The Northvolt file may lack transparency, but it is an inexhaustible source of dubious puns. Before Christmas, Minister Fitzgibbon served us “three-eyed fish”. This week it was Eve, Adam and the Garden of Eden. François Legault then arrived with his apples, oranges and bananas. All that was missing was the three-button wheel. Bring back Sam Hamad, it’s urgent!
Last Monday, Minister Fitzgibbon assured that the environmental process was “very demanding” and “respected”. On Wednesday, we learned that scientific references had been removed from the evaluation which authorized the project… Add the secrecy to which the factory project was subject, and it doesn’t look very serious.
But the setbacks of Northvolt – and the CAQ – still take us away from the essential. Because ultimately, we can accept short-term environmental damage if we obtain greater long-term gain. I’m not saying that it’s automatic or that this is the case for Northvolt (holding a BAPE would help to know that…). But that would be debatable if the government was ready to have a sincere and transparent conversation.
The real problem with Northvolt is that the plant will cost more than $7 billion in public funds, or more than $2 million for each of the 3,000 potential jobs. Is this really a good idea?
Politicians believe that subsidies “create” jobs. That’s a little too optimistic. Subsidies mainly have the effect of moving workers from existing companies to a new, heavily subsidized company. This is even more true during a labor shortage like the one Quebec is currently experiencing, because workers do not fall from the sky.
Imagine yourself for a moment at the head of a small or medium-sized business. Hiring is difficult. We have to pay higher salaries. You do your best to get there, without raising prices too much for customers. Then a multinational arrives. The government subsidizes it with billions, which allows it to offer salaries that are beyond your means.
This is what we are preparing to do with Northvolt: take the taxes paid by local companies to subsidize a foreign multinational. It’s a bit annoying. Not to mention that the profits will go back to Sweden…
The government—in fact, pretty much everyone—also seems to think that Northvolt’s success is guaranteed. It’s moving a little fast in business. Northvolt is a young company. Technology is evolving rapidly and it is unclear who will emerge as the winner. China, which accounts for two-thirds of global battery production, is also becoming a key player in the production of electric cars, with models selling for as little as US$12,000. A lot can still change, and it is far from certain that Northvolt will still be around in 10 years. Or that it should not be saved with even more public funds…
There is currently an escalation of green subsidies from governments all over the planet. For car manufacturers and their suppliers, this is an unexpected windfall. But it is the taxpayers who will foot the bill. The U.S. government alone could spend $100 billion, perhaps even $200 billion, over the next decade on subsidies and tax credits to produce batteries and electric cars. In a way, this is good news for us. So let the United States subsidize the construction of our future electric cars; we will green Quebec at the expense of the Americans.
The energy transition is only just beginning. Quebec has valuable resources, including rare metals and inexpensive green electricity. Demand for industrial projects already exceeds what Hydro-Québec can produce. Why offer discounts?
There are better things to do with public funds than waging a subsidy war against the United States, Europe and China with billions. We could start by lowering taxes on our own businesses. That would help stimulate investment and create wealth in Quebec.