Quebec, Trudeau’s poster child, trying to reach net-zero by going full blast on EV

The province of Quebec is blessed with natural resources in the form of rivers and lakes that Hydro Quebec has damned to generate what is labelled as clean electricity.  As a result of their resource benefits, their 2020 annual report notes their residential rate of 7.3 cents/kWh (kilowatt hour) are the “lowest in North America”!  The report also states $3.6 billion was a “Contribution to the Quebec government’s revenue in 2020”.

Attempting to find the average rates for Ontario is almost impossible and depends on your LDC (local distribution company) and their charges for distribution, regulation etc. on top of the cost of generation.  As one example Hydro One have several residential rate categories combined with TOU (time of use) metrics varying from a low of 13 cents/kWh to over 20 cents/kWh with the average in the range of 17 cents/kWh.  Those costs naturally have an effect on per capita usage so for the 2020-year Ontarians consumed 139.5 terawatts (TW)* whereas Quebecers consumed 171.4 TW*.  On a per capita basis Quebecers consumed just over 20 MW annually whereas it was less than half that in Ontario at about 9.5 MW. 

Back in November 2020 Premier Legault announced a $6.7 billion five year plan to cut emissions. The main focus seemed to be aimed at banning all gas car sales in 2035 and electrification of 1.5 million vehicles, by 2030, including city buses (55%), taxis (40%) and school buses (65%)!

Those various EV will need those large batteries to power them and that means they will weigh more. As expected, the Ford Lightning weights 1,600 pounds more than an ICE powered Ford 150.  That will presumably have more of an impact on the deterioration of asphalt meaning more frequent road repairs but where is that money going to come from?  A large part of our gas taxes currently are slated for keeping our road and highways in reasonable shape but (to the best of my knowledge) those road repair taxes don’t apply to EV! The other issue is recycling those batteries as they “contain hazardous materials, and have an inconvenient tendency to explode if disassembled incorrectly” and “Currently, globally, it’s very hard to get detailed figures for what percentage of lithium-ion batteries are recycled, but the value everyone quotes is about 5%,” says Dr Anderson. “In some parts of the world it’s considerably less.”

As if to amplify the issues with those batteries they are much less effective in cold weather so will require more frequent charging during Quebec’s cold winters which is when their “peak demand” occurs so will Hydro Quebec need to restrict electricity use further?  They already offer customers a “dynamic pricing” break for lowering consumption during 7 hours on a winter day.  The number of EV registered in Quebec as of March 31, 2021 were 85,486 or 1.5% of over 5.8 million road vehicles (2019 stats) so if that increases to Premier Legault’s target of 1.5 million on the road by 2030 we should suspect Quebec will be severely restricting consumption and by then trying to figure out how to recycle the batteries.

It turns out some of those batteries will be manufactured in Quebec as PM Trudeau and Premier Legault in March 2021 got together and announced they would lend Lion Electric Co., a Montreal based manufacturer of electric trucks and buses $50 million each to establish a $185 million lithium-ion battery assembly plant in Quebec. Certain conditions would allow $30 million of that $100 million to be forgivable. Quebec’s Economy Minister, Pierre Fitzgibbon, stated “If we play our cards right, we could become world leaders in this market of the future,”

A Financial Post article about Lion Electric said; “The company went public this past May and has Power Corp as a major investor owning 36 per cent of Lion.” Just another epitome of the “Laurentian Elite”.

If one moves along to a week ago the news broke further about Lion Electric and how they received an order (conditional) for 1,000 electric school buses.  Needless to say, that was big news and was carried extensively in various big and small media outlets. Reviewing several of them you find Lion is expanding south as an article in the Cantech site said; “Lion said the construction of a shell building at its Joliet, Illinois, manufacturing facility was 80 per cent complete and was expected to begin production during the second half of 2022.”  One wonders will that site be supplying those “school buses”?

An article in Global News starts off with: “The Lion Electric Co. says it has received a conditional order for 1,000 electric school buses from Student Transportation of Canada, whose parent company is controlled by Quebec’s pension fund manager.” Hmm, all in the family!

So, it appears the “sainthood” sought by Legault and Trudeau by their attendance at COP 26 is being financed by the taxpayers of not only Quebec and the Federal Liberal government but also by the Alberta taxpayers. The latter provided the bulk of the equalization payments resulting in Quebec receiving $13.2 billion of the $22 billion Alberta coughed up in 2019 alone.

The Laurentian Elites love it but we should guess Albertans will hope all those 1.5 million EV charging their “made in Quebec” batteries will cause blackouts!

*Net of imports and exports.

