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Au Pain Dor Côte-des-Neiges

The room is long, cool and sleek: Its woodwork is dressed in black, and a grid of blond wood slats weaves across the ceiling. White tile splays light back into the room, where servers prepare lattes and serve up tarts. The space, conceived by the local architecture office NatureHumaine, is up for a design award this summer – and it is a chain bakery in Côte-des-Neiges, Montreal.

I've come here, to this pleasant but decidedly unhip neighbourhood, specifically to see this Au Pain Doré. And the café's proprietor, Trudy Resch, says I'm not the only one. "We do get people coming just to have a look," she says with a smile. That's because the café is among 20 winners of the Commerce Design Montreal awards: restaurants and retail stores across the city that will now compete in a summer-long public vote for a People's Choice Award. "This event is making us a destination," Resch says.

If so, the city-run event is accomplishing its goal. Revived this year after a decade-long absence, Commerce Design Montreal (CDM) is a way for Montreal to spur work by local designers and architects, and also to celebrate the thoughtful design of small private projects. Why? Because the city believes, rightly, that those spaces matter: They help to create a sense of place, and so to improve quality of life for locals and visitors alike.

These restaurateurs and shopkeepers "have daring to be creative, and the daring to make a statement," says city councillor Manon Gauthier. Gauthier, a member of the mayor's executive with responsibility for culture, oversees Montreal's design office, and she makes a passionate argument about the competition's value for tourism. "A restaurant is not only a restaurant," she says. "A bakery is not only a bakery. It's a destination. And what do you look for when you travel? A place that will enhance your experience."

That is true, and the place where she's invited me to meet demonstrates it clearly. We're sitting in Old Montreal at Mimi La Nuit, a restaurant and bar that's another of the 20 finalists. Designed by the talented local office La Firme, the space feels like a chic cavern: its ancient rubble-stone walls are exposed, zebrawood bars wander across the room, light fixtures spill a dash of sexy orange incandescence. Tonight, the hippest of the tourists walking the streets may find themselves here; but it's also where Gauthier, who represents Verdun on council, had her last birthday party. The area is "a place where design and business have exploded over the past few years," she says, "and it has made the quality of life better for everyone." An already beautiful neighbourhood has been enhanced by the presence of new places to shop and hang out.

In Old Montreal, the jurors for Commerce Design Montreal chose not just restaurants but also a boutique, Cahier d'Exercices. It is designed by Saucier + Perrotte, one of the city's and Canada's leading architecture firms. It is a skillful essay in minimalism – a white grid of storage, black-painted stone, a few hot-red columns to hold the place up and some strategically placed mirrors that unsettle your perspective. It looks like it might appear on architecture websites, and indeed it has.

But two blocks from that is a basement salon – Privé par David d'Amours – a CDM winner that is unlikely to see many tourists. Its interior, by local architecture and design studio Blazys Gerard, is quiet and sophisticated. According to one of the award's jurors, Montreal Museum of Fine Arts director Nathalie Bondi, this sort of low-profile space is just as important. "In its way it is trying to deliver a new experience for the client," she says, "and to create a better environment for everybody. That is the spirit of this competition – a hairdresser, and also three bakeries. Those people really give another dimension to the simple act of buying bread."

As the city works hard to attract and retain residents, particularly families, it's valuable to celebrate and to elevate the daily bread of urban life. Certainly Montreal has bigger challenges – and Gauthier puts CDM alongside other projects of the design office, including design competitions to improve two important but struggling commercial streets, St. Denis and St. Catherine. But encouraging small-scale retail is an effective way of creating activity, life and a sense of neighbourhood loyalty. "What will determine where you move?" she asks rhetorically. "Where's the bakery? How many little restaurants, little cafés, boutiques? That's what people are thinking in Montreal, and we feel that Commerce Design Montreal has contributed to that."

The central insight here is obvious but rarely cited by municipal governments: Interior design, like the architecture of public buildings and the design of street and public spaces, all contribute to our experience of the city. When I speak with the designer Zébulon Perron, whose office won four of the 20 CDM awards this summer, he is enthusiastic about the competition because "it does so much for independent businesses," he says. "I think that locally owned businesses add so much to a neighbourhood, and that's really what the competition is about."

To test this vision, I head to Little Italy for dinner at one of Perron's designed spaces: L'Impasto, the relaxed but serious outpost of chef Michele Forgione and restaurateur Stefano Faita. The restaurant, a pioneer in the area, sits on a quiet corner off St. Laurent Boulevard, but as I put my hand on the front door's elegant solid-wood handle, it's clear a few things will be a bit unusual. Perron's design preserves the old space's terrazzo and fills the room with salvaged oak chairs but also uses tailored walnut panelling and chic linear-incandescent fixtures that give an uncanny but warm light. As my family and I wolf down a luscious porchetta, the room fills up around us: a group of francophone twentysomethings, an anglo middle-aged couple with their parents, a mix of Montrealers of all ages whose night is a little bit more beautiful because it has been designed to be that way.