Prepared by NextStars | December 2025
Executive Summary
Quebec represents a distinctive investment destination within Canada, combining world class research infrastructure, abundant clean energy, and deep sector expertise in artificial intelligence, aerospace, life sciences, and gaming. While the province faced setbacks in 2025 with the Northvolt battery plant cancellation, Quebec’s fundamentals remain strong: 99% renewable hydroelectric power, North America’s largest AI research hub, a thriving startup ecosystem, and continued momentum in the Bécancour Energy Transition Valley.
Montreal ranks 39th globally among startup ecosystems, having attracted $9 billion in venture funding from 2020 to 2024 with five active unicorns. The province’s unique competitive advantages include electricity costs 49% below the G7 average, French language and culture bridging North American and European markets, and strategic positioning in high growth sectors from generative AI to sustainable aviation.
For international entrepreneurs, Quebec offers compelling immigration pathways through the reopened Immigrant Investor Program (requiring $1.2M investment and $2M net worth) and the Entrepreneur Program supporting accelerator backed startups. The province is actively building for the future with Hydro Québec’s $155 to $185 billion Action Plan 2035 ensuring clean energy infrastructure scales alongside industrial demand.
Economic Overview
Current Economic Position
Quebec’s economy demonstrated resilience in 2024, with real GDP growth reaching 1.7%, exceeding the Budget 2025 forecast of 1.4%. This performance narrowed the standard of living gap with Ontario from 15.9% in 2018 to 10.2% in 2024.
Key Economic Indicators:
| Metric | 2024 | 2025 Forecast | 2026 Forecast |
|---|---|---|---|
| Real GDP Growth | 1.7% | 1.1% to 1.2% | 1.4% |
| Unemployment Rate | 5.3% | 5.8% | 5.4% |
| Household Savings Rate | 8.3% | Declining | Stabilizing |
Quebec households maintain a higher savings rate (8.3%) compared to Ontario (4.1%) and the Canadian average (5.0%), indicating financial resilience and consumer capacity.
Trade Considerations
The 2025 tariff environment presents challenges for Quebec’s export oriented economy. Under the baseline scenario assuming 10% average tariffs, growth moderates but remains positive. Quebec has demonstrated success in trade diversification, with exports to the EU up 27% year to date in 2025, reducing dependence on US markets.
Fiscal Position
Quebec projects a deficit of $12.4 billion (1.9% of GDP) in 2025/26, declining to $9.5 billion in 2026/27 with balanced budget targeted by 2029/30. Net debt stands at 38.7% of GDP as of March 2025, with credit ratings confirmed stable by all major agencies.
Strategic Investment Sectors
Artificial Intelligence
Montreal: The Global AI Capital
Quebec stands as one of the world’s premier artificial intelligence ecosystems, anchored by Mila (Montreal Institute for Learning Algorithms), the largest academic deep learning research center globally.
AI Ecosystem Metrics:
| Indicator | Quebec/Montreal |
|---|---|
| AI Researchers and Students | 2,000+ |
| Global Ranking in AI Research (Tortoise Index) | 5th worldwide |
| Mila Affiliated Professors | 140+ |
| AI Startups Incubated by Mila | 50+ |
| Collective Startup Funding from Mila Ecosystem | $85M+ |
Strategic Developments 2024/2025:
The federal government’s $2.4 billion AI strategy announced in 2024 reinforces Montreal’s position. Key investments include:
- Microsoft: $500 million CAD investment (2024/2025) expanding cloud and AI infrastructure
- IBM: Cloud Multizone Region in Montreal for enterprise AI and data applications
- Scale AI Supercluster: $96 million in project funding across 22 initiatives (past 12 months)
- Impulsion PME: $200 million investment capital program renewed for scaleup growth
Major AI Deals (2024):
- Blockstream: $210 million
- Valsoft Corporation: $150 million
- Combined AI sector funding: $630 million in Montreal
AI Passport Initiative (July 2025): Mila, Creative Destruction Lab Montreal, and NEXT AI Montreal launched a joint program providing entrepreneurs privileged access to shared resources, mentoring, and international promotion.
Key Players: Google DeepMind, Microsoft Research, Meta AI Research, Samsung AI Lab, Cohere (new Montreal office opened 2025)
Aerospace
Global Aerospace Hub
Quebec is one of three global aerospace centers alongside Seattle and Toulouse, with Montreal hosting the world’s only location where all three largest aircraft manufacturers (Airbus, Boeing, Bombardier) maintain direct presence.
