VILLES D’AVENIR COLLECTION VOLUME 9 | ISSUE 2
MONTRÉAL'S BOOMING ECONOMIC GROWTH
BROCCOLINI – A MONTRÉAL FAMILY OF BUILDERS
PP 41614528
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MONTRÉAL ECONOMIC POWERHOUSE : : 2019 EDITION
A MESSAGE FROM THE MAYOR OF MONTRÉAL
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ontreal’s economy is more vibrant, dynamic and innovative than ever before. We are witnessing record-breaking numbers in terms of employment, we are front-runners in promising sectors such as artificial intelligence and we attract internationally renowned companies such as Google and Facebook. The metropolis is going through a pivotal period. New technologies and megadata are transforming the global economy. Business models, the workplace itself and numerous spheres of the economy are evolving. And cities are expected to play a more important role in this new global ecosystem. We are in a privileged position to take advantage of these changes. Higher education institutions, research institutions, a strong sectoral diversity and the presence of talents are undeniable assets to accelerate the growth of the metropolis and improve the quality of life of all Montréalers. In addition, the new legislation gives Montréal additional means and powers to play its role as the main driver of Québec’s economy. There are many challenges to be met, particularly in terms of attraction and talent retention, territorial development and the internationalization of our companies. The solution is based on improving productivity and, on the City’s side, stimulating the Montréal business environment. We must also strengthen the role of the City of Montréal as a facilitator and a catalyst for economic and commercial development. To this end, it is essential to strengthen collaboration between public and private partners and to ensure that all levels of government are actively collaborating to maximize the impact of each of our actions. To this end, planning with the Government of Québec, within the framework of the status of metropolis, will allow us to better coordinate our efforts and actions to accelerate Montréal’s economic development. Our ambition is to make Montréal a leader in our strategic sectors and a benchmark for an inclusive and sustainable economy. We invite all Montréal’s economic stakeholders to work together in order to achieve our full collective potential. It is time for us to gather our forces.
MARTIN GIRARD / SHOOTSTUDIO.CA
Join in on this effort today!
Valérie Plante
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CONTENT : : 2019 EDITION
3 A MESSAGE FROM THE MAYOR OF MONTRÉAL
By Valérie Plante
5 A WORD FROM THE PUBLISHER By Jacques Boisvert
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GETTY IMAGES BY MARTINR35
15 INTERVIEW Staunch promoter of Montréal, Élie Farah 21 LIFE SCIENCES AND HEALTH CARE TECHNOLOGIES An attractive sector in full effervescence 26 MONTRÉAL A Major Transit Hub REPORT UMQ
SPECIAL REPORT
BROCCOLINI 70th Anniversary
THE REMARKABLE BROCCOLINI FAMILY, 3 GENERATIONS OF BUILDERS
33 MANPOWER SHORTAGE Municipalities respond 34 TAXATION A growing imbalance 41 OBJECTIVE Update municipal taxation SPECIAL SECTION
43 FORUM OF ELECTED MUNICIPAL
OFFICALS OF GREATER MONTRÉAL
44 LONGUEUIL A magnet for business and investment 45 LAVAL Be part of a vibrant urban landscape 46 BLAINVILLE Family services and quality of life
DOSSIER REAL ESTATE SECTOR
47 MONTRÉAL REAL ESTATE MARKET BOOMING 50 THE SHIFT TOWARD INTELLIGENT BUILDINGS A societal choice BROCCOLINI BY ALEX TRAN
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A WORD FROM THE PUBLISHER
PUBLISHER Jacques Boisvert EDITORIALS Yasmina El Jamaï, Emmanuelle Gril, Johanne Landry et Sylvie Lemieux QUALITY CONTROL SUPERVISOR Johanne Landry TRANSLATION, REVISION AND PROOF-READING Neil Kroetsch PRODUCTION Supervision : Edith Lajoie Graphic design and layout : Carole Bordeleau pour Carbodesign Advertisements : Lan Lephan PHOTOGRAPHS Denis Bernier and Roxane Paquet COVER PAGE PHOTO © Stéphan Poulin Dendrites, by Michel DE BROIN, a sculptural work in downtown Montréal ADVERTISING Souk Vongphakdy Sales manager Arianne Jobin-Chamberland Sales Advisor Najat El Manir Special Projects Manager Montréal 450 670-7770
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MONTRÉAL, CITY OF LIGHT
jacques.boisvert@jbcmedia.ca
The illumination of the Jacques Cartier Bridge, the lit-up biosphere and buildings such as Place Ville Marie, events like the Loto-Québec International Fireworks Competition and the Montréal en lumières festival… They all make the city sparkle at night as it shines by day, with its intense economic activity, its multi-ethnicity, its universities, its research centres and its leading role in science, technology and video games, not to mention its developers and artists. Selecting Montréal means choosing to live 90 minutes by air from New York in a place open to diversity, a city with 200,000 university students (33,000 international students) where 100 languages are spoken. It means choosing one of three UN cities in North America (along with New York and Washington). Establishing your business in Montréal means opting for an economic ecosystem favourable to growth and creativity, in a city that is at the crossroads of Europe and North America. This edition of Montréal Economic Powerhouse highlights the economic development strategy of the City of Montréal. It begins with an interview with the engineer Élie Farah, who not only settled in Montréal after leaving Egypt, but who has spent a large part of his career promoting his adopted city abroad, and continues to do so. As for Frank Beraud, the CEO of Montréal InVivo, he notes that Greater Montréal is a major centre for life sciences and health technologies (LSHT), with 56,000 people directly and indirectly employed in more than 600 organizations. This $5.6 billion industry is a powerhouse that offers promising perspectives. Pharmaceutical and biotech firms, clinical research and medical and health care technologies that make use of artificial intelligence are the principle segments of this flourishing sector. With its port, railway system, airport and highway network, Montréal is a major intermodal transit hub for logistics, cargo handling and freight transport. We interviewed both Sylvie Vachon, the president and CEO of the Montréal Port Authority, and Mathieu Charbonneau, executive director of CargoM. Their dynamism and tireless promotion of the city are working wonders. The real estate market in Montréal is in full effervescence. We met with many specialists in real estate and urban development in Greater Montréal. All this to say that Montréal is a great place for growing a strong business, as our article on the history of the Broccolini family so clearly indicates. Starting from nothing, over the past 70 years the family has built not only a successful construction firm but also a good many homes, institutions and buildings that are part of the city’s architectural and economic fabric. Pleasant reading!
Jacques Boisvert Publisher
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MONTRÉAL'S BOOMING ECONOMIC GROWTH BY YASMINA EL JAMAÏ, JOURNALIST
Five hundred people were consulted in the course of drafting the City of Montréal’s 2018-2022 strategy to accelerate economic development, a plan officially launched in April 2018. Eight dossiers were added to the 40-page document in May and June, each with a distinct action plan based on five strategic orientations. The subsequent interventions will focus on specific objectives. The plan includes a detailed budget, as well as the strengths and limitations to overcome in each sector of development. The following is a summary of the Accelerate Montréal strategy and its eight related action plans.
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FAVOURABLE CONTEXT The boost that Mayor Valérie Plante and her administration hope to give Montréal between 2018 et 2022 is based on strong, vigorous partnerships with key players in the business community. The other mainstay that the municipal executive committee and its partners have been able to count on since September 21, 2017 is Bill 121, which increased the autonomy and powers of the City of Montréal. It enables the municipal administration to fully take on its role as a local government, and thus exercise greater control over its affairs and have greater latitude for interventions.
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>
These new powers plus its official status as Québec’s "metropolis" also include a Montréal Reflex clause that stipulates that the provincial government take into account the special nature of Montréal when passing legislation. It thus comes as no surprise that the 200-page Accelerate Montréal strategy is an ambitious document. According to the Montréal Reflex agreement, the Québec government will consult the municipal administration on political
VALÉRIE PLANTE, mayor of Montréal
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and social policies that concern Montréal, not to mention the attendant social, economic and financial impacts. The provincial government is committed to conferring with municipal decisionmakers about political and legal structures, and any regulations and programs that might affect the city. In principle, Montréal has more powers on the provincial scene and is able to have its voice heard, able to champion the interests of those who enrich the local economy. The city also has the latitude to establish business assistance programs in order to more effectively support economic activities likely to attract and retain foreign investment. The city also has new powers regarding immigration, heritage preservation and housing. The ambition of Montréal’s mayor and of municipal partners, combined with the desire for effective action that is inherent in the economic development strategy, are also echoed in the implicit recognition of Montréal’s power as a driving force in the Québec economy.
SUSTAINABILITY, INCLUSION AND INNOVATION The new strategy is based on the principle that economic development that is sustainable, inclusive and innovative is an approach that favours new possibilities likely to create a socio-economic upsurge. In line with that resolution, the municipal budget was increased by $40 M compared to the previous budget, with an envelope of some $360 M available over a five-year period. For its part, the provincial government will provide $150 M over five years. The economic development strategy also places its focus on the driving forces of Montréal, such as the presence of innovative businesses full of talented people, greater investments and demographic growth. For example, construction activity is intense in both the public and private sectors, with projects currently underway amounting to more than $24 billion. Private investments in real estate have increased by 14% over the past five years. 5 CORE ORIENTATIONS The five cornerstones for Montréal’s future development are knowledge and talent, stimulating entrepreneurship, raising its international profile, galvanizing economic hubs and improving internal procedures to enhance municipal services and programs. Concretely, the economic development team intends to ensure that the manpower needs of local firms are fulfilled. In order to encourage the creation of new and sustainable businesses, it is adding some thirty resources to its small business network. Other objectives include quality urban development and improving public transit and labour mobility. Enhancing the city’s reputation as a centre for business means establishing Montréal-based firms abroad and attracting foreign investment. Municipal procedures must be optimized to improve the performance of available programs and services. Revitalization of the urban milieu is of prime concern, given that Montréal has some 53 million square feet of vacant land and approximately 7.3 million square feet of vacant buildings. The city will encourage the development of all that potential with projects that welcome businesses as well as residents.
