Hydro-Québec takes partnerships, environmental measures and sharing of wealth to new levels

The Canadian Energy Compendium is an annual Energy Council of Canada initiative which provides opportunity for cross-sectoral collaboration on a topic of shared interest across the Canadian energy sector, produced with the support of Canada’s national energy associations and Energy Council of Canada’s members. The stories contributed to the 2019 edition, Indigenous Energy Across Canada, highlight current conversations celebrating Canada’s dynamic energy sector and encouraging its continuous improvement.

Thanks to Todayville for helping us bring our members’ stories of collaboration and innovation to the public.

Click to read a Foreward from JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President & CEO, Canadian Council for Aboriginal Business

JP Gladu, Chief Development and Relations Officer, Steel
River Group; Former President & CEO, Canadian Council for Aboriginal Business

THE THIRD PHASE OF JAMES BAY DEVELOPMENT: TAKING PARTNERSHIPS, ENVIRONMENTAL MEASURES AND SHARING OF WEALTH TO NEW LEVELS

This article, submitted by Hydro-Québec, will focus on the development of the third phase of the James Bay complex, namely the generating stations namely the Eastmain-1 and Eastmain-1A/Sarcelle/Rupert project. Emphasis will be placed on the development of a new relationship with the Cree that led to an improved project development model.

The Eastmain Complex, the most recent of the James Bay hydroelectric development: Taking partnerships, environmental measures and sharing of wealth to new levels.

When the initial phases of hydropower development in the Baie-James region of Québec was launched in the 1970s, there was no law on the environment, no environmental ministries and no environmental impact assessment process. So consulting affected communities wasn’t on anyone’s agenda and wasn’t yet part of Hydro-Québec’s approach. In the new millennium, with a new phase of development in this region, close-knit partnerships with the Cree Nation have become the cornerstone of project development throughout Québec.

Nadoshtin and Boumhounan agreements paved the way to new developments in Baie-James in the 2000s

The Nadoshtin agreement (2002) between the Crees and Hydro-Québec opened up the possibility of building and operating the Eastmain-1 hydropower project, while the Boumhounan agreement (2002) provided a framework for the Eastmain 1- A/Sarcelle/Rupert project. The key to success for the Eastmain projects was partially diverting the Rupert River’s flow northward.

But Hydro-Québec’s commercial interest in this new project had to be balanced by clear and extensive measures to preserve the surrounding environment and respect host Cree Nation and Cree communities.

In the framework of the Eastmain-1 project, Hydro-Québec made a number of commitments with a view to

reduce the project’s impacts on the environment
protect the Cree way of life and encourage partnerships with the Cree communities
encourage the awarding of contracts to Cree businesses
promote the training and hiring of Cree workers.
built local capacity

“…The company wanted to do more than minimize environmental impact; Hydro-Québec wanted community members to see positive gains from the Eastmain developments…”

From the design stage, which was carried out in concert with the Cree, the Eastmain 1-A/Sarcelle/Rupert project incorporated many environmental protection measures, reflecting the Cree traditional knowledge of the community members they consulted. The Cree of Québec were involved in all stages of the project, ensuring they had a voice in how their land would be impacted.

Photo courtesy Hydro-Québec. Yellow sturgeon are raised in a fish hatchery and released into their natural habitat in mid-September, when they have reached a certain maturity. Cree tallymen assist in releasing the fish into the Rupert River in the Baie-James region.

With input from Cree community members, Hydro-Québec devised a combination of dikes and canals to improve water flow, ensuring that the project, which diverts 71% of the river’s flow, flooded only a minimal land area. They also incorporated a substantial ecological in-stream flow and a series of weirs in the river to protect fish habitats, biological diversity, preserve the landscape, and maintain navigation and other activities in the area.

Furthermore, Hydro-Québec signed an unprecedented water management agreement with the Cree to ensure that the modulation of the ecological in-stream flow was managed in a cooperative manner.

Economic spinoffs

In addition to helping preserve the local environment, Hydro-Québec was committed to bringing growth opportunities to the Cree of Québec. The company wanted to do more than minimize environmental impact; Hydro-Québec wanted community members to see positive gains from the Eastmain developments.

Under the Boumhounan Agreement, an extensive participation program built around information and consultation with Cree stakeholders was put in place. It also made funds available for the Cree to finance fisheries, capacity building and traditional activities projects.

When the Eastmain 1A/Rupert diversion project was completed in 2013, the Cree and Hydro-Québec signed the Reappropriation Agreement, giving Cree land users the necessary support to maintain their traditional activities as long as the Rupert River diversion is in operation.

