Indicators En2009

Greater Montréal: creative people and profitable investments

Attractiveness Indicators2009-2010

Canada’s premier university metropolitan area! p.4

Canada’s R&D capital! p.14

Most competitive cost structure! p.21

Focused and highly competitive incentives! p.26

An excellent business environment! p.31

I

Recently, large urban centres such as Montréal have distinguished themselves by

attracting successful companies and strategic investments because of their innovation,

creativity and high technology. In spite of the current economic downturn, these

metropolitan areas should remain attractive to foreign businesses seeking to locate in

places that offer profitable and progressive alternatives for contending with the shocks

in the world economy.

In the knowledge economy, the key factors that determine a metropolitan area’s drawing

power essentially revolve around the five following variables: talent, innovation, costs,

incentives and business environment.

The cost factor assumes greater importance during hard times. The objective for many

companies is to reduce operating costs so as to maintain profit margins. By investing

abroad in a first-rate metropolitan area with a competitive cost-structure, a company

can achieve this goal. In this respect, Greater Montréal is a first-choice destination.

The following comparative analysis of five attractiveness factors demonstrates that

Greater Montréal measures up very favourably to its main North-American competitors

(Canada and the United States). In spite of the fact that it ranks 16th in North America

and 2nd in Canada in population size, Montréal is nevertheless one of the front-runners

among the twenty largest urban areas in North America and number one in Canada for

several indicators. Its enviable position in this elite group allows it to position itself as

one of the most creative, attractive and progressive metropolitan areas on the continent.

This enviable position highlights Greater Montréal strengths:

01. talent With its eleven institutions of higher learning, including four large

universities, as well as many colleges and schools, the area ranks first in Canada

in terms of students and university-based researchers.

02. InnovatIon Greater Montréal is Canada’s research and development (R&D)

capital and enjoys an international reputation for excellence in information and

communications technology (ICT), life sciences and aerospace.

03. Costs Greater Montréal enjoys a substantial cost advantage over its main North

American competitors, particularly in R&D sectors.

04. InCentIves Montréal has one of the best corporate tax rates in North America

and a broad range of focused and highly competitive incentives.

05. BusIness envIronMent Greater Montréal’s business climate is characterized

by easy access to capital, strategic positioning in North America with close

proximity to Europe, favourable conditions for free trade and investment and an

exceptional quality of life.

Greater Montréal’s relative position on these five attractiveness factors is summarized in

the following table and further developed in this report.

Pierre Brunet andré GamacheChairman of the Board President and CEO

Greater Montréal: a first-choice destination

II

01. talent

Number of university students by % of population (2006) 1 Montréal, Boston Top 20 in North America 4.65%

Number of university students (2006) 1 Montréal, Toronto Top 5 in Canada 159,090

Number of foreign university students (2006) 1 Montréal, Toronto Top 5 in Canada 14,723

Number of university degrees awarded (2006) 1 Montréal, Toronto Top 5 in Canada 46,152

Number of university degrees awarded to foreign students (2006) 1 Montréal, Toronto Top 5 in Canada 3,658

Bilingual population - English, French (2006) 1 Montréal, Ottawa Top 5 in Canada 1,861,930

Trilingual population (2006) 1 Montréal, Toronto Top 5 in Canada 659,850

02. InnovatIon

Concentration of high technology jobs (2007) 5 Seattle, Boston Top 20 in North America 9.4%

Overall R&D performance of businesses 1 Montréal, Toronto Top 5 in Canada Index : Montréal = 95.0 and universities (2006)

Number of university-based researchers (2007) 1 Montréal, Toronto Top 5 in Canada 5,549

Funds dedicated to university-based 1 Montréal, Toronto Top 5 in Canada CA$7 billion research (2000-2007)

Patents held (2007) 1 Montréal, Toronto Top 5 in Canada 618

Growth in the number of patents held (1997-2007) 5 Houston, Seattle Top 20 in North America 78.6%

Rate of attraction of patented inventions (2007) 3 Philadelphia, Houston Top 20 in North America 55.5%

Scientific publications per 100,000 population (2007) 4 Washington, Boston Top 20 in North America 171

Scientific publications resulting from 1 Montréal, Toronto Top 5 in Canada 175 university/business cooperation (2000-2007)

03. Costs

Total business operating costs, 1 Montréal, Toronto Top 20 in North America Index: Montréal = 83.4 12 sector average (2008)

Annual average salary – 8 occupational groups (2009) 1 Montréal, 2nd place Top 20 in North America Average = varies by job US$68,007

Total occupancy cost for industrial space (2008) 3 Atlanta, Dallas Top 20 in North America US$3.84/ sq ft/year

Total occupancy cost for office space (2008) 1 Montréal, Ottawa Top 20 in North America US$15.54/ /sq ft/ year

Average electric rate 2 Seattle, Montréal Top 10 in North America 8.02 ¢/kWh (average = 1,000 kW - 2008)

Consumer Price Index (October 2007) 1 Montréal, Edmonton Top 5 in Canada Index: Montréal = 95

Average home sales price (2008) 1 Montréal, Ottawa Top 5 in Canada CA$258,028

Average monthly rent (2 bedrooms - 2008) 1 Montréal, Ottawa Top 5 in Canada CA$647

04. InCentIves

Effective tax rate – manufacturing 1 Québec, Ontario Canadian provinces and American 30.9%and non-manufacturing companies (2009) states in which Top 20 North American cities are located

05. BusIness envIronMent

Urban infrastructure (2009) 2 Vancouver, Montréal Top 20 in North America Index: Montréal = 100

Quality of life (2009) 3 Vancouver, Toronto Top 20 in North America Index: Montréal = 100

Homicide rate per 100,000 population (2007) 1 Montréal, Toronto Top 20 in North America 1.6

Hosting of international meetings (2007) 2 New York, Montréal North America2 90 meetings

1 The North American metropolitan areas (Canada and the United States) included here are the largest in population size for which data were available. 2 Data for sixteen Canadian and American cities were presented in the Top 100 rankings.

01.

02.

03.

04.

05.

IndicatorsGreater

Montréal’s rankingleading Benchmark areas

Benchmark areas1

results for Greater Montréal

summary of results

III

Table of contents

suMMary ItaBle of Contents IIIIntroduCtIon 2

talent: Greater Montréal: Canada’s premier university metropolitan area 41.1 Undergraduate and graduate university enrolment 41.2 Enrolment in technical and vocational training programs 91.3 Undergraduate and graduate university degrees 91.4 Technical and vocational training diplomas 121.5 Language skills 12

InnovatIon: Greater Montréal: Canada’s r&d capital 142.1 High technology employment 152.2 Research and development 152.3 Patents 182.4 Scientific publications 20

Costs : Greater Montréal: Most competitive cost structure among the top 20 north american metropolitan areas 213.1 Business costs 213.2 Personal costs 24

InCentIves: Greater Montréal: one of the most profitable business destinations in north america 264.1 Corporate taxes 264.2 Main corporate tax incentives 274.3 Main corporate financial incentives 30

BusIness envIronMent: Greater Montréal: a magnet for foreign investment 315.1 Access to capital 315.2 Exports 325.3 Announced private-sector industrial investment projects 335.4 Announced institutional and government investment projects 345.5 Infrastructure 355.6 Quality of life 365.7 Greater Montréal’s overall economic situation 38 aPPendICes a : Labour costs – Comparison of average annual salaries of typical occupations (US$) 39

B : Comparison of corporate income tax rates for manufacturing companies – Canadian provinces and American states home to the twenty largest North American metropolitan areas, 2009 40

Comparison of corporate income tax rates for non-manufacturing companies – Canadian provinces and American states home to the twenty largest North American metropolitan areas, 2009 41

C : Sources 42

d : Methodological notes 43

CredIts 46

01.

02.

03.

04.

05.

2

IntroductionThis fourth edition of Greater Montréal’s Attractiveness Indicators is designed to assist

foreign investors as they go about gathering information and selecting a location. It

underscores how Greater Montréal measures up on the defining elements that constitute

a hub of attraction: talent, innovation, costs, incentives and business environment.

During an economic downturn, such as the one that began in the fall of 2008, costs

become a driving factor in the site selection process. In these circumstances, businesses

generally look for solutions that will reduce their operational costs in the short-term so

as to maintain their profit margins. Relocating operations to places that provide the best

cost/quality ratio is often a winning strategy.

Besides having one of the most competitive cost structures in both Canada and the

United States, Greater Montréal has at its disposal a highly qualified and creative

workforce. With eleven institutions of higher learning, including four major universities,

the area is replete with talent.

Companies that emphasize cost control also tend to be more interested in financial and

tax incentives. These measures generate a considerable amount of competition among

urban centres attempting to attract investment projects. In this regard, Greater Montréal

stands out as a world-class player, widely acknowledged for the competitiveness and

diversity of its array of incentives.

In this document, Greater Montréal’s competitive position is compared with that of

the twenty largest metropolitan areas in Canada and the United States. These North

American regions were chosen by population size. In this regard, the Montréal

metropolitan area ranks 16th in North America with a population of 3.7 million. The term

“North America” takes in only the United States and Canada; Mexico is not included.

Unless otherwise specified, the statistical universe used for comparative purposes is the

Census Metropolitan Area (CMA) for Canada and the Metropolitan Statistical Area (MSA)

and Combined Statistical Area (CSA) for the United States. The terms “Metropolitan

Montréal”, “Greater Montréal” or “Montréal” refer to the Montréal CMA. When historical

data are not available for a given metropolitan area, the next closest statistical universe

is used.

It is not always possible to compare Montréal with the same group of metropolitan areas

because the list of regions varies from one source to another. Data permitting, comparisons

are generally based on the twenty largest North American metropolitan areas, but when

that is impossible, on Canada’s five major CMAs.

Finally, the CA$/US$ exchange rate used to analyse some data in this study is the 2009

first quarter average. From April to June 2009, the Canadian dollar has appreciated by

more than 8.5%. It should be noted that the CA$/US$ historical average exchange rate

for the 2004-2008 period was: US$1 = CA$1.1576.

3

MONTRÉAL

New York

Boston

Washington

Toronto

Detroit

ClevelandPhiladelphia

Atlanta

Miami

Houston

DallasPhoenix

Chicago

Minneapolis

Denver

San Diego

Los Angeles

San Francisco

Seattle

Ottawa

VancouverCalgary

t1. top 20 north american metropolitan areas by population

2008

Metropolitan area statistical definition Population

New York Combined Statistical Area 22,154,752Los Angeles Combined Statistical Area 17,786,419Chicago Combined Statistical Area 9,793,036Washington Combined Statistical Area 8,295,397Boston Combined Statistical Area 7,514,759San Francisco Combined Statistical Area 7,354,555Dallas Combined Statistical Area 6,655,261Philadelphia Combined Statistical Area 6,398,896Houston Combined Statistical Area 5,829,620Atlanta Combined Statistical Area 5,729,304Toronto Census Metropolitan Area 5,607,475Miami Metropolitan Statistical Area 5,414,772Detroit Combined Statistical Area 5,354,225Phoenix Metropolitan Statistical Area 4,281,899Seattle Combined Statistical Area 4,087,033Montréal Census Metropolitan area 3,725,207Minneapolis Combined Statistical Area 3,562,284Denver Combined Statistical Area 3,049,562San Diego Metropolitan Statistical Area 3,001,072Cleveland Combined Statistical Area 2,887,492

Note : Population data for American metropolitan areas are those of July 1, 2008.

Geographic location of Montréal in north america

4

3 The following ratios were used to estimate the number of university students in the Montréal metropolitan area in 2006 and 2007: 70% for the Institut national de la recherche scientifique (INRS), 55% for the Télé-université (TÉLUQ), 50% for the École nationale d’administration publique (ENAP) and 10% for the Université de Sherbrooke. Additional information is available in Appendix D..