Aerospace Metrics:
| Indicator | Quebec |
|---|---|
| Canadian Aircraft Exports from Quebec | 93.4% |
| Canadian Aircraft Engine Exports from Quebec | 76.4% |
| Prime Contractors | 5 (Airbus, Bombardier, Bell Textron, CAE, Pratt & Whitney) |
| Tier 1 Suppliers | 15+ |
| SME Suppliers | 230+ |
| Annual R&D Investment (Greater Montreal) | ~$700 million |
Espace Aéro Innovation Zone (May 2024):
Quebec designated its fourth innovation zone focused on aerospace, with $415 million in planned investment and a mandate for decarbonization and aircraft autonomy:
- Boeing: $240 million contribution including $110 million for an aerospace development center
- Government of Quebec: $85 million
- Other Private Sector (Pratt & Whitney, Bombardier, Thales, Airbus, Flying Whales): $60 million
Quebec Budget 2024/2025: $74.5 million over five years to improve sector competitiveness, develop new technologies, and attract the 41,500 talents needed over the next decade.
International Organizations in Montreal:
- International Civil Aviation Organization (ICAO)
- International Air Transport Association (IATA)
- Airports Council International (ACI)
- International Business Aviation Council (IBAC)
Video Games
Gaming Powerhouse
Quebec, particularly Montreal, represents one of the world’s leading video game development hubs with over 300 studios employing more than 13,500 professionals.
Gaming Industry Highlights:
- Ubisoft Montreal: Largest single game studio in the world (4,000+ employees), creator of Assassin’s Creed, Far Cry, and Watch Dogs franchises
- La Guilde du Jeu Vidéo du Québec: 330+ members representing the largest game developer association of its kind globally
- Montreal International Game Summit (MIGS): Premier annual gathering of the global games industry
Major Studios:
- Ubisoft Montreal
- EA Motive
- Behaviour Interactive (Dead by Daylight)
- Gameloft Montreal
- Red Barrels
- Warner Bros. Games Montreal
Ubisoft RADAR Fund: $10 million investment fund launched for indie game studios in Quebec, providing financing, mentoring, and promotion support.
Competitive Advantage: Quebec’s generous R&D tax credits have historically been crucial to attracting and retaining studios, with salaries increasing 20%+ in 2024 reflecting strong talent demand.
Life Sciences and Biotechnology
Emerging Life Sciences Hub
Quebec aims to become a top five North American life sciences market by 2027, supported by strategic government investment and growing pharmaceutical presence.
Life Sciences Ecosystem:
| Indicator | Quebec |
|---|---|
| Life Sciences Companies | 600+ cluster organizations |
| Lab Space (Greater Montreal) | 5.6 million sq ft |
| Jobs in Pharmaceutical Sector (North America Ranking) | 8th |
| Quebec Life Sciences Strategy Investment | $569 million |
| Private Investment Target | $2 billion |
2022/2025 Quebec Life Sciences Strategy:
- $211 million provincial framework over three years
- Expected to spur $4 billion in private investment
- Focus areas: pharmaceuticals, digital health, AI in healthcare
Major Acquisitions:
- Inversago Pharma (Montreal): Acquired by Novo Nordisk for up to US$1.075 billion
Key Infrastructure:
- Inspire Bio Innovations: Award winning lab campus
- Biotech City (Laval): Life Sciences hub hosting major concentration of companies
- adMare BioInnovations: Innovation center supporting early stage biotechs
Multinational Presence: Pfizer, Novartis, AbbVie, Merck, GlaxoSmithKline, Pharmascience, Sandoz
AbbVie Biotech Innovators Award (2025): Partnership with adMare providing lab space and executive mentorship to early stage Quebec biotechs.
Clean Energy and Hydroelectricity
North America’s Clean Energy Leader
Quebec possesses one of the cleanest electricity grids globally, powered by 99% hydroelectric generation, providing a decisive competitive advantage for energy intensive industries.
