Open this photo in gallery:
N.L. Premier Tony Wakeham speaks to the media after announcing a new agreement on the Churchill Falls station with Quebec Premier Christine Frechette and Prime Minister Mark Carney, in St. John’s, last month.Paul Daly/The Canadian Press
The Newfoundland and Labrador government has voted in favour of a multi-billion dollar agreement to share energy from Labrador with Hydro-Québec, though it passed by a thin margin.
The province’s 20 governing Progressive Conservatives rose in the legislature Thursday night in favour of the draft deal. One Independent member joined them.
The remaining 18 members – 15 Liberals, two New Democrats and one Independent – stayed in their seats.
The draft deal came after years of negotiations, one change in government and a renegotiation process. It has inspired anxiety, anger and hope in a province desperate to end a history of hydroelectric failures and persistent crushing debt.
“I’m very proud of this agreement,” Premier Tony Wakeham told reporters shortly after the vote, adding that he was confident his negotiating team got it right.
“We have power that we never had before, and we can decide what we want to do with that,” he said.
Analysis: New Churchill Falls deal faces political uncertainty, planning hurdles
Thursday’s vote came after a four-day debate about the non-binding agreement, which proposes plans for more than $50-billion worth of hydro and wind energy developments along the Churchill River. The sprawling river cuts through south-central Labrador – and through traditional Innu territory – and has long been cast as a provincial Crown jewel for its roaring hydroelectric potential.
The Innu Nation urged government representatives to vote against the agreement, citing ongoing disputes with the province and worry the draft deal did not include sufficient benefits for Innu people.
“We cannot support an agreement that asks Innu to accept the impacts and risks of major development while the financial benefits go elsewhere,” said a news release Thursday evening.
Wakeham said he intended to meet with the Innu Nation and he acknowledged his government had unresolved issues to address with the Innu people.
Hydro-Québec and Newfoundland and Labrador Hydro co-own and operate a 5,248-megawatt generating station on the river, at Churcill Falls, which is said to be among the largest underground powerhouses in the world.
However, the plant has long been a source of resentment in Newfoundland and Labrador toward Quebec. Under its current operating contract, signed in 1969, Hydro-Québec buys the lion’s share of the energy from Churchill Falls for just a fraction of a cent per kilowatt hour.
The facility supplies about 15 per cent of Quebec’s energy, for a price that many describe as little more than free.
Opinion: Newfoundland energy deal with Quebec strengthens Carney’s hand in trade talks
The new agreement would end the contentious arrangement 15 years early. Hydro-Québec would still buy most of the Churchill Falls power, but at higher, escalating rates.
The Liberals repeatedly questioned the proposed rate scheme, however, saying it should be based on market prices, rather than the consumer price index.
Liberal Leader John Hogan has said the pricing strategy could once again keep Churchill Fates rates far below market value and leave the province regretting the agreement 50 years in the future, just as it regrets the 1969 contract now.
“We have not insisted that our province stands to gain from any windfalls gained by Quebec,” Hogan said in his closing remarks Thursday night. “For me, and when it comes to this deal, the lack of protection for our future and for our children … is where I will take a stand.”
The Liberals first hammered out a draft deal with Hydro-Québec in 2024, before the Progressive Conservatives were elected. Wakeham sent negotiators back to Hydro-Québec to ask for different terms.
The agreement outlines plans for several new projects, including a 2,700-megawatt hydroelectric plant at Gull Island. It also proposes feasibility studies for a second powerhouse at Churchill Falls and a wind farm in the Churchill River area.
Prime Minister Mark Carney has touted the deal as “the largest clean energy investment in North American history” and his government has promised $10-billion in financing to help it along.
Officials hope to reach final agreements by the end of the year, though they have until March 31, 2027, which is when the proposal expires.
Quebec is in the midst of a provincial election campaign and Wakeham said he would sit down with “any government” in the province to continue negotiations.
Craig Pardy, Newfoundland and Labrador’s finance minister, said the money expected from the agreement in 2041 would cover about 60 per cent of the province’s current health-care costs.
“I can say that we’re all eager to make sure that we have more revenue come in for the benefit of Newfoundlanders and Labradorians,” Pardy said.
His 2026-27 budget projected a $688-million deficit and a net debt of $20.8 billion in a province of some 540,000 people.