Details of the new Churchill Falls deal have been revealed, and it includes increased value to the province over the life of the deal, more power, a new wind project in Labrador and the opportunity to sell excess power into the United States.

For Newfoundland and Labrador, the net-present value of the deal is $49-billion, a $13-billion increase from the 2024 MOU. (In nominal dollars, the value of the new deal is $273-billion.)This province will get $10-billion in earlier cashflows prior to 2041.

Ottawa says the deal to upgrade and expand Churchill Falls and develop Gull Island will help build “one of the largest electricity projects in North America.”

That will include $10-billion from the feds in total ($5-billion of which is for NL specifically) for the previously-announced Churchill Falls upgrades, development of Gull Island, and the associated transmission lines. A new component is money to look at investment opportunities with the Innu of Labrador for a “major” onshore wind project in Labrador.

That 2,000 megawatt project will be developed via Independent Power Producer, with Ottawa taking up to 40 per cent equity.

The Churchill Falls expansion, known as CFX, has been removed from the new agreement. A feasibility study will be completed on that front, but commercial arrangements are not in place.

Altogether, according to the federal government, those projects will generate 14,000 megawatts of power, tripling the current capacity of Muskrat Falls.

This province can choose to sell up to 985 megawatts of power at export market pricing, to New York and Massachusetts. Those decisions rest solely on NL Hydro – and approval from the CF(L)Co Board and Hydro-Quebec is not required.

The deal is not yet binding, final agreements are expected to be completed by the end of the year.

Extra Transmission Line, Labrador Mining Projects Referred to Ottawa Major Projects Office

The new Churchill Falls deal includes support for mining projects in Labrador.

The federal government will be referring the Labrador Trough, described as a “world class mining region,” to the Major Projects Office – which will set up federal financing, accelerate permits, and work with Indigenous communities.

That means funding will be made available for strategic, pre-development projects in the region, including:

• The addition of a transmission line to connect mining projects in Lab West to the electricity grid.
• Planning and feasibility work for the Kami Iron Ore project near Wabush.
• Pre-construction work for a new transmission line, and road connecting the Lac Knife project to the Quebec power grid.
• SFP Pointe-Noire’s project to expand critical minerals handling capacity and related infrastructure – which Ottawa says will strengthen a “key transportation gateway for mining production in the Labrador Trough.”

Breakdown of benefits according to province

Key improvements over previous 2024 MOU

More power: As part of a new agreement with Quebec, Newfoundland and Labrador will now be able to retain up to 2,350 MW of electricity from Churchill Falls and Gull Island, 360 MW more than the 1,990 MW promised in the original 2024 MOU. In addition, the Federal Government has agreed to invest in a new 2,000 MW Churchill Falls wind project attached to the deal which will provide Newfoundland and Labrador with an additional 400 MW of its generated output, resulting in the province receiving 760 MW more overall power. Over the course of the deal, Newfoundland and Labrador will maintain complete optionality in how its allotted power from the Churchill Falls base power plant is deployed, with the choice to either keep power for its own industrial development or, alternatively, to sell it, with Hydro-Quebec agreeing to purchase this power at a 150 per cent price premium over base PPA prices.

More value: The total financial benefit to Newfoundland and Labrador from the deal is valued at $49 billion (2026 NPV), up from the $36 billion (2024 NPV) promised in the previous 2024 MOU. Counted in nominal dollars the total value of the new deal is $273 billion compared to the previous government’s accounting of $225 billion under the old MOU.
More transmission: Unlike the previous MOU, Newfoundland and Labrador has secured the ability to transmit power from Churchill Falls and Gull Island through Quebec to the U.S. marketplace through the Champlain Hudson Power Express (CHPE) and the New England Clean Energy Connect (NECEC). Newfoundland and Labrador will now have a guaranteed portfolio of transmission to other markets totalling 985 MW.
Up to 240 MW of CHPE access into New York for Gull Island and Churchill Falls power that will be sold at the same price that Hydro-Quebec receives for the power.
200 MW of NECEC access into New England for Gull Island and Churchill Falls power that will be sold at the same price that HQ receives for the power.
Up to 280 MW of synthetic exports that will be sold at U.S. and Ontario market-based prices.
265 MW of direct transmission using power from sources like Muskrat Falls and a new wind development.

More jobs: The new agreement also includes terms for benefits sharing, including employment. It includes a full guarantee that 85 per cent of all person-hours of employment involved in constructing Gull Island will stay within Newfoundland and Labrador with priority being given to qualified Labrador Innu, qualified Labradorians and qualified Newfoundlanders, in that order. It is estimated that as many as 5,000 workers would be employed at the Gull Island site during peak construction.

Federal partnership in deal

The Federal Government also announced that it is partnering with the Government of Newfoundland and Labrador and the Government of Quebec through a series of new investments that were absent from the 2024 MOU. In total, there is $3.5 billion (2026 NPV) in federal support for Newfoundland and Labrador. These investments include:
Taking up to a 40 per cent equity stake in an adjoining Labrador Wind Project and providing value to Newfoundland and Labrador, totalling an estimated $1 billion (2026 NPV).
Committing $1 billion (2026 NPV) to the construction of a Labrador West transmission line necessary to open new mining and other industrial projects in the Labrador Trough.
Providing a federal loan guarantee for construction costs related to Gull Island, further de-risking the project and reducing overall capital costs.
Offering $1.5 billion of value (2026 NPV) in support for Gull Island, Churchill Falls and transmission.
Referring the Gull Island, Churchill Falls upgrades and Labrador transmission projects to the Government of Canada’s Major Projects Office upon the conclusion of binding agreements which will coordinate and structure federal financing while coordinating and accelerating regulatory and permitting requirements.