Newfoundland and Labrador senator says Quebec energy deal needs independent review

The inside of the powerhouse at the Churchill Falls hydroelectric station in Churchill Falls, N.L., is shown on Friday Nov. 20, 2009. THE CANADIAN PRESS/Kevin Bissett

ST. JOHN’S -- A Conservative senator from Newfoundland and Labrador has joined a chorus of voices calling for an independent review of the province’s draft energy deal with Quebec’s hydro utility.

David Wells said Tuesday that the public in Newfoundland and Labrador doesn’t understand the tentative deal between Hydro-Quebec and Newfoundland and Labrador Hydro. He said the deal is a pivotal issue in the Oct. 14 provincial election, and voters need to understand its implications.

Wells is particularly concerned that the agreement would give Hydro-Quebec 40 per cent ownership of a proposed new power plant at Gull Island, along the Churchill River in Labrador.

“This is the property, this is the resource of Newfoundland and Labrador,” Wells said in an interview. “We don’t have to give it up.”

His comments Tuesday came as Quebec Premier Francois Legault downplayed criticisms of the deal and vowed to finalize it, no matter the outcome of the election.

The agreement signed in December by the provinces’ hydro utilities includes plans for Hydro-Quebec to pay a forecasted $33.8 billion over 50 years for power from the Churchill Falls plant in Labrador, which is the second-largest underground hydroelectric facility in North America.

Hydro-Quebec would also lead an expansion of the plant and the development of a new generating station at Gull Island, of which Newfoundland and Labrador Hydro would own 60 per cent. Hydro-Quebec would buy the majority of Gull Island’s power at rates tied to the cost of building the facility, rather than the energy market.

As voters in Newfoundland and Labrador head to the polls next month, Liberal leader and incumbent premier John Hogan has put the agreement at the centre of his campaign, saying it will change the course of Newfoundland and Labrador’s finances. The province was carrying the country’s highest provincial net debt per capita as of the 2023-24 fiscal year.

Progressive Conservative Leader Tony Wakeham has promised to have the draft deal independently reviewed if he becomes premier, and to hold a public referendum on any final agreements.

Wells said he would like an independent review to explore other options for buyers of Gull Island power, including energy-hungry tech companies looking to fuel data centres.

“The energy world is absolutely changing,” Wells said. “There are other options now. And those options don’t have to include powering aluminum smelters in Quebec.”

Legault said the deal benefits both provinces.

“We will finalize the deal, unlike governments before us, who never succeeded in reaching this necessary agreement with Newfoundland,” the premier said as he opened the Quebec legislature Tuesday.

Boyd Chislett said Wednesday that he suspects the Newfoundland and Labrador government signed the deal because it provided quick access to cash as its net debt approached $20 billion. Chislett is one of three chartered professional accountants who signed an open letter to party leaders last week saying the deal does not serve Newfoundland and Labrador.

Chislett said there were never any detailed public discussions with the provincial government about what a good deal would look like.

“The (draft deal) is not judgeable, because we don’t know what a good deal would be. We don’t know what Newfoundland and Labrador wants,” he said in an interview.

The accountants also said they wrote the letter to support their colleague, Mike Wilson, who resigned earlier this year from a three-person panel overseeing the negotiations of final agreements. Wilson, a former executive with EY, said he left the panel because its independence from the government was “impaired.”

Wilson has issued several lengthy statements to media outlining detailed concerns about the deal, including the proposed Gull Island arrangement. He has also said the public does not understand the complex agreement. He accused Newfoundland and Labrador Hydro last week of breaching its duty to ensure residents understand its plans and commitments.

The Liberal government held a multi-day debate in the legislature in January, weeks after the tentative deal was unveiled. Executives from Newfoundland and Labrador Hydro participated and fielded questions from the Liberals and the Opposition Progressive Conservatives.

The Liberals also launched a website about the deal, which includes information, answers to frequently asked questions and videos promoting the agreement.

Neither the Liberal leader nor Newfoundland and Labrador Hydro were immediately available to comment.

By Sarah Smellie, The Canadian Press

-- With files from Patrice Bergeron in Quebec City

This report by The Canadian Press was first published Oct. 1, 2025.