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Jean Charest, prospector

The Quebec premier’s Plan Nord promises to transform Quebec—into Alberta


 

Jacques Boissinot/CP Images

It was a tweet yesterday from Andrew McIntosh at QMI that finally got me thinking about what Jean Charest’s government is up to in Quebec’s north. I’ll cut to the chase: basically he’s turning it into Alberta.

What Andrew noticed was that, while most of the reporters in Quebec City were safely tucked away in the provincial budget lockup, Charest’s former chief of staff announced he will become an executive at Canada Lithium, which means he’ll be spending a lot of time in Abitibi setting up a mine that will provide 12% of the world’s lithium and, in return, make everybody rich as thieves.

There’s not a whiff of scandal to this. It’s good to see former government people getting honest work. (And the guy involved has been out of government for five years.) But Stéphane Bertrand’s new line of work reflects where things are going in Quebec these days. The whole province — or at least its teetering Liberal government and its investment community — is going resource-crazy.

I had heard, vaguely, about Charest’s “Plan Nord,” which he seems to spend a lot of time talking about, and which I mostly took to mean “don’t look at the construction-industry corruption scandal.” But as I may be the last to figure out, it’s actually a big deal. “Plan Nord” translates as “North Plan” — stop me if I get too technical — and it’s about developing the astonishing mineral wealth in the northern two-thirds of the province. As Charest puts it on the dedicated Plan Nord website, “The advances made by the emerging countries are shifting major economic corridors… The North’s mining potential affords us an opportunity to capitalize on the development of the emerging countries by ensuring the responsible development of the territory’s resources.”

There’s a bunch of other stuff about the environment and sharing the economic benefits with First Nations, but I stripped it down to the bit that sounds eerily like everything Stephen Harper has been doing since December. China needs stuff! We have stuff!

For a hint of the economic potential, check out how cuckoo for Cocoa Puffs the good folks at PriceWaterhouse Cooper have gone over the whole idea: “unique business opportunities for various organizations… help from our global network of industry specialists… position your business to benefit.” Multiply that by an awful lot of consulting, engineering, mining, construction and marketing talent. And good for the First Nations too! Apparently!

Charest’s finance minister delivered a budget Tuesday that features a million tweaks to the Plan Nord, designed mostly to protect Charest’s left flank by getting the government more actively into the investing and revenue-sharing. There’s a billion-dollar fund to make the government part-owner of various projects, a contestable move — equity share won’t bring in nearly the revenues that taxes would have anyway; state investment distorts everyone’s priority and exposes taxpayers to risk as well as reward — but on the other hand, maybe the government Quebec is due to invest in Quebec resource projects, since Quebec’s public-service pension fund is already into the Alberta oil sands for five times as much.

If Charest is counting on Quebec’s mineral resources to keep him in office, he must surely know it’s a long shot. The North is far away from a lot of voters’ preoccupations, the Parti Québécois says he’s being a bad environmentalist, and the great white hope of the Quebec free market, François Legault, says he’s not being statist enough. Which I would call “foreshadowing” except it’s already been clear for months that Legault goes wherever he thinks he needs to go.

But it’s hard to imagine a future Quebec government ignoring the potential revenue in those hills, with so few other bright spots in the provincial economy. The further into resource extraction future Quebec governments get, the harder it’ll be to peddle the kind of virtue that consists in decrying Albertans’ despoliation of the environment while losing a steady trickle of bright, entrepreneurial population westward.

 


 

Jean Charest, prospector

  1. Not likely as bad as Alberta; it would depend on what kind of carbon footprint the mining has. Alberta’s tarsands will produce more and more GHGs and letting us put off moving to clean energy, and that is quite suicidal

    • WTF!?  Specifically:

      -“Not likely as bad as Alberta” – wtf?!

      -“it would depend on what kind of carbon footprint the mining has.”  – you can’t seriously think that the big issue with mining is its carbon footprint

      -“Alberta’s tarsands will produce more and more GHGs” – apparently you do.

      -“and letting us put off moving to clean energy,” – How does contributing 2% to the world supply of oil cement oil’s place in the energy mix? 

      “and that is quite suicidal” – Or, you know, the opposite.

  2. I agree with the fact the Wikipedia entry for Plan Nord was beyond awful (I’m working on it), but you oversimplify the PQ’s stand against it. 

