$1.1B Gaspe cement project in jeopardy over legal challenge

A $1.1-billion cement plant being built in Quebec's Gaspe region could be cancelled if work is suspended in order to conduct environmental hearings, McInnis Cement said Monday in response to a lawsuit.

Lafarge Canada and two non-profit groups mounted a legal challenge last summer after Quebec's environment minister authorized the project without an environmental assessment hearing.

In a legal filing Monday, McInnis said the project is subject to old environmental rules in place when it was first proposed more than 20 years ago.

Successive provincial governments have confirmed many times that the project is not subject to current rules that require such hearings, it added.

McInnis said more than $435 million will have been spent on the project as of December, employing hundreds of people. The plant is slated to open in the fall of 2016.

The company was formed by members of the family that founded Bombardier Inc.and its spinoff, BRP Inc.

Former premier Pauline Marois announced last January that the Quebec government would provide a guaranteed loan worth about $250 million. The province's investment arm will invest $100 million and the Caisse de depot pension fund manager will also invest $100 million as equity partner in the Beaudier Group, the investment arm of the Beaudoin family.