(Rimouski) “It is manageable and financially feasible” to cap rate increases for Hydro-Québec residential customers at 3% per year in the “foreseeable future,” believes François Legault. The premier is making the “political choice” to pass on steeper increases to businesses to finance his energy plan. It is “a gamble with a risk under control,” according to him.
What you need to know
François Legault has appointed Christine Fréchette as Minister of Economy and Energy following the resignation of Pierre Fitzgibbon.
First term of the superminister: to pilot the bill on the energy future of her predecessor, the study of which begins on Tuesday in the National Assembly.
François Legault intends to “protect” residential customers against a rate shock and passes on significant increases in Hydro rates to businesses.
“Business rates in Quebec are the lowest in North America. Even with increases of 4, 5, 6% per year, it will take a long, long time before business rates are equal to what they are elsewhere in other jurisdictions. So I’m not worried,” he said at a press conference in Rimouski on Thursday, at the end of the two-day meeting of the CAQ caucus to prepare for the parliamentary session next week.
This was just before heading to Quebec, where he made a “ministerial adjustment” to appoint Christine Fréchette as Minister of Economy and Energy. The resignation of superminister Pierre Fitzgibbon monopolized attention during the meeting of CAQ MNAs.
Last week, in what would have been his final press scrum, Mr. Fitzgibbon said that “in five years or 10 years, yes, there are going to be significant increases” in rates, beyond 3% for residential customers. He pointed out that companies are already in a sense subsidizing low residential rates. He said there was a “big debate” to be had about how to share the financial burden resulting from the government’s energy plan.
PHOTO JACQUES BOISSINOT, THE CANADIAN PRESS
Resigning Minister Pierre Fitzgibbon and Prime Minister François Legault
Hydro-Québec plans to invest $155 billion to $185 billion by 2035 to double its production and decarbonize Quebec. “We’re talking about the most important project in the history of Quebec. It’s really exciting,” said François Legault.
But this project needs to be financed.
“We think it’s manageable, it’s financially feasible without increasing prices. [résidentiels] by more than 3% per year. And we are working with Hydro-Québec to submit a forecast document up to 2050 in due time,” said François Legault.
He wanted to reiterate his commitment: “Residential rate increases for Quebecers will be limited to a maximum of 3% per year as long as I am premier, and I would even say for the foreseeable future. Quebecers are the real owners of Hydro-Québec. So it is normal that they benefit from what has already been done at Hydro-Québec, from the capacities that currently exist.”
He was referring to the “heritage block”, the energy produced at low cost by current dams.
The next dams, wind power, the raising of existing dams will cost more than the dams that were built previously and there is a political choice to be made.
François Legault, Premier of Quebec
“Are these average cost increases distributed between residential and businesses, or should we protect residential with the existing block and pass on what we call the marginal cost, i.e. the cost of new capacity, to businesses? The political choice I am making is to protect Quebecers. In my opinion, it belongs to them, the heritage block and what was done at Hydro-Québec, and that is to say that if we build new capacity, it is to make profits with businesses. It is not to increase rates for individuals.”
François Legault himself thus settled the “debate” to which his resigning minister was referring.
According to the Prime Minister, “as the years go by, manufacturing companies will be more willing to pay a higher rate to have clean energy to manufacture green products.”
“So the bet we’re making, and I think it’s a bet with a controlled risk, is to say: in 10 years, in 20 years, future generations will have the chance that Quebec is one of the rare places in the world that has clean energy available, among other things, to decarbonize businesses. We’re going to make money in two ways: with tariffs and by creating manufacturing jobs that are paying jobs.”
The bill on the energy future, which was tabled by Pierre Fitzgibbon and will now be led by Christine Fréchette, provides for the creation of an “aid fund” to compensate Hydro-Québec for losses related to the government’s decision to limit residential rate increases to 3%. The potential cost: between $100 million and $300 million per year, according to modeling.
When asked about the subject and reminded that all taxpayers would pay for the rate cap, François Legault seemed surprised and replied: “I don’t see what fund you’re talking about.” The bill also opens the door to a modulation of Hydro-Québec’s rates.
Accelerated training for Christine Fréchette
PHOTO JOSIE DESMARAIS, LA PRESSE ARCHIVES
The new Minister of Economy and Energy, Christine Fréchette
Newly appointed Minister of Economy and Energy on Thursday, Christine Fréchette will undergo accelerated training in order to be ready in time for the public consultation next week on the bill on the energy future, the reform tabled by her predecessor Pierre Fitzgibbon. “I told my partner to forget about me for the weekend. We have a parliamentary committee starting on Tuesday. So I will arrive prepared to welcome the groups about this important bill,” said the new superminister immediately after being sworn in in Quebec City, alongside François Legault and Jean-François Roberge. The latter is taking over from Mme Fréchette to Immigration while retaining his responsibilities for Canadian Relations and the French Language.