Canadian and international companies continue to make record investments in the Montreal area this year as the region shakes off the effects of the continuing COVID-19 pandemic, but a slowdown looms in the months ahead amid the prospect of recession. Quebec’s most sweeping language overhaul in nearly half a century could also scare some businesses away.
Non-Quebec companies made $1.74-billion worth of investments in Canada’s second-largest city through the first six months of 2022 as they launched a record 57 projects and created some 4,700 jobs, according to the latest figures from Montréal International, the city’s investment promotion agency. Thirty one companies established a subsidiary in Montreal for the first time.
Last year over the same period, corporations committed $1.86-billion for 40 new projects. But Montréal International, a public-private partnership partly funded by the Quebec and Canadian governments, counts only investments it facilitated, meaning the absolute numbers could be much higher.
The Montreal region, known for its substantial knowledge and research base, has drawn particular attention from global investors over the years for its expertise in artificial intelligence (AI) and deep learning. Companies like McKinsey & Co.-owned data analytics company QuantumBlack and aerospace giant Thales SA are just two companies to set up AI operations in the city in recent years.
This year, health and life sciences companies also generated a notable chunk of investment activity, with 7 projects launched worth a net $321-million. That’s a higher amount in six months than for all of last year. Moderna Inc.’s plan, announced in April, to build a vaccine manufacturing plant in the Montreal area isn’t yet included in the numbers.
Silicon Valley-based Circle Medical Technologies is among the firms expanding in the Montreal region. The company, a specialist in virtual telemedicine, currently has 25 employees in the city with plans to grow that number to 360 over the next three years. It has already made several hires in software engineering, product design and operations management, said George Favvas, a Montrealer who co-founded the company and now runs it as chief executive.
Mr. Favvas said his leadership team initially thought Montreal would just be an office supporting the company’s San Francisco base. Now he says the city’s strong labour pool and technology ecosystem has convinced him to build out operations there in tandem with its U.S. headquarters.
“We see Montreal is almost a second head office or a satellite head office,” he said. “There’s a range of roles where we’re open to having the candidate work, either in Montreal or in San Francisco, on equal footing.”
The growth underscores the diversity of Montreal’s economy, which has a lower unemployment rate than Toronto, Vancouver or Calgary at 4.8 per cent. Government incentives and the organization’s own promotion work also play a role, said Stéphane Paquet, Montréal International’s president and chief executive.
Still, he says it could be difficult to keep the momentum going.
“I think investment will slow,” Mr. Paquet said. A recession could prompt companies to pull back their plans, he said. Quebec’s economy has about a 35 per cent chance of being hit by recession, Eric Girard, Quebec’s finance minister, said last month.
Lingering questions about Quebec’s new language law could also factor into businesses’ decision-making, Mr. Paquet acknowledged.
The Quebec government passed Bill 96 in late May in a bid to correct a language pendulum it says is swinging too far away from the use and adoption of French in daily life. The controversial new legislation includes measures to make French “markedly predominant” in commercial signage and compels companies with 25 to 49 employees to meet French-language certification obligations under the same stringent standards that previously applied to companies with 50 to 99 employees.
Many corporate leaders in the province have expressed support for reinforcing French, even as they warn that the new legislation could saddle companies with additional costs and complicate their hiring efforts at a time when Canada is facing an acute labour shortage. Top executives with 37 Quebec-based technology companies last month called for a freeze on the implementation of the legislation until Premier François Legault’s government has put in place French-language tutoring and other tools businesses need in order to comply with it.
Montréal International’s phones started to ring last year as companies began asking question when the legislation was tabled, Mr. Paquet said. The group organized education sessions led by law firm Fasken after which fewer questions came in. Since the bill became law in late spring, the queries started again.
“We thought it was over but obviously it is not,” Mr. Paquet said. Now the organization is putting companies directly in contact with the Office québécois de la langue française (OQLF), which is the government agency responsible for enforcing Quebec’s French language charter.
One such information meeting was held July 13 between representatives of foreign-based companies and OQLF officials, Mr. Paquet said. “What I am told is once they’ve talked to the OQLF, it’s much more clear and they are reassured.”
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TD faces public scrutiny, support, of First Horizon takeover in public meeting – Business News – Castanet.net
TD Bank Group’s proposed takeover of Memphis-based First Horizon Bank is the issue before a public meeting Thursday where community members are being given a forum to voice their opinions on the deal.
