Hydro-Québec chief executive Michael Sabia says the utility will strike its own path in response to Tariff threats by accelerating previously planned energy infrastructure investments to bolster the provincial economy. Power lines run near the Beauharnois generating station in Beauharnois, Que., on Jan. 27.Christinne Muschi/The Canadian Press
Hydro-Québec chief executive Michael Sabia says Canada must think big and act now to secure its future in the face of a hostile U.S. government that risks isolating itself amid a global transition toward cleaner energy.
President Donald Trump has ushered in an era of “radical unpredictability” with threats of tariffs against Canada and other allies and threats to annex sovereign countries, Mr. Sabia said in a forceful speech to the Canadian Club of Montreal Wednesday. Canada, he said, cannot shirk from that existential attack and must negotiate any new trade deal from a position of strength.
“Trump wants to break our confidence. My response: No way,” Mr. Sabia said in his prepared remarks. “We cannot wait and let others decide the rules of the game for us.”
Mr. Sabia, a former federal government mandarin and business veteran who previously led the Caisse de dépôt et placement du Québec and BCE Inc., said Canada has to match U.S. tariffs with countertariffs. And he said Hydro-Québec will strike in its own way: by accelerating previously planned energy infrastructure investments to bolster the provincial economy.
The utility will boost annual investments in new hydroelectric production facilities and transmission lines by $6-billion to $14-billion this year, Mr. Sabia said. That’s consistent with projected investment spending of $12-billion to $16-billion a year that it outlined in an ambitious plan in late 2023.
In all, Hydro-Québec will spend $200-billion between now and 2035 in a bid to modernize its grid and reduce the province’s reliance on fossil fuels. That includes new development announced in December on the Churchill River with the government of Newfoundland and Labrador.
The effort will generate 25,000 new construction jobs in Quebec over the next two years alone, Mr. Sabia said. The goal is to ensure the province’s energy security and build east-west partnerships, such as those with Newfoundland, while protecting the environment and contributing to Quebec’s collective wealth, he said.
“Hydro-Québec can’t completely stop an economic slowdown,” Mr. Sabia said, echoing similar comments made by Premier François Legault earlier this month. “A job in the Beauce region can’t simply be moved to the Côte Nord region. But we can offer many people opportunities and serve as a lever to grow our energy ecosystem.”
Mr. Sabia did not touch in his speech on cutting power delivered to the U.S. as a way to fight Mr. Trump’s tariffs, something Ontario Premier Doug Ford has suggested as a “last resort” if the U.S. President doesn’t back down. Mr. Legault said as recently as last month that this remains an option and that “nothing is being excluded.”
Quebec sells most of its U.S. electricity exports on the northeast spot market and any reduction in shipments won’t necessarily be felt in a way that sends a political message. The province’s only existing U.S. supply contract is with Vermont, a state that voted overwhelmingly Democrat last November. Two new supply deals have been cemented with Massachusetts and New York, but those projects are still under construction.
Canada as a whole must show the courage and ambition to invest now in its bedrock sectors and promising industries – whether that be mines, potash or artificial intelligence, Mr. Sabia said. “Build and grow our companies in these sectors, in the country’s big projects,” he said. “It’s the only way to exit this turbulence as winners, more resilient and more prosperous.”
Mr. Trump has said he intends to slap 25-per-cent tariffs on aluminum and steel imported from Canada as part of a wider effort to address what he sees as a trade imbalance between the two countries. He’s also threatened a 25-per-cent tariff on all goods from Canada and Mexico, linking that levy to a perceived failure by the two countries to deal with what the White House has called “the extraordinary threat posed by illegal aliens and drugs” flowing into the U.S.
Mr. Trump’s government is also trying to reverse U.S. commitments to fight climate change. His orders have sought to claw back clean energy projects and conservation efforts worth tens of billions of dollars, sometimes running afoul of court rulings requiring funding freezes to be lifted.
Slowing down Canada’s own energy transition efforts to see how the U.S. actions play out would be a mistake, Mr. Sabia said. The path to a low-carbon global economy was never going to be an easy straight line, he said. There will be highs and lows, and though Mr. Trump’s term might delay that progress, it won’t stop it, he said.
“Through the noise the signals are clear: Markets, suppliers, companies continue to advance towards a clean energy economy,” the Hydro-Québec CEO said.
Mr. Trump is fond of the phrase “drill, baby, drill” to signal his desire to boost domestic oil production, but oil majors remain cautious, Mr. Sabia noted. An ExxonMobil Corp. executive said recently that “a radical change in production is unlikely” because companies are focused on financial sustainability rather than short-term output. Chevron Corp. cut its capital spending plans by US$2-billion for 2025.
Meanwhile, renewable energy companies are increasing their investments and many governments are reaffirming their climate commitments, Mr. Sabia said. “By continuing to advance in Canada, we’ll be aligned with the rest of the world. It’s the United States that will be offside. And that’s our opportunity. It’s the moment to cement our competitive advantage, to take the lead.”