Hydro Québec Overview:
| Metric | Value |
|---|---|
| Hydroelectric Generating Stations | 63 |
| Installed Capacity | 37,370 MW |
| Electricity Cost vs G7 Average | 49% lower |
| Electricity Cost vs United States | 36% lower |
| GHG Emissions vs Coal Power | 70 times lower |
Hydro Québec Action Plan 2035:
Announced November 2023, this transformational plan commits $155 to $185 billion to meet doubling electricity demand by 2050:
- New Capacity: 8,000 to 9,000 MW
- Hydroelectric Generation: 3,800 to 4,200 MW new capacity
- Wind Power: 10,000+ MW by 2035 (tripling current capacity)
- Transmission Network: $45 to $50 billion investment
- Private and Public Wind Investment: $30+ billion
Major Export Infrastructure:
- Champlain Hudson Power Express: $6 billion transmission line to New York City, power flowing 2026, delivering 10.4 TWh annually (20% of NYC’s needs)
- New England Clean Energy Connect (NECEC): Under development to deliver clean power to Massachusetts
Clean Hydrogen and Bioenergy: Government projects $10 billion investment potential with Hy2gen’s Montreal site expected to produce 237,000 megatonnes of clean hydrogen annually by 2026.
Battery and EV Supply Chain
Energy Transition Valley: Quebec’s Industrial Future
Despite the September 2025 cancellation of the $7 billion Northvolt project, Quebec continues building its battery manufacturing ecosystem in the Bécancour Energy Transition Valley.
Northvolt Outcome:
- $270 million provincial investment lost
- $240 million loan recovery underway (~$200 million recovered)
- 352 MW of power allocation now available for reallocation
Active Battery Projects:
GM POSCO Ultium CAM (Phase 1):
- Investment: $600+ million
- Status: Under construction
- Production: Expected early 2026
- Jobs: ~200 direct positions
- Product: Cathode Active Materials for Ultium batteries
- Government Support: ~$300 million (federal and provincial combined)
Phase 2 Status: Indefinitely paused due to global EV slowdown; POSCO Future M invested $483 million demonstrating partner commitment despite headwinds.
Bécancour Industrial Park: Multiple companies including BASF establishing CAM facilities, creating what GM Canada calls a “village” of battery supply chain operations.
Lithium Processing:
- Nemaska Lithium: Producing lithium hydroxide with Ford as a major customer
Strategic Advantage: Quebec’s abundant, low cost clean electricity (98% renewable) makes battery production among the lowest carbon globally, critical for meeting North American ESG requirements.
Startup and Venture Capital Ecosystem
Montreal Startup Metrics
Global Rankings:
| Index | Montreal Ranking |
|---|---|
| Global Startup Ecosystem Report 2025 | 39th globally |
| Ecosystem Value (H2 2022 to H2 2024) | $27 billion |
| Venture Funding (2020 to 2024) | $9 billion |
| Active Unicorns | 5 |
| Median Series A Round | $10.9 million (global avg: $6.8M) |
| Ecosystem Growth (2025) | +13.4% |
VC Deals 2024: Over $1.3 billion across 85 deals
Quebec’s Top Investment Funds: Five of Canada’s top ten VC funds are based in Montreal
Major Innovation Hub (June 2025): Espace Ax.C opens as central hub for Quebec’s startup ecosystem in downtown Montreal
Key Venture Capital Firms
- Real Ventures
- Inovia Capital
- BDC Venture Capital ($430M+ under management)
- Panache Ventures
- Diagram Ventures
- Luge Capital
- Fonds de solidarité FTQ
- Anges Québec
Fintech Leadership
Quebec fintech startups raised $428.4 million in 2024 across 12 deals, representing 27% of all Canadian fintech investment.
Notable Deals:
- Blockstream: $125 million (January 2023)
- Station Fintech Montreal: Largest fintech hub in Canada (34 startups)
- Luge Capital: $52.4 million second fund for early stage fintechs
- Diagram Ventures: $85+ million third fund targeting fintech and Web3
Government Support Programs
- Impulsion PME: $200 million (renewed) venture financing for AI and tech startups
- Quebec Entrepreneurial Plan 2022/2025: $121.7 million supporting diverse entrepreneurs
- SR&ED Tax Credit: Federal R&D incentive
- Quebec R&D Tax Credits: Up to ~30% of qualifying expenditures
- Canada Economic Development (CED): $16 million announced 2024 supporting 13 Quebec incubators/accelerators
Immigration Pathways for Entrepreneurs
Quebec Immigrant Investor Program (QIIP)
Reopened January 1, 2024 after suspension since 2019, the QIIP is Canada’s only passive investment based immigration program.
