Montreal, July 28, 2017 – By declaring Anticosti Island off limits to oil and gas exploration, the Quebec government is restraining economic development and sending a negative signal to investors, after years of uncertainty on this file.
The government confirmed Friday that it was definitely closing the door to oil and gas development on Anticosti Island, an area 16 times the size of the Island of Montreal with a little more than 200 inhabitants. This decision, and the negotiation with the companies involved to abandon their exploration rights, will cost Quebec taxpayers over $40 million, not including damages to be paid to Trans American and Petrolia, with whom agreements have not yet been reached.
“We’re paying, through our taxes, to prevent job creation in Quebec. That’s pretty bad!” says Germain Belzile, Senior Associate Researcher at the MEI.
Instead of encouraging economic development in Quebec, our governments leave resources in the ground. If our politicians could stop being so hesitant and allow the search for and development of these resources, both government and taxpayers would come out ahead.
Moreover, the government deserves a “D” in its handling of this file. It maintained an atmosphere of uncertainty: One day, it is interested in a project; the next, it needs to become a shareholder in the venture in order to approve it, and signs a contract to that effect; the following day, it has lost interest and tries to get out of its obligations. “Such a climate of uncertainty constitutes an excellent recipe for chasing away potential investors in all regions of the province and limiting development, as the economic literature clearly shows,” adds Mr. Belzile.
“The development of our natural resources is a good opportunity to enrich the province of Quebec as a whole, without having to subsidize anyone. That’s why the government should remain open to such development,” adds Michel Kelly-Gagnon, President and CEO of the MEI. “Especially given that, according to surveys, most Quebecers are in favour of developing our resources.”
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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.
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