Skip to main content
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
// //

Michael D. Penner poses following an interview in Hydro-Québec’s Montreal offices on Nov. 10, 2015. Mr. Penner became Hydro-Québec’s board chairman in the fall of 2014.

Christinne Muschi/The Globe and Mail

A flurry of North American public utilities have opted for privatization amid government pressure to tackle out-of-control debt levels, but for one Crown corporation, it's not even on the table.

Don't even think about Hydro-Quebec and privatization in the same sentence, the chairman of the board says.

"It's completely not on [the board's] radar screen whatsoever," Michael Penner – who took over from media baron Pierre Karl Péladeau just more than a year ago after the latter stepped down to enter provincial politics – said in a recent interview at head office in downtown Montreal.

Story continues below advertisement

"There's a better chance that the Egyptians would privatize the pyramids than we would privatize the dams of James Bay," he said, in reference to the giant hydroelectric utility's massive power generating facilities in northern Quebec.

The utility – by far Canada's largest – has paid dividends to Quebeckers for generations and boasts the "most advanced, clean, reliable world-class system," he said, adding: "I don't think that we would want to jeopardize that under any circumstances."

Asked how privatization would "jeopardize" that system, Mr. Penner would say only that "there is no conversation whatsoever about privatization of Hydro-Québec."

The comments come in the wake of the recent successful initial public offering of part of Ontario's hydroelectric transmission and distribution system, Hydro One, as well as comments earlier this year by former Hydro-Québec CEO André Caillé that it would make sense to privatize the utility's distribution arm.

Last year, Liberal Premier Philippe Couillard said the government would assess its options after two Quebec economic experts – Luc Godbout and Claude Montmarquette – proposed in a government-commissioned report the partial privatization of Hydro-Québec and the state-controlled liquor board. The province, they said, must take drastic measures to address its massive debt problem and avoid a credit-rating downgrade.

Hydro-Québec has been under fire in some quarters for allegedly being inefficient and bloated, with some of the highest production costs in North America, especially when compared with those in the private sector.

For example, the Quebec government leaned on Hydro-Québec to build up an impressive network of wind farms in the province despite not really needing to produce any more electricity, says energy economics expert Jean-Thomas Bernard, who is a visiting professor at the University of Ottawa.

Story continues below advertisement

"We know the government prodded [Hydro-Québec] to develop wind when there was surplus," he said.

The high production costs Hydro-Québec currently faces cannot be offset by the low prices the corporation fetches from exports to the United States. That market has seen prices driven down by the growth in supply of natural gas as shale gas discoveries came online, Mr. Bernard said.

Mr. Penner, 46, concedes "there have been seismic energy shifts south of the border and to a lesser extent up in Canada and shale gas has been a big part of that."

But there are opportunities in an era of heightened climate-change awareness for selling environmentally friendly hydroelectric power in the New England states and elsewhere, said Mr. Penner, a former Wall Street M&A lawyer who took over his father's textile business in 2006 and was criticized at home for investing in a North Carolina sock company about a decade after facilities in Quebec and Ontario were shuttered.

"There is an opportunity for us to supply clean energy, reliable energy, to the customer in those markets in order to support their goals to reduce global warming."

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies