Since 2015, the Institut du Québec, in cooperation with the Chamber of Commerce of Metropolitan Montreal and Montréal International, has published the annual report Comparer Montréal. It is the result of a comparative analysis of Montréal and 14 other major North American cities conducted using a range of indicators grouped into five categories. The third edition of this report was released on May 22.
In it we learn that Montréal is in an excellent position in North America in terms of quality of life. However, to accelerate economic growth and reduce the wealth gap with other cities, Montréal needs to improve its performance in certain categories.
Here are the highlights of the study. The ranking in this edition reflects 2016 data.
Montréal: ranked second for quality of life
Québec’s economic driver continues to distinguish itself for quality of life. In fact, this is Montréal’s greatest strength. The city is in the lead for the best distribution of wealth in North America. In terms of income inequality, Montréal is ranked first, as it was last year. It also has the lowest crime rate, affordable housing and alternative means of transportation. In short, it offers residents a safe, quality environment.
However, Montréal still has major challenges to address to improve traffic. Although the situation is much more serious in other Canadian cities, Montréal remained in 10th place with respect to time wasted in traffic. The percentage of wasted time in traffic has increased, growing from 26% to 29% between 2015 and 2016.
The second major challenge in terms of quality of life is the percentage of the population living under the poverty line, which is still too high. Among the 15 North American cities, Montréal is in last place in this regard. However it is not the only Canadian city facing this challenge: Vancouver and Toronto were ranked 13th and 14th respectively in this sub-category.
Strong power of attraction
Montréal ranks first with respect to factors of attractiveness, as is shown by low operating costs and tax benefits companies that invest here enjoy.
With respect to fiscal competitiveness, Montréal remains in third place, despite a slight drop in its competitiveness index, which went from 55.6 to 57.4 out of 120 between 2014 and 2016. Montréal is still well positioned to attract corporate investment.
Maintaining the city’s tax competitiveness is a challenge we need to pay attention to, particularly with American tax reform.
Accelerate innovation
According to the report, Montréal has had “acceptable performance in innovation.”
However, the city has to pick up the pace to improve its ranking in North America. There is good news on this front: the creation of the artificial intelligence super cluster will help foster innovation in Montréal in the coming years.
The access to human capital required for this innovative, growing industry remains a challenge. Montréal is making strides in the number of degrees in science, technology, engineering and math (STEM) awarded. However, other North American cities performed equally well on this front. As a result, Montréal’s position is not improving. The report indicates that the proportion of labour working in fields of the future is not growing. On the contrary: it has stagnated, and is even regressing. Between 2015 and 2016, it dropped from 4.9% to 4.8%.
The second challenge in terms of innovation is stagnation in the number of patents filed. As in 2015, Montréal ranked second to last in this area.
Continue to develop our human capital
Montréal’s position continues to improve with respect to the development of human capital. The city is making advances when it comes to attracting, retaining and integrating immigrants to the job market.
However, it is important to bring down the school dropout rate, which remains high. Additionally, the proportion of people aged 25 to 64 with at least a bachelor’s degree is increasing very slowly. The city is still in second-to-last place in this area.
Despite solid performance in integrating immigrants to the workforce, Montréal has to do better to catch up on North American cities and improve its ranking.
Improve growth and economic activities
While the city is currently experiencing economic vitality, it still trails the pack compared with other major North American cities.
The city’s economy has momentum. But the economy is strong across North America in general.
With respect to economic growth, according to the report, the city moved from 15th to 13th place, ranked ahead of Saint-Louis and tied with Philadelphia. The economic boom the city has seen in the past two years is starting to be reflected in the indicators. With recent tax cuts and the pace of economic growth in 2017, Montréal performance could well do better in the next edition of the report.
>> Download the Comparer Montréal report here