Investissement Québec International is on a roll. The results generated by the organization are quite impressive and reflect the dynamism of the organization. Over the past three years, the organization doubled its foreign direct investment results to $4.6 billion, while exports have almost doubled to nearly $2 billion in firm sales outside Quebec.
Daniel Silverman, vice-president of Foreign Direct Investment at Investissement Québec International shares his views on how Québec distinguishes itself on the international scene and how Investissement Québec’s comprehensive service offer is unique in the world.
Daniel, with a population of 8 million, what makes Québec a major economic player in Canada?
That’s a great question, and something I think that people need to hear around the globe. What we have to offer to international companies looking to expand in North America is exceptional. We are a hidden gem just waiting to be discovered.
First and foremost, our location is ideal. Québec is comprised of 17 economic regions, with 6 metropolitan areas on the eastern seaboard, making it a commercial gateway between the Americas and Europe. We have direct access to 1.5 billion consumers through our 20 strategic commercial ports, 4 international airports, and an integrated railway network connecting Québec to the rest of Canada, the United States, and Mexico.
Another of our top assets is that we are world leaders in several cutting-edge sectors, including artificial intelligence, gaming, VFX and animation, financial services, life sciences and health technologies, aerospace, and cybersecurity. Additionally, the Québec government is strongly committed to developing a strategy for the battery industry, and many elements are already in place to further develop that ecosystem.
We also shine when it comes to talent and research. There are 18 universities and nearly 140 colleges across the province, representing 500,000 post-secondary students, including 87,000 of whom are international students. There are over 100 industry-specific incubators and accelerators across Québec as well, providing opportunities for corporate partnerships and talent development. Québec ranks 1st in Canada for R&D investments thanks to the 1,400+ chairs, research laboratories, and research centres throughout the province.
Québec is equally renowned for its cost competitiveness. This is partly due to our main energy source, hydroelectricity: we are committed to providing reliable, cost-effective, renewable electricity to our population and the industrial sector. With its 99 % clean and renewable electricity, Hydro-Québec, a provincial state-owned company, is strongly dedicated to pursuing its expansion for cost-effective delivery of electricity to its domestic and nearby markets.
Additionally, we offer tailored support programs for foreign and Québec-based businesses to financially back their projects and help them to innovate or grow, along with talent development initiatives and programs.
Finally, the Québec government is fully committed to developing the economy by doubling foreign direct investment in the province and raising Québec’s exports to 50% of its GDP. Investissement Québec International was created to reach those ambitious goals. Today, we have a team of over 200 experts based in over 30 offices throughout 19 different countries, all specializing in foreign direct investment and exports. We are dedicated to attracting and supporting foreign direct investment, providing export assistance, and attracting international talent.
Consequently, our vision and efforts have been recognized on the international level, with Investissement Québec earning the title of Economic Development Organization of the year in 2022 (silver award). This award is given annually by the International Economic Development Council to the international economic development agency that has distinguished itself the most in its mandate. The recognition and visibility afforded by the award reinforces our reputation for efficiency, and it will serve as a calling card to new prospects.
What are the 4 main industry sectors in Québec? What industries do you see rapidly growing in the future?
With such a diverse economy, it’s hard to name only four. Rather, our goal is to further develop Québec’s key sectors: Life Sciences and Health Technologies, Aerospace, Artificial Intelligence, Electric Vehicles, Energy, and many others. Here are some of our priority industries that are experiencing rapid growth:
For the past 18+ months, we have been dedicated to developing the Battery sector through the Québec Battery strategy. We are leveraging the existing ecosystem, our critical minerals, as well as our renewable energy sources, and we are developing a circular economy within the sector. Ultimately, our focus is the supply chain, from the mine to the cell, and then to recycling. This is also having a positive impact on our growing bus manufacturing, recreational vehicle, and eVtol ecosystems.
Another critical sector in Québec is Life Sciences and Health Technologies. The Québec government is currently in the process of finalizing its strategy for that sector. With its low-cost and renewable electricity, and considering the growth of interest for this energy vector, Québec initiated the Green Hydrogen and Bioenergies strategy. Finally, I definitely think we will see growth in the AI, Aerospace, Semiconductor, and Gaming sectors, as we have always been strong in those sectors and we will continue to develop and innovate.
Where do you see most of the investment in Québec coming from? Where would you like to see more investment coming from?
To begin with, we have a unique value proposition for some markets, especially for France. About 25% of our new investment and re-investment results come from France-based companies. Ubisoft set a great example by opening numerous studios throughout the province.
The U.S. is another strong market for Québec. American companies choose to implement here because of our sector strengths, our low operating costs, and our talent pool.
