The “native preference” established by Hydro-Québec is criticized

The reconciliation strategy with Indigenous people presented by Hydro-Québec last Thursday worries stakeholders and observers in the energy sector. By 2029, the state corporation promises to spend “more than a billion dollars on goods and services with indigenous suppliers”, some of which do not yet exist, by giving them priority in the awarding of contracts future.

In his 14-page document (New window)Hydro-Québec is also committed to offer financial support to First Nations and Inuit communities so that they become partners et shareholders energy projects (wind, solar or hydroelectric), in order to generate independent income.

The strategy was welcomed by the chief of the Assembly of First Nations of Quebec and Labrador (APNQL), Ghislain Picard, who sees it as an important step forward.

The state company explains that the communities demand a greater share of Hydro-Québec contracts for Indigenous businessesand she intends to respond positively.

In particular, we will be able to determine with them the best approaches to diversify the niches in which these companies can bid, and increase the proportion of contracts awarded to them.

Hydro-Québec also has increase the support offered to Indigenous businesses at all stages of the procurement process, from supplier qualification to contract closing.

Strategy makes people unhappy

Hydro-Québec will apply a true indigenous preferenceworries a source in the wind industry who cannot be named for fear of damaging its relations with the state company. This is a new right given to indigenous people and it would be good if this were clarified and precisely defined.

How to ensure equity between indigenous and non-indigenous people? asks this source.

Independent energy sector regulatory analyst Jean-François Blain also judges that the envisaged method of allocation is unfair to any other qualified supplier and deplores that the strategy has not been the subject of a democratic validation.

Mr. Blain believes that it is a virtue packaging on the part of Hydro-Québec to succeed in its pharaonic project to increase electricity production by 2035, particularly in the traditional territory of indigenous communities.

The main motivation of this program, under the guise of reconciliation, […] it is to ensure the consent of communities.

The expert does not understand why the state corporation would finance an indigenous community which would become a shareholder in a wind or hydroelectric project and ultimately draw revenue from it, since this means thatHydro-Québec assumes the financial risk.

According to him, this is a deviation from the collective financial structure put in place since the nationalization of hydroelectricity et, it is the very principle of universal redistribution of benefits which is broken.

“It has to be temporary”

For his part, the independent economist Jean-Pierre Aubry believes that it is a good idea to have better links between Hydro-Québec and indigenous communitiesbut, like Jean-François Blain, he deplores that the strategy does not present no accountability.

According to Mr. Aubry, these measures must be temporarywhile these new indigenous businesses build their expertise.

There is a definite cost in the short and medium term, and there is possibly a profit in the long term.

Mr. Aubry considers that the risk is taken by Hydro-Québecand he regrets that there is no counterpart in the strategy on the contribution that communities must make.

It should be planned from the design of this project that an independent entity will be responsible for producing a report or verifying the accounts made on the evolution of this agreement.

In response to questions from -, Hydro-Québec ensures thatin no case [elle va] take all the risks. Indigenous partners will be entitled to loan guarantees or direct financing, but donations are not considered.

Regarding the “indigenous preference” for certain contracts, the state corporation tells us that it will mandate an external firm to provide support to ensure impartiality.

In order to maximize the involvement of Indigenous communities, we will be able to define criteria in calls for proposals and use them during analyzes and ranking of submissions.

Hydro-Québec swears that it still wants to obtain the best prices to offer the best rates to customers.

She adds that the supplier selection process is done strictly according to the terms and conditions defined during the call for tender. This does not change whether we are dealing with an indigenous business or not..

Companies that don’t exist yet

Which Indigenous businesses would share the billion dollars promised by Hydro-Québec by 2029?

While there are indigenous companies that provide services to the energy sector, we have not found any such companies that produce materials for wind turbines or hydroelectric power stations.

There are none not to [sa] awarenessreplied the head of the Mashteuiatsh community, Gilbert Dominique, bearer of the energy file at the table of leaders of theAPNQL.

The president of the Eastern Energy Alliance, Michel Lagacé, confirms that there are indigenous businesses services, maintenance, environmental studies, civil worksmore no company manufacturing wind turbine components.

Indigenous suppliers are mainly in the field of services, for example for clearing of access roadsindicates Hydro-Québec. Nevertheless, the state corporation plans to provide assistance for the development of new businesses.

Opportunities for indigenous suppliers for these sectors will be explored further.

Analyst Jean-François Blain worries about how Hydro-Québec will cover additional costs related to starting new Indigenous businesses. According to him, this represents a financial risk transferred to the community, either through price increases or through loss of earnings for the Public Treasury.

I don’t see how Hydro-Québec will be able to ensure quality, delivery and pace in major projects. without already established companies, underlines Alexandre Bibeau, sales director for eastern North America at Groupe LAR, a company that manufactures and installs hydroelectric power plant equipment.

They will have to demonstrate that they have the capacity, the quality, that they meet Hydro-Québec’s requirements. We have been working in the market for over 80 years.

Mr. Bibeau, however, is not worried about losing contracts with the implementation of the strategy, in any case not in multi-million dollar projects. He believes that smaller mandates will be entrusted to indigenous businesses.

Unpaid bills: what will happen to these communities?

Hydro-Québec did not want to say whether it will offer funding to Innu and Cree communities whose members are significantly late in paying their electricity bills. Several are located where the state corporation has development goals.

She relies on the expected recommendations of the facilitator she appointed to find the right approach in this matter.