Joie de vivre: the FDI mood in Montréal is good

Montréal International’s Stéphane Paquet, Vice President – Investment Greater Montréal, is upbeat. He is basing his FDI strategy on both new sub-sectors within the technology sector, and high technology sectors within traditional sectors. He also has the advantage of fresh home-grown talent, returning talent and incoming talent to execute Montréal’s economic growth. Jo Murray speaks to him.

There is so much to conjure with in Montréal. The Canadian city and its surrounding region has immersed itself in IT and communications technologies, embraced video games, visual effects and animation, and thoroughly involved itself in big data and artificial intelligence. Creativity, coupled with technical know-how, and an environment ripe for nurturing talent, has put Montréal firmly on tech companies’ radars as they seek overseas growth, a foothold in the North American market and, perhaps, a step closer to Hollywood. In fact, the ICT sector in all its flavours now accounts for more than half of all FDI flows into Greater Montréal.

Of course, it helps when a significant precedent is set; after all the coming together of the business case with realised opportunity always pushes a value proposition a little further along. Perhaps that moment truly crystallised for Montréal when Framestore’s British senior managers took advantage of the favourable business environment in 2013 and set up shop in the city.

More recently we have seen UK visual effects and animation company Cinesite open a major animation studio in Montréal. The intention is to get nine feature animated films into production over the next five years. A new 54,000 sq ft animation studio has opened in downtown Montréal with the capacity to employ 500 permanent staff by 2020. State investment has allowed Cinesite to ramp up its visual effects capacity by 100%.

Greater Montréal has become one of the world’s largest special effects hubs over the last decade. This success is no coincidence; the industry owes its ascent to both the ingenuity of local entrepreneurs and to tax credits for film production services and multimedia production. In addition to Framestore, world renowned studios have established a presence, including: BUF, Technicolor, Mikros, Atomic Fiction; and so have local visual effects and virtual reality studios, such as: Rodeo FX, Cirque du Soleil, Digital Dimension, Moment Factory, Felix & Paul, Minority Media and VRvana.

Greater Montréal is known for its deep pool of creative talent. ICT-related industries alone account for over 92,000 jobs, including 35,000 skilled software developers who are often bilingual. The movie production industry alone creates over 12,500 jobs, including 1,000 direct jobs in 2D/3D animation and visual effects. What’s more, close to 10,400 university students enrol in ICT-related programs every year, adding to the local talent pool.

“When we are in Europe we tell companies that Montréal is a launch pad for their expansion into the rest of North America,” says Stéphane. “You can test the market from Montréal.” And this approach is bearing fruit. Whilst 46% of all FDI into the region comes from the US, as you would expect, 17% and 12% respectively flow from France and the UK.

With the video games, animation and visual effects industries maturing into bankable industries, artificial intelligence is a new contender; and the buzz surrounding it is becoming increasingly loud. “We have invested in public research for years; even when others stopped investing,” says Stéphane. “Now the application of artificial intelligence is happening at high speed.”

In fact, the Government of Canada is investing a total of C$160m in a Pan-Canadian Artificial Intelligence Strategy for research and talent, and the Government of Québec is investing C$100m across five years to build an artificial intelligence cluster that harnesses the talent emerging from universities and other R&D organisations. But Stéphane is keen to point out that it is not just fresh talent that will secure Montréal’s place in the artificial intelligence race; it is also returning talent that has already sharpened its teeth elsewhere in the offices of the tech giants in the US and elsewhere, as well as fresh overseas talent being attracted by Montréal’s artificial intelligence ecosystem.

While the bright shiny new industries dominate headlines, there exists alongside those the traditional industries in which Montréal has become expert. Aerospace is very much a stronghold in Greater Montréal but Stéphane is very specific about the slice of the aerospace industry that is proving fruitful in terms of FDI. He says it is the high-tech elements of that industry that his region is more specifically targeting. Austrian F. LIST is a case in point. It has chosen Greater Montréal’s Laval in which to set up its North American production facility for the manufacture of high-end interiors for business and private jets. The company expects to begin operations in Laval in the fall of 2017. It will initially employ 15 specialists and as many as 100 people by 2020.

F/LIST installs interiors in Bombardier jets, in business jets made by Brazilian aircraft manufacturer Embraer and in aircraft for Swiss company Pilatus. By setting up in Laval, the company wishes to develop its business with Bombardier and Embraer, as well as with other aerospace manufacturers that are present in North America, namely Gulfstream, Cessna and Dassault. This is most definitely a company seeking to secure a North American foothold.

Montréal has also been working with Bell Helicopter, a subsidiary of Textron Inc, to not only secure existing jobs, but also to create further investment. The helicopter manufacturer is transferring assembly and delivery activities for Bell 505 Jet Ranger X commercial helicopters from its facilities in Lafayette, Louisiana, to its Mirabel centre. Bell Helicopter has also confirmed that its next commercial helicopter will be assembled in Greater Montréal and the manufacturing of certain composite components will also be brought back to the region.

Further, Advanced Powders & Coatings (AP&C), a GE Additive company, has expanded its operations and built a second plant in Greater Montréal. The company, which specializes in the manufacture of metal powders for industrial sectors such as aerospace, already employs close to 85 people in Boisbriand and plans to invest approximately $31 million in a new, more automated facility that will increase capacity and create 106 new jobs over the next three years.

Additive manufacturing, also called 3D printing, is the process of adding and joining layer-upon-layer of metal powder to create complex objects, such as aircraft engine parts and medical implants. The expansion will enable AP&C to increase production capacity to meet growing demand for specialized powders used in additive manufacturing, particularly by major aerospace industry players.

The Montréal metropolitan area is home to the third-largest aerospace cluster in the world, and it accounts for 55% of jobs and sales in Canada’s aerospace sector and 70% of aerospace research and development investments in Canada. The sector’s global success is powered by four world-class OEMs with operations in Québec—Bombardier, Bell Helicopter Textron Canada, Pratt & Whitney Canada and CAE—as well as a robust Québec-based value chain of close to 200 equipment manufacturers and SMEs.

Another established sector in the region is life sciences and again Montréal International has brought its magic, joined the dots for international companies and imparted knowledge in terms of supply chains, partners and the way in which local eco-systems work. A major investment has been the future North American headquarters of South Korea’s Green Cross Biotherapeutics Inc. The project, whose facilities include a research centre and a blood plasma fractionation operation, is one of Quebec’s largest life science investments in 15 years.

Montréal International is perpetually working out value propositions, evaluating new sectors – such as electric vehicles – and courting international organisations, their secretariats and their conventions. It is definitely a strategy that gathers no moss. But Stéphane concedes that global political events prompted some nervousness at the beginning of the year; however his fears were soon allayed. He says: “In every uncertain moment there are opportunities and, in fact, the year has had a good start.” He calls his role, and that of his team, as being “business concierges” who signpost and assist but do not hand out incentives for short-term gain. And to make sure he is on point he benchmarks Montréal against the largest 20 cities in North America; not against any similar sized city from across the globe.

Most importantly, he is aware of the value Montréal’s insistence on investing in artificial intelligence will have on Montréal’s FDI prospects in years to come. “Artificial intelligence will be to the 21st century what the video games industry was 20 years ago. It can attract all industries – manufacturing, construction, banking, insurance – and we are lucky enough to be part of that.”