Churchill Falls Could Make Newfoundland Rich—or Break It Again

John Hogan is doing his best to make the ballot question in Newfoundland and Labrador’s upcoming election all about the province’s energy future. In mid-September, as the premier greeted voters in Happy Valley-Goose Bay—a regional service town in central Labrador—he made a vow. If his Liberal government is re-elected on October 14, he’ll ensure the proposed redevelopment of the massive Churchill Falls hydroelectric project goes ahead, turbo-charging the provincial economy and righting a decades-long dispute with neighbouring Quebec.

The Labrador project and a tentative new development deal with Quebec are vital to provincial coffers, promising to unlock hundreds of billions in new revenue and creating an estimated 8,000 new jobs, radically transforming the economic outlook of a province that, five years ago, was flirting with financial disaster. By centring his campaign around Churchill Falls, Hogan is hoping all these promised riches will be enough to win the Liberals their fourth consecutive mandate.

He hasn’t had much time to drive the message home or endear himself to voters: the provincial election was called mid-September, the latest date possible under the province’s fixed election law. And Hogan has been in the premier’s chair just a few short months, taking the reins after the shock resignation of Andrew Furey, the popular orthopedic surgeon who navigated the province through the choppy waters of the COVID-19 pandemic and signed the new Churchill Falls memorandum of understanding (MOU) with Quebec premier François Legault in 2024.

Churchill Falls isn’t solely a Liberal priority. The opposition Progressive Conservatives, led by Tony Wakeham, support the project but are calling for more transparency in how the final deal is negotiated. They’re also trying hard to pivot the election’s focus toward issues like health care and crime.

But dealing with Churchill Falls will be inescapable. Whoever wins will be expected to shepherd a final Churchill Falls agreement across the finish line sometime in 2026. During his whistle-stop tour in Happy Valley-Goose Bay, near the mouth of the Churchill River, Hogan promised a Labrador Community Engagement Committee comprised of local residents and partners to help the region prepare for new expansion. Wakeham has vowed to put any final agreement to a province-wide referendum.

Yet with spotty polling, pushback from some voters, and Indigenous communities protesting the expansion of Churchill Falls, experts have cautioned that the election is too close to call. It’s anyone’s guess whether Hogan or Wakeham will be the leader to usher Newfoundland and Labrador into a potentially prosperous new era. Or whether it’s smart to hinge an entire campaign on a tentative deal.

The original 1969 Churchill Falls arrangement has been a source of rage and humiliation for generations of Newfoundlanders and Labradorians. The hydroelectric project is one of the largest in the world, involving a series of dykes on the Churchill River, as well as an underground power-generating station that transmits much of its electricity into Quebec. Signed into law by then premier Joey Smallwood, who was desperate to develop Labrador’s resource potential and had no other bidders, the original deal saw Newfoundland and Labrador reap next to nothing for its vast energy reserves, while Quebec—whose public utility, Hydro-Québec, is the project’s major customer—has accrued an estimated $80 billion in profit. (To add insult to injury, Newfoundland and Labrador has received only a fraction of the energy produced from Churchill Falls since its inception.) A more recent hydroelectric project in Labrador, at Muskrat Falls, has been repeatedly delayed, spiralling billions of dollars over budget, and is beset by environmental and Indigenous pushback over concerns about its potential impacts on wildlife.

The reworked Churchill Falls agreement is an opportunity to get things right—at least according to the rosy optimism of the Liberal government. Under the terms of the MOU signed by Furey and Legault in a bid to secure the energy future of both partners, Newfoundland and Labrador will earn thirty times the rate of the original deal, or up to $225 billion by 2075, if and when a final deal is approved. Unlike the original deal, which kept energy prices paid to the province low for many decades, future prices will be tied to market rates.

Additionally, under renegotiated terms, Newfoundland and Labrador’s share of the energy produced will increase almost fourfold. A second powerhouse—the underground complex that converts the water’s energy to electricity via massive turbines—will be built at Churchill Falls and a whole new generating station constructed at nearby Gull Island. All this new revenue could have a transformational impact in a province whose entire 2025/26 budget is around $11 billion.

Not everyone is on board the government’s good news train, however. One of three commissioners overseeing negotiations between Quebec and Newfoundland and Labrador’s electric utilities resigned in May, claiming the public was not being served by the panel and saying he believed Newfoundland and Labrador could manage a better deal. A group of prominent business and community leaders—including former Conservative premier Danny Williams, who championed Muskrat Falls—have vocally opposed the new agreement, calling it a “giveaway,” as reported by the CBC. And there are some constituents who question whether the deal is worth the environmental impact, or even oppose the development altogether.

North and west of Churchill Falls lies Nunatsiavut, the traditional territory of the Labrador Inuit. The Nunatsiavut government worries about the environmental impacts of more hydroelectric development, and President Johannes Lampe vows to hold the government accountable to protect Inuit rights and lands. In a press release after the MOU was signed, Lampe said he worried about the health and environmental effects of future hydroelectric developments on the Inuit way of life. “The risk of increased methylmercury contamination is serious and could harm our traditional food sources and the health of our people,” he said.

