For more than half a century, Newfoundlanders and Labradorians have lived with the consequences of the 1969 Churchill Falls contract—a deal signed under pressure, without safeguards which locked this province into decades of undervalued energy sales to Quebec.
The result is well known. Quebec reaped billions, while this province received only a fraction of the value of its own resource. While we are now only about 15 years away from freeing ourselves from this Quebec straightjacket, we now have to ask ourselves a simple but urgent question—“Will this 2024 MOU, which has been once again negotiated behind closed doors, make Newfoundland and Labrador the Principal Beneficiary of our own resources, or are we about to repeat history?”.
The MOU signed in December 2024 sketches out a framework for ‘new pricing’ and contemplates future development of Labrador’s immense hydro potential, including Gull Island. This time round Quebec is positioned to receive roughly 7,200 megawatts of power, while Newfoundland and Labrador is allocated 1,990 megawatts. On paper, this sounds like progress. But when we look closer, the protections that would make us the Principal Beneficiary are missing.
There is no fair pricing. The MOU does not tie rates to inflation, nor to true and increasing market based value. It does not set a minimum floor price. Unlike many U.S. jurisdictions it does not recognize the full value of Churchill’s power—its capacity, its reliability, and its ability to balance grids.
We are selling Churchill’s energy only — without a true market based and comprehensive pricing structure (energy, capacity, reliability) and we will be selling it at bargain basement rates while Quebec secures its economic and long‑term energy future.
With this MOU we the people will once again be subsidizing Quebec’s need for ‘reliability’ at our expense.
Under the 2024 MOU the sale of Churchill Falls’ energy “…is only 1.6 cents/kWh, or 10% of the market value… This 10% share falls far short of our equity share in CFLCo, namely, 65.8%, and far short of what we should be obtaining as the owner of the resource, including the water rights on the Churchill River”, states David Vardy, professional economist, former senior public servant, and frequent writer on this Blog.
Under this new MOU, when we are getting only 10% of the value of Churchill’s power, who is getting the other 90%? Who will be the ‘Principal Beneficiary’?
Furthermore, while the MOU does say that 1,990 megawatts is available for Newfoundland and Labrador, in an era when electrification, hydrogen, and data centers are on the horizon, the MOU does not appear to enshrine first right of Churchill’s power for our own homes, businesses, and industries. We cannot afford to be left scrambling for our own power while, at our expense, Quebec enjoys a guaranteed supply.
The MOU locks us into a single‑buyer relationship, no diversification. The MOU does not allow or even contemplate energy sales to Atlantic Canada or the U.S. Northeast, even though those markets are increasingly hungry for clean, reliable power.
By failing to include other options, we will be repeating the single-buyer dependency that defined the last half‑century.
Furthermore, it would appear that Indigenous governments and organizations are not guaranteed ownership stakes in new projects—an omission that risks undermining both the legitimacy and bankability of future developments.
Where is the transparency? This MOU does not require a truly independent review, the public release of financial models or legislative oversight. Without these, we the people of Newfoundland and Labrador are once again putting our trust in backroom negotiations, rather than demanding the tools necessary to hold our leaders and negotiators accountable.
So here we are. The new government promises an independent review. But promises are not enough. Before any agreement is signed, some issues should be non‑negotiable.
For example: options consideration/evaluations; energy, capacity, reliability (comprehensive), true and increasing market-based and inflation adjusted pricing mechanisms; priority access for domestic use; transparency, and others, as appropriate.
This is not about being anti‑Quebec. It is about always being pro‑Labrador and Newfoundland. As a minimum, and along the lines of the 1980’s Atlantic Accord negotiations, it is about ensuring that we are the Principal Beneficiary of our own resource.
While over the last 40 years the economic value of the Atlantic Accord to Newfoundland and Labrador has been tremendous. Notes Canadian Press reporter, Holly Mackenzie-Sutter over the last 4 decades NL “has received about $23 billion in royalty revenues since the first version of the Atlantic Accord was signed in 1985.”
But make no mistake – the royalty benefits of the Atlantic Accord pales in comparison to the long term, total economic value that would accrue to Labrador and Newfoundland from a properly negotiated Churchill River deal.
We cannot, once again, allow 90% of the value of any new Churchill River deal to accrue to Quebec—a total economic value that over the 50 year term of this MOU could grow into the trillions not billions of dollars.
The 1969 Churchill Falls contract and the hard fought Atlantic Accord negotiations should have taught us a painful lesson—if we do not protect ourselves, no one else will.
We now stand at a crossroads. Let’s not be short-sighted.
The decisions made by the Wakeham government will shape our province’s future for generations.
If we sign another lopsided deal, our children and grandchildren will be left to pay the price.
But if we demand, if we settle for nothing less than Principal Beneficiary—for diversification, for access, for revenue fairness, and for transparency we can turn Labrador’s hydro potential into lasting prosperity for all of Labrador and Newfoundland.
The choice is not Quebec’s.
It’s ours.
Let’s not repeat history. Let’s write a new one.