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Accelerate Montréal
In order to accelerate Montréal’s economic development, the city developed eight action plans to realize its vision. A total amount of $360 M will be invested by 2022 to increase the prosperity of our metropolis. ville.montreal.qc.ca/affaires
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NIGHT VIEW OF JACQUES CARTIER BRIDGE
DENDRITES, BY MICHEL DE BROIN, A SCULPTURAL WORK IN DOWNTOWN MONTRÉAL 10
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GETTY IMAGES BY ROMAN BARISEV
STÉPHAN POULIN
5 KEY SECTORS There are five key strategic sectors where development initiatives will be centred, sectors deemed particularly likely to enhance the overall prosperity of Montréal: transport and labour mobility, cultural and creative industries, life sciences and health care technologies, the digital industry and the clean tech sector. These industries have strong potential for growth and a large pool of qualified workers, with some three million jobs in those sectors across the Island of Montréal. Increasing the employment rate is a primary goal of the 5-year plan, the target being a 65% employment rate by 2022. Related targets are raising the full-time rate of employment to 82%, and raising high school graduation numbers so that the 15% of workers over the age of 15 who do not have a high school diploma drops to 12% by 2022. The city also wants to raise the university graduation rate to 32% by 2022, and to improve the employment rate of immigrants aged 25 to 54 to at least 80%. 8 ACTION PLANS At the C2Montréal event on May 25, 2018 the city unveiled the first three action plans for entrepreneurship, social innovation and highperformance economic development. The 118 specific actions and total economic development investment of $175 M clearly indicate a strong desire to make things happen by working in conjunction with the business community. "Together we can build an entrepreneurial, social and sustainable economy so that all Montréalers benefit from collective prosperity," added Mayor Valérie Plante. ENTREPRENEURSHIP The city has allocated $15.5 M to stimulate the creation and growth of small and mediumsized businesses. Plans include financing an annual networking event so that existing and emerging entrepreneurs have quick access to the entrepreneurial milieu. The plan provides support and raises awareness about priority targets – women, immigrant entrepreneurs, diversity, First Nations communities, youth and innovative upstarts. Those priorities will be key elements in calls for submissions for funding. The action plan for entrepreneurship is based not only on stimulating
the creation of new firms, but also on their growth and sustainability. SOCIAL INNOVATION The action plan for social innovation is aimed at small, medium and large firms, as well as university students. In addition to supporting intermediary organizations with expertise in social innovation, plans are afoot to encourage the social economy by increasing municipal purchasing in that field, and $9.2 M has been allocated to that end. HIGH-PERFORMANCE NETWORK Optimizing the services that the city and its partners offer to the business community is also part of the plan for the network of small and medium-sized companies. To help that network reach its goal, the city has hired 27 new resources specialized in providing assistance to entrepreneurs. An additional $29 M over four years has been set aside for business financing, $18.1 M for existing strategic partnerships, $13.6 M for finalizing new partnerships and $0.7 M for other actions related to the plan. The action plans for knowledge and talent, design and international economic affairs include 83 actions and a budget of $14.7 M to promote the skills of Montréal locally and in other countries. Those three action plans were unveiled on May 30. DESIGN The city wants to encourage design and architecture in urban development projects and to accelerate the integration of design in all municipal activities. As a UNESCO City of Design since 2006, Montréal aims to augment its reputation for vitality and style. One of the objectives is to engage local talent to stimulate economic development and the sustainable city. A design and architecture program will be unveiled in 2019, the aim being to equip the boroughs with tools to raise the quality of submissions for municipal contracts. KNOWLEDGE AND TALENT Capitalizing on know-how as a means of attracting and retaining qualified employees is the goal of the action plan for knowledge and talent, especially since Montréal is increasingly competing with cities like Toronto and Vancouver. The four bases of the action plan are to ensure the development MONTRÉAL ECONOMIC POWERHOUSE : : 2019 EDITION
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of knowledge and talent, to reinforce Montréal’s status as a Living Lab, to increase the city’s reputation as a knowledge centre and to optimize the entrepreneurial capacity of its four universities. The goal is to improve Montréal’s positioning in the new knowledge economy. INTERNATIONAL ECONOMIC AFFAIRS The City of Montréal is keen on international trade and being open to the world. The action plan for international economic affairs aims to enhance Montréal’s status and reputation on the international level. It is essential to attract foreign talent and investments and also to stimulate exports, another aspect that is a driving force in the city’s economy. RETAIL TRADE AND SHOPPING DISTRICTS The action plan for retail trade and commerce, unveiled on June 13, acknowledges the importance of street-level retail merchants in Montréal’s eco nomy, and offers support for revitalizing commer cial streets and shopping districts. The 33 actions
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in the plan represent an investment of $74 M. Rejuvenating commercial corridors and supporting the creation and development of retail businesses are important goals, as is adapting municipal policies and infrastructures to the needs of merchants. Support and financing programs specifically aimed at merchants are also in the works. Businesses negatively affected by roadwork will receive financial support. Montréal is the first city in Canada to compensate businesses hurt by public construction projects, with $25 M set aside to reimburse merchants for lost revenue, retroactive from January 1, 2016. Merchants can receive up to $30,000 per year. The plan also emphasizes strengthening relationships with merchants’ associations and business development groups, and attracting diverse start-ups. Efforts will also be implemented to improve merchants’ business models, and 10 resources specialized in business development have been hired to implement retention and attraction strategies for retail trade and to develop business opportunities at the local level.
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ECONOMIC DEVELOPMENT OF THE ISLAND OF MONTRÉAL The action plan for the economic development of the Island of Montréal was announced on June 27, 2018. Investment of $106.4 M over a four-year period is aimed at raising the profile of economic hubs at the local and international levels. The city will support sustainable development projects focused on five sectors with high potential. Emphasis is on improving access to economic hubs, labour mobility and the fluid transport of merchandise. The plan promotes economic hubs as key factors in creating business opportunities for Montréal. It divides the city into three economic hubs – west, centre and east – that are based on both geographical locations and key employment sectors. A communication plan to promote the hu bs and development opportunities is being drafted. As for infrastructure development, it will be subject to the goals of the economic development plan.
Sustainable investment projects will be supported in strategic hubs, which are sectors with high potential. Funding will be provided for sustainable real estate development projects, and for start-up projects in the five high-potential sectors. Initiatives that encourage corporate social responsibility and the adoption of best practices in sustainable development will receive assistance. Improving access to employment hubs and the fluid transport of people and merchandise are also priorities, as are projects, initiatives and organizations whose objective is to promote sustainable labour mobility. The same applies to adopting new technologies and best practices for transporting merchandise and urban logistics services. An advisory committee composed of leading figures in the business community was formed on June 27 to help realize these objectives. The committee will advise municipal decision-makers by determining strategic projects likely to increase the dynamism and impact of Montréal’s economic development.
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STRATEGIC GOALS 1. FOCUS ON KNOWLEDGE AND TALENT 2. STIMULATE ENTREPRENEURSHIP 3. MAKE ECONOMIC HUBS MORE DYNAMIC In sum, the 2018-2022 economic develop ment strategy is marked by a bold approach to raising Montréal’s overall prosperity by mobilizing all the parties involved in accelerating the economic development of the city.
4. RAISE Montréal’S INTERNATIONAL PROFILE 5. CREATE A HIGH-PERFORMANCE NETWORK
To that end, the Rendez-vous Accélérer Montréal forum promoting the eight action plans took place on October 24 at the Palais des congrès in Montréal. The 500 participants learned about develop ment activities and creative approaches involving many actors and sectors, all keen to make the economic development plan a concrete reality by working in conjunction with the business community, entrepreneurs (in the broad sense of the term) and the Government of Québec. GETTY IMAGES BY IMAGEEGAMI
PROMOTE STRATEGIC SECTORS 1. CULTURAL AND CREATIVE INDUSTRIES 2. LIFE SCIENCES AND HEALTH CARE TECHNOLOGIES 3. LABOUR MOBILITY AND TRANSPORT 4. DIGITAL INDUSTRY 5. CLEAN TECH
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INTERVIEW
STAUNCH PROMOTER OF MONTRÉAL //
ÉLIE FARAH BY YASMINA EL JAMAÏ, JOURNALIST
Foreign investment is a crucial element in the economic development of Montréal. The city’s reputation has been growing, particularly since it hosted the World’s Fair in 1967. Organizations such as Investissement Québec and Montréal International are incubators and accelerators that help companies grow and develop, as do official missions to foreign countries. They contribute to the city’s positive image abroad. Élie Farah is a leading figure in raising Montréal’s reputation internationally, thereby contributing to its social and economic development. Portrait of a humble, charismatic man whose career has been very impressive.
JBC MÉDIA BY ROXANE PAQUET
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D
ALEXANDRIA TO MONTHEY TO MONTRÉAL id a young chemical engineer working in Egypt ever imagine that he would end up not only spending the greater part of his career in Montréal but that he would also become a tireless promoter of Greater Montréal ? Élie Farah initially had no inkling of any of that after earning a B.A. in chemical engineering at the University of Cairo. Mr. Farah began his career in Egypt working in production and quality control for the Swiss firm Ciba-Geigy (now Novartis) from 1971 to 1975, which led to sojourns in Monthey, Switzerland and opportunities to expand his horizons. A globetrotter at heart, he began thinking of emigrating to
Australia, the U.S. or Canada. After family members who were living in Canada and the U.S. sang the praises of their adopted countries, the one place that caught his attention was Montréal. Mr. Farah’s attachment to French language and culture was the deciding factor. "I moved to Montréal in the mid-1970s just before the Olympic Games. It took me only five days to find a job back then, a time when many firms were eagerly recruiting employees. I was welcomed with open arms. In Montréal I was able to live the Québec and the Canadian dream," he enthused. Mr. Farah spent most of his career in Montréal, where for over forty years he acquired professional experience in international business development. His passion for that sector is as strong as ever. In a career full of stimulating challenges, he worked for 18 years in the private sector and 27 years in economic development. ECONOMIC DEVELOPMENT OFFICER FOR MONTRÉAL Once established in Montréal, sales became a key focus of his professional activities. His first job here was as manager of the minerals and chemical products division for the Société générale de surveillance. He promoted the firm’s services and established links with clients in other countries. After obtaining an MBA at HEC Montréal in 1981, he worked for Sidbec International from 1980 to 1982 as international sales director, acquiring expertise in iron ore. He was then offered a position in 1982 with the Québec Ministry of Energy and Natural Resources, where he stayed for a decade. His work involved numerous aspects of economic development as well as foreign investment. His skills in international development expanded in 1992 when he was appointed industrial commissioner for the Montréal Urban Community, responsible for attracting foreign investments, an exciting new challenge at age 42.
RIO
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"Attracting foreign investors requires good sales skills. You must be committed to and fully promote the product, in this case the city of Montréal," he said. "Sales is the art of persuasion, a noble exercise in connecting with others. You must understand the potential client’s business and the problems he faces. I’ve always had a lot of respect and empathy for investors, for they can put their careers and their families at risk when they move here to see a project through to completion. The following aspects must be taken into consideration when promoting
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INTERVIEW
Montréal to a potential investor: the business environment, lifestyle, sense of community and the advantages of raising a family here." Mr. Farah has travelled the world for his work, with some 300 missions abroad to convince investors to establish roots in Montréal, a city that has strong selling points. While in the public sector he established contact with various governmental
agencies that focus on economic development, and he gets them involved in his projects. "It’s fascinating to see how the efforts made by government agencies to attract investment and industrial development enrich the economy," he noted. PASSION FOR CONCRETE RESULTS Mr. Farah’s promotional efforts persuaded many firms to choose Montréal. In February 1997 a German life sciences firm was attracted by what the city had to offer, and asked him to help them set up a business managing medical research programs. That same year Élie Farah became president and co-founder of LAB Biosyn Corporation, a subsidiary of LAB International Holdings. The parent company was sold three years later, and Mr. Farah was appointed vice-president in charge of business and corporate development at Biophage Inc., and then became its chief executive officer in 2002. From 2004 until semi-retirement, Élie Farah worked for Montréal International for 12 years as vicepresident in charge of investments for Greater Montréal. He and his team developed strategic approaches for 400 investment projects worth $8.7 billion, endeavours that led to the creation of approximately 35,000 jobs. He is particularly proud of his strong contribution to raising Montréal’s international profile and of the fact that he built a solid team consisting of some twenty professionals devoted to attracting and retaining foreign investments. "The young people I helped train have become excellent promoters of our fair city," adds this father of four children, all born in Montréal, and all recipients of his extensive know-how. MONTRÉAL’S RISING PROFILE "Since the late 1980s, economic development has been centred on developing strong industrial clusters that focus on dynamic sectors such as aerospace. In terms of aviation, Montréal is the third most important city in the world, after Seattle and Toulouse. At the moment, metropolitan Montréal has 16 industrial clusters. The success of these clusters and their initiatives to attract investors over the past 25 years is most impressive," said Mr. Farah.
