Bill
69, An Act to Ensure the Responsible Governance
of Energy Resources
Sharp and Immediate Opposition from Trade Union Organizations to Further Privatization of Hydro-Québec
On June 6, Minister of the Economy, Innovation and Energy, Pierre Fitzgibbon, tabled Bill 69, An Act to ensure the responsible governance of energy resources and to amend various legislative provisions, at the Quebec National Assembly.
The 56-page bill is part of the restructuring of the State to better serve large supranational private interests, and more specifically to integrate Quebec's resources into U.S. energy transportation corridors. Bill 69 will grant the Minister of the Economy, Innovation and Energy new powers including "establishing and implementing an integrated energy resource management plan" for Quebec. The preamble to the bill provides that part of this plan "specifies the electric power supply target that Hydro-Québec must achieve to meet the electric power needs of Québec markets within the time frame indicated in the plan." The bill will allow private power utilities to enter into over-the-counter contracts with Hydro-Québec to harness Quebec's still untapped natural resources by placing "at Hydro-Québec's disposal any immovables or water powers forming part of the domain of the State" and by withdrawing "the obligation for Hydro-Québec to obtain the Government's authorization."
A number of organizations, including trade unions, issued statements the same day opposing Bill 69.
The Canadian Union of Public Employees-Quebec (CUPE-Quebec)
CUPE-Quebec states that Bill 69 "is a gigantic step backwards for the people of Quebec."
CUPE-Quebec, which represents more than 16,000 members in the energy sector, issued a statement on Bill 69. In it Pierre-Guy Sylvestre, an economist with CUPE-Québec said "This is a dark day in Quebec's history. The public power utility, embodied by Hydro-Québec, has enabled almost miraculous social and economic advances. Today, on the contrary, we are witnessing an advance for private companies and investment funds. Workers will certainly lose out."
CUPE-Quebec points out that dynamic pricing, which will be introduced on April 1, 2026, "is a regressive measure that will penalise low-income households," and believes that efforts should instead be made to promote energy efficiency: "Let's reduce residential, commercial and institutional demand by improving the performance of heating and lighting equipment, rather than applying unfair pricing," adds Patrick Gloutney, President of CUPE-Quebec.
The Confederation of National Trade Unions (CSN)
CSN issued a press release, entitled "Bill 69 -- We must remain masters of our own destiny," that said:
"Bill 69 opens the door to more private electricity generation, in particular through section 38[1], which allows a company to generate electricity and distribute it to a customer located on adjacent land."
"The increase in private hydroelectric production to a maximum of 100 megawatts (MW), rather than the current 50 MW, is another way in which new private producers could emerge."
"Despite certain positive points, such as the planning of long-term needs, Fitzgibbon's bill does not close the door to private projects. There is a risk that these projects will not be socially acceptable and will prevent us from achieving an overall vision of what will be produced in the long term," points out Caroline Senneville, CSN President. "Planning should make it possible to avoid unpleasant surprises and to take into account all of Quebec's social, economic and environmental needs."
The CSN is opposed to major rate changes: "Two elements of the rate framework will disappear after 2026: dynamic rates will no longer be optional, and domestic rates may vary according to energy intensity. The pricing model could therefore change radically from 2026 depending on consumption." It's a well-known fact that the cost of heating a home is the largest part of an electricity bill, accounting for up to 55 per cent of the total amount. However, as the CSN press release points out, "some less fortunate people do not have the means to renovate their homes. This is even truer for tenants whose homes are like heat sieves."
The CSN denounces public-private partnerships for "clean" energy with Hydro-Québec taking all the risks. It believes that "the development model for the wind energy sector in Quebec is untenable in its current form" and wants Hydro-Québec to be the sole developer in this area.
What the CSN is referring to is the fact that since 2003, under the Liberal government of Jean Charest, Hydro-Québec has been signing electricity purchase contracts with private wind turbine power producers. In many cases, these contracts guaranteed the private companies a fixed rate that Hydro-Québec is forced to pay, regardless of the price of electricity on North American markets, resulting in huge losses for Hydro-Québec during periods of electricity surplus.[2]
In the current period of high demand for "clean" electricity, Hydro-Québec will guarantee private companies a rate for the electricity they produce. In 2026, Hydro-Québec will find itself with an energy production deficit, as it will have to honour all its firm electricity export contracts to the United States and supply "clean" electricity to all the new facilities producing battery components and extracting/refining critical minerals such as lithium, nickel, scandium, titanium, niobium and aluminium, to name but a few.[3]
The CSN concludes its press release by stating that it "will study the bill in greater depth to better understand all its impacts on the concerned workers."
Québec Federation of Labour (FTQ)
"[...] the Minister is concentrating a great deal of power in his own hands by appropriating a significant portion of the files from the Ministry of the Environment and the Ministry of Natural Resources and Forestry," says the FTQ.
The arrangements that Bill 69 puts in place are ones where Hydro-Québec will "no longer be obliged to proceed solely through calls for tenders. For example, it will be able to enter into supply contracts by mutual agreement, [...] develop new supplies itself or establish partnerships," and where projects will not have to go before the Energy Regulator for approval.[4]
It was revealed in 2022 that the Legault government and Hydro-Québec had regularly called on private consulting firms, the most famous of which was the U.S. multinational management consulting firm McKinsey, to advise them on the preparation and awarding of over-the-counter contracts without a call for tenders, disregarding the in-house expertise within the government's public service and among the Crown corporation's engineers. Hydro-Québec's new Executive Vice-President -- Strategy and Finance, Maxime Aucoin, is himself a former McKinsey employee. We can therefore expect this trend to continue and accelerate with Bill 69.
"As the devil is in the details, the FTQ will take the time to carefully study this ambitious 56-page bill. For the FTQ, there are democratic issues at stake here. We must be wary of politicizing the future of energy. Not everything can be decided off the side of a desk by a single ministry," says FTQ president Magali Picard.
"There are also issues of transparency and cost of living. For example, the fact that Hydro-Québec could sell off certain assets to the private sector worries us. There's also the whole debate to come on residential rate modulation. The government is capping residential rates at three per cent until 2026, but what happens after 2026? For the FTQ, Hydro-Québec must remain in control of its projects," the press release concludes.
This article was published in
Volume 54
Number 6 - July 2024
Article Link:
https://cpcml.ca/Tmlm2024/Articles/M540069.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca