Laval economy slows, as investment dips below $1 billion

By Robert Frank
www.thesuburban.com

Concerns that Laval’s business juggernaut might be stalling arose last week, after Laval Technopole reported that capital investment in Quebec’s third-largest city had fallen below the $1 billion threshold for the first time in many years.

Technopole put a brave face on the figures. In a statement, it described the $946 million that businesses invested in the city during 2013 as “good results, albeit not the highest, which nonetheless confirm Laval’s stability as [an economic] magnet.”

However, no one from the usually voluble Technopole was available afterward to comment on the significant drop in investment, despite The Suburban’s repeated telephone and electronic mail requests for an interview.

Meanwhile, opposition politicians at city hall sounded the alarm.

“It’s the worst performance in more than a decade,” Jean-Claude Gobé told The Suburban. “You have to go back to 2001 to find worse. Residential and industrial investment is down by a third, institutional investment dropped 29 percent and commercial investment plummeted 59 percent.”

During the election campaign, recently re-elected Vimont MNA Jean Rousselle accurately predicted that Laval’s economic dynamism couldn’t remain an outlier indefinitely, while the economy in most of the rest of Quebec stalled—or declined—last year, under the former Parti québécois government. 

Gobé fretted that the city’s current administration is making things worse by killing the goose that laid the golden egg.

“A mayor has to spur investment in the economy,” he asserted in an interview, criticizing what he considers Mayor Marc Demers’ Wyatt Earp ethos. “The mayor is instead saying ‘I deliver law and order in Laval.’ I don’t have anything against that, but he has a responsibility to keep the economy going strong as well.”

“When was the last big real estate development project announced?” Gobé asked. “When was the last major industrial investment?”

“Laval could lose its coveted AAA+ credit rating,” he warned, “which ranks it among the most soundly managed cities in Canada. That could increase the Laval’s borrowing costs, leaving taxpayers to pick up the difference.”

Earlier this month, Kevric real estate mogul Richard Hylands told hundreds of business leaders who attended the annual Montreal Real Estate Forum that midtown Montreal is successfully luring back businesses that had previously fled to Île Jésus.

“Companies that set up in the suburbs found that their free parking doesn’t attract employees to work in those call centres,” he observed, “because those people don’t have cars. So tenants now want buildings close to mass transit in a live-work area like Mile End-Park Extension.”

“Some are coming here from Laval,” Hylands added.

In December, the city fired former Technopole CEO Pierre Desroches, who had hitherto helped attract $1.5 billion in direct investment to Laval during each of the preceding six years.

The city then refused to give Desroches the severance pay that it had previously agreed to in his contract.

Last week, the city grudgingly offered to pay him just 16.5 percent of the money that his contract specified. It remains to be seen whether Desroches, who has never been accused of any wrongdoing, accepts or challenges the ruling in court.

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