I NVEST in the Quebec City metropolitan region

Quebec City metropolitan region

#1 City for business in Canada and the US* KPMG Competitive Alternatives 2010 #3 Lowest business tax cost in North America* Competitive Alternatives, Special Report: Focus on tax KPMG 2010 and Qubec International #1 Safest city for children in Canada* Statistics Canada, 2010 #1 City for transforming innovation and creativity into economic drivers in Canada and the US* Martin Prosperity Institute, 2009 #3 City in the Worlds Best Awards Travel + Leisure, 2009
Andr Chamorel

Despite its Old Europe charm, the Quebec City metropolitan region is resolutely forward-looking in its embrace of cooperation and optimism. Residents dream of high-speed rail links, major international cultural and social events and the Olympic Games and theyre doing everything they can to make these dreams a reality! Every day, the business community works to strengthen its role in key international sectors such as architecture and green buildings, insurance and financial services, biopharmaceuticals, multimedia, nutraceuticals, optics and photonics, natural health products and medical technology. Serving as a catalyst for major scientific and technological advances, the region is known for its daring approach and for promoting the best ideas, especially when theyre aimed at furthering progress and reconfiguring global markets. After all, the future depends on innovation! So does the Quebec City metropolitan region have the means to realize its ambitions? The simple answer is YES, as borne out by the key economic indicators!

#1 City for quality of life in North America Foreign Direct Investment Magazine (fDi), 2007
*Among comparably-sized cities studied.
Quartier Saint-Roch, Quebec City

This sense of confidence is reinforced by the regions numerous selling points: a booming economy, ultra-low start-up and operating costs, outstanding quality of life, one of the best educated workforces in North America and a remarkable pool of researchers and specialized workers. In short, Quebec City offers ideal conditions for investors and a whole lot more! According to a number of prestigious organizations, the Quebec City metropolitan region is one of North Americas most attractive locations. The tables and figures presented throughout this document compare the Quebec City metropolitan region with North American metropolitan regions with at least one million inhabitants (not including Winnipeg). In economic and other terms, all of these regions are comparable with Quebec City. They were selected on the basis of their partnership links with Quebec City, competitive advantages and R&D momentum. I now invite you to discover the Quebec City metropolitan region and its various attractions and activities. I wouldnt be at all surprised if, after reading this publication, you were tempted to learn more about our regions storied history and dedication to success. And wed be happy to meet you and work with you on the development and delivery of your projects.

Population of selected metropolitan areas in North America (2008)

Winnipeg

Quebec City
Raleigh Salt Lake City Edmonton Hartford Ottawa Calgary Milwaukee Nashville Indianapolis Columbus Cleveland Cincinnati Vancouver Denver Baltimore St-Louis Seattle Montreal Boston Toronto Philadelphia 1 500 000 2 000 000 2 500 000 3 000 000 3 500 000 4 500 000 1 000 000 4 000 000 500 000 0

Vancouver Seattle

Edmonton

Calgary
Winnipeg

Salt Lake City Denver

Toronto Boston Milwaukee Hartford Cleveland Colombus Philadelphie Indianapolis Cincinnati Baltimore St-Louis Nashville Raleigh

Montral Ottawa

Quebec City

5 000 000

5 500 000

Sources: Conference Board of Canada, U.S. Census Bureau

Carl Viel, Chief Executive Officer

6 000 000

You may have dreamed of moving to a place that has the attributes of a major city without the disadvantages caused by overpopulation or pollution. You may have dreamed of living in an urban setting located in the heart of nature. You may also have dreamed of leading a European lifestyle while benefiting from a North American dynamic. Its nice to dream but if you ever wanted to bring your dreams to life, you could always make the Quebec City metropolitan region your home!

Overview

Parcours des Anses, Ville de Lvis

Known for its breathtaking beauty, the Quebec City metropolitan region has experienced record growth in recent years. Resolutely focused on 21st century solutions, the region has capitalized on the rise of information technology and communications by diversifying its economy and developing sectors of excellence, thereby garnering itself a leading role on the world stage. The Quebec City metropolitan region is home to one of the highest concentrations of researchers and research facilities in Canada and the US Northeast. This intellectual capital serves to foster creativity and develop cutting-edge industrial sectors throughout the region, attracting growing numbers of specialized workers and innovative firms. Buoyed by this economic vitality, companies across the region are prospering in the cut-throat global economy by embracing innovation. And their presence in Quebec City often gives them a competitive advantage over their rivals:

Open-minded, tolerant, dynamic and creative, the Quebec City metropolitan region also boasts unbeatable quality of life. Growing numbers of immigrants, workers and businesses are forging their futures in Quebec City.

Inflation rate in the Quebec City CMA

2002 index = 100

3,0 2,5

115 110 105 100 95 90 2002 2003 2004 2005 2006 CPI (r) 2007 2008 2009

The Quebec City region has one of the largest pools of creative workers in Canada; The region has some of the lowest start-up and operating costs in North America. Rental costs in the Quebec City metropolitan region are much lower than in other Canadian metropolitan regions, despite the significant rise in the Canadian dollar;

Canadas banking system is the most solid in the world .1 Investments are protected, while tax rates on corporate income are low;
The cost of living in the Quebec City metropolitan region is low. Housing prices are very competitive, while the region has one of the lowest inflation rates in the country.

