Quebec Premier Philippe Couillard’s comments concerning a remote island home to about 200,000 Virginia white-tailed deer and world-class salmon fishing continue to dog him as he arrived in Europe for a multiday mission to woo foreign investors.
For more than a month now, Mr. Couillard has been under increased scrutiny by private-sector leaders and critics alike after he declared in year-end media interviews that his government would never move forward with oil development on Anticosti Island in the Gulf of St. Lawrence. He also said Quebec would probably seek to pull out of existing exploration agreements on the nature-rich island even though the province is a financial partner in the drilling effort.
The comments have riled executives at Pétrolia Inc., the Quebec oil junior in which the government also has an ownership position. And they have raised eyebrows among a broad spectrum of corporate leaders, not only in the resource sector, who are asking to what extent Quebec is truly open for business.
“The signal it sends to the financial community worldwide is it’s very difficult to develop natural-resource projects in Quebec,” said Françoise Bertrand, president of the Fédération des chambres de commerce du Québec. “[The perception is] that the Premier and the government he’s leading are not as keen as they could be on economic development.”
Several internationally based shareholders invested in Pétrolia on the presumption the government would honour its own contractual commitments, Pétrolia said in an unusually acerbic news release on Dec. 21. “It is necessary to recall the existence and binding nature of these agreements and remember that they cannot be hidden or, even worse, sabotaged,” Pétrolia said.
Industry sources say Pétrolia has largely given up on its Anticosti project and is now weighing whether to sue the government for damages. It would not be the first company to do so. Uranium miner Strateco Resources Inc. is also currently pursuing legal action against Quebec for $190-million in a suit financed by Toronto investment firm Third Eye Capital. Strateco claims the government encouraged it to push forward with its Matoush project only to reverse course later on.
The developments underscore the sheer confusion coming from Quebec City in recent years on natural-resource development. People interviewed for this story say they have been led to question Mr. Couillard, a surgeon by training, and his motivation.
“The harm is done,” Strateco chief executive officer Guy Hébert said of Mr. Couillard’s comments.
“How can you invite people to come to [Quebec] and say, ‘Your money is safe?’”
What has transpired over the past month and a half is sure to scare away some potential investors, said one senior banking source familiar with the Anticosti agreements, noting that Mr. Couillard was cool to development on Anticosti even before he was elected Premier.
The Premier further distanced himself from Anticosti oil during the global climate summit in Paris in early December, saying Quebec’s future lies in renewable energy such as hydroelectricity.
“[Mr. Couillard] wants to be seen as a champion of the green economy,” the banker said. “Meeting Arnold Schwarzenegger and Al Gore in Paris and receiving their congrats really gave him a boost of confidence. So he is now the new green giant.”
It has been a difficult winter for economic development efforts in Quebec over all. Spain’s Grupo FerroAtlantica SA said in December that it was cancelling plans for a $382-million silicon factory in Port-Cartier near Sept-Îles. Indian fertilizer giant IFFCO again put on ice its $2-billion project for a urea plant in Bécancour. Falling oil prices have also undermined the business case for Stolt LNGaz’s plans for a liquefied natural gas facility in that city.
Harold Fortin, a spokesman for Mr. Couillard, rejected suggestions that the Premier’s comments on Anticosti are having any lasting effect on investment efforts. Quebec announced two deals on Wednesday, including a preliminary agreement with India’s Tata Steel that could see the province take a stake in the company’s iron ore mine in Schefferville in exchange for more investment in the project by Tata beyond the $1-billion it has already spent.
“The government is currently working on many fronts to attract investment and our discussions are progressing very well,” Mr. Fortin said. “Quebec has many competitive advantages, is open for business, takes it seriously, and investors know it.”
However, many businesspeople counter that things are not nearly as rosy as the Premier’s Office describes, especially as it relates to the relationship between the public, politicians and the business community. A four-year effort to weed out corruption in the construction industry with the Charbonneau commission and a permanent police squad dedicated to the task has only deepened a historical suspicion toward business in Quebec, according to some.
“The point where it gets dangerous is that the government is now hesitating to consult the private sector,” said one well-known Montreal executive, who spoke on condition his name not be used. “You want to give free advice and people aren’t listening.”Report Typo/Error