Four days of extraordinary debate in the Newfoundland and Labrador legislature ended in dramatic fashion Thursday night with a majority of politicians voting in favor of the Churchill Falls accord.
In doing so, they also gave the green flag for further negotiations with Hydro-Québec in an effort to reach formal agreements for new long-term power contracts on the Churchill River.
Despite concerns over the level of independent oversight of the non-binding MOU, 14 members of the PC caucus dramatically walked out of the legislature while the vote was taking place, but the motion passed 25–0 with 21 Liberals, two NDP and two. Two independent members in support of the motion. As speaker, Liberal Derek Bennett did not vote.
PC Leader Tony Wakeham defended his party's decision to boycott, saying they could not support the proposal because the MOU had not undergone sufficient independent review.
“We're not against the MOU. What we're all about is making sure we get the best deal possible for Newfoundland and Labrador,” Wakeham, flanked by his entire caucus, told reporters after the vote.
Energy Minister Andrew Parsons scoffed at the PCs, calling their decision a “coward's move”.
He called the decision insulting to the legislature and the constituents represented by the PC MHAs.
“I would be stoked to be a part of that,” Andrews said.
Four days of debate
The vote marked the end of an unusual session of the legislature, with politicians questioning NL Hydro's top executives and expert advisers from two international firms advising Hydro's negotiating team in the lead-up to the MoU signed on December 12.
MHAs were told by negotiators such as NL Hydro CEO Jennifer Williams that the MOU sets the stage for the best possible deal with Hydro-Québec, righting the historic injustice of reopening 16 years ago in what has been described as one of the worst trade deals in Canadian history. , and provide rails to ensure that the mistakes of previous contracts are not repeated.
In his closing remarks, Williams gave a long list of reasons to support the MOU, and his final point was “it's the best deal.”
Premier Andrew Furey called it a “huge economic opportunity” that would deliver an estimated $227 billion to provincial coffers over the next 50 to 60 years.
“Take this moment in. It will begin potentially the most important transaction in our history since Confederation,” Furey said.
“This is a wonderful opportunity for all of us to share,” Liberal MHA and Justice Minister Bernard Davies said before the vote.
“I think this is a good deal for Newfoundland and Labrador and a good deal for my children and hopefully my grandchildren,” added Transport and Infrastructure Minister Fred Hutton.
The PC MHAs, however, pushed hard for an independent review, preferably by the province's utilities regulator, the PUB, and to delay the vote until that review was completed. But the Liberal majority, with the support of the NDP and independent MHAs Paul Lane and Eddie Joyce, was enough to vote.
“I don't know why we seem to be rushing this MoU from the Speaker after only four days of debate,” Wakeham said.
“We had a lot of questions answered but I would suggest there are more and there will continue to be more. The fact of having this document and allowing another set of eyes to review it, I don't see any downside to it.”
Liberals responded that there has been independent oversight at every stage of the process, and that there will continue to be going forward. MHAs will also have several opportunities to debate the issue in the upcoming sessions of the Assembly.
And Furey has vowed to debate any definitive agreement with Hydro-Québec in the legislature.
“There's still plenty of time to stop if we find out there's other information,” Furey said in his closing remarks.
On Thursday morning, the NDP and two independent MHAs agreed to support the vote after the Liberals agreed to create an independent panel chaired by the province's consumer advocate, Denise Brown, to review the MOU and future negotiations.
“I couldn't have voted for it without an independent review,” NDP Leader Jim Dean said.
The PCs said such a review falls short of the recommendations contained in the Muskrat Falls investigation.
Expecting to sign a formal agreement in 2026
With political approval to proceed with formal negotiations, the goal is to formalize a suite of 10 contracts with Hydro-Québec by spring 2026. Those deals have the potential to rewrite a dark chapter in history that has seen Quebec make billions in profits. Churchill Falls generating station, while Newfoundland and Labrador received pittens under a unilateral agreement. Signed in 1969.
If formal agreements can be reached, the existing Churchill Falls contract will be replaced by a new power purchase agreement in which Hydro-Québec will pay 30 times more — nominally 5.9 cents per kilowatt hour, or today's dollars — for electricity from the existing powerhouse. , and the province will receive $17 billion in new revenue between 2025 and 2041, the expiration date of the original agreement.
Furthermore, the MoU envisages the Gull Island project, a second power station at Churchill Falls, expansion of existing stations and the construction of hundreds of kilometers of new transmission lines.
In total, the projects will increase capacity on the Churchill River from 5,400 MW to 9,190 MW, most of which will be sold to Hydro-Québec at increased prices, as opposed to the 0.2 cent price stipulated in the existing contract.
Hydro-Québec will finance and build the Gull Island Churchill Falls expansion projects, and will pay NL Hydro $3.5 billion for the right to do so. NL Hydro will use that money to pay for its equity in the projects, retain 60 percent ownership, operate the new assets, and protect against cost overruns.
NL. Hydro will get a return of 8 to 9 percent from the new project.
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