Hydro-Québec to hike electricity rates for businesses 4.8% over 3 years

Hydro-Québec is proposing annual rate increases of three per cent for residential customers and 4.8 per cent for commercial and industrial customers over the next three years.

The government-owned utility presented its rate requests for 2026, 2027, and 2028 on Thursday, which must be approved by the Régie de l’énergie.

For the residential sector, the proposed increase would increase electricity bills by an average of approximately $2.40 per month for a residential unit and $6.70 for an average-sized home.

“That’s about $80 more per year for an average home in Quebec, whether people own or rent. That’s the magnitude of the increase before considering the measures customers can take to see a reduction in their bill,” said Dave Rhéaume, Executive Vice President of Commercial Operations and Chief Customer Officer, at a press conference. 

Hydro-Québec’s request is part of the Legault government’s energy reform, adopted under a gag order last June, which aims to limit residential electricity rate increases to a maximum of three per cent.

Furthermore, the government-owned utility announced an increase in its budget for measures to help consumers reduce their bills, including the smart thermostat program.

The budget increases to $2.5 billion for the next three years.

“Rates in Quebec remain significantly lower than in other jurisdictions,” said Dave Rhéaume, Hydro-Québec’s executive vice-president of commercial operations and chief customer relations officer, at a press conference.

The Régie de l’énergie is expected to render a decision around March 2026. The new rates are then expected to take effect on April 1 of the same year.

In the business community, the proposed 4.8 per cent increase is already generating discontent, with the Canadian Federation of Independent Business (CFIB) denouncing it.

Hydro-Québec denies weakening companies in a context of economic uncertainty caused by difficult relations with Washington.  

“Rates in Quebec remain significantly lower than in other jurisdictions,” said Rhéaume. 

He indicated that the increase in rates reflects the significant investments that the state-owned company must make according to its 2035 action plan, in addition to taking into account inflation. 

“These are essential costs. (…) It is certain that, for a company, seeing an increase in its costs is never what is desired. Nevertheless, it is an investment that, in our opinion, is absolutely essential to reach Quebec’s full potential, while protecting the competitiveness of companies,” he said.

The Quebec Federation of Chambers of Commerce (FCCQ) describes the decision as “a decision disconnected from economic realities.” It is calling for government intervention to better distribute the planned increases between residential and business customers.

“The government is once again choosing to place the financial burden of rising electricity rates on the shoulders of businesses. This lack of pricing fairness increasingly compromises their ability to invest and create wealth here in Quebec,” laments FCCQ President and CEO Véronique Proulx in a press release.

“Especially since in a period of tariff crisis, combined with the American One Big Beautiful Act, the government has the responsibility to create a business environment favorable to investment,” she continues. 

“We have calculated the impact of future increases and submitted more than 10,000 petitions signed by entrepreneurs asking not to politicize the issue of electricity rates and to regulate cross-subsidization,” said François Vincent, CFIB’s vice-president for Quebec.

“The Quebec government has decided to turn a blind eye, to cover its ears and to make SMEs swallow the increase.”

Hydro-Québec denies it is weakening SMEs (small- and medium-sized enterprises).

Back in April, the Legault government had blocked the planned residential electricity rate increase at three per cent.

The government adopted a decree to this effect, while the Régie de l’énergie had decided on a 3.6 per cent increase.

At the time, the Legault government acknowledged that the industrial and commercial sectors may have to absorb a higher increase to compensate for Hydro-Quebec’s 0.6 percent loss in revenue.

Small and medium-sized companies to bear the brunt of increases

According to CFIB’s May 2025 survey data, the trade war with the United States is causing 37 per cent of Quebec SMEs to lower profits and 32 percent to lower total revenues. It is in this context of great economic uncertainty that companies will reap the brunt of the electricity rate bill.

The Quebec government’s actions are not helping, says the CFIB, pointing to SME tariffs that are slated to increase by 29.6 per cent from 2023 to 2028.

“We are asking our entrepreneurs to be more productive, to stand firm in the face of the trade war with the United States and the counter-tariffs that penalize them,” said Vincent, in a press release.