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View from Quebec: Gaining value from our resources

From good jobs to consumer demand, Stéphane Forget of the Fédération des chambres de commerce du Québec makes the case for developing hydrocarbons within the province.

The transition to a lower-carbon society is necessary, and it is something we believe in. It is a process that will gain speed, though it will extend over a period that will nevertheless still require the use of hydrocarbons, since hydroelectric power cannot meet all our needs.

Stéphane Forget, President and Chief Executive Officer, Fédération des chambres de commerce du Québec (FCCQ)

We therefore need to think globally about the scope of this transition, especially in economic terms, since the impact of the oil sector in Québec is significant in this area. A number of companies are involved in refining and processing petroleum products, generating more than $10 billion in revenues in 2015, along with $3.5 billion in taxes for our governments. And the workers in this sector have “good jobs,” earning on average 2.3 times the median Québec wage.

This does not even take into account the potential to be found in the hydrocarbon production sector. First, there are the strictly economic reasons. We know that Quebecers’ use of hydrocarbons remains substantial.

Despite a broad consensus on the importance of reducing our consumption significantly, more than 8 billion litres of gasoline were sold in Québec in 2016, up by nearly 4 per cent since 2010.

Oil products continue to rank first in energy consumed in Québec, meeting 38 per cent of our needs. According to data from the Energy Management Chair at HEC Montréal business school, Québec imports about 70 per cent of all its crude oil from abroad, thereby “exporting” more than $10 billion outside Québec. You have to be very rich to allow yourself to engage in this outflow, especially if you can meet your own needs, at least partially.

Revenues from the emergence of local operations could therefore improve our trade balance and our public finances. This idea is far from trivial: the development of other resources already enhances our economic performance and our public finances. By way of illustration, rights, permits, taxes and other contributions from the mining sector brought in more than $600 million for the Government of Québec in 2014. This does not count the impact of wages and of the value chain on the economy and on public finances.

"Revenues from the emergence of local operations could therefore improve our trade balance and our public finances."

Clearly, more work needs to be done to get a better idea of the economic potential from the hydrocarbon sector in Québec. This is why exploration work needs to be allowed to take shape. Four draft sets of regulations for instituting the Hydrocarbons Act have been published for consultation with the intention of producing the strictest regulations in North America. Québec will thereby implement the best regulatory practices and will spur innovations that will create environmental benefits here and elsewhere.

A number of concerns have been raised, most of them related to problems of cohabitation, and these require answers. For the development of our resources to be successful, the benefits must be clear, the impacts must be understood and mitigated, and trust must be established. Québec has done plenty of work over the last few years to set social-acceptance guidelines. The FCCQ has contributed greatly to these guidelines and has welcomed them.

While it is normal to require compliance with best environmental practices, we think it is abnormal to minimize the economic and financial potential during the thinking process. Regulations must embody a balanced view of the place that development of our hydrocarbons could take in our society and our economy. For this to happen, we need to allow projects that will past the test — a demanding one — of our regulations.

This is a translation of a letter originally published in French on La Presse.