2,0 1,5 1,0 0,5 0

Inflation rate (l)

Sources: Conference Board of Canada and Qubec International

1 According to the World Economic Forums Global Competitiveness Report 2009-2010.

Economy
In North American terms, Quebec City is one of the most dynamic, cutting-edge and economically attractive metropolitan regions, maintaining its leading position year after year. The Quebec City metropolitan region is Canadas seventh largest census metropolitan area (CMA 2 ), although its extraordinary economic vitality often propels it into the top ranks of Canadas major cities.

Quebec City by night

#1 GDP growth in Eastern Canada

Average annual real GDP growth per capita between 2003 and 2008 (%)

Strong and resilient economy

Over the past two decades, regional economic growth has been driven by economic diversification, backed by a vigorous labour market and growing private investment. This impressive track record has been accompanied by sustained demographic growth. Even during the depths of the global recession in 2009, the local labour market remained relatively strong. Overall, growth in the Quebec City metropolitan region was quicker and more pronounced than in other parts of Canada: 2010 kicked off with the good news that 1,000 to 2,000 new jobs will be created in the region over the next 12 months.

As the seat of the provincial government, Quebec City is home to a large number of civil servants, while workers in the thriving insurance and financial services sectors also bolster economic stability, in addition to protecting against global economic fluctuations. In addition, the rate of gross domestic product growth in the Quebec City metropolitan region is one of the highest in Canada. Between 2003 and 2008, regional GDP rose by nearly 2% annually. In terms of GDP growth, the region ranks first in Eastern Canada.

Salt Lake City Winnipeg Hartford Seattle Boston Edmonton

Quebec City
Vancouver Baltimore Calgary Milwaukee Ottawa Nashville Philadelphia Montreal Toronto Denver Cleveland Raleigh St-Louis Indianapolis Columbus Cincinnati -0,3 0,0 0,3 0,6 0,9 1,2 1,5

Sample of 20 metropolitan areas in North America

1,8

2,1

2,4

2,7

Sources: Conference Board of Canada, U.S. Bureau of Economic Analysis and Qubec International

2 A CMA must have a population of 100,000 or more.

Diversified economic growth

The Quebec City metropolitan region provided 391,700 jobs in 2009, with business services, public administration, finance, insurance, transportation and communications accounting for 40.4% of local workers. Virtually all of these sectors expanded significantly over the past 20 years, while some have become key drivers of the regional economy. The strongest growth areas are finance, insurance and real estate, which accounted for 9.6% of the labour market in 2009,3 up from 5.3% in 1987. Between 1987 and 2009, employment more than doubled in the professional, scientific and technical services sector, rising from 12,700 to 27,800 jobs. The information, cultural and recreation and business services sectors also performed very well.

Employment in the Quebec City CMA in 2009 4

30.1 % 26.9 % 26.7 % 8.5 % 5.1 %

public services driving services

5

household services 6 manufacturing construction

We are pleased to be contributing to the economic and technological development of the Quebec City metropolitan region by establishing our production and R&D operations here. Featuring state-of-the-art technology, our new facility in Quebec City is where our polymerase chain reaction-based in vitro diagnostic products such as BD GeneOhmTM are manufactured. This is a major achievement for us, and we couldnt have made it happen without your assistance. Ernie Ritchey Director of Operations in charge of BD Diagnostics-GeneOhms facility in Quebec City

Luxigon

The Quebec City metropolitan region has capitalized on the rise of technology by embracing economic diversification and key sectors of excellence and establishing a firm foothold in the knowledge economy. Insurance and financial services, architecture and green buildings, biopharmaceuticals, multimedia, nutraceuticals, optics and photonics, natural beauty products and medical technology have all performed well and made key contributions to regional economic performance in terms of job creation and production growth.

3 4 5 6

Statistics Canada, Labour Force Survey, 2009 and 2008 Comparative Economic Analysis, Quebec City Metropolitan Region, Conference Board of Canada, 2009. 2008 Comparative Economic Analysis, Quebec City Metropolitan Region, Conference Board of Canada, 2009. Driving services: Finance and Insurance, Professional, Scientific and Technical Services, Administrative Services, Information industry and Wholesale Trade. Household services: Retail Trade, Transportation and Wharehousing, Cultural Industry, Accomodation and Food Services and Other Services.

International architectural competition winning project of the Muse national des beaux-arts du Qubec.

Major investment and infrastructure projects: record number of building permits issued in Quebec City in 2009
Construction cranes and jackhammers will continue to be prominent features of the local landscape in 2010 as new transportation infrastructure is developed and major industrial and commercial projects are launched. Governments at all levels will be investing in the region by undertaking initiatives aimed at upgrading educational facilities, building new research laboratories in the health sector and developing new sports and recreation facilities. Investments totalling nearly $11.3 billion have been announced or are underway.

Total value of building permits

2,0 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
$ billions

Taux dinflation (g)

IPC (d)

Sources: Statistics Canada and Qubec International

Gold and silver medals 7

In terms of GDP growth, the Quebec City metropolitan region ranks first in Eastern Canada, according to a study conducted by the Conference Board of Canada in 2008. In 2007, regional GDP grew by an impressive 3.1%, garnering a gold medal. Quebec City also won gold in KPMGs ranking of urban areas with low business start-up and operating costs, which are unrivalled in North American and international terms. Between 1999 and 2005, real GDP in the region grew by an average of 3% annually, while the construction sector recorded average growth of 5.8%. In terms of job creation, the Quebec City region won silver in 2007, with employment growth topping 2.4%, outperforming many of the other regions studied.

