Renewal of Plan Nord Aims for $50 Billion in Investment

In April 2015, Québec Premier Phillipe Couillard outlined his strategy for re-launching Plan Nord, the plan for sustainably developing Québec’s northern regions.Plan Nord toward 2035 is the 2015-2020 action plan that picks up where the original May 2011 plan from then-premier Jean Charest left off. It reflects the progress, additional challenges, and policy modifications since that time and provides the framework for actions over the next five years.

The Updated Plan

Plan Nord still covers 1.2 million square kilometers, almost 72% of the total landmass of Québec. The overall size of the plan has been reduced somewhat, down to $50 billion in anticipated investment from the original $80 billion, but the same 2035 timeframe was retained.

The government announced an expected cost to the province of $2.7 billion over the existing 20-year timeframe, with an investment of $912 million in infrastructure through 2020. Hydro-Québec is expected to contribute $20 billion through 2035, and the government will be asking the private sector to contribute the remaining investment. Such an investment is expected to bring thousands of needed jobs to the area, both construction-related and permanent positions.

This time around, Inuit and Cree groups are an integral part of the plan and have been incorporated into the decision-making process. The report repeatedly discusses the commitment to respecting the native people of northern Québec as well as the biodiversity of the area. Premier Couillard drove this point home in his announcement, stating “we want to create jobs and prosperity for northern communities and Québecers while respecting both the people of the North and the environment.”

The plan calls for mechanisms to be established to protect 50% of the covered area from industrial development, devoting that segment to environmental protection and biodiversity preservation. 20% of that amount is to be established over the next five years. Meanwhile, programs will be established to help to structure the development in the north. Areas of focus include adequate housing, education, training, and retention of the labor force, as well as improvements in social services.

Positives for Energy Development

Clean energy sources are central to the development plan. Forest biomass plays a role wherever possible, particularly in providing power for the mining industry or in powering remote communities, but hydroelectric power is the main focus. That should be no surprise—given that Québec has 3% of the world’s entire reserves of freshwater, 97% of Québec’s electricity is generated by hydropower, and 80% of Hydro-Québec’s generating capacity is in the northern regions.

From the infrastructure side, the existing transmission grid will be extended where it’s cost effective to do so. Meanwhile, Plan Nord targets supporting the development of off-grid communities while ensuring that a sufficient amount of conventional fuels are available during the transition period.

Natural gas is expected to fill a part of that transition period as well as provide sufficient power to northern mining operations. In September of 2014, the provincial government announced that it intended to invest $50 million in Gaz Métro to assist in liquid natural gas (LNG) development. The overall project is expected to cost around $118 million and should result in a threefold increase in LNG production with availability set for the summer of 2016.

While the release of the Plan Nord outline is a positive development, it must be followed up with a detailed plan and action per that plan. Momentum is critical. Otherwise, renewable energy efforts in northern Québec could suffer another setback. There is no guarantee that a third launch of Plan Nord will come to pass.