The virtual meeting is being convened jointly by the Federal Reserve Board and the U.S.Office of the Comptroller of the Currency, which are reviewing the proposed US$13.4 billion deal.
The meeting comes as TD has faced renewed criticism in recent months for allegedly aggressive sales tactics in the U.S., including from Senator Elizabeth Warren who has called for the merger to be blocked until the bank is “held responsible for its abusive practices.”
TD agreed to a US$122 million settlement with U.S. regulators in 2021 stemming from illegal overdraft practices, while an investigative report released in May alleged that problematic practices continue at the bank, something the bank had strenuously denied.
The federal agencies also held a public meeting in mid-July for BMO’s proposed US$16.3 billion takeover of Bank of the West, where numerous community groups urged the deal be blocked until a strong community benefits agreement can be reached.
The bank also faced criticism for the proportionately low number of mortgages granted to Black and Latino borrowers, while numerous community groups that have received funding from BMO voiced their support of the deal.
Judge sides with Enbridge Inc. in Michigan’s latest effort to halt Line 5 pipeline
WASHINGTON — The international dispute over Line 5 belongs in federal court, a Michigan judge declared Thursday, dealing a critical blow to Gov. Gretchen Whitmer’s bid to shut down the controversial cross-border pipeline.
It’s the second time in nine months that District Court Judge Janet Neff ruled in favour of pipeline owner Enbridge Inc., which wanted the dispute elevated to the federal level.
That first decision prompted Michigan Attorney General Dana Nessel — believing her only path to victory to be in state court — to abandon the original case, turning instead to a separate, dormant, nearly identical circuit court case to try again.
Neff’s disdain for that tactic was palpable throughout Thursday’s ruling.
“The court concludes that (the) plaintiff’s motion must fail, based on …(the) plaintiff’s attempt to gain an unfair advantage through the improper use of judicial machinery,” Neff wrote.
“The court’s decision … is undergirded by (the) plaintiff’s desire to engage in procedural fencing and forum manipulation.”
A spokesperson for Nessel did not immediately respond to media inquiries.
Whitmer is a Democrat and close ally of President Joe Biden whose political fortunes depending on the support of environmental groups in the state. She ordered the shutdown of Line 5 in November 2020.
She cited the risk of an ecological disaster in the Straits of Mackinac, the environmentally sensitive passage between Lake Michigan and Lake Huron where the pipeline runs underwater between the state’s upper and lower peninsulas.
They went to circuit court, where Enbridge pushed back hard, arguing that Whitmer and Nessel had overstepped their jurisdiction and that the case needed to be heard in federal court.
Late last year, Neff sided with Enbridge, prompting Whitmer and Nessel to abandon the complaint and try again, this time with a similar circuit court case that had been dormant since 2019.
Nessel had hoped to head off Enbridge’s jurisdictional argument on a technicality: that under federal law, cases can only be removed to federal jurisdiction within 30 days of a complaint being filed.
But Neff wasn’t buying it, citing the precedent she herself established in 2021 when she ruled for Enbridge the first time.
“It would be an absurd result for the court to remand the present case and sanction a forum battle,” Neff wrote.
“The 30-day rule in the removal statute is intended to assist in the equitable administration of justice and prevent gamesmanship over federal jurisdiction, but here, it is clear to the court that (the) plaintiff is the one engaging in gamesmanship.”
The Line 5 pipeline ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U. S. border and the Great Lakes by way of a twin line that runs along the lake bed.
Critics want the line shut down, arguing it’s only a matter of time before an anchor strike or technical failure triggers a catastrophe in one of the area’s most important watersheds.
Proponents of Line 5 call it a vital and indispensable source of energy, especially propane, for several Midwestern states, including Michigan, Ohio and Pennsylvania. It is also a key source of feedstock for refineries in Canada, including those that supply jet fuel to some of Canada’s busiest airports.
In a statement, Enbridge described Thursday’s decision as “consistent with the court’s November 2021 ruling that the state’s prior suit against Line 5 belonged in federal court.”
That, the company said, is the correct forum for “important federal questions” about interstate commerce, pipeline safety, energy security and foreign relations.
The statement goes on to say that shutting down Line 5 would “defy an international treaty with Canada that has been in place since 1977.”
Line 5 talks between the two countries under that treaty, which deals specifically with the question of cross-border pipelines, have been ongoing since late last year.
“Enbridge looks forward to a prompt resolution of this case in federal court.”
This report by The Canadian Press was first published Aug. 18, 2022.
James McCarten, The Canadian Press
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