Observations of geomagnetic and telluric field variations have been made at four stations near La Malbaie, Quebec, in a seismically active region northeast of Quebec City. The data were analysed by transfer function and impedance tensor methods to study the nature of geomagnetic induction in the region and its structural implications. Transfer functions and telluric fields were influenced by several factors including the nearby St. Lawrence River, lateral variations in conductivity caused by geological complexities, and conduction of electric currents probably originating through induction in the ocean.It is demonstrated that it is possible to distinguish between induction by the vertical geomagnetic field and induction by the horizontal components. Anomalous vertical fields caused by vertical field induction are observed in the area and the electric currents associated with them have a flow pattern which is similar to that of currents induced by the horizontal field. Further, the Z-induced currents changed impedance tensor elements by as much as 20% though the effect was usually smaller than this. Nonetheless, the magnetotelluric data confirmed the presence of a conductivity anomaly in the Laurentides Park region of Quebec.