QUEBEC — Quebec and Newfoundland and Labrador are nearing a new agreement over the hydro development of Churchill Falls.

While details of the agreement are sparse, both provinces confirmed Thursday that progress has been made in talks.

One source said the two provinces are “close to a deal.”

There have been reports that the agreement, which would replace the 2024 memorandum of understanding between the provinces signed by former Quebec premier François Legault and then-Newfoundland and Labrador premier Andrew Furey, could be signed as soon as next week.

“As of right now, no final deal has been signed,” Ashley Jackson-Politi, a spokesperson for Newfoundland and Labrador Premier Tony Wakeham, said on Thursday.

“We can confirm that in recent days we have made significant progress in negotiations with both Quebec and the government of Canada as it relates to replacing the 2024 MOU with a new deal for Churchill Falls and Gull Island.”

Upon arriving Thursday morning for a roundtable meeting of economic players in Montreal to discuss the potential for a new trade agreement with the United States, Quebec Premier Christine Fréchette indicated there has been progress in negotiations for Churchill Falls.

“Discussions have sped up in the last while,” Fréchette told reporters. “This makes me very confident that we can sign something soon. It’s a big issue for Quebec.

“Energy security is important for Quebec. It’s important to secure energy at competitive prices for future generations. There are regions that need energy; we have companies that need energy.

“This is what an agreement with Newfoundland represents.”

Fréchette and Wakeham met just weeks ago at a meeting of Canada’s premiers in Prince Edward Island. At the time, Fréchette said she believed a new agreement would be concluded “more or less shortly,” and before the fall election in Quebec.

The 2024 memorandum of understanding between Quebec and Newfoundland and Labrador was designed to end and replace the controversial 1969 Churchill Falls contract, which allowed Hydro-Québec to buy power at a very low price.

The agreement would see Quebec pay Newfoundland and Labrador 10 times more than it has for the power from Churchill Falls.

It also involved the development and financing of three new projects by Hydro-Québec, including Gull Island. The deal would mean power for Quebec for the next 50 years.

The deal faced turbulence, however, from Wakeham’s new Progressive Conservative government.

After taking power from the Liberals in 2025, Wakeham’s government set up an independent review of the memorandum of understanding. Last spring, that committee concluded the MOU was not in the public interest.

According to reports, the federal government has played a key role in bringing the two sides closer together by promising Newfoundland and Labrador the extension of a federal refundable tax credit for large infrastructure projects.

Both provinces have also agreed to increase the production capacity of the new project to ensure both get more power out of the deal.

Demand for details
On Thursday, however, Quebec’s opposition parties accused Fréchette of playing politics, with the general election campaign about to be launched.

They demanded she reveal the details of any new agreement before the Oct. 5 vote.

“Quebecers deserve an agreement that yields the maximum spinoffs,” Quebec Liberal Leader Charles Milliard said in a social media message. “An agreement signed a few days before the start of an election campaign has the potential to generate lots of skepticism, and the Coalition Avenir Québec has a habit of electoral stunts.

“Christine Fréchette must demonstrate that nothing was sacrificed in negotiations simply to reach a deal before the election.”

Noting the agreement will bind Quebec for 50 years, Parti Québécois Leader Paul St-Pierre Plamondon questioned the legitimacy of signing such a deal so close to an election and wondered what the rush is.

“Energy will be a major issue of the election campaign and Christine Fréchette does not have the legitimacy to commit Quebec for such a long term,” St-Pierre Plamondon said.

Québec solidaire co-spokesperson Ruba Ghazal said there is no rush to seal such a deal, asking what both Fréchette and Prime Minister Mark Carney sacrificed in order to get a deal for Quebec.

“Before signing, the CAQ must make this (agreement) public,” Ghazal said.

Fréchette responded, telling reporters she was not going to make any deal public before Quebec has in hand something to sign.

Asked if Quebec made concessions, Fréchette said the new agreement “improved on spinoffs” from the 2024 deal.

Under the existing agreement, Hydro-Québec pays 0.2 cents per kilowatt-hour of electricity produced by Churchill Falls, which, in 2022, it was able to resell at 40 times the price.

Under the 2024 agreement in principle, Quebec would pay progressively more for energy, at one cent/kWh in 2025, two cents until 2041 and four cents over the remainder of the contract up to 2075.

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