There are limits to wanting to make companies pay for new electricity production, warns the Employers’ Council, which believes that Quebec is behaving as if it had the only source of clean energy, while the entire world is investing massively in renewable energies.
Quebec does not have a monopoly on green energy, argues the Quebec Employers Council (CPQ) in its brief submitted to the parliamentary committee examining Bill 69.
In the United States, there will be more and more renewable energy at a price as low or lower than in Quebec, thanks to public support from theInflation Reduction Act (IRA), explains CPQ president Karl Blackburn during an interview with The Press.
“The IRA will lower electricity prices in the United States, while we will increase prices, it is nonsense in terms of competitiveness for our companies.”
Mr. Blackburn is surprised to hear Premier François Legault publicly trumpet that companies will rush to establish themselves in Quebec and take advantage of its renewable energy. “That’s not what I’m hearing on the ground,” says Karl Blackburn.
PHOTO FRANÇOIS ROY, THE PRESS
Karl Blackburn, President of the Quebec Employers Council
The CPQ also does not believe that Quebec will be one of the rare places in the world with clean energy at a good price, as the Prime Minister says.
CPQ economist Norma Koraya points out that the gaps between the cost of electricity in Quebec and those in neighbouring territories have narrowed considerably.
According to the U.S. Department of Energy, wind power costs 3 cents per kilowatt-hour in some states, while here, we’re talking about production at 6 or 7 cents per kilowatt-hour, excluding transmission and distribution costs.
Norma Koraya, economist at the Quebec Employers Council
The costs of wind power are already more attractive in the United States than in Quebec and will continue to be so, according to her.
Quebec is no longer the “El Dorado” of clean energy that it once was, adds Karl Blackburn.
The CPQ also deplores the fact that Bill 69 does not go further to encourage residential consumers to better consume available energy. Capping the increase in residential rates at 3% will not encourage energy sobriety, according to the employers’ organization.
A missed opportunity
Capping residential consumer rates and further increasing business rates will increase rate cross-subsidization, whereby businesses partially subsidize residential consumers.
This is a missed opportunity for an exercise that aims to reframe the energy sector in Quebec, according to the president of the CPQ. He believes that there will be increasing pressure on companies to assume the investments that will have to be made to increase electricity production.
We are playing with what was an undeniable advantage for Quebec by acting as if elsewhere in the world, we had not improved. I was pleased to hear the president of Hydro-Québec, Michael Sabia, say today that too much energy had been allocated to new sectors to the detriment of companies already present in Quebec.
Karl Blackburn, President of the Quebec Employers Council
“I have dozens of examples of companies that needed electricity and were told: not before 2028,” said Karl Blackburn.
A price shock
Businesses have already started to pay the price of Quebec’s new energy reality, say major industrial electricity consumers, who pay a total bill of $3.5 billion per year to Hydro-Québec.
For 2025, the 3.3% rate increase requested by Hydro-Québec for rate L, which applies to these large industrial customers, is higher than the 3% increase for residential customers.
Like the CPQ, the Quebec Association of Industrial Electricity Consumers, which brings together these large consumers, including aluminum smelters, believes that the reform of the energy sector should have addressed the fact that companies partly finance residential rates.
The L rate will no longer be partially exempt from inflation, as it has always been, according to what Bill 69 proposes, which heralds a rate shock for businesses.
In its brief, the Association calculates that this measure alone will increase the L rate by 8.1% by 2035 and that the industrial rate will jump by 50% during the same period, which will greatly undermine the competitiveness of Quebec companies already established in Quebec and for which the relatively low energy costs partly offset the heavier tax burden in the province.