Spirit of optimism helps business boom in Montreal. Renewed prosperity linked to decline of separatism

The economy of this city may well have been down for the count in the late 1970s, but today there is a definite change. ``The Montreal economy is booming again,'' claims Pierre Martin, chairman of Gaz M'etropolitain Inc.

For example: In the late '70s the only major building in this second-largest French-speaking city in the world (after Paris) was done by the government. Now more than 10 large new commercial office buildings have or are being built.

``The unseen thing is the optimism of the younger generation of entrepreneurs, investors, and managers,'' says Yvon Marcoux, president of the French-speaking chamber of commerce.

After the 1976 election of the Parti Qu'eb'ecois to power in Quebec -- with the party's advocacy of separatism and introduction of a tougher law promoting the use of French as the language of business -- economic conditions in this city of 2.8 million deteriorated rapidly.

Thirty-two of Canada's 100 largest industrial companies had their head offices in Montreal in 1966. By 1982 only 17 were left. Most had taken their headquarters to Toronto in neighboring Ontario.

Montreal's corporate law firms, accounting companies, consulting and advertising groups, were hit hard. Moreover, more of Canada's financial community shifted to Toronto.

One major factor in the flight was resentment by the English-speaking business power brokers over the language law. Corporate executives complained that, since most of their business was in English-speaking North America, the required use of French at work was restrictive and difficult. In the decade 1971-81, Toronto's population grew 14.1 percent. Montreal's population increased only 3.1 percent -- a drastic decline from the 23.8 percent growth in the previous decade.

Toronto, which had closely trailed Montreal for decades as Canada's most populous city, became Canada's largest metropolis. And while Montreal's population remains basically stagnant, other factors have improved dramatically.

For one thing, Francophones and Anglophones are cooperating. ``The two communities have never been so close,'' says Pierre Fortin, a professor of economics at Laval University. French-speaking Montrealers have won their battle to be able to speak French at work and on the streets. If Montrealers bump on the sidewalk, even an Anglophone's response will likely be ``excus'e'' rather than ``pardon me.'' Pierre MacDonald, a Francophone and senior vice-president of the Bank of Montreal, says of French Canadia ns: ``We have got rid of our inferiority complex.''

Another help to the city has been the rapid increase in education and income levels in Quebec. In 1961, some 55 percent of French-Canadians got no further than 8th grade and only about 3 percent went to university. ``We were quite a poor and illiterate people 25 years ago,'' recalls Mr. Fortin.

Quebec's famous ``quiet revolution,'' starting in the late 1950s and '60s, included massive expenditures on education. By now, some 95 percent of Francophones have at least an eighth-grade education and about 18 percent go to university. This is a level just about the same as in Ontario or Western Canada. Only in graduate education does Quebec still lag behind.

Mr. MacDonald, the new Liberal government's Minister of Trade Affairs, spoke of the shift of French-Canadians from a mostly rural to an urban society, from blue-collar to white-collar jobs, from being untraveled to well-traveled people.

Once better educated, French-speaking Quebeckers also decided, as Fortin put it, ``to become rich.'' Whereas the universities once concentrated on turning out lawyers, teachers, and doctors, they now are handing out a great many more degrees in business, engineering, and the sciences.

French-Canadians are thus better equipped to become executives and businessmen and have succeeded in doing so. The domination of Montreal's business community by its English-speaking residents has lessened if not ended. In the same time span, the proportion of Quebeckers owning corporate stock has risen from about 4-5 percent to 10-11 percent, partially because of a provincial tax encouragement.

``Our aim is not to develop as the second city of Canada next to Toronto, but as one of the 10 largest in North America,'' says Mr. Marcoux, a first vice-president of La Banque d''Epargne.

With that goal in mind, Marcoux has been backing the federal government's proposal for freer trade with the United States.