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Quebec and Newfoundland replace the 1969 Churchill Falls contract

Quebec and Newfoundland replace the 1969 Churchill Falls contract

Built World

A new hydro deal ends the most resented energy contract in Canadian history and commits both provinces to a multi-billion-dollar Labrador buildout

October 9th, 2026: Wakeham and PQ premier-designate discuss Churchill Falls

Overview

Updated Oct 22

For 57 years, Newfoundland and Labrador sold power from one of the world's largest hydro plants to Quebec for about 0.2 cents a kilowatt-hour, which Quebec resold for roughly 50 times that. On August 17, 2026, the two provinces signed a framework to end that arrangement.

Newfoundland's House of Assembly approved the framework on September 17. Quebec's October 5 election produced a Parti Québécois minority government, and on October 9 Premier Tony Wakeham and premier-designate Paul St-Pierre Plamondon spoke by phone. Wakeham said he saw no sign Quebec wants to scrap the deal; negotiators have until March 31, 2027 to sign binding contracts, a deadline that can be extended.

Why it matters

The 1969 contract sent an estimated tens of billions in resale profit to Quebec while Newfoundland got about $100 million a year. This deal rewrites who keeps that money.

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Key Indicators

$273B
Total deal value (nominal)
The new framework's total financial benefit to Newfoundland and Labrador, counted in nominal dollars.
0.2¢/kWh
1969 contract price
What Quebec paid per kilowatt-hour under the old deal, against about 10.3 cents it earned on 2023 exports.
1.8¢/kWh
New price from 2027
The price Quebec pays rises to 1.8 cents per kilowatt-hour in 2027, with annual CPI adjustments.
2041
Old contract expiry
The 1969 contract runs until 2041; the new deal raises prices before then.
2,250-2,700 MW
New Gull Island plant
Capacity range of a new hydro plant planned downstream of Churchill Falls.
15%
N.L. consumer rebate
A Churchill River electricity rebate promised to Newfoundland and Labrador ratepayers.

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People Involved

Tony Wakeham
Tony Wakeham
Premier of Newfoundland and Labrador
Spoke with PQ premier-designate Paul St-Pierre Plamondon on October 9; said he saw no sign Quebec wants to scrap the deal
 Christine Fréchette
Christine Fréchette
Premier of Quebec
Outgoing premier after losing the October 5 election to the Parti Québécois
 Mark Carney
Mark Carney
Prime Minister of Canada
Backed the deal with federal financing
 Andrew Furey
Andrew Furey
Former Premier of Newfoundland and Labrador
Signed the original 2024 memorandum
 Paul St-Pierre Plamondon
Paul St-Pierre Plamondon
Premier-designate of Quebec
Won a minority government on October 5; in transition and expected to review the Churchill Falls deal after hearing from Hydro-Québec

Organizations Involved

Hydro-Québec
Hydro-Québec
Provincial Crown corporation
Buyer under both the old and new contracts

Quebec's state-owned electricity utility, the buyer of most Churchill Falls power since 1969.
Newfoundland and Labrador Hydro
Newfoundland and Labrador Hydro
Provincial Crown utility
Seller and co-owner of Churchill Falls generation

Newfoundland and Labrador's state utility, which owns most of the Churchill Falls plant but long collected little of its value.

Timeline

May 1969 October 2026

8 events Latest: October 9th, 2026 · 1 month ago
Tap a bar to jump to that date

  1. Wakeham and PQ premier-designate discuss Churchill Falls

    Latest Political

    The two spoke by phone four days after the Parti Québécois won a minority government. Wakeham said he got no sense Quebec wants to tear up the agreement; St-Pierre Plamondon is still in transition and will hear from Hydro-Québec.

  2. Parti Québécois wins Quebec election

    Political

    Quebec voters elected a sovereignist PQ government. Leader Paul St-Pierre Plamondon has said he won't scrap the Churchill Falls deal but will conduct a due diligence review.

  3. N.L. House of Assembly approves Churchill Falls framework

    Political

    A slim majority of members voted in favor of the Definitive Cooperation and Implementation Agreement after a four-day special session. The deal allows work on final agreements to continue until March 31, 2027.

  4. New Churchill Falls deal unveiled

    Agreement

    Carney, Wakeham and Fréchette announce a deal in St. John's expanding generation at Churchill Falls and a new plant at Gull Island, with a 15% consumer rebate for Newfoundland ratepayers.

  5. New N.L. premier reopens the talks

    Political

    After winning office, Tony Wakeham orders a review of the 2024 memorandum and sends negotiators back to the table.

