The controversy behind a remote town’s stimulus project - Macleans.ca

The controversy behind a remote town’s stimulus project

Ottawa’s $1.1-million deal with a Quebec hotel sparks cries of favouritism

by

Geoff Howe/CP / Stéphane Voyer

Havre-St-Pierre on Quebec’s North Shore is famous for its whale watching, though getting there is almost as much of a trek for tourists as it is for humpbacks. A 15-hour drive from Montreal, the town tends to attract only the hardiest of nature lovers.

Still, local businessman Daniel Dresdell recently opened up a 100-room, three-star hotel in the town—convinced, he says, that tourists will flock to the town of 3,280 if they have a decent place to stay. Apparently, the federal government is convinced as well: last December, the Conservative government financed 20 per cent of Dresdell’s project to the tune of a $1.1-million two-year interest-free loan, just one of the fiscal stimulus measures of its Economic Action Plan. “Tourism contributes significantly to the socioeconomic development of Quebec’s regions and the well-being of their residents,” said Conservative MP Denis Lebel at the time.

“There is a small core of tourists who were coming and finding there was nowhere to stay, so they would stay elsewhere,” Dresdell told Maclean’s. “My hotel is changing that.”

But others believe that Dresdell is capitalizing not on the trickle of whale watchers but on the huge influx of workers from Hydro-Québec’s massive Romaine dam project nearby—and that the $1.1-million loan amounts to government favouritism. “It’s a stupidity,” says Gilles Boudreau, who runs the L’Archipel hotel. “We already have tons of hotels in the area. This isn’t for tourism.”

Havre-St-Pierre does indeed already have 12 bed and breakfasts and tourist hotels with nearly 160 rooms between them. Boudreau says occupancy is way down.

Dresdell’s timing is certainly canny. Construction on the hotel started a month after ground was broken on Hydro-Québec’s $6.5-billion project, which will be completed in 2017. According to Quebec’s business registry, the hotel is described as a “hotel for workers.” (“I’m going to have that changed,” Dresdell said when informed by Maclean’s.) He owns several other area businesses, including the town’s only grocery store. He says his business interests employ 175 people from the town.

The hotel, which includes a 200-person cafeteria and a bar capable of hosting 112 revellers, was built by Groupe Secto, a construction company specializing in mobile offices and large-scale worker camps. It has a history of outfitting Hydro-Québec; it built two camps for two of the energy giant’s largest projects. The hotel’s parent company, Complexe MV Inc., actually received the government loan after the hotel was built, mere weeks before it began taking reservations. (An Economic Development Agency of Canada official recently told Maclean’s the delay in payment was due to the size of the project.) Secto and Complexe MV Inc. actually share some staff: Marcel Maltais, Secto’s director general, is also vice-president of Complexe MV Inc.

Boudreau, for his part, says the region’s smaller hotels haven’t seen much of the business clientele associated with Hydro’s project. “They’ve been subsidized by the federal government to bust our teeth,” says Boudreau of the new hotel. “Our phone isn’t ringing.”

Dresdell says he needed the government money to get him through the first lean years. “You try to fill a 100-room hotel with just tourists in the first year,” he says. Roughly 50 per cent of the hotel is currently rented to workers from the Hydro-Québec project, he says; though he expects tourist traffic to pick up in the next two or three years. “I’m a businessman, and as a businessman I’m here to fill up my hotel rooms. Of course I’m going to use my contacts to try and get business.”