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Regulatory: An overview of Quebec’s Plan Nord
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Regulatory: An overview of Quebec’s Plan Nord

How the Plan Nord will develop the region’s economy and social framework

Launched in May 2011 by the former Liberal Quebec government, the Plan Nord is a sustainable development program for northern Quebec that establishes the framework for the long-term economic and social development of an area that covers approximately 72 percent of Quebec’s territory (463,323 square miles).

The government will deploy the Plan Nord over the next 25 years through a series of phases and is expected to lead to 80 billion Canadian dollars ($81.8 billion) in public and private investments. The Plan Nord focuses primarily on the mining, forestry, biofood and tourism industries and places great emphasis on the development of energy, transportation, communication and social infrastructure, such as housing.

In this context, the Quebec Finance Minister announced the following measures in the 2012 budget speech:

  • Focusing on natural gas to stimulate the development of new mineral resource processing projects. Thus, Gaz Métro with the support of the Quebec government will undertake feasibility studies with a view to building a gas pipeline to supply the Côte-Nord region. Such a pipeline would represent an investment of approximately CA$750 million.
  • The Caisse de dépôt et placement du Quebec (manager of public- and private-sector pension funds) and CN (a Canadian railway company) are teaming up on a project to build a rail link between the port in Sept-Îles and the various mining projects in the Labrador Trough. If the project proceeds, it would represent a multi-billion dollar investment.
  • In 2012 Hydro-Quebec will undertake studies on the extension of the power transmission grid to Nunavik from the Complexe La Grande facility.

When the Plan Nord was launched in 2011, the Quebec government announced the creation of a new government corporation, the Société du Plan Nord, which will be responsible for coordinating government funding to implement the strategic plan formulated by the government in connection with its five-year action plans relating to the Plan Nord. Bill 27 creating the Société du Plan Nord is still being reviewed by the lawmakers. Under the circumstances, the government announced the creation of the Plan Nord Transition Office. This office is taking over the short‑term mandates and responsibilities that will eventually be entrusted to the Société du Plan Nord.

It is worth noting that two other major economic arms of the Quebec government, Hydro-Quebec and Investissement Quebec, were assigned important roles in their respective areas of expertise, namely the development of energy strategies and the coordination of public investments in private-sector projects.

In the 2012 budget, the Quebec government refined the role of Investissement Quebec, not only vis-à-vis the Plan Nord but in the natural resource sector generally.

Investissement Quebec already controls two subsidiaries operating in the natural resources sector, Société québécoise d’exploration minière (SOQUEM), which specializes in mining, and SOQUIP, which specializes in hydrocarbons. For better coordination of its investment strategy in resource development companies, the government announced in the 2012-2013 budget the creation of Ressources Quebec, a new Investissement Quebec subsidiary. That new entity will consolidate all of Investissement Québec’s current equity interests in mines and hydrocarbons, with SOQUEM and SOQUIP becoming subsidiaries of Ressources Quebec. The primary role of Ressources Quebec, made official on April 18, will be to establish more private partnerships with private entities in the mining and hydrocarbon sectors.

Ressources Quebec will be allocated over CA$1 billion, of which CA$500 million will be invested in equity interests in specific Plan Nord projects and the other CA$500 million will be invested in projects in the overall the Plan Nord territory. Thirteen developers have already been informed that the government is considering investing in their projects.

SOQUEM, now a Ressources Quebec subsidiary, will be allocated a further CA$100 million over five years for investments in mining projects.

Furthermore, the profits generated by the equity interests taken by Ressources Quebec will be deposited in a new fund announced in the budget speech, Capital Mines Hydrocarbures, and reinvested in future projects.

On Sept. 4, Quebec’s voter elected a minority Parti Québécois (PQ) government. The announcement of the new government’s vision for the Plan Nord is eagerly awaited. The new government has proposed to adopt an “integrated strategy for resources in the north in order to guide development projects” and may do some tinkering with the Plan Nord, such as changing the nature of the program to “Développement nordique”. It will be interesting to see how and if the new government will support infrastructure projects such as roads, transmission lines and railways in order to allow the new development projects to get off the ground in the north. Some have speculated that the new government will require some form of equity participation in projects in order to finance infrastructure projects.

Contributing Author

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Alain Massicotte

Alain heads the Montréal Infrastructure/P3 Group at Blakes, where he specializes in project finance and public-private partnerships (P3s). He counsels many foreign governments with respect...

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