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Jean-Philippe Buteau is a partner at Norton Rose Fulbright’s office in Quebec. He acts for a variety of clients in the mining and oil & gas industries in Quebec and abroad and has been involved in a number of key Plan Nord projects.
The newly elected Quebec Liberal majority government recently tabled its first budget which, despite a series of measures to address a larger than expected deficit for 2013-14, followed through on a campaign promise to revive the Plan Nord, in an enhanced version.
The Plan Nord was originally introduced in 2011 as a long-term program for the economic and social development of Quebec’s territory situated north of the 49th parallel, through more than $80 billion in public and private investments over a 25-year period. The election of the Parti Québécois in September 2012 resulted in the Plan Nord being halted and then revised and rebranded as “The North for All.”
The implementation of the resurrected Plan Nord will be overseen by the Comité ministériel du Plan Nord, a newly created committee, with support from the Secrétariat au Plan Nord, whose functions will be taken over by the Société du Plan Nord, a new government corporation to be created over the next couple of months.
The Société du Plan Nord will play a key role in implementing the government’s strategy. It will be responsible for co-ordinating the territory’s development in consultation with all partners including local and aboriginal communities, to ensure their support and participation, and with sustainable development in mind.
Funding will be provided through the Northern Plan Fund, endowed with $63 million for 2014-2015. The fund will finance major work on road infrastructure in the Plan Nord territory, including extending Highway 138 and repairing Highway 389 in the Côte-Nord region and the James Bay Highway. The fund is expected to be financed by tax spinoffs generated from the Plan Nord’s mining, energy and public infrastructure projects. The government plans to contribute approximately $2 billion between 2014 and 2035.
The government will also create Capital Mines Hydrocarbures, a $1 billion fund that will acquire equity interests in companies that extract mineral substances in Quebec. The fund will be managed by Ressources Québec, a subsidiary of Investissement Québec. With the $250 million already allocated to Ressources Québec in previous budgets, the fund will benefit from a substantial budget to assist mining companies seeking to secure project financing.
The budget also confirms the government’s funding (up to $20 million), in collaboration with private partners, of a feasibility study for a multi-user rail line from Sept-Iles to the Labrador Trough to open up the iron-ore-rich region and provide the transportation infrastructure necessary to develop several iron-ore projects in the area.
Also, an interministerial committee will be established to ensure the fast delivery of natural gas and liquefied natural gas to businesses in the Côte-Nord region, serviced by sea and land rather than by a new pipeline. The budget also implies that the review process by the Bureau d’audiences publiques sur l’environnement (BAPE) could be conducted through a fast-track review process.
The government will also be investing $100 million in educational infrastructure upgrades and training programs for residents of the north, including $10 million for the training of skilled workers. The government also announced the revival of Quebec Tourism Strategy North of the 49th Parallel, which will benefit from a $3.2 million budget to develop northern Quebec as a word-class northern destination.
Alongside the Plan Nord, Hydro-Québec will invest $1.1 billion between 2016 and 2018 in the transmission line between the Chamouchouane substation in the Saguenay region and the Bout-de-l’Île substation in the Montreal area.
Finally, the budget confirms the current tax regime remains mostly unchanged to restore industry and investor confidence by ensuring the rules are favourable, stable and foreseeable.
The 2014-15 budget clearly confirms that the new government sees the mining industry as a partner and key player in the province’s economic growth. Even if the scope and depth of the new Plan Nord remain to be confirmed, it is already seen as a positive change by an industry that has recently suffered from rough market conditions and changing rules. As we can expect four years of political stability in Quebec, let’s hope the new Plan Nord is carried through to the fullest extent possible for the benefit of both mining companies and Quebec’s citizens.
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