OTTAWA – CTV News has learned the federal government, as well as the Quebec and Newfoundland and Labrador provincial governments, are poised to announce a new deal on Churchill Falls next week.
The previous “memorandum of understanding (MOU),” inked in December 2024 by then-premiers Andrew Furey and Francois Legault, became a focal point of the Newfoundland and Labrador provincial election last October, with the leader of the Progressive Conservative Party - and now premier - Tony Wakeham criticizing the terms of the MOU and promising a referendum on it.
Once elected, Wakeham struck a review committee, which concluded the terms of the MOU were not “in the public interest.” The premier then said he would embark on renegotiations with the new premier of Quebec, Christine Fréchette.
Wakeham also signalled he wanted the federal government involved, and multiple provincial and federal sources told CTV News that both Prime Minister Mark Carney and federal Energy Minister Tim Hodgson were heavily involved in negotiations and “deep in the weeds,” viewing the construction of the hydroelectric project as one of national significance and important for energy security, in light of persistent economic threats from the United States.
CTV News reached out to Wakeham’s office, where a spokesperson confirmed significant progress in negotiations has been made, but added that “as of right now, no final deal has been signed.”
Sources tell CTV News the new deal will allow for more power to be sent to Labrador, a key sticking point for Wakeham, and the federal government will play a role in the financing of transmission lines, with significant loan guarantees and investment tax credits.
The original Churchill Falls deal, signed in 1969, resulted in Newfoundland selling power at a discount to Quebec at rates far below market value. That deal was only set to expire in 2041.
The 2024 MOU allowed for new rates for the power to take hold in 2027, in an effort to rectify what Newfoundlanders have spent decades calling a raw deal – they had the resource, but Quebec got the bargain.
Provincial sources say the bulk of the 2024 deal will remain in place.
With files from CTV News’ Garrett Barry
