Kassar International Meeting Conference "Setting up in Quebec, Why?"

The economic situation in Quebec

Mr. Yves Lafortune, Senior Economic Affairs Advisor at the Quebec General Delegation in Paris, began this meeting by presenting the Quebec economic situation. This macroeconomic approach provided a good understanding of the overall economic situation in Quebec, subsequently focusing on certain sectors of activity.

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Starting with the simple observation that Quebec is the gateway to North America, Mr. Lafortune will detail what makes Quebec a region of opportunity. Even if we talk more and more about the northern development of Quebec, 90% of the business is done in the south, in the Montreal area. When we look at the Quebec economy, we find very interesting figures and forecasts; the GDP forecast for 2014 is 400 billion Canadian dollars, the growth rate of 1.9% in 2014 and finally the unemployment rate of 7.4%. The Quebec market is a market of 135 Million consumers on a radius of 1000 Km, it is also a qualified and stable workforce, an operating cost among the lowest in North America and finally, high tax incentives for companies that do R&D.

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In addition to this dynamic and attractive growth, there are major regional initiatives to support the economy. Among these initiatives are what the Quebecers call "Les créneaux d'excellence" and "clusters industrielles," which correspond to the French pôles de compétitivité and have great importance and influence in Quebec. In parallel, the "Priorité Emploi" initiative aims to increase employment in Quebec by helping companies invest. Other industrial initiatives, on transportation, on research and innovation or on the development of foreign trade complete this panel of aid to businesses, with the main objective of increasing private investment and budgetary control. In this process, France is identified as a major partner for the economic development of Quebec.

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On the other hand, the northern development policy participates in Quebec's growth. The main objective is to develop northern Quebec in a sustainable and responsible manner. Investments will first focus on public infrastructure, with the establishment of the Ministerial Action Group for private investment projects and the creation of the Northern Development Coordination Secretariat. The implementation of the CETA (Comprehensive Economic and Trade Agreement) will, by 2015, strengthen the economic and trade relationship between Canada and the European Union. It is expected that this agreement will increase trade between the European Union and Canada by 20%, with the ultimate goal of a general agreement between North America and the European Union. Overall, this agreement will facilitate trade by eliminating tariffs, limiting technical barriers and harmonizing standards and certifications.

Quebec also has sectors of excellence including aerospace, agri-food, biotechnology, and emerging sectors such as green technologies. Thus, through an overview of Quebec's economic and business situation, Mr. Lafortune showed how this region of Canada is a land of opportunity for French companies wishing to expand their business in North America.

The Aerospace Sector in Quebec and the Role of Investissement Québec

Ms. Linda Houle, Director of Business Development at Investissement Québec, will continue this meeting with a presentation of the aerospace sector in Quebec. She will be followed by Mr. Yves Grimard, Director of Europe and Middle East at Investissement Québec, for a presentation of Investissement Québec's actions and missions.

To begin, a telling figure: 50% of Canadian aeronautical activity takes place in the Quebec region. In Quebec, 212 companies specialize in the aeronautics sector and hire nearly 42,000 people. Among them, we find companies such as Bombardier, Aerolia, Safran and CAE. Quebec is also a major centre for research and development in the aeronautics sector [7th in the OECD, 1st in Canada ($7.8 billion, 2.63% of GDP)]. There is a high concentration of researchers that is significantly higher than the OECD average (10% of employees in Quebec for 6.2% in the 30 OECD countries) and finally, some of the most competitive R&D tax incentives in North America.

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Mr. Yves Grimard then presented Investissement Québec and the role of this institution. Investissement Québec is a merchant bank, which means that it is an economic development agency backed by a financial institution. Through 17 regional offices, Investissement Québec carries out 2000 financing operations for small and medium-sized businesses. The government has also decided to entrust certain fiscal measures to Investissement Québec. As a result, Investissement Québec drafts eligibility certificates for certain tax exemption measures.

The Pôle d'épargne de l'environnement

The Quebec Excellence Pole for Ground Transportation.

Mr. Jean Simard, President of the Quebec Land Transportation Cluster of Excellence, presented the cluster's mission to ensure the growth and competitiveness of companies in this sector by developing structural projects. It is also the spokesperson for companies in this sector with regional and national public organizations. The cluster includes 650 companies that employ nearly 31,000 people and have annual revenues of approximately $7 billion. Ground transportation that fits into the cluster includes both special and commercial vehicles, public transportation, recreational transportation and electric vehicles.