Greater Montréal’s skilled

workforce represents:

350,000 university, college and

vocational education students

enrolled in:

- Eleven world-class institutions

of higher learning, including

four major universities (two

Francophone, two Anglophone),

that offer innovative programs

adapted to the needs of the

new economy.

- Colleges and specialised

secondary level schools

that provide students with

technical and vocational training

developed in conjunction with

the private sector.

15,000 foreign university students.

A multicultural, multilingual

population open to the world.

01. Talent

1.1 underGraduate and Graduate unIversIty enrolMent

In 2007, over 170,000 students were registered in Greater Montréal’s institutions of higher learning. In the future, companies will be able to draw on a major pool of university graduates to meet their skilled manpower needs.

t2. university enrolment in Greater Montréal by Institution

Fall 2006-2007 2006 2007 Growth

Institutions number % number % 2006/2007 (%)

Based in Greater Montréal

Université de Montréal 40,148 23.5 40,232 23.5 0.2Université du Québec à Montréal 39,328 23.0 38,563 22.5 -1.9Concordia University 31,282 18.3 31,904 18.6 2.0McGill University 31,354 18.4 31,415 18.3 0.2HEC Montréal 11,631 6.8 11,934 7.0 2.6École Polytechnique de Montréal 5,289 3.1 5,362 3.1 1.4École de technologie supérieure 4,606 2.7 4,549 2.7 -1.2subtotal 163,638 95.8 163,959 95.7 0.2 With campuses and activities in Greater Montréal

Télé-université (TÉLUQ) 3,816 2.2 3,935 2.3 3.1Campus de Longueuil de l’Université de Sherbrooke 2,067 1.2 2,072 1.2 0.2École nationale d’administration publique 906 0.5 921 0.5 1.7Institut national de la recherche scientifique 361 0.2 362 0.2 0.2subtotal3 7,150 4.2 7,291 4.3 2.0

total 170,788 100.0 171,250 100.0 0.3

5

Over 70% of Greater Montréal’s university student body was enrolled in science, management and social science programs in 2007.

In 2007, over 27,000 students were enrolled in high-tech related programs; this represented more that 15% of all university students in Greater Montréal.

t3. university enrolment in Greater Montréal by discipline

Fall 2006-2007

2006 2007 Growth

disciplines number % number % 2006/2007 (%)

Scientific disciplines 46,008 26.9 45,878 26.8 -0.3Applied Science 24,031 14.1 23,905 14.0 -0.5Health Science 12,784 7.5 12,990 7.6 1.6Science 9,194 5.4 8,983 5.2 -2.3

Management 39,015 22.8 39,768 23.2 1.9Social Science 34,894 20.4 35,313 20.6 1.2Education 11,396 6.7 11,209 6.5 -1.6Literature 9,171 5.4 9,030 5.3 -1.5Arts 7,471 4.4 7,400 4.3 -1.0Multidisciplinary Studies 4,373 2.6 4,234 2.5 -3.2Law 3,536 2.1 3,628 2.1 2.6Other 14,925 8.7 14,789 8.6 -0.9

total 170,788 100.0 171,250 100.0 0.3

t4. university enrolment in Greater Montréal by High technology Program

2007

Program number

Computer Science 4,055Mechanical Engineering 3,864Electrical, Electronic and Communications Engineering 3,536Biological Sciences 2,407Medicine 2,002Industrial and Management Engineering 1,587Biochemistry 1,502Pharmacy and Pharmaceutical Science 1,170Chemistry 1,083Mathematics 1,055Chemical Engineering 856Information Technology and Computer Engineering 841Microbiology 587Veterinary Medicine 585Physical Science 541Biological and Biomedical Engineering 342Information Management 321Experimental Medicine and Surgery 261Physical Engineering 219Aerospace, Aeronautical and Astronautical Engineering 114Probability and Statistics 101Applied Mathematics 88

6

«

Among North America’s Top 20, Greater Montréal ranks 1st in the largest per capita number of university students, ahead of Boston, which is often considered the intellectual capital of the United States.

G1. university students by % of Population

Top 20 North American metropolitan areas, 2006

MontréalBoston

MinneapolisDenver

WashingtonSan Diego

PhiladelphiaNew York

DetroitChicagoPhoenix

MiamiCleveland

San FranciscoToronto

Los AngelesAtlantaDallas

SeattleHouston

0 % 1 % 2 % 3 % 4 % 5 %

G2. university students (in 000s)


New YorkLos Angeles

BostonWashington

ChicagoPhiladelphia

San FranciscoDetroit

MontréalMiami

MinneapolisDallas

TorontoDenverAtlanta

PhoenixSan Diego

HoustonCleveland

Seattle

0 100 200 300 400 500 600 700 800

Greater Montréal is 9th in North America in the number of university students.

7

« «the creation of ePsIlon rto and its establishment in Greater Montréal is a major step in our strategy to penetrate the north american market. the highly qualified workforce and the numerous research centres, a dynamic academic environment as well as the existing technological infrastructure all constitute growth factors for our company.

Mr. Bruno desaunettes, EPSILON President (2009)

G3. Graduate students

Top 5 Canadian metropolitan areas, 2006

0

5,000

10,000

15, 000

20,000

25, 000

30, 000

35, 000

40, 000

Montréal Toronto Vancouver Ottawa Calgary

G4. university students


0

50,000

100,000

150, 000

200, 000


Greater Montréal remains Canada’s university capital: it ranks 1st in the number of university students, particularly graduate students.

8

Acknowledged around the world for its educational excellence, Greater Montréal continues to attract more foreign university students than its Canadian competitors, particularly at the graduate level.

G5. foreign Graduate students


0

1,000

2,000

3, 000

4,000

5,000

6,000


G6. foreign university students


0

6, 000

3,000

9,000

12,000

15, 000


9

4 Enrolment statistics include students registered in the following technical programs: diplôme d’études collégiales (DEC), attestation d’études collégiales (AEC), certificat d’études collégiales (CEC), diplôme de perfectionnement de l’enseignement collégial (DPEC).

5 Enrolment statistics include only regular track programs (diplôme d’études professionnelles, certificat d’études professionnelles, attestation de spécialisation professionnelle and attestation de formation professionnelle).

6 In calculating the total number of Greater Montréal students, data from the following administrative regions were included: Lanaudière, Laurentides, Laval, Montérégie and Montréal.

Businesses can draw on a pool of over 120,000 college students (55,000 with technical training) and more than 50,000 students enrolled in secondary level vocational programs.

The most popular technical training programs in Québec produce candidates for jobs that are of critical importance to any company locating in Greater Montréal.

In 2007, there were over 42,000 university graduates in the Greater Montréal area, 75% having majored in science, management or social science.

1.2 enrolMent In teCHnICal and voCatIonal traInInG ProGraMs

t5. technical4 and vocational5 training in Greater Montréal6

2004-2007

training 2004 2005 2006 2007*

Technical 60,645 58,520 56,733 56,175Vocational 46,963 49,630 51,021 52,359

* 2007 data are provisional.

t6. Most Popular technical training Programs (deC) in Québec

2007

Program number

Management and Accounting Technology 5,021Information Technology 3,179Business Management 2,989Mechanical Engineering Technology 1,687Industrial Electronics Technology 1,658

1.3 underGraduate and Graduate unIversIty deGrees

t7. university degrees awarded By Major

2006-2007

2006 2007 Growth

Major number % number % 2006/2007 (%)

Management 11,681 28.1 11,578 27.6 -0.9Scientific disciplines 11,342 27.3 11,528 27.5 1.6

Applied Science 5,695 13.7 5,635 13.4 -1.1Health Science 3,505 8.4 3,741 8.9 6.7Science 2,143 5.2 2,152 5.1 0.4

Social Science 8,786 21.1 9,010 21.5 2.6Education 2,825 6.8 2,709 6.5 -4.1Literature 2,562 6.2 2,454 5.9 -4.2Arts 1,744 4.2 1,774 4.2 1.7Multidisciplinary Studies 1,563 3.8 1,674 4.0 7.1Law 1,042 2.5 1,127 2.7 8.2Other 62 0.1 60 0.1 -3.7

total 41,607 100.0 41,914 100.0 0.7

10

t8. university degrees awarded in High technology Programs

2007

Program number

Computer Science 1,015Electrical, Electronic and Communications Technology 891Mechanical Engineering 807Biological Science 640Industrial and Management Engineering 414Medicine 375Pharmacy and Pharmaceutical Science 357Biochemistry 320Mathematics 259Chemistry 246Information and Computer Engineering 229Microbiology 192Chemical Engineering 184Veterinary Medicine 142Physical Science 131Information Management 113Biological and Biomedical Engineering 75Experimental Medicine and Surgery 62Physical Engineering 42Aerospace, Aeronautical and Astronautical Engineering 41Probability and Statistics 33Applied Mathematics 19

In 2007, over 6,500 university students graduated with degrees in high technology fields; this represented 15% of all university graduates in Greater Montréal.

Montréal remains Canada’s university capital, ranking 1st in the total number of university degrees awarded and, more specifically in the number of graduate degrees conferred.

G7. Graduate degrees awarded


0

2,000

4,000

6, 000

8,000

10, 000

12,000


11

G8. university degrees awarded


0

10,000

20, 000

30,000

40,000

50,000


G9. Graduate degrees awarded to foreign students


0

300

600

900

1,200

1, 500

Montréal TorontoVancouver Ottawa Calgary

Greater Montréal’s educational excellence is acknowledged the world over. It is in Montréal that the largest number of graduate and undergraduate university degrees is conferred to foreign students in Canada.

12

G10. university degrees awarded to foreign students


0

500

3, 500

2,500

2,000

1,500

1, 000

3,000

4, 000


Over 21,000 vocational training diplomas were earned in 2006. Approximately 9,000 technical training diplomas were awarded in 2005.

7 The Greater Montréal total includes data from five administrative regions: Lanaudière, Laurentides, Laval, Montérégie and Montréal.

Greater Montréal has the largest bilingual population in Canada.Over two million residents are fluent in both official languages (French and English). This represents more than half of the region’s entire population.

«

1.4 teCHnICal and voCatIonal traInInG dIPloMas

t9. technical and vocational diplomas awarded in Greater Montréal7

2003-2006

training 2003 2004 2005 2006

Technical* 9,277 9,123 8,865 N/AVocational** 17,653 18,755 19,875 20,652

* Provisional 2005 data.** Provisional 2006 data.

1.5 lanGuaGe skIlls

t10. Bilingual Population by Metropolitan area in Canada

2006

Metropolitan area Bilingual population %

Montréal 1,861,930 51.9Ottawa 496,030 44.4Québec City 232,530 33.0Winnipeg 74,885 10.9Toronto 418,505 8.3Calgary 84,085 7.9Vancouver 162,790 7.8

13

t11. Population fluent in at least three languages by Metropolitan area in Canada

2006

Metropolitan area trilingual + population %

Montréal 659,850 18.4Toronto 534,190 10.5Ottawa 112,771 10.1Vancouver 193,320 9.2Calgary 60,135 5.6Edmonton 45,750 4.5Winnipeg 29,560 4.3

It is also home to Canada’s largest trilingual population: nearly 20% of the population is fluent in at least three languages.

t12. linguistic skills in Greater Montréal, top 20 languages

2006

language number language number

French 3,266,845 Vietnamese 30,235English 2,124,735 Romanian 27,645Spanish 206,895 Russian 27,115Italian 178,780 Tagalog (Pilipino) 18,970Arabic 142,930 Hebrew 18,555Creole languages 74,935 Polish 18,135Greek 50,660 Armenian 17,905Chinese* 45,425 Punjabi 15,235Portuguese 38,695 Persian (Farsi) 15,045German 31,930 Urdu 14,800

* Including Cantonese, Mandarin, Taiwanese, Chaozhou (Teochew), Fukien, Hakka and Shanghainese.