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"Since the late 1980s, economic development has been centred on developing strong industrial clusters that focus on dynamic sectors such as aerospace. In terms of aviation, Montral is the third most important city in the world, after Seattle and Toulouse." – Élie Farah
JBC MÉDIA BY ROXANE PAQUET
The city offers many attractions, such as operating costs that are lower than the rest of North America and the presence of thousands of talented individuals. Montréal has become the biggest video game creator in Canada, and the city is also renowned in the animation and visual effects sectors. Montréal’s reputation has continued to grow over the years, and the city is now a leading centre for artificial intelligence and other avant-garde sectors. Its attractive features are underscored by its high international profile. "I’ve visited other extraordinary cities besides Montréal, but rental costs elsewhere are exorbitant. The cost of education can be extremely high as is the case for New York and London, or a city might have a high crime rate as Chicago and Detroit do," he added. "Montréal offers an attractive combination of good locations for businesses plus an excellent quality of life." A number of challenges remain, however. "Montréal and Québec have always had to struggle to attract investors and to promote the city as a technological hub. Instead of comparing the attractiveness of Montréal or Toronto, two cities
that have historically been economic engines of the Canadian economy, it is better to focus on competition from Boston and New York and the fact that the American market is 10 times the size of the Canadian market. In 2008 Montréal International and other economic development agencies seeking investment dollars on foreign turf established the Consider Canada City Alliance, a collaboration-based approach to attract investors to Canada. Once an investor commits, Canadian cities then compete to encourage the investor to establish a business in their respective regions," he explained. He advises promoters to introduce a visiting investor to his or her peers, people likely to share their experience of settling in Montréal, and apt to pass on advice on how to make an investment venture a success. He also recommends that they create well-paying jobs in the technology sector in order to attract investment and foreign talent, thus stimulating the local economy. In his opinion, recruiting talent is a very important business location factor, as is employee retention. Noting that foreign investment has led to 2000 subsidiaries of foreign firms setting up shop in
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Greater Montréal, he points out that it is easier to encourage these businesses to reinvest locally than it is to attract new investors. Thus the importance of intensifying efforts to retain both personnel and investors. Semi-retired since April 2016, Mr. Farah works as a part-time consultant, creating economic wealth, managing performance and mentoring (he acts as a coach for business leaders on behalf of TechnoMontréal). In doing so, he helps a younger generation make enlightened decisions by implementing the requisite structures and processes adapted to their skill level. He also conducts training sessions that cover the various components of the investment value chain.
A grandfather of six and married to a former Canadian ballet teacher of Egyptian origin, this 69-year-old consultant born and raised in Alexandria seeks to take full advantage of retirement. "I love assisting a management team by sharing my know-how. I’ve thrived on various challenges all my life, and I love creating wealth for the community that welcomed me so warmly . My expectations for Montréal have all been met and then some, and for that I am very grateful. In my travels and encounters, I continue to sing the praises of Montréal and Canada for all that they have to offer. Each phase of my life has had its charms and challenges. The trick is to make the most of each period of life, and I plan to continue to do so in retirement," said Élie Farah.
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LIFE SCIENCES AND HEALTH CARE TECHNOLOGIES GETTY IMAGES PAR METAMORWORKS
AN ATTRACTIVE SECTOR IN FULL EFFERVESCENCE BY EMMANUELLE GRIL, JOURNALIST
No doubt about it, life sciences and health care technologies are on the upswing. It is a fast-growing sector that takes advantage of an educated workforce, with new firms being born regularly. A look at a booming field.
G
reater Montréal is a major centre for life sciences and health technologies (LSHT). With 56,000 people directly and indirectly employed in the sector and working for more than 600 organizations – from start-ups to big firms and research centres – this $5.6 billion industry is a powerhouse that offers promising perspectives. Pharmaceutical and biotech firms, clinical research and medical and health care technologies that make use of artificial intelligence are the principal segments of this flourishing sector.
"Québec ranks 10th in North America in terms of competitiveness in this industry. We are a major player and Montréal is an attractive centre, given its critical mass of organizations and researchers," said Frank Béraud, the CEO of Montréal InVivo, a coalition of LSHT stakeholders in Greater Montréal.
MONTRÉAL INVIVO
FRANK BÉRAUD CEO Montréal InVivo
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MONTRÉAL INVIVO
GETTY IMAGES BY KASTO80
INVESTORS ARE BACK This is a far cry from the downsizing that occurred less than a decade ago, when several domestic biotech start-ups disappeared in a major restruc turing that affected research centres and big pharmaceutical companies. Today the level of employment has climbed back to where it was just before that slowdown which, noted Frank Béraud, was not a vote against Montréal, but rather a global trend within the pharmaceutical sector. A sign that prospects are really looking up is that most of the people laid off at the time are back in the industry or have launched their own firms. "That shows that the industry is vibrant, and that the ecosystem is capable of absorbing ups and downs. In fact the sector is very diversified, and there is an equilibrium between the pharmaceutical, biotech and medical technologies sectors," said Mr. Béraud. Another strong signal is that for the past two years investments have increased. "A number of companies have really taken off. They’ve managed to attract a substantial amount of capital," he noted. In that regard, many recent cases illustrate how much the wind has shifted. Theratechnologies, listed on the stock exchange, issued $57 M worth of shares last June, and is preparing its second new
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drug launch to treat the human immunodeficiency virus (HIV). Acasti Pharma issued $24 M of shares in October. It is currently in Phase 3 of a clinical study to produce a krill-based medication (a zooplankton) to combat cardiovascular diseases. Clementia Pharma (treatment of bone diseases) was listed on the stock exchange in 2017 with financing of $120 M. Milestone Pharma ($55 M in 2017 and $80 M in 2018), Dalcor Pharma ($150 M in 2016) and Feldan Therapeutics ($12.5 M in 2018) are two other impressive examples. In May 2017 the Québec government decided to support the sector by launching the 2017-27 Québec Life Sciences Strategy, accompanied by a $205 M envelope. "The strategy is the fruit of substantial collaboration between industry players and the government. It incorporates much of what we asked for. The goal is to be among the top five LSHT centres in North America by 2027, and to attract $4 G in private investments by 2022. Note that over the past five years, investments amounted to $3.5 G," added Frank Béraud. He pointed out that the federal government has also made the LSHT sector a priority for Canada’s economic development. The federal strategy
is currently being drafted, and also involved consultations with the milieu. It is aligned with the objectives promoted by Montréal InVivo, notably to ensure that Greater Montréal is home to one of the Canadian flagship life science firms. SUPPORT FOR THE INDUSTRY Montréal InVivo is a non-profit organization financed for the most part by the three levels of government. Centred on the industry and nourished by research, its primary focus is the economic development of the LSHT sector. "We have several strategic priorities, such as helping to establish a strong, world-class industry, so that small firms can grow and develop," explained the CEO. Montréal InVivo also wants to take advantage of Québec’s excellent research facilities and innovative prowess. "We are blessed with worldclass institutions and researchers. We know full
well that in our field, research is a critical issue, a powerful lever that can lead to innovations that are ultimately integrated into the market," noted Mr. Béraud. Another big priority is to support expertise and increase the pool of talent. While LSHT suffers no shortage of manpower, as is the case in other fields, we must encourage and stimulate an upand-coming generation if we want them to be prepared to carry the torch when the time comes. "We have just launched an extensive survey on matching the training received with employment requirements. The purpose is to verify whether there is a sufficient number of young people choosing scientific careers, and then to encourage them to focus on the life sciences. In doing so, we must make sure that they are well prepared and trained for the current and future needs of the industry." He added, however, that we must wait
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MONTRÉAL INVIVO
to see what shortcomings the report identifies and what they imply. Montréal InVivo is also working on a report on best practices in continuing education. "Modifying university programs is a process that can be long and complex. One avenue to explore in the meantime is continuing education and complementary training," he said. Integrating innovations is another priority, for while many very innovative technologies are created in Québec, few end up on the market. "It is clear that we are experiencing difficulties integrating them into our health care system. There are certain barriers that complicate the task, for example the rule about awarding contracts to the lowest compliant bidder," he added. That means that for a small or medium-sized business in Québec, it’s often easier to sell innovations in other parts of Canada, or in the U.S. or Europe. Not being able to penetrate your own local market makes for a very sorry calling card. That is why the organization is working with various partners in order to shake things up. The 2017-27 Québec Life Sciences Strategy has led to the creation of a Bureau for Innovation in Health Care and Social Services, something that Montréal InVivo and the sector at large have long sought. "The Bureau champions innovation in the health care network. It was set up a few months ago and is headed by Paul L’Archevêque, a man who is very well known in the industry." While the Bureau reports directly to the Ministry of Health and Social Services, its action plans are funded by the Ministry of the Economy, Science and Innovation, which Mr. Béraud views as a logical choice, given that implementing innovations within the health care network will obviously have economic spinoffs for the Québec economy. Montréal InVivo is also involved in promoting the assets of the province. "Our mission consists of publicizing the economic and social impacts of LSHT firms. It can be difficult, as it is a sector where accomplishments can be difficult to grasp in concrete terms. An aircraft flies through the sky, so we immediately grasp its effect. It’s harder to understand all the work and investment necessary to develop a new medication, for example."
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QUÉBEC STANDS OUT That being said, Québec’s know-how and expertise stand out, particularly in the Greater Montréal region where 80% of LSHT firms are located. What is Montréal’s magic recipe? First of all, a substantial critical mass of researchers. "The principle world life science hubs are in cities that have a high concentration of research facilities, most of it done in renowned universities. Take Boston, for example, or San Francisco. We have that asset in Montréal. We have the new CHUM University of Montréal Hospital, not to mention the McGill University Health Centre and the CHU St. Justine pediatric hospital, which make Montréal a world leader in medical research," Frank Béraud explained. Québec has not only brains and infrastructures, but also the personnel – technicians, scientists – necessary to make it all work. In a large hub like Boston, for example, finding the qualified people you need is no easy task. Even though there are many researchers, the pool of technical personnel is quite limited, and they are much sought after. To illustrate the increase in value that Montréal offers in this field, the CEO mentioned the case of Repare Therapeutics, a leader in DNA damage repair and precision oncology drugs. Although the lead venture capital firm that is backing the biotech start-up is San Francisco-based and the research director was previously head of the oncobiology group at AstraZeneca R and D in Boston, Montréal was chosen as the home for the new company. Why? Because it has an educated, talented workforce, solid infrastructures and the requisite human resources. They are essential elements that will allow the LSHT sector to take root in the Montréal region, and to grow and prosper. ISSUES FACING THE INDUSTRY Even though it is vigorous and in good health, the biotech industry faces many challenges. First is financing, which tends to be abundant and readily accessible in the start-up and initial growth phases, but later on, investment is more difficult to obtain for well established companies. "If they encounter difficulty at that stage, what often happens is that they seek funding in the U.S., which increases the risk of them shifting their activities south of
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the border," said Mr. Béraud. He stressed the importance of developing a solid funding chain at each stage of the life cycle of new firms. Another big challenge is integrating technologies within the network. The Bureau for Innovation in Health Care and Social Services will of course be working to help make things happen, but Mr. Béraud noted that there is a structural inhibitor in that the purchase of supplies is based not on value, but on price. "Given that context, the ability to measure the added value of an innovation is essential for its successful adoption by the health care network. It is extremely difficult to get access to health care data. Consequently, local companies are obliged to get them from other places in Canada, which hinders the Québec industry," said Mr. Béraud. "The data base at the Régie de l’assurance maladie du Québec – a standardized, centralized system – is a veritable gold mine, a real competitive advantage in the North American market. Secure, well controlled
access to that data base would give us a remarkable competitive edge. Foreign firms could carry out their research studies in Québec, not to mention the fact it would greatly facilitate implementing those innovations throughout our health care network," he added. He referred to it as the sword of Damocles hanging over the pharmaceutical industry, given that the Patented Medicine Prices Review Board is currently reviewing the costs of medications. That could lead to a decline in revenues for pharmaceutical firms, and thus adverse effects on the venture capital funds and university research chairs that depend on them. "Ironically, if that situation were to occur it would undermine the efforts of the federal government to support the economic develop ment of the biotech sector," he noted. He hopes, however, that the threat never materializes. In any event, it would appear that the LSHT sector has a promising future in Greater Montréal.
