Energy in Québec: Global Shock Meets an Existing Crisis

The ongoing conflict in the Middle East has pushed gasoline prices in Québec up by about 25 cents per litre in just a few days, and for many Quebecers, that sort of leap is hard to ignore. But the reality is that this isn’t just the impact of a global shock; it’s a blow to a province already dealing with its own energy challenges.

Québec is under pressure. Electricity demand is growing, major industrial projects are competing for limited capacity, and long-term planning is struggling to keep pace with reality. The spike in fuel prices doesn’t create the problem—it simply makes it more visible. Adding fuel to the fire is the fact that the Minister of Economy, Innovation and Energy, Jean Boulet, has decided to delay the tabling of the PGIRE, the government’s first central long-term energy planning framework, leaving key questions about Québec’s energy trajectory unanswered.

Unsurprisingly, the issue has quickly entered the policy debate in the CAQ leadership race. Bernard Drainville and Christine Fréchette—the two candidates vying to replace François Legault—have put forward proposals to deal with rising fuel costs. Drainville has suggested redistributing additional fuel tax revenues back to taxpayers, while Fréchette has proposed a more targeted approach through reduced vehicle registration fees.

Opposition parties are also positioning themselves. The Parti Québécois is talking about reducing or eliminating what it sees as double taxation on gasoline, either through fuel taxes or the QST. Meanwhile, Liberal leader Charles Milliard has warned against “improvised or unrealistic solutions that create false hope,” while also acknowledging that additional QST revenues could be returned to taxpayers—provided it is done in a targeted way to support those who are most impacted. Rounding out the discussion is Éric Duhaime, leader of the Québec Conservative Party, who continues to argue that Québec should withdraw from the cap-and-trade system with California to bring down costs.

There is also growing attention on particularly affected sectors, such as agriculture. Both Drainville and Fréchette have promised to reimburse the carbon tax paid by farmers, acknowledging the industry’s vulnerability to energy price fluctuations.

But beyond these short-term measures being proposed, something more important may be taking place. Fréchette has opened the door to revisiting natural gas development in Québec, citing global uncertainty and commercial tensions with the United States. Such a statement would have been politically risky not long ago, but in the current geopolitical reality, it reflects a shift in how energy security is being discussed.

While policies are being pitched in the political arena, Hydro-Québec is facing its own constraints. The Régie de l’énergie recently reduced the rate increases the utility had proposed for different categories of consumers. While that helps limit price increases in the short-term, it also means less revenue than expected—creating a gap that will ultimately impact government coffers.

Piece all these developments together, and a clearer picture emerges: Québec is not just reacting to higher gasoline prices—it is dealing with a broader energy imbalance. The province is trying to keep prices low, limit production options, and meet growing demand, all at once, and the balancing act is getting harder to maintain.

The current situation may ultimately force a more honest conversation about energy in Québec—one that goes beyond temporary fixes and looks at how the province actually secures its long-term supply in an increasingly volatile world.