    The environment is certainly one issue, the others being the ridiculous mining regime and the low royalty rates (a point being raised last fall by Parizeau and others), the absence of a value chain strategy and the giveway of public funding for infrastructures like the extension of route 167 (at a cost of $330M) to allow Stornoway to develop a diamond find in the Otish mountains.

  3. Hey Paul Wells why isn’t Ontario doing this ?

    Instead of building wind mills and locking up vast tracts of northern land into parks McGuinty could be addressing native poverty by encouraging development.

    Year round roads would be a good place to start …

    • Ring of fire.

      • Beat me to it.  But seriously, every other province is trying to be Alberta right now.  Clark in BC is promising prosperity as a result of 13 fabled new mines.  This is not the first version of Plan Nord.  Ontario has the Ring of Fire.  Newfoundland…well, go read Cosh on that point.  Even Nova Scotia and New Brunswick are busy debating natural gas royalties.  Remember that the next time the place of resource revenues in equalization payments come up.

        • Nobody wants to be Alberta.

          Mining is just one more part of a diverse economy, one that’s always been around in fact.

      • The Premier’s office (successfully) did everything it could to kill off the western half of ring of fire after native occupation from 2006 to 2009 prevented continued exploration at Big Trout Lake. McGuinty removed a $200B+ resource from development, worth nearly half the value of the Athabaska oil sands. We’re talking enough platinum group elements to meet the needs of every catalytic converter and fuel cell for a century.

        When things get tougher in the eastern half of ring of fire, expect the Premier to make more exploration impossible there too. 

  4. I did not know much plan Plan Nord until your tweet yesterday, Wells, and it makes me wonder if Que example will encourage McGuinty to care about working class jobs and wealth creation here in Ontario. Probably won’t happen, McGuinty seems wedded to ancient technologies of dubious value, but I can live in hope. 

    TorStar ~ Narch 2010:
    A junior oil and gas company from Alberta has been quietly scooping up land rights in southwestern Ontario, part of an audacious plan to bring Alberta-style exploration to the birthplace of Canada’s petroleum industry. It may sound like a risky strategy, but the potential payoff is real. Tony Hamblin, a petroleum geologist with Natural Resources Canada, said Ontario represents a ripe opportunity that has been largely overlooked.

    NY Times ~ Feb 2012:
    To put it another way, the technique of hydraulic fracturing, used to extract natural gas from once-impossible-to-get-at reservoirs like the Marcellus Shale that lies beneath New York and Pennsylvania, has more than proved its value. At this point, shale gas, as it’s called, makes up more than 30 percent of the country’s natural gas supply, up from 2 percent in 2001 — a figure that is sure to keep rising. Fracking’s enemies can stamp their feet all they want, but that gas is too important to leave it in the ground.

  5. It’s going to be so much fun when the proposed Plan Nord meets reality.

    http://www.plannord.gouv.qc.ca/english/documents/area-covered.pdf

    Yeah, who cares if Quebec is including large chunks of Labrador into its planning because the Plan Nord maps use the pre-1927 Privy Council decision. Won’t it be fun when they sell the exploration rights to chunks of territory which actually belong to a different province?

    Oh right! *smacks forehead* I forgot – nobody cares when Quebec is giving Newfoundland the squeeze – Be it the Churchill deal, the Old Harry find in the gulf (lobbying in an attempt to get Ottawa to stop Newfoundland while it changes its environmental regulations), or the actual boundaries of the province – they just don’t care. They just get to waltz all over Newfoundland because I’ll be damned if that tune ain’t real catchy.

    Most people retort with, “Well, sure Quebec claims it but we all know its not their territory.” But if that’s the case, why are they still drafting modern plans using improper maps!? If they have no plans to try and utilize those lands, why didn’t they just exclude them from their plans?

    Any international business should be wary that Quebec could sell them mining exploration rights in a different province. Because if I wasn’t from Canada, let alone Newfoundland, I wouldn’t know otherwise – but they expect international businesses from Asia, Europe, Australia, Brazil, etc to know better about internal boundary disputes?

    • Well, the map is better than the tourist maps Quebec used to issue which showed the Labrador border but has all of Labrador coloured the same as Quebec – and the word “Quebec” spilling across said border into Labrador.
       