7 Comparative Economic Portrait 2008, Quebec City Metropolitan Region, Conference Board of Canada, 2009.

Talent and human capital

Well educated and creative, the residents of the Quebec City metropolitan region thrive on groundbreaking projects and new ideas. Thanks to the vibrant local community and regional economy, immigrants continue to flock to Quebec City, fuelling demographic growth. Thanks to the presence of major universities in the region, a highly qualified workforce is available and ready to take on a full role in the creation of innovative companies and other aspects of community development.

#1 In Canada in terms of number of university students #1 In Canada in terms of the number of graduate students (masters/doctoral level)
Camirand Photo

#2 In Canada in terms of the number of university graduates in the 25 to 64-year-old group

Place Royale in the Old Quebec City quarter.

Well-educated population
One of the most striking things about the Quebec City metropolitan region is the proportion of people in their 20s: more than in any other part of Quebec or Canada!8 Approximately 14.1% of the local population is in the 20 to 29-year-old age group, compared with the provincial average of 12.8% and the Canadian average of 12.9%. Another striking thing about the region: 90% of people of working age have at least a high-school diploma. As a percentage of the total population, Quebec City ranks just behind Boston in terms of the number of university students! In North American terms, the Quebec City metropolitan region has one of the highest concentrations of university students, with a larger proportion of graduate students than in any other major Canadian city.
Hartford Columbus Boston St-Louis Philadelphia Raleigh Cincinnati Baltimore Vancouver

Population aged 25 to 64 with at least a high school diploma or equivalent (% of population aged 25 to 64)

Quebec City
Ottawa Tampa Calgary Denver Toronto Richmond San Diego Edmonton Montreal Winnipeg 82 83 84 85 86

Sample of 20 metropolitan areas in North America, 2006

87

88

89

90

91

92

Sources : Statistique Canada; U.S. Department of Education, Institute for Education Sciences, National Center for Education Statistic Integrated Postsecondary Education Data System (IPEDS); U.S. Census Bureau

8 Statistics Canada, 2006 census.

University students (% of population)

Boston

Students enrolled in graduate programs (% of population)

Boston St-Louis Baltimore

Quebec City
Winnipeg Ottawa Montreal Columbus Hartford San Diego Philadelphia St-Louis Cincinnati Baltimore Richmond Edmonton Raleigh Vancouver Toronto Tampa Calgary Denver 2.0 2.5 3.0 3.5 4.0 4.5

Quebec City
San Diego Hartford Philadelphia Montreal Denver Ottawa Richmond Columbus Raleigh Cincinnati Edmonton Vancouver Winnipeg Calgary Tampa Toronto 6.0 0.0 0.2 0.4 0.6 0.8 1.0 1.2

Sample of 20 metropolitan areas as in North America, 2008

Sample of 20 metropolitan areas in North America, 2008

5.0

5.5

1.4

1.6

1.8

2.0

Sources : Statistique Canada; U.S. Department of Education, U.S. Census Bureau and SECOR

Sources : Statistique Canada; U.S. Department of Education, U.S. Census Bureau and SECOR

Ville de Qubec

10

Jardins Saint-Roch

Ville de Qubec

Universit du Qubec

Immigration growth
The Quebec City metropolitan region has seen a net increase in both international and internal migration since 2001. This is no doubt due to the robust labour market, as well as to strong economic growth and diversification over the past 20 years. Most of these new residents came from other regions of Quebec or from elsewhere in Canada, according to Statistics Canadas 2006 census.

In addition, Quebec City attracted more immigrants from 2001 to 2006, with that period accounting for 34% of the total current immigrant population. And its very likely that most of these new immigrants will stay: the immigration retention rate in the Quebec City metropolitan region is nearly 85%, as opposed to 80% in Canada as a whole. A regional international recruitment portal has been established to ensure that the region benefits from foreign workers expertise. www.1888mevoila.com

Creative workforce
In the globalized economy, urban prosperity hinges on the ability to attract and retain intellectual capital. In other words, Quebec Citys prosperity is a sure bet! According to a 2009 study by the Martin Prosperity Institute ,9 the Quebec City metropolitan region comes first in its category in terms of creativity. This ranking is based on three variables: talent, technology and tolerance. These variables were studied in 11 metropolitan regions of comparable size across North America, with the Quebec City metropolitan region easily outpacing the others:

#1 Employer for workers in the creative class in North America

Camirand Photo

#1 Technological pool (high technology jobs, number of patents and growth in the number of patents over a 5-year period) in North America #1 Pool of workers (ability to attract and retain talent and workers in the creative class) in North America #1 Openness and tolerance in North America

Valcartier Vacation Village

9 Prosperity Scorecard for Quebec City, Dr. Kevin Stolarick, Martin Prosperity Institute, Rothman School of Management, University of Toronto, June 2009.

