Audio Transcript:

Marco Werman: That's a tough one for the White House, but perhaps President Obama's biggest high-tech headache at the moment is the sloppy healthcare.gov roll-out. Some might blame Canada. That's because one of the subcontractors facing scrutiny for the website's many failings is CGI Federal, a unit of Canada's biggest IT companies - the Montreal-based CGI group. Whatever its role in the ObamaCare controversy, we wondered how CGI's model of doing business across borders fits in with Montreal's economy as a whole. Well, it turns out high-tech and exports have been key to the city's recent economic recovery. I asked Richard Shearmur, a Professor of Urban and Regional Development at McGill University what Montreal's secret is.

Richard Shearmur: I don't think there's just one secret. There's a variety of things that need to be taken into account, but maybe the first thing is that this is not just a recent success. This is something that has been building up over a number of years and, in fact, stretches back quite a long way into Montreal's Industrial history. The more recent phenomenon that's been happening is that at least for the last twenty years or so, there has been a concerted effort by the provincial government and also by the city to promote sort of high-tech manufacturing such as the aeronautical industry, such as pharmaceuticals, but also to promote [??] services.

Werman: I mean we've heard of course about CGI exporting its services, but do they represent one of many companies right now in Montreal doing the same thing?

Shearmur: Yeah, they do represent one of many companies. There's another very large one, SNC-Lavalin, a multi-national engineering services firm, and there are many slightly smaller ones who are spanning the globe, both in engineering consulting and also consulting related to mining and other industrial-type activities. So we're not necessarily talking about the management consultants, the financial consultants, those types of jobs now have gone to Toronto. That occurred really in the 1970s, but Montreal has picked up on this industrial consultancy, engineering consultancy, and they now have a number of large multi-nationals which are very active throughout the globe.

Werman: I mean we're really talking a city that for the last decade or more has really been focused on innovation. What about having two languages - English and French? Has that helped or hurt innovation in Montreal?

Shearmur: I think in the short-term many people would say that it's an impediment between the Francophones and the Anglophones about which language should dominate. It also makes it somewhat more difficult to attract a global workforce. But I think in the longer-term, the presence of these two large European cultures at loggerheads creates attention which on the whole is fairly constructive. People here can't be complacent. They're always confronted with a different point of view. So because there is this tension, I think this does translate not only into the industries in the city, but also into the city's culture and social innovation. I mean there's a lot of music that's coming out of Montreal right now and, having heard interviews with the musicians and knowing the [??] through my daughters, it's clear that the fact that there is a double culture in Montreal, we always get people coming over from France, people coming up from the States, from the rest of Canada, means that it's a meeting place for the English and the French views of the world which I think then does translate into a wider approach to innovation or at least to new ideas which is quite particular to Montreal.

Werman: Right. But now with ObamaCare and CGI there in Montreal taking a lot of the heat for the healthcare.gov foul-ups, will Montreal pay a price for this?

Shearmur: I think obviously Montreal's reputation is going to take a bit of a beating. I mean first of all because Montreal was off the radar and now it's on the radar, it's not on the radar for a very good reason. I think there's also a downside though to what we've been talking about which is the fact that we do have all these innovation, we do have these service companies which are exporting, we do have some high-tech manufacturing, but nevertheless the actual real incomes or GDP per capita in Montreal remains very low, so I think there's a downside to what we're talking about as well. But obviously in terms of Montreal's image, although CGI is maybe not promoting it in a great way right now, I think the underlying argument that there are a lot of global consulting companies operating from Montreal is true and this does reflect something fundamental about Montreal.

Werman: Well, many cities get a second shot, so I wouldn't be too worried.

Shearmur: OK.

Werman: Richard Shearmur, Professor of Urban and Regional development at McGill University. Thanks for your time.

Shearmur: Thank you very much.