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REDEFINING NORTH
AMERICAN CLEAN POWER
The historic $10B federal-provincial agreement
on Churchill Falls and Gull Island by John Tenpenny
N A LANDMARK step for Canada’s clean energy transition
and interprovincial relations, the federal government,
Newfoundland and Labrador, and Québec have
reached an agreement to overhaul and expand the
Churchill Falls Generating Station while advancing the
development of the Gull Island hydroelectric project.
Supported by $10 billion in federal 昀椀nancing, the
trilateral deal e昀昀ectively replaces the controversial 1969
Churchill Falls Power Contract, establishing what leaders
describe as one of the largest electricity expansion initiatives in North American history.
The agreement will see the federal government,
Newfoundland and Labrador, and Québec partner to
modernize existing infrastructure, construct new capacity,
and build associated transmission corridors. Together, the
projects will generate 14,000 megawatts (MW) of clean,
renewable power—nearly tripling the current generating
capacity of Churchill Falls—and provide enough electricity to heat, light, and cool all the homes in Toronto,
Montréal, and Vancouver combined.
Prime Minister Mark Carney highlighted the broad
strategic impact of the agreement during its public unveiling. “Canada is extending its unique advantage in clean,
reliable, and a昀昀ordable power,” Carney stated. “Because
when we master energy, we master our destiny. Through
cooperative federalism, we are unlocking our immense
potential, building big, building sustainably, building in
partnership, and building Canada strong for all.”
I
A new deal for Newfoundland and Labrador
For more than half a century, the original 1969 Churchill Falls contract stood as a deeply contentious issue
between Newfoundland and Labrador and Québec.
Under that original agreement, Hydro-Québec purchased
Churchill Falls electricity at a 昀椀xed rate of 0.2 cents per
kilowatt-hour (kWh), reselling it at signi昀椀cantly higher
market rates while the resource’s home province received
a fraction of the value.
Attempts to revise the agreement led to a Memorandum of Understanding (MOU) in December 2024.
However, following a provincial change of government
RENEWCANADA.NET
in October 2025, Newfoundland and Labrador Premier
Tony Wakeham commissioned an independent review
under the Public Inquiries Act. Submitted in April 2026
by an Independent Review Committee (IRC), the review
concluded that the 2024 MOU was “not in the overall
best long-term interest of the people of the province” and
recommended negotiating a stronger framework focused
on transmission rights, economic development, and longterm 昀椀scal value.
Led by a three-member negotiating team—former Fortis CEO Barry Perry, Newfoundland and Labrador Hydro
CEO Jennifer Williams, and lawyer and former Cabinet
Minister Jerome Kennedy—the province negotiated the revised multi-billion-dollar framework under the oversight
of an independent panel.
The new agreement secures major advantages for Newfoundland and Labrador over the previous 2024 proposal:
MORE POWER AND CONTROL: Newfoundland and Labrador
can retain up to 2,350 MW of electricity from Churchill
Falls and Gull Island—360 MW more than in the 2024
MOU. Coupled with a new 2,000 MW federal wind
development project attached to the deal, the province
secures an additional 400 MW of power, yielding 760
MW more overall power than previously negotiated.
The province retains complete optionality to use its
power for domestic industrial growth or sell it back to
Hydro-Québec at a 150 per cent price premium over
base Power Purchase Agreement (PPA) rates.
SUBSTANTIAL FISCAL VALUE: The total 昀椀nancial bene昀椀t to
Newfoundland and Labrador is valued at $49 billion
(2026 Net Present Value), up from $36 billion under
the 2024 MOU. In nominal dollars, the value reaches
$273 billion.
GUARANTEED TRANSMISSION ACCESS: Newfoundland and
Labrador secured a guaranteed transmission portfolio totaling 985 MW, allowing power from Churchill
Falls, Gull Island, and Muskrat Falls to pass through
Québec into Ontario and U.S. markets—including
direct access through the Champlain Hudson Power
Express (CHPE) into New York and the New England Clean Energy Connect (NECEC).
NOVEMBER/DECEMBER 2026 – RENEW CANADA 29
