Over the years, Quebec has earned a reputation as being hostile to business due to persistent anti-business policies. As a consequence, Montreal has declined as a hub for major corporate headquarters. With a lower concentration of large corporate headquarters, the city loses out on many economic benefits.
Cities that host a high concentration of large corporate headquarters have several advantages. The local economy gains from the increased number of high-paying jobs as well as the spin-off benefits of attracting professionals such as lawyers, accountants, and consultants and other services that benefit all businesses. The presence of these high paying jobs also has the potential to expand government revenue and help fund vital public programs.
One way to illustrate the decline of important corporate headquarters in Montreal is simply by looking at the total number. Of Canada's top 500 companies measured by gross revenue, 96 were located in Montreal in 1990. By 2011 (the latest year of available data), there were 75 -- a decline of 21.9 per cent. Montreal's national share of these headquarters dropped over the same period to 15.0 per cent in 2011 from 19.2 per cent in 1990.
Another method is to adjust by population. Doing so indicates the concentration of headquarters in a city and better reflects the benefits expected for the local economy. The number of top 500 corporate headquarters in Montreal adjusted for population in 1990 was 2.9 per 100,000. Over the following 21 years this concentration decreased by 31.0 per cent, reaching 2.0 per 100,000 in 2011.
The above numbers could reflect a number of things, including corporations leaving Montreal or the corporations in Montreal falling off the top 500 list. In either case, they show the importance of Montreal as a major corporate city is in decline.
The decline of corporate Montreal has coincided with deterioration in the business climate resulting from adverse provincial policies. In a report titled "Canadian Provincial Investment Climate," the Fraser Institute has regularly measured business climates based on surveys of leading investment managers who indicated what policies and conditions they thought were important in creating and maintaining a positive investment climate. This research has shown Quebec is behind most other provinces; the 2010 edition ranks Quebec seventh out of 10.
The investment managers identified government fiscal prudence, the overall regulatory burden ("red tape"), labour market regulations, and transportation infrastructure as being important to their investment decisions. But they particularly pointed to both corporate and personal income taxes as being significant factors. By looking at taxation in Quebec we can better understand the cause of corporate Montreal's decline.
Quebec's corporate income tax rate currently stands at 11.9 per cent. This rate exceeds those set by the provincial governments in Montreal's main competition for Canadian corporate headquarters: Calgary (10.0 per cent), Vancouver (10.0 per cent), and Toronto (11.5 per cent). While the Quebec government has made Montreal less competitive by increasing corporate taxes in recent years, provincial governments in competing jurisdictions were reducing rates to make their business climates more attractive for investment and economic activity.
Quebec's high personal income taxes have also made Montreal uncompetitive as a locale for headquarters. In 2012, Montreal's top income earners paid a combined federal and provincial personal income tax rate of 48.22 per cent. This, again, compares unfavourably to the combined rates in Calgary (39.00 per cent), Vancouver (43.70 per cent), and even high-taxed Toronto (47.97 per cent). Higher taxes on upper-income Quebecers put Quebec firms at a disadvantage in attracting and retaining talent and makes corporations more hesitant to locate their headquarters in the province.
This disadvantage will only worsen this year with the Quebec government increasing its top income tax rate by 1.75 percentage points. Also troubling, the new higher rate will kick in at the relatively low income level of $100,000. This low threshold will apply to many skilled professionals and compound the difficulties Quebec firms face in attracting and retaining workers.
The government of Quebec should take seriously the long term decline of Montreal as a major corporate hub. Ever increasing taxes on corporate and personal income have made Montreal's business climate uncompetitive compared to other major Canadian cities. Making the tax system more competitive would be an important step towards securing and recapturing Montreal's position as one of Canada's corporate hubs.
This column was written with assistance from Hugh MacIntrye, Fraser Institute policy analyst.
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We are already bilingual at least.
If ROCers have no need, no interest, even outright opposition to learning or even seeing French on the cereal box... Hey that's fine! But, for the love of grace, please leave us alone.
The bigger issue for Quebeckers and particularly Montrealers is : " Do we really want/ feel we have that much in common with other Canadians?? Really"
Or maybe more in common with cooler people from the States, Europe, the whole world?
That, in my opinion, without anything to do with French or not, is a main argument for autonomy!!
( if the PQ were to spin it that way, rather than language based, they will probably go from 30% to 85% for separation.... But of course, in that scenario, an independent Qc would be fully, truly ( not paper on the wall NB style) a bilingual independant Qc!!
That kind if Qc is one I would vote for!!!
