Canada, Quebec and Newfoundland and Labrador have reached an agreement on a nearly $70-billion expansion of hydroelectric generation and related infrastructure in Labrador, a project package the federal government describes as the largest clean energy investment in North American history.
The agreement includes up to $10 billion in federal financing and centres on upgrades and expansion at the Churchill Falls Generating Station, development of the Gull Island hydroelectric project and construction of associated transmission infrastructure. It also includes opportunities for co-investment with the Innu of Labrador in a new onshore wind project.
The projects are projected to generate 14,000 megawatts of clean electricity, nearly tripling the current generating capacity of Churchill Falls. The federal government estimates they could support 23,000 jobs, ranging from skilled trades to engineering, and contribute $31 billion to Canada’s GDP through the early 2040s.
The government says the additional electricity would be enough to light, heat and cool the homes in Toronto, Montréal and Vancouver combined, although the power will be generated in Labrador and its eventual allocation and transmission will depend on the agreements and infrastructure involved.
The deal brings together the federal government, Quebec and Newfoundland and Labrador, as well as Hydro-Québec and Newfoundland and Labrador Hydro. A new Definitive Cooperation and Implementation Agreement between the two provincial utilities replaces the 1969 Churchill Falls contract and provides a framework for expanding Churchill Falls and developing Gull Island.
For Newfoundland and Labrador, the agreement is significant because of the province’s long-standing dispute with Quebec over the value and control of Churchill Falls power.
Premier Tony Wakeham said the new arrangement replaces what he called the “notorious 1969 Churchill Falls deal” and the 2024 memorandum of understanding.
“Newfoundlanders and Labradorians will finally be the primary beneficiary of our own resources, with complete control over whether we use our power to develop our economy or sell to outside markets,” Wakeham said.
Quebec Premier Christine Fréchette said the agreement is intended to strengthen the province’s energy supply while supporting economic growth.
“In the current geopolitical context, it is vital for every nation to secure its energy future,” Fréchette said. “Through this partnership, we are supporting the energy transition and enabling the growth of our economy through renewable energy, while ensuring our energy independence.”
Prime Minister Mark Carney described the agreement as part of a broader effort to expand Canada’s electricity infrastructure.
“Canada is extending its unique advantage in clean, reliable, and affordable power,” Carney said. “Through cooperative federalism, we are unlocking our immense potential, building big, building sustainably, building in partnership, and building Canada strong for all.”
Beyond electricity generation, the agreement is tied to mining and infrastructure development across the Labrador Trough, a roughly 1,100-kilometre geological and mining region extending across Labrador and Quebec. The region is a major source of high-purity iron ore and has produced more than two billion tonnes of iron ore over the past half-century, according to the federal government.
Ottawa is referring the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor to the Major Projects Office, which will coordinate federal involvement in financing, permitting and project development. The government is also providing nearly $20 million for feasibility work on infrastructure intended to support mining and transportation projects in the region.
Those projects include a transmission expansion study for Labrador West, planning for transportation and energy infrastructure connected to the proposed Kami iron-ore project near Wabush, work related to a proposed transmission line and road serving the Lac Knife graphite project, and improvements to mineral-handling and rail infrastructure at the Port of Sept-Îles.
The additional electricity could have implications beyond Labrador and Quebec as Canada faces rising demand from industrial development, mining and other electricity-intensive sectors. The agreement is also being positioned as part of the country’s broader effort to expand its electricity grid and increase domestic access to low-emission power.
However, the nearly $70-billion figure represents the value of the combined construction projects rather than money being spent immediately. The individual projects will still require further engineering, financing, environmental and regulatory work before construction and operation.
The federal government says the projects are expected to provide economic benefits into the early 2040s. The projected 23,000 jobs and $31 billion in GDP contribution are estimates associated with the development and construction program and are not guarantees of permanent employment or economic output.
The scale of the proposed buildout nevertheless places Labrador at the centre of one of the largest electricity-development initiatives currently announced in North America, with 14,000 megawatts of planned clean generation, 23,000 projected jobs and electricity capacity described by Ottawa as equivalent to the household electricity needs of Toronto, Montréal and Vancouver combined.
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