Ottawa has declared it as the most significant investment in clean energy in North America’s history. Prime Minister Mark Carney, along with N.L. Premier Tony Wakeham and Quebec Premier Christine Fréchette, made the announcement in St. John’s regarding a new agreement on Churchill Falls and other energy ventures in Labrador.
Wakeham stated, “We are finally turning the page on one of the darkest chapters in our past, and replacing both the notorious 1969 Churchill Falls agreement and the 2024 memorandum of understanding with a better deal for all of us.”
The leaders gathered on Pier 17 against a scenic ocean backdrop to unveil the details of the new deal. Ottawa will invest $10 billion to upgrade and expand the Churchill Falls generating station, develop the Gull Island hydroelectric project, construct transmission lines, and introduce a 2,000 MW onshore wind energy project in Labrador. The exact location and specifics of the wind project are under consideration by Newfoundland and Labrador Hydro.
These projects, as per the federal government, constitute the largest clean energy investment in North American history, valued at nearly $70 billion. This investment will almost triple the current generating capacity of Churchill Falls, providing enough power to illuminate, heat, and cool the combined homes of Toronto, Montreal, and Vancouver.
Carney highlighted the significance by stating, “Tripling the current generation capacity of Churchill Falls to that 14,000 megawatts of renewable power is more than B.C. Hydro’s entire generating capacity and double the output of Bruce Power, the continent’s largest nuclear plant.”
The projects are anticipated to create 23,000 jobs, as stated by both levels of government. The agreement aims to offer Quebec a secure power source while assisting N.L. in generating additional revenue from natural resources to tackle its debt concerns. Additionally, it aims to help residents of Newfoundland and Labrador save on their electricity bills.
Wakeham Labels Agreement as a ‘Win-Win-Win’
The updated agreement between Newfoundland and Labrador Hydro and Hydro-Quebec promises increased value to N.L., estimating a net present value of $49 billion, up from the $36 billion in the 2024 memorandum of understanding. This agreement is effective until March 31, 2027, unless mutually altered or definitive agreements are signed earlier.
While the Quebec election may bring uncertainty, Wakeham sees the deal as a triple win for N.L., offering more power, increased value, and enhanced transmission capabilities. The agreement also includes studying the potential expansion of the current facility, with upgrades to increase its capacity by 23.5% or 1,275 MW.
The deal will provide about 760 MW additional power to Newfoundland and Labrador, rising to 2,350 MW with the wind project’s completion. Hydro-Quebec will gain access to up to 6,915 MW, potentially reaching 8,515 MW with the wind project. Hydro-Quebec will pay 1.8 cents per kilowatt-hour next year, increasing by 14% annually to reach 11.5 cents in 2041.
Ottawa will offer a loan guarantee for Gull Island construction costs, part of a new Atlantic energy strategy under the Major Projects Office. The agreement also includes studying the potential development of a new wind project generating facility.
The increased power supply is expected to boost Labrador’s mining sector, with Ottawa providing financial support for this development. Natural Resources Canada will contribute over $2.3 million for an engineering and design study on transmission lines to enhance power supply to Labrador west. Additionally, there is funding for preconstruction and feasibility planning for the Kami iron ore project southwest of Wabush.
Quebec Election Uncertainty
Amid an upcoming Quebec election, questions arose regarding the deal’s continuity with potential new leadership. Fréchette asserted that the agreement secures more power and jobs for Quebec, emphasizing its benefits for the province. She challenged critics, stating that the agreement guarantees 23,000 jobs for both Newfoundland and Quebec.
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