I see your point.
But sometimes, like in other life situations ( bad marriage, dead end job, living in wrong neighborhood, etc), there comes a point when if the situation is clearly less than what you aspired to, you need to bite the bullets, take the short term losses, and move on.
I believe the Qc/ Cda relationship has reached this juncture. For Qckers ROC barely exist except for some taxes flows, and most ROCers would prefer to associate with Talibans or war criminals rather than have anything to do with Qckers. This state, i believe, is not an intrinsic thing but comes from trying to force both sides in an unnatural alliance.
So let take the short term investment in our separate future and bite the bullet.
Doesn't mean we can't do the transition smoothly to minimize negative taste to each side, of course.
Torontonians just are not happy campers, possibly because all they can think of is work, work, work.
Vancouverites also suffer from this malaise and possibly for the same reason, but I didn't live there long enough to find out. But many there are an angry, driven bunch in spite of living in the best climate Canada has to offer. Perhaps it is the rainfall, or a Vitamin D deficiency, or something like that.
I currently live in Saskatchewan which is also a nice place full of nice people who speak English or French or Ukrainian, Cantonese, Punjabi, Mandarin, Urdu, German, Japanese, Cree, Lakota, Dene and many other languages. I like it here.
Still, my preference remains with Montreal which I think is far more interesting than any other city in Canada.
In 2011 Montreal had 14.7% of capital investments compared to 14.2% for Vancouver and 10.9% for Toronto. Unemployment is at 9% now compared to 10.2% in 1990. The poverty rate was 41.2% in 1994 and has steadily declined to 13.3% now. All this seems to indicate the economic climate in Montreal has been getting better for the last 2 decades even tho corporations are moving their headquarters.
Sadly, Montreal will never regain its former cultural glory and authenticity. Remember how a walk down st Laurent st. was like taking a trip around the world?
Now it boasts nothing but one american style fast food restaurant after another.
But, the New Province of Montreal may claw its way out of the financial/cultural/social impoverishment inflicted over the past 40 years and thrive once again.
Again, I think I made it pretty clear, I was comparing the present state to 40 years ago. And judging by the maturity of responses, you guys prob werent even born yet.
Yet it need not be so, I am an anglophone that speaks French as a second language, while my partner is a Francophone, who speaks English as a second language. We have found that English is a precise, technological, business language, while French is a passionate, cultural, artistic language. One is emotional while the other is intellectual, to be complete you need both. Our children are bilingual, while finding their way both in business and culture simultaneously.
That being said, I normally sit in the centre and look both ways when it comes to issues. As the article relates to "taxes", I am more on the side of "user pays" according to choice. I do not believe the government should always be in my back pocket, yet I can see the merit of consumption taxes funding a safety net, for the unfortunate of which there are "many", who fall through the cracks at times.. Corporations and governments could go a long way here, if they had the same thought in my opinion ...
Montreal and Qc need to becomeore competitive. Then again, HQs don't move every year, so recouping those lost will not happen.
That being said, Qc needs to beore entrepreneurial, create more companies will global reaches who may grow to top 500, not cda 500 but US 500!
The argument that Canada with its Toronto centric economic policy is detrimental but nothing should prevent Qc from better aligning to the US market to achieve a better evonomy
No taxation isn't everything, but given the uncertainty created by a separatist government, high taxes, and arcane language laws that seem to be enforced randomly. It would be hard for any consultant to convince a major company to move to Montreal. Harder for any new companies to rise up as well.
Montreal is sadly a fading gem, I love the city, but it needs to be left alone by the Politicians in Quebec City and allowed to save the Province.
Did he take into account that Montreal as one of the best trained labour force in North America and that house price are relatively lower? Did he take into account lower tuition fees and subsidize daycare.
The relative decline of Montreal can be explained by Quebec and Canada’s immigration policy. Quebec welcomes 40 to 50 K immigrants per year. Half of them eventually learn French, half of them eventually learn English. Those who learn English eventually leave for Toronto after 5, 10 or 20 years. Therefore, this phenomenon actually increases the real number of immigrants to Ontario.
The problem is actually Quebec being part of Canada. Once Quebec is independent, we will be able to attract immigrant who wants to speak French with us. Thus, this will create a more prosperous Quebec and a more prosperous Canada. .
Do you have any data to back up your claim that "Montreal has one of the best trained labour force in North America". I found that statement interesting because Quebec has the highest high school dropout rates in Canada.
Their only chance is to change their draconian language laws.
Sounds legit. Not at all anecdotal.