The group claims $450 million in government funding and tax breaks provide an unfair advantage.
QUEBEC CITY — The Quebec government’s $450 million investment in a new cement plant project in Port-Daniel-Gascons has prompted the creation of an advocacy group calling for a “fair and equitable” competitive environment in the province’s cement industry.
The Regroupement pour l’équité dans l’industrie cimentière québécoise says the government’s involvement in the McInnis Cement plant creates an unfair and unequal competitive environment where other cement plants are operating at “barely” 60% capacity.
The group consisting of representatives from various sectors including Quebec’s other cement plants, contends the $1 billion project would never have gotten off the ground without the government’s involvement.
Quebec is providing McInnis Cement with a secured interest-bearing $250-million loan and holds through Investissement Québec, a $100 million stake in the firm.
La Caisse de dépôt et placement du Québec will also make a $100 million equity investment alongside Beaudier.
McInnis Cement was created following the Beaudier Group’s acquisition of Cimbec in December 2011
In addition to the funding, the firm will receive tax breaks for 10 years and the group says the plant will also avoid the BAPE environmental assessment process other industrial operations must go through.
“Out of fairness, transparency, and respect for taxpayers, the government should withdraw from this project and release the studies on which it based its decision to make such a large investment that could have a negative impact on many regions in Quebec,” said Michel Binette, the group’s spokesperson.
He said thousands of direct and indirect jobs will be put at risk by the arrival of this new, subsidized plant.
The Port-Daniel-Gascons plant would serve the Boston-Washington, DC corridor, but the group says this market is already “well-served” by Quebec’s existing cement plants, to which they currently sell up to 25% of their capacity.
The group also says any drop in production resulting from the new plants will threaten the 650 jobs at Quebec’s four existing cement plants.
“People realize that what is happening here is that Peter is being robbed to pay Paul,” said Binette.
He also questioned the BAPE decision based on the Quebec government’s rationale that the project he described as being, in fact, “new” obtained the green light nearly 20 years ago.
“The initial project never got a certificate of authorization to build the cement plant, so the government cannot simply use the argument that the initial project was approved before the Environment Quality Act and its (office of public hearings on the environment) came into effect for the cement industry.”
The group is asking that the government put a figure on the benefits it has granted the Port-Daniel-Gascons project, including tax breaks, preferential electricity rates, and any other benefits that could give it net advantages not currently available to the rest of the cement industry.
McInnis Cement begins construction of the plant in the spring and the project will take two years to complete. The company claims 2,300 jobs will be created over tat period.
The plant will eventually produce 2.2 million tons of cement, with a potential increase to 2.5 million tons. Most of the cement produced will be exported out of Quebec.