Quebec’s auditor general slams government’s ‘unplanned approach’ to battery industry

Quebec’s auditor general slams government’s ‘unplanned approach’ to battery industry

Province showed poor planning in $2.2B of investments in various battery companies: report

The Quebec government has managed the province’s battery sector with a lack of planning and insufficient analysis to identify risk, according to a new auditor general report released on Wednesday.

The auditor general's office announced last July that it would be investigating the millions of dollars in subsidies provided by the province to the electric battery industry, after major players in the sector — including battery manufacturer Northvolt — came under severe financial difficulties.

In examining how Investissement Québec and Quebec's Ministry of Economy, Innovation and Energy managed financial assistance to the sector, Christine Roy found key elements such as clear objectives, timelines and targets were missing from the Coalition Avenir Québec (CAQ)'s approach.

Roy said in a news conference that the sector has been handled with an "unplanned approach." Considering the large amount of public funds at stake and risks involved, she added that "it's important to plan more rigorously."

Roy found there was a lack of structure for providing reasonable assurance that significant risks had been adequately identified and assessed.

She cited one example where "a company had a large problem of liquidity, but the government didn't find that."

Roy's office analyzed 29 files related to 11 companies in the battery sector, representing approximately $2.2 billion in authorized financial assistance as of Sept. 30, 2025 — about $1.9 billion of which had been disbursed as of that time.

She found that four of the 11 companies have filed for creditor protection — after receiving, on average, 89 per cent of the financial support granted to their respective projects. Two other companies, meanwhile, have suspended or abandoned their projects.

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Losses from these projects, according to Roy's report, total "$375.2 million, representing approximately 14.6 per cent of the amount authorized to date, and 95 per cent of those losses are linked to two files."

However, she said the full cost to taxpayers won't be fully known for years because some projects are still underway or under analysis.

Premier Christine Fréchette responded to the findings Wednesday, saying the 95 per cent of losses incurred were due to Northvolt and electric vehicle-maker Lion, and that she had ordered a stop to more public money being put into those two projects when she became the minister of economy, innovation and energy.

It's noted in the auditor's report that it was only in May 2025, after Fréchette's arrival in the ministry, that a financial framework was adopted to provide the Treasury Board with forecasting information on the various financial assistance programs related to this sector.

However, the report describes this framework as insufficient, as it only covers financial aid already authorized, which does not allow for forecasting future fund outflows.

Earlier in the day, Fréchette had pointed out that there were still a large number of people working for companies in the battery sector in Bécancour, Que.

The premier admitted the sector has slowed down, because the energy transition hasn't been as prominent as it once was, but "it's still here to stay."

Bernard Drainville, the current minister of the portfolio which oversees this file, acknowleged the findings in the report and committed to working with the auditor general to "strengthen and improve our risk management."

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Written by Patricia Kozicka, with files from Radio-Canada and The Canadian Press