A linguistic and cultural diversity capable of meeting the needs of multinational companies

« «

all the technical skills found in the region, the synergy with Montréal universities and the technological infrastructure already in place are factors that will support our company’s growth.

Mr. William Mallol, vice-président of AMESYS Canada (2008)

14

Innovation in Greater Montréal

represents:

A vast community of talent

involved in high technology

sectors such aerospace, life

sciences and information and

communications technology.

An ideal R&D environment for

companies: Montréal is home

to more research centres and

university-based researchers than

any other urban centre in Canada.

A priority for federal, provincial

and municipal governments that

finance many R&D projects and

make Greater Montréal the leading

beneficiary of university research

funding in Canada.

A niche that has enormous

commercial potential as

demonstrated by the area’s

remarkable performance in

both Canada and North America

in terms of patents held and

the number of scientific

publications generated by

university/business cooperation.

02. Innovation

aerosPaCe

Over 42,000 jobs in 236 companies.

Along with Seattle and Toulouse, Greater Montréal is one of the three world capitals of the aerospace industry.

Main leaders: Air Canada, Bell Helicopter Textron Canada, Bombardier Aerospace, CAE, Esterline CMC Electronics, General Electric, Goodrich, Héroux-Devtek, Honeywell, L-3 Communications MAS (Canada), MDA Space, Messier-Dowty, Pratt & Whitney Canada, Rolls-Royce Canada, Sonaca Montréal, Thales Canada and Turbomeca.

Cluster Secretariat: www.aeromontreal.ca

lIfe sCIenCes Over 41,000 jobs in 620 organizations, including 150 research centres.

World leader in basic research in oncology, cardiology, endocrinology and immunology.

Main leaders: Algorithme Pharma, Anapharm, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, MDS Pharma Services, Merck Frosst, Novartis, Pfizer, Sanofi-Aventis, Schering-Plough and Wyeth.

Cluster Secretariat: www.montreal-invivo.com

InforMatIon and CoMMunICatIons teCHnoloGy (ICt)

120,000 jobs in approximately 5,000 companies.

A highly diversified cluster with a particularly dynamic electronic game sector. Recent investments by foreign companies such as Ubisoft, Electronic Arts, Eidos, VMC Game Labs, Cyanide, Javaground and Eyetronics have helped to make Montréal one of the foremost world-class centres in this field.

Main leaders: Autodesk, BCE, Compuware, Dassault Systèmes, DMR/Fujitsu, Electronic Arts, Ericsson, CGI Group, GFI, IBM, Morgan Stanley, Positron, Sanmina-SCI, SAP, SR Telecom, Ubisoft, Eidos, Telus and Videotron.

Cluster Secretariat: www.technomontreal.com

15

12%

9%

0%

6%

3%

15%

Sea

ttle

Bos

ton

Was

hing

ton

Dal

las

Montr

éal

San

Fra

ncis

co

San

Die

go

Toro

nto

Min

neap

olis

Los

Ang

eles

Pho

enix

St.

Loui

s

Atla

nta

Phi

lade

lphi

a

Chi

cago

New

Yor

k

Det

roit

Hou

ston

Mia

mi

Riv

ersi

de

2.1 HIGH teCHnoloGy eMPloyMent

G11. Concentration of High technology Jobs (%)


Greater Montréal ranks 5th in North America in high-tech job concentration8, just behind Seattle, Boston, Washington and Dallas. In 2007, one out of every ten jobs in the area was related to high technology.

0

100

80

60

40

20

Montréal Toronto VancouverOttawa Calgary

61.3 58.3 59.7 52.6 52.6

33.7 33.0 28.0 30.3 26.3

95.091.3

87.682.9

78.9

Private sector R&D University research

2.2 researCH and develoPMent

G12. top r&d Centres (Maximum score = 100)


According to RE$EARCH Infosource’s exhaustive study9, Greater Montréal remains Canada’s R&D capital. Montréal’s performance places it ahead of Toronto, Ottawa, Vancouver and Calgary in both private sector and university-based R&D.

8 The number of high-tech jobs divided by the region’s total number of jobs. High technology includes aerospace, life sciences and ICT. Please refer to Appendix D for the list of sectors and additional methodological information.

9 This compilation led to the construction of composite index consisting of eleven indicators that measure the R&D performance of companies (seven indicators – maximum score = 64) and universities (four indicators – maximum score = 36) located in Canada’s largest metropolitan regions. Please see Appendix D for more methodological detail.

16

Greater Montréal ranks 1st in Canada and 9th in North America for the number of research centres.

G13. number of research Centres


WashingtonNew York

BostonSan Francisco

Los AngelesChicago

PhiladelphiaDetroit

MontréalDenver

MinneapolisSeattle

HoustonTorontoAtlantaDallas

PhoenixCleveland

MiamiSan Diego

0 200 400 600 800 1, 000

G14. number of university researchers


Montréal

Toronto

Vancouver

Ottawa

Calgary

0 1, 000 2, 000 3, 000 4, 000 6, 0005, 000

Greater Montréal also ranks 1st in Canada in the number of university-based researchers.

« «the Montréal region has been an important centre of high-technology for many years, known for its aerospace, electronics, telecommunications, life sciences and transportation industries, and for its engineering services and r&d. It is an ideal location for triad MdG, and we look forward to serving companies throughout and beyond with the cost and time benefits of triad’s mixed-signal asIC designs.

Mr. richard Prescott, General Manager of Triad MDG (2008)

17

G15. university research funding – Ca$ Billion

Top 5 Canadian metropolitan areas, 2000-2007

0

6

5

4

3

2

1

7

8


Greater Montréal leads all other Canadian metropolitan areas in terms of the amount of money invested in university research. Over $7 billion was awarded to Montréal-based universities between 2000 and 2007; this represented 20% of the entire amount invested in Canada during that same period.

G16. nserC Grants and Bursaries awarded to universities – Ca$ M


Montréal

Vancouver

Toronto

Ottawa

Calgary

0 30 60 90 120 150

The grants and bursaries awarded to Greater Montréal researchers by the Natural Sciences and Engineering Research Council of Canada (NSERC) and the Canadian Institutes for Health Research (CIHR) represent nearly 14% and over 22% of the respective totals invested in Canada: a new benchmark.

«

18

G17. CIHr Grants and Bursaries awarded – Ca$ M


Montréal

Toronto

Vancouver

Ottawa

Calgary

0 50 100 150 200 250

Montréal

Toronto

Ottawa

Vancouver

Calgary

0 100 200 300 400 500 600 700 800

2.3 Patents

G18. Patents Held


Greater Montréal leads all Canadian metropolitan areas for patents held.

«

19

« «our decision to upgrade our facilities in Canada […] acknowledges efforts by the Canadian and Québec Governments to protect companies’ intellectual property with effective patent legislation and to install measures to provide Canadian patients with timely access to innovative new medicines. such efforts prove we can work together to create a climate that supports investment in r&d and the health care system and drives economy activity.

Mr. Jean-françois dehecq, Chairman of the Sanofi-Aventis Group (2008)

G19. Growth rate in Patents Held (%)

Top 20 North American metropolitan areas, 1997-2007

HoustonSeattle

San FranciscoSan DiegoMontréal

PhoenixAtlantaDetroitBoston

MinneapolisLos Angeles

DallasPhiladelphia

New YorkTorontoDenver

WashingtonMiami

ClevelandChicago

-50 % 0 % 50 % 100 % 150 % 200 %

Greater Montréal ranked 1st in Canada and 5th in North America in the rate of growth in patents held: 80% between 1997 and 2007.

G20. Patent attraction rate (%)


50 %

40 %

0 %

30 %

20 %

10 %

60 %

Phi

lade

lphi

a

Hou

ston

Montr

éal

Cle

vela

nd

New

Yor

k

Was

hing

ton

Chi

cago

San

Fra

ncis

co

Dal

las

Det

roit

Atla

nta

Min

neap

olis

Los

Ang

eles

Bos

ton

Den

ver

Mia

mi

Toro

nto

San

Die

go

Sea

ttle

Pho

enix

Metropolitan Montréal is 3rd in North America in attracting intellectual property. In 2007, over half of the patents held in Greater Montréal originated with foreign inventors (from outside the region). This statistic demonstrates the extent to which the area has become integrated into global innovation networks.

20

WashingtonBoston

San FranciscoMontréal

SeattlePhiladelphia

DetroitHoustonToronto

ClevelandMinneapolis

New YorkAtlanta

Los AngelesChicago

San DiegoDenverDallas

PhoenixMiami

0 50 100 150 200 300250

2.4 sCIentIfIC PuBlICatIons

G21. scientific Publications per 100,000 Population


In 2007, Greater Montréal ranked 4th per capita in North America in scientific publications due to a sizeable concentration of renowned institutions of higher learning, researchers and university professors.

160

120

0

80

40

200

2000 2001 2002 2003 2004 2005 2006 2007

Calgary Montréal Ottawa Toronto Vancouver

G22. scientific Publications resulting from university/Private sector Cooperation


In 2007, Greater Montréal remained Canada’s leader in the number of scientific publications generated by university/private sector cooperation. These remarkable results were due to the extensive research synergies developed among the area’s businesses and institutions of higher learning.

«

21

Greater Montréal’s competitive

cost structure represents:

A genuine advantage in an

economic downturn during

which companies are striving to

maintain profit margins.

An incentive for foreign businesses

wishing to locate closer to their

North American customers.

A competitive factor of particular

significance for R&D sectors.

An advantage that directly

affects costs for companies

and individuals.

03. Costs

MontréalTorontoTampaAtlantaDallas

HoustonSt. Louis

WashingtonPhoenix

San FranciscoPhiladelphiaMinneapolis

San DiegoDenverSeattleBoston

ChicagoDetroit

New YorkLos Angeles

80 90 100 110

« «the City of Montréal and the Government of Québec have created an outstanding business and research environment, with a talented, multilingual workforce; strong and diverse public sector and academic institutions; stable costs; and reliable infrastructure. these components are part of a winning formula that has led to success for companies operating in the region.

Ms. Maria Codipietro, Managing Director of SAP Labs Canada (2008)

3.1 BusIness Costs

Greater Montréal has the most competitive cost structure of any major North American metropolitan area. At the beginning of 2009, it enjoyed a 14% cost-advantage over its U.S. counterparts.

G23. Business operating Costs average for 12 sectors

Top 20 North American metropolitan areas for which data were available, 2008 (Average for U.S. cities = 100)

Note: Exchange rate used here: US$1 = CA$1.2453 (2009 Q1 average)

22

20 %

25 %

30 %

35 %

15 %

0 %

10 %

5 %

40 %

Clin

ical

Tria

ls M

anag

emen

t

Ele

ctro

nic

Sys

tem

Tes

ting

Bio

med

ical

R&

D

Adv

ance

d S

oftw

are

Con

tent

Dev

elop

men

t

Sha

red

Ser

vice

Cen

tre

Pre

cisi

on C

ompo

nent

s

Airc

raft

Par

ts

Aut

o pa

rts

Met

al C

ompo

nent

s

Ele

ctro

nics

Ass

embl

y

Pla

stic

Pro

duct

s

Med

ical

Dev

ices

Pha

rmac

eutic

als

Spe

cial

ity C

hem

ical

s

Tele

com

Equ

ipm

ent

Food

Pro

cess

ing

G24. Montréal’s Cost-advantage (%) Compared to average for u.s. Cities, by sector

2008

Montréal’s cost-advantage is particularly important for R&D and high technology sectors.This is especially true for clinical trial management (34.4%), electronic system testing (28.6%), biomedical R&D (24.1%), advanced software (24.1%) and Web and multimedia content creation (23.2%).

