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Quebec and Newfoundland replace the 1969 Churchill Falls contract
Built WorldA new hydro deal ends the most resented energy contract in Canadian history and commits both provinces to a multi-billion-dollar Labrador buildout
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Overview
For 57 years, Newfoundland and Labrador sold the power from one of the world's largest hydro plants to Quebec for about 0.2 cents a kilowatt-hour. Quebec resold much of it for roughly 50 times that. On August 17, 2026, the two provinces signed a deal to end that arrangement.
Prime Minister Mark Carney, Newfoundland and Labrador Premier Tony Wakeham and Quebec Premier Christine Fréchette announced the agreement in St. John's. It raises the price Quebec pays now, before the old contract expires in 2041, and commits both sides to build new hydro capacity on the Churchill River in Labrador.
Why it matters
The 1969 contract sent an estimated tens of billions in resale profit to Quebec while Newfoundland got about $100 million a year. This deal rewrites who keeps that money.
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Key Indicators
$200B+
Projected N.L. revenue by 2075
Newfoundland and Labrador's estimated take from the new framework through 2075.
0.2¢/kWh
1969 contract price
What Quebec paid per kilowatt-hour under the old deal, against about 10.3 cents it earned on 2023 exports.
2041
Old contract expiry
The 1969 contract runs until 2041; the new deal raises prices before then.
2,250 MW
New Gull Island plant
Capacity of a new hydro plant planned downstream of Churchill Falls.
15%
N.L. consumer rebate
A Churchill River electricity rebate promised to Newfoundland and Labrador ratepayers.
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Quebec and Newfoundland replace the 1969 Churchill Falls contract
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People Involved
Organizations Involved
Hydro-Québec
Provincial Crown utility
Buyer under both the old and new contracts
Quebec's state-owned electricity utility, the buyer of most Churchill Falls power since 1969.
Newfoundland and Labrador Hydro
Provincial Crown utility
Seller and co-owner of Churchill Falls generation
Newfoundland and Labrador's state utility, which owns most of the Churchill Falls plant but long collected little of its value.
Timeline
May 1969 August 2026
5 events
Latest: Today
Tap a bar to jump to that date
-
New Churchill Falls deal unveiled
Today AgreementCarney, Wakeham and Fréchette announce a deal in St. John's expanding generation at Churchill Falls and a new plant at Gull Island, with a 15% consumer rebate for Newfoundland ratepayers.
-
New N.L. premier reopens the talks
PoliticalAfter winning office, Tony Wakeham orders a review of the 2024 memorandum and sends negotiators back to the table.
-
Provinces sign a framework to end the contract
AgreementPremiers Legault and Furey unveil a memorandum to replace the 1969 deal and expand Churchill River capacity, targeting $200 billion-plus for Newfoundland by 2075.
-
Supreme Court upholds the contract again
LegalCanada's top court rejects Newfoundland's bid to rewrite the terms, leaving the low fixed prices in place.
-
The 1969 contract is signed
OriginThe Churchill Falls corporation agrees to sell most of the plant's power to Hydro-Québec at fixed, declining prices running to 2041.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
May 1969
The Churchill Falls contract is signed (1969)
Newfoundland's power corporation agreed to sell most of Churchill Falls output to Hydro-Québec at fixed prices that fell over time. The deal locked in rates near 0.2 cents a kilowatt-hour and ran to 2041, with a near-automatic renewal.
Then
Quebec financed the plant and secured cheap, reliable power for its grid.
Now
As market prices climbed, Quebec earned huge resale profits while Newfoundland collected about $100 million a year. Courts upheld the contract into 2019.
Why this matters now
This is the grievance the 2026 deal is meant to settle. Understanding how one-sided the original became explains why the reset matters so much in Newfoundland.
2012–2021
Muskrat Falls megaproject (2012–2021)
Newfoundland sanctioned the Muskrat Falls dam on the lower Churchill River at about $6.2 billion. Costs ballooned past $13 billion, and Ottawa stepped in with rate relief to shield ratepayers.
Then
The project came online years late and far over budget.
Now
It became a cautionary tale about hydro megaproject risk and left the province wary of large builds it cannot fully control.
Why this matters now
The new deal promises tens of billions in construction on the same river. Muskrat Falls shows how quickly those numbers can slip, which is why financing and cost-sharing are central.
July 2024
Columbia River Treaty renegotiation (2024)
Canada and the United States reached an agreement-in-principle to modernize their 1964 Columbia River hydro treaty, updating how power benefits and flood control are shared six decades on.
Then
Negotiators announced revised terms giving Canada more flexibility over its share of benefits.
Now
The talks showed that long-term cross-jurisdiction hydro deals can be reopened and rebalanced when one side feels shortchanged.
Why this matters now
Like Churchill Falls, it is a decades-old power pact renegotiated across a border. It is a template for resetting the split without tearing up the underlying infrastructure.