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Aluminum giant has threatened to close three Quebec smelters if electricity rates jump by 60%
QUEBEC — In the Quebec National Assembly, in response to opposition questions, Premier Pauline Marois said she would get involved personally in negotiations with Alcoa Inc., which has said its three Quebec smelters will no longer be competitive if Hydro-Québec raises the price it pays for electricity.
“We should reassure Alcoa employees, not scare them,” Marois said, answering opposition questions. She said “discussions at the highest level” are underway between the Quebec government and Alcoa, led by Jean St-Gelais, who as secretary-general of the executive council is Quebec’s highest civil servant.
Earlier Marois said she would not negotiate in public with Alcoa. “This is a major industry for Quebec,” Marois said, adding aluminum smelting has been established in Quebec “for decades,” providing “very good jobs.”
“And we will continue to do so,” the premier told the assembly.
François Legault said the government is proposing a 60-per-cent increase in the Hydro rates it is charged, threatening 3,300 smelter jobs.
Pierre Moreau, Liberal house leader, said the Parti Québécois government is “sacking” the Quebec economy.
“The jobs in aluminum will continue to be in Quebec,” added Martine Ouellet, minister of natural resources. “We will work with the company to find appropriate solutions.”
The three energy-intensive smelters in danger of closing are in Bécancour, Baie-Comeau and Déschambault.
In Quebec, the base rate for electricity paid by aluminum smelters and other industrial users is 4.25 cents a kilowatt hour.
A smelter in New York State can buy electricity, generated with natural gas, for 2.3 cents a kilowatt hour, according to Jean Simard, president of the Aluminium Association of Canada,
New smelters in the Arabian Peninsula — in Oman, Qatar and the United Arab Emirates — are paying 2 cents a kilowatt hour, Simard told a Quebec government commission late last month.
A proposed rate increase would boost the L Tariff charged to Alcoa and other smelter operators, as well as to other industrial users, to 4.46 cents a kilowatt hour, Simard said.
To be competitive, he told The Gazette at the time, Quebec producers need a price closer to 2.5 cents to 2.8 cents a kilowatt hour.
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