Greater Montréal has a highly skilled, competitively priced workforce. For example, taking into account the 2009 Q1 CA$/US$ exchange rate, an R&D director’s base salary is 30% lower in Montréal than in San Francisco.

«

Note: Exchange rate used here: US$1 = CA$1.2453 (2009 Q1 average)

t13. average annual salaries (us$) eight typical occupations

Sample of five North American metropolitan areas, January 1, 2009

R&D Director Montréal San Diego Chicago Seattle Boston 84,187 114,024 114,303 121,644 121,855

Manager Montréal San Diego Chicago Boston Seattle 73,355 96,519 96,868 103,041 103,253

Aerodynamics Engineer Montréal Seattle Chicago San Diego Boston 73,013 89,799 90,525 91,302 96,445

Software Developer Montréal San Diego Seattle Chicago Boston 72,283 90,005 92,083 92,377 97,732

Chemist Montréal San Diego Seattle Chicago Boston 60,640 76,850 77,176 77,809 82,335

Industrial Engineer Montréal Seattle Chicago San Diego Boston 65,662 80,773 81,325 82,103 86,567

Researcher Montréal San Diego Chicago Seattle Boston 58,389 71,897 72,388 72,556 76,825

Programmer Montréal San Diego Chicago Seattle Boston 56,525 72,231 73,467 74,484 78,039

Notes : See Appendix A for data on the Top 20 North American metropolitan areas. Exchange rate used here: US$1 = CA$1.2453 (2009 Q1 average).

23

G25. Industrial space leasing Costs – us$/sq ft/year

All North American metropolitan areas for which data were available, 2008

AtlantaDallas

MontréalToronto

ChicagoHouston

DenverPhiladelphia

SeattleBostonOttawa

New Jersey (North)Miami

Silicon Valley/San JoseVancouver

CalgaryLos Angeles County

San Francisco Peninsula

0 2 4 6 8 10 12

Greater Montréal offers industrial and office space at very affordable prices.

G26. office space leasing Costs – us$/sq ft/year

All North American metropolitan areas for which data were available, 2008

MontréalOttawaTorontoAtlantaDallas

CalgaryPhiladelphia

VancouverDenver

San Jose/Silicon ValleyChicago

Los AngelesSeattle

HoustonMiami

San FranciscoWashington

Downtown - New YorkBoston

Midtown - New York

0 20 40 60 80 100 120

Notes : Industrial and office space leasing costs include service charges and local taxes and are for class A buildings. Except for New York (as indicated in the table), office space is located in downtown areas. Exchange rate: US$1 =CA$1.2227 (December 31, 2008).

« «Montréal International, an organization dedicated to the economic promotion and development of Greater Montréal, supported us in this project and showed us the benefit of a facility in Québec’s biggest city with a large, highly skilled bilingual population, strong cultural ties with the united states and france, and competitive wages which were all key determining factors in making our decision.

Mr. roger Politis, co-founder of Avanquest Software and Managing Director in charge of the Group’s Research & Development (2008)

24

t14. average electricity rates (¢/kwh - taxes Included)

Top 10 of the 20 largest North American metropolitan areas for which data were available, April 1, 2008

Average Power

Power 500 kW 1,000 kW 2,500 kW1

Consumption 100,000 kWh 400,000 kWh 1,170,000 kWh

Load factor 28% 56% 65%

Seattle 5.32 Seattle 4.88 Seattle 4.87 Houston2 11.44 Montréal 8.02 Montréal 6.61 Détroit2 12.16 Houston2 9.41 Detroit2 8.39 Montréal 12.42 Detroit2 9.55 Houston2 9.19 Toronto 12.96 Toronto 10.08 San Francisco2 9.59 Miami2 13.72 Miami2 11.08 Toronto 9.63 Chicago2 14.25 Chicago2 12.79 Miami2 10.51 San Francisco2 17.58 San Francisco2 13.17 Chicago2 12.48 Boston 22.72 Boston 17.64 Boston 16.8 New York2 26.62 New York2 20.1 New York2 18.1

Notes : 1 25 kV supply voltage. 2 Hydro-Québec devised this estimate. Actual costs could vary with actual use. The exchange rate used here: US$1 = CA$1.0270 (April 1, 2008). The Canadian dollar depreciated by more

than 20% in relation to its American counterpart between April of 2008 and April of 2009.

Greater Montréal has one of the world’s most competitive and stable electric rates, currency exchange rates notwithstanding. When the Canadian and American dollars were at par in April of 2008, Greater Montréal already enjoyed a distinct advantage in North America. Québec’s vast source of hydroelectric power combined with its state-of-the-art transportation and delivery network ensure safe and competitively priced energy to companies located in the Greater Montréal area.

0

20

40

80

60

100

120

Montréal Edmonton VancouverOttawa Toronto

3.2 Personal Costs

G27. Consumer Price Index (average for all Canadian Cities = 100)

Top 5 Canadian metropolitan areas for which data were available, October 2007

Greater Montréal has a highly enviable cost of living due especially to the least expensive housing and lowest tuition and childcare fees in North America.

Note : For a more detailed discussion of the categories of consumer goods that constitute the CPI, please see the methodological notes in Appendix D.

25

G28. average Home sales Price (Ca$)


100, 000

300, 000

200, 000

500, 000

400, 000

600, 000

700, 000

Montréal Toronto VancouverOttawa Calgary

The average home sales price or apartment rent is lower in Montréal than in other large Canadian cities, such as Ottawa, Toronto, Calgary and Vancouver.

t15. average Monthly rent (Ca$)

Top 5 Canadian metropolitan areas, October 2008

type of apartment Montréal ottawa Calgary vancouver toronto

Studio 490 643 688 735 7401 bedroom 581 798 897 846 9002 bedrooms 647 961 1,089 1,084 1,0613 or more bedrooms 806 1,144 1,089 1,234 1,252

Note: Universe: privately owned apartment buildings with at least three apartments.

26

Greater Montréal’s financial and

tax incentives represent:

A significant edge making

Montréal the major North

American metropolitan area with

the lowest corporate tax rate for

R&D companies. This advantage

is made possible because of

generous R&D tax credit programs

established by the Canadian and

Québec Governments.

One of North America’s most

competitive corporate tax rates

for manufacturing and

non-manufacturing companies.

A Québec tax advantage that

will be strengthened even further

by the Government of Canada’s

intention to lower corporate taxes

from 22.12% to 15% by 2012.

With this measure, Canada’s

overall tax burden on new

business investment will be the

lowest among G7 countries.

A significant package of focused

and highly competitive incentives

for technology companies.

04. Incentives

4.1 CorPorate taxes

One of the most competitive tax rates in North America

t16. Comparative Corporate tax rates

Sample of Canadian provinces and American states, 2009

ManufaCturInG CoMPanIes

Basic tax rate (%)

federal Province/state City/some states

Québec (Montréal) 19.00 11.90 - -Ontario 19.00 12.00 - -Texas 35.00 1.00 - -Illinois 32.90 7.30 - -California 35.00 8.84 - -New Jersey 35.00 9.00 - -Massachusetts 35.00 9.50 - -New York 32.90 7.10 10.05

effective tax rate (%)

federal Province/ City/ total outside state some the city of states reference

Québec (Montréal) 19.00 11.90 - - 30.90 - -Ontario 19.00 12.00 - - 31.00 - -Texas 34.65 1.00 - - 35.65 - -Illinois 30.50 7.30 - - 37.80 - -California 31.91 8.84 - - 40.75 - -New Jersey 31.85 9.00 - - 40.85 - -Massachusetts 31.68 9.50 - - 41.18 - -New York 29.00 7.10 10.05 46.15 39.62

27

non-ManufaCturInG CoMPanIes

Basic tax rate (%)

federal Province/state City/some states

Québec (Montréal) 19.00 11.90 - -Ontario 19.00 14.00 - -Texas 35.00 1.00 - -Illinois 35.00 7.30 - -California 35.00 8.84 - -New Jersey 35.00 9.00 - -Massachusetts 35.00 9.50 - -New York 35.00 7.10 10.05

effective tax rate (%)

federal Province/ City/ total outside state some the city of states reference

Québec (Montréal) 19.00 11.90 - - 30.90 - -Ontario 19.00 14.00 - - 33.00 - -Texas 34.65 1.00 - - 35.65 - -Illinois 32.45 7.30 - - 39.75 - -California 31.91 8.84 - - 40.75 - -New Jersey 31.85 9.00 - - 40.85 - -Massachusetts 31.68 9.50 - - 41.18 - -New York 29.00 7.10 10.05 46.15 39.62

Note : All of the comparisons including methodological notes and complete data for Canadian provinces and American states home to the Top 20 North American metropolitan areas are supplied in Appendix B.

4.2 MaIn CorPorate tax InCentIves

→r&d tax CredIts

Government of Canada: 20% tax credit; Government of Québec: 17.5% refundable tax credit.

Together, these two measures lower R&D taxes by more than half.

t17. net after-tax Cost of an r&d expenditure (Ca$)

2008

example: Private, foreign-controlled companies 20 eligible employees @ $50,000/year100% of their work is related to eligible activities.Subcontractor: $200,000Equipment: $100,000

federal Québec total

Salaries 1,000,000 1,000,000 Proxy amount @ 65 % 650,000 Subcontractors* 200,000 100,000 * Equipment 100,000 Québec SR&DE tax credit -192,500 1,757,500 1,100,000 Federal tax credit @ 20% and Québec credit @ 17.5% 351,500 192,500 544,000

* Only 50% of the amount paid to a subcontractor is eligible for the Québec tax credit.

28

« «two factors played in favour of Montréal. first was the quality of the local workforce. after determining that the city satisfied this criterion, the second factor was financial. Montréal had to be competitive with the other cities around the world and this tax credit was crucial in the financial mechanics of the decision.

Mr. Jim rosenthal, Head of Firmwide Technology and Operations at Morgan Stanley (2008)

t18. tax Credit Calculation

Multimedia titles Multimedia titles Category 1 Category 2

Basic credit 30% of eligible 26.25% of eligible labour costs labour costs

Bonus for titles 7.5% of eligible N/A available in French labour costs

TOTAL 37.5% of eligible 26.25% of eligible labour costs labour costs

Category 1 : Titles produced without being part of a commission and destined for commercial markets; titles must be intended for a wide audience and subject to a structured marketing approach.

Category 2: Other multimedia titles.

tax HolIday for foreIGn researCHers and sPeCIalIsts

Foreign researchers and other specialists may be eligible for a tax holiday on 100% of their taxable income.

This holiday consists of an exemption from Québec income tax for a period of up to five years.

An eligible individual can deduct the following from his/her income: - 100% of his/her salary for the first two years; - 75% for the third year; - 50% for the fourth year; - 25% for the fifth year.

→ refundaBle e-BusIness tax CredIt

A Québec Government incentive for the development of e-business in Information Technologies (IT).

A refundable tax credit equal to 30% of eligible salaries.

A maximum of $20,000 per employee, per year.

Eligible IT activities are those included in the following North American Industry Classification System codes (NAICS): - 334110 – Computer and Peripheral Equipment Manufacturing; - 334220 – Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing; - 417310 – Computer, Computer Peripheral and Pre-Packaged Software Wholesaler-Distributors; - 443120 – Computer and Software Stores; - 511210 – Software Publishers; - 51821 – Data Processing, Hosting and Related Services; - 541510 – Computer Systems Design and Related Services.

→ refundaBle tax CredIt for tHe ProduCtIon of MultIMedIa tItles

Companies that produce multimedia titles may be eligible for a provincial refundable tax credit, which is calculated as follows:

29

« laval BIoteCHnoloGy develoPMent Centre (lBdC)

The objective of this tax program is to bring biotechnology businesses together at designated facilities adapted to their needs, thereby contributing to the creation of scientific research networks maximizing synergy and cooperation.

