Electricity in Quebec Before Nationalization, 1920 to 1939

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 especially when compared to the neighbouring province of Ontario. Even 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 observe the opposite: electrical firms in Quebec increased production faster than elsewhere while prices fell constantly. 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 comparing Quebec’s private industry with Ontario’s nationalized industry.

Keywords: Electricity, Canadian Economic History, Monopoly

JEL Classification: D40, L10, N72