Clash of visions between Legault and Sabia on the decarbonization of businesses

Photo: Jacques Boissinot The Canadian Press Michael Sabia, during a parliamentary committee held on November 30, 2023, in Quebec City

With all due respect to the president and CEO of Hydro-Québec, it is the companies “that have the greatest impact on Quebecers” — whether they are from here or elsewhere — that will benefit in the future from the megawatts (MW) allocated by Quebec, Premier François Legault ruled Tuesday.

“If a company creates jobs at $50 an hour, then another creates jobs at $20 an hour, well, I choose the one at $50 an hour,” said the Coalition avenir Québec (CAQ) representative, back in the National Assembly in an atmosphere marked with a hot iron by the theme of energy. “We look at the companies that have the most spinoffs for Quebecers”

In the morning, the big boss of Hydro-Québec, Michael Sabia, had rung the bell for the return of Parliament by commenting first on Pierre Fitzgibbon's controversial Bill 69 on energy, bequeathed by the resigning representative to the new Minister of Economy and Energy, Christine Fréchette, last week.

And Mr. Sabia put his “cards on the table.” Questioned by Liberal MP Marwah Rizqy, the CEO of Hydro-Québec publicly questioned the former “superminister’s” directions, which he said threaten the Crown corporation’s objectives in terms of decarbonizing the industry, in addition to opening the door to the “cannibalization” of its electricity production.

“Up until now, the government has put a lot, a lot of emphasis on new businesses,” noted Mr. Sabia, disagreeing with former Minister Fitzgibbon’s propensity to use Hydro’s energy blocks to attract foreign companies. “I think we need to rebalance things.”

In its action plan filed last year, the Crown corporation clearly stated its preference for the decarbonization of local businesses, to which it planned to allocate 75% of its future power, compared to 25% to “fuel economic growth.”

“Is this distribution respected in all of [the government’s] decisions to date?? It’s not entirely obvious,” agreed Mr. Sabia on Tuesday.

Before his resignation, Pierre Fitzgibbon had notably granted a share of the available megawatts to the Northvolt plant in Montérégie, whose parent company is now in serious financial difficulties. Mr. Sabia's predecessor at Hydro, Sophie Brochu, also made headlines in 2022 by calling on the Legault government to avoid making the state-owned company an energy “Dollarama” for foreign companies.

“Not Quebec First”

The red flags raised in the morning by Michael Sabia quickly moved to the Red Room, where Quebec MPs began a stay of about two years on Tuesday, while waiting for the Blue Room to undergo major renovations.

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Based on the comments of the big boss of Hydro, the interim leader of the Quebec Liberal Party (PLQ), Marc Tanguay, first criticized Premier Legault for abandoning Quebec's small and medium-sized businesses. “Whether it's a project that comes from Sweden, China or Beauce, it's all the same for this government… It's not 'Quebec First',” he lamented, prompting the leader of the CAQ government to retort that the PLQ was no longer “the economic party we knew.”

In the House, Québec solidaire MNA Haroun Bouazzi criticized the government for “opening the way to the privatization of our national jewel” by providing in Bill 69 that electricity would be distributed by private third parties to private third parties. Speaking in committee, Parti Québécois MNA Pascal Paradis expressed his fears that the legislation would become a “Trojan horse” for the private sector.

In response to Mr. Bouazzi’s questions on Tuesday morning, Michael Sabia had rightly called on the government to be cautious with the private sector. “There is always a risk of cannibalization, because a worker who works on a project [in the private sector] is not available for Hydro-Québec projects,” he said.

Speaking about a self-production and electricity sales project located in Shawinigan, TES Canada, Pierre Fitzgibbon had already stated that “this [was] only the beginning,” reported Radio-Canada in 2023.

“Working more closely”

Despite his reservations expressed about the work of former Minister Fitzgibbon, Michael Sabia reached out to the Legault government on Tuesday. With his gaze turned toward Minister Fréchette, the CEO of Hydro loudly stated his intentions to build a close professional relationship with his new counterpart. “We are going to work more closely in the future,” he maintained.

On the electricity rate issue, the bigwig at Hydro-Québec did not wait until his appearance before the parliamentary committee to agree with the government’s vision on Tuesday morning. In a short press scrum before the parliamentary media, he insisted on the need to keep costs at “affordable” levels for Hydro-Québec customers.

“In my opinion, there is a social pact that is fundamental here in Quebec and that is to keep residential rates very low,” he said. “There is a lot of noise on this subject, but let me be very clear: residential rates will be limited to 3%, and for commercial and industrial customers, we are talking about something like 4% to 5%.”

The CEO Hydro has thus stuck to the promise reiterated last week by Premier François Legault: not to increase residential rates beyond 3% annually as long as he is in power.

Minister Fréchette will continue to study Bill 69, inherited last week from Pierre Fitzgibbon, over the next two weeks.

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