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Eastmain 1-A and Rupert River Diversion Hydropower Project

Economic Spinoffs


Two distinct populations have settled in the Baie-James region, the Crees and the Jamésiens. On the one hand, the Cree population has rapidly increased over the last 30 years and there was an increase of 307% in the labour force from 1976 to 2001, compared to 34% for Québec as a whole. Most of the Cree communities have experienced major economic development since 1975. During the same period, the Crees went from an economic largely dependant on traditional activities and social security benefits, in the early 1970s, to an economy based jobs related to community and institutional development. Income from wage-based employment largely exceeds income from hunting, fishing and trapping activities. Moreover, the service sector (tertiary) in Cree communities, which supplied a large portion of the jobs in the last 30 years, is now saturated. Cree communities, and particularly the young people, are affected by a high unemployment rate.

On the other hand, the Jamésien population, which resides primarily in the southern portion of the Baie-James territory, in the towns of Chapais, Chibougamau, Level-sur-Quévillon and Matagami, decreased by 20% between 1971 and 2001.In the early 1970s, the Jamésien economy was based mainly on mining and forestry. Since 1997, the low price of metal on the global market has led to a significant slump in the region’s mining economy. The forestry sector also saw its economy hampered by a number of external factors. The proportion of jobs associated with the primary sector decreased sharply between 1991 and 2001, from 15% to 8%.

At the public hearings, the Cree authorities, along with several participants, expressed the need for job creation to promote the well-being of their communities, particularly owing to the substantial growth of the population, the decrease in the practice of traditional activities and to the large influx of youth on the job market. Some raised the issue of the temporary nature of jobs in the construction sector and of the under-representation of the Cree workers on the proponent’s jobsite. One of the most frequently mentioned topics is the need for adequate training programs to allow Crees to eventually hold skilled, permanent jobs in businesses involved in territory development.

At the public hearings held in Chibougamau and Montréal, many briefs and testimonies, notably from Jamésiens, were presented in support of the project, mainly owing to its significant economic spinoffs. Elected officials, development agencies and socioeconomic stakeholders, among others, emphasized the importance of hydropower development, as much for the Nord-du-Québec and the surrounding regions as for all Québec. One of the subjects raised in both cities was the fragility of the regional economy and, consequently, the need to maximize economic spinoffs.

Economic spinoffs of the project

Construction of the Eastmain-1-A and Rupert Diversion project will generate economic spinoffs of nearly $ 2.4 billion for all of Québec, including direct, indirect and induced spinoffs (table 1). As for the Nord-du-Québec administrative region, where the project will be carried out, it will benefit from 9% of the economic spinoffs.

Table 1. Breakdown of the economic spinoffs by region
 
Beneficiairies  Value ($ M) Percentage
Nord-du-Québec

  - Crees
  - Jamésiens

211.6

104.9
106.7

9%

4%
5%

Abitibi-Témiscamingue  133.8 6%
Saguenay–Lac-Saint-Jean 186 8%
Other regions of Québec 1 822.4 77%
All of Québec 2 353.8 100%

For the Cree communities

As regards to Cree communities, the Boumhounan Agreement foresees that contracts with a minimum value of $ 240 million will be offered to Cree businesses during the construction period, which will generate $ 104.9 million in economic spinoffs within the Cree territory, half of which in the form of salaries and the other half in the purchase of goods and services. During the operation period, the proponent intends to award $ 45 million in contracts to Cree businesses.

The Boumhounan Agreement also foresees a number of funds (table 2), with a total value of $ 43.65 millions, which will have positives repercussions on economic activity and job creation in Cree communities, both before and after construction. Some of these funds, the Boumhounan Fund for remedial works, for instance, should extend over 15 years.

Table 2. Funds specified in the Boumhounan Agreement
 
Fonds Budget ($ M)

Wildlife Management Plan (Weh-Sees Indohoun Corporation)

0.75
Boumhounan Remedial Works Fund (over 15 years) 32
Boumhounan Archaeological and Burial Site Fund 2.5
Eenou Indohoun Fund 3.9
Training Fund (already mentioned) 1.5
Eastmain-1-A/Rupert Mercury Fund 3
Total 43.65

Among other economic spinoffs for the Crees, there is a possibility of a business partnership with the proponent regarding their participation in the construction and operation of a new hydropower powerhouse at the La Sarcelle site. In the Cree Employment Agreement (Apatisiiwin Agreement), signed in March 2004, Hydro-Québec reiterated its commitment to take measures to ensure, by March 31st, 2017, that 150 Crees would hold permanent positions on its staff in the Baie-James region. This commitment should offset the negative effects of the «boom and bust» cycles, which often happen at the end of construction works.

For the Jamésiens

The optimization measures, intended to promote the participation of Jamésien businesses and workers, implemented by the proponent during the Eastmain-1 powerhouse project will be reinstated for this project. Thus, companies in the Baie-James region can participate in the Eastmain-1-A and Rupert Diversion project to a proportion of up to $ 106.5 million for the region. This amount includes direct spinoffs of $ 87.34 million, indirect spinoffs of $ 4.14 million and induced spinoffs of $ 15.18 million. Other economic spinoffs originate from the agreement concluded with the Municipalité de Baie-James, which foresees a financial partnership of about $ 300 million over a period of 50 years, for investments in the economic development of the region. COMEX hopes that the Crees and Jamésiens cooperate in all the major actions foreseen in the territory.

Conditions to be fulfilled by the proponent

The proponent must submit his annual follow-up on economic spinoffs during the construction phase to the ministère du Développement durable, de l’Environnement et des Parcs. He will focus mainly on the hiring of Cree workers, on the measures intended to ensure the integration of said workers to the work crews and on the awarding of contracts to Cree businesses. He will also report on the follow-ups conducted five and ten years after the beginning of operations.

Moreover, considering the number of workcamps (8) and their dispersion over a vast territory, the proponent must inform the Ministère of the additional Cree employment counsellors that he intends to hire.

He must also inform the Ministère of the results of his discussions with the Commission de la construction du Québec (CCQ) regarding Crees’ access to employment opportunities on the jobsites.

The proponent must determine, with his Cree partners, which trainings should be offered in order to reach the employment objectives, set in the impact study, regarding the construction and operations phases of the project. To offer the Crees access to jobs in different fields of work, responsible authorities should extend the training programs beyond the construction field. The proponent must inform the Ministère on this aspect and report on the annual follow-ups on the results of the training programs.

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