Post-project consultations: ensuring that measures were effective

The COMEX, a joint committee composed of 3 members appointed by the Government Quebec and 2 members appointed by the Cree Nation government, organized consultations with Cree communities to hear their views on the effectiveness of environmental and social mitigation measures put in place for the Eastmain 1A/Rupert diversion project. Approximately 200 members of the Cree Nation from six communities participated in the consultations organized in November 2012.

Photo courtesy Hydro-Québec. Between 2002 and 2005, prior to the impoundment of the Eastmain-1 reservoir, 50 archeologists and Cree workers undertook archeological digs. They discovered 158 sites and their work shows that the Baie-James territory has been occupied by these populations for the last 5,000 years.

The major findings of the COMEX were as follows:

[…]”the Committee is convinced that the Eastmain-1-A and Sarcelle Powerhouses and Rupert Diversion Project will have contributed to greater understanding between all the parties concerned, to greater Cree involvement in the development of the territory, and perhaps to empowering them to achieve their long- term economic and community development goals.”
“Compared to previous projects carried out in the territory, the Eastmain-1- A/Sarcelle/Rupert project included more adequate and an unprecedented number of mitigation and compensation measures, for both environmental and social impacts. Many of these measures are aimed at helping Cree land users reclaim the territory. A new approach was developed and the Crees have benefited from the partnerships built with the proponent, thereby forging a new relationship.”
“Hydro-Québec was proactive, exceeding the requirements of the certificate of authorization in an effort to minimize the project’s impacts and ensure greater Cree involvement in environmental and social follow-up activities.”
“Hydro-Québec went to great lengths to ensure that Aboriginal communities derive benefit from the project.”

A new project development model

The Eastmain Complex – the most recent phase of development in Baie-James – added a potential energy output of 8.7 TWh per year, enough to power more than 500,000 Québec homes. The new relationships that Hydro-Québec and the Cree Nation developed over that period have become models for future energy resource development throughout Québec. With considerable untapped hydropower potential and a strong wind potential in Québec, Hydro-Québec’s new and improved project development model holds great promise for the future of clean energy in northeast North America.

Jacob Irving, President of Energy Council of Canada

The Canadian Energy Compendium is an annual initiative by the Energy Council of Canada to provide an opportunity for cross-sectoral collaboration and discussion on current topics in Canada’s energy sector. The 2020 Canadian Energy Compendium: Innovations in Energy Efficiency is due to be released November 2020.

Click to read comments about this series from Jacob Irving, President of the Energy Council of Canada.

Energy Council of Canada

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The Energy Council of Canada brings together a diverse body of members, including voices from all energy industries, associations, and levels of government within Canada. We foster dialogue, strategic thinking, collaboration, and action by bringing together senior energy executives from all industries in the public and private sectors to address national, continental, and international energy issues.

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Indigenous Clean Energy (ICE) promotes collaborative frameworks for renewable energy, energy efficiency, advanced energy systems and green energy infrastructure

Business / 5 years ago

INDIGENOUS PARTICIPATION IS IMPORTANT TO THE CANADIAN WIND ENERGY INDUSTRY, WITH OVER 35 COMMUNITIES ALREADY BENEFITTING FROM WIND PROJECTS

Alberta / 5 years ago

INDUSTRY-INDIGENOUS RELATIONS: A TREND TOWARD DEEPER ENGAGEMENT

Alberta

Yes Alberta has a spending problem. But it has solutions too

Published on September 14, 2025

Todayville

From the Fraser Institute

By Tegan Hill and Milagros Palacios

The Smith government’s recent fiscal update sparked concerns as once again the province has swung from budget surpluses to a budget deficit. To balance the budget, Finance Minister Nate Horner has committed to address the spending side and will “look under every stone” before considering the revenue side, and this is the right approach. Alberta’s fiscal challenges are a spending problem, not a revenue problem.

For perspective, if program spending had grown by inflation and population over the past two decades, it would be $55.6 billion in 2025/26 rather than the actual $76.4 billion. So, while the Smith government has demonstrated important restraint in recent years, total program spending and per person (inflation-adjusted) program spending is still materially higher in 2025/26 than in previous periods.

Alberta’s high spending is fuelling the projected $6.5 billion deficit. Consider that at the alternative spending level ($55.6 billion) Alberta would be enjoying a large budget surplus of $14.4 billion in 2025/26—rather than adding to the province’s red ink.

Despite this, the discussion around deficits often revolves around volatile resource revenue (e.g. oil and gas royalties). It’s true—resource revenue has declined year over year and that has an impact on the budget. But again, it’s not the underlying problem. The problem is successive governments have increased spending during good times of relatively high resource revenue to levels that are unsustainable without incurring deficits when resource revenue inevitably declines. In other words, the fiscal framework for the provincial government relies too heavily on volatile resource revenues to balance its budget.

