Montreal's big attraction.
The President of the International Financial Centre of Montreal (IFC Montreal), Andree Corriveau, has great ambitions for the city. She wants to turn Montreal into a world financial centre, on par with Paris, Luxembourg and Zurich. That's IFC Montreal's mandate and Corriveau has been travelling non-stop to promote the city among financial institutions, fund managers, back-office services and banks worldwide and trying everything to bring them to the city. I reached her in Florida for this interview. She has been on the job for just 18 months but is already very proud of what she has accomplished. "I want to make sure financiers in other countries know what the Quebec government is offering," she says.
IFC Montreal serves as a prime contact for various financial and public sector stakeholders, works with companies that are seeking to set up an international financial centre (or IFC -- a generic term and not to be confused with the government support organisation, IFC Montreal) by supporting and navigating their application for government accreditation. It helps set up, develop and maintain companies specializing in international financial transactions in the city.
Corriveau says that other cities like Dublin and New York invest millions of dollars to promote their financial sectors. New York recently announced that it would do everything possible to keep its financial institutions. She believes that Montreal, too, has to defend its turf, including what it already has in the international finance sector.
With this in mind, the Quebec government offers tax exemptions to businesses and individuals that allow the city to compete with the incentives provided by other cities and countries. The individual tax exemptions are the unique element of this initiative. Tax incentives targeting financial institutions include exemptions on capital taxes (1.28% of revenues) and income taxes (9.04%). In addition, the companies are not required to contribute to the health system fund, a 4.26% saving for an unlimited period. Since Quebec law guarantees these exemptions, they will be available for as long as the law is in force.
Foreign specialists who move to Montreal do not pay provincial income tax for five years. Montrealers who are hired by the financial companies and who work exclusively in the company's international sector pay only 50% of Quebec income taxes. However, the companies and their employees still pay federal taxes, and there are certain conditions that apply, including the requirement that the companies fall within one of 25 listed categories.
Companies interested in seeking accreditation as an IFC must be involved in foreign capital transactions. They have to provide Corriveau with a detailed business plan specifying the type of business, their reasons for setting up shop in Montreal, the activities they will undertake, the number of jobs that will be created, and so forth. She then submits this plan to the Department of Finance for evaluation and confirmation that the company meets the requirements of the law governing IFCs. If the conditions are met, the company is accredited.
Companies that open offices in Montreal and obtain the status of an IFC are required to contribute a certain amount each year to the Financial Sector Development Fund, contributions that amount to about half of the IFC Montreal's operating budget. The Department of Finance recently allocated $800,000 over three years to boost this organization. This funding has allowed Corriveau to hire people to assist her with promoting IFC Montreal and the city of Montreal as an international financial centre.
Created in 1986 by the Quebec government, the Montreal Exchange and the City of Montreal, IFC Montreal had established 70 accredited IFCs when Corriveau joined in 2000. Although some of them are new to the city, others have been based in Montreal but did not have the IFC accreditation. Today, there are 118 IFCs in Montreal. Although there are 504 banks and financial institutions in Montreal, many focus on Canadian finance and are therefore not eligible for IFC status. "The transactions have to involve countries other than Canada. This can include the United States," Corriveau says.
The Quebec government created this program to turn Montreal into a major financial centre but also to slow or, if possible, stem the flow of capital to Toronto and elsewhere. In the past 20 years, the Montreal financial sector has lost many major players. To attract foreign financial companies to the city, the Quebec government is banking on IFC Montreal in the same way it did with Cite multimedia, Montreal's high tech centre. "To be competitive, you have to be able to offer at least as much if not more than the other cities in the world with the same vocation," insists Corriveau. These cities have worked hard to achieve what they have, and so has Montreal. You can't just focus on stopping capital from leaving. You have to build a critical mass of your own.
To promote Montreal, Corriveau is travelling the world to explain the benefits of setting up operations in Montreal over other locations in North America. IFC Montreal is normally the one courting the companies, either individually or in groups, and she knows that to succeed she has to lobby as many people as possible. "The day financial institutions approach me first for information on our program will be the day Montreal is recognized as a major international financial centre," she states. For interested companies, such a decision can take months, if not years. It takes time to produce results.
