To consumers billed at Rate L

Summary of the measure

In the March 2016 Québec Economic Plan, the government announced the implementation of a program to promote investments by businesses in the manufacturing and natural resource processing sectors.

Through the program, the businesses billed at the large power industrial rate (Rate L) that carry out one or more eligible investment projects can receive government assistance in the form of reduced electricity costs in their establishments billed at Rate L.

The assistance provided in the form of reduced electricity costs allows for the reimbursement of up to 50% of the eligible costs:

the reimbursement of 40% of the eligible costs incurred;
the additional reimbursement of up to 10% of the eligible costs incurred for projects aimed at greenhouse gas (GHG) emission intensity reductions.

The maximum reduction of the electricity bill is 20% for a maximum period of:

four years or;
eight years in the case of an application concerning at least $250 million;
four years over a maximum of six years for projects where the business successfully demonstrates to the Ministère des Finances that the project has been impacted by the public health crisis.

For example, a business with an annual electricity bill of $12 million whose eligible costs total $5 million can benefit from $2 million in financial assistance, that is, the reimbursement of 40% of the eligible costs of its project. The assistance granted will correspond to a 20% reduction in its electricity bill for 10 months. However, if the allowable costs stand at $60 million, the business will benefit from $9.6 million in total assistance, that is, 20% of its annual electricity bill for four years. A business that has demonstrated that it has been impacted by the public health crisis will receive a total of $9.6 million, or 20% of its annual electricity bill for four years, spread over a maximum of six years.

Eligibility

To be eligible for the measure, the investment projects must be carried out in Québec in businesses at least one of whose establishments is billed at Rate L. The eligibility application that a business submits can combine several investment projects.

Projects starting on or after January 1, 2021 can be submitted until December 31, 2021.
Projects starting on or after January 1, 2022 can be submitted until December 31, 2022.
Projects starting on or after January 1, 2023 can be submitted until December 31, 2023.

Minimum investment threshold

The total planned investments in the application must reach a minimum investment threshold that corresponds to the lesser of:

40% of the annual electricity cost of all of the business’s establishments billed at Rate L;
$40 million.

Eligibility certificate

To obtain an eligibility certificate, businesses must submit a detailed investment plan and show that each of their projects achieves one of the program’s objectives, namely:

the enhancement of productivity or energy efficiency through the modernization of operating procedures;
the conversion of production processes to adapt existing products to market demand;
increased output to adapt supply to market demand;
new production start-up.

Where applicable, the businesses must show the potential GHG emission intensity reduction.

Period of application of the measure

A discount may be applied to the electricity bill of a business for consumption between January 1, 2017 and December 31, 2032. The discount will be applied as of the date of the second bill issued following the month of submission of the first audited report on capitalized costs, and a reduction of the electricity bill may be applied:

for a maximum period of four years or;
eight years in the case of an application concerning at least $250 million or;
for projects impacted by the public health crisis, a discount on the electricity bill may be provided for a period of four years spread over a maximum of six years.

In cases where the production of these reports results in two or more discounts being due simultaneously, the discounts will be applicable consecutively in the order in which they are requested.

Maximum reduction of the electricity bill

The maximum reduction of the electricity bill is 20% for establishments billed at Rate L.

The amount of the eligible reimbursement is calculated according to the investments carried out. If the amount of the eligible reimbursement for a given year exceeds the maximum reduction of 20% of electricity costs, the surplus may be carried over to subsequent years.