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MONTRÉAL
A MAJOR TRANSIT HUB BY SYLVIE LEMIEUX, JOURNALIST
Foodstuffs, clothing, furniture, vehicles… These and other everyday goods are off-loaded in Montréal on a daily basis before being sent to consumers by truck, train, boat or airplane. Due to its advantageous geographical position, the city is the port of entry for the intermodal transport of merchandise delivered to North American and international markets. Focused on growth, Montréal is developing tools to realize its ambitions.
GETTY IMAGES BY BUGPHAI
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The objective is to improve Montréal’s position among the major intermodal transit hubs in North America. The city has several cards up its sleeve that will help attract clients. Its favourable geographic location gives it direct access to 135 million consumers within a radius of 1000 kilometres. It boasts an operational ocean port that is accessible 12 months a year. Moreover, the Port of Montréal is the only container port in the Québec-Ontario corridor, and it handles two-thirds of Canada’s international trade. The city also has two airports and a substantial railway network that facilitates shipments to western Canada and the American Midwest, not to mention its extensive highway network. A MATTER OF FLUIDITY In order to increase its activities the sector must resolve a few issues, and a fluid transport system is at the top of the list. An overloaded road and highway network that has been under renovation these past few years does not make for optimal circulation of goods and merchandise. "That is why it is important to work together to find appropriate solutions so as to improve fluidity," explained Mathieu Charbonneau, executive director of CargoM. The association now has some fifty members, including the Montréal Port Authority, Aéroports de Montréal, major rail, marine and road carriers, manufacturers and importers/exporters like Dorel, la Société des alcools du Québec, Decathlon and research and educational institutions.
ADMINISTRATION PORTUAIRE DE MONTRÉAL
A
ll that activity is carried out by thousands of men and women who physically handle on a daily basis tons and tons of cargo. More than 120,000 people (direct and indirect employment) work in some 6300 transportation and logistics firms in Greater Montréal. It is a key sector of economic development, and the city is keen on binding its strengths together to support its growth. That led to the creation in 2012 of the CargoM industrial cluster. The president and CEO of the Montréal Port Authority and chair of the CargoM board of directors, Sylvie Vachon, stated that "We managed to bring all the various players together to sit down at the same table. Previously they had been working together, but not in a structured, cohesive fashion."
SYLVIE VACHON President and CEO of the Montréal Port Authority Chair of the CargoM board of directors
In recent years CargoM has initiated actions that have led to concrete results. The organization developed the CargoMobile app for truckers, a project carried out jointly with the City of Montréal, the Association du camionnage du Québec and the Government of Québec. "The application provides information on blocked roads or traffic jams, in real time, as well as truck routes. It gives the driver the best route to take to his destination," added Mr. Charbonneau. Another project helped improve the movement of trucks at the Notre Dame St. entrance to the Port of Montréal (see sidebar). Last summer CargoM created an important pilot project to evaluate the possibility of extending business hours at freight terminals. The results were conclusive, and now they are open from 6 a.m. to 11 p.m. instead of 7 a.m. to 3 p.m. "It gives trucking and shipping firms
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CargoM
GETTY IMAGES BY SEBATL
The CargoM team was inspired by changes made at the port of Savannah, Georgia, which now has a logistics ecosystem renowned for its efficiency and performance.
GETTY IMAGES BY NICOLASMCCOMBER
a bigger window of opportunity for transporting freight, since they can now avoid rush hour," he noted. Despite increased operating costs for the terminals given the need for additional manpower, the new measure has already proved its worth. "It’s a necessary investment that has greatly improved service," added Mr. Charbonneau. "It’s being implemented in all ports. The terminals are now more efficient." For real gains to be made, all parties in the chain must be made aware of these new hours of business. "We are working with the owners of distribution centres to get them to change their own hours of business in order to avoid having truckers come to pick up cargo at the port in the early morning, only to find the centre closed." A lot remains to be done in that regard, particularly with grocery store chains that can’t receive deliveries at night because of a law limiting the number of employees on hand after regular opening hours. Solutions do exist, however, such as the automated drop zones
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found in European distribution centres. They allow truckers to deposit the merchandise in secure access spaces isolated from the rest of the warehouse. Let’s hope the idea catches on in Québec. The future is also in mutualised (shared) distribution centres, according to Mr. Charbonneau. "The growth in e-commerce has meant a great increase in the movement and shipping of goods. Efforts must be consolidated so that a greater volume of packages is sent on each delivery trip. It’s more efficient, especially in a context of job scarcity, as is the case for truckers. It also helps reduce greenhouse gas emissions, which is a gain for the environment." Plans are underway to establish mutualised distribution centres in Montréal. AN INSPIRING MODEL The CargoM team was inspired by changes made at the port of Savannah, Georgia, which now has a logistics ecosystem renowned for its efficiency and performance. With results sure to arouse envy,
INTEGRATED LOGISTICS (l';J FREIGHT FORWARDING & TRANSLOADING
Savannah is the fourth largest container port in the United States. From a second-tier port, over the past 25 years it has become the main port of entry for the south-eastern U.S., a region experiencing strong economic growth. Bringing together a number of major players to share a common vision of development has led to the construction of many large-scale distribution centres (Ikea, Home Depot, Dorel, etc.) in recent years. "The key to their success is the collaboration established with all stakeholders, including port authorities, all parts of the logistics chain and economic development officials for the state of Georgia. The port now attracts a lot of business. In the early 1990s it had only a handful of distribution centres, whereas today it has 250," noted Mathieu Charbonneau, who travelled to Savannah twice with a Québec delegation to learn from the port’s success. "The port officials from Savannah also travelled to Montréal to see how we do things here," he added.
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CargoM
Many tools developed by CargoM were inspired by those developed in Savannah, like Zoom Grand Montréal, a website featuring plots of land and industrial and commercial buildings for sale or rent in Greater Montréal. "Our goal is to attract more distribution centres here. We are working closely with economic development organizations to promote the strengths of our sector. We are also part of trade missions to other countries," said Mr. Charbonneau. "Montréal is beginning to harvest the fruits of our work. Until recently we had very little cargo coming from Asia passing in transit through Montréal. Now 25% of our container traffic comes from Asia or is headed to Asia," he added.
" We have developed information tools that highlight the strong sectors of our economy such as artificial intelligence, which offers interesting opportunities for developing our industry." – Mathieu Charbonneau Executive director CargoM
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SOLICITING CLIENTS ABROAD In 2019 Mr. Charbonneau and members of the CargoM cluster will be on the road once again, travelling with trade missions to solicit clients in other countries. A trade mission to Europe and meeting with major foreign firms and consular authorities in various countries are occasions to promote Montréal as a transit hub. "We have developed information tools that highlight the strong sectors of our economy such as artificial intelligence, which offers interesting opportunities for developing our industry," he explained. "Expanding the Port of Montréal with the construction of the Contrecœur freight terminal is another element we can promote. It demonstrates the vitality of the sector. The project will help raise our freight handling capacity."
LOGISTICS AND TRANSPORT, A THRIVING SECTOR
142 MILLION
122,000
25%
Number of tons of cargo handled in Montréal
Number of jobs in supply chain logistics (including manufacturers, wholesalers and retailers), half from the trucking sector
Percentage of containers from an Asian destination that were handled in the Port of Montréal in 2017
6 300
$4.3 BILLION
Number of transportation and logistics firms in the Greater Montréal region
Economic spinoffs from the logistics and transport sector in 2017
GETTY IMAGES BY WANGANQI
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CargoM
CIRRELT
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AN INTERNATIONALLY RENOWNED RESEARCH CENTRE
t’s a well-guarded secret, but Québec is home to one of the biggest transport and logistics research centres in the world. The Interuniversity Research Centre on Enterprise Networks, Logistics and Transportation (CIRRELT) employs over 80 professors and researchers, as well as contributing members and guests, not to mention 500 Masters and Ph.D candidates. It conducts its activities in two sites, one in Montréal and the other in Québec City. CIRRELT involves 10 Québec universities and focuses on several areas of research: designing and managing logistics networks, optimizing supply chains, environmental issues linked to the movement of cargo, etc. "Much of the research
work is carried out in collaboration with the industry," explained Martin Trépanier, co-director of CIRRELT. "Researchers study concrete problems that freight carriers experience, and then share best practices with the entire sector." CIRRELT recently worked with CargoM on its project to measure and improve truck transport fluidity at the Notre Dame St. entrance to the Port of Montréal. Some fifty trucks were equipped with data logging technology that provided continuous information about the comings and goings on that major road artery. The data analysis done by CIRRELT researchers determined that trucks could not easily enter or leave the port because the traffic lights were poorly synchronized. "Thanks to those results, we were able to convince officials at the City of Montréal and the Ministry of Transport to modify traffic light synchronization during rush hour so as to improve the movement of trucks without impeding the fluidity of local traffic," noted Mathieu Charbonneau. Data science and artificial intelligence are flourishing areas of research at CIRRELT, along with new technologies such as self-driving vehicles. "We’ll have to see how we can insert them into our logistics activities," noted Mr. Trépanier. "Even if it’s not for the near future, they will have their place in either heavy duty transport or in city delivery services. Big truck fleet operators are expressing interest." Over the past three years, CIRRELT has received $45 million in grants and contracts for research projects. CIRRELT receives about $1M in subsidies from various granting agencies, the federal and provincial governments and universities.
MARTIN TRÉPANIER Co-director CIRRELT
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REPORT UMQ
MANPOWER SHORTAGE
MUNICIPALITIES RESPOND GETTY IMAGES BY MARTINEDOUCET
REPORT BY SYLVIE LEMIEUX, JOURNALIST
Posters are part of the landscape in industrial zones in the Greater Montréal area, bearing upbeat messages: "Now Hiring!", "Free Training!", "Great Working Conditions!" There is a pressing need for workers in every industry, from professionals to journeymen. Municipalities have put into place initiatives to help employers recruit the workers they need. The solutions are diverse and adapted to the local context.