11

Main post-secondary institutions

Laval University
As the leading francophone post-secondary institution in the Americas, Laval University offers some 400 regular programs at the bachelors, masters and doctoral levels. As an indication of its wide-ranging focus, it includes 17 faculties and 60 departments, schools and institutes. Every year, more than 44,000 students attend Laval Universitys main campus in the heart of Quebec City. Recognized for its pioneering work in various fields of endeavour, Laval University is one of Canadas foremost research institutions and creative hubs. In 2010, its external research funding topped $270 million. With 222 research chairs, centres and institutes, it is the only university in the country with three Canadian networks of centres of excellence: the Canadian Institute for Photonic Innovations; Geomatics for Enlightened Interventions and Decisions (GEOIDE); and ArcticNet, which studies the impact of climate change along Canadas Arctic coast. Building on its deep roots in the region, Laval University places special emphasis on partnerships. It also supports the efforts of private and public organizations to fully develop their resources. The following is a key indicator of the strong bonds of partnership between Laval University and the Quebec City metropolitan region: 25.6% of the institutions research funds come from non-governmental partners, as opposed to an average of 16.3% for other Quebec universities. Committed to the betterment of the society we live in, Laval University is playing an ever-greater international role, having entered into 570 partnership agreements with other post-secondary institutions in over 65 countries. Laval University is also an international player in key research areas such as health sciences, environmental studies, bio-food sciences, genomics, sound and image technology and obesity studies. To date, 224,000 men and women have graduated from Laval University, including three Canadian prime ministers and eight Quebec premiers.10
Ville de Qubec

6 Post-secondary institutions in the region

A nationwide university network based in the Quebec City metropolitan region

Quebec City is home to the headquarters of the University of Quebec, Canadas largest post-secondary network, with nine teaching institutions, 5,000 professors and instructors and over 87,500 students enrolled in more than 750 programs, including several distance learning options. The UQAR campus in nearby Lvis also welcomes local and international students pursuing their post-secondary education in a human-centred environment on the banks of the St. Lawrence River. The University of Quebec is also home to the National School of Public Administration (ENAP), the University of Quebec Press (PUQ), Tl-Universit and the National Institute of Scientific Research (INRS), including the Water, Earth and Environmental Centre, which focuses on four main research areas (hydrology, environmental rehabilitation/waste recycling, aquatic/ terrestrial biogeochemistry and geosciences).

Technical schools The regional picture is completed by a variety of vocational secondary schools, technical

colleges and specialized institutes. Located in downtown Quebec City, the National School of Interactive Entertainment (ENDI) provides students with a unique opportunity to hone their video game skills in a simulated environment combining production techniques and a corporate immersion program. Moreover, the financial and insurance sector can count on the support of the Insurance and Financial Services Development Centre, which enables graduate students to acquire in-depth knowledge.

12

10 Beginning with Edmund James Flynn, Conservative Party leader elected Quebec Premier in 1896, and continuing on through the Honourable Jean Chrtien, Liberal Party leader elected Canadian Prime Minister from 1993 to 2003, 11 Quebec and Canadian first ministers have received law degrees from Laval University.

Campus de lUniversit du Qubec

Le Petit Sminaire de Qubec

13

Nearly $800 million is invested in research and development in the Quebec City metropolitan region every year.11 But the human imagination will always be more powerful than money and there is a concentration of creativity in the Quebec City metropolitan region like nowhere else!

Innovation and creativity

#1 Number of university researchers #2 Research university funding

Ex Machina

#3 Scientific publications

14

The Image Mill

Home to some 6,000 researchers and associates, the region has one of the highest concentrations of research centres in Canada, with nearly 400 labs, groups, consortiums, institutes and R&D centres. Among Canadian metropolitan regions, Quebec City has the highest proportion of university researchers and outpaces Canadas three largest cities (Montreal, Toronto and Vancouver) in terms of research funding and the number of scientific publications.

University research funding per 100 researchers CA$ millions

Edmonton Quebec City Toronto Montreal Vancouver Ottawa Calgary
Top 8 Canadian metropolitan areas, 2008

Number of university researchers per 100,000 population

Quebec City Winnipeg Ottawa Montreal Edmonton Calgary Vancouver Toronto 60 80 100 120 140 160 180 200
Top 8 Canadian metropolitan areas, 2008

Winnipeg 10 12 14 16 18 20 22 24 26 28 30 32

Sources : Research Infosource and SECOR

Scientific publications per 100,000 population

Edmonton Ottawa Quebec City Vancouver Winnipeg Montreal Calgary Toronto 100 120 140 160 180 200 220 240 260 280
Top 8 Canadian metropolitan areas, 2007

Sources : Research Infosource and SECOR

Sources : Research Infosource and SECOR

11 Source from page 14: Quebec Ministry of Economic Development, Innovation and Export Trade (MDEIE).

15

The large number of research centres and researchers in the Quebec City metropolitan region fosters the development of high-tech industries, including optics and photonics, green buildings, nutraceuticals, biopharmaceuticals, medical and environmental technologies

and natural health products. The following provides an overview of the regions main research centres:

CHUQ Canada's leading biomedical research centre

What is the connection between a prostate cancer hormone treatment and a new diagnostic test for bladder cancer? Both were developed at the CHUQ Research Centre. Formed from the merger of three leading Quebec City hospitals (and their respective research centres), CHUQ has flourished, becoming a major catalyst for hospital research in Canada. Among other innovations, it played a key role in the discovery of an immune system mechanism used to prevent neurological damage associated with Alzheimers disease, as well as in the development of DNA-based diagnostic tests used to identify infectious agents in less than one hour.

DRDC-Valcartier Canada's leading national defence research centre

With its state-of-the-art infrastructure, Defence Research and Development Canada (DRDC) develops prototypes of weapons systems as well as command, control, information, communications, intelligence, surveillance and recognition systems. Approximately 50% of its R&D program is undertaken in partnership with industry stakeholders, who capitalize on the opportunity to take part in research projects with NATO member countries or to access a virtual immersion lab, an aeroballistic tunnel, a hyperspeed impact research lab and a mobile hyperspectral measurement lab.

