On September 4, 2012, Quebec’s voters elected a minority Parti Québécois (PQ) government led by Pauline Marois. The PQ is proposing a number of changes to the province’s environmental and natural resources policies and priorities. The new government was sworn in on September 19 and has already implemented some changes. This bulletin provides a preview of what may lie ahead.

When in opposition, the PQ was very critical of the previous government’s resource development and environmental policies. The PQ’s election platform sets out extensive commitments on the resource development issues and provides some insight into policies that the government may seek to implement. That said, it is important to keep in mind that the PQ only holds a minority of seats in the National Assembly, which may mean that its ambitious goals notwithstanding, many of the proposed changes may never see the light of day.

Ministerial Responsibilities

On September 19, 2012, the newly elected Premier appointed the Cabinet. The Ministers named to the Natural Resources and Environmental portfolios have had significant involvement in the Quebec environmental protection movement.

  • Martine Ouellet was appointed Minister of Natural Resources. Ms. Ouellet has spent the better part of her career at Hydro-Québec, the government-owned public utility, and has been a vocal critic of the mining industry and long-time defender of the province’s water reserves. Priorities for the Natural Resources portfolio will include: the rethinking of mining royalties; the future of the Plan Nord championed by the previous government; the revival of the forestry industry; and redefining the province’s energy policy. Ms. Ouellet will also be tasked with pushing forward the long-awaited and long-debated reform of the Mining Act. The two previous attempts at reform died on the order paper.
  • Daniel Breton, a co-founder of the Québec Green Party and an advocate for sustainable development and energy independence, was named Minister of Sustainable Development, Environment, Wildlife and Parks. Priorities at the Ministry will include sustainable development, energy independence, reductions in greenhouse gas (GHG) emissions, and a rigorous protection of water, air and natural settings

Plan Nord

The announcement of the PQ’s vision for the Plan Nord is eagerly awaited. The PQ has proposed to adopt an “integrated strategy for resources in the north in order to guide development projects” and may do some tinkering with the Plan Nord. It will be interesting to see how and if the PQ will support infrastructure projects such as roads, transmission lines and railways in order to allow the new development projects to get off the ground in the north. Some have speculated that the PQ will require some form of equity participation in projects in order to finance infrastructure projects. Should the PQ decide to proceed with the proposal, the Minister of Environment will be responsible for implementing the commitment to devote 50% of the Plan Nord territory to non-industrial purposes that was promised by the previous government.

Mining Royalties

A cornerstone of the PQ platform on resources and environmental matters is Quebec asserting control over its natural resources. The PQ has committed to increase mineral royalties and, to that end, is proposing a hybrid royalty system comprised of a 5% base royalty on the gross value of production and a 30% supertax on profits above an 8% return on capital. The PQ platform also provides that, where possible, companies will be required to carry out secondary and tertiary transformation of mineral and forest products in the province in order to create sustainable jobs in Quebec.

Shale Gas

Freshly sworn in, the Minister of Natural Resources abruptly announced the government will move to impose a definite moratorium on shale gas exploration and development in the province. The announcement caused confusion within the industry, as the Minister announced at the same time that the Bureau d’audiences publiques sur l’environnement (BAPE) – a public body charged with conducting environmental assessment hearings – would be entrusted with the strategic environmental assessment that is currently underway and given a wider mandate in connection therewith. The former Liberal government had imposed a partial moratorium on gas exploration in March 2011 while a strategic environmental assessment to evaluate the risks of hydraulic fracturing is carried out.

Energy

On energy issues, the PQ platform proposes to:

  • adopt an energy independence policy to reduce imports of oil and to drastically reduce consumption of oil and gas;
  • after review by the BAPE, provide for royalties on hydrocarbon extraction of more than 50% of profit before tax;
  • require that wind energy production projects be controlled by the government, co-operatives and local communities; and
  • create a fund to develop necessary technologies to electrify public and commercial vehicle fleets as well as rail lines when possible.

Greenhouse gases, royalties on water, and wetlands

The PQ intends to be more aggressive than the Liberal government in tackling GHG emissions and has proposed to reduce GHGs by 25% of 1990 levels by 2020, instead of the current 20% target. The PQ promptly delivered on its commitment to decommission the Gentilly 2 nuclear facility. The PQ has also stated that royalties on groundwater and surface water takings used for bottling and in industrial processes will increase and promised to improve the protection of wetlands particularly in urban areas.

Land Rehabilitation

During the election campaign, certain members of the PQ reiterated their intention to reinstate the popular “Révi-Sols” program, which aims to rehabilitate contaminated lands for residential, recreational, institutional, commercial and industrial uses. The program had generated more than C$2.7-billion in investments when it was in place.

While it appears that changes are coming with respect to environmental and natural resources policy in Quebec and in the way the government exercises its discretion in making decisions, major legislative changes will require the support of other parties. This could push the PQ to reach compromises with opposition parties that have platforms that are more open to natural resources and industrial development.