MONIQUE LEROUX S PRESENTATION CANADA- UNITED KINGDOM CHAMBER OF COMMERCE

Transcription

1 MONIQUE LEROUX S PRESENTATION CANADA- UNITED KINGDOM CHAMBER OF COMMERCE MARCH 5, 2015

2 Canada s High Commissioner in London; Délégué Général du Québec à Londres; President of the chamber of commerce; Distinguished guests at the table of honour Ladies and gentlemen; I want to start by thanking you for asking me to speak before this important podium. A long line of distinguished figures, including several Canadian Prime Ministers, Mark Carney, Tony Blair, Boris Johnson, and many others, have passed before me. It is an impressive list of names to be in! As you all know, Canada and the United Kingdom have long had close political and economic ties. What you may not know, is that those links played an important role in Desjardins Group s past. Alphonse Desjardins, the founder of our co- operative bank, was inspired to create his first Caisse after reading People's Banks, a book written by Henry Wolff, and published here in London in the late 1800s. In addition, Lord Grey (who was born in London and was Governor General of Canada during Desjardins Group s early years) was a strong co- operative sector champion. 1

3 In 1907 Lord Grey tangibly demonstrated his support for our organization, by becoming an honorary Desjardins member. We at Desjardins have never forgotten that support. My presentation today will center on four themes. I ll start by talking about recent Canadian and Quebec economic developments; their projected impact on North Atlantic trade and investment flows, and particularly how they relate to Montreal. Second, I ll talk about Finance Montreal, whose board of governors I sit on, and how we are working to develop Montreal s growing financial sector. Third I will share thoughts about how Desjardins Group, the co- operative bank I head, is positioning itself to help companies prosper in these challenging times. I ll conclude by sharing my views on the co- operative model and its potential in addressing global economic and social challenges. Recent Canadian and Quebec economic developments The world s economy remains turbulent and volatile. Many Western stock markets are doing well. But GDP growth is uneven. Not enough of the benefits are trickling down into the real economy. 2

4 Canada, which many regard as a resource economy, has its own set of challenges. Recent weakness in oil prices will hit us hard. Real GDP growth is expected to slow, from 2.4% in 2014, to just 2.0% this year. Growth is however expected to pick up slightly to 2.2% in 2016, as oil prices begin to recover. However Canada is a highly diversified economy and not all regions will be affected by recent trends in the same way. It is an important strength that we need to continue to build on. Monsieur le Délégué Général: Quebec, which is an oil consumer, not a producer, will in many ways, do well in these circumstances. Low oil prices, coupled with strengthening US demand, will provide the province s diversified manufacturing, technology and services economy, with solid momentum. Effective action on the political front will also help. Quebec s new government is making significant efforts to tighten its belt. This bodes well for the future. However over the medium term, public sector spending restraint will limit provincial GDP growth to 1.7% this year, and to 1.5% in

5 The Greater Montreal region, which accounts for half of Quebec s economy, is benefitting from opportunities on two major fronts. The weak Canadian dollar is making the city s products and labour costs cheaper in US dollar terms. That s important because the United States is by far the biggest export market for Montreal businesses. However these businesses need to take advantage of this opportunity to increase their productivity by investing more in technology, innovation and people. In addition, the Comprehensive Economic and Trade Agreement - signed between Canada and Europe in 2014 will further deepen cross- Atlantic relationships in coming years. This will also provide significant opportunities for Montreal companies. CETA is far broader in scope and complexity than the North American Free trade accord which links Canada, the United States and Mexico. When fully implemented the new Canada- Europe partnership is projected to: Increase bilateral trade in goods and services by 23%, or $38 billion. Improve consumer and business access to goods and services. Create greater certainty, transparency and protection of investments. Enhance regulatory cooperation and labour mobility. Generate new opportunities in procurement markets. 4

6 Not surprisingly, Montreal s business community, like those in the UK and Europe, is preparing to leverage the increased Trans- Atlantic ties that CETA is projected to create. In fact Montreal forms a natural base for UK and European businesses that want to develop the Canadian and US markets or to invest there. Both French and English are widely spoken in Montreal. A significant part of its population is bilingual, making this one of the city s strongest assets. The advantages of such cooperation are obvious to everyone here. Montreal s French and English speaking communities and cultures have also long created huge synergies that the city leverages on the international front. The city s bilingual character is one of the main reasons it has been able to attract international organizations. Montreal also benefits from the fact that much of Quebec s manufacturing, financial and technology sectors, is located there. The city s four major universities, - two that are primarily French- speaking and two primarily English- speaking, - are also major assets. Led by McGill University and the University of Montreal, the city boasts medical, MBA, advanced engineering and a range of other programs, which are ranked among the world s best. 5

7 These learning institutions, coupled with an unusually strong artistic, musical and creative talent base, provide the city with an uncommon vibrancy, and a joie de vivre, which is hard to duplicate. One particularly attractive investment option for British and European businesses is in Montreal s growing financial sector. Many foreign investors are attracted by tax credits that eligible financial businesses can claim. These can substantially lower the cost of salaries paid to foreign specialists who work in these companies. Quebec s financial services sector, which is in large part centered in Montreal, comprises close to 160,000 professionals. These include 100,000 who work in some 3,000 firms. Finance Montreal alone has 23 governor members and 12 association members. These include financial institutions, insurance companies, pension funds, hedge funds and IT organizations. Public sector partners such as our regulators, the Finance Department, economic development agencies and Quebec s six major universities are also represented. 6

8 Finance Montréal, recently launched a five- year strategic plan. Work groups have been set up to develop six of the city s distinctive assets and advantages. These include: Pension fund management. Montreal already hosts two of the world s largest institutional investors (the Caisse de Dépôt et Placement du Québec and PSP Investments) and 250 pension funds are based there. Derivative products expertise is centered around the Montreal Exchange, which is the Canadian derivatives products exchange. o Finance Montréal, has been supporting efforts to conclude an agreement between Canada and the People s Republic of China to make Canada a RMB trading center for the Americas. o Montreal would be ideally suited to support resulting currency derivatives trading. Desjardins Group, which partners in ventures with both Caisse de Dépôt et Placement du Québec and the Montreal Exchange has a major stake in both of the above two niches. Infrastructure. Montreal has an excellent pool of infrastructure industry talent engineers, contractors, managers and bankers. o By breaking down silos and working better together these groups should be able to better leverage significant public sector infrastructure investments that will be made in coming years. 7

9 IT applied to financial services is another niche that Montreal, which is blessed with a strong information technologies cluster, that includes players such is CGI, is well positioned to build on. o Technologies applied to sectors such as insurance and financial intermediation are projected to be growth areas in coming years. Entrepreneurship. As we all know, some of the financial sector s major challenges have come from entrepreneurs outside the sector. o Supporting financial business entrepreneurs through networking and seed capital is thus a key priority. o Desjardin Groups s investment in Fiera Capital is one such initiative. Human resources. Montreal s natural advantages can only achieve their full potential, if the city fully leverages its human resources, which are its greatest strength. o This work group (which I head) focuses on ensuring that Montreal maintains its lead in attracting, retaining, developing and training top financial sector talent. However these six core competencies aren t the whole story. Finance Montreal is currently considering forming work groups that deal with insurance, which is another of our strengths, development capital and sustainable investing. Indeed Finance Montreal provides an example of what I call coop- etition a pool of competitor businesses, working together for a common goal. The key takeaway is that European financial firms have fertile terrain in Montreal upon which they can build their North American presences. 8

10 Desjardins Group Desjardins Group, the organization I head, is also positioning itself to help British, European and Canadian companies prosper in a growing, freer trade environment. We too at Desjardins will be looking to leverage opportunities stemming from the CETA partnership. For those that don t know us, let me tell you a bit about ourselves. Desjardins Group is Canada s largest financial services co- operative and is among Canada s systemically important financial institutions. We have $230 billion in total assets, seven million members and 48,000 employees. For those of you who think that a financial services co- operative is not as good as a real bank, let me assure you: In 2014 Bloomberg ranked Desjardins Group second among the world s strongest banks. Desjardins Group has a conservative financial management approach, coupled with excellent strengths on both the innovation and technology fronts. Desjardins Group s acquisition of State Farm s Canadian activities, which was completed in early January, positions us as Canada s second largest P&C insurer. 9

11 In addition, Desjardins Group offers one of Canada s financial sector s most diversified range of services. These include: Wealth Management and Life and Health Insurance Property and Casualty Insurance Personal Services Business Services True to our co- operative nature, Desjardins Group has long been willing to partner, or to work together, with a range of financial institutions. We are for example extremely satisfied with our partnership with Credit Mutual and State Farm. I also want to salute several other partners who are represented here in the room today. These include CGI, Norton Rose and.. In this spirit, Desjardins Group, in partnership with the International Cooperative Alliance, also took a leadership role in organizing the International Summit of Co- operatives, which took place in Quebec City in 2012 and The cooperative business model I want to close by providing a little pitch for the cooperative sector, which has been growing in importance in recent years. I believe that the cooperative business model has significant potential to help address some of today s major global challenges. The global co- operative movement has growing significantly in recent years. It now includes nearly one billion members, 100 million employees and takes in $2 trillion in annual revenues. 10

12 The International Co- operative and Mutual Insurance Federation has also demonstrated impressive clout. In 2013 ICMIF members accounted for: $268 billion in premiums or 5.8% of global market share 280,000 employees Coops are not subject to hostile takeovers. Nor do they export jobs to low cost areas of the world to cut costs. And because they don t have shares traded on equity markets, co- ops can take the long- term view in managing their businesses. These are some of the reasons why I believe that it is good to have what I call a strong plural economy composed of: a dynamic, well regulated private sector, an efficient and effective government sector and, of course, a profitable, growing and innovative cooperative sector.. The United Kingdom itself has, of course, been a major leader in the global co- operative movement. You have also produced some of our sector s top talent. For example Dame Pauline Green, president of the International Co- operative Alliance, with whom I co- chaired the International Summit of Cooperatives, had a long and esteemed political career here. 11

13 In conclusion: The UK is Canada s second largest goods export market; British companies provide Canada s third largest source of investment. We at Finance Montreal and at our partners Montreal International will do everything we can to build on these key links. Support from major levels of government will help. At the federal level, the Canadian government continues to look for ways to improve existing trade deals and is now looking to towards concluding one in the Pacific Rim. Provincially, Quebec was one of the provinces that best took advantage of the North American Free Trade Accord, and is now looking to duplicate that success here in Europe. When Montreal, Quebec and Canada co- operate together, there is no limit to what they can achieve! Thank you. 12