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everal initiatives focus on improving labour mobility. In Laval, a free shuttle bus (#360) links the Montmorency subway station to downtown Laval, thus facilitating travel to commercial centres and educational institutions. Taxi sharing services serving industrial areas have also been set up in collaboration with the Société de transport de Laval. In St. Julie, the town is working together with employers to coordinate work schedules with various companies to encourage effective use of public transit. That decision is the result of extensive consultation with local employers to determine their particular labour needs and issues. "We are working together to find solutions," said mayor Suzanne Roy. "We must be creative and not afraid to do things differently. The employment situation is a big challenge, one we must tackle head on." That collaboration led to many new ideas, such as sharing seasonal workers among firms. Some employers require extra workers in the summer, others in winter. For positions not requiring special qualifications, it is a win/win situation for all parties
concerned. Ms. Roy noted that what remains is to evaluate the feasibility of that solution. PROACTIVE RESPONSE Fluid transit service is a major issue in Longueuil. Its three industrial hubs are poorly served by bus services at present. The only choice for workers is to drive to work, one cause of major traffic jams that occur. "That doesn’t help us, despite all the efforts made by my administration to facilitate recruiting. New firms have moved to Longueuil, and they require a lot of new workers," said mayor Sylvie Parent. "We are working proactively with the Réseau de transport de Longueuil to find appropriate solutions for companies like Molson Coors, which is building a new brewery here. Does that mean there will be a new bus line? It’s too soon to say, but we must evaluate needs." On her desk are several major investment projects for improving road infrastructures, including widening Highway 30. Poster campaigns, a microsite listing job openings (emploirivesud.ca), a career fair, recruitment missions abroad… Cities are developing numerous tools to support firms looking to hire more workers.
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REPORT UMQ
TAXATION
GETTY IMAGES BY BUZBUZZER
A GROWING IMBALANCE Municipal revenues are being affected by new economic and demographic realities. Cities increasingly depend on revenue from property taxes, and growth now depends less and less on the built environment. Three mayors in the Greater Montréal region describe this state of affairs.
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ENVIRONMENTAL CHALLENGES IN ST. JULIE Everyone is aware of the limits of the current municipal taxation system. The growing imbalance between revenues and demand for services is only going to increase," said Suzanne Roy, mayor of St. Julie. "Think of the environment, for example. It is municipalities that are on the front line of interventions, whether upgrading infrastructures that were not built to resist extreme weather caused by climate change, or working on projects to make their cities more eco-friendly. It places an extra burden on municipalities." They are forced to find new sources of revenue, such as those proposed by the Union of Québec Municipalities (UMQ) (see other text page 41). Ms. Roy hopes that the new tax agreement will place greater emphasis on a green tax shift in the form of ecotaxes, tax credits or other fiscal advantages. "We need incentives to protect the environment, rather than continuing to build residential housing, which causes urban sprawl. We changed the zoning of a large territory on Mont St. Bruno in order to protect it. That means, of course, that we lost potential property taxes, whereas we still need to pay maintenance costs every year," she added.
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SUZANNE ROY Mayor City of Sainte-Julie
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AN EMERGING ISSUE IN LONGUEUIL While the transformation of the economy, combined with its impact on municipal revenues, is a global issue, "in Longueuil at the moment, it is an emerging issue," said Sylvie Parent, the mayor of this city on the South Shore that is in the throes of an unprecedented economic boom. In recent months several firms (notably Molson Coors building a new brewery) have announced plans to establish new facilities in Longueuil. With a growing population, residential development is also booming. That, however, adds pressure on municipal finances, since demand for services is rising. In Longueuil, 82% of revenues comes from property taxes. Despite its strong commercial sector, the rise in online shopping means that Longueuil must respond with efforts to maintain what is has to offer. According to a study carried out by the firm Aviseo Conseil and commissioned by the UMQ, in 2016 the city lost $88.8 million in property taxes due to e-commerce.
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SYLVIE PARENT Mayor City of Longueuil
CITY OF LONGUEUIL
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CITY OF LAVAL
"The large shopping centres are starting to experience difficulties, which means we must rethink those spaces," noted Sylvie Parent. "There is also growing demand for neighbourhood stores. We are fortunate to have shopping streets and commercial corridors that meet that need, such as St. Charles Street. But we’ll soon have to embark on renovations to modernize those infrastructures. It will reinvigorate local shops and services." DIGITAL TRANSFORMATION IN LAVAL Marc Demers, the mayor of Laval, is of the same mind. The new tax agreement must be reviewed so that municipalities can adequately serve the community. Laval is also booming, thus creating new needs in terms of municipal services. Although the economy is changing, Laval is less affected than other cities by the growth in e-commerce, according to Mr. Demers. "Retail commerce continues to expand in our area because of easy access and a huge pool of consumers. And it is getting more diverse with the arrival of new stores such as Lee Valley, which recently opened at the Centre Laval." That being said Laval has, however, lost property tax revenue due to online shopping to the tune of $155 million in 2016, according to the Aviseo Conseil report. The municipality wants to help merchants adapt to the digital revolution. In order to remain focused on economic growth, Laval is also helping its industrial sector accelerate the digital shift through its PME 2.0 program.
VILLE DE LAVAL
MARC DEMERS Mayor City of Laval
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OBJECTIVE
GETTY IMAGES BY YOZAYO
UPDATE MUNICIPAL TAXATION The growth of e-commerce plus demographic changes are shaking the municipal taxation structure, as a study published by the Union of Québec Municipalities (UMQ) clearly shows. This has led to calls for reforming the tax and financial structures of municipalities. A status report.
Q
uébec municipalities get almost 70% of their revenue from property taxes, compared to 40% in Ontario. Given that the economy is shifting toward e-commerce and the digital economy, it is time to review the existing model of municipal taxation in light of the fact that wealth is less and less generated by real estate and property holdings. "We have a taxation system from another century," noted Alexandre Cusson, the UMQ president and the mayor of Drummondville. "We must find new financial levers so that municipalities can continue to offer services to their citizens." More online sales mean fewer storefront retail shops. According to a study by Aviseo Conseil that was commissioned by the UMQ, online shopping led to the loss of 2000 businesses in Québec in 2016, i.e. $3 billion in property taxes. That represents a tax loss of $65 million, or the equivalent of 350 Walmart stores. In an increasingly virtual economy, manufacturing is declining and is being supplanted by services. Businesses that are part of the automated, robot economy also require less floor space and fewer employees. The ageing population will also have an impact on construction projects, which are expected to decline by 40% over the
UMQ
ALEXANDRE CUSSON President Union des municipalités du Québec Mayor of Drummondville MONTRÉAL ECONOMIC POWERHOUSE : : 2019 EDITION
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REPORT UMQ
next 15 years, according to the study. These factors all contribute to the drop in property tax revenues. NEW SOURCES OF FINANCING During the recent election campaign, the UMQ submitted to the political parties various proposals for increasing municipal revenue, including full payment of property taxes on government buildings. That measure would put some $150 M more into municipal coffers every year. "The Québec government is the only taxpayer that does not pay the full cost of property taxes," noted Mr. Cusson. "That represents a substantial loss of revenue for cities, which must nonetheless provide services like snow removal and waste collection. That has been the situation for several years, and it’s something that must be corrected." Other issues included in the UMQ submission are sharing royalties paid for use of natural resources, widespread access to digital infrastructures by 2021, regional measures to support manpower needs, authorization to conclude financing agreements with the federal government and reimbursing the Québec sales taxes (TVQ) paid by municipalities. During the recent election campaign the UMQ obtained support from all the political parties to transfer part of the TVQ to the municipalities, the equivalent of $1.6 G. "What remains to be done is to negotiate the terms and conditions of the transfer, but we’re confident that will be done soon, given the commitment of François Legault and the opposition parties to this issue." The new agreement to restructure the taxation system must be concluded by late September 2019. At that point, municipalities will be in the midst of preparing their 2020 budgets and will need to know exactly how much money is at their disposal. Discussions are already underway with the new provincial government. "I was able to discuss the matter with the premier a few days after the election, and we invited him to work with us on restructuring municipal taxation. And by no means should we base it on past agreements. We must reinvent the financing structure of our cities," said Alexandre Cusson. MANPOWER SHORTAGES Employment is another key issue for the UMQ. "This year I visited 32 cities across Québec. Everywhere 42
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I went, people mentioned the shortage of qualified workers," he added. "We must collectively find solutions to that shortfall. We want to sit down as soon as possible with all the partners – employers, unions and government officials – to determine short and medium term solutions. Companies are losing business opportunities, and that has an impact on the Québec economy and on tax revenues for municipalities. These issues are interconnected." In his opinion, a number of measures must be implemented to redress the labour shortage. Solutions could include reducing the administrative burden for companies that want to recruit personnel abroad (current procedures are timeconsuming and costly), rewriting tax regulations so that retirees who want to go back to work are not penalized, and providing accelerated training that responds to the specific needs of the job market. "We also need to encourage immigrants to settle in the regions," he said. "At the moment, 86% of immigrants who arrive in Québec stay in Montréal, even though 55% of the available jobs are outside Montréal." The regions want to attract more immigrants and encourage them to settle outside Montréal. Many leave outlying regions for big cities or for another province. Offering them a job is often not enough. Integration classes and French language training for the worker and his or her family are insufficient at present. "People have to wait months before they can register for a course", said Mr. Cusson. "There’s a strong chance that they will decide to leave because they are unable to integrate into the community. The number of students required to start a French class cannot be the same number in Sept-Îles as in Laval or Montréal. Having French classes in the workplace is another avenue worth exploring." As mayor of Drummondville, he sees the impacts of the manpower shortage on the economy on a daily basis. "In our region there will be 13,000 job positions to fill in the coming years. That’s enormous. And that doesn’t take into account factories that have put investment projects on hold, or that are thinking of setting up shop outside Québec. The jobs we are not creating today means we’ll still have a labour shortage a few years from now if we don’t come up with solutions," he concluded.
FORUM OF ELECTED MUNICIPAL OFFICIALS OF GREATER MONTRÉAL PROMOTIONAL REPORT
The Greater Montréal area, with its 3.9 million inhabitants, accounts for roughly half of Québec’s population and gross domestic product. For the city itself and the 81 other municipalities located in the Montréal Metropolitan Community, this is an invaluable asset. Together, they form a powerful urban agglomeration that is competitive on both the local and international stages, united yet diverse. Each municipality has its own characteristics, advantages and local colour, providing a multitude of possibilities to firms from here and abroad wishing to set down roots. We will introduce a few of the most dynamic ones in the following pages.
GETTY IMAGES BY WEBPHOTOGRAPHEER
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Longueuil
CITY OF LONGUEUIL
A MAGNET FOR BUSINESS AND INVESTMENT Longueuil is in the midst of an unprecedented economic boom. That comes as no surprise, given that it is strategically positioned to attract business investment.
"A
stone's throw from downtown Montreal. A municipality crisscrossed by major highways as well as railway and airport infrastructures. In addition to access to a huge pool of skilled labour, companies that move here realize that Longueuil is a gateway to the vast eastern seaboard market in the U.S.", said mayor Sylvie Parent. Longueuil also has a strong industrial presence in the aerospace, agrifood and information technologies sectors, as well as a large cluster of firms in transportation materials and equipment, not to mention college and university educational institutions. They all make for an attractive package that stimulates economic growth.
