Quebec raises doubts about electrification as it refuses to reinvest in Lion Electric

The Quebec government says it had to make a 'difficult decision' about whether to further invest in the beleaguered company, which manufactured electric school buses and trucks.

The Quebec government says it is rethinking the pace of its plan to electrify the transportation sector and will not pump any more public money into vehicle maker Lion Electric.

Economy Minister Christine Fréchette told reporters in Quebec City on Thursday that the government had to make a “difficult decision” about whether to invest more government dollars in the beleaguered company, which manufactured electric school buses and trucks.

She said the governing Coalition Avenir Québec had received a proposal from a group of buyers interested in Lion Electric, which sought creditor protection in December amid financial struggles. News reports this week said the group was seeking government aid of about $24 million to relaunch the company.

“It would have been irresponsible to go ahead with another significant injection of public funds into Lion, based on the plan that was presented to us,” the minister said. “I would have expected the private sector to be more involved.”

Lion Electric was once a star player in Quebec’s aspirations to be a leader in electric vehicles, but it is now in peril. This week, Premier François Legault suggested the government’s agenda may be shifting, given the political reality south of the border.

“We see that the situation has changed in the United States with the arrival of (President Donald) Trump,” he said. “I continue to think that in the medium and long term, we need to electrify both our transportation and our entire economy. But we have to realize that currently, in the short term, we have a neighbour who isn’t making this a priority.”

Fréchette first made the announcement about Lion Electric Wednesday evening on social media, saying the government believed in Lion’s potential and it was difficult to decide not to support “a local company that offered an innovative product that contributed to the energy transition.”

Quebec has already invested heavily in the St-Jérôme-based company. On Thursday, Premier François Legault told reporters the province stands to lose about $140 million on its bet on Lion Electric.