As a share of the economy, non-resource revenue (e.g. personal income and business income) averaged 12.5 per cent over the last decade (2016/17 to 2025/26) compared to 11.1 per cent between 2006/07 to 2015/16. In other words, Alberta is collecting a larger share of non-resource revenues than in the past as a share of the economy. This statistic alone makes it difficult to argue that the province has a revenue problem.

So, what can the government do to rein in its spending?

Government employee compensation typically accounts for nearly 50 per cent of the Alberta government’s operating spending. From 2019 to 2024, the number of provincial government jobs in Alberta increased by 46,500. Over that period, total compensation for provincial government jobs jumped from $24.2 billion to $29.5 billion. Put differently, government compensation now costs $5.3 billion more annually than pre pandemic. The government should reduce the number of government jobs back to pre-pandemic levels through attrition and a larger program review.

Business subsidies (a.k.a. corporate welfare) is another clear area for reform. Business subsidies consume a meaningful share of each ministries‘ annual budget costing billions of dollars. For example, in 2024/25, grants were the second-largest expense for the ministry of environment at $182.0 million and the largest expense for the ministry of arts, culture and status of women at $154.2 million. For the ministry of energy and minerals, grants totalled $166.3 million in 2024/25. With more than 25 ministries, the provincial government could find meaningfully savings by requiring that each to closely examine their budgets and eliminate business subsidies to yield savings.

The Smith government’s recent fiscal update rung the alarm bells, but to fix the province’s fiscal challenges, one must first understand the underlying problem—Alberta has a spending problem. Fortunately, there are some clear first steps to tackle it.

Alberta

Maritime provinces can enact policies to reduce reliance on Alberta… ehem.. Ottawa

Published on September 14, 2025

Todayville

From the Fraser Institute

By Alex Whalen

Nova Scotia’s Finance Minister John Lohr recently took the rare step of publicly commenting on the province’s reliance on transfer payments from Ottawa. For decades, the Maritime provinces have heavily relied on federal transfers, and the equalization program in particular, to fund provincial budgets.

Ottawa collects taxes from across Canada and then redistributes money to different provinces and/or individual Canadians through various programs, including equalization. The MacDonald Notebook recently reported that Lohr told a Halifax Chamber of Commerce audience “we’re very aware that we are very dependent on transfer payments from other parts of the country… we can’t continue to take that for granted… we have the resources here.”

Lohr makes an important point. Consider equalization, a federal program that, in effect, provides payments to provinces with weaker economies and a lower ability to raise tax revenues, with the goal of ensuring all provinces can deliver comparable services at comparable tax rates.

Premiers in other provinces have often lobbied for changes including reform or outright elimination of the program. In fact, Newfoundland and Labrador (backed by Alberta, British Columbia and Saskatchewan) is currently challenging the program in court. These provinces believe the program is unfair given how equalization payments are calculated on an annual basis. And this is a serious political concern because at some point these provinces could force reforms to equalization that would result in reduced payments to recipient provinces.

Such a move would have a major impact on provincial finances in the Maritimes. In 2024/25, Prince Edward Island, New Brunswick and Nova Scotia are the three provinces most dependent on equalization funds, ranging between $3,718 per person in P.E.I. to $3,252 per person in Nova Scotia. Equalization represents between 19.4 per cent and 21.9 per cent of provincial revenue in these provinces. Put differently, without this federal transfer program, these provinces would lose roughly one-fifth of their revenue. Only Manitoba comes close to this level of reliance on equalization.

But why should the Maritime provinces wait to have reform forced upon them? Moreover, it shouldn’t be a goal to be a long-term recipient province for the same reason one wouldn’t want to be a long-term welfare recipient. Regardless of what Alberta and Saskatchewan wants, we in the east should want to be off equalization for our own reasons. Strengthening provincial economies in the Maritimes would raise living standards and incomes, while strengthening provincial finances and reducing reliance on programs such as equalization.

So, what can be done?

First, the Nova Scotia government’s recent shift in policy to permit more natural resource development in areas such as mining and natural gas is a strong first step. The province is sitting on billions of dollars in economic opportunity in this sector, while the sector’s wages tend to be among the highest of any industry. Other provinces should follow suit and develop their natural resource sectors.

More broadly, governments in the region should trim their bloated bureaucracies to make way for broad-based tax relief. The Maritime provinces have the largest governments in Canada, with government spending (at all levels—federal, provincial and local) exceeding 57 per cent of provincial economies. A consequence of this large government sector is some of the highest taxes in North America (across all types of taxation). Reducing the size of government to national-average levels would make room for substantial tax relief that would boost growth in the region.

Long-term dependence on federal transfers does not need to be a given in the Maritimes. With the right policy environment in place, the governments of Nova Scotia, P.E.I. and New Brunswick can strengthen their economies while reducing reliance on the rest of Canada. On this front, Minister Lohr is on the right track.