NL Reaches Agreements on Churchill Falls and Gull Island Development

The Government of Newfoundland and Labrador has reached historic agreements with both Quebec and the Federal Government to replace both the 1969 Churchill Falls Power Contract and the December 2024 Memorandum of Understanding (MOU) between Newfoundland and Labrador Hydro, Hydro-Quebec and CF(L)co with a new and better deal that will ensure Newfoundland and Labrador remains the primary beneficiary of its own resources.

Today, the Honourable Tony Wakeham, Premier of Newfoundland and Labrador, joined the Right Honourable Mark Carney, Prime Minister of Canada, and the Honourable Christine Fréchette, Premier of Quebec, and representatives from Newfoundland and Labrador Hydro and Hydro-Quebec to announce a new deal to develop Churchill Falls and Gull Island, while delivering more power, more value and more transmission for the people of the province.

Key improvements over previous 2024 MOU

The new deal delivers multiple benefits to the people of Newfoundland and Labrador, including:

• More power: As part of a new agreement with Quebec, Newfoundland and Labrador will now be able to retain up to 2,350 MW of electricity from Churchill Falls and Gull Island, 360 MW more than the 1,990 MW promised in the original 2024 MOU. In addition, the Federal Government has agreed to invest in a new 2,000 MW Churchill Falls wind project attached to the deal which will provide Newfoundland and Labrador with an additional 400 MW of its generated output, resulting in the province receiving 760 MW more overall power. Over the course of the deal, Newfoundland and Labrador will maintain complete optionality in how its allotted power from the Churchill Falls base power plant is deployed, with the choice to either keep power for its own industrial development or, alternatively, to sell it, with Hydro-Quebec agreeing to purchase this power at a 150 per cent price premium over base PPA prices.
• More value : The total financial benefit to Newfoundland and Labrador from the deal is valued at $49 billion (2026 NPV), up from the $36 billion (2024 NPV) promised in the previous 2024 MOU. Counted in nominal dollars the total value of the new deal is $273 billion compared to the previous government’s accounting of $225 billion under the old MOU.
• More transmission: Unlike the previous MOU, Newfoundland and Labrador has secured the ability to transmit power from Churchill Falls and Gull Island through Quebec to the U.S. marketplace through the Champlain Hudson Power Express (CHPE) and the New England Clean Energy Connect (NECEC). Newfoundland and Labrador will now have a guaranteed portfolio of transmission to other markets totalling 985 MW.
• Up to 240 MW of CHPE access into New York for Gull Island and Churchill Falls power that will be sold at the same price that Hydro-Quebec receives for the power.
• 200 MW of NECEC access into New England for Gull Island and Churchill Falls power that will be sold at the same price that HQ receives for the power.
• Up to 280 MW of synthetic exports that will be sold at U.S. and Ontario market-based prices.
• 265 MW of direct transmission using power from sources like Muskrat Falls and a new wind development.
• More jobs: The new agreement also includes terms for benefits sharing, including employment. It includes a full guarantee that 85 per cent of all person-hours of employment involved in constructing Gull Island will stay within Newfoundland and Labrador with priority being given to qualified Labrador Innu, qualified Labradorians and qualified Newfoundlanders, in that order. It is estimated that as many as 5,000 workers would be employed at the Gull Island site during peak construction.

Federal partnership in deal

• The Federal Government also announced that it is partnering with the Government of Newfoundland and Labrador and the Government of Quebec through a series of new investments that were absent from the 2024 MOU. In total, there is $3.5 billion (2026 NPV) in federal support for Newfoundland and Labrador. These investments include:
• Taking up to a 40 per cent equity stake in an adjoining Labrador Wind Project and providing value to Newfoundland and Labrador, totalling an estimated $1 billion (2026 NPV).
• Committing $1 billion (2026 NPV) to the construction of a Labrador West transmission line necessary to open new mining and other industrial projects in the Labrador Trough.
• Providing a federal loan guarantee for construction costs related to Gull Island, further de-risking the project and reducing overall capital costs.
• Offering $1.5 billion of value (2026 NPV) in support for Gull Island, Churchill Falls and transmission.
• Referring the Gull Island, Churchill Falls upgrades and Labrador transmission projects to the Government of Canada’s Major Projects Office upon the conclusion of binding agreements which will coordinate and structure federal financing while coordinating and accelerating regulatory and permitting requirements.

