Quebec, Newfoundland and Labrador announce Churchill Falls energy deal

After years of negotiations and an independent review, Quebec and Newfoundland are announcing a non-binding deal on the Churchill Falls project.

Quebec Premier Christine Frechette and Newfoundland and Labrador Premier Tony Wakeham announced the agreement on Monday.

They were joined by Prime Minister Mark Carney, provincial ministers and Hydro-Quebec president and CEO Claundine Bouchard.

“We are finally turning the page on one of the darkest chapters in our past and replacing both the notorious the August 1969 Churchill Falls Agreement and the 2024 MOU, with a better deal for all of us,” said Wakeham.

The negotiations have surrounded a deal for Hydro-Quebec and Newfoundland and Labrador Hydro to share energy from the Churchill River in Labrador.

Both utilities jointly own the Churchill Falls generating station in Labrador, which is laid out in a pact signed in 1969 that was set to expire in 2041.

Under the new agreement announced Monday, Quebec would have a guaranteed supply of electricity from Churchill Falls until 2077. The agreement effectively terminates and replaces the original 1969 deal.

“What we are accomplishing today is important,” said Frechette. “Together we are choosing to build the future of Quebec and Newfoundland and Labrador, to build the future of our economies and to build a better future for generations to come.”

2:12 Independent N.L. panel rejects Quebec’s proposed Churchill Falls hydro deal

The federal government said it is providing $10 billion in federal financing to upgrade and expand the existing 5,428 megawatt (MW) generating station, develop a 2,700 MW Gull Island hydroelectricity project, build associated transmission lines, and unlock co-investment opportunities with the Innu of Labrador in a major new Labrador onshore wind project.

Get breaking National news

Get breaking Canada news delivered to your inbox as it happens so you won't miss a trending story.

Sign up for breaking National newsletter Get Started

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

“Canada has built big before, the ambitions of James Bay and the original Churchill Falls,” Carney said. “Today, we’re coming together, determined to build up that greatness, to develop the biggest clean energy initiative in North American history.”

Quebec’s utility says about 6,915 MW would be received from both Churchill Falls and the potential Gull Island station, with another 3,850MW bookmarked for studying new projects including a wind farm in Labrador a hydroelectric facility in Churchill Falls. It would amount to a total of about 10,000 MW for Quebec, though the federal government notes the project would generate 14,000 MW in total.

Speaking at a news conference in St. John’s, Wakeham told attendees that his province would be able to retain an additional 360 MW from Churchill Falls at Gull Island. Another 400 MW will be accessed from the planned wind power at Churchill Falls.  It amounts to a total of 2,750 MW for the province, “a full 760 megawatts” more than under the 2024 memoradum of understanding.

“The opportunity is enormous and this number does not include any power from the Churchill Falls expansion,” Wakeham added.

According to a provincial news release, Newfoundland and Labrador would retain about 2,350 MW from Churchill Falls and Gull Island, which amounts to 360 MW more than what the original 2024 MOU promised. The new wind project would provide 2,000 MW, amounting to the 400 added megawatts noted by Wakeham.

Two years ago, the provinces unveiled a framework agreement to end the 1969 deal and established a new arrangement to share energy and expand the Churchill River’s generating capacity.

But after Wakeham’s Progressive Conservatives won a majority government in the 2025 election, the premier subjected the deal to an independent review. He also sent a negotiating team back to the bargaining table with Quebec in June, looking for what he described as more power, more value and permission to transmit power from Labrador through Quebec to export markets.

Previously, Wakeham said he would hold a public referendum on the deal but on Monday said a special session of the House of Assembly would instead be held to review the deal.

For Quebec, the deal could ensure it has the megawatts it needs to meet the province’s growing electricity demand through 2075.

Much of the criticism behind the original 1969 deal centred around Quebec being able to buy hydroelectric power from the Churchill Falls plant for just 0.2 cents per kilowatt hour and then resell it at a higher price.

Newfoundland and Labrador has unsuccessfully attempted to challenge the deal in court in the past, including at the Supreme Court of Canada. But those rulings have said Quebec has a legal right to continue paying next to nothing for Churchill Falls energy until 2041.

The draft 2024 agreement stipulated that Hydro-Quebec would gradually increase the rate until 2075, reaching an effective average price of 5.9 cents per kilowatt hour – 30 times the current price. Under the new deal, the Quebec utility will now pay even more starting at 1.8 cents per kilowatt hour in 2027, but averaging out to 7.4 cents per kilowatt hour over the next 50 years.

Negotiators are hoping to hammer out a final deal by the end of this year.

— with files from The Canadian Press