Panel concludes Quebec energy deal is not good enough for Newfoundland and Labrador

ST. JOHN’S — A panel appointed by the Newfoundland and Labrador government says a proposed energy deal with Hydro-Québec is not in the province’s best interests.

In a report expected to be released Tuesday, the three-person panel outlines several concerns with the non-binding framework agreement to share power from Labrador, which was signed by the provinces’ hydroelectric utilities in 2024.

In particular, the panel concludes the agreement does not provide Newfoundland and Labrador with enough power, which could limit energy-hungry sectors such as mining and hamper long-term economic growth.

“However, the government of Newfoundland and Labrador could make significant decisions … that may ultimately allow Newfoundland and Labrador Hydro to work toward a revised agreement with Hydro-Québec to serve the public interest,” says the report’s executive summary, which was shared by a source with The Canadian Press.

The Canadian Press agreed not to name the source, who was not authorized to speak publicly.

The long-awaited report could bring answers to a weary Newfoundland and Labrador public that has long felt cheated by Quebec, and it could reignite negotiations between the provinces’ power utilities — if Quebec is willing.

The panel was tasked in December to determine whether the draft deal is in the “best long-term interests of the people of the province,” according to its terms of reference. The deal was unveiled in late 2024 in St. John’s by Newfoundland and Labrador’s previous Liberal government. If finalized, it would expire in 2075.

Tony Wakeham, Newfoundland and Labrador’s current Progressive Conservative premier, has demanded a review of the proposal since the day it was announced. He assembled the panel just weeks after his party formed government last fall, halting all negotiations of final agreements to wait for the committee’s report.

The draft deal they scrutinized proposes new rates and allocations for power from the 5,428-megawatt Churchill Falls generating station in Labrador. Currently, Hydro-Québec gets the majority of the electricity at basement-floor prices under a contract signed in 1969 that has long been a source of bitterness in Newfoundland and Labrador.

The deal would also allow Hydro-Québec to lead new developments on the Churchill River, alongside Newfoundland and Labrador Hydro. If they proceeded, the utilities 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.

Newfoundland and Labrador would get more money from Hydro-Québec for electricity from Churchill Falls, but at the expense of economic growth that would come with more power, the panel’s report said.

The committee said it was concerned that Newfoundland and Labrador Hydro would have no transmission ability to sell Churchill Falls power to export markets. Their report also mentioned “the challenge of sustaining joint ventures between partners with divergent interests.”

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

Chris Huskilson, a former chief executive of Nova Scotia-based power company Emera Inc., led the group. His team included former EY executive Michael Wilson, who previously criticized the draft deal and said Newfoundland and Labrador could get better terms.

Wakeham previously promised the panel members would present their report in-person on Tuesday. However, his office said Friday that would no longer happen. The members decided their report speaks for itself, a spokesperson said.

Former Quebec premier François Legault helped shepherd the proposed arrangement between Hydro-Québec and Newfoundland and Labrador Hydro. His party, the Coalition Avenir Québec, is not expected to do well in the province’s upcoming election, which must be held by early October.

The Parti Québécois, which is ahead in the polls, has spoken out against the proposal, saying it gives far too much to Newfoundland and Labrador.

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

Sarah Smellie, The Canadian Press