Hydro-Québec employees overpaid | JDM

According to a report which has just been submitted to the Régie de l’énergie, the overall remuneration of Hydro employees exceeds that of their peers in large companies by almost 15%.

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While Hydro-Québec maintains that the overall compensation of its employees is 5.4% above its reference market, an analysis carried out by the firm Gallagher shows that the gap is rather 14.45%, well above the “competitiveness zone” of plus or minus 5% recommended by experts.

This is the expert report that the Quebec Association of Industrial Electricity Consumers (AQCIE) had produced before the Régie de l’énergie in the current Hydro-Québec tariff case.

“In a context where the Prime Minister is asking organizations and ministries to respect their budgets and we are being told to tighten our belts, meanwhile, at Hydro-Québec, executives and employees are paid 15 % above the market,” laments Jocelyn B. Allard, president of AQCIE.

Hydro-Québec’s reference market is made up of large companies and municipalities, among others.

Context

Following a request from the Régie de l’énergie, in August 2024, Hydro-Québec submitted an update to the 2020 benchmarking study carried out by the firm Normandin Beaudry to assess the overall compensation of its employees. This estimated the pay gap for Hydro employees at 5.4% compared to its reference market.

The 2020 Benchmarking Study reflected the direct compensation (base salary and incentive compensation), pension plans and group insurance of 44 organizations, including 27% municipal or university organizations and state corporations.

It is in this context that the AQCIE and the CIFQ retained the services of the Gallagher firm in order to question and validate the results and conclusions contained in the study.

Gallagher took the liberty of reevaluating certain elements of Baudry’s report to show that the methodology used by Normandin Beaudry, a firm hired by Hydro-Québec, has the effect of underestimating the “normal” salary potential at Hydro-Québec compared to to its reference market

It is not 5.4% above the reference market as Normandin Beaudry claims, but when we take into account all the elements of remuneration, it is rather 14.45% above the competitive zone, above the reference market, concludes the Gallagher firm.

Reduce expenses

Remember that in March, Quebec asked state corporations to identify the equivalent of $1 billion over four years in spending reductions in order to contribute to returning to a balanced budget. The request targeted Hydro-Québec, Loto-Québec, the Société des alcools du Québec (SAQ), the Société québécoise du cannabis and Investissement Québec.

Regarding Hydro-Québec, Finance Minister Eric Girard said: “It will be up to Hydro-Québec to identify places where it can reduce its expenses. […] The answer will come from Hydro-Québec when we sit down with them and discuss with them. We want efforts, then they will tell us where they can make these efforts.”

Total pay gaps

Middle managers 2.2%

Supervisory executives 5.8%

Professionals 13%

Specialists 31%

Engineers 34%

Technologists 15%

Trades -2.1%

Office workers 11.5%