CITY OF LONGUEUIL
RECORD INVESTMENTS In 2017 investments in the Longueuil area amounted to $335 M, setting a record that will no doubt be surpassed by year's end. Several new firms have set up shop in the region, generating all sorts of jobs. Molson Coors is currently constructing a new brewery not far from the St. Hubert airport in Longueuil, an investment
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SYLVIE PARENT Mayor of Longueuil
of hundreds of millions of dollars. "The Molson Coors plant will attract providers who will want to establish premises nearby," the mayor added. The municipality includes some 15 industrial zones, with ample space to welcome new employers. The Longueuil airport zone alone offers millions of square feet for establishing new industrial facilities. With a growing population, the region also attracts commercial and real estate investors like Devimco, which is developing a $500 M mixed use project in the Place Charles Le Moyne neighbourhood above the Longueuil subway station. Another highlight of 2018 was the opening of Decathlon in Brossard, the first store established in Canada by the French firm, which specializes in affordable sports gear and equipment. A WINNING PARTNERSHIP This dynamism is in large part due to the efforts of DEL, a not-for-profit development organization that provides assistance and support to firms moving their operations to Longueuil or expanding existing facilities. It has created a number of tools to help local employers, whether that be searching for financing, recruiting manpower or establishing a new business. These approaches include the 150:00 accelerator (150 hours of client-specific coaching) aimed at stimulating entrepreneurship in business sectors of the future, pursuing new ways of designing cities and factories, or implementing new technologies or intelligent transportation systems. Hardbacon, for example, is a young "fintech" firm that is developing a portfolio analysis and financial planning application driven by artificial intelligence. It opted to settle in Longueuil, on the 150:00 premises. n
Laval
Laval, Quebec's third largest city, is focused on developing accessibility, proximity and fluidity to become an indispensable hub that attracts citizens and businesses, as well as teaching and health care institutions. A vibrant city that is very much in the action and also driving the action, Laval currently has four major projects underway. In the coming decades they will change its cityscape and architectural profile.
T
DOWNTOWN – CREATING A DYNAMIC HUB he downtown core is taking shape with $2 billion of public and private investment in projects underway now or in the near future. This sector is the main focal point for investors, given that a strong business district is emerging downtown. It is already home to vital incubators: the Quebec Biotechnology Innovation Centre (QBIC), the Laval Smart Mobility Incubator and Accelerator (CIAMIL) and the Centre québécois d'innovation en commerce (CQIC). All these mixed uses create a dynamic downtown core near the Montmorency métro station, one that is userfriendly and on a human scale. The potential for turning this sector into an innovative district is huge, as all the elements for an urban campus are already in place!
CITY OF LAVAL
BE PART OF A VIBRANT URBAN LANDSCAPE MARC DEMERS Mayor of Laval
CARTIER – A PEDESTRIAN NEIGHBOURHOOD The gateway to Laval, this district with development potential of 300,000 square feet has a lot to offer local retailers. The area is attracting the interest of private firms. Setting up shop in a walking neighbourhood encourages local hires and creates a feeling of belonging among local residents, as well as people who come to the district for work or entertainment. DE LA CONCORDE – FACILITATING MOBILITY This project involves conversion of an industrial sector near the downtown core. The intermodal commuter métro and train station and the adjacent Route verte connect the neighbourhood to the Montreal region. Creating an additional 1500 housing units and retail shops is part of the revitalization project for this district. The area has 650,000 square feet of development potential. VAL-MARTIN – REVITALIZING THE DISTRICT The focus here is to give new life to a neighbourhood abandoned in recent years, while improving social housing in Laval. Over 350 social housing units will be built in Val-Martin, plus a community centre and a park. This first phase of revitalization, carried out in partnership with the federal and provincial governments, will triple population density at the site. The city will seize this opportunity to upgrade municipal infrastructures, and thus increase connectivity and create favourable conditions for long-term mobility.
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CITY OF LAVAL
Choosing Laval is to participate in the innovative and sustainable development of a dynamic and enterprising city. n
EXCEPTIONAL DEVELOPMENT OPPORTUNITIES
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Blainville
With an excellent geographic location, Blainville is much appreciated for the excellent services and quality of life it offers its citizens. In 2106 MoneySense magazine named the city as Canada's best place to raise a family. Blainville has added that title to its list of awards, and makes good use of it in its promotional campaigns.
T
he 17th largest city in Quebec and the 2nd largest in the Laurentians, Blainville sits at the crossroads of Highways 15 and 640. It is a prime destination for young families as well as investors. Mayor Richard Perreault views the city's standing as a reflection of the efforts of his administration, which promotes the city's residents as the most important priority. "Over the past 20 years Blainville has grown and developed, and its population is now more diverse. The city adapted to the new demographics, upgrading its services and infrastructures to reflect its new profile. The challenges were many, but we responded well, and our tax rates are among the most competitive in the region," he noted. HIGHEST STANDARDS OF QUALITY Mayor Richard Perreault and his team have been in office since 2013, governing a city that
CITY OF BLAINVILLE
FAMILY SERVICES AND QUALITY OF LIFE RICHARD PERREAULT Mayor of Blainville
expanded rapidly in the early 1990s, but whose development has been stabilizing. The efforts to update and modernize that began in 2006 have raised expectations, creating new needs that the municipal administration is striving hard to fulfill. An extensive 2016 survey regarding its Family Policy showed that a large portion of city residents are very satisfied with the services they receive. Over 98% of the 790 respondents stated that municipal services meet the needs of families. "In addition, the Observatoire québécois du loisir ranked Blainville as Number 2 among municipalities of its size (50,000 to 99,999 residents) that invest the most in leisure and culture, which places it at the forefront of towns that make quality of life a top priority. We have always aimed for high standards of quality, and will continue to do so in the years to come," he added. A FLOURISHING ECONOMY In line with the overall Quebec economy, Blainville has been doing well and remains focused on growth. The city continues to attract commercial investment, particularly in the Exit 28 district, and is pursuing development along Highway 15. Industrial parks also offer prime locations for firms that wish to invest in Blainville. Housing projects continue to attract new residents and new families, such as the area near the train station and the Chambéry project.
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CITY OF BLAINVILLE
Blainville can indeed boast about its reputation as an excellent place to raise a family, its quality of life and the exceptional services it offers. It certainly makes for a great calling card. n
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MONTRÉAL ECONOMIC POWERHOUSE : : 2019 EDITION
DOSSIER REAL ESTATE SECTOR
MONTRÉAL REAL ESTATE MARKET BOOMING BY JOHANNE LANDRY, JOURNALIST
In a city of knowledge with a high quality of living, investors are aiming high with major projects, and rental rates for office space remain competitive. Welcome to Montréal.
M
ontreal’s recent economic performance is impressive, notes Marie-France Benoit, senior director at Altus Group. Economic and demographic growth underpin a vigorous real estate market. Not only that, but Montréal’s economy is more diversified when compared, for example, to Calgary or Toronto, their respective driving forces being oil and the financial sector. "The Montréal real estate market is not dependent on the booms and busts of a single sector of activity, which makes for greater stability" she said. "There is a direct link between the development of transportation infrastructures and a city’s economic development," added Jean Laurin, president and CEO of Devencore, noting the positive impacts for Montréal of the new Champlain Bridge, new roads to the West Island and the airport, and the recent announcement of the upcoming Réseau électrique métropolitain. Success requires labour mobility. When a firm opts to set up shop in a given neighbourhood, their employees must be able to get there easily. Investments in key sectors such as video games and artificial intelligence are playing a growing role in stimulating the Montréal economy. The Mile End and Mile Ex neighbourhoods continue to attract technology firms, and the district is gradually becoming a hub for artificial intelligence and creative media, noted Jean Laurin.
MARIE-FRANCE BENOIT Senior director Altus Group
STRONG INTEREST IN MONTRÉAL Comparing Montréal to other big Canadian cities, Marie-France Benoit points to investors’ strong interest in Montréal’s real estate market. On the one hand, returns on real estate investments are relatively higher than in other cities. On the other hand, diverse segments of the market offer potential for redevelopment and value creation. MONTRÉAL ECONOMIC POWERHOUSE : : 2019 EDITION
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The quality of development projects in Montréal is rising, with greater attention being paid to its architecture and urban environment, which often improves a neighbourhood’s quality of life, added Jean Laurin. "My theory is that companies look for buildings with architectural features that allow employees to set down roots, particularly in the technology sector where young employees live in a virtual world. A historical building with a history, with a past, helps them to be anchored to reality and connected to the past. At the opposite extreme are firms with ultra-futuristic buildings where a feeling of being rooted is achieved by means of green spaces, parks and gardens where employees reconnect with nature," said Laurent Benarrous, an associate at Avison Young, adding that Montréal offers several possibilities in the first category, but that few companies have reached a critical mass to justify occupying as much space as Apple, for example, which is in the second category.
JEAN LAURIN President and CEO Devencore
A COHESIVE, UNIFIED DOWNTOWN Downtown Montréal is busy and vibrant both day and night. Half of the supply of office space is downtown, which is also home to three universities and all sorts of other activities. Over the course of the past 30 years, many small, isolated parts of the downtown core have coalesced into a cohesive whole by means of structuring projects, noted Marie-France Benoit, citing the example of the Bonaventure Highway being transformed into an urban boulevard such that Griffintown is now integrated into Old Montréal. Another example is the recent renovation and creation of green spaces in the Quartier international, which has considerably enhanced the downtown business district. Closer ties with Old Montréal have been made possible by eliminating waste ground and parking lots to make way for urban parks and construction projects like the Jacques Parizeau Building. "With the entertainment district and the new CHUM hospital centre just east of the business district, plus the Quartier de l’Innovation which extends west to Atwater St., downtown Montréal forms a cohesive whole, which strengthens its appeal," Marie-France Benoit emphasized.
DOMINIC BÉRUBÉ
LAURENT BENARROUS Associate Avison Young
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MAJOR DEVELOPMENT PROJECTS Foreign readers might be interested to learn that several projects, some of them large-scale, have been or are soon to be announced, such as the Viger Station development project where 300 rental apartments will transform a former parking lot into a thriving urban centre around the former railway station turned into an office building. In the east end, the Olympic Stadium Tower has been converted into modern offices, with some rental space still available. Jean Laurin is very enthusiastic about the new National Bank head office downtown. "It’s the largest office tower built in the downtown core in 25 years, a building of 1 million square feet surrounded by a 40,000 square foot park." It is scheduled
to open in 2022. The Quartier des lumières project will be built near the Jacques Cartier Bridge, the Mach Group recently announced. Construction will begin in January 2020 and will progress in successive stages over an 8-year period. It will encompass 4.5 million square feet in some 15 office buildings, shops and apartments, creating an urban village near the former Radio Canada Tower. The old Molson Breweries head office nearby is currently for sale. In Montréal East the decontamination of 228 acres, formerly the property of the Shell Oil Company and recently acquired by the Laganière Group, could eventually prompt other firms to relocate there. These are only some of the projects underway.
For foreign firms thinking about establishing a bridgehead in North America, Montréal rental rates are half that of the 17 top North American markets. "In terms of occupancy rates, the cost of rent in Montréal is 25% of that charged in midtown Manhattan and 50% of the cost of rent in San Francisco," added Laurent Benarrous. In addition to competitive prices, the cost of housing and manpower is also lower than in other markets, and the city also enjoys an internationally renowned quality of life.
