What’s the Deal?
Seventeen years ahead of schedule, Newfoundland and Labrador has secured a modern Churchill Falls agreement with Quebec.
What’s In It For You
The $225,000,000,000 in new revenue is transformative in meeting the needs of Newfoundlanders and Labradorians, and will be invested in key areas such as:
HEALTH CARE
Expanding access to health care facilities and professionals across the province.
AFFORDABILITY
Addressing cost of living challenges to put money back in your pocket.
PUBLIC SAFETY
Increasing police presence in our communities and working to decrease crime.
ROADS
Building and repairing roads, bridges, and other public infrastructure.
EDUCATION
Investing in your children’s future with teachers, technology, and improved facilities.
FISCAL RESPONSIBILITY
Paying down provincial debt to improve long-term stability.
Why Acting Now Matters
Newfoundland and Labrador is leading Canada in nation-building projects that will unlock economic benefits for the people of this province.
Significant revenue that is guaranteed to rise with market prices, delivering immediate, tangible benefits including strengthened services, improved infrastructure, and reduced debt.
Ensures the province remains in control of its own energy future through increased power supply for industrial development.
New developments including at Gull Island represent thousands of jobs and this agreement prioritizes opportunities for the people of this province first.
This Is Our Moment.
Our government is the first to offer a way out of the 1969 Churchill Falls contract—righting a historic wrong. The MOU sets a foundation for growth, investment, and leadership. It is proof that Newfoundland and Labrador can turn resource potential into lasting prosperity, deliver benefits for generations, and make the right choice when opportunity is at the door.
The Facts
On Dec. 12, 2024, Newfoundland and Labrador and Quebec signed an historic Memorandum of Understanding (MOU) to terminate and replace the 1969 Upper Churchill contract and develop new capacity on the Churchill River including Gull Island. Below is a summary of the main points of the MOU.
- More than $225 Billion in total revenue to the Newfoundland and Labrador treasury from the new power contracts and the new developments.
- Increased benefits totaling $17 Billion over the next 17 years from Churchill Falls alone—starting now, not in 2041—on average $1 Billion per year.
- Churchill River capacity increased by approximately 3,900 MW; providing Newfoundland and Labrador Hydro (NL Hydro) with access to nearly four times as much electricity for use in Labrador than is available today.
- Respect for existing agreements with Indigenous communities in Labrador.
- Development of Gull Island with full protection from the construction and cost overrun risks.
- Thousands of jobs and billions in economic benefit here at home.
- Four new projects expected to generate:
- 3,000: average annual direct jobs during construction.
- 5,000: peak direct jobs.
- Additional indirect and induced employment from construction projects as well as industrial
growth in Labrador made possible by increased access to electricity. - Both provinces have signed a non-binding MOU, with the goal of signing binding agreements
by April 2026.
- Effective average price 5.9 cents/kWh, which is 30 times higher than current price.
- Price will escalate over time, tied to market prices, elements which were missing from 1969 deal.
- Hydro-Québec will pay CF(L)Co. $33.8 Billion in today’s dollars, which is $180 Billion to Newfoundland and Labrador in nominal dollars.
- The new Churchill Falls Power Purchase Agreement also includes off-ramps in 2051 and 2061 to provide additional flexibility to NL Hydro and CF(L)Co. for future unforeseen changes in the market and pricing for electricity.
- Agreement will be retroactive to January 1, 2025, and continue to December 31, 2075.
- New pricing for Churchill Falls is not conditional on new projects proceeding.
- Ownership of CF(L)Co. remains unchanged at 65.8% NL and 34.2% Quebec.
- An improved water management agreement to optimize electricity production on the Churchill River.
- Modernized shareholders’ agreement for CF(L)Co.
- Hydro-Québec is forecasted to pay $3.5 Billion in today’s dollars for the right to co-develop
- new projects in Labrador.
- New projects will increase capacity from the Churchill River by approximately 3,900 MW.
- Gull Island: 2,250 MW.
- Churchill Falls Expansion: 1,100 MW with a second powerhouse at Churchill Falls.
- Churchill Falls Upgrades: 550 MW with upgrades to existing units.
- Transmission: 340 km of 735kV AC lines to enable new developments.
- Combined ownership of all new developments is approximately 65% NL and 35% Quebec.
- NL Hydro will have access to 1,990 MW to support industrial growth in Labrador—nearly four times its current allocation.
- Over $33 Billion in construction spending in total.
- A new generating station on the Churchill River capable of producing 2,250 MW.
- An estimated cost of $24.9 Billion including financing, with commissioning targeted for 2035.
- Newfoundland and Labrador equity investment to be covered by the $3.5 Billion payment from Hydro-Québec.
- Innu Nation Impacts and Benefits Agreement in place.
- Environmental Assessment completed in 2012.
- Ownership of the new entity: 60% by NL Hydro and 40% by Hydro-Québec.
- NL Hydro to operate and maintain the facility once commissioned.
- 50-year power purchase agreement, covering all costs to develop, construct, operate, and maintain the facility including a return on equity ranging between 8-9%, set every five years.
- Price projected to increase at 2% annually.
- No automatic renewal rights.
- Hiring protocol set out in the Environmental Assessment. Qualified workers hired in order: Innu Nation, residents of Labrador, residents of the island, rest of Canada.
- Hydro-Québec to manage construction and completion, including funding any cost overruns. NL Hydro will participate in the oversight of the project.
- A second powerhouse at Churchill Falls, near the existing plant and using existing reservoir, capable of producing approximately 1,100 MW.
- An estimated cost of $4.6 Billion including financing.
- Newfoundland and Labrador equity investment to be covered by the $3.5 Billion payment from Hydro-Québec.
- Owned by CF(L)Co.: 65.8% NL Hydro and 34.2% Hydro-Québec.
- NL Hydro will operate and maintain the facility once commissioned.
- 50-year power purchase agreement, covering all costs to develop, construct, operate, and maintain the facility including a return on equity ranging between 8-9%, set every five years.
- Price projected to increase at 2% annually.
- No automatic renewal rights.
- Hydro-Québec to manage construction and completion, including funding any cost overruns. NL Hydro will participate in the oversight of the project.
- CF(L)Co. will upgrade the 11 existing generating units at Churchill Falls with modern equipment which will add approximately 550 MW to its production capability (currently at 5,428 MW).
- An estimated cost of $1.9 Billion including financing.
- Owned by CF(L)Co.: 65.8% NL Hydro and 34.2% Hydro-Québec—the plant will continue to be operated and maintained by NL Hydro.
- Power sales from the upgraded units will be a part of the contract for the existing Churchill Falls plant, ending in 2075, with no automatic renewal rights.
- Price projected to increase at 2% annually.
- NL Hydro will manage the construction and completion, with any cost overruns to be borne by shareholders of CF(L)Co.
- NL Hydro to construct approximately 340 km of 735kV AC transmission lines in Labrador to enable new developments; Hydro-Québec to construct the required transmission in Quebec.
- An estimated project cost of $3.6 Billion including financing.
- 100% owned by NL Hydro which will be responsible for construction and completion.
- NL equity investment expected to be covered by the $3.5 Billion payment from Hydro-Québec.
- Costs to be recovered through power sales from the new developments, including a cost-of-service return.