  6. Provinces sign a framework to end the contract

    Agreement

    Premiers Legault and Furey unveil a memorandum to replace the 1969 deal and expand Churchill River capacity, targeting $200 billion-plus for Newfoundland by 2075.

  7. Supreme Court upholds the contract again

    Legal

    Canada's top court rejects Newfoundland's bid to rewrite the terms, leaving the low fixed prices in place.

  8. The 1969 contract is signed

    Origin

    The Churchill Falls corporation agrees to sell most of the plant's power to Hydro-Québec at fixed, declining prices running to 2041.

Scenarios

1

Provinces sign binding final agreements

Likely Resolves by Q2 2027

Discussed by: CBC News, BNN Bloomberg

The August announcement is a political framework. To hold, both governments must convert it into definitive, binding contracts covering pricing, ownership and construction. Negotiators had targeted final agreements in 2026. If lawyers and utilities close the remaining terms, this resolves yes.

2

Gull Island construction gets the green light

Possible Resolves by End of 2029

Discussed by: CBC News, Newfoundland and Labrador Hydro

The deal promises a new 2,250-megawatt plant at Gull Island and upgrades at Churchill Falls. A formal final investment decision or construction start would show the buildout is real, not just signed. Financing from Ottawa and the utilities has to line up first.

3

Opposition forces the deal back to the table

Possible Resolves by Q2 2027

Discussed by: Global News, CBC News

Former officials called the 2024 version a 'giveaway,' and Wakeham already reopened it once. Public hearings, a legislature vote, or a Quebec political shift could stall or reopen the terms before binding contracts are signed, repeating the 2024-2026 pattern.

4

Quebec election reshapes the deal

Deadline passed (Oct 5, 2026)

Discussed by: CBC News, Premier Tony Wakeham

Quebec votes on October 5. Wakeham says he is prepared to sit down with any government that wins. A change in government could slow or reopen negotiations, though the framework is designed to survive a transition.

5

PQ due diligence review leads to renegotiation

Possible Resolves by Q1 2027

Discussed by: CBC News, Premier Tony Wakeham

The Parti Québécois's due diligence review of the Churchill Falls deal could lead to demands for changes. Plamondon has said he won't axe the deal, but the review could slow negotiations or prompt renegotiation of specific terms.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

May 1969

The Churchill Falls contract is signed (1969)

Newfoundland's power corporation agreed to sell most of Churchill Falls output to Hydro-Québec at fixed prices that fell over time. The deal locked in rates near 0.2 cents a kilowatt-hour and ran to 2041, with a near-automatic renewal.

Then

Quebec financed the plant and secured cheap, reliable power for its grid.

Now

As market prices climbed, Quebec earned huge resale profits while Newfoundland collected about $100 million a year. Courts upheld the contract into 2019.

Why this matters now

This is the grievance the 2026 deal is meant to settle. Understanding how one-sided the original became explains why the reset matters so much in Newfoundland.

2012–2021

Muskrat Falls megaproject (2012–2021)

Newfoundland sanctioned the Muskrat Falls dam on the lower Churchill River at about $6.2 billion. Costs ballooned past $13 billion, and Ottawa stepped in with rate relief to shield ratepayers.

Then

The project came online years late and far over budget.

Now

It became a cautionary tale about hydro megaproject risk and left the province wary of large builds it cannot fully control.

Why this matters now

The new deal promises tens of billions in construction on the same river. Muskrat Falls shows how quickly those numbers can slip, which is why financing and cost-sharing are central.

July 2024

Columbia River Treaty renegotiation (2024)

Canada and the United States reached an agreement-in-principle to modernize their 1964 Columbia River hydro treaty, updating how power benefits and flood control are shared six decades on.

Then

Negotiators announced revised terms giving Canada more flexibility over its share of benefits.

Now

The talks showed that long-term cross-jurisdiction hydro deals can be reopened and rebalanced when one side feels shortchanged.

Why this matters now

Like Churchill Falls, it is a decades-old power pact renegotiated across a border. It is a template for resetting the split without tearing up the underlying infrastructure.

Sources

(21)
+15
CBC News Lethbridge Herald Government of Newfoundland and Labrador Newfoundland and Labrador Heritage CTV News BLG Canada's National Observer Hydro-Québec SaltWire Mondaq The Globe and Mail Newfoundland and Labrador House of Assembly Canada News Media CBC News CBC News CBC News Government of Newfoundland and Labrador CBC News CBC News CBC News Government of Newfoundland and Labrador