ST. JOHN’S, N.L. –
Quebec and Newfoundland and Labrador have reached a sweeping deal to develop new energy projects in Labrador and end a decades-old contract that has long been a thorn in the side of Canada’s easternmost province.
The new agreement in principle will see Hydro-Quebec pay 30 times more for power from the Churchill Falls hydroelectric station in Labrador, and shell out $3.5 billion for the right to partner on the new installations with Newfoundland and Labrador Hydro.
Jennifer Williams, Newfoundland and Labrador Hydro’s chief executive, teared up while presenting the arrangement to reporters on Thursday. “It’s a different future,” she said.
Under the current contract, signed in 1969, Newfoundland and Labrador has owned the majority of the power plant, but Quebec has pocketed the majority of the profits. Quebec pays just 0.2 cents per kilowatt hour for Churchill Falls power.
The current arrangement had been set to run until 2041, but the new plan effectively ends it as of Jan. 1. In the new scenario, Hydro-Quebec will pay an average price of 5.9 cents per kilowatt hour, netting Newfoundland and Labrador Hydro about $1 billion per year until 2041.
It also lays out a partnership between Hydro-Quebec and Newfoundland and Labrador Hydro to upgrade and expand the current Churchill Falls facility, and to build a new hydroelectric plant further down the Churchill River at Gull Island, a spot long eyed for development.
Hydro-Quebec will contribute $3.5 billion for the right to co-develop the new production alongside Newfoundland and Labrador Hydro, and assume much of the financial risk. The new deal is set to run until 2075.
The provinces plan to have a binding agreement in place by April 30, 2026. Once that happens, Quebec will pay the new higher rates from Churchill Falls retroactively to Jan. 1, 2025.
This report by The Canadian Press was first published Dec. 12, 2024.