Quebec and Newfoundland and Labrador are preparing to announce a new agreement to develop hydroelectricity in Labrador, CBC News has learned. According to officials in both provinces, only two or three small issues remain to be settled before the two governments expect to have a done deal, marking what would be a significant breakthrough in a file that has divided the two provinces for generations.
The agreement would reset one of the longest running grievances in Newfoundland and Labrador, where people have complained for decades that Quebec receives cheap power from Labrador. That sense of unfairness has shaped provincial politics for years, and a fresh deal would aim to put those complaints to rest by rebalancing how the two provinces share the benefits of Labrador's energy.
At the centre of the new arrangement is fresh hydro development on the Churchill River, which is widely seen as one of the best undeveloped hydroelectric resources in the country. Harnessing more of that potential would add significant generating capacity at a time when governments across Canada are looking to expand and modernize their power systems.
The current talks build on earlier efforts. A framework for a deal was reached back in 2024, but when a new government took over in Newfoundland and Labrador last fall, it concluded that the earlier arrangement was not in the province's best interest and sent negotiators back to the table to seek better terms.
Under the terms of that previous deal, the rates would have been reset much closer to market levels. For Newfoundland and Labrador, officials have indicated, that shift alone would have meant an extra billion dollars a year, underscoring just how much money is at stake in the pricing of Labrador's electricity.
Several factors are pushing both sides toward an agreement now. A Quebec election is imminent, and a change in government could send all of the negotiations right back to square one. At the same time, the federal government has been pressing both provinces to get something done, in part because of its own commitment to try to double the size of the country's electricity grid.
Despite the momentum, an announcement is not expected this week. The Innu nation is currently holding elections, and the Churchill River sits within its land claims, so politicians want new Indigenous leaders to be in place before any new deal is discussed. The details were reported by CBC's Peter Cowan from St. John's.