      Since we’re listing NL grievances against Quebec, here are a few more:
       
      – The Come-By-Chance refinery, when it reopened after a number of years of being mothballed, was only allowed to reopen on the condition that none of its products could be sold in Canada other than in NL [the Feds owned the refinery due to unpaid debt, so they could set those restrictions as part of the sale agreement; the refinery’s new owners were planning to sell primarily to the eastern US anyway, so they went along with it – but the measure was put in place because eastern Canadian refiners (OK, to be fair, Irving as well as the Quebec refineries) simply didn’t want the competition.]
      – Back around 1990, the Feds decided to grant extra tuna licences off the coast of NL (Feds control the fisheries). A number went to NL, a handful to the maritimes – and fully half the licences went to Quebec – even though they did not traditionally fish those waters.
      – NL plans to develop the Lower Churchill for hydroelectricity. They wanted initially to route the power to US markets through Quebec, and Quebec refused to do so unless they were to receive the bulk of the revenue. Despite the fact that this is in contravention to NAFTA.
      – NL then devises an alternate plan that will see power routed to the island, down the west coast, and then across the Gulf through the maritimes. They don’t ask for money from the Feds, only loan guarantees so they can negotiate better rates from lenders. Quebec has a hissy fit when Harper agrees; they were still hoping to force it through Quebec and rake the profits.

      I’m sure others can easily add to this list, but those are the ones that are top of mind for me.

      •  Wasn’t Labrador given to New Brunswick in the 60’s by decree by the Queen?

        • Time to turn in your citizenship, my friend!

  6. but I stripped it down to the bit that sounds eerily like everything Stephen Harper has been doing since December.

    Oil is already a very efficiently traded commodity. Apart from trying to get it to the coast through regulatory efforts in Canada (doubtful despite all the bravodo Enbridge will proceed any time soon), what precisely is Stephen Harper accomplishing trying to peddle oil/gas to Asia?

    I could see the rationale, however, if it was a foot in the door to expose other less traded companies/industries to growing markets, or areas where they don’t have established suppy/dist’n chains/customers.

    • On his trade mission, Harper was hawking agricultural and other resource products, not just oil. It seemed to me to be focussed primarily on western resources, though.

      • Good question re whether you can rail Quebec mining output to the BC coast, or tanker it to China from Montreal/Churchill.  Absent those options, his focus makes sense.

        • That’s kind of like saying China doesn’t sell any of its goods in eastern Canada because of the extra transportation costs.

          Iron ore from northern Quebec and Labrador has been (and is still) shipped from the seaport of Sept-Îles, on the north coast of Quebec’s Atlantic seaboard (it’s on the Gulf of St. Lawrence) since the 1950s. I’m sure they wouldn’t object to an increase in vessel traffic.

          Then it’s down to the Panama Canal (until the Northern Passage becomes a regular trade route).

          But aside from the potential future growth in Quebec’s mining industry, I’m sure there are lots of other eastern Canadian goods that would love to have access to growing markets…

          • I wasn’t trying to be cute.  Assuming there’s a market connection, it’s not like China doesn’t need steel.

  7. Quebec and Ontario started out in mining and forestry, and still get substantial income from them, although they diversified after that, as population grew.

    I don’t know why anybody is surpised by this.

  8. Sure they’re making Harper  look good…but!

    Despite the rhetoric i suspect they’ll make many of the same mistakes Harper’s making with respect to FNs. Basically take their assent for granted after you toss em a couple a bucks…ie., check out Quebecs’s less then stellar James Bay record.

    Oddly enough i think the PQ is right. Don’t follow the AB model of ridiculously low royalty rates and low value added chain…becoming short term wealthy rentiers[ is that the expression?] 

    sure it provides lots of good paying jobs and needed foreign investment. It also[in the case of AB] sets off inflation in every sphere of the enterprise, from labour shortages to costly over priced materials and shortages and subsequent pressure on the environment due to the general rush to the through by the shareholders/investor community…in other words a modern gold rush.

    AB and the fed are only now thinking of putting in an effective monitoring regime for the Atha B river thanks to their decision to allow the industry to dominate something called RAMP…a farcial attempt to greenwash the impact on the river. This after calling critics, FNs and David Schindler deluded and much worse for speaking the truth.

    I’m not anti development…just anti lets get it out of the ground before it rots, the buyer goes elsewhere down the enviro/labour foodchain like Chile, and we all become so poor and destitute we can’t afford to buy new Apple products. 

