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Miguel OuelletteJust as the world is suffering through a natural gas shortage and prices are soaring, Quebec is thumbing its nose at the chance to become a leader when it comes to locally produced energy. Against all economic and even environmental logic, the Quebec government recently decided to definitively ban fossil fuel exploration and development in the province.

It’s a slap in the face for an industry that has already been mistreated by previous Quebec governments.

In 2016, Quebec adopted the Petroleum Resources Act in order to create a regulatory framework for the production of oil and natural gas within the province. The Act sent a clear message to energy sector investors: Quebec is prepared to welcome you, as long as you respect the environment and our rules, which are among the world’s strictest. After all, it is in everyone’s best interests to protect the environment while enabling wealth creation.

Following the introduction of the Petroleum Resources Act, companies submitted drilling applications and invested millions of dollars in preparation for the local production of fossil fuels.

Unfortunately, the Quebec government then revealed the secret ingredient of its special poutine sauce: the arbitrary and interventionist state control of the economy.

Click here to downloadDespite the recommendations of its own experts at the Department of Energy and Natural Resources, and in contravention of the regulations already in effect, the government started to revoke drilling permits. One example is the Galt project in the Gaspé region, which was, ironically, a partnership with Quebec taxpayers through Ressources Québec. I am not making this up.

But if you think the political crusade ends there, think again. The government also has no plans to provide fair market value compensation to the companies for the resources it will expropriate with its ban on developing fossil fuels. Fair market value is considered when other sectors face expropriation, so why is the energy sector being treated differently?

Foreign investors from every sector are waiting to see if the government is really going to unfairly expropriate companies that have followed the letter of the law. If this does happen, it will send a very bad message; namely that, in Quebec, the political class has no qualms about arbitrarily interfering in the economy, saying no to wealth creation and which have cost Quebecers thousands of jobs and millions of dollars of tax revenue that could have helped reduce the tax burden or fund public services.

Keep an Eye on Quebec

Meanwhile, Quebecers will continue to import over 300,000 barrels of oil a day, and over $5 billion a year will be sent to Alberta and the United States to pay for the oil and gas we consume locally.

There’s nothing wrong with interprovincial and international trade, of course. But when there are energy resources here, and companies that want to develop them, it’s the height of hypocrisy to prevent that economic activity from taking place, to the detriment of the local economy, all in the name of environmental protection.

While it may almost be the case that there’s no such thing as bad publicity for pop stars like Lady Gaga, the same cannot be said about the economic decisions of the government that have a negative impact on Quebec families’ bank accounts. Let’s not make a bad political decision even worse and turn ourselves into an object of international ridicule.

Miguel Ouellette is Director of Operations and Economist at the Montreal Economic Institute.

Miguel is a Troy Media contributor. For interview requests, click here.

This commentary was submitted by the Montreal Economic Institute, an independent public policy think tank based in Montreal. MEI is a Troy Media Editorial Content Provider Partner.

Through its publications and media appearances, the MEI stimulates debate on public policies across Canada by proposing reforms based on market principles and entrepreneurship.


The views, opinions and positions expressed by columnists and contributors are the authors’ alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

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