A biotechnology business involved in development and innovation that locates in the LBDC can benefit from a: - 30% refundable tax credit on wages paid to eligible employees; - 30% refundable tax credit on eligible purchased or leased specialized assets; - 30% tax credit on eligible specialized facilities leased by the corporation.

tax HolIday for tHe CoMMerCIalIzatIon of IntelleCtual ProPerty

t19. summary of Conditions for the tax Holiday

tax exemption rate 100% of corporate revenue

tax exemption period First ten years after incorporation

eligible corporations Québec-based Incorporated in Canada Must derive at least 90% of income from commercialization activities

eligible activities Manufacturing of products derived from intellectual property Commercialization of developed products

other conditions The intellectual property must have been developed by Québec universities or eligible public research centres.

tax CredIt for fIlM ProduCtIon servICes

Government of Québec: 25% (refundable); Government of Canada: 16%.

Applies to labour expenditures.

An additional 20% can be claimed for computer-assisted special effects (VFX) and animation.

A 20% tax exemption is also allowed for the shooting of scenes in front of a chromatic screen (Chrome Key).

Total tax credits for production services can amount to 53.8%.

InternatIonal fInanCe Centre (IfC)

The following advantages are available to a corporation or partnership operating an International Financial Centre (IFC) in Montréal: - Québec income tax reduction of 75% on income from qualified international financial transactions (QIFTs); - Capital tax deduction of 75% for paid-up capital deriving from IFC activities; - A 75% exemption on contributions to the Québec Health Services Fund based on payroll linked to IFC operations.

To be designated as an IFC and take advantage of these tax benefits, all of the corporation or partnership’s activities must involve eligible qualified international financial transactions (QIFTs).

suCCess@Montréal, Industry

The City of Montréal offers property owners a five-year subsidy equivalent to the increase in the general property tax due to the construction, conversion or expansion of an industrial building.

- Reimbursement over a period of five years as follows: 100% - 100% - 100% - 80% - 60%; - Maximum annual subsidy: $1 M; - Eligibility open until December 31, 2009; - Three-year deadline for project completion after the eligibility date; - Eligible industrial sectors: manufacturing (excluding nuisance generating activities), film and video production, information

system design, packaged software development, call centres, headquarters, physical science R&D, engineering and life sciences.

30

4.3 MaIn CorPorate fInanCIal InCentIves

fInanCIal assIstanCe for JoB CreatIon and traInInG

The Government of Québec provides businesses with technical and financial assistance to help them meet their human resource needs.

The contribution can be either: - Up to 25% of eligible costs for the implementation of a training plan; or - Up to 50% of costs incurred by the creation of a human resources department.

To be eligible for the “major economic initiatives” category, a company must: - Submit a proposal for a project that will have an important impact on regional employment or one that comes

after a significant investment; or - Create fifty new full-time, lasting jobs over a twenty-four-month period.

Since March 19, 2009, the Government of Québec has increased its financial assistance for the implementation of training plans for major economic projects from 25% to 50%.

strateGIC suPPort for InvestMent ProGraM (PasI)

Any business with a project designed to consolidate a sector for which Québec (Montréal) offers competitive advantages and not having a negative impact on existing enterprises can obtain either a refundable subsidy from Investissement Québec or a guarantee of reimbursement for the net loss incurred by the financial institution that granted a loan, line of credit or letter of credit.

If no other type of financing is available, the business can receive a non-refundable subsidy.

An investment project must be worth at least $5 M; a development project, at least $2 M.

Government financial assistance cannot exceed 50% of the project’s total cost.

Financial assistance will be provided for a period not exceeding ten years.

strateGIC aerosPaCe and defenCe InItIatIve (sadI)

The Government of Canada will invest close to $900 M between 2007 and 2011.

The purpose of this initiative is to support strategic industrial research and precompetitive (R&D) projects in the aerospace, defence, space and security industries.

Loans will be extended for a maximum of fifteen years and cover 30% of a project’s eligible costs.

The contribution to each project corresponds to the minimum financial assistance required to undertake and successfully complete the project and generate spinoffs for Canadians.

31

to live and work in Greater Montréal means that one:

Benefits from Canada’s outstanding investment climate:

- Canada has been ranked 1st

among G7 nations and 5th among eighty-two countries for its business climate for the 2009-2013 period. (Economist Intelligence Unit, 2008).

- Canada provides enterprises with the best access to capital (Milken Institute, 2009).

- The time needed to set up a business in Canada is the shortest of any G7 member nation (World Bank, 2008).

Reaps the advantages afforded by one of the most strategic locations in North America (close to Europe), free trade conditions and treaties (North American Free Trade Agreement – NAFTA) and world-class transportation infrastructure.

Operates in a market in which foreign investment is promoted and abundant. Foreign-controlled companies account for nearly 50% of all private capital investment in Greater Montréal.

Profits from the business opportu nities and vitality generated by major institutional and government infrastructure investments.

Enjoys an exceptional quality of life, one that ranks among the best in the world.

05. Business Environment

7,0

7,5

8,0

Can

ad

a

Hon

g K

ong

Sw

itzer

land

Uni

ted

Kin

gdom

Sin

gapo

re

Uni

ted

Sta

tes

Net

herla

nds

Nor

way

Aus

tral

ia

Finl

and

5.1 aCCess to CaPItal

Canada was able to weather the storm as world credit markets crumbled in 2008 because of the stability of its equity markets and strength of its economic policy. In 2008, the Milken Institute ranked Canada 1st in its Access to Capital Index.

G29. access to Capital Index (Maximum = 10)

Top 10 countries/regions, 2008

32

Canada

Sw

eden

Luxe

mbu

rg

Aus

tral

ia

Den

mar

k

Net

herla

nds

Bel

gium

New

Zea

land

Irela

nd

Mal

ta

1st

2nd

3rd

4e

5e

6e

7e

10e

9e

8e

G30. World ranking of the soundness of Banks

2008-2009

Note : Standing among 134 countries. Ranking based on the degree of soundness of financial institutions.

In October 2008, the World Economic Forum rated Canada’s banking sector as the soundest of any country in the world and ranked the sophistication of its financial markets and strength of its investor protection among the best anywhere.

Also in 2008, the International Monetary Fund found that Canada’s financial system was modern, well managed and capable of weathering major crises.

5.2 exPorts

t20. value of exported Merchandise by World destination (Ca$ M)

Greater Montréal10, 2006

destination value %

United States 32,980 73.9 East Coast 15,723 35.3 Industrial Heartland 6,346 14.2 Midwest 5,356 12.0 Southeast 3,502 7.9 West Coast 2,052 4.6

European Union 5,377 12.1

Japan 1,256 2.8

South America and Mexico 1,023 2.3

Other 3,969 8.9

total 44,604 100.0

Because of its strategic geographical location, state-of-the-art infrastructure and dynamic economy, Greater Montréal is a veritable launching pad for local companies’ intent on exporting their products. Approximately 75% of the region’s exports are destined to the United States.

Thanks to NAFTA, exporting companies have access to an enormous market consisting of over 440 million people. More than 100 million American consumers are within a one-day drive of Greater Montréal.

10 The total for Greater Montréal includes data from the five following regions: Lanaudière, Laurentides, Laval, Montérégie and Montréal.

«

33

« «the creation of aaa Canada represents a major step for our breakthrough in the north american market and more specifically in Québec, a hospitable territory for the aerospace industry. the experience of both aaa and drakkar, the large number of partners and the proximity of major players in the field are all factors favouring the growth and integration of our future customers.

Mr. Gilles Chauby, President of AAA France (2008)

5.3 announCed PrIvate-seCtor IndustrIal InvestMent ProJeCts

Foreign companies made 17 of the 30 publicly announced projects worth $10 million or more.

t21 - sample of announced Private-sector Industrial Investment Projects (Mergers and acquisitions not Included)

Greater Montréal, 2008-2009

Company amount (Ca$ M) type of investment Industry Country of origin

Bombardier 2,600 Expansion Aerospace Canada

Devimco 1,300 Construction/Development Real estate Canada

Quebecor Media 800 to 1,000 Expansion ICT Canada

CAE 714 Expansion Aerospace Canada

Pratt & Whitney Canada 575.3 Expansion Aerospace United States

VIGER DMC International 400 Construction/Development Real estate Canada/ Netherlands

Pratt & Whitney Canada 360 Expansion Aerospace United States

El-Ad Canada Group 306 Construction/Development Real estate Canada

Développement CATO inc. 300 Construction/Development Real estate Canada

Morgan Stanley 200 Greenfield ICT United States

Hilton (Waldorf-Astoria Collection) 200 Greenfield Hotel United States

Esterline CMC Electronics 149.4 Expansion Aerospace United States

TELUS 100 Expansion ICT Canada

Claridge Investments 100 Construction Real estate Canada

Pratt & Whitney Canada 90 Greenfield/Restructuring Aerospace United States

Héroux-Devtek 77 Expansion Aerospace Canada

Transcontinental 60 Expansion Printing Canada

Boehringer Ingelheim 36 Expansion Life Sciences Germany

TELUS 33 Expansion ICT Canada

Velan 25.3 Modernisation Manufacturing – other Canada

Sanofi-Aventis 25 Expansion Life Sciences France

Transcontinental 20 Expansion Printing Canada

Sunrise Senior Living 20 Expansion Senior residences United States

Rolls-Royce 19.5 Expansion Aerospace United Kingdom

InterContinental Hotels and Resorts 14 Modernisation/Expansion Hotel United Kingdom

RTI Claro 13.5 Expansion Aerospace United States

Amesys 12.1 Greenfield Aerospace France

Avanquest Software 11.7 Greenfield ICT France

LISI Aéronautique Canada 10 Expansion Aerospace France

Clarins 10 Greenfield Beauty products France

34

5.4 announCed InstItutIonal and GovernMent InvestMent ProJeCts

Large-scale institutional and government investment projects in strategic sectors.

t22 - sample of announced, in Progress and/or Completed large-scale Institutional and Government Investment Projects

Greater Montréal, 2008-2009

nature of the project Promoter(s) value (Ca$ M) start end date date

Montréal Harbourfront Government of Canada, Government 6,400 N/A 2027 of Québec, City of Montréal

Centre hospitalier de l’Université de Montréal (CHUM) Government of Québec 2,500 2009 2018

Strategic Plan - Vision 2020 Port of Montréal 2 500 2008 2020

Airport expansion, construction and repair Montréal-Trudeau International Airport 2 000 2000 2023 of surrounding infrastructure

Extension of Highway 30 Ministère des Transports du Québec (MTQ) 1 800 2008 2012

Redevelopment and construction of buildings Canadian Broadcasting Corporation (CBC) 1 600 n.d. n.d.

Reconstruction of the Turcot Interchange Ministère des Transports du Québec (MTQ) 1 500 2009 2016

McGill University Health Centre (MUHC) – Glen Site McGill University Health Centre (MUHC) 1 350 2007 2011

Renovation of the Beauharnois Power Plant Hydro-Québec 1 100 1994 2009

Outremont Campus Université de Montréal 1 100 2007 2020

Extension of Metro Line 5 to Anjou Borough Agence métropolitaine de transport (AMT) 945 n.d. 2027

Improvement of Notre Dame St. Ministère des Transports du Québec (MTQ) 750 2008 2014

Albert-Hudon/Ruisseau de Montigny Montréal North Borough, Olymbec 630 n.d. 2017

Expansion of the Centre hospitalier universitaire Fondation Centre hospitalier universitaire (CHU) 500 2007 2011(CHU) Sainte-Justine Sainte-Justine, Government of Québec

Light-rail line between Old Montréal Agence métropolitaine de transport (AMT) 475 n.d. 2022and the Jean Talon Station

Construction on Highway 40 Ministère des Transports du Québec (MTQ) 468 n.d. 2010

Bridge on Highway 25 Ministère des Transports du Québec (MTQ) 400 2008 2011

McGill University – Macdonald Campus McGill University 385 n.d. 2022

Extension of Metro Line 2 to Agence métropolitaine de transport (AMT) 340 n.d. 2027Bois Franc train station

Centre de recherche du Centre hospitalier Government of Québec 320 2010 2013de l’Université de Montréal (CHUM)

Contrecoeur Site Société d’habitation et de développement de Montréal (SHDM) 320 2007 n.d.