    • *…rush to the trough.

    • Better to complain about how to cope with prosperity than be poor.

      Also forcing value added production where it doesn’t make economic sense is beyond silly.

      Rather than keeping money in the province it drains it away. Lower tax returns from lower corporate profits. More expensive products acting as a hidden tax.

      Basically its a regulatory approach to job creation. Heck, why not pay people to dig holes and fill them back up again ?

      Somewhere Andrew Coyne is probably glaring at you.

      • Poor! Who the hell are really poor in this country, outside of remote FN’s communities?

        Where did i say value added should be needlessly “forced”? It may make more sense in Quebec for instance than AB. 

        “Rather than keeping money in the province it drains it away. Lower tax returns from lower corporate profits. More expensive products acting as a hidden tax”

        like running sawmills in rural BC provide useful things called jobs, run by things call people, who pay things called taxes that help support local govt and other things you purport to care about called families.

        Dig holes in the ground!!!…A hidden tax!!!…your analogy is so ludicrously over the top it is not funny.

        Losing a little off the top of corporate profits to sustain local economies is a far cry from soviet era a job for every person, no unemployment and a fictious national balance sheet. Get some perspective please!

        No wonder OWS came along. It had to enventually. There is only one logical end to a pigs in clover corporate profits uber alles ideology.

        Much as i like AC he isn’t a god!
         
        Maybe Andrew might have a different perspective if he lived in a small northern community like mine? Or in one of the BC towns that have lost their mills while raw logs still trundle by their windows.

        All i want to see is a balanced approach to economic development; one that doesn’t only look at the bottom line. People aren’t widgets and they aren’t numbers on a spread sheet. They need to eat and live under a safe roof whether here or in Mexico; they need to have the self respect from having a job that pays them a decent standard of living wherever they live, despite what Andrews market models tell him is best for the national economy. Theres are more than one way to define national weath and the more peoples pockets its in the better imo.   

        • Of course its all relative and this is movement at the margins.

          But every drop in GDP pushes people into poverty and every gain in GDP lifts people out of poverty.

          Low unemployment is the easiest way to fight poverty, more so than any government program.

          And where does corporate profit go ? Back into the economy to hire more people.

          Rationalizing production eliminates needless waste and lifts human beings out of poverty.

          Why should the starving and dying in this world pay a premium to keep out of the way towns in existence that don’t serve an economic purpose ??

          • All theorectically correct. But very little of it works out theorectically. Rich people are never satisified with being rich. They’re always looking for some economic model that justifies their greed. And then they have the chutzpah to whine when we tax them.

             Mostly balderdash in the real world. There’s nothing wrong with taking care of your own.The resources of this country belong to the people of this country – not some pseudo person called a corporation.

            Ever notice how corps like to brag their taxes support the social programmes of this country but at the same time tell you you can’t raise CITs on them, cuz they don’t pay them, you do?

          • Actually many progressives favour the elimination of the corporate tax rate because its regressive and really does get passed on to consumers.

            Where do corporate profits go ?

            To retired middle class people with pension funds. To hiring more workers. To science and development. To expanded production.

            Big pay outs to corporate executives can easily be gobbled up with income taxes.

            I’m not a Libertarian. I’m all for re-distribution.

            But lets worry about that AFTER production. Its when the lefties start to mess with production like making all kinds of crazy alterations to a rational supply chain that I start to get annoyed.

  9. Just wait until Quebec gets over the phoney hysteria and fear over hydraulic fracturing, and begins exploiting its abundant natural gas resources.

    McGuinty is an utter fool.  He’s sold out Ontario’s future over and over again to line the pockets of his friends (with the eHealth and ORNGE scandals, with the alternative energy handouts to industry which is making Ontario too costly a place to do business because of electricity costs, and now his abandonment of infrastructure investment in favour of keeping his public service union friends running the McGuinty SuperPac [the so-called Ontario Working Families Coalition] happy.

    Ontario….seeking to add an O to the PIIGS.

    • Well, none of that is true. You’re just tripping over your ideology again.

    • I’ll take a flyer on it NOT being all hysteria.

      • The problem is with shoddy well completion practices, not with hydraulic fracturing.  In jurisdictions with strong regulation of drilling practices and standards, this becomes a non-issue.  

        • The difference is between natural gas wells, and shale gas.

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