And to ensure we penetrate all markets, we have recently grown Investissment Québec International’s foreign direct investment team significantly and have doubled down on our
efforts, specifically throughout Asia. Given our sector priorities and synergies with key countries such as Korea, Japan, Singapore, and Australia, we’ll focus on those, as they all present key opportunities for Québec.
How have Québec’s international subsidiaries played a vital part in your economy, and how do you support their growth?
We owe a large part of the success and growth of our economy to international subsidiaries. In fact, 70% of our investments are from the re-investment of 2,300+ international subsidiaries in the province of Québec.
In order to support and accompany international subsidiaries in setting up, investing, and growing here, Investissement Québec International truly plays a vital role. Once these companies are established, the subsidiaries’ managers can always count on our assistance to deal with subsidizing and regulatory authorities during their continuing expansion.
In fact, understanding the challenges faced by these subsidiaries is crucial, and we strive to be proactive in adapting the Québec government's service offering to support them. This means ensuring that the local business environment allows them to innovate, grow, and remain competitive in order to attract new investment projects from their head offices. To do so, meetings and special events between subsidiary managers and Québec government representatives are organized periodically.
So far, our track record is impressive. For example, big players such as Google, Bridgestone, RioTinto, Ubisoft, Stryker, PepsiCo, Sobeys, Air Liquide, L’Oréal, Epic Games, Airbus, Vantage, and many others continue to re-invest in Québec. They help create high-value jobs and complement our existing ecosystems.
You mentioned earlier that the government has a mandate to double foreign direct investment in Québec. Can you please elaborate on that mandate and explain what it means to the Québec economy?
In an effort to stimulate the economy and to promote the strengths of Québec globally, the government created Investissement Québec International (IQI) within the existing structure of Investissement Québec. Based on the previous three years of foreign direct investment (FDI) results, the government mandated IQI to double FDI over a period of five years, from $3 billion to $6 billion.
For the 2021-22 exercise, the organization unveiled exceptional results. Québec supported 121 investment projects, representing $4.6 billion in CapEx, which amounted to a record year for foreign direct investment amid a global pandemic. We are definitely heading in the right direction, as we are entering the third year of our mandate!
How does your financing corporation help companies to get their project ideas off the ground? What financial solutions do you provide?
I cannot think of any other economic development or investment promotion agency that is backed by a financing corporation, which represents a significant advantage for our FDI team. Québec offers multiple programs to support both local and foreign businesses with operations in the province. That covers everything from financing to innovation to international talent attraction, as well as to export assistance.
One significant advantage is the ability to invest in a project or business with equity. Rather than a grant program or an incentive, Investissement Québec’s venture capital and investment funds are invested in an equity stake of a project or business.
As for our diverse financial solutions, one of the key programs offered by Investissement Québec and the Ministry of Economy and Innovation is our ESSOR program, which supports job-creating investment projects in order to increase productivity and competitiveness. The budgetary impact of the financial assistance may represent a maximum of 15% or 25% of eligible expenditures, depending on the type of project and the activity sector. Many types of assistance are available: refundable contributions (low-interest or interest-free loans), loan guarantees, equity participation, and non-refundable contributions.
And our support doesn’t stop there. Additional programs include numerous initiatives and tax credits to boost a company’s growth by increasing productivity and innovation, helping with product commercialization, and driving exports. There are also attractive tax holidays for major investments. Québec also offers grants for HR training, tax holidays for foreign researchers and experts, and many other sector-specific tax and R&D credits.
Why is Québec a champion of intermodal transport? How many consumers are provided with privileged access to the Americas via this gateway?
We have direct access to 1.5 billion consumers through our 20 strategic commercial ports, 4 international airports, and an integrated railway network connecting Québec to the rest of Canada, the United States, and Mexico.
Daniel, what makes Québec a premier investment location in 2022 and beyond?
In a nutshell, we are an innovative, cost-competitive, highly educated, strategically located diamond in the rough. We don’t stand still; we continue to innovate, to evolve, and we are going to stay ahead of the race for investment, talent, and exports.
How will we achieve this? Over the next several months, Québec will implement the life sciences and health technologies strategy, initiate strategic reflection and action towards the hydrogen strategy, and will have some major transformational industry investment announcements. Furthermore, the government will launch its first innovation zones in some regions of the province.
To position Québec as a premier investment destination globally, we will rely on the government’s continued support, the assistance provided by Investissement Québec, and the over 70 FDI professionals of the Investissement Québec International team.
For more information on the services available from Investissement Quebec, we invite you to visit their website at https://www.investquebec.com/international/en/
Daniel Silverman photo credit: Eva Blue - Tourisme Montréal Credit MU Ville-Marie ElMac Gene Pendon
