and other wage-based taxes. The two latter categories vary by company sector and geographical location.
detailed findings for KPMG presents deta metro population of at 41 cities with a met least 2 million. lt iis in relation to them largest North American (as well as the la areas) that Greater metropolitan a relative competitive position Montréal’s re discussed in Section 4 of this report. is discusse go to the official Please g Competitive Alternatives website at: Compe http://www.competitivealternatives.com. http:/
CORPORATE TAX RATE
ONTARIO
In Canada, the federal tax rate is 11% for private Canadian-controlled companies with taxable income of less than $500,000. In certain provinces, reduced rates are also applicable to small businesses. The 2011 general rate of 16.50% (18% before that date) will pass to 15% as of 2012.
Non-manufacturing companies: rate will be reduced to 11% and 10% respectively as of July 1, 2012 and 2013.
In the United States, the general tax rate of 35% varies depending on the corporation’s taxable income. For U.S. manufacturing companies, a deduction of 9% of the profit related to production activities or taxable income is available for 2011 and thereafter, which means an actual rate reduction of 3.15%. This deduction was 3% for 2005, 2006, 6% for 2007, 2008 and 2009 and 9% for tax year 2010 and later. Certain States, such as Arkansas, California, Connecticut, District of Columbia, Georgia, Hawaii, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, Tennessee, Texas, West Virginia and Wisconsin do not apply the federal deduction for manufacturing production. For the taxable years beginning on or after January 1, 2010, Kentucky and Virginia apply a 6% rate in regards to the deduction for manufacturing production. City and state taxes are generally deductible from U.S. federal tax. The actual U.S. federal tax rate takes this deduction into account.
ILLINOIS For the tax year beginning after January 1, 2011 and before Jan 1, 2015, the state corporate income tax rate is 7%. The income tax rate prior to January 1, 2011 was 4.8%. In addition, a personal property replacement income tax of 2.5% applies to corporations other than S corporations.
MASSACHUSSETTS For tax years beginning on or after January 1, 2011, the state rate on corporate taxable income is 8.25% and will be reduced to 8% for the tax years beginning on or after January 2012. Moreover, a tax on corporate capital calculated at the rate of 0.26% must be added to the 8.25% tax.
NEW JERSEY The state rate applies to the taxable income exceeding US$100,000. A surtax of 4% was added to the income tax for privilege periods ending on or after July 1, 2006 but before July 1, 2010. Gradual rates apply to taxable income under US$100,000.
Attractiveness Indicators 2011-2012 / 51
APPENDIX C
KPMG’s analysis is based on information collected between July 2009 and January 2010. All of the above ment mentioned taxes are those that were in effect on January 1, 2010 and reflect the c changes announced during the data co collection period that subsequently ca came into takes into force. The real tax rate tak subsidies and account tax credits, sub breaks. across the board tax bre
NEW YORK
05. Innovation
Companies are subject to a state tax based on the highest of four amounts. The income tax rate is 7.1%.
CONCENTRATION OF HIGH TECHNOLOGY JOBS
New York City: a surtax of 17%, applied to the state tax (7.1%) for the New York metropolitan area, has been added to the city’s rate of 8.85%. The three rates may not apply to all companies.
TEXAS The State imposes a Franchise Margin Tax at a rate of 1%. The “Margin” equals the lesser of the three following calculations: (1) Total revenues minus cost of good sold; (2) Total revenues minus compensation; and (3) 70% of total revenues. For tax years 2010 and 2011, if the revenue is less than US$1,000,000, the entity is exempt to the tax liability. The threshold will be reduced to US$600,000 after January 1, 2012.
Data for Canadian metropolitan areas were taken from Statistics Canada’s Survey of Employment, Payroll and Hours (SEPH). It was chosen over the Labour Force Survey (LFS) because its methodology is similar to that used by the US Bureau of Labor Statistics’ (BLS) Quarterly Census of Employment and Wages (QCEW) that was used as a source of information on American metropolitan areas. Neither the SEPH nor the QCEW include self-employed workers. It should be noted that US data are by Metropolitan Statistical Area (MSA). For all 20 major metropolitan areas, Montréal International compiled data on high technology jobs as defined by the North American Industry Classification System codes (NAICS): / Aerospace • 3364 Aerospace Product and Parts Manufacturing
/ Life Sciences and health technologies (LSHT) • 3254 Pharmaceutical and Medicine Manufacturing • 3391 Medical Equipment and Supplies Manufacturing • 4145 Pharmaceuticals, Toiletries, Cosmetics and Sundries Wholesaler-Distributors (code 4242 in the United States) • 5417 Scientific Research and Development Services • 6215 Medical and Diagnostic Laboratories / Information and Communications ications Technologies (ICT) • 3333 Commercial and Service Industry Machinery ery Manufacturing • 334 Computerr and Electronic Product Manufacturing nufacturing • 3359 Other er Electrical Equipment and Component mponent Manufacturing • 4173 Computer and Communications Equipment ipment and Supplies WholesalerDistributors stributors (code 4234 in the United States) • 4179 Other Machinery, Equipment and Supplies Wholesaler-Distributors (code 4236 in the United States) • 5112 Software Publishers
52 / Montréal International
• 517 Telecommunications
UNIVERSITY RESEARCH FUNDING
• 518 Data Processing, Hosting and Related Services
Statistics Canada supplied data on research funding awarded to Canadian universities by federal and provincial agencies and the private sector.
Systems Design • 5415 Computer Syste Services and Related Service Schools • 6114 Business S and Computer and Management Training Electronic and Precision • 8112 Elect Equipment Repair and Maintenance Equipme
PRIVATE SECTOR RESEARCH S Data for fo the Greater Montréal metropolitan polita area reported in Section 5.4 were supplied by the Institut de la statistique sup du Québec (2004) and estimated on the basis b of information for the five following administrative regions: Lanaudière, Laurentides, Laval, Montérégie and Montréal.
Montréal International calculated the amount of university research funding in each Canadian metropolitan area by aggregating data on the universities located in each CMA. For Greater Montréal, data were collected on the École nationale d’administration publique (ÉNAP), École Polytechnique de Montréal, École de technologie superieure (ÉTS), lnstitut national de la recherche scientifique (INRS), Université de Montréal, McGill University, Université du Québec à Montréal (UQAM), Concordia University, HEC Montréal and Télé-université (TÉLUQ).
OVERALL QUALITY OF LIVING INDEX Mercer’s annual survey compares quality of living in 215 countries based on 39 factors in ten categories. These include: political and social environment, economic environment, socio-cultural environment, health and sanitation, schools and education, public services and transportation, recreation, consumer goods, housing and natural environment.
COST OF EDUCATION In Section 6.2, the other major Canadian metropolitan areas that were considered in calculating the $5,700 average tuition fee were Calgary, Ottawa, Toronto and Vancouver.
For the INRS, ENAP and TÉLUQ, only data on their Greater Montréal operations were considered. The ratios used were: 70% for the INRS, 50% for the ENAP and 55% for TÉLUQ. These ratios are based on student body.
APPENDIX C
Industrial • 5324 Commercial and Indu Equipment Rental Machinery and Equipmen and Leasing
06. Quality of Life
Attractiveness Indicators 2011-2012 / 53
CrEdits Greater Montréal Attractiveness Indicators 2011-2012 is published by Montréal International Conception // quatuor.ca Cover page photos (Left to right, from top to bottom) • Bombardier Aerospace • Tourisme Montréal • Biosphère, Environment Museum • Ubisoft, Montréal • National Research Council Canada • Tourisme Montréal • Ubisoft, Montréal
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