‘Tense’ negotiations result in non-binding Churchill Falls deal that includes massive expansion

OTTAWA — Quebec, Newfoundland and Ottawa announced a deal Monday that would see a massive redevelopment and expansion of the Churchill Falls hydroelectric facility and both provinces set aside a decades-long conflict over electricity prices… for now.

Prime Minister Mark Carney and his Quebec and Newfoundland counterparts Christine Fréchette and Tony Wakeham were in Newfoundland to announce the new deal on Monday afternoon.

“After months of occasionally tense but always positive negotiations, we have achieved a rare win-win-win,” N.L. Premier Wakeham said, calling the original 1969 energy deal between Quebec and his province “one of the darkest chapters” of its past.

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“What a great day it is for Quebec, Newfoundland and Labrador,” Fréchette added.

The renegotiated but non-binding deal promises to boost energy production at the Churchill Falls hydroelectric facilities significantly, as well as commits to build a long-debated production facility at nearby Gull Island.

Both provinces noted that the deal would not have happened without significant federal government investment. According to a release, Ottawa is committing up to $10 billion and promising to expedite approvals for the construction projects by referring it to the new Major Projects Office.

Plans to expand existing facilities and building the Gull Island power project as well as an onshore wind energy project and new transmission lines to Labrador in Quebec would triple the generating capacity of Churchill Falls to 14,000 megawatts of renewable power, Carney said.

“That is more than the entire generating capacity of BC Hydro. More than double the output of Bruce Power, the largest nuclear plant on this continent. It is the equivalent of 18 Hoover Dams, at its current operating capacity,” the prime minister said, calling it the largest renewable energy investment in Canada’s history.

In a technical briefing for reporters Monday morning, Newfoundland government officials said much of the current agreement is non-binding until the deal if completely finalized and approved likely by the end of the year.

That means the agreement risks getting upended for the second time in two years if the Parti Québécois gets elected in the province’s upcoming provincial election in October. The PQ currently leads in provincial opinion polls.

The PQ previously told National Post that if elected, it would try to redraft any deal to include further compensation for the province’s historic loss of the territory of Labrador roughly one century ago. That could explain why both provinces moved to sign a deal before the provincial elections are called.