Quebec again denies risking public funds in Northvolt

Photo: Adil Boukind Le Devoir The site of the future Northvolt battery factory in Montérégie

Alexandre Shields

Published yesterday at 11:24 a.m. Updated yesterday at 3:35 p.m.

• Québec

Under pressure from opposition parties over the financial risks taken by the government, which injected hundreds of millions of dollars of public funds into the Northvolt project, Premier François Legault reaffirmed Tuesday that Quebec took a “calculated risk.”

“One of my greatest prides is having developed the battery industry,” the CAQ leader repeated during question period at the National Assembly. “If we don’t want to take a calculated risk, we don’t do anything,” he added. “I want to reassure everyone. There is no question of adding a penny to Northvolt and withdrawing guarantees,” Mr. Legault also stated. “That Goldman Sachs or other investors ask us for things, I think that’s normal, but the answer is no.”

The Prime Minister was responding to information published Tuesday morning by Radio-Canada indicating that the government would be prepared to lose part of the hundreds of millions invested in the subsidiary established here to save the parent company of the Swedish multinational.

One of the main creditors of the company in difficulty, the American investment bank Goldman Sachs, is in fact demanding access to the assets of the subsidiaries abroad, in particular the one being developed in Quebec, guarantees as a condition for saving the company.

A source close to the matter confirmed the information to The Canadian Press and suggested that the Minister of the Economy, Christine Fréchette, had given her agreement in principle. The latter responded by stating that there was no question of giving up a guarantee on the sums injected by the Quebec government to attract the battery plant project here.

During question period in the National Assembly, the minister did, however, mention “negotiations” in progress, but without giving further details. “We are working to protect the interests of Quebecers and to carry out the project in Quebec,” she maintained, while acknowledging that Northvolt’s “schedule” will be revised this fall.

In total, $510 million in public funds have so far been injected into the Northvolt project located on the banks of the Richelieu River. The government offered a $240 million loan for the acquisition of the land for the future plant, which had been purchased for $20 million in 2015 by its previous owner. Investissement Québec, for its part, paid $270 million to “finance the preliminary activities” of the Swedish company.

In the event of a problem, the Legault government would keep $240 million, the value of the land planned to build the battery plant in Montérégie, indicated the source close to the matter.

“Work is continuing”

Investissement Québec and Northvolt, however, refuse to specify the terms of the purchase of the land that now belongs to the Swedish multinational thanks to the granting of public funds, despite an access to information request.

The Dutyattempted to obtain a copy of the documents detailing the terms and conditions for the purchase of the land that was chosen to house the largest industrial project in Quebec history. However, Investissement Québec refused to provide “the document” in question, citing the “confidential commercial information” it contains.

Northvolt echoed the same sentiment. “The content of this commercial agreement is confidential,” the company said, while reiterating that “work is continuing on the site. We have completed 60% of the excavation of the first building.” Minister Christine Fréchette also stated several times on Tuesday that the various phases of the Northvolt project are still on the agenda.

The opposition nevertheless hounded the government, arguing that public funds are now at risk because of the company's difficulties in financing the continuation of its activities. “You realize the absurdity of the situation, it's shameful,” declared PQ leader Paul St-Pierre Plamondon in a press scrum at the National Assembly, while discussing the possible use of Quebec funds to save the parent company in Sweden.

“In the Northvolt file, we look like happy guests at a dinner for idiots given by Goldman Sachs,” quipped Liberal leader Marc Tanguay.

Solidarity MNA Gabriel Nadeau-Dubois, for his part, played down the $240 million “value” given to the Northvolt land. This land, he recalled, is still contaminated, it is located partly in a flood zone and its former owner had paid $20 million for it in 2015.

With Dave Noël and The Canadian Press

Read also

• A Quebecer Takes Over the Reins of the Northvolt Plant in Sweden
• A Northvolt Subsidiary Responsible for the Expansion of its Swedish Plant Declares Bankruptcy
• In the Battery Industry, “What Counts is the Batting Average,” According to Legault