Basically the strain of European Jews who came to Montreal favored smoked meat whereas the European Jews who came to NYC liked pastrami better.
Pastrami is sometimes made from brisket, but you are correct that the NY style pastrami served in the hardcore old school Jewish delis generally is a fattier cut of meat than typical Montreal smoked meat. However, some places in Montreal, like Snowdon Deli, offer choices of a fattier smoked meat. So the distinctions between Pastrami and Smoked Meat are blurring a little bit because you can get lean pastrami or fatty smoked meat. I have had lean pastrami that is leaner than Schwartz's smoked meat, but I do not like it as much as the typical pastrami of NYC.
BTW Pastrami is smoked and steamed. Just like smoked meat- although as you noted the curing process is different.
Suffice it to say that Pastrami and Smoked Meat are first cousins in the world of smoked meats. Italian Prosciutto and Spanish Serrano Jamon are more like 2nd or 3rd cousins. I think they are made out of pork as well, removing them further from the Pastrami and Smoked Meat lineage.
