Panel concludes Quebec energy deal not in Newfoundland and Labrador’s best interests

ST. JOHN’S – Newfoundland and Labrador Premier Tony Wakeham has invited Quebec back to the bargaining table, after a panel concluded a framework energy agreement with Hydro-Québec was not in his province’s best interests.

In a report made public Tuesday, the three-person panel appointed months ago by Wakeham outlines a series of concerns with the non-binding framework agreement signed in 2024 by the provinces’ hydroelectric utilities to share power from Labrador.

Wakeham has also asked Prime Minister Mark Carney to join the talks, as significant new power capacity from the mighty Churchill River hangs in the balance at a time when Canada is racing to shore up its energy sovereignty.

“For our part, we are prepared to commence those negotiations,” Wakeham told reporters in St. John’s, N.L. Tuesday. “If our partners in Quebec and Ottawa are prepared to act in addressing these issues, so are we.”

For his part, Carney says he has been in contact with Wakeham and Quebec Premier Christine Fréchette and that the federal government is willing to help.

“If there are things that the government of Canada can do … we will do them,” the prime minister told reporters in St-Michel-des-Saints, Que.

The panel’s report criticizes the pricing structures and power allocations in the framework agreement, and accuses the former Liberal government of meddling in negotiations, which it says may have resulted in a weaker deal for Newfoundland and Labrador.

The three panellists also accuse Hydro-Québec of being in a conflict of interest as a minority shareholder and primary customer of proposed hydroelectric developments along the Churchill River in Labrador.

The committee said it was concerned Newfoundland and Labrador Hydro would have no transmission ability through Quebec to sell power from Churchill Falls to other export markets.

The agreement, as it stands, would bring roughly $36 billion in present-day dollars to Newfoundland and Labrador’s treasury until 2085, excluding costs to offset rate increases for customers, the panel said. The former Liberal government underestimated, overestimated or left out information from its valuations of several parts of the agreement, their report claimed.

“The (independent review committee) concludes that despite the benefits, the memorandum of understanding in its current form is not in the public interest,” the committee wrote.

Hydro-Québec and Newfoundland and Labrador Hydro are joint owners of the 5,428-megawatt power plant at Churchill Falls in Labrador, with the latter utility owning roughly two-thirds of the facility. The framework agreement reached in late 2024 would terminate the current energy contract for Churchill Falls that allows Hydro-Québec to buy most of its power at basement-floor prices.

The contract was signed in 1969 and is supposed to expire in 2041. Several premiers in Newfoundland and Labrador fought unsuccessfully to end it sooner, as it is widely seen to be lopsided in favour of Hydro-Québec.

Under the new deal, Hydro-Québec could lead new developments on the Churchill River with Newfoundland and Labrador Hydro. If the utilities proceed, they would ultimately share more than 9,000 megawatts of power from the river, of which Hydro-Québec would be entitled to roughly 80 per cent despite being a minority owner.

The agreement provides Newfoundland and Labrador Hydro with just 500 megawatts of new electricity between 2042 and 2075, which could limit economic growth, particularly in western Labrador’s mining sector, the panellists wrote.

In an interview with The Canadian Press, Fréchette said she is open to compromise but warned that any concessions from Quebec would come at a price.

“If Newfoundland and Labrador asks to revisit certain elements, we will have demands of our own as well,” she said on the sidelines of an official trip to Paris. “Premier Tony Wakeham is aware of that.”

“The overall balance has to be maintained,” she added. The premier is expected to meet with Wakeham soon.

The Wakeham-appointed panel included Chris Huskilson, a former chief executive of Nova Scotia-based power company Emera Inc., and Michael Wilson, a former EY executive who previously criticized the draft deal.

Its members did not attend Tuesday’s press conference to present their report, despite past promises from Wakeham that they would.

“They decided that they weren’t going to be here, that they would let the report speak for (itself),” the premier said. “They told me they would be here and then they changed their mind.”

This report by The Canadian Press was first published May 19, 2026.

— With files from Erika Morris in Saint-Michel-des-Saints, Que. and Thomas Laberge in Paris.