Energy Minister feels Hydro-Québec has the means to reduce its expenses

Hydro Quebec file photo. (Daniel J. Rowe/CTV News)

Quebec's Energy Minister Pierre Fitzgibbon feels that even if it has to plan billions in investments to reduce the number of blackouts and increase its production, Hydro-Québec is in a position to reduce certain expenses in order to contribute to a return to a balanced budget.

"There are always ways, I think, of cutting back, and that's true everywhere in government," said the minister at a news scrum in Montreal on Monday, as part of an event organised by Propulsion Montréal. "The budgetary effort requested would not jeopardise the investments planned by the state-owned company. It's certain that at Hydro-Québec, considering the issues of spending on vegetation (cutting and pruning trees that risk causing a blackout), maintaining energy security, and new projects, we won't jeopardise that."

Earlier on Monday, Finance Minister Eric Girard also gave assurances that the requested budgetary effort would have no impact on the infrastructure investments that the state-owned company needs to make to increase its production capacity.

"Clearly, for Hydro-Québec, there will be no savings in capital expenditure," the minister told a news scrum on the sidelines of a speech to the Montreal Chamber of Commerce.

State-owned companies will have to identify the equivalent of $1 billion in spending cuts over four years in order to contribute to a return to balanced budgets.The request concerns Hydro-Québec, Loto-Québec, the Société des alcools du Québec (SAQ), the Société québécoise du cannabis (SQDC) and Investissement Québec.

They will have to achieve savings from the 2025-2026 financial year.

Annual savings are expected to reach $400 million in 2028-2029.

The budgetary effort comes at a time when Hydro-Québec has set itself the goal of investing nearly $100 billion to increase network capacity by 2035, according to its action plan unveiled in November.

In addition, between $45 billion and $50 billion will be invested to improve system reliability.

Hydro-Québec wants to reduce the number of outages by 35 per cent over the next seven to 10 years, at a time when adverse weather conditions have led to an increase in the number of outages.

Fitzgibbon feels the budgetary exercise is "very commendable" in a context where Quebec must return to a balanced budget.

"I think that Mr. Girard, quite rightly, wanted to have an approach to demonstrate to the rating agencies that we are on a critical path to reduce deficits," he said.

The Legault government has not identified the changes that Hydro-Québec would be able to deliver. Fitzgibbon mentioned administrative services as a possible avenue, but added that he did not yet have the details.

"It will be up to Hydro-Québec to identify the areas where it can reduce its spending," said Girard. "The answer will come from Hydro-Québec when we sit down with them and talk things over. We want to make an effort, and they will tell us where they can make that effort."

He pointed out that Hydro-Québec would have time to analyse these avenues since no changes are planned for this year: "We have not set 2024-2025 revenues because there will be discussions with the Crown corporations and their boards of directors."

This report by The Canadian Press was first published in French on March 18, 2024.