INO Canada's leading applied optics and photonics research centre

The importance of the regional optics and photonics industry is largely attributable to the National Optics Institute (INO). As Canadas only centre of industrial-focused optics and photonics expertise, INO has carried out 24 technology transfers since the mid-1980s leading to the creation of new companies, as well as 40 other transfers that have enabled existing firms to boost their productivity, efficiency and product offer.

FPInnovations the world's leading non-profit forest research institute

Can an entire building be made out of wood? Of course! Not only will it be just as solid as with concrete or steel beams, but negligible amounts of greenhouse gases will be produced during construction! In the near future, FPInnovations hopes to export its expertise worldwide and to convince the construction industry to and adopt its new wood processing and technologies techniques.

16

INAF setting the standard for food technology research

The natural products industry is thriving in the Quebec City metropolitan region thanks to the Nutraceuticals and Functional Foods Institute (INAF), which studies interactions between foods and their components, as well as nutrition and health in a multi-disciplinary setting. An internationally recognized research and training leader, INAF develops emerging sciences (such as nutrigenomics) and high technology applications (such as the in vitro digestive system simulator, the only one of its kind in Canada).

INRS - Water, Earth and Environment global environmental leader in the areas of water and geological resources
The regional outlook for water and geological resources is bright thanks to the efforts of researchers at National Institue of Scientific Researchs Water, Earth and Environment Centre (INRS-ETE). The Institutes scientific program focuses on four main areas: hydrology, environmental rehabilitation/waste recycling, aquatic/terrestrial biogeochemistry and geosciences. These areas face a number of common strategic issues, including risks surrounding extreme natural events or humangenerated contamination, the impact of climate change on resources, resource use and necessary adaptations, water/mineral resource management and related land use planning and rehabilitation/decontamination technologies for urban and natural environments.

IUCPQ leader in the treatment of heart/lung disorders and obesity

Dedicated to basic and clinical research, the Qubec University Institute of Cardiology and Pneumology has propelled Canada into the top ranks of researchers studying obesity, a growing health problem. Thanks to the efforts of three IUCPQ researchers, ScienceWatch ranked the Institute 18th among more than 30,000 research institutions worldwide in terms of the number of scientific publications on obesity.

CRULRG cutting-edge brain disease research

Over the past few decades, the regional biopharmaceutical industry has been bolstered by the efforts of the Laval University/Robert Giffard Research Centre, where a staff of 400 people (divided into 55 research teams) are studying neurons and brain function. Since it was founded in the mid-1980s, the CRULRG has recorded average annual growth of 20%, with the rate accelerating in recent years. Today, it is in the Canadian Top Five, although recently announced investments could help bring it into the worldwide Top Five!

17

Costs and competitiveness

In a globalized economy, companies must compete with the emerging countries, including Brazil, China and India. Against that backdrop, business start-up and operating costs, payroll costs and rental costs can be key factors determining whether firms merely stay in the game or eventually rise to the top. In this regard, companies in the Quebec City metropolitan region enjoy a significant competitive advantage over their North American rivals.

Noted for its business focus, Quebec City is built on a human scale. Thanks to its compact size, we can rally community groups and decision makers around global issues more quickly and effectively than we can in any other metropolitan area in North America. Major employers get a fair hearing and receive immediate support and assistance from the authorities and economic development stakeholders. Dominic Brown CEO, Beenox (an Activision studio)

Ville de Qubec

18

Beenoxs head office in Quebec City.

Generally speaking, it is much cheaper for companies to start up operations in the Quebec City metropolitan region than it is elsewhere in Canada or in the US. Over the past decade, the region has led the North American rankings in terms of low after-tax start-up and operating costs12 among cities in the same category. In 10 out of 18 economic sectors (biomedical R&D, clinical trials, pharmaceutical products, electronic system testing, web content developpement/multimedia, advanced software design, precision manufacturing, auto parts, metal machining and food processing), overall business operating costs are much lower in the Quebec City metropolitan region than they are on average in comparable US cities. R&D companies in the Quebec City metropolitan region benefit from 20% to 27% lower start-up and operating costs, while firms specializing in Web content, multimedia and high-tech software enjoy a comparative advantage of 20% to 22% in this regard.
12 Competitive Alternatives, KPMG 2010.

Average business operating costs for 18 industries (%)

Quebec City
Winnipeg Montreal Vancouver Edmonton Toronto Raleigh Buffalo Nashville Baltimore Indianapolis Salt Lake City Milwaukee St-Louis Philadelphia Denver Hartford Seattle Boston San Diego 88 90 92 94 96 98

Sample of 20 metropolitan n areas in North America 2010

Fumoir Grizzly

100

102

Sources : KPMG and Qubec International Note : Average for U.S. cities = 100.

19

Quebec City's cost advantage (%) compared with the average for U.S. cities, by industry, 2010
Electronic Systems Testing Web Content Development/Multimedia Advanced Software Biomedical R&D Shared Service Centre Oil and Gas Equipment Medical Device Manufacturing Pharmaceutical Products Telecom Equipment Electronic Components Metal Machining Specialty Chemicals Aircraft Parts Auto Parts Precision Components Food Processing Plastic Products 0 5 10 15 20 25 30

Leasing costs for downtown office space (US$/sq. ft.)

