Win augurs well for energy, resource development and First Nations

couillard

On April 7, 2014, Quebec elected a majority Liberal government.  The Liberals have 70 out of 125 seats in the National Assembly and garnered 41% of the vote.  The outgoing Parti Québécois has 30 seats and 25% of the popular vote.  Barring extraordinary events, the Liberals will be able to govern until the next fixed election date in October 2018.

What are the implications of the Liberal victory for electricity, mining, oil & gas, the Plan Nord and First Nations?

Electricity

On the production and transmission side, little change is expected. Projects under construction will be completed and the upcoming call for tenders for 450MW of wind power should proceed.  The Liberals will want to increase exports and as a result will encourage transmission projects.  On the consumption side, electricity rates will continue to rise but not necessarily for large industrial consumers. The new government should be more open to using current surpluses to retain industry and encourage investments.

Mining

The recently adopted mining regime may be tweaked but will essentially remain.  The big difference will be in attitude. The mining industry will now deal with a government unhesitatingly in favor of mining and other natural resource development, subject in all cases to social acceptability and the protection of the environment.

Oil & Gas

The Liberals are generally accepting of the proposed pipeline reversal and construction projects, provided that they benefit the Quebec economy. The Liberals are also in favor of shale gas and oil exploration and development and will put in place a proper legal and tax regime.  The Liberals,however, are not in favor of massive governmental investment in oil & gas exploration.  They are of the view that it is not government’s role and that it is ill equipped  to incur the considerable risks associated with this activity.  As such, the Anticosti oil exploration deals recently signed by Quebec may be revisited. Negotiations with the Federal government regarding the Old Harry offshore oil field should proceed more smoothly now that Quebec has a pro-Canada government.

Plan Nord

Though at present it is more marketing slogan than detailed plan, the Plan Nord is back and will be an important economic development tool.The Liberals now have time to develop the Plan Nord in a deliberate manner.

First Nations

In his acceptance speech, incoming Premier Philippe Couillard specifically mentioned First Nations and his desire to partner with them on projects (read energy, natural resource and infrastructure projects).  This gracious gesture is something new, but is also reflective of the fact that Dr. Couillard ran and was elected personally in the constituency of Roberval, which extends over a large area of north-central Quebec, extending north from the Saguenay region. He now considers this area his “home.” It augurs well for a smoother and more rapid development of natural resources in much of Quebec.