Uncertainty surrounding trade policy and federal support of industries has slowed progress among cross-border partnerships between companies in Québec and New England.

René Sylvestre, Québec’s Delegate to New England, and two prominent business executives representing businesses in the province, told an AIM gathering on September 17 that 85-90 percent of goods that Québec companies send to the US are exempt from tariffs under the United States-Mexico Canada trade agreement.

“Most companies are taking a wait-and-see approach. To set up a new production line with parts and equipment coming from Europe or Asia, they simply don’t know what the final costs will be. Right now, it’s less about the tariffs themselves and more about the uncertainty of what lies ahead,” Sylvestre told more than 80 business leaders during a discussion on Québec–New England economic ties.

The event, entitled Québec – New England: Perspectives on Regional Partnerships, Tariffs, and Growth – was produced by the AIM International Business Council, hosted by AIM member Nutter, McClennen & Fish  and sponsored by member Massport.

Two Québec executives with close ties to New England – Suzie Talbot, President and Founder of DIEX Recherche; and Ben Dudley, Director of New England Stakeholder Relations for Hydro-Québec Energy Services – agreed that uncertainty has been the primary by-product of the tariff issue. At the same time, Talbot said that reductions in US government support for medical research are prompting some of her company’s US partners to consider expanding operations North of the border.

“We work with big pharma and early-stage biotech…Lately, with the regulatory evolution and the funding cuts, we’re seeing more interest from the life-sciences companies here looking to extend more into Québec,” said Talbot, whose private clinical research organization operates six sites across Quebec.

Dudley said the fact that exports of hydroelectricity from Quebec are exempted from tariffs under  the rules of origin provisions in the US-Mexico Canada trade agreement is good news for New England, since Hydro-Quebec historically supplies some 10 percent of the electricity used in the region.

“We’ve been major exporters of low-cost electricity to New England for decades now, since the 1980s…so, we’re an important partner for New England in achieving its affordability goals and its renewable-energy goals,” Dudley told the gathering.

As an example, he noted that New England Clean Energy Connect (NECEC), a transmission project designed to deliver 1,200 megawatts of clean hydroelectric power from Hydro-Québec in Canada to the New England Power Grid, is scheduled to be completed at the end of the year. The project aims to provide renewable energy, reduce carbon emissions, and help stabilize energy prices for New England ratepayers

Quebec and New England have for centuries forged an economic and cultural relationship as enduring as the rivers and roads that connect the two regions. It is a relationship that has been shaped by geographic proximity, economic opportunities, and political shifts – evolving from fur trading in the 1600s and 1700s to Quebec’s current role as a significant source of hydroelectric power, building materials and other key products for our region.

Sylvestre, whose mandate is to develop and support economic, political, and institutional exchanges with the six New England States, said those close ties and shared values will support New England’s longstanding economic relationship with Quebec at a moment when it is being tested by changing US federal policy, international geopolitics and long-term economic shifts.

Asked by AIM President and Chief Executive Officer Brooke Thomson what lies ahead, Sylvestre said simply: “We’ll figure it out.”