May 29, 2024

Quebec attracted a record $13 billion in foreign direct investment in the fiscal year ended March 31, more than doubling last year’s record high of $6 billion and five times more than in 2018-19, Investissement Québec announced.

Much of the jump in foreign investments was due to Swedish battery manufacturer Northvolt’s decision to build a $7-billion plant in Quebec. Announced in late September, Premier François Legault said it was the largest private manufacturing investment in the province’s history. Quebec committed $2.9 billion for the project, while Ottawa chipped in $4.4 billion. Officials at the agency said the Northvolt deal contributed as much as $6 billion toward the increase in foreign investments in the province last year.

The provincial investment and financing agency also helped Quebec exporters book $5.1 billion of foreign sales in the most recent year, a 64 per cent jump from 2022-23.“The record investment figures demonstrate the attractiveness of Quebec and the impetus that our government has given to the economy. I want to congratulate Investissement Québec’s international team for its efforts,” Quebec Economy Minister Pierre Fitzgibbon said at the agency’s headquarters in downtown Montreal.Since being given a wider mandate in 2019, Investissement Québec now incorporates the former regional offices of the Economy Ministry — as well as the Centre de recherche industrielle du Québec — to make it easier for entrepreneurs to get advice and financing from the same location. Its mandate includes boosting exports, attracting more foreign capital and generating greater wealth for the province.

On the foreign market, 59 per cent of fixed sales were conducted in the United States; 31 per cent in Europe, Africa, the Middle East, Asia and Latin America; and 10 per cent elsewhere in Canada, similar to last year’s figures. A total of $2.1 billion in sales were conducted outside of the U.S. market.

Investissement Québec International organized more than 9,000 business meetings between Quebec entrepreneurs and foreign buyers or business partners in the last year.At the same time, seeking out foreign investments and supporting subsidiaries of foreign companies resulted in 109 projects generating a total of $13.1 billion in investments in Quebec, compared to $2.3 billion for the 2018-19 fiscal year.While investments linked to electric battery production and natural resources accounted for a significant part of the total, the results in other sectors were comparable to the averages attained over the last five years, the agency said.

Foreign direct investment in the Montreal area slumped 24 per cent last year as technology companies scaled back expansion plans and some industrial projects were scrapped due to a lack of available power, Montreal International, the city’s non-profit investment promotion agency, reported in February.

Daniel Silverman, vice-president of foreign direct investment, said much of the new investment last year happened in the regions of Quebec where there is more space to accommodate the vast factories and production zones required for electric battery production and subsidiaries linked to that production.

“Obviously Quebec’s electric battery ecosystem, its battery strategy,” had a lot to do with last year’s growth, Silverman said. As well, Investissement Québec created a team in 2020 to bring investments to locations outside of the Montreal region, where there are available sites, and skilled personnel, particularly after the pandemic when many people left the city. But the Quebec agency also works closely with Montreal International to attract investment, he said.

Also making a difference is Quebec’s focus on creating “innovation zones,” like the one announced on Tuesday in which Boeing Co. pledged $240 million toward a Montreal-area aerospace cluster, anchoring a provincial plan that aims to make Quebec a global launchpad for development of drones and greener aircraft. Other innovation zones in places like Bromont, Sherbrooke and Bécancour are becoming beacons for investment, Silverman said.

Montreal is the only place in the world where the aviation giants Airbus, Boeing and Bombardier are directly present, Fitzgibbon said. It is also strong in life sciences, as evidenced by the creation of the $180-million Moderna vaccine plant, which bodes well for future investments.

While Quebec does not expect to be able to equal its $13 billion in foreign investments for the coming year — given that the Northvolt project, which was years in the making, accounted for nearly half of this year’s record haul — Fitzgibbon said the pipeline of projects that have been created is generating offshoot industries needed to support them, and there are more in the works that will keep investments flowing.

Source: Montreal Gazette
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