“We could have made much more intelligent choices by probably spending less money for greater results,” says an economics professor, who not only accuses the Legault government of building the battery sector “on thin air”, but to empty our SMEs of their employees for the benefit of foreign companies subsidized with billions of dollars.
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Even if the sector will have positive benefits in construction, lithium extraction, transport or taxes for cities, the game is not worth the candle, worries Frédéric Laurin, professor of economics at the School of management of the University of Quebec at Trois-Rivières (UQTR).
“Paternalistic”, “archaic”, “risky”… the intellectual does not mince his words regarding the flagship project of the Legault government.
“Why bring these companies in? To create jobs? We don’t need it. For innovation? They are not going to innovate. To make our SMEs work? We are not sure that there will be a connection with them,” he is surprised.
- Listen to the interview with Saidatou Dicko, governance expert, on the battery sector via QUB radio :
Frédéric Laurin maintains that the battery sector is “a counter-example of modern economic development”. “Importing technology from elsewhere is exactly what developing countries do,” he says.
Non-existent sector
In a recent political note, the researcher at the SME Research Institute (INRPME) goes so far as to write that “the battery sector does not exist in Quebec”.
According to him, despite our lithium extraction companies (like Nemaska Lithium) and our battery factory projects in Bécancour (Ford-EcoPro and GM-POSCO) and Saint-Basile-le-Grand/McMasterville (Northvolt ), Quebec is far from being cut to the chase.
After a report from the Journal recounting the story of a worker forced to send his CV in English to the Ultium CAM factory in Bécancour, the National Assembly of Quebec adopted a motion to protect French.
Provided by GM-POSCO
Canada will have a lithium-ion battery production capacity of 25.5 GWh by 2030, according to data from S&P Global Market Intelligence, underlines the regional development specialist.
This is far behind China (2051 GWh), the United States (187 GWh), Poland (90 GWh), Hungary (57 GWh), Japan (48 GWh), South Korea (41 GWh) , France (41 GWh) and Sweden (32 GWh), he mentions.
Small player
When it comes to assembly plants, Quebec is “not even a leader in North America,” points out Frédéric Laurin, because they are mainly in Michigan (6 factories), in the states bordering Illinois. , Indiana and Ohio (5 plants) and in the southeastern United States (11 plants).
François Legault, Justin Trudeau and François-Philippe Champagne with the battery during the announcement of the Swedish Northvolt mega-factory in Quebec for the manufacturing of lithium-ion batteries in Saint-Basile-le-Grand and McMasterville. Montreal, September 28, 2023. PIERRE-PAUL POULIN/LE JOURNAL DE MONTRÉAL/AGENCE QMI
Photo Pierre-Paul Poulin
While our machine shops are struggling to have their workforce and our regional green energy SMEs are in dire need of capital to grow, the professor has difficulty understanding how we can put so many resources on the battery. .
“The paternalistic side is to impose this development model on us, especially here in Mauricie, while we are trying to get out of big business,” he concludes.
Labor: ‘It’s a national emergency’
According to Frédéric Laurin, the labor shortages caused by battery factories will be “worse than a recession”. “The government does not seem very alerted by the labor shortage, even though it is a national emergency,” he observes. Our SMEs, already crushed by the glaring lack of employees, will have the rug pulled out from under them by foreign multinationals showered with billions of dollars of public money. “We will pay the price. This could end badly. Foreign companies may be underestimating the labor shortage. Even in Europe, they don’t have a shortage like us,” he analyzes.
Innovation: “They’re just assembly plants”
For the UQTR professor, it is illusory to think that foreign companies will stimulate innovation. “It doesn’t create innovation. They are just assembly plants,” he believes. He also deplores the innovation zone of the Energy Transition Valley (VTÉ), which according to him imposes large international factories, while there was already an economic diversification strategy more focused on local SMEs. “I know a municipality which has industrial space and which wants nothing to do with a battery factory because there is not enough innovation and too much soil contamination,” he breathes.
Technological risk: We put “all our eggs in one basket”
Frédéric Laurin fears that there is a risk of putting “all your eggs in one basket”. Instead of injecting public money into our already existing innovative companies, Quebec is banking on a single technology, he denounces. “Technological lock-in” threatens us, that is to say that our battery factories could be outdated in a few years, while we have not finished paying for them. “A more viable economic development strategy would ensure that risk is spread by diversifying the investment portfolio by financing several varied technologies,” he says. He thinks that “all-automobile” is not viable.
Legacy of Legault: “We are so far from the big dams”
The comparison between the battery sector and the construction of hydroelectric dams in the 1960s and 1970s is lame, according to Frédéric Laurin. The first works for corporations. The second for the Quebec state. The professor also has difficulty explaining why the battery sector is sometimes compared to the aeronautical sector, which has Bombardier as its root, a Quebec company, unlike the big players in the battery sector. Will this be a legacy from the Legault government? “We are so far from the big dams. It’s day and night. We are talking here about machining and assembly. Can we have a legacy built on foreign expertise? he wonders out loud.
Success factors not encountered by the battery sector
-Volume development (factories that consume a lot of resources)
-Lack of innovation (assembly plant with technologies developed elsewhere)
-No critical mass of companies to have a cluster
-No leadership from a local company in the sector
-No assurance of having a Quebec subcontracting network
-Lack of available and specialized labor
-Risk of “technological lock-in”
-Little territorial anchoring
(Source : An economic critique of the method of development of the battery sector in QuebecNovember 2023, Frédéric Laurin)