Strong criticism of our shift towards the electric battery sector

“We could have made much smarter decisions, probably spending less money for better results,” said an economics professor, who not only accuses the Legault government of building the battery sector “from nothing,” but also our SMEs from their employees to benefit foreign companies who are subsidized with billions of dollars.

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Even if the sector will bring positive benefits in construction, lithium production, transportation or taxes for cities, the game is not worth the effort, fears Frédéric Laurin, economics professor at the School of Management at the University of Quebec in Trois- Rivieres (UQTR).

“Paternalistic”, “archaic”, “risky”… the intellectual doesn’t mince his words when it comes to the Legault government’s flagship project.

“Why include these companies? To create jobs? We don’t need it. For innovation? They won’t innovate. So that our SMEs function? “We are not sure whether there will be a connection with them,” he wonders.

  • Listen to the interview with Saidatou Dicko, governance expert, on the battery sector via QUB radio :

Frédéric Laurin considers the battery sector to be “a counterexample to modern economic development”. “Importing technology from other countries is exactly what developing countries do,” he says.

Non-existent sector

In a recent policy note, the researcher at the SME Research Institute (INRPME) goes so far as to write that “the battery sector does not exist in Quebec.”

According to him, despite our lithium extraction companies (such as Nemaska ​​​​Lithium) and our battery factory projects in Bécancour (Ford-EcoPro and GM-POSCO) and Saint-Basile-le-Grand/McMasterville (Northvolt), Quebec is far from on point .

GEN portrait of Frédéric Laurin, professor in Vaudreuil-Dorion.

Following a Journal report that told the story of a worker who was forced to send his resume in English to the Ultium CAM factory in Bécancour, Quebec’s National Assembly passed a motion to protect the French language. Provided by GM-POSCO

According to S&P Global Market Intelligence, Canada will have a lithium-ion battery production capacity of 25.5 GWh by 2030, the regional development specialist highlights.

This is far behind China (2051 GWh), the United States (187 GWh), Poland (90 GWh), Hungary (57 GWh), Japan (48 GWh), South Korea (41 GWh), France (41 GWh) and Sweden ( 32 GWh), he says.

Little player

When it comes to assembly plants, Quebec “is not even the leader in North America,” emphasizes Frédéric Laurin, because they are located mainly in Michigan (6 plants), in the states bordering Illinois, Indiana and Ohio (5 plants) and in the southeast of the USA (11 works).

GEN portrait of Frédéric Laurin, professor in Vaudreuil-Dorion.

François Legault, Justin Trudeau and François-Philippe Champagne with the battery during the announcement of the Swedish Northvolt mega-factory in Quebec to produce lithium-ion batteries in Saint-Basile-le-Grand and McMasterville. Montreal, September 28, 2023. PIERRE-PAUL POULIN/LE JOURNAL DE MONTRÉAL/AGENCE QMI Photo Pierre-Paul Poulin

As our machine shops struggle to find workers and our regional green energy SMEs desperately need capital to grow, the professor struggles to understand how we can put so many resources into the battery. .

“The paternalistic side is to impose this development model on us, especially here in Mauricie, while we are trying to get out of big business,” he concludes.

Labor: “It’s a national emergency”

According to Frédéric Laurin, the labor shortage caused by battery factories will be “worse than a recession.” “The government does not seem to be very aware of the labor shortage, even though it is a national emergency,” he notes. Our SMEs, already suffering from dire labor shortages, will be pulled out from under them by foreign multinationals showered with billions of dollars of public money. “We will pay the price. This could end badly. Foreign companies may underestimate the labor shortage. “Even in Europe there is no shortage like we have,” he analyzes.

Innovation: “These are just assembly plants”

For the UQTR professor, it is illusory to believe that foreign companies stimulate innovation. “It doesn’t create innovation. “They’re just assembly plants,” he believes. He also regrets the Energy Transition Valley (VTÉ) Innovation Zone, which he says mandates large international factories while there was already an economic diversification strategy more focused on local SMEs. “I know a community that has industrial land and doesn’t want anything to do with a battery factory because there is a lack of innovation and the soil is too contaminated,” he breathes.

Technological risk: We put “all our eggs in one basket”

Frédéric Laurin fears that there is a risk of “putting all your eggs in one basket”. Instead of investing public money in our existing innovative companies, Quebec is relying on a single technology, he denounces. We are facing “technological lock-in,” meaning our battery factories could become obsolete in a few years, even though we haven’t paid for them in full yet. “A more viable economic development strategy would ensure risk diversification by diversifying the investment portfolio through financing different technologies,” he says. In his opinion, “everything based on automobiles” is not feasible.

Legacy of Legault: “We are so far from the big dams”

According to Frédéric Laurin, the comparison between the battery sector and the construction of hydroelectric power plants in the 1960s and 1970s is poor. The first works for companies. The second for the state of Quebec. The professor also has difficulty explaining why the battery sector is sometimes compared to the aviation sector, which, unlike the major players in the battery sector, has Bombardier, a Quebec company, as its origin. Will this be a legacy of the Legault government? “We are so far from the big dams. It’s day and night. We’re talking about machining and assembly here. Can we build a legacy built on foreign expertise? he wonders out loud.

Success factors that the battery sector does not know

-Volume development (factories that consume a lot of resources)

-Lack of innovation (assembly plant using technologies developed elsewhere)

-No critical mass of companies for a cluster

-No tour by a local company in the industry

-No guarantee that there is a subcontractor network in Quebec

-Lack of available and specialized labor

-Risk of a “technological lock-in”

-Low territorial anchoring

(Source: An economic critique of the battery sector development method in Quebec, November 2023, Frédéric Laurin)

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