Requirements:
| Criterion | Requirement |
|---|---|
| Investment Amount | $1,200,000 CAD (through approved intermediary) |
| Net Worth Minimum | $2,000,000 CAD (legally acquired) |
| Management Experience | 2 years in past 5 years (full time) |
| French Proficiency | B2 level (TEF, TEFAQ, TCF, or DELF/DALF) |
| Education | Secondary school diploma minimum |
| Work Permit | Required before PR application |
| Application Fee | $15,000 CAD |
Key Features:
- Passive investment (no active business management required)
- Investment fully guaranteed and returned after term
- Family included in application
- Path to permanent residence
Quebec Entrepreneur Program (QEP)
For entrepreneurs planning to establish or acquire businesses in Quebec.
Component One (Accelerator Backed):
- Support from Quebec business incubator, accelerator, or university entrepreneurship center
- Minimum passing score: 41 points on selection grid
- No spouse points available
Component Two (Business Owners):
- Business ownership and active management required
- Minimum passing score: 81 points across 13 factors
- Points for education, age, languages, Quebec ties
Selection Factors:
- Education level and training areas
- Age
- French and English proficiency
- Residence and family in Quebec
- Business project evaluation
Federal Start Up Visa (Available Across Canada)
For startups with designated organization support:
- Venture Capital: Minimum $200,000 investment
- Angel Investor Groups: Minimum $75,000 investment
- Business Incubators: Letter of support required
- Processing Time: ~37 months
Strategic Considerations for Founders
Competitive Advantages
- Clean Energy Cost Advantage: Electricity 36% to 49% below competitors, 99% renewable, enabling lowest carbon manufacturing in North America
- World Class AI Ecosystem: Mila, major tech labs, Scale AI supercluster provide unmatched research collaboration and talent access
- French Language Bridge: Montreal’s bilingualism facilitates expansion to European and Francophone markets
- Lower Operating Costs: Compared to Toronto and Vancouver, Montreal offers meaningful cost of living and operating expense advantages
- Research Infrastructure: McGill, Université de Montréal, Polytechnique, and specialized institutes like Mila provide deep research partnerships
- Government Support: Generous R&D tax credits, venture financing programs, and active economic development assistance
Sector Opportunities
Highest Potential Areas:
- Generative AI Applications: Health diagnostics, climate modeling, creative industries, legal tech
- Climate Tech: Green hydrogen, carbon capture, circular economy (powered by clean electricity advantage)
- Aerospace Decarbonization: Hybrid electric propulsion, sustainable aviation technologies
- Life Sciences AI: Drug discovery, precision medicine, health data platforms
- Gaming and Interactive Media: Continued studio expansion, indie development ecosystem
Risk Factors
- Trade Uncertainty: 10% to 25% tariff scenarios could impact growth, though Quebec is diversifying export markets (EU exports up 27%)
- Battery Sector Setbacks: Northvolt failure and GM POSCO Phase 2 pause indicate global EV supply chain headwinds
- Fiscal Position: $11+ billion deficits require continued fiscal discipline
- French Language Requirements: Immigration pathways require B2 French proficiency
- Follow on Capital Gap: Startup Genome identifies shortage of scale stage funding as barrier to commercializing early stage innovation
Regional Ecosystems
Montreal: AI, gaming, fintech, life sciences, aerospace (dominant hub)
Quebec City: Healthtech, digital twins, industrial automation, insurance tech
Sherbrooke: Quantum computing (DistriQ innovation zone), biomedical engineering, clean technologies
Bécancour/Trois Rivières: Battery manufacturing, Energy Transition Valley, industrial decarbonization
Gatineau: Federal innovation programs, government procurement opportunities
Conclusion
Quebec offers international entrepreneurs a compelling combination of clean energy advantage, world leading research infrastructure, and deep sector expertise. While the Northvolt setback demonstrated the risks in emerging industries, the province’s fundamentals remain strong: Montreal continues climbing global startup rankings, AI investment accelerates, and the clean energy advantage becomes more valuable as decarbonization drives industrial location decisions.
For founders in AI, climate tech, life sciences, aerospace, and gaming, Quebec provides advantages unavailable elsewhere in North America. The reopened Immigrant Investor Program and Entrepreneur pathways create accessible entry points, while the collaborative ecosystem culture and lower operating costs compared to other major Canadian cities enhance runway and growth potential.
Success in Quebec requires embracing French language and culture while leveraging the province’s unique bridges between North American scale and European sophistication. Founders who can navigate this bilingual business environment will find exceptional opportunity to build globally competitive companies powered by clean, affordable energy and supported by world class research talent.
NextStars transforms immigrant entrepreneurs’ ideas into climate conscious global companies through our 12 to 24 month venture studio programs. Contact us to explore Quebec opportunities.
