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Montréal's history is a fascinating story of sparkling successes followed by dramatic downs. Over the centuries the city has swung from the proverbial economic/political centre-of-the-Canadian universe, only to see-saw back into a kind of national backwater. The city's evolution has been anything but smooth, usually involving two steps forward and one step back.

The recent past

Canada's most important decision after WWII was to create a welfare state. Ottawa intended to concentrate federal power by keeping control over key taxation and social programs in all provinces. It was at this crucial juncture that Québec's nationalists seized their chance to launch their state within a state.

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Quiet revolution

In 1960 the nationalist Liberal Party won control of the Québec assembly and passed sweeping measures that would shake Canada to its very foundations. In the first stage of this Quiet Revolution, the assembly vastly expanded Québec's public sector and nationalized the provincial hydroelectric companies.

Suddenly francophones - who had long been denied equal rights in the private sector - were able to work in French and develop their skills in white-collar positions. Still, progress wasn't swift enough for radical nationalists, and by the mid-1960s they claimed Québec independence was the only way to ensure francophone rights.

To head off clashes with Québec's increasingly separatist leaders, Prime Minister Pierre Trudeau proposed two key measures in 1969: Canada was to be made fully bilingual to give francophones equal access to national institutions; and the constitution was to be amended to guarantee francophone rights. Ottawa then pumped cash into French-English projects which, nonetheless, failed to convince francophones that French would become the primary language of work in Québec.

In 1976 this lingering discontent helped to elect René Lévesque and his Parti Québécois, committed to the goal of independence for the province. The following year the Québec assembly passed Bill 101, which not only made French the sole official language of Québec, but also stipulated that all immigrants enroll their children in French-language schools. The trickle of anglophone refugees turned into a flood. Alliance Québec, an English rights group, estimates that between 300, 000 and 400, 000 anglos left Québec during that period.

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The almost-distinct society

The Quiet Revolution heightened tensions not only in Québec but across Canada. After their re-election in 1980, federal Liberals, led by Pierre Trudeau, sold most Quebecers on the idea of greater rights through constitutional change, helping to defeat a referendum on Québec sovereignty the same year by a comfortable margin. Québec premier Robert Bourassa then agreed to a constitution-led solution - but only if Québec was recognized as a 'distinct society' with special rights.

In 1987 the federal Conservative Party was in power and Prime Minister Brian Mulroney unveiled an accord that met most of Québec's demands. To take effect, the Meech Lake Accord needed ratification by all 10 provinces and both houses of parliament by 1990. Dissenting premiers in three provinces eventually pledged their support, but incredibly the accord collapsed when a single member of Manitoba's legislature refused to sign.

The failure of the Meech Lake Accord triggered a major political crisis in Québec. The separatists blamed English-speaking Canada for its demise, and Mulroney and Bourassa subsequently drafted the Charlottetown Accord, a new, expanded accord. But the separatists picked it apart, and in October 1992 the second version was trounced in Québec and five other provinces. The rejection sealed the fate of Mulroney, who stepped down as prime minister the following year, and of Bourassa, who left political life a broken man.

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Referendum & rebirth

In the early 1990s Montréal was wracked by political uncertainty and economic decline. No one disputed that the city was ailing. The symptoms were everywhere: corporate offices closed down and moved their headquarters to other parts of Canada, shuttered shops lined downtown streets, and derelict factories and refineries rusted on the perimeter. Relations between anglophones and francophones, meanwhile, plumbed new depths after Québec was denied a special status in Canada.

The victory of the separatist Parti Québécois in the 1994 provincial elections signaled the arrival of another crisis. Support for an independent Québec rekindled, and a referendum on sovereignty was called the following year. While it first appeared the referendum would fail by a significant margin, the outcome was a real cliff-hanger: Quebecers decided by 52, 000 votes - a razor-thin majority of less than 1% - to stay part of Canada. In Montréal, where the bulk of Québec's anglophones and immigrants live, more than two-thirds voted against sovereignty, causing Parti Québécois leader Jacques Parizeau to (in) famously declare that 'money and the ethnic vote' had robbed Québec of its independence.

In the aftermath of the vote, the locomotives of the Quiet Revolution - economic inferiority and linguistic insecurity among francophones - ran out of steam. Exhausted by decades of separatist wrangling, most Montrealers put aside their differences and went back to work.

Oddly enough, a natural disaster played a key role in bringing the communities together. In 1998 a freak ice storm - some blame extra-moist El Niño winds, others blame global warming - broke power masts like matchsticks across the province, leaving over three million people without power and key services in the middle of a Montréal winter. Some people endured weeks without electricity and heat but regional and political differences were forgotten as money, clothing and offers of personal help poured into the stricken areas. Montrealers recount those dark days with a touch of mutual respect.

As the political climate brightened, Montréal began to emerge from a fundamental reshaping of the local economy. The city experienced a burst of activity as sectors like software, aerospace, telecommunications and pharmaceuticals replaced rust-belt industries like textiles and refining. Québec's moderate wages became an asset to manufacturers seeking qualified, affordable labor, and foreign investment began to flow more freely. Tax dollars were used to recast Montréal as a new-media hub, encouraging dozens of multimedia firms to settle in the Old Port area.

The upshot is a city transformed and brimming with self-confidence. Rue Ste-Catherine teems with trendy boutiques and department stores; Old Montréal buzzes with fancy hotels and restaurants; once-empty warehouses around town have been converted to chic apartments and offices. The Plateau has become one of North America's hippest neighborhoods.

