Billions poured into state coffers
The government receives, year after year, between $5 and $6 billion a year in dividends from its main “cash cows”. We are talking here about Hydro-Québec, SAQ and Loto-Québec. The SQDC added to this herd in 2018. The best performance of government companies dates back to 2006-2007, when the harvest was $6.22 billion. But the current exercise could come close to – and even exceed – this amount (the final results will not be known until early 2023). The newspaper summed up the ups and downs of these Crown corporations in 2022.
Three price hikes in less than a year on the SAQ
Photographic Archives, Stevens Leblanc
Catherine Dagenais CEO of the SAQ
Who remembers that the year began with the imposition of the vaccination passport at the Société des alcools du Québec (SAQ)? The measure only lasted a month and cost the state company at least $1.27 million. A drop in the ocean of proceeds raised by the SAQ, which donated $1.35 billion to the state of Quebec for its 2021-2022 fiscal year.
even more ambitious goals
Ambitions are even higher for the current year: the check should come to $1.33 billion, because the government revised its expectations upwards by $44 million in its March budget.
In late October, the SAQ also announced a third price increase in less than a year. The adjustment of 2.4% on average affected nearly 2,000 products. The increase had been 1.66% on average for 1,332 products in November 2021 and 3.7% on average for 2,550 products in May 2021.
Business is good for Quebec products. Sales are increasing and already represent 1 in 5 products sold, for a total of 146 million in the 2nd quarter, the results of which were published at the beginning of December.
The year 2022 also began when the labor dispute had just been settled with the 800 salaried workers of the two SAQ warehouses as well as with those in charge of delivering the bottles to the different branches.
The union fears in particular that the project to expand and automate its distribution center will lead to job losses. The SAQ is betting a lot on this project to improve its delivery times, which are still 3 to 5 business days.
owner leaving soon
Finally, the president and CEO, Catherine Dagenais, is in her last months at the helm of the SAQ.
He will retire next June with a severance package of more than $450,000.
Return to the game for Loto-Québec
Photo provided by Loto-Québec
Since last summer, Loto-Québec has been running a pilot project for the sale of self-service lottery tickets at its headquarters in Montreal.
At the end of a year marked by numerous labor disputes and the forced closure of its stores at the beginning of the year, Loto-Québec seems to have good hopes of making up for lost time.
In December, the state-owned company revealed the best half-year results in its history, with a profit of $803.5 million for 2022-23. This is an increase in profits of 37.9% compared to the same semester of the previous year (2021-2022) and 9.4% compared to the pre-pandemic period 2019-2020.
To hell with inflation
Despite the inflationary pressure on their wallets, Quebecers seem to have resumed their gambling habits in droves. Casinos, gaming halls and gaming establishments have shown enviable performance since the beginning of the year.
However, its CEO, Jean-François Bergeron, takes note of the changes in consumer habits. With the support of new alliances, he is transforming the experience he offers in his establishments (events, shows, etc.); a way, it is believed, to rejuvenate his clientele.
Photographic Archives, Ben Pelosse
Jean-François Bergeron, executive director of Loto-Québec
In the same spirit, management continues its efforts to increase its market share in the world of online gambling, which is often illegal and undermined by organized crime.
Today, 25% of the casino’s revenue comes from its online business. And online lottery sales have quadrupled in three years to nearly 13% of its lottery sales today.
The competition there is strong, multiple and often hidden, suggests its CEO. However, he estimates that Loto-Québec would currently manage to monopolize “around 60%” of this lucrative online gaming market in Quebec.
Therefore, unless Public Health imposes a new closure of its establishments, Loto-Québec appears to be in a good position to reach its target of $1.4 billion in royalties by the end of the current fiscal year. Last year, its activities contributed $1.1 billion to the Quebec treasury.
The choice of slow SQDC
Photo from CUPE 5454 Facebook page
SQDC strikers demonstrate in Quebec City earlier this month. Labor relations have not been good at the cannabis distributor in 2022.
