Electrical transmission cables connecting to Quebec at the Churchill Falls hydroelectric project in Newfoundland in July 2007. The original Churchill Falls contract was signed in 1969.Greg Locke/Reuters
The federal government could facilitate negotiations between Quebec and Newfoundland and Labrador to clinch a deal on the Churchill Falls energy project, Prime Minister Mark Carney says.
The two provinces signed a non-binding memorandum of understanding on energy co-operation in December, 2024, vowing to put aside decades of bad blood over the Churchill Falls hydropower station. Both provinces had pledged to invest in and work together on future electricity development worth tens of billions of dollars.
However, the election of Progressive Conservative Premier Tony Wakeham in Newfoundland last year has largely stalled talks between the two provinces on that effort, and the agreement in principle expired at the end of this April. Mr. Wakeham ordered a review of the MOU by an independent panel of experts that is set to outline their conclusions next Tuesday.
Opinion: Without Churchill Falls deal, Newfoundland faces a dire fiscal future
“It’s possible that the government of Canada can find a solution, or add to the solutions, between the provinces,” Mr. Carney said Thursday during a news conference announcing a national electricity strategy. “We’re having discussions about that.”
Under the MOU, negotiated by former premiers François Legault and Andrew Furey, Newfoundland would win significantly more revenue for power generated from the existing Churchill Falls station. It would also clinch a partner – Hydro-Québec – with deep pockets and technical know-how for three new production projects along Labrador’s Churchill River.
Then-Quebec Premier Francois Legault and Andrew Furey, then-Premier of Newfoundland and Labrador sign a memorandum of understanding in St. John's in December, 2024.Paul Daly/The Canadian Press
Meanwhile, Quebec would secure a key source of electricity at a time when its electricity surpluses have dwindled. Hydro-Québec’s export volumes fell for the fourth straight year in 2025, as the government-owned utility dealt with a drop in its northern water reservoirs that it hasn’t experienced since the 1960s.
Christine Fréchette, who replaced Mr. Legault as Premier earlier this year, has said Ottawa is keen on the two provinces cementing a deal. “They can help us make sure that this agreement will be signed in the coming weeks or coming months,” she told reporters last month.
How Quebec and Newfoundland overcame a century of hurt to reach a new deal on Churchill Falls
The original Churchill Falls contract was signed in 1969. Under the current contract, Quebec purchases about 4,800 megawatts of power from the station at 0.2 cents a kilowatt-hour. That’s a fraction of the energy’s market value, which Hydro-Québec resells for multiple times more.
Newfoundland previously launched a legal bid to reopen the contract, but the Supreme Court of Canada rejected the challenge in 2018.