Canadian financial services firms, buoyed by a strong Canadian dollar and low interest rates at home, are expanding their international ambitions and increasingly finding New England the place to launch them.

Power Financial Corp. of Montreal yesterday agreed to buy Boston mutual fund firm Putnam Investments for $3.9 billion, becoming the latest in a growing line of Canadian companies acquiring New England financial services firms. Power follows Manulife Financial Corp. of Toronto, which bought John Hancock Financial Services Inc. in 2004; Toronto Dominion Bank, which acquired a majority stake in Banknorth of Portland, Maine, in 2005; and Canaccord Capital Inc. of Vancouver, which purchased the Boston investment firm Adams Harkness, now Canaccord Adams, in 2006.

Perhaps the key factor in this Canadian buying spree, analysts and company officials said, is the strength of the New England financial services industry, which operates in one of the nation's wealthiest markets and provides access to one of the industry's deepest talent pools. Similarities in climate, history, and culture make the region a comfortable place for Canadian firms to do business.

Mark Maybank, Canaccord's chief operating officer, said his company decided to enter the US market through Boston in part because it found business values, particularly an ethic of collegiality, similar to those of Vancouver and Toronto, where Canaccord also has a major presence. There was another important similarity, Maybank said: "They're all great hockey cities."
Canadian firms have been able to make their foray into New England and other parts of the United States because of favorable economic conditions in Canada, said Dale Orr, chief economist for Canada at Global Insight, the Waltham forecasting firm. The Canadian economy is growing at a solid pace while the Canadian dollar, known as the "loonie," is near its strongest levels in years, giving Canadians greater purchasing power.

The Canadian dollar is now worth about 85 cents US, up from 65 cents a few years ago.
Meanwhile, historically low interest rates in Canada, about a point lower than in the United States, are fueling a surge in borrowing for homes, cars, and business that is boosting profits of Canadian financial institutions, Orr said. Those growing profits make it possible for the firms to expand, and increasingly they look to the United States.
"It's nice to live just north of the largest consumer economy in the world," said A. Paul Cellucci, former Massachusetts governor and US ambassador to Canada.

Sun Life Financial Inc., one of Canada's largest financial-services companies, kicked off Canadian investment in Boston money firms in 1982 when it bought MFS Investment Management, the company that invented the mutual fund, for $45 million.
New England has longstanding ties to Canada. Nearly 1 million French Canadians immigrated to New England in the 19th and early 20th centuries, providing the labor for textile mills and shoe factories that then drove the region's economy. Their descendants today make up one the region's biggest ethnic groups.

Canada also is New England's biggest trading partner. Massachusetts, for example, exports some $3 billion a year in goods to Canada, accounting for 13 percent of the state's foreign exports. Fast-growing China, in contrast, buys just 5 percent of the state's exports.

Family and business ties have helped make New England a logical entry point into US markets for Canadian firms, said Paul Tellier, a former senior Canadian government official and former chief executive of transportation equipment maker Bombardier Inc. of Montreal. In eastern Canada, he said, "many families have more connections with Boston than with Toronto."
Unlike domestic mergers, foreign acquisitions tend not to lead to job cuts because the companies are looking to expand their reach, as opposed to cutting costs by eliminating duplicative operations, said Todd Malan, president of the Organization for International Investment, a trade group representing foreign subsidiaries in the United States.
"These are market entry strategies," Malan said, "and you tend to find foreign firms making a purchase, then investing and growing."

In Boston, for example, Procter & Gamble Co. sliced hundreds of jobs at Gillette Co. following their merger. Employment at John Hancock, meanwhile, is unchanged, at about 4,000, since Manulife's acquisition, a spokeswoman said. Canaccord boosted its Boston workforce to 155 from about 135.

Ultimately, Canadian business officials said, they have acquired Boston companies because they made sense for their own businesses and strategies. R. Jeffrey Orr, chief executive of Power Financial Corp. cited the "depth of talent and asset-management expertise that exists in Boston" as a factor that could help his company grow. Orr is not related to Orr, the Global Insight economist.

There could be other benefits related to Power's acquisition. Paul Joskow, an MIT economics professor who sits on the board that oversees Putnam's mutual funds, said currently his French is just "passable."
But, he added, "it's getting better all the time."

Robert Gavin can be reached at rgavin@globe.com; Ross Kerber at kerber@globe.com.