If the SAQ wants to improve its delivery times and invest accordingly, the Société québécoise du cannabis (SQDC) is the opposite: it would be possible to deliver cannabis to your home in less than 30 minutes most of the time, but the state-owned company it bans it for fear that Quebecers will consume more if its products are delivered too quickly.
This is also the modus operandi of the SQDC: the fear that Quebecers will consume more cannabis. The $75.7 million in profits it earned in 2021-2022 went into the fund to finance the prevention, research, and fight against cannabis-related harm.
After more than four years of existence, the SQDC estimates that it has captured 58% of the black cannabis market thanks to its 450 products offered in its network of 90 -soon 100- branches… and online.
Quebec takes control of Hydro
Photographic Archives, Stevens Leblanc
Pierre Fitzgibbon, during the swearing in of the new Council of Ministers, on October 20. Mr. Fitzgibbon is now Minister of Economy, Innovation and Energy, Minister responsible for Regional Economic Development and Minister responsible for Greater Montreal and the Montreal region.
In October, during the formation of the new Council of Ministers, François Legault adds Energy to Pierre Fitzgibbon’s already well-stocked portfolio of responsibilities. Quebec announces that a committee chaired by Prime Minister Legault will decide on the main orientations of the Crown corporation.
However, a clash of visions is brewing between the current CEO of Hydro-Québec, Sophie Brochu, and Minister Fitzgibbon. The latter wants to use the energy to attract foreign investors, while Mto me Brochu believes that Hydro-Québec should sell its hydroelectricity at its fair value, particularly in foreign markets. METERto me Brochu even declared that Hydro-Quebec “must not become a Dollarama of electricity.”
The year 2022 has paid off for Hydro-Québec, which posted net income of $3.6 billion for the first three quarters, already more than all of its earnings from last year. In 2021, these record benefits had allowed the state company to deliver a historic dividend of 2,700 million to the Government. We expect more this year.
Hydro-Québec’s big coup in 2022 will surely have been the purchase of 13 hydroelectric plants from the US company Great River Hydro, at a cost of US$2 billion. Thus, Hydro steps on New England, a market coveted by the state company.
In December, Minister Pierre Fitzgibbon called on Quebecers to “energize sobriety.” After years of surplus, new electricity needs could require adding up to 150 terawatt hours (TWh) to Hydro-Québec’s capacity by 2050, the government estimates.
One of the solutions considered is to determine if a new dam is possible in Quebec. Hydro-Québec is currently evaluating several sites.
The debates are to be expected in 2023, because to some it seems absurd that Quebecers are invited to “energy sobriety” while Hydro has promised to sell 20 TWh to the Americans (almost the entire production of the Manicouagan River), contracts that They will come into effect in 2-3 years.
Finally, the year ended badly for Hydro subscribers. More than 250,000 of them lost power a few days before Christmas. In December, the auditor general had also highlighted Hydro-Québec’s poor performance regarding the reliability of its service and the increasing number of interruptions year after year.
Some key dates for Crown corporations in 2022
The Legault government intervenes to prevent electricity rates from rising, in 2023, at the same rate as the consumer price index, as provided in Law 34, approved in December 2019.
Federal, state and New York City authorities give final green light to the largest contract in Hydro-Québec’s history. The 25-year deal will generate revenue that could reach nearly US$30 billion (C$38 billion).
Hydro-Québec buys 13 hydroelectric plants in the United States for US$2 billion (about C$2.7 billion)
The SAQ announces a price increase for 1,458 products offered at its points of sale and on its website. The average increase is 2.4%.
Photographic archives, The Journal
We learn that Hydro-Quebec has awarded $250,000 in contracts to perform A since Sophie Brochu’s appointment as head of the Crown corporation. Effect A, which offers training to help women break through the glass ceiling, is headed by the spouse of M.to me User information.
Photographic archives, The Journal
A former Hydro-Quebec employee, Yuesheng Wang, 35, hired in early 2018, is arrested for spying for China.
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