The construction of the Churchill Falls project in the 1960s flooded an area of land in central Labrador larger than Prince Edward Island. Scientific studies have found that Labrador Indigenous communities have been affected by methylmercury connected to Churchill Falls since the early 1970s. Contamination can result if naturally occurring mercury in organic matter is converted to highly toxic methylmercury when land is flooded for hydroelectric development. The methylmercury bioaccumulates up the food chain, including in the food sources Indigenous communities depend upon, such as harvested fish.

The flooded land also held traditional Innu burial grounds and gathering areas, caribou migration routes, and wildlife central to the Innu’s traditional way of life. (The Innu are a Labrador Indigenous people entirely distinct from the Inuit.) Under the 2008 New Dawn Agreement, the Innu Nation are guaranteed legal title to their land and a share of benefits in future projects, like the new generating station at Gull Island.

Innu Nation grand chief Simon Pokue signed an official acknowledgement of the MOU, confirming the province’s commitments to the Innu of Labrador. But not all community members are happy. Jerome Jack, a Sheshatshiu land defender and son of the late Innu leader Bart Jack, is calling on the current Innu leadership to resign. In June, Hydro-Québec announced a proposed deal between the utility and the Innu Nation which would see the Innu Nation receive $87 million over sixteen years as part of a Reconciliation Fund, as well as 3 percent of the future dividends Hydro-Québec receives from Churchill Falls. However, members of the Innu community still have to vote to approve the deal. In an interview with The Independent, a local outlet, Jack said the leadership of the Innu Nation is violating its own agreement with Hydro-Québec by allowing exploratory work at the Gull Island site without the explicit consent of the Innu community.

In July, Jack and other community members blocked access to the Hydro-Québec site at Gull Island, forcing the company to halt exploratory work. Later in the summer, four Innu youth walked 130 kilometres from Sheshatshiu to Gull Island to raise their concerns about the deal. “I want our government to treat the youth like they matter,” said seventeen-year-old Percey Montague, one of the walkers, in an interview with the CBC. Gull Island is an important place for Montague’s family. Every September, Montague told the CBC, hundreds of community members from across the region gather together on the land.

How the provincial votes swing on October 14 may define the economic future of Newfoundland and Labrador. But for younger generations of Innu, a future worth protecting is one in which they can continue to gather undisturbed at Gull Island each September, without worrying about someone else’s big ideas for their land.

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Kelly Blidook, a political scientist at Memorial University, expects a competitive race between the Liberals and Conservatives. Despite the fact that the Liberals have been in power ten years, Blidook feels Wakeham lacks charisma and has not adequately addressed what he might do differently with regards to Churchill Falls. But Hogan has been equally uninspiring. “He’s not particularly interesting or exciting,” Blidook says. “But he’s also not someone people dislike.” Since Hogan took over the party in May, provincial voters have expressed strong approval for his leadership.

Blidook believes the Liberals have largely succeeded at promoting the MOU as an economic booster. For the average voter, Blidook says, the MOU offers good financial news, leaving the Conservatives with little room to manoeuvre their messaging on the issue, given the expected windfall promised by the deal.

For its part, the third-party New Democratic Party is running an energetic campaign, but they have never won more than five seats in any previous election. Analyst Éric Grenier of The Writ expects Hogan to eke out victory, but the Liberals will need to pick up seats around St. John’s in order to account for expected losses in rural parts of the province. While an early October poll from Narrative Research also suggests a Liberal victory, in a tight race, either the NDP or independent members of the House of Assembly could hold the balance of power, making political horse trading in the months leading up to the signing of the final Churchill Falls deal a distinct possibility.

Blidook notes some vulnerabilities for the governing Liberals. Just a few months into his leadership, Hogan led the province through a series of devastating wildfires. Some residents feel the government could have done a better job combatting fires and supporting those displaced by evacuations. A Furey-era scheme involving secret cash payouts to retiring Liberal cabinet ministers was scuttled after public blowback but remains fodder for Conservative attacks.

This election and its aftermath could offer hints for the country’s broader trajectory. The tensions in Labrador are a microcosm of the complicated choices facing leaders who must accelerate economic growth in the face of US tariffs while honouring their commitments to meaningful reconciliation with Indigenous nations. Outcry from Indigenous communities against projects like Gull Island signals political trouble ahead for all levels of government.

The proposed development was on a draft list of major infrastructure projects the federal government was considering fast-tracking under the controversial new Building Canada Act, bypassing and expediting the usual environmental impact assessments and public consultations. The bill was roundly criticized by many Indigenous groups across the country. When a list of upcoming projects to consider for fast-tracking was released by the federal government in September, Gull Island wasn’t included, though it was alluded to as a future possibility.

During a press conference in St. John’s in September, Prime Minister Mark Carney signalled his enthusiasm for Churchill Falls and Gull Island, but with a vague caveat. “There’s different ways that we have a role,” he told a reporter from NTV, referring to the federal government. “Sometimes the answer to our role is just, ‘Get out of the way, the project’s going to move forward, the province has it in hand.’”

Whoever winds up leading Newfoundland and Labrador will need to act swiftly. But in a province desperate for an economic miracle, and with the ghosts of recent hydroelectric failures looming large over its shores, winning the election might be the easy part.