An Exceptional Culture for Extraordinary Business
Quebec's Economic Renewal
Quebec's Economy Shifts Into High Gear
A Trade Driven Economy
An Attractive Fiscal Environment
Support to the Business Community
A Business-Oriented Educational System
A Highly Skilled Work Force
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A Trade Driven Economy
The increasing penetration of Quebec exports into the American market has also driven substantial growth in the provincial economy. In 1996, over 66 percent of Quebec's total international trade was conducted with the United States. In terms of exports, a total of $39.7 billion in Quebec-based goods and services were sold to the US, representing 80 percent of Quebec's total exports. Conversely, $19.3 billion in goods and services were cleared from the United States to Quebec in 1997, accounting for 48 percent of total provincial imports.
A primary driver of Quebec's economic performance has been a rapidly increasing level of international commerce. While Quebec-based companies have been reaping the benefits of an expanding economy, additional impetus has clearly been provided by low interest rates coupled with an undervalued Canadian dollar. In 1996, the province's international trade figures topped $90 billion, accounting for over 52 percent of provincial GDP. Of the total amount, international exports represented $49.1 billion while the remaining $40.9 billion was derived from international imports.
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"Over 90 percent of Harris Farinon Canada's production is exported to international markets. Quebec offers a great environment from which to penetrate world markets. The multicultural nature of our operation helps us to sell all over the world. Moreover, Quebec has one of the world's most favorable R&D tax treatments, allowing us to get nearly twice as many engineers per dollar in Montreal as compared to some high-tech US cities."
Richard B. Peabody
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In this light, it is clear that the US represents a crucial trading partner for the province of Quebec, both now and into the future. Quebec-based companies have strongly benefited from the signing of several important free trade agreements over the past several years. In fact, the province of Quebec was one of the major forces behind the ratification of the Canada-United States Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA).
The conclusion of the FTA in 1988 has had a dramatic impact on Quebec exports covered by the agreement. These exports have increased at an average annual rate of 33 percent since the FTA has been in effect, comparing favorably with the rest of the world where exports have grown at an average annual rate of only 2 percent. Under current FTA regulations, more than 95 percent of all products from Quebec enter the US entirely duty-free while the remaining duties are slated to be abolished by 1999. It is also significant to note that the majority of all information technology products manufactured in Quebec are eligible for tariff treatment under the FTA. This has placed Quebec-based firms in a strong competitive position in terms of directly serving customers in the American market.
The conclusion of the NAFTA agreement has also brought Mexico into the North American trading bloc. This has placed a potential market of 369 million consumers and a combined GDP of US$7 trillion at Quebec's disposal, representing one of the richest, most dynamic economic spaces in the world. In addition, the impending ratification of trade agreements with the Mercosur alliance will further entrench Quebec's position within the Free Trade Area of the Americas (FTAA), currently slated for approval in 2005.
©1998 Conway Data, Inc. All rights reserved. Data is from many sources and not warranted to be accurate or current.