Foreign investment rebounded in 2021 to set record: Montreal International

“There’s a bit of catch-up here because of investments that couldn’t take place in 2020.”

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After a one-year slump caused by COVID-19, foreign investment in the Montreal region rebounded in a big way, setting a record in the process.

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Greater Montreal attracted $3.77 billion worth of foreign investment projects in 2021, a 69-per-cent jump from 2020, the city’s investment promotion agency reported Monday. Reinvestments — by subsidiaries already present in the region — accounted for about three-quarters of the total dollar figure, highlighting the importance of luring foreign investors in the first place, Montreal International said.

“There’s a bit of catch-up here because of investments that couldn’t take place in 2020,” chief executive Stéphane Paquet said in an interview. “Many companies in the US and Europe loaded up on cash at the start of 2020 and some of them waited to carry out their projects.”

All told, Montreal International says it “accompanied” 100 investment files last year, resulting in the creation of 11,550 jobs with an average annual wage of about $82,000. Eight of the projects $100 million, including investments by French video-game developer Ubisoft, US tech company Kyndryl and US exceeded subscription-commerce platform App Direct.

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Montreal International also sought to ease the province’s long-running labor shortage by luring 1,135 foreign workers to the area through virtual recruitment missions, webinars and digital promotion campaigns. About 250 health care workers, most of them nurses, were hired abroad last year, along with 115 teachers and nursery educators. More than 350 information technology workers were recruited to work for locally based companies.

Two more international organizations — the International Sustainability Standards Board and the Global Humanitarian Aviation Organization — set up shop in the city last year, and Montreal International had a hand in both decisions.

Montreal International’s responsibilities include connecting foreign investors with local companies and assisting them on matters relating to immigration or government financing. It doesn’t provide any tax credits to companies.

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“We’re like a luxury hotel concierge,” Paquet said. “We cover a wide range of services.”

Software outpaced all other sectors last year, accounting for 18 per cent of Montreal’s foreign investment. Seventeen per cent of inflows came from video-game makers, compared with 14 per cent for logistics and transport, and eight per cent each for data centres, aerospace and finance.

US companies were the most active foreign investors, contributing 35 per cent of all dollar amounts. France ranked second with 22 per cent.

Those new investments generated combined revenue of $823 million for the various levels of government, according to Montreal International data. The figure includes $425 million for Quebec, $300 million for the federal government and $98 million in property taxes for the Communauté métropolitaine de Montréal.

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In an age where many Quebec companies are struggling to fill vacant positions, Paquet sees no problem in creating yet more jobs locally. Quebec’s economy added 81,500 positions last month, Statistics Canada said Monday. That pushed the province’s unemployment rate down to 4.5 per cent — the lowest in the country.

“We’re very aware that the unemployment rate is no longer at 12 per cent, which is why talent attraction is a growing mission for us,” said Paquet. “We create well-paid jobs. You multiply these jobs by the average wage and you get an annual payroll of about $1 billion. This payroll is what will allow our shopping streets, our restaurants and our local businesses to thrive. So I’m not going to apologize for targeting the sectors that have the biggest impact on GDP.”

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It’s difficult to say at this point what effect the war in Ukraine will have on international investors, said Alexandre Lagarde, Montreal International’s vice-president of foreign investment.

“There’s a lot of concern among our clients in Europe about inflation, and especially energy prices, but that could also result in opportunities if companies decide to diversify by expanding to North America,” he said. “But it’s a bit too early to detect a trend.”

Still, Paquet is confident he can deliver good numbers again in 2022.

“We haven’t emptied the pipeline,” he said. “There are still lots of projects left.”

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