IN-DEPTH: Did Quebec sovereignty drive BMO and businesses from Montreal? History gives a complicated answer

CALGARY — With the clock continuing to tick towards the inevitable October referendum on Alberta independence, a historical anecdote keeps resurfacing from the federalist camp as a cautionary tale — one that’s more nuanced than some let on.Federalist proponents have increasingly invoked Quebec’s experience with sovereignty as a warning of the economic fallout and corporate relocation that could hit Alberta if the independence sentiment were to win out in the fall.One talking point in particular has been repeatedly referenced: the Bank of Montreal (BMO) relocating its headquarters to Toronto in the 1970s.Calgary Mayor Jeromy Farkas was the latest to cite it, saying in a recent video on the city’s business outlook that political uncertainty drove major companies out of Montreal decades ago.."There's a reason the Bank of Montreal is no longer headquartered in the city of Montreal," Farkas said.Others have brought that point up as well.Liberal MP Corey Hogan (Calgary Confederation) made the same argument in June, telling the Western Standard that using independence rhetoric as leverage against Ottawa could have unintended consequences."Ask the people of Quebec just how applying pressure has worked. Look at what happened in the 1970s. There’s a reason the Bank of Montreal is not headquartered in Montreal,” Hogan said..'THIS IS ON PEOPLE'S RISK REGISTER': Liberal MP warns Alberta independence is worrying investors.However, Alberta independence advocate and lawyer Keith Wilson disputes this, arguing the BMO argument is a “cartoon version of history.”Wilson previously told the Western Standard that any exodus of banks and other companies was driven primarily by Quebec's language legislation, particularly Bill 101, rather than fears of sovereignty or the 1980 referendum.Bill 101, officially known as the Charter of the French Language, was introduced by the Parti Québécois (PQ) in 1977 to make French the dominant language of government, business, workplaces, and education in Quebec.“[That] language policy required them to impose extremely costly and oppressive language rules on all of their staff and all of their business,” Wilson said.“So rather than comply with those onerous rules which were intended to target English-speaking Quebecers, some of the banks and some of the insurance companies decided instead to relocate their head offices to Toronto... The history on that is clear.”Historical records, however, suggest the story behind the move — and the broader wave of businesses relocating from Quebec at the time — is less cut and dried.Founded in Montreal in 1817, BMO remains legally headquartered in the city today, but its operational headquarters and executive offices moved to Toronto’s First Canadian Place in 1977, the year after René Lévesque's PQ government was elected and the same year as the passage of Bill 101..But was the PQ’s election the primary reason behind BMO’s move?News sources from the time show there were rumours of the bank shifting its headquarters away from Montreal well before Lévesque’s win..A Canadian Press article published in the Montreal Gazette on November 7, 1975, reported that there were rumours BMO was “searching for a new head office” but that the bank “emphatically” denied a move to Toronto, even though some bank industry officials speculated recently-opened First Canadian Place could function as a head office regardless.The article also cited a Montreal Chamber of Commerce survey, which reported that local business leaders viewed the city's economic, social, and political climate as “generally pessimistic” and identified language problems, heavy taxation, and government bureaucracy as “particular difficulties for business.”.Other large corporations raised similar concerns the following years, with Royal Bank announcing it was transferring three major departments from Montreal to Toronto in February 1977.Executive vice-president Rowland Frazee insisted the move was "purely a business decision” driven by Toronto's growing role as Canada's financial centre and denied it was related to Quebec's political climate, though he acknowledged Quebec’s language policies had been causing problems in recruiting staff for the bank and that the long-term economic future of Toronto seemed far more optimistic than that of Montreal..“Over the years Toronto has continued to grow as an increasingly important centre of financial activity. Accordingly, the bank has taken steps from time to time to strengthen our presence in that city where several of our main competitors have their head offices,” Frazee told the Montreal Star.Then-Bell Canada chairman of the board Jean de Grandpre also said his company would be forced to move its headquarters out of Montreal if English could no longer be used as the principal language of work in the head office.