Last month, the government of Quebec and Alcan cobbled together a deal in which Alcan agreed to invest $2b in order to build a new aluminum smelter in the Saquenay-Lac St Jean region; the selling point was the creation of 740 jobs.
The Quebec government’s contribution:
- A $400m interest-free loan over 30 years.
- $112m in tax breaks
- Cheap electricity
It turns out that this is a particularly rancid piece of pork. My colleagues Jean-Thomas Bernard and Gérard Bélanger decided to take some time to put a dollar figure on the value of the electricity subsidy, and they published their results in an op-ed article in the print version of today’s Le Soleil (their original text is available here). They conclude that in each of the 30 years of the project, the Quebec government’s contribution amounts to $336,000 per job created.
Yikes.
Worthwhile Canadian Initiative 
$336,000 per job created
That’s what the Province of Quebec is spending, explicitly and implicitly, to entice Alcan to build a smelting plant in the Saquenay-Lac St Jean region. That is one heck of a lot of money to spend on job creation, for jobs that probably would be create…
Stephen
I think the metric normally used for industrial job creation is $100k/ job?
i.e. that is what (I think) the Ontario government used (or used to use) when deciding whether to support municipalities in their bids for large industrial plants.
You have to presume big spillovers into the aluminium processing industry, fabrication, etc., to justify the Alcan deal.
More significantly, aluminium smelters are moving to Iceland, because it offers carbon-free geothermal power in abundance. (Google is also moving server farms there, for the same reason). The assumption is that carbon will be taxed in the future, and the heavy industry with the carbon free power source will have a competitive advantage.
Since Quebec has hydro power, shouldn’t Alcan be paying it? Rather than the opposite?