International and Canadian companies are making record investments in the Montreal area as the region tries to shake off the COVID-19 pandemic and reclaim the economic momentum that came to a sudden stop last year.
Foreign investment in Canada’s second-largest city punched to a new high of $1.86-billion through the first six months this year as companies launched 40 new projects and created 6,300 jobs, according to figures from Montréal International, the city’s investment promotion agency. The organization, a public-private partnership partly funded by the Quebec and Canadian governments, counts only investments it facilitated, meaning the absolute numbers could be much higher.
“People tend to forget, but Montreal was on a roll before COVID-19 hit,” Stéphane Paquet, Montréal International’s president and chief executive officer, said in an interview Tuesday. “And what we see [now] is the fundamentals are still pretty good.”
The results vindicate Quebec’s decision in recent years to pursue investments by U.S. technology companies in particular, a wave that started when Microsoft Corp. bought deep-learning and artificial intelligence startup Maluuba in 2017. Information technology, cybersecurity and media firms have been among the big winners of the pandemic, experiencing rising sales and valuations as the time people spent online exploded across the world.
Among the tech companies targeting Montreal is U.S.-based AppDirect, which picked the city in March for its Canadian headquarters as it carries out a new cloud solutions project to develop advanced invoicing and billing applications. More than half the company’s global work force will be located in Montreal. The Quebec government is supporting the venture with a refundable loan of up to US$40-million.
Video-game producers, long drawn to Montreal because of Quebec’s generous payroll tax credits, have also been ramping up their commitments to the city. Room8 Group, Clipwire Games, Quantic Dream, Amazon, Focus Home Interactive and Phoenix Labs are all among the companies that have announced expansions in Montreal in recent months.
Amazon Games, a division of the online retailing giant, cited Montreal’s creative talent pool as a reason why it decided to open a new game development studio in the city. It is recruiting for several positions, including software developers and game artists.
Several investments have been counted in Montréal International’s statistics but not yet announced, said Alexandre Lagarde, the agency’s vice-president of foreign direct investment. The companies themselves control the timing of the disclosure and some of them choose never to make their moves known, he said.
Among the major projects that have been made public, France’s L’Oréal, one of the world’s biggest cosmetics companies, said last month it would expand its distribution centre in the Saint-Laurent borough to add 20,000 pallets of storage capacity on a 95,000-square-foot area. Meanwhile, U.S.-based SAP Inc., a business software solutions provider that has long been in Montreal, said it would spend millions on a new flexible, demand-driven space in the city’s Place Ville Marie “to accommodate the future of work in a postpandemic world.”
Those two investments in particular underscore a strategy Montréal International has employed since the pandemic began, which is to intensify focus on markets that have yielded past success, such as France, while carving out opportunities from pockets of growth in hard-hit industries such as aerospace. For example, the agency helped secure a new investment from MSB Group, a supplier of aircraft interior components for private jets.
“We were able to shift our attention to where it counts,” Mr. Lagarde said.
Montreal island and its surrounding region, home to about half of Quebec’s 8.5 million people, became Canada’s COVID-19 epicentre during the pandemic’s early months as the first wave ripped through nursing homes and killed thousands. After some of strongest lockdown measures in North America, the city centre is slowly coming back to life, but the extent to which office workers will return after a 16-month absence remains to be seen. Their presence is make or break for hundreds of restaurants and service businesses.
Jobs wise, the region is holding its own. Montreal now has more people employed than it did before the pandemic started. The city’s job level in June stood at 101.2 per cent of its February, 2020, level, while Vancouver’s stood at 100.3 per cent and Toronto’s 97 per cent, according to Montreal International.
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