Canadian and international companies continue to make record investments in the Montreal area this year as the region shakes off the effects of the ongoing COVID-19 pandemic, but are slowing in coming months amid the prospect of a recession. The most sweeping overhaul of Quebec’s language in nearly half a century could also spook some businesses. Non-Quebec companies made $1.74 billion in investments in Canada’s second-largest city in the first six months of 2022 as they launched a record 57 projects and created about 4,700 jobs, according to the latest data from Montréal International , the investment promotion of the city. agency. Thirty-one companies established a subsidiary in Montreal for the first time. Last year at the same time, companies committed $1.86 billion to 40 new projects. But Montréal International, a public-private partnership funded in part by the governments of Quebec and Canada, counts only the investments it has facilitated, meaning the absolute numbers could be much higher. The Montreal region, known for its substantial knowledge and research base, has attracted the attention of global investors over the years for its expertise in artificial intelligence (AI) and deep learning. Companies such as McKinsey & Co-owned data analytics firm QuantumBlack and aerospace giant Thales SA are just two companies that have set up AI operations in the city in recent years. This year, health and life sciences companies also generated a notable chunk of investment activity, with 7 projects launched worth a net $321 million. This is a higher amount in six months than for the whole of the previous year. Moderna Inc.’s plan, announced in April, to build a vaccine manufacturing plant in the Montreal area is not yet included in the numbers. Silicon Valley-based Circle Medical Technologies is among the companies expanding into the Montreal area. The company, which specializes in virtual telemedicine, currently has 25 employees in the city with plans to increase that number to 360 over the next three years. It has already made many hires in software engineering, product design and operations management, said Giorgos Favvas, the Montreal native who co-founded the company and now runs it as CEO. Mr. Favvas said his leadership team initially thought Montreal would simply be an office to support the company’s San Francisco base. Now he says the city’s strong labor pool and tech ecosystem have convinced him to develop operations there in conjunction with its US headquarters. “We see Montreal as almost a second head office or a satellite head office,” he said. “There are a number of roles that we are open to the candidate working in, either in Montreal or in San Francisco, on equal terms. The growth underscores the diversity of Montreal’s economy, which has a lower unemployment rate than Toronto, Vancouver or Calgary at 4.8%. Government incentives and the organization’s own promotional work also play a role, said Stéphane Paquet, president and CEO of Montréal International. However, he says it could be difficult to maintain the momentum. “I think investment will slow down,” Mr. Paquet said. A recession could prompt companies to withdraw their plans, he said. Quebec’s economy has about a 35 percent chance of being hit by a recession, Eric Girard, Quebec’s finance minister, said last month. Lingering questions about Quebec’s new language legislation could also affect business decision-making, Mr. Paquet acknowledged. The Quebec government passed Bill 96 in late May in an attempt to correct a language pendulum it says is moving too far away from the use and adoption of French in everyday life. The controversial new legislation includes measures to make French “significantly dominant” in commercial signage and forces companies with 25 to 49 employees to meet French language certification obligations to the same strict standards that previously applied to companies with 50 to 99 employees. Many business leaders in the province have voiced their support for strengthening French, even as they warn the new legislation could burden companies with additional costs and complicate their hiring efforts at a time when Canada is facing a severe labor shortage. potential. Top executives with 37 Quebec-based tech companies last month called for a freeze on implementation of the law until Prime Minister Francois Lego’s government puts in place French-language courses and other tools businesses need to comply. Montréal International’s phones started ringing off the hook last year as companies began asking questions when the legislation was tabled, Mr. Paquet said. The team organized training sessions led by law firm Fasken, after which fewer questions came. Since the bill became law in late spring, the questions have started again. “We thought it was over, but apparently it’s not,” Mr. Paquet said. The organization now puts companies directly in touch with the Office québécois de la langue française (OQLF), which is the government agency responsible for enforcing Quebec’s French language statute. One such briefing was held on July 13 between representatives of overseas-based companies and OQLF officials, Mr. Paquet said. “What they’re telling me is that once they’ve talked to OQLF, it’s a lot clearer and they’re reassured.” Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox morning or night. Sign up today.
