The Montreal effect

Yet, within 50 years and in far easier economic times, the HQ had gone. So, too, had Montreal's status as the country's commercial capital. Why? Because of the rise of Quebec nationalism.

That - at least - is the story told over and over again by the French-speaking province's once powerful Anglophone elite and, now, increasingly, by those who fear Scotland's constitutional wranglings will hurt business here, too.

Myrlande Dallien lives with this fear. The Francophone finance worker is on her lunch in Dorchester Square, in the ­shadows of Sun Life's 60ft Corinthian columns. This spring she was one of a clear majority of voters who gave the pro-independence Parti Quebecois (PQ) - sovereigntists, rather than nationalists, to use the local jargon - their biggest hammering since Sun Life finally quit Montreal in 1984. Her reason: the PQ couldn't quite bring themselves to rule out a third referendum after losing two previous ones, by 3-2 in 1980 and by just 50,000 votes in 1995.

"I don't think Quebec would be sustainable by itself," she said. "And I don't think our financial institutions would do well outside Canada."

Her city has even given its name to the shedding of HQs and jobs because of independence uncertainty: the Montreal Effect.

Quebec's principal city had 96 of the HQs of Canada's top 500 companies in 1990, according to the Fraser Institute. By 2011, it had 75. That is a drop in nearly two decades from nearly three HQs for every 100,000 of Montreal citizens to just two. Even the Bank of Montreal now has its headquarters in Toronto.

And this post-1990 exodus comes on top of the flight of capital and people after 1977's landmark Bill 101, the law that forced Anglophone managers to address their majority French workers in their own language.

Scotland is still on its first - and perhaps last - referendum. But after seven years of nationalist government and two months away from the big vote, is there any sign of a Montreal Effect here? The Sun Life of Scotland - Standard Life - earlier this year made precautionary noises, outlining contingency plans to re-register some of its business in England if there is a Yes in September. Some prominent business people have threatened to quit, including bra tycoon and staunch unionist Michelle Mone. But Scottish-based businesses haven't reached Quebec levels of fear. Why? And what would it look like if they did?

Brad MacKay cautions against visions of removal vans outside banks accompanied by dramatic political declarations such as those made by Mone. The Ontario-born professor at Edinburgh University knows that businesses, especially those in the financial sector or with substantial UK-wide customer bases, are worried. How? He's surveyed them. But he reckons they are waiting to see how the vote plays out - and, perhaps more importantly, to see how negotiations go after any Yes vote. Even then, he said, they may not blame the indyref if they do choose to leave or downgrade investment.

He said: "One of the issues that is coming up with the business community here is the so-called Montreal Effect, basically the concept that the uncertainly of independence could lead to investment being directed outside of Scotland.

"But even if you talked to Canadian businesses which relocated from Montreal to Toronto they would cite commercial reasons, not political ones. This is for the same reason that you would see in Scotland too: most businesses try to maintain political neutrality, even many years after the fact."

MacKay - along with others familiar with Quebec and Scotland - advises against drawing too many parallels between Canada and the UK. English-speaking executives in Montreal, after all, were often fleeing language laws as much as the prospect of constitutional change. And largely monoglot Scotland has no equivalent of Quebec's Bill 101. Corporate Canada also saw the PQ's social-democracy as anti-business. So pre-indyref, we are seeing fewer jitters.

But MacKay and his colleagues do find real concern among businesses as they survey them. "One of the key issues is currency," he said. "I personally am not convinced there would be a currency union. But there is also the issue of having a single macro-prudential regime for the whole of what would have been the UK. I think the future of financial services operating across the UK would be problematic if there was a Yes vote."

Quebec, of course, didn't have one vote. It had two. Anglophones called this "the Neverendum".

Dennis Dawson is a Canadian senator and was a No campaigner in both the 1980 and 1995 elections. He stressed the debate wasn't just politically divisive, but commercially divisive too.

"It split families," he said. "But it also split companies, it split organisations. There was an expression used by Robert Bourassa [a former federalist or unionist premier of Quebec] during the 1980 referendum. 'There is nothing,' he said 'more nervous than a million dollars.'

"Investors don't like instability. It's not that they necessarily dislike sovereignty. The debate was more damaging than what the result could have been, whatever it was. You have seen the number of HQs that moved out to Toronto after the sovereigntists came to power in 1976. Investment did not grow so quickly in Quebec as elsewhere."

Quebecers are widely thought to have moved away from the sovereigntists, forming a "Generation Non" of young people who have essentially turned their back on Anglophone Canada but who don't see the need to go the final step and become independent. Last week, in La Presse, the province's biggest French-language paper, an academic from the University of Ottawa explained why.

"Put simply, like Quebec, Scotland is simply a region too rich to become independent," Philippe Prevost said. "The economic and social risks involved in a separation are seen by a majority of the population to be too high compared with the potential gains independence supporters are trying to sell." Other newly would-be independent nations, he stressed, have had less to lose. Montenegro, East Timor and South Sudan, for example, have GDP per capita of just one-tenth of Scotland or Quebec's level.

Such is the level of economic activity in Scotland that businesses could have much more to lose if there is even a slight economic wobble at independence.

Similar risks in Quebec meant some businesses threw firms into the Non camp with a passion still not seen in Scotland. In the final days of the 1995 referendum, the chief executive of Bombardier, one of Quebec's biggest companies and the inventor of the snowmobile, made a passionate plea for a No vote. Laurent Beaudoin was seen to tremble with emotion at a meeting of Montreal business leaders, He said "economic disruption" could mean he would have to move jobs to the United States. He got a standing ovation.

Jacques Parizeau, an economist, the premier of Quebec and one of the leaders of the Oui campaign, was appalled. He said Beaudoin was "spitting in the soup" of his workers. Will any major Scottish employer dare do the same if polls ever get to the knife edge they had in Quebec?