Quebec City
Hartford Cincinnati Nashville St-Louis Cleveland Raleigh Baltimore Denver Winnipeg Seattle Philadelphia San Diego Boston Montreal Ottawa Edmonton Calgary Vancouver Toronto 15 20 25 30 35 40

Sample of 20 metropolitan areas in North America, 2009

45

50

55

Sources : KPMG and Qubec International

Sources : Groupe Altus and CB Richard Ellis Note: Exchange rate used: US$1 = CA$1.07

20

Sample of 5 metropolitan areas in North America, 2010

Average annual salaries (US$) overview of 11 typical occupations

Quebec City 221,105 Biochemist Computer Engineer Software Developer Product Development Manager Electrical Engineer Optical Engineer Mechanical Engineer Microbiologist Software Programmer Optics and Photonics Technician 88,552 87,281 85,896 84,574 81,111 80,927 74,923 74,827 67,561 46,576 Boston 321,415 103,068 103,729 101,173 102,838 100,964 94,604 91,987 85,849 81,796 53,548 Denver 294,185 94,780 95,055 92,723 93,805 92,416 86,634 84,263 79,121 75,273 48,660 Raleigh 287,441 91,588 93,068 90,723 89,631 89,801 84,020 81,647 76,032 72,821 45,941 St-Louis 281,232 90,912 91,324 89,061 90,292 90,682 84,963 82,594 75,503 71,229 46,676

Sources: Economic Research Institute and Qubec International Note: Exchange rate used: US$1 = CA$1.04 (1st quarter 2010)

Quebec City has proved to be an ideal location for us because it has everything you need to be highly competitive in the business world : a qualified and stable workforce, not only for research but also for vaccine manufacturing ; a variety of stimulating tax incentives and low business start-up and operating cost. Paul Lucas, President and CEO, GlaxoSmithKline Canada

21

Canadas political, economic and cultural stability are the envy of the world. Thanks to rigorous regulation and monitoring, the national banking system is known for its solidity and transparency, while investments are also protected. As one of North Americas oldest parliamentary democracies, the province of Quebec is also known for its political and economic stability. Together with the Canadian government, the Quebec government seeks to foster business development by reducing the corporate tax burden as much as possible. In this pro-investment and pro-development environment, the Quebec City metropolitan region is particularly attractive to businesses. The evidence is on display in KPMGs 2010 Competitive Alternatives study, which named Quebec City the best place to do businessin Canada and the US among cities of 500,000 to 1.5 million inhabitants!

Business environment

22

Canada's banking system solid as a rock

Canadas banking system is the most solid in the world.13 Backed by the Banking Charter, it is more closely regulated than in other countries. Financial institutions also receive close scrutiny from the financial and securities authorities. Thanks to this vigilant approach, Canada emerged from the recent global financial crisis in better shape than the other G 20 countries.

Investor protection
As regards investor protection, Canadas banking system is in the worldwide Top Five.15 In particular, investors are protected by financial reporting by hedge funds and by information disclosures concerning investment products tied to hedge funds.
Quebec City
Montreal Winnipeg Calgary Edmonton Vancouver Toronto Ottawa Seattle Baltimore Hartford Denver Tampa Nashville Raleigh St-Louis Philadelphia Indianapolis Boston San Diego

Corporate income tax rates for all industries (%)

Sample of 20 metropolitan areas in North America, 2010

Pro-business regulatory environment

Canada ranks eighth in the listing of pro-business countries and second in terms of business creation.16 In other words, its easy to do business and create companies in Canada because the regulatory environment is so pro-business.

Financial market transparency

Canada is in the worldwide Top Three in terms of financial market sophistication.14 The national banking sector is trustworthy and transparent, while the financial markets are regulated with a view to adequately protecting investors and other economic stakeholders.

Low tax rates

In 2008, the income tax rate for R&D companies in Quebec City was 22.9%. The metropolitan region boasts one of the lowest corporate tax rates in comparable North American regions, ranking number three 17 in this regard. Quebec Citys R&D sector stands out in terms of its very low corporate tax rate (only 19.4%). The region also boasts low tax rates in the services and manufacturing sectors (28.5% and 25.8% respectively).

0,0

4,0

8,0

12,0

16,0

20,0

24,0

28,0

32,0

Sources : Competitive Alternatives, Special Report: Focus on Tax, KPMG 2010 and Qubec International Note : Exchange rate is US$1 =CA$1.06

13 14 15 16 17

According to the Global Competitiveness Report 2009-2010, produced by the World Economic Forum. According to the Global Competitiveness Report 2009-2010. Rating of 8.3, according to the Global Competitiveness Report 2009-2010. According to Doing business 2010, produced by The World Bank Group. Competitive Alternatives, Special Report: Focus on Tax, KPMG 2010.

23

Tax rate comparison

In 2009, the province of Quebec had the most competitive tax rates in Canada and the US. By 2012, the federal corporate income tax rate will be reduced significantly, reflecting the Canadian governments commitment in this regard. Among the G 20 countries, Canada will soon have the lowest tax rate on new business investments.

