A group of experts appointed by the Newfoundland and Labrador government believes that the proposed energy agreement with Hydro-Québec does not serve the province’s interests.
In a report due to be published on Tuesday, this three-member committee raises several concerns about the non-binding framework agreement signed by the two provinces in 2024.
The committee concluded, in particular, that the agreement does not provide sufficient electricity to Newfoundland and Labrador, which could limit energy-intensive sectors, such as mining, and hinder long-term economic growth.
“However, the Newfoundland and Labrador government could make important decisions (…) that could ultimately allow Newfoundland and Labrador Hydro to work on revising the agreement with Hydro-Québec in the public interest,” reads the summary of the report, which was provided to The Canadian Press by a source.
The Canadian Press agreed not to name this source, who was not authorized to speak publicly.
This highly anticipated report could provide answers to a weary population of Newfoundland and Labrador, which has long felt wronged by Quebec. It could also revive negotiations between the two provinces’ electricity utilities – if Quebec is willing.
The draft energy agreement was unveiled in late 2024 by the former Liberal government of Newfoundland and Labrador and the then-Premier of Quebec, François Legault. If finalized, it will expire in 2075.
From the day the provisional agreement was announced, Tony Wakeham, the current Progressive Conservative premier of Newfoundland and Labrador, demanded a review of the proposal.
Just weeks after taking office last fall, he tasked the group of experts with examining the agreement. He also suspended all negotiations pending the independent committee’s report.
According to the mandate given to it last December, the group of experts was to determine whether the agreement would “best serve the long-term interests of the people” of Newfoundland and Labrador.
“Not in the public interest”
The provisional agreement proposes new rates and allocations for electricity produced by the 5,428-megawatt Churchill Falls generating station in Labrador.
Currently, Hydro-Québec obtains most of the electricity at unbeatable prices under a contract signed in 1969 that has long been a source of resentment in Newfoundland and Labrador.
The agreement would also allow Hydro-Québec to pursue new projects on the Churchill River, alongside Newfoundland and Labrador Hydro. If these projects materialize, the utilities would eventually share more than 9,000 megawatts of electricity, of which Hydro-Québec would be entitled to approximately 80 per cent.
According to the committee’s report, Newfoundland and Labrador would receive more money from Hydro-Québec for electricity produced at Churchill Falls, but at the expense of the economic growth that would result from increased electricity production.
The committee expressed concern that Newfoundland and Labrador Hydro would lack the transmission capacity to sell electricity from Churchill Falls to export markets. Its report also mentions “the difficulty of maintaining joint ventures between partners with diverging interests.”
“The independent review committee concludes that, despite the advantages, the memorandum of understanding, in its current form, is not in the public interest,” the document reads.
Presentation on Tuesday
The committee was chaired by the former president of Nova Scotia’s energy company, Emera. His team included Michael Wilson, a former EY executive, who had previously criticized the draft agreement and stated that Newfoundland and Labrador could obtain better terms.
Wakeham had promised that the committee members would present their report in person on Tuesday. However, his office indicated last Friday that this would not be the case. The members felt that their report spoke for itself, according to a spokesperson.
Before leaving office as premier, Legault helped finalize the proposed agreement between Hydro-Québec and Newfoundland and Labrador Hydro. With the next election just months away, his party, the Coalition Avenir Québec, is not faring well in the polls.
The Parti Québécois, which is leading in the polls ahead of the October election, has spoken out against the provisional agreement, believing that it grants far too much to Newfoundland and Labrador.
–This report by La Presse Canadienne was translated by CityNews
