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MONTREAL – In a bid to rescue an economy in danger of slipping into recession, the Parti Québécois government has launched a multibillion dollar job creation effort anchored by a program that will offer Quebec’s surplus hydroelectric power at below-market rates to corporate investors.
With her minority government one-year old, Premier Pauline Marois has presided over a province that has generated barely 0.1% employment growth during that time. Meanwhile, the wider economy is at a near standstill, according to Desjardins Group, pulled down by a sputtering manufacturing sector and weak international trade.
“The recovery is slow to materialize,” Ms. Marois told an audience in the foyer of pension giant Caisse de dépôt et placement du Québec’s headquarters Monday. “It’s important to act with every means at our disposal.”
Ms. Marois is now betting that she can stoke job growth and private sector investment by using Quebec’s vast hydroelectric resources as a lure. While the PQ has used the tool before — for example, to snare a $1.2-billion investment by Swedish communications technology firm Ericsson AB this year — the party is now enshrining it formally in policy and commanding a specific block of electricity totalling 50 TeraWatt-hours for that purpose.
Investment Quebec is being mandated to seek out big power users willing to make job commitments in exchange for the cheaper electricity. Priority will be given to new investors, especially natural resources transformation companies, electric transport and green energy equipment makers and data warehousing firms.
Hydro-Québec estimates it will have surplus power every year until 2027. The Crown-owned utility saw its revenue from electricity sales fall by $109-million in 2012 amid a decline in purchases from industrial users like aluminum smelters.
As part of its effort to kickstart growth, the Marois government is also speeding up previously-planned public infrastructure investments (which should benefit engineering and construction firms, in theory), and introducing a maximum $10,000 tax credit for home renovations (which should help struggling Rona Inc. and other hardware companies).
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