Provincial election? Bring it on, say Newfoundland critics of Quebec energy deal

Jack Harris, a former member of Parliament for the NDP, reads the Churchill Falls memorandum of understanding with Quebec, at his home office in St. John's, N.L., on Friday, Sept. 12, 2025. THE CANADIAN PRESS/Paul Daly

ST. JOHN’S — An imminent provincial election in Newfoundland and Labrador is a key opportunity for the public to demand transparency about a new energy agreement with Hydro-Québec — and possibly even halt it, say critics of the deal.

Jack Harris, a former member of Parliament for the NDP, is among a number of former politicians, public servants and energy leaders in the province to publicly oppose the tentative agreement, saying it repeats mistakes of the past.

With an election call expected in the coming days, Harris said he hopes the public will demand more public discussion about the agreement and vote according to where they stand.

“We’re actually talking about repeating — with our eyes wide open, supposedly — the failure that was the Upper Churchill from Newfoundland and Labrador’s point of view,” Harris said in a recent interview, referencing a lopsided 1969 energy deal with Quebec that has haunted the Atlantic province for decades.

“We don’t need to do this, this does not have to happen, and we’d be fools to do it.”

Newfoundland and Labrador’s Liberal government has championed the new memorandum of understanding with Hydro-Québec as a game changer for a province carrying spiralling debt. The government expects its net debt to hit $19.7 billion next year, in a province of about 540,000 people.

But not everyone is sold on the tentative deal with Quebec’s hydro utility. Accountant Mike Wilson resigned from a panel appointed to oversee the negotiations of final contracts, and said a better deal was possible. He also said the panel’s independence was “impaired” and its reports would not meet the public’s expectations.

Progressive Conservative Leader Tony Wakeham has vowed to have an independent third-party review the draft deal if his party wins the election. “Based on this independent review I will demand better terms for Newfoundland and Labrador,” Wakeham said in a fundraising email this month.

And Harris co-signed a letter alongside eight others — including a former director of Newfoundland and Labrador Hydro — saying the deal undersells the province’s resources. It asks the utility’s board of directors stop the deal or resign.

In response, Newfoundland and Labrador Hydro said their critique included inaccuracies based on “incorrect assumptions and interpretations.”

“As Newfoundlanders and Labradorians with families who have been raised here, we would never agree to hit replay on the past 50 years and will accept nothing less than a fair deal,” said a message posted to the utility’s website.

Nine business leaders also penned a letter to Premier John Hogan last week, saying the deal is fair, balanced and a boon for the province. Criticisms have oversimplified the complex agreement, the letter said.

The tentative agreement aims to end 16 years early a contract signed in 1969 that allows Hydro-Québec to buy most of the energy from the 5,428-megawatt Churchill Falls plant in Labrador for bargain-basement prices. Newfoundland and Labrador Hydro pays the same rates, but gets a fraction of the power — about 525 megawatts — despite owning roughly two-thirds of the dam’s parent company.

As of 2019, the deal yielded close to $28 billion in profits to Quebec, and about $2 billion for Newfoundland and Labrador.

Under the new agreement, Newfoundland and Labrador Hydro would get more power from the plant — up to 1,630 megawatts by 2061. Prices would also go up: Hydro-Québec would pay a forecasted $33.8 billion in present-day dollars over the next 50 years for its share of the electricity.

That price will be tied to the market and other factors, including the cost of energy Hydro-Québec pays for other sources, Newfoundland and Labrador Hydro has said.

Hydro-Québec would also lead new developments along the Churchill River, including a 2,250-megawatt hydro plant proposed for Gull Island. The utilities would form a new company to own and operate Gull Island, of which Newfoundland and Labrador Hydro would own 60 per cent. Hydro-Québec would get 90 per cent of the power for 50 years, paying rates tied to the cost of building the facility.

David Vardy, a former chair of the province’s Public Utilities Board, said he hopes people will use the election to demand the Liberal government face the mounting criticisms and prove it is acting in the public’s best interests. Wilson’s resignation from the oversight panel raised questions the government must account for, Vardy said in a recent interview.

He worries the MOU once again gives Hydro-Québec too much control in exchange for quick cash.

“My concern is that we’re seen to be on our knees, financially, and Hydro-Québec has taken advantage of us,” Vardy said.

In a statement, a spokesperson for Hogan said the MOU is the result of years of negotiations and extensive independent advice from legal, financial and energy experts.

“Premier Hogan has been clear that the mistakes of the original Churchill Falls agreement will not be repeated,” Sonja Pomeroy said in an email.

The MOU will be “the election issue,” Hogan told reporters last month. “It is what we need to talk about as a province.”

Harris said he is all ears.

“Then let’s talk about it,” Harris said.

Hogan is expected to call an election this week.

This report by The Canadian Press was first published Sept. 14, 2025.

Sarah Smellie, The Canadian Press