The federal Minister of Innovation, François-Philippe Champagne, is undoubtedly one of the most talented and diligent ministers in Justin Trudeau’s government. The latter also nicknames him the “Energizer rabbit” because of his inexhaustible dynamism. However, the member for Saint-Maurice–Champlain also has the unfortunate tendency to go all out, as some voters in his riding would say. Certainly, politics is not a field for pessimists. But Mr. Champagne’s overflowing optimism is often excessive, if not misleading.
Passing through Everybody talks about it, the minister praised the successes of his government, which, in partnership with those of Quebec and Ontario, managed to attract billions of dollars in foreign investments in the electric battery sector. According to him, Canada and Quebec are positioning themselves to become hubs for the construction of electric vehicles, but also for the production of batteries and their components. The same goes for the extraction and refining of critical minerals that go into the manufacturing of these products. ” We win. »It’s a question of pride, he explained. “We are capable of winning… We succeeded. »
What exactly do we gain? Is the announcement by the Swedish company Northvolt of the construction of a lithium-ion battery factory in Montérégie proof that Quebec has become a major global player in this booming industry? Would the emergence of a cluster of battery component producers in Bécancour be a guarantee of the success that Mr. Champagne and his Quebec counterpart, Pierre Fitzgibbon, are delighted with?
Nobody knows whether the $35 billion in subsidies that the federal, Ontario and Quebec governments have so far promised to attract three battery factories to the country constitute a good investment. Although Canada has certain advantages, including its clean electricity, competition is fierce and technology is constantly evolving. Apart from the promise of endless subsidies, nothing can guarantee the sustainability of these factories.
The London firm Benchmark Mineral Intelligence lists all announcements for the construction of battery factories, commonly called “gigafactories” because of their production capacity, measured in gigawatt hours (GWh). Of the 38 gigafactories announced or already under construction in North America, 35 are in the United States. However, Benchmark predicts that the continent will only account for 15% of global battery production in 2030. China alone will account for 68%.
Northvolt’s Quebec plant will be one of the smallest, with an initial capacity of 30 GWh, three times less than the planned capacity of the Volkswagen plant in St. Thomas, Ontario. Are we really winning at this game?
François-Philippe Champagne returned to the charge on Thursday, congratulating himself on having convinced the five largest grocery chains in the country to lower the prices of certain products. “I looked at some circulars this morning, and we can already see grocers adjusting before Thanksgiving,” he said, announcing the implementation of measures aimed at protecting consumers struggling with the ‘inflation. His statement left experts speechless. In short, Mr. Champagne would be as responsible for the week’s discounts at Maxi as… Martin Matte.
Big chain flyers are prepared weeks, if not months, in advance. Contracts with suppliers are negotiated based on quantities ordered and production costs. If Loblaw, Sobeys, Metro, Costco and Walmart are taking part in this public relations exercise with the minister, it is because the measures announced by Minister Champagne are not very restrictive.
Although the large chains have been making big profits for two years, their profit margins on food products have not increased. This is what the Deputy Governor of the Bank of Canada Nicolas Vincent indicated in a speech delivered on October 3 in Montreal: “As for food retailers, we see that prices have increased at approximately the same rate as costs in recent years, including when inflation is high. Based on this analysis, cost increases were therefore fully passed on to prices. »
Without praising the big chains, we must recognize that Canada has experienced one of the lowest food inflation rates in the world in the last three years. Notwithstanding the scandal surrounding the fixing of the price of sliced bread which took place for several years until 2015, these chains are fighting fiercely among themselves for market share. The most informed consumer knows how to take advantage of weekly sales and promotions and, thus, eat at a lower cost thanks to this competition.
This observation does not mean that food inflation in recent years has not seriously hurt households or that millions of disadvantaged Canadians have not had more difficulty feeding themselves adequately. But the show “boucane” by Mr. Champagne, as Dalhousie University professor Sylvain Charlebois described it in The Press, arrives a little late. Food inflation has been slowing for several months now, so that the meteoric price increases of 2021 and 2022 due to increased production costs and strong consumer demand after the pandemic seem to be behind us.
Whatever he says, the Energizer Bunny has nothing to do with it.
Based in Montreal, Konrad Yakabuski is a columnist at Globe and Mail.