François Legault has not ruled out suspending the export of Quebec electricity south of the border as retaliation for the customs tariffs that Donald Trump wants to impose. In truth, this is the last card the CAQ government would play, and it is considering other ways to respond, including targeting American symbols.
Unlike the PM of Alberta, Danielle Smith, who refused to jeopardize her oil exports, François Legault chose to be part of the Canadian front against the bellicose president.
In solidarity with the other provinces, he did not rule out suspending contracts for the sale of electricity to the Americans, if necessary.
On the other hand, the real position of the Legault government was expressed earlier Wednesday by Minister Christine Fréchette.
“It is not our intention to use energy or electricity rates,” she responded spontaneously in Quebec, far from the spotlight focused on the PM summit meeting in Ottawa.
Behind the scenes, in government, we admit that this scenario has little chance of materializing.
Contracts have been signed with the states of New York and Massachusetts.
Redefining these concluded agreements would harm Quebec’s reputation as a supplier.
And what’s more, the government would miss its target by attacking states, rather than Trump’s federal government.
Tax… Amazon?
Among the options considered, there is that of a surtax on products such as aluminum, which the Americans can hardly replace.
Trump threatened to impose a 25% tariff.
But if it decided to start gradually with 5%, for example, the effect of this tariff would be canceled out in the short term by the exchange rate, which currently favors local exporters.
In the event of a higher price from the outset, a tax on online purchases on platforms such as Amazon or Walmart would be considered.
This possibility was not discussed between the PMs in Ottawa, it is said, but is being analyzed by the Legault government.
In this way, American symbols would be targeted.
The measure would also have the advantage of encouraging citizens to shop more in local businesses.
-The CAQ government still doesn’t like the idea of making consumers pay.
Helping businesses
He could tone down his intention to increase Hydro rates for businesses (François Legault has already mentioned a 6% increase), since they will suffer a drop in their business in the USA.
But since Hydro must double its production capacity for the energy transition, someone must foot the bill, and once again, the CAQ do not want to make the residential consumer suffer, they find themselves in another dilemma.
An aid program for businesses that would suffer the greatest impacts is also part of the considerations.
In the current context of a deficit of $11 billion, however, we wonder where the Minister of Finance, Eric Girard, could take the money, without having to postpone reaching a zero deficit in 2030.
There would definitely be no “wall to wall”.
The wood industry, for example, already weakened, could receive greater support in compensation.
No matter what measures the CAQ leader takes, perverse effects are to be feared, like in a risky game of snakes and ladders.
And on top of that, the likely federal election adds a layer of uncertainty to deal with.
This is not a crisis like COVID-19.
François Legault must still have the impression once again of walking on a wire, blindfolded…
IN BULK
Not yet, the reshuffle
François Legault will carry out a ministerial reshuffle in 2025, but not immediately. The context favors short-term stability, although the PM could draw out the card of redistribution of roles if he feels the need between now and spring. Even if Christine Fréchette’s task is heavy, we tell the government that there is no question of forcing things to resplit the Economy and Energy, which are intimately linked. Christine Fréchette therefore remains the superminister with crucial responsibilities, while a fight looms with the future American president.
Photo Agence QMI, TOMA ICZKOVITS