INDUSTRIAL AND SENIOR HOUSING MARKETS The industrial real estate market continues to be popular with investors, notes Marie-France Benoit, adding that historically Montréal was the birthplace of industrialization in Canada. "It is a market that has enormous depth, with an inventory of 345 million square feet. There has been a sharp increase in demand for industrial space over the past two years." She also pointed out that the multifamily residential market is thriving. Based on data from the Canada Mortgage and Housing Corporation (CMHC), in 2017 the multi-tenant residential market accounted for 43% of housing starts, approximately one-third of which are residences for senior citizens. The CMHC data also indicate that condo construction represented 38% of housing starts in 2017. Almost 45% of new projects are in downtown Montréal where sales are reaching record levels, according to statistics from the Altus Group on the new condo market, a boom that is influencing the rental market. An expanding clientele is choosing the quality and services of a condo without, however, wishing to own one. "Rentals of condo-style apartments make construction of such projects economically feasible, a trend that contributes to enhancing the quality of the property portfolio in downtown Montréal," noted Ms. Benoit. THE RENTAL MARKET Our readers outside the Greater Montréal region might not be aware that the cost of renting office space in Montréal is 35% less than the average for the five biggest Canadian markets, as pointed out by Laurent Benarrous.
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GROUPE MACH
2
GROUPE MAURICE
1. LE QUARTIER DES LUMIÈRES OF GROUPE MACH 2. CALÉO, THE RESIDENTIAL COMPLEX FOR RETIREES OF GROUPE MAURICE
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REAL ESTATE SECTOR REPORT
THE SHIFT TOWARD INTELLIGENT BUILDINGS
BY EMMANUELLE GRIL, JOURNALIST
The industry 4.0 revolution (or fourth industrial revolution) is taking root in all spheres of activity, including real estate and property management. It is an area where there is an urgent need to accelerate the integration of innovations into everyday practice and decision-making processes.
W
hile many in the real estate industry continue to work in traditional ways, the 4.0 revolution is well underway. The task is to facilitate and successfully complete the transition into the digital era. MAKE THE MOST OF DATA BASES What is the 4.0 revolution? It covers the impacts, both positive and negative, related to the introduction of digital technologies into business affairs. Andrée De Serres, the Ivanhoe Cambridge Real Estate Chair at the École des sciences de la gestion at the University of Québec at Montréal (ESG UQAM), cites as an example BIM (Building Information Modelling) technology, which lets people create a 3D model of a building. "In doing so, the innovative construction company that uses BIM is also obliged to ensure upgrade training and follow-up of subcontractors and employees to ensure that everyone is on the same page. It also requires recourse to new liaison personnel who will validate the content," she explained. She also said that developers of buildings based on 3D modelling must know how to get maximum benefit from their buildings to enhance value. The challenge is the same for intelligent buildings. "Integrating sophisticated building management systems requires upgrading the know-how of employees involved in building operations: energy efficiency, technical management, maintenance, security, managing users’ needs, etc."
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JBC MÉDIA BY DENIS BERNIER
ANDRÉE DE SERRES Professor and Chair of Ivanhoe Cambridge in Real Estate ESG UQAM
GETTY IMAGES BY METAMORWORKS
A SOCIETAL CHOICE
Moreover, innovations often outstrip the limits of intelligent building systems. Financiers, insurers and appraisers must also take those innovations into account in their calculations and their proposed products and services. These buildings must be integrated into the heart of their neighbourhoods and the intelligent city. The ultimate challenge is the development of a new generation of skills and tools that can be generated from a comprehensive analysis of mega data bases. Combined with the boom in artificial intelligence, the 4.0 revolution opens the way to many new opportunities and new models for creating value in the real estate industry. ADOPT AN ECOSYSTEMS APPROACH For a successful transition an ecosystems approach should be employed, notes AndrĂŠe De Serres. "That means not adopting a silo approach, because in an
ecosystem everything is interconnected. We have to bring all the players into a loop of disruptive change throughout the different phases of the building life cycle, given their interdependence and mutual feedback as they intervene at various moments in the life cycle of the building," she noted. Ultimately, that will also radically modify procedures and business models, and will involve acquiring new skills. Supporting firms and public sector organizations in achieving this transition toward the new era of cyber-physical systems and increasing their productivity and competitiveness is a big challenge for our society. "The different levels of government must contribute their support. MontrĂŠal, which is already a centre for the development of artificial intelligence, has the necessary wherewithal to become a city of innovation as regards intelligent buildings," said Ms. De Serres. Impacts will be not
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REAL ESTATE SECTOR REPORT
only economic but also social, for intelligent building systems directly contribute to improving the well-being of citizens and visitors to the city. She notes that real estate industry players do not seem to have grasped the scope of the 4.0 revolution, even though this sector of activity constitutes a major milestone in the economic and social development of our society. To help accelerate the pace of change, the Ivanhoe Cambridge Real Estate Chair at ESG UQAM has created its new Observatory of innovations and valuations in real estate, ImmoLab 4.0, and AndrĂŠe De Serres is the director of the lab. "The goal is to bring together the various partners from academia, the private sector and the public sector so as to develop a centre of meta data for real estate, as well as a centre for experimentation that will help facilitate the transformation of technological and digital innovations into managerial, operational and financial innovations as we enter the proptech era," she explained. ImmoLab 4.0 is also a hub for the development, storage and protection of data bases. In this field and in several others, information technologies and artificial intelligence are advancing by leaps and bounds, revealing promising new perspectives, as long as we learn to use them and exploit their potential.
GETTY IMAGES BY ULTIMA_GAINA
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SPECIAL REPORT
BROCCOLINI 70th Anniversary
THE WONDERFUL STORY OF BROCCOLINI, A FAMILY OF BUILDERS FOR THREE GENERATIONS BY SUZANNE GAGNÉ AND EMMANUELLE GRIL
The Broccolini firm was established in 1949. From modest beginnings, it grew over the next 50 years until it became a major player in the construction industry. Snapshot of a successful company renowned for excellence and integrity.
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HE CAME FROM AFAR TO HELP US BUILD MONTRÉAL n January 1931 with only $10 to her name, Angela Antonia Broccolini stepped aboard the Roma Aquila with her little boy Donato, setting sail for Montréal to rejoin her husband Giuseppe. They were from the Abruzzo region of Italy, heading to America to flee poverty and the fascist regime of Mussolini. Angela had no way of knowing that one day her son would build not only all sorts of homes and high-rises, but also a family business that would become a leading force in the Québec construction industry. The young Donato grew up in Montréal and discovered a life full of promise. As a teenager, he picked up hammer and saw and went to work with his uncle, a home builder. He soon proved to have a talent for business and in 1949 at age 24, the young carpenter purchased a lot in the Notre Dame de Grâce neighbourhood and built a small home that he sold for about $15,000.
WIKIPEDIA
GETTY IMAGES BY PICCERELLA
LAUNCHED IN 1926, THE ROMA AQUILA THAT BROUGHT DONATO BROCCOLINI TO MONTRÉAL IN 1931 WAS A 1700-PASSENGER OCEAN LINER. IT WAS LATER CONVERTED INTO AN AIRCRAFT CARRIER AND THEN TAKEN OVER BY THE GERMAN OCCUPATION FORCES IN 1943, BEFORE BEING SCUTTLED TWO YEARS LATER.
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Encouraged by that initial success, he acquired other lots that he would either sell outright or after having built a house on the lot. He then decided to take night courses in architectural techniques. A tireless worker, Donato Broccolini built houses in Notre Dame de Grâce, LaSalle, Côte St. Luc and La Prairie: single family homes, duplexes, triplexes and apartment buildings on one or two streets and sometimes entire neighbourhoods. "He soon established mutually respectful relations with clients, and was renowned for his honesty and for guaranteeing the quality of the construction work," noted his son Paul, Executive Vice-President at the helm of the firm. INSTINCTIVE ENTREPRENEURS In 1953 the company began to flourish and Donato Broccolini married Jeannette, a young woman also of Italian origin. They had four sons who, like their father, showed entrepreneurial flair from a young age. "It’s not always easy, with four boys in the house," said Paul Broccolini. "To give my mother a break, my father would often bring us to construction sites on Saturdays. We would pull nails from planks that could be reused or recycled. We also picked up empty bottles left by the workers. We used the money from the bottle deposit return to buy chocolate bars or soft drinks that we would sell to the workers before the coffee break food truck arrived!"
For his sons, Donato Brocollini was a silent, natural leader who inspired respect and taught by example. Their more talkative mother transmitted the same values, in both words and deeds: the importance of family, of work, of respect and honesty, and the value of money. ADAPT AND EVOLVE One thing is certain, much like the ship he sailed on from Italy to Canada, Donato Broccolini sailed on the shifting waves of change. When the market slowed in 1970 and he had many unsold units on his hands, he decided to make a major shift in order to rejuvenate his business. He plunged into the institutional and commercial sectors and began building schools, hospitals, post offices and even doing some work at the Port of Montréal. There was lots of work but Broccolini remained a small firm with a handful of employees. He spared no effort, tirelessly active on many fronts: cost estimates, accounting, project management, construction, etc. At the time, his office was in the basement of the family home in Côte St. Luc, where his four sons absorbed his strong work ethic. Once they were old enough, they started accompanying him on work sites. "As soon as we were able, we spent our summers working with him," said the eldest, Joseph Broccolini, Executive Vice-President, who joined the firm in 1982. He was preceded by his brothers John and Peter, who entered the family business in the 1970s. The youngest son Paul joined them in 1986. While his sons assisted him in managing the company, it was gradually expanding. "At the time there were all sorts of players in the construction industry but the market was tightening up," noted Paul Broccolini. "We decided to concentrate our activities in the private sector. We built malls and big box stores, warehouses and industrial buildings. That was when we began offering our real estate development service. It expanded through word of mouth, and it’s a decision we’ve never regretted."
GETTY IMAGES BY GEORGE MARKS
GROWTH AND CHANGE OF DIRECTION As the company grew in the mid-1980s, additional employees were hired and the firm moved to offices in the Town of Mount Royal. That same year it obtained its first million-dollar contract. From that point on, its order book was always full. The company built head offices, factories, warehouses, office buildings, shopping centres and car dealerships. Its clients included the National Bank of Canada, Alcan, the Royal Bank, Canderel and Provigo. GETTY IMAGES BY ROMRODINKA
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When Donato turned 65 in 1989, he made the decision to hand the company over to his four sons, in equal shares. He remained the president, however, and continued to go to the office every day. The company pursued its growth, even though the recession of the early 1990s was having an adverse effect on the economy. Despite that context, projects continued to pour in and there was plenty of construction work. In fact, in 1990 it was awarded a huge contract to build a sorting and distribution centre for the Molson O’Keefe brewery in Boucherville, buildings with a total area of 300,000 square feet. The firm’s success continued, and in 1998 Broccolini had a record year. It acquired its first property in
Serving the Construction Industry for over 30 years • • • • •
JBC MÉDIA BY DENIS BERNIER
The Mount Royal premises were now cramped, so Broccolini moved to a new location on Maynard St. in Montréal, going from 1000 square feet to 3000, and then to 4000 square feet of floor area. An impressive move up for a company that began with small scale contracts!
