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Ericsson plans new Montreal-area R&D centre for global market

A Sony Ericsson Xperia Arc smartphone is shown with an ANT+ fitness application during the 2011 International Consumer Electronics Show (CES) in Las Vegas, Nevada in this January 7, 2011 file photo.

Steve Marcus/Reuters

The Quebec government's efforts to entice companies into locating their cloud-computing and other information-technology operations in the province appear to be paying off.

Telefon AB LM Ericsson plans to build a 40,000-square-metre global information-and-communication-technologies centre close to Montreal after clinching key incentives from the Parti Québécois government of Premier Pauline Marois.

Ericsson anticipates investing about $1.3-billion in the project.

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The goodies offered by the province include a 10-year corporate tax holiday under terms of a new provincial budget provision for companies that invest more than $300-million in new data-centre projects in Quebec.

Stockholm-based Ericsson, one of the world's leading providers of wireless network equipment, will also benefit from low hydroelectricity rates from state-owned Hydro-Québec, said Mark Henderson, president of Ericsson Canada Inc.

"That will certainly cover some of what we're doing here," Mr. Henderson said when asked whether Ericsson will take advantage of the 10-year corporate tax break.

He pointed out that Ericsson, which has R&D hubs in Montreal and Ottawa, already benefits from government tax benefits.

The new centre, to be built in Vaudreuil-Dorion, and start operations in early 2015, requires huge amounts of power, and preferential rates from Hydro-Québec were one among several elements in the decision to locate in Quebec, said Mr. Henderson.

"We've been speaking with Hydro-Québec about the use of power," he said.

"No doubt about it, the province is very supportive when it comes to locating IT and R&D in the province."

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The PQ government touts its cool climate, plentiful water supply, relatively cheap, clean and reliable electricity and high-tech talent pool in its campaign to woo companies looking to locate their high-heat generating, energy-hungry data centres.

The new Ericsson facility will house the company's R&D operations in the innovation of next-generation technology and cloud-based services, said Mr. Henderson.

It will also provide remote customer support for such things as early access to innovation on new business services in real time. And it will house "a good portion of" Ericsson's internal cloud-computing network, said Mr. Henderson.

"The future of Quebec and the greater Montreal area relies on the knowledge base, the training opportunities and the skills available locally," Ms. Marois said in a statement.

"And I welcome the establishment of Ericsson's new global ICT centre and see this as an example of what Quebec has to offer and a sign of confidence in our economy."

Ericsson has more than 3,100 employees in Canada, about 1400 of them in Quebec.

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The new data centre – the length of almost eight football fields – will end up creating 40 to 60 engineering-level jobs, said Mr. Henderson.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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