Christopher Skeete: Montreal is the only serious choice for defence bank

Tourists visit the lookout on Mount Royal to take in Montreal’s skyline Wednesday July 24, 2024. Photo by John Mahoney /Montreal Gazette

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Second in a series from advocates for the five Canadian cities vying to be the home of the new Defence, Security and Resilience Bank.

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Europe is rebuilding its defence industrial base at a speed unseen since the 1950s. North America is fragmenting its trade and alliance relationships at a comparable pace. Amid this shift, Canada and a coalition of partners are launching the Defence, Security and Resilience Bank — the first multilateral lender designed for the security economy that is now emerging. Multilateral lenders are shaped by their host environments.

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The European Bank for Reconstruction and Development was placed in London in 1991 to anchor it in Europe’s deepest capital market at a moment when private finance had to be mobilised at scale. The DSR Bank faces a placement question of similar consequence, and a more difficult one. It must finance dual-use industrial capacity at a moment where capacity is being rebuilt. A host city for this bank should meet three tests.

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First, it should bridge European and North American defence and financial communities. Second, it should sit inside the dual-use industrial ecosystem that the bank is designed to underwrite. Third, it should already operate in a diplomatic and multilateral ecosystem such an institution requires.

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Montreal meets these tests in a way no other city in North America does, and few cities in Europe could match.

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It is the only North American metropolis where French is the official language and where English remains unavoidable in business, science and diplomacy. Montreal hosts more than 70 international organizations. That’s the third-largest concentration on the continent, after New York and Washington. The Francophone Capital of the Americas is most notably the seat of the International Civil Aviation Organisation.

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Over six decades, Quebec has built the policy framework, the diplomatic protocols and the inter-governmental practice required to host multilateral institutions. The plumbing is already in place. The industrial fit is closer still. Montreal is the world’s third-largest aerospace cluster after Toulouse and Seattle, with more than 230 firms and 43,000 jobs. Quebec accounts for three-quarters of Canadian aerospace research and development and close to a third of Canadian defence exports.

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The same metropolitan area hosts one of the two leading concentrations of artificial intelligence research in the world, anchored by Mila and a research base now integrated into defence and dual-use applications. A bank whose mandate combines defence, security and resilience cannot credibly operate from a city that does not produce the technologies it is meant to finance. The financial environment carries the rest.

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Montreal is home to global insurers, pension funds with deep infrastructure and project-finance experience, and a workforce capable of supporting a multilateral lender from its first operational quarter.

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None of this is an argument against Canada’s other major cities, all of which have legitimate claims to international institutions of various kinds. The decision before the Canadian government and its international partners is whether the DSR Bank will be built to match the seriousness of the moment that produced it. It calls, in short, for Montreal.

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Christopher Skeete is Quebec minister of international relations and la Francophonie.

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