Completion of improvements in the Old Port of Montréal Old Port of Montréal Corporation 309 n.d. 2022

Upgrade of the Casino de Montréal Loto-Québec 306 2009 2013

Train de l’Est project (Montréal/Repentigny – Mascouche) Agence métropolitaine de transport (AMT), 300 n.d. 2010 Government of Québec, City of Montréal

Quartier de la santé Technoparc Montréal, Centre hospitalier de 300 2005 2013 l’Université de Montréal (CHUM), City of Montréal

Extension and construction - Government of Québec, 273 2006 2012 Montréal Heart Institute Montréal Heart Institute

Concert hall – Montréal Symphony Orchestra (MSO) Government of Québec 265 n.d. 2011

Development of the Saint-Viateur Est – Maguire neighbourhood Plateau Mont-Royal Borough 265 n.d. 2012

McGill University Health Centre (MUHC) – McGill University Health Centre (MUHC), 250 n.d. n.d. Mountain Campus Government of Québec

Rehabilitation of the Champlain Bridge Government of Canada 212 n.d. n.d.

For additional information on these and other investment projects, please go to the following websites: City of Montréal - Montréal 2025 : http://www.Montréal2025.com/ Commission de la construction du Québec (CCQ): www.ccq.org/Publications.aspx?sc_lang=en&profil=GrandPublic Ministère des transports du Québec (MTQ): http://www.mtq.gouv.qc.ca/portal/page/portal/grands_projets/trouver_grand_projet

35

VancouverMontréal

AtlantaToronto

WashingtonChicago

New YorkBostonMiami

HoustonSeattle

San FranciscoMinneapolisLos Angeles

PittsburghDetroit

PortlandSt. Louis

Winston-SalemCleveland

75 80 85 90 95 100 105

5.5 InfrastruCture

G31. urban Infrastructure – Montréal = 100

Sample of the twenty largest North American metropolitan areas for which data were available, 2009

In 2009, Greater Montréal ranked 2nd in North America in the overall quality of its infrastructure (electricity, water management, telecommunications and transportation).

G32. Passenger traffic – Montréal-trudeau International airport

Number and year-to-year variation (%), 1998-2008

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-10 % 5,000,000

-5 %

15 %

10 %

5 %

0 %

20 % 13,000,000

11,000,000

9,000,000

7,000,000

Variation Number

Passenger traffic at the Montréal-Trudeau International Airport was estimated at 12.4 million in 2008, on par with the record-setting year of 2007. Passenger traffic grew by 35% between 1998 and 2008.

Montréal has two international airports: Montréal-Trudeau and Montréal-Mirabel. The former is the largest Canadian facility east of the Great Lakes. Because of its location, it is a hub for North American and European traffic. Montréal-Mirabel is an all-cargo airport. It is open twenty-four hours a day and provides air carriers with modern facilities at highly competitive prices.

36

G33. Cargo traffic - Port of Montréal

Metric tonnes handled and year-to-year variation (%), 1998-2008

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-10 % 10, ,000,000

-5 %

15 %

10 %

5 %

0 %

20 % 30,000,000

25,000,000

20,000,000

15,000,000

Variation Number

Port traffic increased by 3.9% in 2008 and handled 27 million tonnes of cargo. It was a record year for the Port of Montréal whose growth rate exceeded that of North America’s ten principal container ports. Over the past decade, Montréal’s port traffic has grown by close to 30%.

A major international port linked to more than 100 countries around the world, the Port of Montréal is the cornerstone of a thoroughly integrated intermodal system. Excellent rail and highway networks connect it to the rest of North America.

Moreover, the Port of Montréal is unique on the North Atlantic coast because it serves Northern European, Mediterranean, Central Canadian as well as U.S. Midwestern and Northeastern markets efficiently, rapidly and economically year-round.

5.6 QualIty of lIfe

Cosmopolitan, multicultural and bilingual, Montréal has developed a unique personality born of a harmonious blend of European and North American cultures. It is well known for its openness, friendliness, creativity and intellectual vitality. Montréal is also unique because it affords quality neighbourhood living adjacent to the downtown core.

Montréal is as lively in winter as it is in summer, bubbling with artistic, commercial and cultural activity both day and night. The downtown core is constantly bustling with action: it is a place where people live and where visitors come to take in films, stage shows and festivals.

The heart of Montréal’s Quartier International beats to the rhythm of the many international conferences, symposia and trade shows that Montréal hosts every year. It is a safe city where people can stroll with peace of mind. In fact, its homicide rate is the lowest among the Top 20 metropolitan areas in North America.

Well-known for its good cheer and joie de vivre, Montréal has acquired an international reputa-tion for its cuisine, a mix of many styles and cultural influences, and major festivals celebrating jazz, light, snow, film and comedy. The Montréal International Jazz and Just for Laughs festi-vals are examples of great events during which the city swings to a festive beat.

Life in Greater Montréal also means that one has only to drive an hour or two to get to cottage country where one can enjoy the great outdoors, swimming and fishing in lakes and rivers and many other recreational sports. «

37

G34. Quality of life – Montréal = 100

Sample of the twenty largest North American metropolitan areas for which data were available, 2009

VancouverToronto

MontréalSan Francisco

BostonPortland

WashingtonChicago

New YorkSeattle

PittsburghWinston-Salem

Los AngelesCleveland

MinneapolisHouston

MiamiSt. Louis

DetroitAtlanta

75 80 85 90 95 100 105

In 2009, Greater Montréal was rated 3rd in North America for quality of life.

G35. Homicide rate – Per 100,000 Population

Top 20 North American metropolitan areas for which data were available, 2007

MontréalToronto

MinneapolisBostonSeattle

San DiegoNew York

TampaDallas

RiversideLos AngelesWashington

St. LouisMiami

PhoenixAtlanta

San FranciscoHouston

PhiladelphiaDetroit

0 2 4 6 8 10 12

In 2007, the last year for which data were available, Greater Montréal’s homicide rate was the lowest among North America’s Top 20 metropolitan areas.

« «Montréal represents the gateway to the north american market and has been chosen for its international and multicultural renown, its highly qualified workforce and its unique living environment in north america.

Mr. Bernard vaillot, President and CEO of Galaxie Presse (2008)

38

t23. Montréal and International Meetings

2003-2007

2003 2004 2005 2006 2007

Canadian ranking 1st 1st 1st 1st 1st

North American ranking 3rd 3rd 3rd 2nd 2nd

World ranking 23th 25th 21th 14th 15th

Number of international meetings 67 59 66 87 90

Greater Montréal is 2nd among North American cities (15th worldwide) in the number of international meetings that it hosts annually. With ninety events in 2007, as compared to eighty-seven the previous year, Greater Montréal continued to outdistance Washington (26th worldwide, sixty-eight conferences) and San Diego (30th worldwide, sixty conferences). With 128 events (7th worldwide), New York was the only North American city to outperform Montréal. In 2007, Toronto and Vancouver were 39th and 41st worldwide respectively.

5.7 Greater Montréal’s overall eConoMIC sItuatIon

t24. economic Indicators

Montréal Metropolitan Area, Province of Québec, Canada, 2008

Montréal-Indicators Montréal Québec Québec (%) Canada

Population 3,725,207 7,742,276 48.1 33,222,418

Employment 1,900,100 3,881,700 49.0 17,125,800

Labour force 2,052,600 4,184,900 49.0 18,245,100

Unemployment 152,600 303,300 50.3 1,119,300

Real GDP ($M 2002) 121,339 248,136 48.9 1,327,385

Personal income ($M) 130,316 258,967 50.3 1,227,907

Personal disposable income ($M) 96,610 197,947 48.8 951,935

Employment by sector 1,900,100 3,881,700 49.0 17,125,800

Goods-producing sector 362,100 886,400 40.9 4,021,300

Agriculture 5,400 61,500 8.8 327,000

Forestry, fishing, mining 3,400 32,700 10.4 340,100and oil and gas extraction

Utilities 14,400 32,900 43.8 151,800

Construction 97,100 215,800 45.0 1,232,200

Manufacturing 241,700 543,600 44.5 1,970,300

Service sector 1,538,000 2,995,200 51.3 13,104,500

Commerce 316,000 624,600 50.6 2,678,800

Transportation and warehousing 98,600 186,000 53.0 857,700

Finance, insurance, 132,000 230,600 57.2 1,075,400real estate and leasing

Professional, scientific 174,600 265,600 65.7 1,200,000and technical services

Business, building 73,200 136,900 53.5 686,500and other support services

Educational services 132,600 256,500 51.7 1,192,800

Health care and social assistance 223,000 470,600 47.4 1,903,400

Information, culture and recreation 111,100 174,800 63.6 759,600

Accommodation and food services 113,700 244,700 46.5 1,073,500

Other services 82,100 175,800 46.7 751,100

Public service 81,000 229,100 35.4 925,700

39

Appendix a

r&d director

average Metropolitan annual area salary

Montréal 84,187Toronto 88,372Phoenix 104,104Atlanta 108,107Cleveland 108,984Miami 108,986Dallas 110,147Houston 110,789Denver 111,720Philadelphia 113,358San Diego 114,024Chicago 114,303Minneapolis 114,496Washington 114,977Detroit 117,970Los Angeles 120,791Seattle 121,644Boston 121,855San Francisco 129,020New York 133,662

Manager


Montréal 73,355Toronto 77,011Phoenix 87,895Atlanta 91,290Miami 91,895Cleveland 92,224Dallas 92,822Houston 93,433Denver 94,461Philadelphia 96,160San Diego 96,519Chicago 96,868Minneapolis 96,869Washington 97,328Detroit 100,020Los Angeles 102,216Boston 103,041Seattle 103,253San Francisco 109,343New York 113,440

aerodynamics engineer


Montréal 73,013Toronto 76,621Cleveland 77,040Miami 83,634Phoenix 84,722Atlanta 84,876Philadelphia 88,323Denver 88,709Dallas 89,219Minneapolis 89,792Seattle 89,799Chicago 90,525San Diego 91,302Washington 91,313Detroit 91,347Houston 92,123Los Angeles 95,785Boston 96,445New York 97,416San Francisco 102,956

software developer


Montréal 72,283Toronto 75,858Miami 83,061Phoenix 84,767Cleveland 85,561Atlanta 86,537Philadelphia 88,885Minneapolis 89,627Dallas 89,651San Diego 90,005Detroit 90,050Denver 90,252Houston 90,570Washington 92,056Seattle 92,083Chicago 92,377Los Angeles 94,402Boston 97,732New York 100,469San Francisco 104,285

Chemist


Montréal 60,640Toronto 63,697Cleveland 64,739Atlanta 69,572Phoenix 71,891Miami 73,028Dallas 75,503Minneapolis 75,604Philadelphia 76,330Denver 76,514San Diego 76,850Houston 76,932Seattle 77,176Detroit 77,464Chicago 77,809New York 78,256Los Angeles 80,633Washington 81,551Boston 82,335San Francisco 87,622

