June 25, 2024

Quebec to Spend Billions to Develop Northern Regions

The region is well endowed with mineral resources, woodlands and potential hydroelectric developments, but it currently lacks the roads, railways and other infrastructure necessary for their exploitation.

The plan, announced Monday, initially commits the province to spending 2.1 billion Canadian dollars ($2.2 billion). It also calls for a variety of measures, including the establishment of an investment fund, which Quebec hopes will initially lead to the development of at least 11 mines and ultimately produce overall investment totaling 80 billion Canadian dollars.

While the proposed project, known as Plan Nord, includes banning any industrial development in a large portion of the region, the program has the potential to put the province at odds with environmentalists. Similarly, while consultations are already under way between the province and the area’s large native Canadian population, the development of their traditional lands may pose potential political difficulties.

But assuming the plan proceeds as envisioned, it will become the largest attempt to develop Canada’s sparsely populated north since the development of oil sands in Northern Alberta. It will also build upon the large hydroelectric projects in northern Quebec, which are already a significant source of energy for the northeastern United States.

“The Plan Nord is the project of a generation,” Quebec’s premier, Jean Charest, said in a statement. “The Plan Nord is a sweeping, human adventure. It is unique both in its scope and its approach.”

For Mr. Charest, a Liberal, the plan appears partly intended to reverse his long slide in public opinion polls. But more broadly, it also has the potential to reverse the province’s financial difficulties and, in particular, its struggle to finance public health care services.

The government estimates that plan will produce 14 billion Canadian dollars for its treasury over the next 25 years. Some of that will come from royalty payments, as mineral rights are generally held by provincial governments in Canada.

The government-owned Hydro Quebec already profits from selling surplus electricity, most of it already generated in the north, to the United States. Expansion of electrical generation will enable the province to expand that export business and perhaps open sales to neighboring Ontario, which is seeking a way to replace its coal-fired generating plants.

The plan encompasses all of Quebec’s territory above the 49th parallel, an area of about 463,000 square miles. The area contains substantial deposits of base metals that are in high demand from China, including iron ore, zinc and nickel. It also has deposits of lithium, a key component of modern batteries, and rare earth elements, commodities that China produces but is increasingly reluctant to share.

To encourage the development of mining projects, the government will introduce tax credits for efforts to minimize environmental impact. And it has immediately set aside 500 million Canadian dollars for direct investment by the government in private sector ventures.

Much of northern Quebec is within the boreal forest that extends across Canada and through parts of Alaska, Russia and Scandinavia. It is an important reserve of fresh water, and many environmentalists and scientists say that its forests help offset the effects of global warming. The boreal forest is also an important summer home for many migratory birds.

The province said that “industrial development” would be banned in about half of the northern region and that 12 percent of the area would receive special protected status. It seems likely that defining where the protected areas should be will be the subject of debate between industry and environmental groups.

Article source: http://www.nytimes.com/2011/05/10/business/energy-environment/10arctic.html?partner=rss&emc=rss

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