Premier François Legault on Monday announced a revised blueprint for Quebec’s economy.Christinne Muschi/The Canadian Press
The Quebec government is leaning harder on pension fund giant Caisse de dépot et placement du Québec to boost the economy as Premier François Legault doubles down on state interventionism to shield the province in the face of mounting trade turmoil.
The Caisse, which had roughly 20 per cent of its $473-billion in assets under management invested in Quebec at the end of last year, “needs to do even more” to back local projects and business, Mr. Legault said Monday at an event to unveil a new vision for the provincial economy. He said it’s one of the few organizations in Quebec with the power to sign billion-dollar cheques.
“I think the situation is critical right now,” Mr. Legault said. “There’s a risk for the living standards of future generations from the policies of Donald Trump. At the same time, there are opportunities and together, we need to better use Quebec’s strengths.”
Facing sagging polls and a revolt from doctors that could sink his re-election prospects, Mr. Legault on Monday outlined a revised blueprint for the economy that summons the power of state actors such as Hydro-Québec and Investissement Québec while discarding some of the policies of previous administrations. He said Quebec would invest in defence, put the welcome mat back out for data centres, and remove legislative obstacles to speed up strategic infrastructure projects.
It’s part of a wider effort to save both his government and the province from a brutal reckoning. Quebec has been particularly hard hit from tariffs enacted by the Trump administration in the United States as companies in the aluminum products, forestry, and manufacturing sectors, among others, jettison workers and freeze investments.
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The Caisse, which is independently run at arm’s length from the government, has a dual mandate to manage deposits with a view to achieving optimal returns while contributing to Quebec’s economic development. It is omnipresent in the province, investing in dozens of companies such as Alimentation Couche-Tard Inc. ATD-T and WSP Inc. WSP-T and pushing into transit development with Montreal’s $8-billion Réseau express métropolitain light-rail system.
Mr. Legault said there’s room for the pension fund manager to step up its Quebec activity by taking what he called “calculated” risks, adding that talks were now under way with Caisse executives on a new investment objective. “That’s why it was created,” he said at the event, held at Hydro-Québec’s Beauharnois generating station. “To help entrepreneurs who have good ideas but maybe not deep-enough pockets to see them through.”
Charles Émond, the Caisse’s chief executive, has often said that the group has no problem investing in Quebec because assets in its backyard are typically those it understands best. Caisse spokeswoman Marjaurie Côté-Boileau echoed that sentiment Monday but added: “Investing the hard-earned money of Quebeckers means we must keep responsibility front of mind. We need businesses to launch projects that benefit the economy and at the same time help protect and grow Quebeckers’ retirement savings.”
Observers warn that the risk is in exploiting the Caisse for the government’s pet projects, which could weaken its investment diversification strategies and rob its depositors of better returns to be had elsewhere. Mr. Legault intends to check in on the pension fund’s progress with monthly follow-ups, he told Montreal’s La Presse.
“It is essential that La Caisse remain independent in its investment selection to fulfill its primary obligation,” said François Dauphin, president of the Institute for governance of private and public organizations. “La Caisse is judged annually first and foremost by its returns.”
Hydro-Québec is another major actor being tapped. The utility, which is one of the world’s biggest producers of hydroelectricity, is spending $185-billion to increase generation capacity and improve the reliability of its electric grid. More than 20,000 people will be needed to carry out that work as of next year – a work force that could include some who’ve been recently laid off and retrained, the Premier suggested.
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Quebec’s abundant and relatively cheap electricity has been in high demand for decades, allowing the province to choose which industries it wants to welcome to use it. Recently, data centres had been on the rejection list because the sector isn’t seen as a major job creator.
Now, however, the government has had a change of heart. It sees the industry as an opportunity. Major players such as Google are hungry for power and willing to pay well for it, Mr. Legault said. Meanwhile, manufacturers are increasingly locating their operations near data centres, he said. In sum, Quebec could reap attractive revenues for its electricity while also winning corporate investment.
Mr. Legault said Quebec is not averse to welcoming U.S. investment as long as the province profits significantly from its power sales.
Meanwhile, the federal government wants to boost the construction of Canadian-owned and operated data centres that are equipped to train and run artificial intelligence models. The recent federal budget mandated AI Minister Evan Solomon to negotiate such deals and enabled the Canada Infrastructure Bank to invest in these projects.
Mr. Solomon said in an interview Monday that the federal government is open to providing financial backstops and offtake agreements, where the government can purchase capacity, with data centre companies to complete deals. “There’s going to be a lot of different structures,” Mr. Solomon said. “Some offtake, some backstop.”
The government has not struck any deals yet but there are “lots of term sheets on the table,” Mr. Solomon said.
With a report from Joe Castaldo