New Churchill River electricity rebate

In order to ensure the benefits of a new Churchill Falls and Gull Island agreement are shared by Newfoundlanders and Labradorians, Premier Wakeham further announced that, upon the finalization of the definitive agreements, the Government of Newfoundland and Labrador will introduce a 15 per cent “Churchill River Electricity Rebate” for all residential ratepayers in the province on their first 2,000 kWh of electricity usage per month, a measure that will save ratepayers an average of $351 per year.

Quotes

“This is a win-win-win for Newfoundland and Labrador, the Federal Government and Quebec. I want to thank Prime Minister Carney and Premier Fréchette for their leadership throughout this process. We are finally replacing the notorious 1969 Churchill Falls deal and the 2024 MOU with a new deal that will guarantee us more power, more value and more transmission. Newfoundlanders and Labradorians will finally be the primary beneficiary of our own resources, with complete control over whether we use our power to develop our economy or sell to outside markets. Today is not about what we can tear up, it’s about what we can build up. It is now time for us to roll up our sleeves and get to work to build a better and brighter future for all of us.”

Honourable Tony Wakeham

Premier of Newfoundland and Labrador

“In the current geopolitical context, it is vital for every nation to secure its energy future. I am very proud to announce today the conclusion of this new agreement, which is a priority for Quebec, particularly, for generations to come. Through this partnership, we are supporting the energy transition and enabling the growth of our economy through renewable energy, while ensuring our energy independence.”

Honourable Christine Fréchette

Premier of Quebec

“Canada is extending its unique advantage in clean, reliable and affordable power. 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.”

Right Honourable Mark Carney

Prime Minister of Canada

“This deal will result in thousands of jobs for trades workers in Newfoundland and Labrador and billions of dollars of procurement opportunities for our businesses. But that’s just scratching the surface. There are hundreds of billions of dollars in critical minerals in Labrador that we have been unable to develop due to lack of power. With this new deal, we can open up these opportunities and create tens of thousands of new jobs and billions of new economic opportunities for decades to come.”

Honourable Lloyd Parrott

Minister of Mines and Energy

BACKGROUND

The agreement will officially terminate the 1969 Power Contract between Quebec Hydro-Electric Commission and Churchill Falls (Labrador) Corporation Limited . The 1969 agreement, which for decades allowed Hydro-Quebec to purchase Churchill Falls electricity at 0.2 cents per kWh and sell it at market rates, remains one of the most controversial contracts in Canadian history and, for more than 50 years, has shaped the relationship between Newfoundland and Labrador and Quebec.

On December 12, 2024, the previous Government of Newfoundland and Labrador signed an MOU with the Government of Quebec that was intended to revise the terms of the 1969 power contract in order to address Newfoundland and Labrador’s longstanding concerns.

Following the change of government in October 2025, Premier Wakeham suspended work on the MOU pending an independent review of the MOU’s terms. On January 15, 2026, the Premier used Part II of the Public Inquiries Act, 2006 to commission an Independent Review of the previous government’s MOU. On April 30, 2026, the Independent Review Committee (IRC) submitted its report – Creating Long-Term Value from the Churchill River for the People of Newfoundland and Labrador . In their report, the IRC concluded that, despite containing some benefits, “the MOU as currently configured is not in the overall best long-term interest of the people of the province.” Instead, the Independent Review Committee articulated that “The Government of Newfoundland and Labrador could make significant decisions, discussed in the IRC’s recommendations, that may ultimately allow Newfoundland and Labrador Hydro to work toward a revised agreement with Hydro-Quebec to serve the public interest” and, in particular, identified five key recommendations around which the Government of Newfoundland and Labrador could negotiate a better deal.

Guided by the findings of the Independent Review Committee, a three-member negotiating team – comprised of former Fortis CEO Barry Perry, Newfoundland and Labrador Hydro CEO Jennifer Williams, and St. John’s lawyer and former Cabinet Minister Jerome Kennedy – represented the province in negotiations with Hydro-Quebec and the Federal Government to secure a stronger agreement focused on transmission rights, economic development and long-term fiscal value under the oversight of an independent panel.

All negotiations took place under the supervision of an independent oversight committee, with the final deal approved by the Newfoundland and Labrador Hydro board of directors. The Government of Newfoundland and Labrador will now work with the governments of Quebec and Canada, Newfoundland and Labrador Hydro and Hydro-Quebec to implement final binding agreements for the deal.

As part of this work, and in keeping with the principles of Reconciliation and the recommendations of the IRC, the Government of Newfoundland and Labrador has begun conversations with representatives of the Innu Nation about opportunities for the Innu to engage as full partners in developments related to the agreement.