Quebec Premier Christine Fréchette says she will meet with Newfoundland and Labrador Premier Tony Wakeham as he looks to renegotiate the tentative Churchill Falls agreement reached in 2024.
After releasing an independent review Tuesday that found the agreement is not in the province’s best interest, Wakeham pressed to renegotiate a new deal with more favourable terms.
“We will take the time to review the report. We both agree on the importance of reaching a win-win agreement in the near future,” Fréchette wrote, noting she spoke with Wakeham this week.
Announced in late 2024, the current memorandum of understanding was negotiated by then-Quebec premier François Legault and then-Newfoundland and Labrador Premier Andrew Furey.
Intended to replace the contentious 1969 deal, the new agreement would allow Quebec to continue buying electricity from Churchill Falls — though at a higher price — and would increase the amount of energy it imports from Labrador through investments in three new hydroelectric projects.
The three projects are a new power plant on the Churchill River, increased generating capacity at the existing station, and a run-of-river generating station at Gull Island.
When announced, both provinces hailed the agreement as a “win-win.” But following his election in the fall of 2025, Wakeham expressed skepticism and quickly appointed a three-person panel to review it.
At a news conference Tuesday, Wakeham said the panel found the memorandum of understanding has positive aspects but is “deeply flawed.”
The panel’s report raised concerns about the province’s right to use Churchill Falls power in-province and “problematic” power pricing models, among other risks.
“If the price tag of tearing up one bad deal is being forced to sign a second bad deal, we will be consigning our children and grandchildren to continue living under the shadow of the 1969 agreement,” Wakeham told reporters.
Wakeham announced a new negotiating team but stressed the process would not need to restart from scratch.
“We’re going to build on the parts that work, and fix the parts that don’t,” he said.
Wakeham said he has raised specific concerns about the agreement with Fréchette and understands she has issues of her own to put on the table.
He spoke of a “window of opportunity” to reach a new deal but stopped short of setting a timeline.
In a brief statement issued Tuesday, Hydro-Québec welcomed Wakeham’s interest in resuming discussions and said it believes a final agreement can “create sustainable value.”
“That said, any final agreement must be based on balanced terms and be beneficial to Hydro-Québec’s customers,” the utility added. “There will be no agreement on terms less favourable than those initially agreed upon.”
Quebec Economy Minister Bernard Drainville said the provincial government is confident the two sides can finalize the agreement.
“We remain committed to getting a final agreement with the government of Newfoundland over what we hope to be a short period of time,” he said.
Drainville praised the memorandum of understanding signed by Legault in 2024.
“And we think that it is possible to have a final agreement with the government of Newfoundland, which will be yet again a win-win agreement for both of our provinces,” he added.
Drainville made the comment at an unrelated press conference also attended by Prime Minister Mark Carney.
Carney said he has had several conversations with the two premiers about the Churchill Falls project.
Though the proposal is between the two provinces, “if there are things that the government of Canada can do (to help), we will do them,” the prime minister said.
The Gazette’s Andy Riga contributed to this report.
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