Jacques Cartier explored the area of modern Montreal in 1535, but the first French settlement was not established until 1642. By the early 18th century, Montreal had become the commercial center of New France. The capture of the city in 1760 by British forces during the Seven Years’ War effectively ended French political control. By the terms of the Treaty of Paris, Montreal and New France were formally transferred to Britain in 1763. Many merchants returned to France, enabling British businesses to gain gradual control as the local economy shifted from the fur trade to shipbuilding and industry. By 1850, the population reached 50,000, then doubled during the next 20 years. Completion of the Canadian Pacific Railway in 1885 further enhanced the industrial capacity of the city, and by 1914, the population had grown to almost a half million.
In 1901, Montreal was made up almost totally of French (60.9 percent) and British stock (33.7 percent), an unusual lack of diversity for a major North American city. This changed significantly between 1900 and 1914, with a large influx of Europeans, most notably Jews, Germans, Poles, and Ukrainians. By 1911, these newcomers accounted for almost 10 percent of the population. After 1930, an increasing number of Italians, Greeks, Chinese, blacks from the United States and the Caribbean, and Lebanese arrived. Following the disruptions of World War II (1939–45), there were significant influxes from Germany, Greece, Portugal, and Italy. Relaxed immigration rules in the early 1960s led to development of the first Haitian community. Although Montreal had become considerably more diverse by the 1960s, it was still largely a European city. After 1970, immigration to Montreal was characterized by the shift in source countries from Europe to various parts of the developing world and the favoring of immigrants from former French colonies, especially Vietnam, Haiti, Morocco, and Algeria. A significant number of Central Americans and South Americans also began to arrive. With the retrocession of Hong Kong to China in 1997, Chinese immigration to Montreal was high in the 1990s.
With the majority of the population of French descent, there was considerable ethnic tension in Montreal during the 20th century. It was most evident over the question of conscription during World War I (1914–18) and World War II. During the 1960s and 1970s, Quebec Province was the center of a French-Canadian nationalist movement whose supporters were known as Quebecois; some sought full independence for the province of Quebec. By the 1960s, Montreal had become a polyglot city and was losing some of its distinctive French character, particularly as more French speakers moved to the suburbs. The debate over the value of immigration was often heated, especially as it tended to support a greater use of the English language. In the years following the terrorist attacks of September 11, 2001, there was a growing reluctance to welcome more immigrant from Islamic countries. Although Montreal was a relatively lowcrime city, rising crime rates were sometimes attributed to immigrants, as in the case of Iranian refugees arriving in the early 1980s who had connections with the Southeast Asian heroin trade. By the late 1990s, more than 100 had been convicted of drug trafficking. Nevertheless, a study conducted throughout the 1990s demonstrated that most immigrants in Montreal blended well within the society and that their use of French in public life was only slightly lower than that of native Montrealers.
By summer 2002, Quebec Province was actively seeking ways to encourage immigrant settlement outside Montreal, but found the lack of specialized jobs a stumbling block. At the same time, Canadian immigration minister Denis Coderre observed that Canada would face a shortage of up to 1 million skilled workers within five years, suggesting the likelihood that the Montreal immigrant community would continue to grow.