Sample of 12 metropolitan areas in North America, 2008

Corporate income tax rates

Research and Development Montreal Quebec Edmonton Winnipeg Toronto San Diego Boston Hartford Baltimore Raleigh Denver St-Louis -24.6 % -22.0 % -18.0 % 0.0 % 6.3 % 16.3 % 17.3 % 18.1 % 19.1 % 19.4 % 19.6 % 21.1 % Services Quebec City Montreal Edmonton Toronto Winnipeg Baltimore Denver St-Louis Hartford Raleigh Boston San Diego 3.4 % 15.1 % 25.1 % 25.5 % 27.0 % 36.3 % 36.8 % 37.2 % 38.0 % 38.1 % 39.0 % 39.6 % Manufacturing Montreal Quebec City Winnipeg Edmonton Toronto Baltimore Hartford Raleigh Denver Boston St-Louis San Diego 9.3 % 9.7 % 10.0 % 14.0 % 15.1 % 25.0 % 25.6 % 26.2 % 26.3 % 27.8 % 27.9 % 29.6 %

Sources: Competitive Alternatives, Special Report: Focus on Tax, KPMG 2010 and Qubec International

24

Sample of Canadian provinces and US states, 2010

Sample of Canadian provinces and US states, 2010

Manufacturing companies - Effective tax rate (%)

Canadian provinces or US states Quebec Ontario Texas Illinois California New Jersey Massachusetts New York Federal 18.00 18.00 34.65 30.50 31.91 31.85 31.68 29.00 Provincial/state 11.90 12.00 1.00 7.30 8.84 9.00 9.50 7.10 TOTAL 29.90 30.00 35.65 37.80 40.75 40.85 41.18 46.15

Non-manufacturing companies - Effective tax rate (%)

Canadian provinces or US states Quebec Ontario Texas Illinois California New Jersey Massachusetts New York Florida Fdral 18.00 18.00 34.65 30.50 31.91 31.85 31.68 29.00 33.08 Provincial/state 11.90 12.00 1.00 7.30 8.84 9.00 9.50 7.10 5.50 TOTAL 29.90 30.00 35.65 37.80 40.75 40.85 41.18 46.15 38.58

Sources : Invest Quebec and Qubec International Note: Exchange rate is US$1 =CA$1.04 (1Q10)

Andr Chamorel

Sources : Invest Quebec and Qubec International Note: Exchange rate is US$1 =CA$1.04 (1Q10)

Fontaine de Tourny

25

Regional synergy and mobilization

In 2007, the regional business community adopted strategic frameworks and action plans aimed at better positioning its sectors of excellence on the international stage. Approximately $25 million in private and public funding has already been committed to this initiative. By 2012, $1 billion will have been invested in projects designed to stimulate the creation of 10,000 jobs. Key industries in the Quebec City region: Insurance and financial services Environment and energy - Environmental services and green technology - Oil, natural gas, clean energy - Green and intelligent buildings

Life sciences - Biopharmaceuticals - Medical technology - Natural health products Information and communication technologies (ICT) and electronics - Multimedia creation - Optics and photonics - Geomatics and geospatial technology - Security, defence and emergency preparedness Food processing - Health foods Transportation and materials - Plastics and composite materials - Wood processing - Metal products - Transportation material

Ultra-modern infrastructure
Extending from central Quebec to the US border, the Quebec City metropolitan region boasts ultra-modern high-performance infrastructure forming a world-class intermodal network. In just a few years, Quebec City should be connected to other major North American urban areas by a high-speed train link. A related project is currently under consideration and garnering support from a growing number of Canadian and US officials.

Air transportation
Located just 20 minutes from downtown Quebec City, Jean Lesage International Airport continues to pursue the path of modernization. Since 2008, operations have expanded steadily, with four new carriers and new destinations: indeed, it was one of the few Canadian airports to record a traffic increase in 2008-2009 in the middle of the global economic downturn! In 2010, Jean Lesage International Airport will offer connections to more than 250 cities around the world, with non-stop service to 29 cities including Toronto, New York, Washington, Chicago, Cleveland, Detroit, Bordeaux, Marseille and Paris.

Telecommunications
In 2012, Canadas first large-scale fibre-optic network will be rolled out. All told, $225 million will be invested in this broadband technology project. In this regard, the Quebec City metropolitan region, together with Boston and San Francisco, can be described as breaking new ground in terms of digital connectivity and competitiveness.

26

Gene H. Kruger Pavilion, Laval University

160 miles From Quebec City to: Montreal

470 miles Toronto

500 miles Boston

530 miles New York

Maritime transportation
Located 400 miles from the Atlantic coast, the Port of Quebec City is the gateway of choice to the Great Lakes and the US Midwest. In addition to being a deepwater port, it is open year-round. Thanks to its strategic geographic location, it links North Americas industrial heartland with the rest of the world. Thanks to its state-ofthe-art facilities, it can accommodate vessels of up to 150,000 tons. It also has solid bulk terminals for nickel, ore, grains and fertilizer. Nearly 27 million tons of cargo moves through the port each year.

Road and rail transportation

Extending more than 2,796 miles, the regional road network is one of the most extensive in Canada, serving the metropolitan area and connecting the provinces of Eastern, Central and Western Canada, as well as the US border states of New York, Vermont, New Hampshire and Maine. In 2010, more than $400 million will be invested to upgrade the network. The regional rail network provides access to the entire North American continent, including door-to-door delivery of goods and a full range of intermodal transportation services.

Jean Lesage International Airport

27

Unbeatable lifestyle

With all the amenities of a major urban centre, Quebec City remains in harmony with its spectacular natural environment. As a result, it is recognized as one of the greenest cities in Canada: a businessfocused city where the lifestyle and air quality are unbeatable!