Industrial engineer


Montréal 65,662Toronto 68,942Miami 75,119Phoenix 76,174Atlanta 76,210Cleveland 77,213Philadelphia 79,465Denver 79,719Dallas 79,972Minneapolis 80,580Seattle 80,773Chicago 81,325Washington 82,068Detroit 82,076San Diego 82,103Houston 82,684Los Angeles 86,043Boston 86,567New York 87,867San Francisco 92,573

researcher


Montréal 58,389Toronto 61,346Phoenix 67,037Cleveland 67,601Miami 68,455Atlanta 69,020Dallas 70,231Minneapolis 70,579Philadelphia 71,510Houston 71,660Denver 71,707San Diego 71,897Detroit 72,347Chicago 72,388Seattle 72,556Los Angeles 75,133Washington 76,119Boston 76,825New York 77,641San Francisco 81,743

Programmer


Montréal 56,525Toronto 59,398Miami 67,002Phoenix 67,781Cleveland 67,979Atlanta 69,102Dallas 71,040Minneapolis 71,404Philadelphia 71,465Detroit 72,004Houston 72,024San Diego 72,231Denver 72,427Chicago 73,467Washington 73,721Seattle 74,484Los Angeles 75,297Boston 78,039New York 80,209San Francisco 83,517

Source: Economic Research Institute (ERI), January 1, 2009Note: US$1 = CA$1.2354 (2009 Q1 average) The comparison is based on data from the twenty largest metropolitan areas in Canada and the United States.

laBour CostsComparison of average annual salaries of typical occupations (US$)

40

Appendix B

Comparison of Corporate Income tax rates – Manufacturing Companies

Canadian provinces and American states home to the twenty largest North American metropolitan areas, 2009

Basic corporate tax rate (%) effective tax rate (%)

City/ City/2 outside Province/ some Province/ some the city of federal1 state states federal1 state states total reference

Québec 19.00 11.90 - - 19.00 11.90 - - 30.90 - -Ontario 19.00 12.00 3 - - 19.00 12.00 3 - - 31.00 - -Washington 32.90 - - - - 32.90 - - - - 32.90 - -Texas * 35.00 1.00 - - 34.65 1.00 4 - - 35.65 - -Colorado 32.90 4.63 - - 31.38 4.63 - - 36.01 - -Floride 32.90 5.50 - - 31.09 5.50 - - 36.59 - -Arizona 32.90 6.97 - - 30.61 6.97 - - 37.58 - -Illinois 32.90 7.30 - - 30.50 7.30 - - 37.80 - -Georgia * 35.00 6.00 - - 32.90 6.00 - - 38.90 - -Michigan * 35.00 6.11 5 1.00 32.51 6.11 1.00 6 39.62 38.97Ohio 32.90 8.50 2.00 29.45 8.50 7 2.00 8 39.95 38.60California * 35.00 8.84 - - 31.91 8.84 - - 40.75 - -Massachusetts * 35.00 9.50 - - 31.68 9.50 9 - - 41.18 - -Minnesota * 35.00 9.80 - - 31.57 9.80 - - 41.37 - -District of Columbia * 35.00 9.98 - - 31.51 9.98 - - 41.49 - -Pennsylvanie 32.90 9.99 6.40 27.51 9.99 6.40 10 43.90 39.60New York * 35.00 7.10 10.05 29.00 7.10 11 10.05 12 46.15 39.62

* Several states and jurisdictions such as Arkansas, California, North Carolina, South Carolina, North Dakota, the District of Colombia, Georgia, Hawaii, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Hampshire, New Jersey, New York, Oregon, Tennessee, Texas and West Virginia do not apply the federal deduction for manufacturing activities.

State and city taxes are generally deductible from U.S. federal income tax. The effective U.S. federal tax rate takes this deduction into account.1 In Canada, the federal tax rate is 11% for Canadian-controlled private corporations with taxable income under CA$500,000. Some provinces also apply reduced rates to

small businesses. The 2009 19% general rate will be reduced to 18% in 2010, 16.5% in 2011 and 15% beginning in 2012. In the United States, the 35% general rate varies with the business’s taxable earnings. A deduction equal to 6% of production-generated profits or taxable income — which

translates into a 2.1% reduction in the effective rate — was available for manufacturing companies in 2007, 2008 and 2009. This deduction will be 9% in 2010 and subse-quent years.

2 Most of the city tax rates used here are those for 2008 because 2009 rates were not available when this document went to press. 3 10%, effective July 1, 2010.4 Texas has a 1% Franchise Margin Tax. The tax applies to the lowest of the three following margins: (1) gross profit margin; (2) total revenue less remuneration; or (3) 70% of

total revenue. As of January 1, 2009, a taxable entity will owe zero tax with reportable revenue of $434,782 or less. 5 The corporate tax rate is 4.95% on taxable income. A 23.4% surtax was added in 2009. Moreover, corporations having a Nexus in the state are subject to a gross sales tax

of 0.8%. 6 Many Michigan cities have a 1% income tax. However, Saginaw, Grand Rapids and Highland Park impose rates of 1.5%, 1.3% and 2% respectively.7 Ohio applies a progressive rate on taxable income ranging between 5.1% and 8.5%. The rate indicated above applies to taxable income greater than $50,000 and is being

gradually eliminated at a rate of 20% per year over a five-year period beginning in 2006 (2005 tax year). The effective rate for 2009 is 1.7% after the gradual elimination of 80% of the corporate tax rate. On the other hand, the Commercial Activity Tax on gross receipts will be progressively introduced at 0.26% as of March 31, 2009.

8 Several Ohio cities have a corporate income tax. Rates range from 0.5% to 2.85%. The rate indicated above is for Cleveland. Dayton’s tax rate is 2.25%.9 Starting on January 1, 2009, the 14% surtax was eliminated and is currently included in the 9.5% rate. The corporate tax rate will be reduced to 8.75%, 8.25% and 8% for

2010, 2011 and 2012 respectively. However, a 0.26% tax on company capital must be added to the 9.5% rate. 10 Philadelphia. A 0.1325% gross receipts tax is added to the income tax.11 Corporations are subject to a tax based on the highest of the four amounts. The income tax rate is 7.1%.12 New York City. A 17% surtax charged on the state tax (7.1%) for the metropolitan New York City area was added to the city rate of 8.85%. The three rates may not all apply

to all corporations.

CoMParIson of CorPorate InCoMe tax rates

41

Comparison of Corporate Income tax rates – non-manufacturing Companies

Canadian provinces and American states home to the twenty largest North American metropolitan areas, 2009

Basic corporate tax rate (%) effective tax rate (%)

City/ City/2 outside Province/ some Province/ some the city of federal1 state states federal1 state states total reference

Québec 19.00 11.90 - - 19.00 11.90 - - 30.90 - -Ontario 19.00 14.00 3 - - 19.00 14.00 3 - - 33.00 - -Washington 35.00 - - - - 35.00 - - - - 35.00 - -Texas 35.00 1.00 - - 34.65 1.00 4 - - 35.65 - -Colorado 35.00 4.63 - - 33.38 4.63 - - 38.01 - -Floride 35.00 5.50 - - 33.08 5.50 - - 38.58 - -Georgia 35.00 6.00 - - 32.90 6.00 - - 38.90 - -Arizona 35.00 6.97 - - 32.56 6.97 - - 39.53 - -Illinois 35.00 7.30 - - 32.45 7.30 - - 39.75 - -Michigan 35.00 6.11 5 1.00 32.51 6.11 1.00 6 39.62 38.97California 35.00 8.84 - - 31.91 8.84 - - 40.75 - -Massachusetts 35.00 9.50 - - 31.68 9.50 7 - - 41.18 - -Minnesota 35.00 9.80 - - 31.57 9.80 - - 41.37 - -District of Columbia 35.00 9.98 - - 31.51 9.98 - - 41.49 - -Ohio 35.00 8.50 2.00 31.33 8.50 8 2.00 9 41.83 40.53Pennsylvanie 35.00 9.99 6.40 29.26 9.99 6.40 10 45.65 41.49New York 35.00 7.10 10.05 29.00 7.10 11 10.05 12 46.15 39.62

1 In Canada, the federal tax rate is 11% for Canadian-controlled private corporations with taxable income under CA$500,000. Some provinces also apply reduced rates to small businesses. The 2009 19% general rate will be reduced to 18% in 2010, 16.5% in 2011 and 15% beginning in 2012.

In the United States, the 35% general rate varies according to the business’s taxable earnings.State and city taxes are generally deductible from U.S. federal income tax. The effective U.S. federal tax rate takes this deduction into account.

2 Most of the city tax rates used here are those for 2008 because 2009 rates were not available when this document went to press.3 The tax rate will be reduced to 12%, 11.5%, 11% and 10% on July 1, 2010, 2011, 2012 et 2013 respectively.4 Texas has a 1% Franchise Margin Tax. The tax applies to the lowest of the three following margins: (1) gross profit margin; (2) total revenue less remuneration; or (3) 70% of

total revenue. As of January 1, 2009, a taxable entity will owe zero tax with reportable revenue of $434,782 or less.5 The corporate tax rate is 4.95% on taxable income. A 23.4% surtax was added in 2009. Moreover, corporations having a Nexus in the state are subject to a gross sales tax

of 0.8%.6 Many Michigan cities have a 1% income tax. However, Saginaw, Grand Rapids and Highland Park impose rates of 1.5%, 1.3% and 2% respectively.7 Starting on January 1, 2009, the 14% surtax was eliminated and is currently included in the 9.5% rate. The corporate tax rate will be reduced to 8.75%, 8.25% and 8% for

2010, 2011 and 2012 respectively. However, a 0.26% tax on company capital must be added to the 9.5% rate.8 Ohio applies a progressive rate on taxable income ranging between 5.1% and 8.5%. The rate indicated above applies to taxable income greater than $50,000 and is being

gradually eliminated at a rate of 20% per year over a five-year period beginning in 2006 (2005 tax year). The effective rate for 2009 is 1.7% after the gradual elimination of 80% of the corporate tax rate. On the other hand, the Commercial Activity Tax on gross receipts will be progressively introduced at 0.26% as of March 31, 2009.

9 Several Ohio cities have a corporate income tax. Rates range from 0.5% to 2.85%. The rate indicated above is for Cleveland. Dayton’s tax rate is 2.25%.10 Philadelphia. A 0.1325% gross receipts tax is added to the income tax.11 Corporations are subject to a tax based on the highest of the four amounts. The income tax rate is 7.1%.12 New York City. A 17% surtax charged on the state tax (7.1%) for the metropolitan New York City area was added to the city rate of 8.85%. The three rates may not all apply

to all corporations.

42

Appendix C

sourCes

Compiled By Montréal International

Graphs sources

1 & 2 U.S. data: U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS)

Canadian data: Ministère de l’Éducation, du Loisir et du Sport du Québec and Statistics Canada

3 to10 Statistics Canada, Postsecondary Student Information System (PSIS)

11 U.S. data: Bureau of Labor Statistics (BLS)

Canadian data: Statistics Canada

12, 14 & 15 RE$EARCH Infosource Inc.

