Quebec should reopen its costly secret risk-sharing contracts with aluminum multinationals, says Grand Chief Matthew Coon Come.

The contracts will end up costing Hydro-Quebec ratepayers $10.2 billion, according to a new study by an Oregon-based energy consultant. “If Premier Johnson can have legislation adopted to unilaterally reopen the labour contracts of Quebec, he can certainly adopt legislation to stop these huge losses under the risk and profit-sharing program,” said Coon Come.

The contracts commit Hydro-Quebec to providing over 3,600 megawatts of electricity to 13 large industrial companies—15 per cent more than the entire Great Whale River project would generate.

“Now that the export market has dried up and that the risk and ‘profit’-sharing program is in question, the so-called ‘need’ for the Great Whale River project can no longer be seriously argued,” said the Grand Chief.

The contracts allow aluminum producers to pay less for Hydro’s electricity if the price of the metal falls. The contracts were signed based on the argument that the aluminum smelters would create jobs. But according to the new study, which was commissioned by the Grand Council, the risk-sharing contracts will create only 8,400 jobs over their life—at a cost of $1.2 million per job.

Since 1988, the price of aluminum has fallen by half due to the recession and Russia’s flooding of the market with surplus aluminum. The falling price means aluminum producers now pay only 1.81 cents per kilowatt-hour of electricity. Hydro-Quebec spends 2.97 cents to produce and deliver each kilowatt-hour of electricity.

Officials from major aluminum-producing nations met in Ottawa late last month to discuss the troubled industry and agreed to cut world-wide output by 25 per cent. But the cuts are unlikely to affect aluminum production in Quebec. In fact, Hydro-Quebec’s risk-sharing contracts make it profitable for the aluminum producers to keep their smelters in Quebec going full-blast, even as they cut production elsewhere in the world.