Churchill Falls: A historic framework agreement

Earlier this week, the governments of Quebec and Newfoundland and Labrador, with Ottawa present and supportive, unveiled a framework agreement that redefines the next fifty years of operation at the Churchill Falls complex. It is a historic moment in relations between Quebec and Newfoundland and Labrador, and on the energy front as well.

More ambitious than the agreement negotiated earlier under François Legault, it sets out total potential of 14,000 MW for the project as a whole, of which Quebec could draw up to 10,000 MW. The project provides for increasing the capacity of the Churchill Falls generating station itself, developing the new Gull Island station, and building wind capacity in Labrador, that last portion conditional on feasibility studies. The project also depends on the consent of the Innu Nations of Labrador and Quebec, who have restated how important it is that they be consulted on any project on their ancestral territory.

A delicate political moment

Days before the election campaign is called, Premier Christine Fréchette, at the end of her mandate, is committing Quebec to a structuring project spanning several decades. It will still fall to the elected government to ratify the agreement, or not, in the months that follow. The opposition parties have criticized that stance and are questioning the agreement’s legitimacy.

A project of this scale inserts itself into the Quebec election campaign at the same time, and puts Quebec’s substantial energy capacity needs back at the forefront.

What it changes for businesses

For the business community, this announcement has to be read on two levels.

First, businesses are right to see this additional capacity as good news, even though it does not resolve access to energy blocks in the short term. As of May 2025, more than 100 projects were waiting on the desk of the Minister of Economy, Innovation and Energy, totalling 7,500 MW.

It is already difficult for businesses established here to grow, and just as difficult to properly attract the ones we want to welcome, without clear visibility on Quebec’s available energy capacity. This agreement therefore brings longer-term predictability and avoids a rate shock in 2041, when the current agreement expires.

If Quebec intends to attract industrial projects on a sustained basis, with the ambition of achieving its decarbonization, it will have to guarantee capacity to match, and Churchill Falls is only the beginning. And beyond capacity, suitable infrastructure and visibility remain just as decisive for Quebec’s economic development.

To make this a genuine driver of growth, all of these pieces will have to be in place. Every megawatt counts, but more will be needed. Churchill Falls is a step forward, and it will certainly return to the political conversation in the coming months.