Quebec is once again looking north for growth and investment.
Finance Minister Carlos Leitao, keeping a campaign pledge, said the province’s newly elected Liberal Party government will revive the so-called Plan Nord, a strategy to tap mining and energy resources north of the 49th parallel that former Premier Pauline Marois halted after gaining power in 2012.
Canada’s second most populous province will also create a C$1 billion ($914 million) fund to buy equity stakes in mining and oil and gas companies, many of which operate in the province’s remotest regions, Leitao said yesterday in Quebec City as he unveiled his budget for the fiscal year that began in April.
“We intend to take full advantage of our natural resource endowment,” Leitao told reporters. “Many other jurisdictions in North America and elsewhere in the world would love to have the kind of natural resources we have.”
Led by Philippe Couillard, the Liberals swept to power April 7 thanks in part to a pledge to create 250,000 jobs in Quebec over five years.
Former Liberal Premier Jean Charest unveiled the Plan Nord in 2011, promising C$80 billion of government and company investment by 2036 in an area twice the size of France.
About C$2 billion will be allocated to the new Northern Plan Fund by 2035, an amount that includes C$63 million for 2014-15, Leitao said yesterday. The fund will finance work on roads in the Plan Nord territory, with C$100 million set aside to train aboriginal Canadians.
Leitao defended his government’s decision to invest in Plan Nord amid a global commodities slump, saying the province must prepare for the next rebound in prices.
“The world still needs aluminum, iron ore and other natural resources,” Leitao said. “It’s totally appropriate to restart” the plan.
Quebec’s new C$1 billion natural resources fund -- called Capital Mines Hydrocarbures -- will seek to acquire equity stakes in mining and oil and gas companies so “Quebec society can obtain, as a shareholder, a direct share in the profits,” Leitao said, adding legislation creating the fund will be introduced in the fall.
The province, Canada’s largest by area, will set aside as much as C$20 million to pay for a feasibility study on a new rail line between the port town of Sept-Iles and the Labrador Trough region, Leitao said. Canadian National Railway Co. (CNR), the government’s partner in the venture, suspended preliminary work on the C$5 billion line last year amid delays in mining projects.
Quebec will quickly identify partners in a bid to begin evaluating whether to go ahead with the line this summer, Leitao said without being more specific.
Hydro-Quebec, the provincially owned utility, is planning to build a C$1.1 billion power line from northern Quebec to meet growing demand for electricity in Montreal’s northernmost suburbs, Leitao also said today. Construction of the line should create 1,000 jobs over five years, he said.
Quebec will use its energy surpluses -- currently estimated at 75 terawatt hours in the next decade -- to lure industrial investments and boost the competitiveness of the province’s companies including aluminum, Leitao said.
Leitao also distanced himself from measures -- announced by the previous government in February -- aimed at protecting homegrown businesses from hostile takeovers. Former Finance Minister Nicolas Marceau had proposed amendments to the province’s Business Corporations Act that would have given public companies “adequate means of defense” against unsolicited bids.
Some of the proposed measures “raise a number of questions,” Leitao said in his speech today.
Quebec will “consult the financial community on the best initiatives to take in this regard,” he said.
“The stability of the business environment, which our government can guarantee, will certainly help retain and foster development of head offices in Quebec,” Leitao said. “The best support we can give them is an environment that is conducive to economic growth and that offers a competitive tax system.”
To contact the editors responsible for this story: Paul Badertscher at firstname.lastname@example.org Chris Fournier