The Churchill Falls power supply contract expires in 2041 and has for years been perceived as a major injustice for Newfoundland, as Quebec pays low rates for power it can later sell for much higher prices.
It’s time for Quebec to put more money on the table if it expects to renew its deal for Churchill Falls electricity from Newfoundland.
That was the message on Wednesday from Newfoundland-Labrador Premier Andrew Furey a day after he met with Premier François Legault, his Quebec counterpart, to discuss the issue.
The Churchill Falls power supply contract expires in 2041 and has for years been perceived as a major injustice for Newfoundland, as Quebec pays low rates for power it can later sell for much higher prices.
According to the current terms of the deal, Hydro-Québec pays two cents per kilowatt hour of electricity produced by Churchill Falls, which in 2022 it was then able to turn around and sell for an average price of 8.2 cents per kilowatt hour.
A 2019 study estimated that while Newfoundland had made $2 billion off the Churchill Falls deal, Quebec had pocketed $28 billion.
Talks between the two provinces have been going on for the past four years, but Newfoundland is still waiting for Quebec to table a more generous proposition.
“I hope he can put more money on the table for us,” Furey told reporters on Wednesday, adding that while “reasonable progress” had been made in the discussions, it was far too early to talk about a deal being in sight.
However, Furey also warned Legault that the clock was ticking when it came to renewing the deal.
“The time has now come to see if there is room for an agreement.”
The Churchill Falls complex is strategic for Hydro-Québec, allowing the utility to cover 15 per cent of its energy needs and accounting for a third of its profits. The deal also allows Hydro-Québec to purchase 85 per cent of the output of Churchill Falls. The remaining 15 per cent is used to supply clients of the Newfound-Labrador power grid or sold on export markets.
The deal, while controversial, has nevertheless managed to survive multiple legal challenges over the years.