QUEBEC-ONTARIO ELECTRICITY TRADE: FIRST NATIONS WILL NOT BE AN OBSTACLE
Posted on August 27, 2014
In the August 26, 2014 edition of the Globe and Mail, McGill Economics Professor Christopher Ragan wrote an article regarding the sale of electricity from Quebec to Ontario (http://www.theglobeandmail.com/report-on-business/economy/economy-lab/quebec-ontario-electricity-trade-is-smart-but-not-simple/article20196863/). In the piece, Professor Ragan is supportive of Ontario purchasing power from Quebec but lists three “serious problems” that could derail the transaction:
- Canada’s nuclear industry, centered in Ontario, will lobby hard against power purchases from Quebec.
- Quebec’s manufacturing sector will lobby hard against Quebec helping Ontario’s manufacturing sector by providing it with inexpensive Quebec power.
- Quebec will have to build additional generating capacity in the North and Prof Ragan cautions that: “First Nations will demand genuine consultation at every step of the project, and that close attention be paid to the project’s impact on the environment and on traditional hunting and fishing grounds. They will also demand a share of the income generated. The Quebec government will need to recognize the legitimacy of these demands and partner with the First Nations in a genuine and transparent manner. All of this is possible, but it is not simple.”
I agree with Professor Ragan regarding problem 1 above. As for problem 2, I submit that lobbying by Quebec manufacturing, if there were to be any such lobbying at all, would receive short shrift from the current government. The Couillard government is probably the most laissez-faire government that Quebec has had in 50 years. Among other things, it wants to reduce the $3.6 billion in subsidies it yearly pays to Quebec businesses. Also, and perhaps more importantly, new hydro construction would be most welcomed by Quebec’s engineering, construction and electric equipment sector.
As for problem 3, I am surprised that Prof. Ragan views dealing with Quebec’s First Nations as the toughest of the three problems. In fact I do not view such an event as a problem. Rather, it is just something to be done in the ordinary course of business.
My surprise stems from the fact that ever since the Great Whale debacle, Quebec understands and accepts that development in Northern Quebec (north of the 49th parallel) requires reaching agreement with affected First Nations and local communities (http://futureimperfect.ca/what-alberta-and-the-keystone-xl-pipeline-can-learn-from-quebecs-failed-great-whale-project/).
Over the last 25 years Quebec and the Cree Nation have put into place numerous agreements and policies that would serve as relevant and useful precedents for future hydro projects, including as to protection of the environment, traditional hunting and fishing grounds and the sharing of income (http://www.cbc.ca/player/News/TV+Shows/The+National/ID/2385270324/). It is also important to note that First Nations are not against development. It just has to be done the right way.
In other words, should Ontario want to purchase Quebec power, Quebec would in turn have to sit with the Cree Nation or any other affected First Nation and hammer out a business agreement. There is no doubt that this would be a serious and demanding process, but it would not require any change of policy or philosophy on the part of Quebec. It would just be business as usual.