What amateurism on the part of the government of François Legault and his big boss in the battery sector, Pierre Fitzgibbon, the super-minister of the economy, innovation and energy and head of Investissement Québec.
They decided to invest billions of dollars of public money in battery factories without first seriously examining the details of their public investment strategy in the electric vehicle battery market.
As my colleague Francis Halin reported last week, the state-owned company Investissement Québec (IQ), which is responsible for investments in the battery sector, does not have a meaningful document on the various risks associated with public investments in the sector. With the exception of a 78-page study (redacted) by Hatch, which deals with nickel supply. In this study, Hatch highlights the importance of securing this raw material in the battery industry.
In short, the Legault government seems to be going there almost blindly with its huge investments in the battery factory projects announced so far, namely those of Northvolt, GM/POSCO Chemical, Ford Motor and its Korean partners EcoPro BM and SK On.
Worse, the CAQ government didn’t even see fit to impose a Quebec content threshold on the battery sector it is spending billions of dollars developing. There is no need to set such a threshold, says Minister Fitzgibbon. So Northvolt, GM or Ford have absolutely no obligation to source raw materials and services from Quebec.
Legitimate concerns
Quebec’s investments in new battery factories are rightly a cause for great concern. Let me repeat the inflammatory statements made by two university professors reported in Le Journal this week.
Saidatou Dicko, professor of accounting at the University of Quebec in Montreal (UQAM), governance expert: “The government needs to be more transparent and demanding in terms of risk assessment. It doesn’t make sense.”
Luc Bernier, professor at the Graduate School of Public and International Affairs at the University of Ottawa: “We put all our eggs in one basket. If the batteries are obsolete in five or eight years, what will we do with our factories that have cost us billions?
However, the huge investments in the battery sector are being made jointly with Justin Trudeau’s government. As we know, the federal government is not skimping on massive investments in battery factory projects, particularly in Quebec and Ontario.
A study and it is urgent
With more than $40 billion in future investment in the battery sector by the federal government, Ontario and Quebec, the goal is obviously to capture a relatively large share of the global electric vehicle battery market.
There is no doubt that this market will grow significantly.
According to the company Mordor Intelligence, the size of the global battery market is expected to grow from $50 billion in 2023 to $145 billion in 2028, an annual increase of 23.5%.
So there is great growth potential in sight.
However, we must not lose sight of the fact that a large number of developed countries, including the USA, China and several European countries, are also part of the crazy race for electric batteries by also investing heavily.
At a time when battery factories are mushrooming across the industrialized world, it would have been essential for the Legault government to have serious studies on the risks of investing so many billions in the battery sector.
This is even more important as the battery will develop rapidly in the coming years.
It’s never too late to do something good.
Let Legault and Fitzgibbon stop treating us like pigs and immediately commission a serious study before continuing their massive investments in the battery sector.
I, of course, invite Justin Trudeau and his Minister of Innovation, Science and Industry, François-Philippe Champagne, to take part in this important study, simply to ensure that we do not waste billions of public money.