“A national or international company whose head office is in Montreal will certainly not be able to remain if we refuse to allow English to remain as the principal language of work at its head office,” he told the Star..BMO chairman Fred H. McNeil struck a similar note at the bank’s annual meeting in January 1977, stating the PQ’s election would not change the bank's operations but did caution that if Quebec were to ever leave Canada, the bank would have to move its head office because the federal Bank Act specifies that the head office of a bank “shall be in Canada” and because BMO is a federally chartered Canadian institution.A May 1977 Toronto Star article captured a deeper unease simmering under the surface of Quebec society — the concern among Anglophone (and some Francophone) executives that the PQ government wished to force out English-speaking corporate head offices altogether.McNeil didn’t dismiss that tension, telling the Star the new language laws made staffing harder even as he insisted the bank’s shift towards Toronto was a calculated business decision, noting some of BMO’s traditional head office functions had been on the move for “some time.”"This decentralization is a straight business decision and has nothing to do with separatism; it has been going on for years,” McNeil said, contending decentralization was normal for a large company such as the bank.By 1979, the business exodus was undeniable — the New York Times reported 368 businesses had moved their headquarters out of Quebec between late 1976 and early 1979, attributing it not to any single cause, but to a mix of language laws, taxes, political uncertainty, and Toronto's rising financial clout.Asked by the Western Standard whether Alberta today can fairly be compared with 1970s Quebec, University of Calgary economics professor Trevor Tombe was skeptical..“[This is] very different than the situation in Quebec. Brexit [was] different than Quebec. Alberta would be different than Quebec. No two circumstances are identical." Tombe said, noting the conditions that drove Quebec sovereignty don't map neatly onto those at play in Alberta.Unlike their Quebec counterparts of the past, Alberta business leaders remain optimistic. A recent Business Council of Alberta survey found nearly two-thirds of respondents expecting economic conditions to improve in Alberta over the next year, a trend the council said likely reflects “the significant number of recent major project announcements and growing opportunities for the oil and gas sector.”That’s a far cry from the significant turbulence which marked Quebec’s economic situation in the 1970s — high inflation, rising public debt which strained public finances, and tax hikes on higher earners that made it harder to attract and retain corporate head offices and executives.Alberta is currently outperforming the rest of Canada economically with GDP growth forecasts stronger than national averages. According to Statistics Canada, Alberta added 78,500 of 99,000 new jobs created nationwide over the past 12 months, most of which were in the private sector.Major investment announcements have also continued despite the ongoing debate on independence.Meta recently announced a $13 billion AI data centre in Sturgeon County, and in April, Shell announced a deal to acquire Calgary-based ARC Resources in a transaction valued at approximately $22 billion, marking a strong return by the company to Alberta’s Montney formation..Meta making over $10B AI data centre investment in Alberta.“Alberta's economy is strong, both at present and likely to be so well into the future,” Tombe said.“It's got a lot of advantages, not just natural resources, but demographics and a young population here, which I think speaks very highly to the province's long-term future.”He cautioned, however, that policy uncertainty regarding independence could still come into play and questioned what effect a ‘yes’ vote would have on investment levels.“Separation is not some automatic thing, it's a negotiated process,” he said.“You could imagine negotiations that are smooth and you could also imagine negotiations that are not so smooth. The economic implications of those two scenarios would be very different.”Despite political talking points, the historical record suggests there was no single event that drove BMO and corporate Canada out of Montreal but rather multiple forces that happened to converge at once at one unique point in history..UPDATED: Keith Wilson says Alberta independence is 'necessary' in debate with Jason Kenney.Quebec's experience offers a useful historical reference point, but not a template for Alberta.The two sovereignty movements differ, with Quebec's rooted in language and cultural nationalism and Alberta's driven by economic and political imbalance.Quebec was/is a net recipient in Confederation; Alberta is the net contributor.And unlike banks and corporations, the natural resources that are the backbone of Alberta’s economic might can’t relocate."Oil sands plants can't leave, petrochemical plants can't leave. The oil and gas isn't going anywhere,” Wilson said during his May 25 debate with former premier Jason Kenney, discussing the Quebec comparison.“Alberta's different."

IN-DEPTH: Did Quebec sovereignty drive BMO and businesses from Montreal? History gives a complicated answer

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