Maybe Alberta’s Premier should hold off asking for Constitutional Changes to the Equalization Formula

The past week was an interesting one here in Canada as a couple of major provincial announcements from the east (Quebec) and west (Alberta) suggest what appears to be a major conflict on energy sources and the flow of tax dollars related to the “Equalization Formula”.

On the latter; in 2019 Alberta contributed $22 billion more in tax revenue than they got back from the Federal government according to a Fraser Institute review whereas Quebec in that year, received $13.2 billion or 66.9% of total equalization payments.

Those equalization payments have seemingly annoyed Albertans as clearly demonstrated via a recent referendum resulting in almost 62% voting to revise the “constitution”. The principal reason expressed by Alberta Premier Kenney why Albertans supported the referendum was; “to demand a repeal of “discriminatory” environmental laws that hurt Alberta’s energy sector.”  Needless to say, the push to eliminate fossil fuel generation has impacted the Alberta economy and forecasted to do more harm.

While many of those “environmental laws” were imposed by the Trudeau led Liberal minority government another recent “related event” presumably played a role!  That event was how Quebec Premier Legault suddenly announced: “The government of Quebec has taken a decision to renounce, definitively, extraction of hydrocarbons in its territory,” and labelled it as “a recipe for prosperity in an emerging age of international consensus on preventing drastic climate change by cutting fossil fuel carbon emissions blamed for global warming.” Needless to say Premier Legault will attend COP-26 where he presumably hopes to be honoured for Quebec being blessed with hydro dams. Legault noted those dams “enable us to attract investment because, in future, enterprises that want to produce goods without emitting greenhouse gases are going to find in Quebec an incomparable land of opportunity”.

As is to solidify Premier Legault’s anticipated blessing at COP 26 it is interesting to note Quebec accounts for 46% of all EV (electric vehicles) registrations in Canada perhaps related to their generous grants and cheap electricity rates. 

It seems ironic Albertans contribute their tax dollars to allow Quebecers to receive an $8K grant from Quebec (coupled with one for $5K from the Feds) to purchase a Tesla EV!

Does Premier Legault see lithium demand fueling Quebec prosperity?

The foregoing question is one that could be weighing on Premier Legault’s mind and why he dismissed exploration and extraction of hydrocarbons (fossil fuels) in Quebec even though they may well have untapped and significant resources particularly related to natural gas.  As it turns out Quebec also has lithium reserves which are currently in high demand and recently forecast to reach as much as US$30,000 per metric ton in the spot market. Couple those lithium reserves with another forecast suggesting its demand will grow at average annual rates of 30%* and one can see why Premier Legault is excited about the net-zero push.

As it to top things off back in late March of this year the US Department of Commerce “held a closed-door virtual meeting with miners and battery manufacturers to discuss ways to boost Canadian production of EV materials, according to documents seen by Reuters.”  The article describing the meeting noted a month before; President Biden and PM Trudeau committed to building an EV supply chain between the two countries. Interestingly two US mining companies (Livent and Pallinghurst) have invested in Canada jointly purchasing “the Nemaska lithium project in Quebec, in what will be North America’s largest lithium mine.” Livent was one of the 30 or so companies present at the ”closed-door” virtual meeting as was Tesla.  Another interesting article from July 2020 noted a California based company; KoBold Metals, “financed by well-known billionaires including Jeff Bezos, Ray Dalio, Michael Bloomberg, Richard Branson and Gates” has been attracted to Quebec.  KoBold’s principal focus is on finding “cobalt” and nickel deposits (secondary) both used in the manufacturing of those EV batteries.  They have acquired “rights to an area (in Quebec) of about 1,000 square kilometres (386 sq. miles), where it plans to begin collecting geophysical data before the end of the year.” It should be apparent why many of the “billionaires” behind KoBold push the “net-zero” concept. It is to simply make themselves even richer at a huge cost to the rest of us commoners. 

From all appearances Premier Legault sees the push for net-zero and elimination of fossil fuel use as a gamechanger for Quebec by attracting investors seeking minerals for EV.  Those incoming investments will (he believes) create well-paying jobs and rocket Quebec’s economy up to surpass Alberta’s on a per capita basis. His wish perhaps, is to see Quebec vault to become Canada’s richest province.  Should that happen because of the demise of fossil fuels Quebec may find itself as “The Province” doling out those “equalization” monies.

Maybe Premier Kenny should hold off before insisting on revisions to the equalization formula, as in the future, when the world has achieved the goal of the eco-warriors and our demented politicians, Quebec will be rife with cash and the rest of Canada will be the beneficiaries. 

We will all surely need it, should the foregoing happen, as we will be struggling to survive without reliable power to keep us warm in our cold winters and many of us will, by then, be living in poverty.

*BYD a major Chinese battery manufacturing company recently announced they will raise battery prices by 20% due to raw material costs.