Montréal's renewed vigor has lured back some of the anglophones who'd left in the 1980s and '90s. Language conflicts have slipped into the background because most young Montrealers are at least bilingual, and for the first time there are more homeowners than renters and property prices have soared. Montrealers here in the early 90s remember renting Plateau apartments with balcony views of Parc LaFontaine for only $250 while the same apartment wouldn't rent for less than $700 these days. Condo-talk and real-estate conversations unheard of before are now de rigueur everywhere from downtown restaurants to Mile End cafés.

Though less divisive than in times past, contemporary Québec faces thorny issues in areas like civil rights of minorities, administration and the welfare state: English-language education is denied to many families and Montréal's new island-wide administration is under severe strain. Jean Charest's Liberals successfully knocked the separatist Parti Québécois out of office in 2003 but the federalist party has had a rocky ride since then and has been the target of dozens of demonstrations by workers for wanting to cut public-sector jobs, hiking day-care prices from $5 to $7 and pruning Québec's bloated bureaucracy.

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From the beginning

The Island of Montréal was long inhabited by the St Lawrence Iroquois, one of the tribes who formed the Five Nations Confederacy of Iroquois. In 1535 French explorer Jacques Cartier visited the Iroquois village of Hochelaga (Place of the Beaver) on the slopes of Mont Royal, but by the time Samuel de Champlain founded Québec City in 1608, the settlement had vanished. In 1642 Paul de Chomedey de Maisonneuve founded the first permanent mission despite fierce resistance by the Iroquois. Intended as a base for converting aboriginal people to Christianity, this settlement quickly became a major hub of the fur trade. Québec City became the capital of the French colony Nouvelle-France, while Montréal's voyageurs (trappers) established a network of trading posts into the hinterland. After the British conquest of Montréal in 1760, Scottish fur traders consolidated their power by founding the North West Company.

The American army seized Montréal during the American Revolution (1763-1783) and set up headquarters at Château Ramezay. But even the formidable negotiating skills of Benjamin Franklin failed to convince French Quebecers to join their cause, and seven months later the revolutionaries decided they'd had enough and fled empty-handed.

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Industrial revolution

In the early 19th century Montréal's fortunes dimmed as the fur trade shifted north to the Hudson Bay. However, a new class of international merchants and financiers soon emerged, founding the Bank of Montréal and investing in shipping as well as a new railway network. Tens of thousands of Irish immigrants came to work on the railways and in the factories, mills and breweries that sprang up along the Canal de Lachine. Canada's industrial revolution was born, with the English clearly in control.

The Canadian Confederation of 1867 gave Quebecers a degree of control over their social and economic affairs and acknowledged French as an official language. French Canadians living in the rural areas flowed into the city to seek work and regained the majority. At this lofty point in time, Montréal was Canada's premier railway center, financial hub and manufacturing powerhouse. The Canadian Pacific Railway opened its head office there in the 1880s, and Canadian grain bound for Europe was shipped through the port.

In the latter half of the century, a wave of immigrants from Italy, Spain, Germany, Eastern Europe and Russia gave Montréal a cosmopolitan flair that would remain unique in the province. By 1914 the metropolitan population exceeded half-a-million residents, of whom more than 10% were neither British nor French.

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War, depression & nationalism

The peace that existed between the French and English ran aground after the outbreak of WWI. Many thousands of French Quebecers signed up for military service until Ontario passed a law in 1915 restricting the use of French in its schools. When Ottawa introduced the draft in 1917, French-Canadian nationalists condemned it as a plot to reduce the francophone population. The conscription issue resurfaced in WWII, with 80% of franco- phones rejecting the draft and nearly as many English-speaking Canadians voting yes.

During the Prohibition era Montréal found a new calling as 'Sin City', as hordes of free-spending, pleasure-seeking Americans flooded over the border in search of booze, brothels and betting houses. But with the Great Depression the economic inferiority of French Canadians became clearer than ever.

Québec's nationalists turned inward with proposals to create co-operatives, nationalize the anglophone power companies and promote French-Canadian goods. Led by the right-wing, ruralist, ultraconservative Maurice Duplessis, the new Union Nationale party took advantage of the nationalist awakening to win provincial power in the 1936 elections. The party's influence would retard Québec's industrial and social progress until Duplessis died in 1959.

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Grand projects

By the early 1950s the infrastructure of Montréal, by now with a million-plus inhabitants, badly needed an overhaul. Mayor Jean Drapeau drew up a grand blueprint that would radically alter the face of the city, including the metro, a skyscraper-filled downtown and an underground city. The harbor was extended for the opening of the St Lawrence Seaway.

Along the way Drapeau set about ridding Montréal of its 'Sin City' image by cleaning up the shadier districts. His most colorful nemesis was Lili St-Cyr, the Minnesota-born stripper whose affairs with high-ranking politicians, sports stars and thugs were as legendary in the postwar era as her bathtub performances.

The face of Montréal changed dramatically during the 1960s as a forest of skyscrapers shot up. Private developers replaced creaking Victorian-era structures with landmark buildings such as Place Bonaventure, a modern hotel-shopping complex, and the Place des Arts performing-arts center. The focus of downtown shifted from Old Montréal to Ville-Marie, where the first passages of the underground city took shape. The skyscraper at Place Ville-Marie was the most important skyscraper in Montréal throughout the 1960s and for decades afterwards.

Around 1960 Montréal lost its status as Canada's economic capital to Toronto. But new expressways were laid out and the métro was finished in time for Expo '67 - the 1967 World's Fair - a runaway success that attracted 50 million visitors. It was the defining moment of Montréal as a metropolis, and Mayor Drapeau was encouraged to launch the city's candidacy for the 1976 Olympics. A snazzy stadium complex was built for the event, but unlike the highly successful Expo '67, it was completed late and amassed a mountain of debt.

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