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Montreal Mayor Gerald Tremblay, right, Minister of Public Works Christian Paradis, centre, and provincial Finance Minister Raymond Bachand congratualte each other at a news conference announcing the return of the Canadian Grand Prix to Montreal. ((Graham Hughes/Canadian Press))

Formula One will return to Montreal for at least the next five years, government officials announced Friday.

The Quebec race was removed from the Formula One circuit in October 2008 over a contractual dispute, to the dismay of civic leaders and merchants.

But government officials said they have reached a new agreement with F1 boss Bernie Ecclestone to bring the Grand Prix back to North America.

The deal includes $15 million in annual contributions from the three levels of government — $5 million from the federal government, $4 million from Quebec and $1 million from Montreal.

Tourism Montreal will also contribute $5 million to keep the race in Montreal.

In return, the city and its partners will receive a 30 per cent share of ticket sales.

'Montreal is a great race – it is one of the races that has the highest TV ratings in the world.'—Quebec Finance Minister Raymond Bachand

The deal includes an option to renew for another five years, officials said.

"This agreement is a win-win situation for the Quebec taxpayer, and for the Canadian taxpayer," said Quebec Finance Minister Raymond Bachand.

"For Quebec, this event by itself results in annual tax revenues of more than $10 million, for a $4 million investment, minus revenues from ticket sales," Bachand said.

Formula One, and the corporation that holds the lease for the Gilles-Villenueve Circuit, the Société du parc Jean-Drapeau, will be responsible for organizing the race and will assume the burden of the risk involved, Bachand said.

"The return of Canada’s Grand Prix was very important for Montreal," said Mayor Gérald Tremblay. "Important for the international notoriety of Quebec’s metropolis, important for the economic benefits."

Tremblay described the lengthy negotiations with Ecclestone as "very positive and constructive."

"He wanted the Grand Prix to come back to Montreal," Tremblay said.

Not at any price

The agreement is significantly less than the $175-million, five-year partnership Ecclestone had sough.

"We wanted a Grand Prix, but not at any price," Tremblay said.

Bachand said the current economic context played a role in persuading Ecclestone to accept a "more reasonable" deal.

Last year "the world economy was different … there were lots of cities looking for Formula One," Bachand said. "Of course the world has changed since Decemeber and January."

Ecclestone was also influenced by pressure from the race teams and fans, Bachand said.

"You know, Montreal is a great race – it is one of the races that has the highest TV ratings in the world – so finally he came back."

Officials denied reports that Ecclestone had sought to avoid paying taxes in Canada.

Tremblay said he expects next year’s race to be a great success.

"We had a phone call from the organizer of the NASCAR race, and … everyone is phoning to secure tickets for the Formula One event," Tremblay said. "The fans have been waiting for this and the fact that we didn’t have it last year means they are eager to attend."

World-class race promised

Despite the fact BMW, Honda and Toyota have pulled out of F1, Bachand said officials have been guaranteed a world-class race.

"We have an option if we consider that that isn’t the case we have an option to pull out of the contract," Bachand said. "That being said as far as I know, Ferrari, MacLaren and Williams — which are three of the key teams — are still there."

The race has an economic impact on the city of about $89 million a year, officials said.

The Montreal Grand Prix attracts more than 300 million television viewers from 144 countries.

The next race is June 13, 2010 at the Gilles-Villeneuve Circuit.