Electricity in Quebec before nationalization, 1920-1939

I have a new working paper co-written with Germain Belzile – it is by no means complete. I intend to make some corrections to improve it further. It concerns an important chapter of Quebec history: the era before the nationalization of electricity. We contest the claim that the companies were acting as monopolies and gouging consumers. We find that electricity prices were dropping, output was increasing, productivity was increasing and that was in spit of a greater demand caused for Quebec electricity exports by Ontario which subsidized consumption. We don’t pretend that everything was “honky-dory”, we argue that the case for nationalization was very weak relative to private production. Here is the abstract and the paper is available here.

Abstract: Upon opening history books about the electrical industry in the Canadian province of Quebec prior to nationalization (which was realized in two steps between 1944 and 1962), one is often confronted with the claim that the industry was monopolistic and was gouging consumers via predatory pricing – especially when compared to the neighbouring province of Ontario. All though it is hard to collect price data at the level of firms, it is possible to collect some overall – but often ignored – data about the industry to evaluate this claim. With the use of such data over time, we can observe the opposite. Rather than behaving as oligopolies, the electrical firms in Quebec increased production faster than elsewhere while prices did the same in the period before nationalization. Moreover, there is strong evidence that productivity growth was higher in Quebec than in Ontario and the Canadian average. The main reason for this divergence between facts and history books is most likely the choice of benchmarking Quebec with Ontario – a province which had opted for public production in the early 20th century.

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