As Quebec prepares to increase its electricity production to achieve its ambitious economic goals, the government is trying to extend an energy agreement that has caused much discontent in Newfoundland and Labrador in recent years.
About 15% of Quebec’s electricity comes from the Churchill Falls Dam in Labrador, under a deal that expires in 2041 and is widely seen as unfair to the Atlantic province.
Quebec Premier François Legault not only wants to extend the agreement, but also build another dam on the Churchill River to help Quebec achieve its goal of becoming the “world leader in the green economy.”
But renewing this contract “will not be easy,” warns the scientific director of the Trottier Energy Institute at Polytechnique Montréal, Normand Mousseau.
If extending the Churchill Falls agreement is not essential to responding to Quebec’s energy projects, “we would have problems” if the agreement ends as planned, maintains Mr. Mousseau.
The Legault government is encouraging global companies, such as manufacturers of batteries for electric vehicles, to establish themselves in Quebec, in particular by touting its hydroelectricity. But in order to meet demand, Quebec will have to produce more electricity in the coming years.
In November, Hydro-Québec released its strategic plan which calls for an increase in production of 60 terawatt hours by 2035. Churchill Falls produces about 30 terawatt hours, and Quebec will have to replace this energy if it cannot reach an agreement to extend the contract with Newfoundland and Labrador, recalls Mr. Mousseau.
If Quebec wants to continue to buy electricity produced at Churchill Falls, the government will have to pay more, says Mr. Mousseau, who is also a professor of physics at the University of Montreal.
“We pay a fifth of a cent per kilowatt hour, it’s not much,” he emphasizes.
Discontent in Newfoundland and Labrador
Under the contract concluded in 1969, Quebec was to assume most of the financial risk linked to the construction of the Churchill Falls dam, in exchange for the right to purchase electricity at a fixed price.
The agreement ultimately generated revenues of more than $28 billion for Hydro-Québec, but returned only $2 billion to Newfoundland and Labrador.
This unbalanced agreement fueled “anti-Quebec” sentiment in Newfoundland and Labrador, according to Dalhousie University history professor Jerry Bannister.
“There was a kind of angry, combative nationalism that defined energy development. And particularly in Muskrat Falls, it was revenge, it was vengeance,” he explains.
The electricity produced by the Muskrat Falls power station, also located on the Churchill River, will therefore be sold to Nova Scotia rather than Quebec. But this project experienced technical problems and cost overruns: as of June 29, the bill associated with the construction of Muskrat Falls had reached $13.5 billion, while the province had estimated the total cost at $7.4 billion. billion when it approved the project in 2012.
“Anti-Quebec” sentiment may have subsided over time, but Mr. Bannister believes the Churchill Falls Accord continues to influence Newfoundland politics.
Discussions in slow motion
In September, the Premier of Newfoundland and Labrador, Andrew Furey, indicated that the Legault government will have to demonstrate to him that it is prepared to pay more for the energy produced at Churchill Falls if it wishes to extend the CONTRACT.
However, this was the last time that the two men held a meeting on this subject.
On Tuesday, Mr. Legault’s office assured that discussions were continuing, while the government of Newfoundland and Labrador said Thursday that it wanted to maximize the value of its “assets and future opportunities” along the Churchill River.
Whatever the nature of the negotiations currently taking place, Grand Chief Simon Pokue of the Labrador Innu Nation claims to have been excluded from the negotiations.
Churchill Falls flooded 6,500 square kilometers of traditional Innu lands, denounces Mr. Pokue, who adds that in response, the Innu Nation filed a $4 billion lawsuit against Hydro-Québec in 2020. This process continues.
“A lot of damage has been done to our land. Our lands are flooded and we will never see them again. No one will ever fix that,” he laments.
Furthermore, a portion of the benefits from Muskrat Falls was supposed to go to the Innu Nation, but cost overruns and a refinancing agreement between the federal government and Newfoundland and Labrador limited the funds available.
If Mr. Legault wants to see another dam built on the Churchill River, at Gull Island, the Innu Nation must receive the sums it expected from Muskrat Falls, argues Mr. Pokue.
“They did it once, they won’t do it again,” he warns. It won’t start until we are consulted and involved. »