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Montréal's economy is hot


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Montreal's economy is hot. Now how do we get it even hotter?

October 2016, Montreal’s unemployment rate dropped below seven per cent for the first time in almost eight years.

In the almost two years since then, it has not only remained below that level, it has slowly, though not always steadily, continued to decline.

In four of the past eight months, the regional unemployment rate has been below six per cent — something that has never happened since Statistics Canada began recording comparable numbers.

It’s not just that fewer Montrealers are actively looking for work. The regional gross domestic product (GDP), the strongest indicator of economic health, rose by 3.5 per cent in 2017. And while foreign direct investment across Canada declined in 2017, it was up 50 per cent in the Montreal region, reaching more than $2 billion.

For the first time in decades, Montreal’s economy is hot.

But while there are plenty of positive signs, Montreal continues to lag behind other large North American cities on many economic measures. Salaries are lower, per capita GDP continues to trail our peers and even though the local unemployment rate is now lower than Toronto’s, it remains higher than the rate in Vancouver and many comparable cities in the United States.

To find the origin of Montreal’s current growth spurt, you have to go back more than 20 years, according to Jean-Guy Côté, the associate director of the Institut du Québec, a think tank created through a partnership between the Conference Board of Canada and HEC Montréal.

In the late 1990s, the Parti Québécois provincial government decided it would encourage what it called “multimedia” companies — video-game developers and companies making technology related to the then-nascent internet — to expand in Quebec.

Included in the 1997 provincial budget were tax credits and grants intended to attract foreign multimedia companies and to help spur growth for companies already here. At the time, the entire sector employed around 3,000 people in Montreal.

That year, video-game maker Ubisoft opened a Montreal studio, with plans to employ 550 within five years. That studio alone now employs more than 3,000 — most of them highly skilled workers.

“What we see right now are the benefits of this choice. Montreal is becoming a hub for these kinds of industries,” Côté said. “These past choices were good ones and, right now, the growth in Montreal is mostly based on that.”

 wide range of service providers have grown with these industries, selling to these businesses and their workers. And as tech workers buy homes and infrastructure is built around those properties, that encourages further growth, Côté said.

In 2017, the number of people working in Montreal rose by 75,000, a growth rate of 3.61 per cent. That’s the highest rate among the 20 largest metropolitan regions in Canada and the United States, according to a report prepared by Montréal International, an economic development agency, using data from the Conference Board of Canada and the U.S. Bureau of Labor Statistics.

“The first reason why is the rise of our tech sectors,” said Christian Bernard, the chief economist at Montréal International.

The city’s artificial-intelligence, visual-effects, video-game, aerospace and information-technology sectors all saw growth last year, he said.

But tech isn’t the only factor. The large number of construction projects underway in Montreal in recent years has also created jobs.

“Montreal has been under construction for the last 10 years and this kind of spending is good news for the city, too, because there’s full employment right now for construction workers,” Côté said.

There may also be some more ephemeral factors driving the current period of growth, factors whose effect is easier to measure than their cause.

“I think one element that we see now is confidence,” said Michel Leblanc, the president and CEO of the Chamber of Commerce of Metropolitan Montreal. “I think at this point, you have a community, private investors, bankers that want to support those projects, individuals who will invest, who will buy, private companies that will expand. All this is based on the fact that people believe that if we do things right, it will work out; if we invest well, we’ll get a good return; if we create new businesses, we’ll find a market. I think this dynamic is built on confidence.”

While some of this confidence comes from a strong economy, government also plays a role, said Dominique Anglade, Quebec’s economy minister.





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Très bon papier de Jacob Serebrin dans la Gazette sur l'économie de Montréal. Et j'apprécie davantage le passage sur l'origine de ce succès économique dont il faut remonter 20 ans en arrière avec la création de la ''cité du multimédia'' par le gouvernement du Parti Québecois et l'arrivée de ''Ubisoft'' 

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