After four years of talks and decades of resentment in Newfoundland and Labrador, - has learned that the Quebec and Newfoundland governments are on the verge of reaching an agreement in principle to renew the contract for the Churchill Falls hydroelectric power station.
Even if the offices of Prime Ministers François Legault and Andrew Furey did not want to confirm this information and declined our requests for interviews. Everything indicates that this agreement would increase hydroelectricity production for Quebec.
- reported last February that senior executives at Hydro N.L. and Quebec had met several times over the past year, particularly in recent weeks.
An agreement would be beneficial for the two provinces, but it would undoubtedly also be beneficial for the two prime ministers. The smell of an election is being felt in Newfoundland and Labrador, a vote that Andrew Furey must call no later than October 2025.
François Legault, falling in the polls, could boast of having negotiated a less expensive solution than the construction of a new dam to double the size of Hydro-Québec and achieve his ambitions linked to the energy transition.
Legault’s act of contrition could have weighed in the balance
In February 2023, Mr. Legault traveled to Newfoundland and Labrador, where he recognized, for the first time on behalf of the Quebec government, that the contract signed in 1969 disadvantaged Newfoundlanders. He affirmed understand their frustration
.
The contract that was signed for 65 years today has become a bad contract for Newfoundland. We cannot rewrite history, but we can try for the future to find ways to work together, for the benefit of both, to have a win-win result.
Under the contract, Hydro-Québec pays a rate of 0.2 cents per kilowatt hour for the electricity produced by Churchill Falls, but it resells it today at a rate 40 times higher, given the explosion in the market.
As the Quebec state-owned company buys 85% of the electricity produced by this plant, a study carried out in 2019 shows that it pocketed nearly $28 billion in profits, or a third of its profits. In comparison, the remaining 15% energy block at Hydro NL. brought in only $2 billion.
Newfoundland and Labrador has repeatedly tried to force the reopening of the contract, calling it a historic injustice. However, several court judgments have confirmed its validity, given that Hydro-Québec had assumed the financial risks of constructing the complex.
« Show us the money! » repeated Prime Minister Andrew Furey
For months, Prime Minister Andrew Furey has been repeating that Quebec will have to table a more generous proposal to reach an agreement with him. It was impossible for us to know whether the Legault government agreed to put more money on the table. - was unable to obtain details of the possible agreement in principle.
Mr. Furey considered his province in a strong position in the negotiations, given that Quebec is looking for clean energy to carry out all its projects. Building a new hydroelectric project would take the Legault government around fifteen years.
Mr. Legault’s entourage, for their part, also had the impression of having the short end of the stick. We know that Newfoundland and Labrador is experiencing serious financial difficulties with the Muskrat Falls dam project. The province also found itself on the verge of bankruptcy.
The commercial agreement was valid until 2041. However, the two provinces have an interest in reaching an agreement so that the Gull Island dam project, downstream of Churchill Falls, can finally be realized.
Premiers Furey and Legault had several opportunities to discuss, notably during the Council of the Federation as well as during the Conference of New England Governors and Eastern Canadian Premiers. Mr. Legault also attended a Canadian game in Montreal with Andrew Furey.
And the Innu in all this?
Remember that Grand Chief Simon Pokue deplores that the Innu were never consulted for the construction of the Churchill Falls complex.
The chief has often repeated that the 4,000 Innu of Sheshatshiu and Natuashish would prevent the realization of any new agreement without their consent.
The Innu Nation is also suing Hydro-Québec and the Churchill Falls Corporation in Labrador, in order to obtain compensation for the damage caused by the construction of the power station.
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