The cluster organizes conferences and workshops for the public and private sectors.

The cluster organizes networking events with decision and policy makers in this sector to facilitate the establishment and growth of a company in this sector. The principals are companies such as Bombardier, but also specialized companies such as Carl Thibault (fire trucks) or Rheinmetall (military transport; tanks).

The cluster is also involved in the development of a new business model.

If we look at the market served by this cluster, the United States leads with 84% of the market, followed by Canada with 13% and Mexico with 3% of the market. Here is the approximate breakdown of new rolling stock order intake (in US$) in 2010-2012:

There is evidence that growth in the transportation sector is picking up and it is being fueled by the significant challenges of the 21st century such as climate change, rising energy prices, and increasing urbanization. One characteristic of the U.S. transportation market that offers opportunities for foreign companies is the lack of standardization. As a result, each supplier can deliver its vehicle without having to modify the design or the parameters of the vehicle. In addition, the strategy for the electrification of transport launched by the government in 2013, aims to subsidize companies that would favor electric transport in order to accelerate the transition to this type of transport.

With the development of Canada's far north, the mining industry will need to be accompanied by the development of mining transportation. As a result, the cluster is preparing to be able to cover this future market by seeking partners among international companies.

Kassar International; supporting your company's business development internationally.

After the presentations of these various institutions, Mr. David Kassar, president of Kassar International, made a transition to explain the activity of the firm and thus make the link between the actions of the Quebec institutions and the accompaniment of the companies by the firm Kassar International. He explained that international business cannot be improvised. It is important to make an export diagnosis in order to analyze the tools at one's disposal and those that must be put in place. It is also important to be accompanied, in its international approach, by a consulting firm that will guide you in all the steps and that will open doors for you through its network. Because unfortunately, today's managers and business leaders spend 80% of their time doing what they don't know how to do and 20% doing what they started the business for, while they should spend 80% of their time doing what they know how to do and 20% delegating to specialists.

Euler Hermes; your trade insurance.

In order to develop internationally with peace of mind, you need to protect yourself against the risk of non-payment. To this end, Euler Hermes, the world's leading credit insurer, represented by Mr. Nicolas Casset, Regional Manager, will support you with insurance, collection and bonding solutions. Indeed, 98% of companies have already experienced an unpaid bill and a quarter of them have had to file for bankruptcy because of unpaid bills.

As a result, if we were to retain three good reasons for taking out credit insurance, we would retain the fact of being able to develop one's turnover by ensuring the good financial health of one's customers and prospects, the gain in reactivity and competitiveness and finally, the optimization of the recovery of unpaid debts.

Euler Hermes internationally is 1400 credit analysts and arbitrators, 40 million companies monitored, locations in 54 countries and finally 20,000 credit decisions per day.

Testimony of Mr. Vincent LEMAIRE, president of SAFRA

The company SAFRA is accompanied on the Quebec market by the firm Kassar International and Investissement Quebec for its business development in this region of Canada and subsequently throughout North America. SAFRA is an Albigensian company, created in 1955 and specialized in urban public transportation equipment. The main issue of the company is public transportation. The challenge being to transform public transportation by making it sustainable and qualitative, because in 2050 the use of private vehicles will be prohibited in city centers.

SAFRA has therefore positioned itself on this market with the marketing of the BUSINOVA bus, an urban transport vehicle with a high level of technical, economic and ecological performance. This bus with worked lines combines 2 major innovations; both protected by patent: a bi-modular chassis and the multi-hybrid propulsion system.

With a renowned sponsor; YANN ARTHUS-BERTRAND, and innovative and dynamic projects, SAFRA is putting all the chances on its side. But SAFRA does not stop only at the regional or even national market, SAFRA looks to the international. With the support of Kassar International, SAFRA has put in place an international strategy, in order to capture international markets with a project of establishment in Quebec. Investissement Québec brought its knowledge of the Canadian market and connected SAFRA with specialists in this sector in Quebec, including the road transport pole of excellence headed by Mr. Simard.

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In short, the SAFRA CANADA project, which began last September, is coming to fruition with the very soon creation of the company in Quebec, which will allow this innovative Albigensian SME to roll towards other horizons.