At the same time, the city of Montreal in Quebec was looking to recover from job losses due to disappearing manufacturing and textile industries from the early 1990s. The controlling political party, Parti Québécois (PQ), pursued new job creation in technology, computers, and multimedia. Lobbyist Sylvain Vaugeois, hearing that Ubisoft was searching for jobs, came up with a plan called Plan Mercure which would incentivize Ubisoft to found a studio in Montreal by having the government subsidize each employee for five years, but the government rejected this plan, believing it was too expensive for use of public funds. Vaugeois still went on to meet with Ubisoft, inviting them to visit Montreal and suggesting Plan Mercure was viable, and upon their visit, discovered that they had been misled, leading to some embarrassment on the city and province. PQ representatives of Quebec's and Montreal's government met with Ubisoft to convince them to establish a studio in Quebec after hearing that Ubisoft was considering a studio instead near Boston or in New Brunswick, and recognised they needed to follow on some form of Vaugeois' Plan Mercure to convince Ubisoft to form a studio in Montreal. Pierre Pettigrew, the Minister of Human Resources Development worked with the Quebec and federal government to come to a solution, whereby the two governments would split the previously considered per employee ( from the Quebec government) to provide 500 new jobs to young persons and provide training in the multimedia sector. Ubisoft was agreeable to this, and established Ubisoft Montreal (formally named Ubisoft Divertissements Inc.) on 25 April 1997. The studio was founded in offices in the , a former textile factory, located in the Mile End neighbourhood along Saint-Laurent Boulevard.
