Canadian Manufacturing

Quebec will become ‘have’ province under northern development plan: Liberals

Party says Plan Nord will enable province to wean itself off decades of federal equalization transfers



MONTREAL—Jean Charest’s Liberals predict Quebec will make the historic transformation into a “have” province over the next quarter-century thanks to an ambitious northern-development plan.

Quebec’s natural resources minister says the project—known as “Plan Nord”—will enable the province to wean itself off decades of federal equalization transfers, tackle its heavy debt and bankroll its costly social programs.

Clement Gignac’s prediction would see the province pump cash into the federation for the first time since the modern equalization program was established in the 1950s.

Amid campaign clashes over tuition fees, corruption allegations and Quebec independence, Plan Nord is a sleeper issue heading into the Sept. 4 election.

Gignac says the initiative, which includes mining, energy and tourism projects, has the potential to become a game-changer for Quebec, much like the Hibernia oil project was for reversing the once-grim economic fortunes in Newfoundland and Labrador.

“I think the rest of Canada will not perceive Quebec (in) the same way when it happens … and as a French-Canadian and Quebecer, I’m hoping that we will perceive ourselves differently,” Gignac said.

Quebec received more than $50-billion in federal transfers between 2005-06 and 2011-12.

It is slated to receive nearly $7.4-billion in 2012-13.

The Liberals estimate Plan Nord will churn out $80-billion in public and private investment over a quarter-century, and create 20,000 jobs.

The project, unveiled in 2011, focuses on development across a massive area north of the 49th parallel that is about twice the size of France.

Gignac says if all goes according to plan, the Quebec of 2036 will see its previously inaccessible northern regions humming with mining activity, Sept-Iles bustling as Canada’s second-busiest port and Quebecers enjoying more wealth than ever.

A study will be conducted on the possibility of constructing a deep-water port on Hudson Bay and the plan is expected to generate about 3,000 megawatts of renewable hydroelectric energy for the province.

Plan Nord also pledges to consult local communities in the process and aims to make half of the territory exempt from industrial development.

To entice investors, Plan Nord calls for the government to invest $2.1-billion in public money on infrastructure—such as roads and airports—that will ease access to faraway regions.

In the end, the Liberals predict the endeavour will pump $14-billion into provincial coffers.

But the optimism is not shared by all, as the initiative faces much criticism over economic, social and environmental concerns.

The Parti Quebecois (PQ) accuses Charest of selling off Quebec’s natural wealth at bargain-basement prices.

It says the province’s mining royalties are too low.

It promises to create an additional 30 per cent tax on all mining profits beyond a certain level.

And the PQ says the government should only spend taxpayer money on infrastructure projects if companies give something in return, such as a stake in the operation.

The Coalition for Quebec’s Future (CAQ), meanwhile, alleges the plan will primarily benefit foreign companies and Quebec mining firms cosy with the Liberals.

If the CAQ wins the election, leader Francois Legault has said he would develop resources in the north under a partnership between the government and companies.

The CAQ would create a $5-billion natural-resources fund within the province’s pension-fund manager as means to invest in mining companies.

The royalties earned from non-renewable resources would be used for paying down the debt.

Plan Nord also faces opposition from some environmental and First Nations groups.

Last year, the Pessamit Innu said the project violated the rights of aboriginal people and “rapes” their land.

Mining experts, meanwhile, warn that while Quebec’s north is packed with resource potential, it’s difficult to predict how much return Quebecers will actually reap from Plan Nord.

“These things are easier to say than to really do,” said Roussos Dimitrakopoulos, a professor in McGill University’s department of mining and materials engineering.

He listed some of the hurdles faced by mining firms interested in northern Quebec.

They include a lack of infrastructure, the extreme climate and volatile commodity prices.

“I think this is the hard part with Plan Nord—too many variables,” said Dimitrakopoulos.

He said the big companies he’s asked about Plan Nord have not shown a lot of enthusiasm.

“Their answers are very cold—there’s no particular excitement about it,” he said. “You’d probably need a hell of a lot higher commodity prices and profit margins to make them interested.”

One expert, however, says Plan Nord has indeed caught the attention of foreign mining firms from China and Europe.

“Yes, it’s gotten companies moving,” said Michel Jebrak, an expert in mining entrepreneurship at Universite du Quebec a Montreal.

“People were interested because it’s like we’re opening a vast territory without political problems, because we are in Canada.”

Jebrak believes the infrastructure investment promised by the Liberals is critical to the project’s success.

He’s not so sure, however, about the predicted 25-year timeframe to complete such a large undertaking.

“(Charest) said it is a plan for a generation, but it’s more than that because conquering a territory like that would take closer to 50 years than 25 years,” Jebrak said.

The Liberals’ natural resources minister said that three decades ago there were doubts about Hibernia, Newfoundland’s $5.2-billion offshore oil project.

Gignac said the province has since morphed from a have-not into one of Canada’s richest, per capita.

He predicts Quebec can do the same with Plan Nord—eventually.

“It’s not overnight, make no mistake about that.”

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