The Government of Newfoundland and Labrador has announced a landmark agreement with the Governments of Quebec and Canada to replace the long-standing 1969 Churchill Falls Power Contract and the 2024 Memorandum of Understanding (MOU). The new agreement is designed to ensure Newfoundland and Labrador receives greater benefits from its natural resources while supporting long-term economic growth, energy security, and job creation.
Premier Tony Wakeham joined Prime Minister Mark Carney and Quebec Premier Christine Fréchette to unveil the deal, which includes the development of Churchill Falls and Gull Island hydroelectric projects, expanded transmission access, and new federal investments.
What Has Changed?
The agreement provides significant improvements over the previous 2024 MOU, including:
- Increased access to electricity, allowing Newfoundland and Labrador to retain up to 2,350 MW of power from Churchill Falls and Gull Island, plus additional benefits from a proposed wind energy project.
- Greater financial returns for the province, with the deal valued at approximately $49 billion (2026 NPV), compared to $36 billion under the previous arrangement.
- Enhanced transmission rights, giving the province improved access to U.S. and other electricity markets through dedicated transmission capacity.
- Strong employment commitments, including a guarantee that 85% of construction labour hours for the Gull Island project will remain in Newfoundland and Labrador. Peak construction is expected to support up to 5,000 workers.
Community and Economic Impact
The agreement includes approximately $3.5 billion (2026 NPV) in federal support for Newfoundland and Labrador through investments in renewable energy development, transmission infrastructure, project financing, and measures to help accelerate project approvals. In addition, the provincial government has announced a proposed 15% Churchill River Electricity Rebate for residential customers on their first 2,000 kWh of monthly electricity usage, which is expected to save households an average of $351 per year.
Beyond the immediate financial benefits, the agreement is intended to ensure Newfoundland and Labrador becomes the primary beneficiary of its hydroelectric resources while supporting industrial growth, economic diversification, renewable energy expansion, and critical mineral development in Labrador. Provincial officials believe the project will create thousands of jobs, attract new investment, and generate significant long-term economic opportunities for communities throughout the province.
Quick Facts
- The new agreement officially replaces the long-standing Churchill Falls contract, widely regarded as one of the most controversial energy agreements in Canadian history, as well as the 2024 Memorandum of Understanding. The revised framework is intended to provide Newfoundland and Labrador with greater control, revenue opportunities, and long-term benefits from its hydroelectric resources.
- The total value of the agreement to Newfoundland and Labrador is estimated at approximately $49 billion in net present value terms, representing a significant increase over the benefits projected under the previous arrangement. The deal is expected to strengthen the province’s fiscal position and support economic growth for generations to come.
- The Government of Canada has committed substantial financial support through investments in renewable energy projects, transmission infrastructure, loan guarantees, and project development initiatives. These investments are intended to help advance energy development while reducing financial risk and accelerating economic opportunities in Labrador.
- The Gull Island project is expected to be a major source of employment, creating thousands of jobs during construction. The agreement also includes provisions ensuring that the majority of employment hours remain within Newfoundland and Labrador, providing significant benefits to local workers, businesses, and communities.
- To ensure residents share directly in the benefits of the agreement, the province plans to introduce a 15% Churchill River Electricity Rebate on the first 2,000 kWh of monthly residential electricity consumption. The measure is expected to lower electricity costs and provide meaningful annual savings for households across Newfoundland and Labrador.
Conclusion
The Churchill Falls and Gull Island agreement marks a significant milestone in Newfoundland and Labrador’s energy history. By securing greater control over provincial resources, expanding market access, and attracting substantial federal investment, the agreement is expected to strengthen the province’s economic position while creating new opportunities for businesses, workers, and communities.