It's not just low-income consumers who pay low prices for energy. Some industries also benefit from these prices, and could be paying Hydro-Québec more-which would mean more revenue for the province.
An oft-cited example of the problems caused by the current system is Quebec's aluminum industry: smelters receive cheap energy in exchange for creating jobs. But according to Garcia, the province has traded $2.57 billion in annual lost earnings for around 10,000 jobs-a ridiculous subsidy of more than $250,000 per job.
Despite what some may say, privatizing Hydro-Québec wouldn't impoverish the people of Quebec or boost blood-sucking capitalists. Instead, it would help the government (and therefore taxpayers) get as much as possible out of its most valuable natural resource.
Hydro-Québec is dreadfully inefficient when compared to similar-sized utilities in North America. Garcia estimates that Hydro-Québec could save $2 billion through basic reforms to increase productivity and efficiency. There would be job losses, but that's inevitable-Hydro-Québec has almost twice as many employees per customer as the average comparable American utility. When you factor in the money saved by no longer subsidizing the aluminum industry, along with the gains from higher prices, Hydro-Québec stands to increase its profits by about $10 billion.
This is where the government of Quebec stands to benefit. Through an intelligent royalty scheme, such as that proposed by Garcia, Quebec could make $8 billion per year after prices have adjusted. Hydro-Québec doesn't currently pay provincial or federal income taxes either-only a $2 billion dividend to the provincial government.
Obviously, privatization would have to be implemented carefully. The burden of rising energy prices on Quebec's poorest citizens should be considered-something Garcia's study inadequately addresses. However, the money the province will gain from privatization could easily help with this through tax credits to low-income households, or a similar policy.
Quebec stands to gain from such moves through increased revenues, a sounder fiscal situation, and a more efficient use of the province's most important natural resource. Garcia's plan may not be perfect, but it's the most comprehensive proposal to date. It would be unfortunate if we didn't at least discuss his recommendations and open a serious debate on the issue.
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