Camirand Photo

28

Camirand Photo

Camirand Photo

Canadian artistic and cultural hub

Governments of all levels support the creation, production and dissemination of the arts throughout the region, which features a stunning array of art, history and ethnological museums, theatres, drama workshops, symphony orchestras, contemporary music ensembles, concert halls, live performance venues and national and international festivals and artistic events. Quebec Citys cultural scene remains vibrant all year round so much so that people come from all over the world to join in the celebrations!

The region is covered by forests, making up over 55% of the land area. In addition to various bodies of fresh water, Quebec City boasts parks, green spaces, woodlands, tree-lined avenues and other green spaces. The urban forest is one of the centrepieces of Quebec Citys green heritage. Admired for its outstanding architecture and natural beauty, Quebec City is one of the worlds top tourist destinations, ranked number three in the Worlds Best Awards (Travel + Leisure, 2009) and number six in the list of best tourist destinations 18 in North America (Cond Nast Traveler Magazine, 2009).

Quebec City is also one of the safest places in North America, with a crime rate of less than 5% one of the lowest in Canada. And the kids can rest easy: Quebec City is the safest Canadian city for children.20 Growing up is also easier since children enjoy free access to the healthcare and public education systems (kindergarten to college). Moreover, fees at Quebec universities are among the lowest in North America. The Quebec City metropolitan region also stands out in terms of its highly competitive housing prices.

Power of attraction
In addition to being a hub for technological and scientific innovation, Quebec City is a university centre, as well as one of the most promising business locations in North America. The entire region is attracting growing numbers of multinationals seeking to lower their operating costs and secure the loyalties of a mobile workforce increasingly attuned to environmental and other quality-of-life issues.

A green water city and heritage jewel

Quebec City features a harmonious blend of European and North American cultural influences. Founded in the early 17th century on the banks of the St. Lawrence River, Quebec City has retained its Old World charm, visible most clearly in its architecture and fortifications (it is the only walled city North of Mexico). Cited as an outstanding example of a fortified colonial city, Quebec City was declared a UNESCO World Heritage Site in 1985.

Unbeatable quality of life

Very few North American metropolitan regions have a quality of life comparable to that found in the Quebec City metropolitan region. According to Foreign Direct Investment Magazine,19 Quebec City has the best quality of life in North America! Moreover, this opinion is shared by many researchers, specialized workers and business leaders, who field offers from around the world and decide to relocate to the Quebec City metropolitan region to reap the benefits of a one-of-a-kind lifestyle.

Ville de Qubec

2007 New Years Eve party

18 #3 Worlds Best Awards Travel + Leisure, 2009 / #6 Best Tourist Destinations in North America Cond Nast Traveler Magazine, 2009. 19 #1 quality of life in North America, Foreign Direct Investment Magazine (fDi), 2007 20 Child and Youth Victims of Police-reported Violent Crime, 2008, Statistics Canada 2010.

29

Average home sales price (CA$)

Winnipeg Quebec City Montreal Ottawa Edmonton Calgary Toronto Vancouver
150 000 200 000 250 000 300 000 350 000 400 000 450 000 500 000 550 000 600 000
Top 8 Canadian metropolitan areas, 2009

Average monthly rent (CA$) all housing units

Montreal Quebec City Winnipeg Edmonton Ottawa Vancouver Calgary Toronto 500 600 700

Top 8 Canadian metropolitan areas, 2009

800

900

1 000

Sources: Canadian Real Estate Association, Quebec Federation of Real Estate Boards and Qubec International

Sources: Canada Mortgage and Housing Corporation and Qubec International Note: Privately initiated rental apartment structures of three units or more

30

Chutes de la Chaudire, Ville de Lvis

31

The region's foremost economic development agency

32

Camirand Photo

Price Building, Quebec City

Qubec International
Founded in 2003, Qubec International plays a key role aimed at enhancing the international standing of the Quebec City metropolitan region. Our mandate involves promoting the regions competitive business environment, attracting foreign investment and qualified foreign workers, supporting marketing initiatives, developing external markets and boosting business competitiveness and cluster development by fostering innovation and securing access to financing sources.

We would be pleased to assist you with your start-up or expansion projects. Our service offer includes: Providing advice and information on the region, including local economic conditions, infrastructure, demographic trends, key sectors, business opportunities and major sector initiatives. Facilitating contacts with municipal, provincial and federal authorities, representatives of public utilities and legal, tax and accounting experts.

Providing information on financing sources and tax benefits. Providing up-to-date information on operating costs, market studies and patents. Drawing up lists of potential locations and arranging site visits. Providing support in identifying potential partners (businesses, research centres and training facilities). Providing support in recruiting, training and integrating qualified foreign workers. Providing appropriate post-relocation follow-up.

One of the most important things that any entrepreneur needs is a strong network of contacts. When Picomole was considering a move to Quebec City, Qubec International played a vital role in helping us break down barriers and see the many advantages of such a move. Since our move, the team at Qubec International has been generous and enthusiastic in helping us get established and noticed in our adopted community. We commend the team at Qubec International for their knowledge and dedication, but most of all for their willingness to freely share their networks with us. This, more than anything, has helped us to make impressive progress since our arrival. John Cormier, PhD, Founder and CEO, Picomole Instruments Inc.

CONTACT INFORMATION

Toll free : 1 800 681-9700 info@quebecinternational.ca www.quebecinternational.ca

Special thanks to: CHUQ - Ex Machina - Fumoir Grizzly - Muse national des beaux-arts du Qubec Quebec City Tourism and Convention Bureau - Laval University - Ville de Lvis - Quebec City

33