Corriveau and her team monitor the media for leads and potential prospects. "Some don't know about our program and are thinking about going to New York. Thanks to our media watch efforts, we are able to inform prospects about Montreal before any decisions are made," she says. Corriveau also participates in conferences and events to raise awareness of her product.
Corriveau continually has to stand up to some major adversaries to capture interested parties. A number of large North American cities are putting up a phenomenal fight for this business. The major benefit she can draw on to entice companies is the low cost of operatinga company in Montreal, compared with other major centres. The quality of Montreal's bilingual, even trilingual workforce, and the relatively low cost of renting or purchasing office space are equally important incentives. Since September 11th, security is a major consideration and Corriveau has no qualms about bringing this argument to the table. "This is the ideal time to be promoting Montreal," she maintains, noting that New York is just a one-hour flight away. The proximity of cities such as Toronto and Boston also plays a deciding role and she believes that Montreal offers a far superior quality of life than the other cities, providing an appealing blend of business and pleasure.
Although it is a competition, she maintains that she is not working against Toronto or other cities, but rather for Montreal.
Congress of the Union of Arab Banks
Corriveau's crowning achievement so far has been bringing the Congress of the Union of Arab Banks to Montreal. This event, to be held in July 2003, will bring 300 to 400 Arab bankers to Montreal for their annual international congress. Montreal won out over Dublin and Kuala Lumpur. After New York in 1996, which hosted around 500 delegates, Montreal will become the only other North American city to host this congress, which is attended by members of the Union of Arab Banks, finance ministers from many countries, and central bank representatives.
"The selection of Montreal as the venue for this major international conference makes it stand out as a centre of international finance in Canada and North America," affirms Corriveau. This announcement is the result of the tremendous collaborative efforts made by the Government of Quebec, the City of Montreal, and by the city's banking and financial community.
'This wonderful decision by the Union of Arab Banks to hold their 2003 international congress in Montreal is a source of great satisfaction to us all," said Pauline Marois, deputy premier and minister of finance for the Government of Quebec. "This announcement again demonstrates that Quebec provides outstanding access to North American financial markets. This positive development also owes much to the many initiatives conducted by the Government of Quebec to make the City of Montreal a prime location for the management of international financial services."
Owing to the events of September 11th, the annual conference previously scheduled for 2002 was put off until 2003. Corriveau views this congress not only as an ideal opportunity to show off the Montreal financial sector to the Arab bankers and other delegates. The IFC president also believes that it will be an ideal time for Quebec and Canadian industries interested in developing Middle East markets to meet the financial experts from those areas right here at home. "The people attending the congress will be accompanied by the international press," she notes. "That will result in more exposure for Montreal."
Corriveau is also working on another significant project -- opening a local chapter of the Financial Women's Association of New York (FWA). Although her submission has been approved, it has not yet been officially announced. Founded in 1956, this association has 1,100 members in New York with chapters worldwide. "I hope the association we're going to create in Montreal will interest women in finance," she says. Corriveau anticipates having more than just bankers as members in the new association. She'd like to see women who work in treasury, accounting and finance departments in large firms involved in the new group.
She sees FWA members involved in various areas including setting up scholarships for female students in finance or economics, and creating synergies within various companies. This is still in the planning stage and Corriveau has yet to make an official announcement regarding the goals and mission of the Montreal chapter.
The work she is doing to promote Montreal's financial sector should lead to the creation of new jobs and some significant economic spinoffs. IFC Montreal has caught a second wind since Corriveau caine on board. For her, the results have been encouraging and she hopes to continue at the same pace at the very least. She has set some realistic -- though ambitious -- objectives, for herself and her employees, and is more than confident that they will succeed.
Julie Demers (email@example.com) is associate French editor of CMA Management magazine.
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|Date:||Jul 1, 2002|
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