Canada and Provinces Negotiate New Churchill Falls Energy Deal

The federal government of Canada and the provincial governments of Quebec and Newfoundland and Labrador are finalizing a new agreement for the Churchill Falls hydroelectric project. The deal follows renegotiations initiated by Tony Wakeham, the Premier of Newfoundland and Labrador, who rejected a December 2024 memorandum of understanding as contrary to the public interest. The original 1969 contract, which allowed Quebec to purchase power at rates far below market value until 2041, has remained a long-standing point of contention.

Reports from Quebec media, including La Presse, indicate a new memorandum of understanding has been reached. This reported deal would increase benefits for Newfoundland and Labrador from $36 billion to $49 billion and increase domestic power allotments by 760 megawatts. It also includes wind power projects and guaranteed transmission access through Quebec, supported by federal incentives such as a 15 per cent Clean Electricity Investment Tax Credit and loan guarantees from the Treasury Board of Canada.

Premier Wakeham's office has cautioned that no final agreement has been signed, though a spokesperson noted significant progress. The negotiations are pressured by an October 2026 general election in Quebec, where the governing Coalition Avenir Québec trails the Parti Québécois, a party that has vowed to axe the MOU. Opposition leaders in both provinces are demanding the release of the agreement. In Newfoundland and Labrador, John Hogan and Jim Dinn criticized the lack of transparency, with Dinn accusing Wakeham of abandoning a promised public referendum on the deal.