DONATO BROCCOLINI, FOUNDER
Pointe Claire, the point of departure for its plunge into real estate services, an area that would very soon expand. Now a company with some thirty employees it moved its offices once again, this time to premises on Sorel St. near the De la Savane subway stop in Montréal, where it owned the building it occupied.
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As it neared its 50th anniversary in 1998, Broccolini could take pride in having built a solid foundation. The future would show that it would continuously grow. Donato Broccolini is extremely proud of "having built a successful and long-lasting family firm". He believes that the secret to success is hard work. His son Joseph adds two other factors – competitiveness and personalized customer service. Those distinctive aspects have helped
them land many contracts and loyal customers, as well as several prestigious projects. "Although the firm has expanded – today it has 350 employees and has even conquered Ontario! –, we want to preserve the values we inherited from our parents, values that influence our dealings within the family and with our employees, for after all, our company is an extension of our family," concluded Paul Broccolini.
1998
A RECORD YEAR 1998 was a high point in the 50 years of the firm’s existence, with a record number of construction sites and total revenue of over $75 M. It successfully completed contracts to build the 80,000 square-foot Atlas refrigerated warehouse in Ville St. Laurent, the 130,000 square-foot Nortel distribution centre in Dorval, new offices for Wawanesa in Montréal (130,000 sq. ft.), Canadian Tire stores in Laval, St. Jérôme, St. Jovite, Beauport, Québec City and Trois Rivières (each one 90,000 sq. ft.), a contract to renovate 16 floors of the Domtar head office in downtown Montréal, and others to build a Loblaws supermarket in Pierrefonds (80,000 sq. ft.), the Nordx/CDT factory in Pointe Claire (300,000 sq. ft.), the Zellers store in Granby (120,000 sq. ft.) and new offices for Pfizer Canada in Kirkland. At the time, the Broccolini clan did not want to cut any corners or to expand too quickly. "It’s a matter of navigating between obstacles that emerge on the road to excellence, and of never repeating the same mistakes," Joseph Broccolini noted. A winning strategy indeed! IN THE FOREGROUND, SOME MEMBERS OF THE BROCCOLINI CONSTRUCTION TEAM IN 1998. LEFT TO RIGHT: JOHN, JOSEPH, DONATO, PETER AND PAUL BROCCOLINI. BY DENIS BERNIER, QUÉBEC CONSTRUCTION MAGAZINE, RÉTROSPECTIVE 1998, TRANSCONTINENTAL COURTESY
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BROCCOLINI
FROM 1999 TO TODAY
A STAR IS BORN BY EMMANUELLE GRIL, JOURNALIST
By the time of its 50th anniversary in 1999, Broccolini had certainly come a long way. As it approaches its 70th successful year, the company is now a major player in the real estate industry, forging ahead one step at a time.
T
wenty years ago, Broccolini worked out of a 5000 square-foot office space on Sorel St. in Montréal, near the De la Savane subway station. It had a staff of about thirty who were managing projects worth between $3 and $20M each, noted Executive Vice-President Joseph Broccolini. Much has changed since, although the firm is still solidly rooted in its core values. "We moved into our new 50,000 square-foot head office in Kirkland in 2012, and now have 350 employees. We also opened offices in Ottawa in 2004 and in Toronto in 2011. As for our projects, some of them are worth $300M!," he added. WIDE-RANGING GROWTH Over the past two decades, the pace of business has accelerated. The company diversified its activities considerably and increased the number of large-scale projects. It expanded its industrial client base, building some forty stores for Canadian Tire and projects for Target, Sobeys, etc. In 2004 it built a Canadian Tire distribution centre in Coteau-du-Lac with a floor area of 1.5 million square feet, and in 2019 will construct an Ikea distribution centre in Beauharnois of 1.2 million square feet.
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JOSEPH BROCCOLINI, EXECUTIVE V.P.
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IKEA DISTRIBUTION CENTRE IN BEAUHARNOIS
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The residential segment has also had the wind in its sails in recent years. As a general contracting and construction management firm, it has built several residential projects such as the 155 Redpath Avenue condo complex in Toronto, and the Westboro Connection apartments, the Cathedral Hill high rise and Life Sciences condos in Ottawa. Broccolini is also the contractor and developer of many remarkable projects like Park Towns in North York (Toronto), The Slater in Ottawa and the prestigious 50-floor condo tower L’Avenue, the tallest residential tower in Montréal. The office building sector is also on a roll. Roger Plamondon, president, Real Estate Development and Acquisitions, remembers one project that was a major turning point. In 2012 Broccolini won a contract with the federal government to build two towers in Gatineau with a total floor area of 1.5 million square feet. "It was the first time that we built two towers at once. It marked a milestone, as it showed that we were a force to be reckoned with in the office building sector," he explained. In the meantime, Broccolini acquired financing tools that allow it to respond to market opportunities. "The company created its first limited partnership in 2007 – there have been several since – thus generating capital. By calling on investors it raised $72M, in addition to its own funds," noted Mr. Plamondon. To carry out certain transactions, Broccolini also counted on partnerships with major players such as Canderel, Investors Group, SunLife and Manulife.
JBC MÉDIA BY DENIS BERNIER
Real estate development is also growing apace, a sector where Broccolini acts as both owner and promoter. The company now has a vast portfolio of building sites and diverse real estate holdings, from industrial complexes to office buildings and mixed-use properties.
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It has gradually conquered the Ontario market, notably by building Telus House (2007), the head offices of EDC (2009), and two office buildings for Public Works and Government Services Canada in Ottawa (2010).
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BROCCOLINI
A WINNING FORMULA There is no question now of slowing down when things are going so well! Several other prestigious projects are already underway or about to be launched. Broccolini was chosen by Amazon to build its huge warehouse in Ottawa, a facility of some one million square feet. Work on the project began last August.
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Since October 2017 Broccolini has been busy building the new 418,000 sq. ft. Maison de Radio-Canada in Montréal, a huge complex that will include an atrium and a 7-storey tower. "The entire neighbourhood will be revitalized by that building," noted Roger Plamondon. Two prestigious residential projects in Montréal, 628 St. Jacques Street and Victoria sur le parc, were recently announced, not to mention the new head offices of the National Bank that will be built on St. Jacques Street.
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Understanding your reality is our trademark. Contact us: Marco Millin Assistant Vice President, Real Estate Financing 514-284-4500, ext. 40983 Marco.Millin@LaurentianBank.ca
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Our expert team of real estate professionals is known throughout the market place. We offer construction and take-out financing solutions custom-tailored to commercial, industrial and residential real estate projects across Canada. Proud to participate in Broccolini’s achievements. Congratulations on your 70th anniversary!
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JOSEPH BROCCOLINI EXECUTIVE V.P.
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MICHAEL BROCCOLINI V.P. BUSINESS DEVELOPMENT & FINANCE
There is no doubt that Broccolini has developed a winning formula. Its secret? Family values solidly anchored in all the company’s services, as Joseph Broccolini remarked. "We have the same values whether at work or in our personal lives, and every member of the team is committed to adhering to those values. Pride and passion, the entrepreneurial spirit, integrity and collaboration guide our actions," asserted the Vice-President. But that’s not all. The firm has also arranged for a smooth transfer of power, initially from the first generation to the second, i.e. from Donato to his sons Joseph, Peter, Paul and John. To assist them in the transition process, the company called on the expertise
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ANTHONY BROCCOLINI CHIEF OPERATING OFFICER
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TERESA BROCCOLINI DIRECTOR PROPERTY MANAGEMENT
of a team of specialist consultants. A second transfer of power is being harmoniously integrated with the third generation, i.e. Michael (Vice-President, Business Develop ment and Finance), Anthony (Chief Operating Officer), Teresa (Director, Property Manage ment), Sarah (Head Chef) and Adriano (Assistant Superintendent).
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SARAH BROCCOLINI HEAD CHEF
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ADRIANO BROCCOLINI ASSISTANT SUPERINTENDENT
Formwork for concrete structures and superstructures Commercial
Institutional
Roger Plamondon also mentioned that Broccolini recruits talent from outside the family for management positions and as members of the various committees, in order to provide balance. "I often joke that the family didn’t reproduce enough offspring to fill all the positions available within the firm."
Industrial
Civil engineering
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WISHES A GOOD
70 YEARS
TO BROCCOLINI
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ABB MONTRÉAL CAMPUS BUILDING IN THE ST. LAURENT TECHNOPARC
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AMAZON WAREHOUSE IN OTTAWA
BROCCOLINI
The final ingredient in this winning recipe? Maintaining a sense of proportion. As Joseph Broccolin noted, "We have grown gradually. In order to run, you must first learn to walk. We progressed slowly and put into place systems and procedures so that we could maintain control. As my father often says in Italian, Chi va piano, va lontano." In other words, slow and steady wins the race. It’s an approach that has served Broccolini extremely well.
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BROCCOLINI
BROCCOLINI BY ALEX TRAN
STANDING
MICHAEL BROCCOLINI, V.P. BUSINESS DEVELOPMENT & FINANCE ; SARAH BROCCOLINI, HEAD CHEF ; JOSEPH BROCCOLINI, EXECUTIVE V.P. ; JOHN BROCCOLINI, CHIEF EXECUTIVE OFFICER ; PAUL BROCCOLINI, EXECUTIVE V.P. ; ADRIANO BROCCOLINI, ASSISTANT SUPERINTENDENT ; GIULIO BROCCOLINI – CURRENTLY ATTENDING FULL-TIME STUDIES SITTING
ANTHONY BROCCOLINI, CHIEF OPERATING OFFICER ; DONATO BROCCOLINI, FOUNDER ; TERESA BROCCOLINI, DIRECTOR PROPERTY MANAGEMENT
Since its inception, Broccolini Construction Inc. has constantly evolved in order to meet the challenges of an ever-changing marketplace. Today, as industry leaders, they now celebrate 70 years of accomplishments and we are pleased to extend Broccolini our sincerest congratulations in achieving this milestone anniversary. Unibéton, a divison of Ciment Québec Inc., is truly proud of its longstanding association with Broccolini as we wish them continued success in all their future endeavors.
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HAPPY 70th ANNIVERSARY TO BROCCOLINI!
BROCCOLINI + FASKEN Wall-to-wall innovation Broccolini’s solid reputation in the Real Estate industry is built upon its bold vision and innovative ideas. Fasken is proud to work alongside an industry leader in delivering world class projects that reshape and rejuvenate the urban landscape.
Congratulations for 70 years of excellence!
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fondsimmobilierftq.com
BUILDING A BETTER FUTURE SOLAR UNIQUARTIER – BROSSARD PARTNERS: DEVIMCO IMMOBILIER AND FONDACTION
46 PROJECTS
under construction or in development valued at $2.9 billion and that will create some 24,000 jobs
$76.3 MILLION
invested to date in social, community or affordable housing
50 PROPERTIES under management
2 MILLION SQUARE FEET of land slated for development
Portfolio as at May 31, 2018
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WORKING TOGETHER TO PROMOTE ECONOMIC GROWTH For more than 25 years, the Fonds immobilier de solidarité FTQ has been strategically investing with other real estate leaders in profitable and socially responsible flagship projects that create jobs. Working together to enhance our partners’ success, the Fonds immobilier is helping to define a more modern approach to urban development, with a view to DRIVING QUÉBEC’S ECONOMY.
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