13 Research Centers Directory (35rd Edition), Detroit: Gale Research

16 Natural Sciences and Engineering Research Council of Canada (NSERC)

17 Canadian Institutes of Health Research (CIHR)

18 to 20 United States Patents and Trademark Office (USPTO); data compiled by the Observatoire des sciences et des technologies (OST)

21 to 22 Thomson Reuters, Science Citation Index (SCI) – Expanded; data compiled by the Observatoire des sciences et des technologies (OST)

23 & 24 KPMG, Competitive Alternatives

25 & 26 Cushman & Wakefield Research

27 Statistics Canada

28 Canada Mortgage and Housing Corporation

29 Milken Institute

30 World Economic Forum (from www.investincanada.gc.ca)

31 et 34 Mercer Human Resource Consulting

32 Aéroports de Montréal

33 Montréal Port Authority

35 U.S. data: Federal Bureau of Investigation Canadian data: Statistics Canada

tables sources

1 U.S. data: U.S. Census Bureau Canadian data: Conference Board of Canada

2 to 4, 5 to 9 Ministère de l’Éducation, du Loisir et du Sport du Québec

10 & 11 Statistics Canada

12 Association for Canadian Studies

13 Economic Research Institute, Inc.

14 Hydro-Québec

15 Canada Mortgage and Housing Corporation

16 Investissement Québec and Raymond Chabot Grant Thornton

17 Samson Bélair/Deloitte & Touche

18 Investissement Québec

19 Government of Québec

20 Statistics Canada (compiled by the Institut de la statistique du Québec, Direction des statistiques économiques et du développement durable and the ministère du Développement économique, de l’Innovation et de l’Exportation du Québec, Direction de l’analyse du commerce extérieur et de l’investissement étranger)

21 Montréal International

22 Commission de la construction du Québec (Chantiers importants), ministère des Transports du Québec (MTQ) and the City of Montréal (Montréal 2025)

23 Union of International Associations

24 Conference Board of Canada, Institut de la statistique du Québec and Statistics Canada

43

Appendix d

MetHodoloGICal notes

selection of Metropolitan areas

To enhance the objectivity and accuracy of the economic analysis presented in this document, the metropolitan areas used here were chosen by population size. North America’s twenty largest metropolitan areas served as the basis for comparison on most of the indicators. Conference Board of Canada data (March 4, 2009) were used to select Canadian metropolitan areas and U.S. Census Bureau estimates (July 1, 2008) for American cities. When Canadian and American data were either not available for the same time period or not comparable, the analysis focused on indicators for Canada’s five largest metropolitan areas or Montréal alone.

The geographical units generally used throughout this document were the Canadian Census Metropolitan Area (CMA) and the recently redefined U.S. Metropolitan Statistical Area (MSA) and Combined Statistical Area (CSA).

types of Indicators analysed: volume vs. Intensity

Since Montréal ranks 16th among the twenty largest North American metropolitan areas in terms of population, it does not always compare well on volume indicators. All things being equal, the larger a metropolitan area’s population, the greater its chances of developing a critical mass of businesses, students, jobs, patents, etc.

At times, intensity is as important as volume when assessing an area’s unique attractiveness. Thus, in this report, some indicators measure both volume and intensity (per capita).

additional Methodological Information

seCtIon 1 – talent

The university data that Montréal International compiled for this document were those of institutions located in the Greater Montréal area. Data were collected from the following institutions: Université de Montréal, McGill University, Université du Québec à Montréal, Concordia University, HÉC Montréal, École Polytechnique and École de technologie supérieure (ÉTS). For the École nationale d’administration publique (ENAP), Institut national de la recherche scientifique (INRS) and Télé-université (TELUQ), only data on their Greater Montréal activities were considered. The ratios used to estimate the student body of institutions with only partial operations in the Greater Montréal area were: 70% for INRS, 55% for TÉLUQ, 50% for ENAP and 10% for the Université de Sherbrooke.

Even though these numbers were established on the basis of information collected from the institutions themselves, the estimates presented here can differ from each institution’s official statistics because they rely of data supplied by the Ministère de l’Éducation, du Loisir et du Sport du Québec. The objective was to provide as accurate an approximation as possible of the number of enrolled students and graduates in Greater Montréal in 2006 and 2007.

seCtIon 2 – InnovatIon

Composite Indicator of the Best r&d Communities. Data are taken from RE$EARCH Infosource’s Canada’s Top 20 Research Communities List 2006.Metropolitan area rankings are based on eleven R&D-related performance indicators: seven for businesses (highest possible score = 64) and four for universities (highest possible score = 36).

The private sector indicators include: the number of companies involved in R&D, number of R&D companies per capita, company R&D spending, company per capita R&D spending, number of scientists and engineers, number of scientists and engineers per capita and percent of labour force employed in natural and applied sciences and related fields.

The university indicators are: total sponsored research income for all universities in a CMA, total research income per full-time faculty position, total number of scientific publications and total number of scientific publications per full-time faculty.

44

High-tech Jobs. Statistics Canada’s Labour Force Survey (LFS) was used for data on Canadian metropolitan areas. U.S. data were taken from the Bureau of Labor Statistics’ (BLS) Quarterly Census of Employment and Wages (QCEW). Montréal International compiled high technology employment data for the twenty largest metropolitan areas using the following three- and four-digit codes of the North American Industry Classification System (NAICS):

aerospace 3364 Aerospace Product and Parts Manufacturing

Health sciences 3254 Pharmaceutical and Medicine Manufacturing 3391 Medical Equipment and Supplies Manufacturing 4145 Pharmaceuticals, Toiletries, Cosmetics and Sundries Wholesaler-Distributors (code 4242 in the United States) 5417 Scientific Research and Development Services 6215 Medical and Diagnostic Laboratories

ICt 3333 Commercial and Service Industry Machinery Manufacturing 334 Computer and Electronic Product Manufacturing 3359 Other Electrical Equipment and Component Manufacturing 4173 Computer and Communications Equipment and Supplies Wholesaler-Distributors (code 4234 in the United States) 4179 Other Machinery, Equipment and Supplies Wholesaler-Distributors (code 4236 in the United States) 5112 Software Publishers 517 Telecommunications 518 Data Processing, Hosting and Related Services 5324 Commercial and Industrial Machinery and Equipment Rental and Leasing 5415 Computer Systems Design and Related Services 6114 Business Schools and Computer and Management Training 8112 Electronic and Precision Equipment Repair and Maintenance

number of research Centres. These data were taken from the Research Centers Directory (RCD), published annually by Detroit-based Gale Research. With forty years of experience, the RCD is the only comprehensive guide for contact information and research fields in Canadian and U.S. research centres. The term “research centre” includes the following facilities:

Research institutes Experiment stationsUniversity laboratories Data centresThink tanks Technology transfer centresFoundations Research societies and associationsResearch parks Research incubatorsEtc.

Montréal International compiled a list of all research centres in the twenty largest North American cities. The combined statistical area (CSA) was used for U.S. metropolitan areas. However, it should be noted that Gale Research excludes R&D establishments managed by or for the Canadian and American federal governments from its RCD, because they are listed in a separate inventory, The Government Research Directory.

university research and researchers. These data are from RE$EARCH Infosource’s Canada’s Top 50 Research Universities. This report supplies information on every Canadian university’s research budget and number of researchers from 2000 to 2007. The sources cited by RE$EARCH Infosource are Statistics Canada, the Conférence des recteurs et des principaux des universités du Québec (CREPUQ), Système d’information sur la recherche universitaire (SIRU) and RE$EARCH Infosource’s internal database on Canadian universities. Montréal International aggregated the data by metropolitan area, performed the ranking and interpreted the findings.

natural sciences and engineering Council (nserC) Bursaries and Grants. NSERC is the federal agency responsible for making strategic investments in Canada’s capability in science and technology. It supports not only fundamental university-based research through discovery grants, but partnerships involving universities, governments and the private sector. It also promotes specialised training for highly qualified personnel. Only grants and bursaries awarded to universities have been included in this document. The findings presented here are those for the 2007-2008 fiscal year. Montréal International aggregated the data by metropolitan area, performed the ranking and interpreted the findings.

Canadian Institutes of Health research (CIHr) Grants and Bursaries. The CIHR is the Government of Canada’s agency responsible for funding health research in Canada. While projects may receive joint funding from CIHR and one or more other partners, only the former’s contributions have been compiled for this report. The findings are for the 2007-2008 fiscal year. Montréal International aggregated the data by metropolitan area, performed the ranking and interpreted the findings.

45

Patents. U.S. data are based on earlier definitions of metropolitan areas, i.e., Metropolitan Statistical Area (MSA), Primary Metropolitan Statistical Areas (PMSA) and Consolidated Metropolitan Statistical Areas (CMSA).

scientific Publications. Three types of documents are generally defined as original scientific contributions: articles, research notes, and review articles. U.S. data are based on earlier definitions of metropolitan areas, i.e., Metropolitan Statistical Areas (MSA), Primary Metropolitan Statistical Areas (PMSA) and Consolidated Metropolitan Statistical Areas (CMSA).

seCtIon 3 – Costs

Business operating Costs. These data are from KPMG’s biennial comparative study, Competitive Alternatives (2008). KPMG’s overall cost index is based on an average of twelve sectors and twenty-seven cost factors, consisting primarily of costs related to labour, taxation, transportation, energy, telecommunications and facilities. The average US$/CA$ exchange rate for 2009 Q1 (US$1 = CA$1.2354) was integrated into KPMG’s Competitive Alternative Cost Model in order to assess Greater Montréal’s competitive position vis-à-vis other large North American metropolitan areas.

average Price of electricity. These data are based on a survey conducted among fifteen companies and estimates prepared by Hydro-Québec and subsequently validated, for the most part, by the businesses involved.

Consumer Price Index (CPI). The overall consumer price index allows for comparisons among Canada’s five largest metropolitan areas (data for Calgary were not available) on a basket of goods and services, including food, shelter, household operations, furnishings and equipment, clothing and footwear, transportation, health and personal care, recreation, education and reading, and alcoholic beverages and tobacco products. The combined index for the five cities equals 100.

average Home sales Price. The average Multiple Listing Service (MLS) price was used in determining the average home sales price.

average rent. Definitions: 1) Rent: refers to the actual amount tenants pay for their unit. No adjustments are made for the inclusion or exclusion of amenities and services such as heat, electricity, parking, and hot water. For available and vacant units, rent refers to the amount that the owner is asking for the unit. Services such as heating, electricity and hot water may or may not be included in the rent. 2) Rental Apartment Structure: Any building containing three or more rental units, of which at least one is not ground oriented. Owner-occupied units are not included in the rental building unit count.

seCtIon 5 – BusIness envIronMent

access to Capital. The Milken Institute 2008 Access to Capital Index ranks 122 countries on six continents for which data are available. Fifty-six variables are assessed on seven components of each country’s economic, financial, and social infrastructures: macroeconomic environment, institutional environment, financial and banking institutions, equity market development, bond market development, alternative sources of capital and international funding. The overall index is calculated using the weighted average of these seven components. The first two are weighted 25% each. The other five are each weighted as 10% of the final score. For more information, go to: http://www.milkeninstitute.org/pdf/2008CAI.pdf

urban Infrastructure. Mercer’s 2009 Quality of Life survey identifies the cities with the best infrastructure based on electricity supply, water availability, telephone and mail services, public transport provision, traffic congestion and the range of international flights from local airports.

Quality of life. Mercer’s annual survey compares quality of life in 215 countries based on thirty-nine factors within ten categories which include: political and social environment, economic environment, socio-cultural environment, health and sanitation, schools and education, public services and transportation, recreation, consumer goods, housing and natural environment.

Homicide rate. Data not being available for Combined Statistical Areas (CSA), the statistical universe used for the United States was the Metropolitan Statistical Area (MSA).

46

Montréal International

Montréal International is the result of a private/public partnership. Its mission is to contribute to the economic development of Greater Montréal and enhance the region’s international status.

Mandates

Attract foreign investment

Increase the presence of international organizations

Facilitate the relocation of skilled foreign workers

Stimulate the development of innovation

Support the development of metropolitan clusters

Promote Greater Montréal’s competitive and international environment

Credits

Attractiveness Indicators 2009-2010 is published by Montréal International.

The electronic version of this document is available at:www.montrealinternational.com

© All rights reserved, Montréal International 2009

380, Saint-Antoine Street West, Suite 8000Montréal (Québec) H2Y 3X7

Telephone: 514 987-8191Fax: 514 987-1948

[email protected]

www.montrealinternational.com

Montréal International wishes to thank its partners for their financial support: the Government of Canada, the Government of Québec, the Communauté métropolitaine de Montréal, the City of Montréal and private companies.

Documents

Indicators En2009