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When considering Quebec's place in North America, one can hardly help but refer to "The Nine Nations of North America," a book written some 20 years ago by Joel Garreau, then Washington Post editor. In this book, Garreau provides readers with a clear answer: "Quebec is that part of North America that is so distinct from the rest, and against such odds, that it takes pride in serving to define what a nation is -- and can be ... Quebec, when it comes right down to it, ends up being a nation, not because of industry or armies or stirring political rhetoric, but because when you're there, you know it's no place else."
There is indeed no better endorsement than that which comes from the outside. So when Toronto's Globe & Mail -- which coined the expression Quiet Revolution back in 1962 to describe Quebec's coming of age -- labeled Montreal's recent economic comeback as a high-tech renaissance, one could not help but witness a favorable shift of perception.
This recognition from Montreal's economic arch-rival newspaper came shortly after the Wall Street Journal's Christopher Chipello and Roger Ricklefs (September 1999) told the American business community about Montreal's Multimedia City and its brand-new R&D and high-tech manufacturing center. And to top it all came the July 2000 edition of WIRED, which ranked Montreal No. 12 among the 46 hot spots of the global high-tech networks, ahead of cities like Tokyo, Los Angeles, Hong Kong, Copenhagen and Singapore. But none of this happened by chance in a fortnight.
Montreal (right), on the other hand, is making a name for itself in the e-commerce industry, recently ranking as the No. 12 high-tech hot spot in WIRED. With a gross domestic product (GDP) of US$136 billion and a population of 7.5 million, the Quebec economy has experienced tremendous change over the past 20 years, going from a traditional resource-oriented economy to one largely knowledge-based that now employs more than 400,000 Quebecers.
Spurred by a decade of unprecedented growth south of the border where it exports 80 percent of everything it produces (roughly 40 percent of its GDP), Quebec's economic performance grew at a pace of 4.1 percent in 1999. And if the latest estimates are correct, this rhythm will likely be sustained throughout 2000 and into the first quarter of next year. Provided that already 70 percent of all direct foreign investment in Quebec comes from the United States, then the high-tech renaissance of Canada's second-most populous province will undoubtedly attract many more investors.
With an industrial strategy aimed at developing a knowledge-based economy, consecutive administrations have dedicated themselves to foster research on advanced techniques and technology innovations. This has involved a number of initiatives and measures that were introduced to ensure the appropriate environment for the creation and development of a high-technology industry.
Scientists at the Quebec Artificial Insemination Center (CIAQ) and the Faculty of Veterinary Medicine of the Université de Montréal in St. Hyacinthe have just announced the successful cloning of Starbuck, a bull of legend in dairy production, who sired over 200,000 cows during his 20-year life. His semen was exported to 70 countries, imprinting milk production and the Holstein race forever.
Nowadays Quebec ranks among the industrialized regions on the leading edge of technology, and it is an international leader in aerospace, biopharm aceutical products, information technology and telecommunications, hydroelectricity and metallurgy.
Quebec's high-tech focus began in the 1980s with the creation of a Science and Technology department and the Science and Technology Council. A financial assistance program for employment in the science sector was set up as early as 1981. A few years later a science and technology development program was established with the Canadian federal government with a budget of C$100 million. Centers ensuring the transfer of university research to the private sector were then created, notably the Center de Recherche en Informatique de Montréal (CRIM) and the Institut National D'optique (INO).
But there are some underpinnings to this renaissance like corporate taxes in Quebec, which are among the most advantageous in North America. Within Canada, Quebec offers the most generous tax incentives with respect to R&D and ranks first in this respect among major industrial countries. Main R&D tax measures include a deduction of all eligible R&D expenses, a basic 20 percent federal tax credit, a 20 percent refundable tax credit on salaries, a refundable tax credit increased to 40 percent for R&D conducted at a recognized research center, and a two-year tax break for foreign researchers.
The Conference Board of Canada has evaluated that C$100 of R&D conducted in Quebec represents an expense of C$40.92 for a small company and a mere C$34.46 for a large company conducting research at a recognized center. Furthermore, tax credits can be financed through a loan guarantee offered by Investissement Quebec (www.invest-quebec.com), the provincial foreign investment agency created in 1998.
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