Consultants divided on whether or not Michael Sabia is true match for Hydro-Québec's CEO

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An achieved chief is returning to Quebec — however is he the fitting man for the job and the business?

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Information that former BCE Inc. and Caisse de dépôt et placement du Québec chief govt Michael Sabia might quickly be named Hydro-Québec’s subsequent CEO sparked combined reactions on Wednesday. The 69-year-old, who’s presently federal deputy minister of finance in Ottawa, would succeed Sophie Brochu, who left the state-owned firm April 11 after lower than three years on the helm.

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A number of observers lauded Sabia’s work ethic and his potential to remodel the organizations he has led all through his profession. Others questioned his abrasive management type, in distinction to Brochu’s extra collaborative strategy, and his lack of information of the facility business. His nomination comes at a time when Quebec is on the right track for an power transition that may require increasingly more electrical energy to exchange heating oil and different fossil fuels — and doubtless a number of new dams — because the province seeks to realize carbon neutrality by 2050.

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“It’s a surprising appointment,” Pierre-Olivier Pineau, an power coverage specialist and professor on the HEC Montréal enterprise college, mentioned in an interview. “Our precedence in Quebec is to hold out the power transition. We now have to rethink our power system, assessment our consumption and combine new applied sciences into the facility community, and Mr. Sabia doesn’t strike me as somebody who has explicit competencies in these areas. So I’m not reassured.”

A number of challenges await Hydro-Québec’s subsequent CEO.

“Hydro-Québec has some huge investments forward, and it should ship on them. It has to ship power companies whereas paving the way in which for a full-scale decarbonation of society,” mentioned Normand Mousseau, a physics professor at Polytechnique Montréal who’s scientific director of the engineering college’s Trottier Power Institute. “Whoever leads the corporate has to grasp know-how and innovation. A financier will not be what we want.”

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With demand for power hovering, the province’s present energy surpluses are anticipated to vanish by the top of 2026. Quebec might want to discover methods of considerably boosting power output over the following a long time to satisfy the wants of each firms and residential prospects, power minister Pierre Fitzgibbon mentioned final week in Montreal. Wednesday in Quebec Metropolis, Fitzgibbon declined to touch upon studies of Sabia’s appointment.

Some, like McGill College administration professor Karl Moore, imagine Sabia’s adaptability ought to enable him to beat any lack of familiarity with the power business.

“Hydro-Québec is on the verge of a metamorphosis. How do you remodel the corporate and the way do you develop an acceptable technique? These are issues that Sabia is excellent at,” mentioned Moore, who has usually hosted the chief as a part of his administration courses at McGill. “To my thoughts, it’s an excellent match. He has issues to study, however he has some nice individuals to show him.”

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Sabia “is a superb thoughts, however he has the humility to grasp that as CEO, everybody else is aware of issues that he doesn’t, and that there are areas wherein the others are extra competent than he’s,” added Moore.

Former Quebec public safety minister Martin Coiteux, who was in authorities when then-premier Jean Charest employed Sabia as head of the Caisse, is satisfied the chief has what it takes to succeed at Hydro-Québec.

“Michael is a person who has been in a position to carry out a number of totally different capabilities in numerous contexts as a result of he has a capability to assume strategically, loads of power and a capability to remodel organizations,” mentioned Coiteux, who spent a couple of 12 months as chief economist of the Caisse below Sabia.

“It is a man who has achieved lots and is definitely able to engaging in much more. He’s a type of individuals who will in all probability by no means cease working. On high of that, he has a capability to understand the massive points.”

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Executives at Hydro-Québec might be in for a shock when Sabia takes the reins.

“His management type is totally totally different to that of Sophie Brochu,” former provincial training minister Michelle Courchesne — a former colleague of Coiteux within the Charest authorities — mentioned Wednesday on Radio-Canada radio. “He’s reputed to be abrasive. His management may be very direct, quasi-authoritarian.”

On the Caisse, which he took over within the wake of the 2008-09 monetary disaster, Sabia succeeded in strengthening danger administration, overhauling funding methods and revamping govt groups. Beneath his watch, the technique delivered common annual returns of 9.9 per cent over a decade whereas internet property nearly tripled to greater than $340 billion by the point of his departure in early 2020.

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Sabia’s tenure on the Caisse additionally consists of the adoption of a local weather coverage constructed round scaling again high-carbon investments equivalent to coal and rising renewable power holdings. It was below his watch that the Caisse went forward with the development of the Réseau specific métropolitain light-rail system as a way of decreasing greenhouse gasoline emissions. A number of delays and a number of other hundred hundreds of thousands of {dollars} in value overruns later, the monetary knowledge of the REM funding isn’t solely clear.

Sabia’s familiarity with infrastructure might be one of many causes behind his appointment at Hydro-Québec, in line with Louis Hébert, a administration professor at HEC Montréal. Premier François Legault has repeatedly mused aloud in regards to the want for the corporate to construct new dams.

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“The CAQ authorities desires infrastructure tasks,” Hébert mentioned. “It’s essential to finance these tasks and to fireplace up the challenge administration machine, that are two issues that Mr. Sabia has accomplished. On that entrance, you can’t say that he has a stellar observe file.”

Sadly for Quebec, Sabia’s age — he’ll flip 70 in September — in all probability implies that the latest govt upheaval at Hydro-Québec isn’t over, in line with Mousseau.

“It is a CEO who will in all probability go away in 4 or 5 years, which implies that the objectives of the strategic plan received’t be achieved,” Mousseau mentioned. “When a brand new CEO is available in, they carry in a brand new strategic plan and a brand new govt staff, so somebody must do the work once more. As a society, that’s not what we want.”

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