Foreign investment: Montreal area drew more projects, less capital in 2022

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Foreign direct investment in Greater Montreal dipped in 2022 as the global economy cooled off, though the region did attract a record number of projects.

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Non-Quebec investors committed $3.58 billion worth of capital to the area in 2022, Montreal International, the region’s economic development agency, said Monday. It’s only the second time in history that foreign investment in Montreal’s metropolitan area has surpassed the $3 billion mark, following 2021’s record tally of $3.77 billion.

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While the 2022 number represents a five per cent year-over-year drop, Montreal International supported 102 projects last year — a new high.

Montreal’s performance on the investment front comes against a backdrop of slowing economic output. Global growth probably fell in 2022 to an estimated 3.4 per cent from six per cent a year earlier, the International Monetary Fund said in late January. A further decline, to 2.9 per cent, is projected for 2023, the IMF said.

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“Twenty twenty-two was a very eventful year. We had to cope with a global economic slowdown that is affecting every city. The good news is that Greater Montreal managed to preserve its attractiveness in the eyes of foreign investors, international organizations and international talents,” Jean Laurin, Montreal International’s chairman, said Monday at a news conference.

As interest rates rise, “incubation periods” for projects are about two months longer on average than they were last year, said Montreal International chief executive Stéphane Paquet said.

“Before investing tens of millions of dollars, companies are taking a bit more time,” he said. “Clearly, people are being more prudent.”

More than half of the 102 projects announced last year, or 52, were new installations.

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“This means that every week, somewhere on Earth — in New York, Paris, London or on the U.S. West Coast — there’s an entrepreneur or a company that chose to set up shop in greater Montreal,” Paquet said.

Annual tax benefits generated by the new investments are estimated at $206 million for the federal government, $288 million for Quebec and $81 million for local municipalities, according to Montreal International calculations. The numbers reflect personal income taxes and don’t include corporate taxes.

Life sciences and health technologies companies proved to be particularly active last year, with investment more than doubling to an all-time high of $685 million, or 19 per cent of the grand total. Twelve health-related projects were announced for the metropolitan area — including U.S. drugmaker Moderna’s planned Laval manufacturing plant, which could open by the end of 2024.

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“This was the year of life sciences and health care,” Paquet said.

Off-island locations benefited from the deal flow. Suburban municipalities including Laval and Longueuil attracted a record 21 projects, worth $755 million, Montreal International said.

In Laval alone, foreign investment almost quadrupled to $405 million, Mayor Stéphane Boyer told reporters. Permit applications from companies are running at two to three times above annual norms, which means that another good year could be in store in 2023, he said.

All told, Montreal International says the announced investment projects led to the creation of 8,287 jobs with an average annual wage of more than $88,000. That’s about 1.5 times the average salary of a Montrealer.

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Montreal International also took steps to tackle the province’s persistent labour shortage by recruiting 629 skilled workers from 38 countries in key sectors such as education, health services and information technology. When spouses are included, Montreal international says it supported 1,340 foreign workers and students in their immigration process — a 13 per cent decline from 2021 that the agency blames on the broader economic context.

Some 183 local employers, including Alithya, Fujitsu and Mouvement Desjardins, tapped Montreal International’s recruitment expertise by taking part in one or more of its nine initiatives last year. These efforts included a first in-person mission in Paris since the start of the pandemic.

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