Tactics of the Electrical Loop

Quebec, a province known for its ambition, has been facing setbacks in its bid to make a mark in the battery sector, a growing and competitive industry. The failures of Northvolt and Nemaska Lithium, two key players in this venture, have left the province with significant financial losses.

In the case of Northvolt, the company, which received funding from the CAQ government before any construction began, has reportedly collapsed due to a multitude of factors, including the launch of too many factories at once and the election of Donald Trump. This failure is expected to cost Quebec around $270 million.

The situation with Nemaska Lithium, another significant player, is also concerning. Rio Tinto, one of the owners of Nemaska Lithium, may need to inject more funds due to delays in the company's mine at Whabouchi and plant in Becancour. Quebec, which owns 50% of the shares in Nemaska Lithium and has already invested $965 million, injected an additional $150 million in August.

The setbacks in these projects have not only resulted in financial losses but have also raised questions about the CAQ government's management of such ventures. Critics argue that the state doesn't have the same tolerance for risk as the private sector, and the CAQ government has been criticised for its handling of Northvolt and SAAQclic.

However, the debate is not solely about the objectives of these projects but about the evaluation of risks and negotiation of agreements. Economics professor Frédéric Laurin, who proposed the creation of CLEANTECH QUÉBEC in 2023 to support businesses in Québec in the fields of clean technologies and innovative sectors such as aerospace, has been vocal about this.

The battery market was taking off, and states were competing to attract investments. Quebec, inspired by Ontario's enrichment through the automotive industry, wanted to make its mark in the battery sector. The province estimated economic spin-offs from these projects at $2.87 billion.

Despite these setbacks, Quebec is not giving up. Professor Laurin proposed in 2023 to support existing companies in clean technologies and innovative sectors such as aeronautics, rather than creating new ones from scratch. A total of 15 other battery sector projects are still in the works, and the province remains hopeful.

It's important to note that the money lost due to the failure of Northvolt and Nemaska Lithium is the population's money. The federal government was cautious and did not immediately allocate funds, despite promising more money than Quebec.

In conclusion, the failures of Northvolt and Nemaska Lithium have been a significant blow to Quebec's ambitions in the battery sector. However, the province remains optimistic, with 15 other projects in the works and a focus on supporting existing companies. The lessons learned from these setbacks are likely to guide Quebec's future strategies in this competitive and growing industry.