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A  SITE  SELECTION  SPECIAL  FEATURE  FROM  NOVEMBER 2001
Quebec


All That Glitters
Is Not High-tech

    Besides its well educated work force and focused R&D activities, Quebec has other appealing aspects such as easy access to the U.S. marketplace -- a key component for another growing industry in the province: value-added logistics. In Montreal, a strategy is in place to transform the city into a hub between Europe and the eastern portion of the North American continent, where goods can come in by boat, be conditioned, packaged or semi-assembled and then shipped out by rail, road or plane.
One of North America's leading universities, McGill
University is set against Mount Royal in downtown Montreal.

      Montreal already has in place the most efficient and cheapest harbor on the northeastern coast of the continent, according to a Mercer Management Consulting study conducted on behalf of Montreal International. The report shows that it's cheaper and faster to bring in a boat to Montreal, unload its contents onto a train and ship it to New York than it is to unload it in New York. "The turnaround is extremely rapid," says Roquet. "We also have a 24-hour airport at Mirabel that is underutilized at present, and we have extremely good railway and road linkages to the United States all the way down into Mexico."
Big Blue Bids on Bromont

    IBM's $150 million investment in its Bromont assembly plant is proof of Quebec's appeal to the information technology industry. As part of the investment, IBM will hire 400 new employees, bringing its Bromont work force to 3,400. By year's end, IBM expects to increase annual production at its Bromont facility by more than 30 percent.
    "Two market segments are currently experiencing strong growth: telecommunications and the Internet," says Mike Wong, vice president of Manufacturing for IBM Canada. "Both these sectors use the semiconductors we manufacture, and this has a direct effect on our own growth. The investment we're making in Quebec this year will enable us to meet the unprecedented demand."
    If more proof is needed, Quebec supports some 4,000 information technology companies, including 100 multinationals, and employs approximately 102,000 Quebecers. R&D investment in Quebec's IT industry is in the $510 million range, and the province exports $9 billion worth of IT products and services a year.

      For companies in which logistics are essential, there's not much more you need. Technicolor, the leading film print, videocassette, CD and DVD production and distribution company, agrees. The company is building the world's most advanced motion picture film laboratory in the Montreal Foreign Trade Zone at Mirabel. The $29 million lab will allow Technicolor to better service the North American film processing needs of the motion picture and entertainment industry.
      The trick for Technicolor is to bring the film master in, and within a matter of hours, ship 3,000 copies of a new movie all over the world so that the launch date is more or less the same; therefore, speed is essential. "Mirabel is an ideal location for our new high-tech lab given the pro-business climate and cooperation of the region's government leaders," says Walter Schonfeld, president of Technicolor's Worldwide Film Group. "We were looking for a location that could provide a highly skilled work force and logistical convenience across North America. Mirabel quickly rose to the top of our list."
      The Mirabel Foreign Trade Zone is the key component to Quebec's logistics appeal. Mirabel acts as a one-stop shop for value-added logistics operations. Investment projects meeting certain eligibility requirements can receive technical and financial assistance as well as help in obtaining permits and authorizations required by various public institutions.
      Locating in the "Zone" can provide logistics operations with major tax breaks. Refundable tax credits for constructing, acquiring or leasing a building are valued at 25 percent through Dec. 31, 2010. And companies locating in the Zone are exempt from income tax, tax on capital, employer contribution to Health Services Fund and income tax for foreign exports. Salaries of eligible employees also earn refundable tax credits as does customs brokers fees.
      In addition to the tax incentives, the logistics industry benefits from the Montreal-Mirabel International Airport facility, the proximity of the Port of Montreal as well as an efficient and extensive highway and railway network. Roquet believes such infrastructure combined with the work force will make Mirabel a high-value-added logistics hub. "That is what we're beginning to work at," Roquet adds. "We want to dream, and we dream a lot. We're dreaming of maybe having North America's Amsterdam in Montreal."
     
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