As high tech spending falls in the US, firms outsource to Montreal
November 11, 2008 (PRLEAP.COM) Technology NewsKovasys Inc. (www.kovasys.com), an IT recruitment agency in Montreal, has recently been witnessing a spike in the number of American companies crossing the border into Canada - especially Montreal- to do their software development and high tech projects. Due to the unstable economy in the US, and massive layoffs, more and more companies are deciding to save money and nearshore their IT operations to a cheaper yet proximate location. Montreal meets this criteria as it is only few hours away from Chicago, New York, and Boston, yet costs are up to 55-70% lower.
Morgan Stanley, a global financial services provider from New York City, has recently settled their offices in the old district of Montreal and is in the process of hiring 700 developers. Other major companies such as SAP, Ericsson, and PC Mall, have also recently made Montreal their second home.
The rate by which these companies are coming in has tremendously increased the demand for IT personnel in Quebec. As a result, IT recruitment companies, such as Kovasys Inc., have started relocating personnel from Toronto, Vancouver and Paris to Montreal in order to meet the demand for highly skilled IT professionals.
This trend however is not surprising, since this is exactly what the government of Quebec has wished to achieve when they introduced the subsidies for high tech companies less than a year ago. A high tech company with offices in Montreal can expect a refund in terms of tax credits, for as much as $20,000 per employee. This adds up to 55-70% in terms of salary reduction when compared to the same positions in cities like New York or Boston when you take 30% exchange rate into account. Montreal is already home to a number of video game industry giants like Ubisoft, EA Arts, A2M and Gameloft.