Newfoundland and Labrador and Quebec energy negotiations

Newfoundland and Labrador and Quebec have made significant progress toward a new agreement regarding the Churchill Falls hydroelectric project and Gull Island. This new arrangement is intended to replace a 2024 Memorandum of Understanding (MOU) that had been criticized by the Newfoundland and Labrador government.

The proposed deal is expected to increase the price Quebec pays for power and expand production capacity, potentially providing Newfoundland and Labrador with revenues estimated at over $225 billion over the life of the arrangements. Such an expansion could also revitalize the Atlantic Loop project, which seeks to connect Atlantic provinces to the Quebec power grid. The federal government has reportedly acted as a facilitator, potentially offering financial incentives like the Clean Electricity Investment Tax Credit.

While reports indicate a deal has been reached, officials noted that no final documents had been signed as of mid-August 2026. A major announcement involving provincial leaders and Hydro-Québec executives is expected in St. John’s to detail the energy and economic development agreement. The negotiations aim to reshape a relationship governed by a 1969 contract that provides Quebec with below-market rates until it expires in 2041.