Critics slam Newfoundland, Quebec power agreement as MLA leaves party

There was turmoil in and outside the Newfoundland and Labrador legislature Monday as a four-day debate about a tentative deal to share Labrador energy with Hydro-Québec got underway.

Government member Keith Russell rose to tell his colleagues he was leaving the governing Progressive Conservatives to represent his Labrador district as an Independent. He did not explain why he was walking away from the party and he refused to speak to reporters after his announcement.

“This is not a decision I make lightly, but there are moments in public life when we must listen to our conscience and put the people we represent first,” he told the legislature.

Russell’s departure was a surprise to Premier Tony Wakeham.

“Mr. Russell was in our caucus this morning,” Wakeham told reporters. “But Mr. Russell has made his choice.”

The Tories now hold half of the legislature’s 40 seats, though they retain a working majority.

Outside the Confederation Building, more than 100 people opposed to the proposed energy agreement sang the “Ode to Newfoundland” — the province’s official anthem — and applauded Russell’s move.

“This deal is absolutely not in Newfoundland and Labrador’s best interest,” said William Wells, who was CEO of Newfoundland and Labrador Hydro from 1996 until 2004.

Wells said the 50-year framework agreement gives Hydro-Québec the lion’s share of the power from the Churchill River in Labrador, with little in return for Newfoundland and Labrador.

“No deal is better than this deal,” Wells said.

The province’s former Liberal government first unveiled a draft deal in 2024, but Wakeham sent negotiators back to work after he was sworn in as premier last year. He unveiled the latest iteration of the agreement last month, alongside Prime Minister Mark Carney, who touted it as the “largest clean energy investment in North American history.”

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The framework agreement outlines plans for Hydro-Québec and Newfoundland and Labrador Hydro to divvy up power from the Churchill Falls generating station and launch new hydro, wind and transmission projects worth more than $50 billion, officials said.

The two provinces’ electric utilities co-own and operate the 5,428-megawatt Churchill Falls hydroelectric plant through a 1969 contract described by critics in Newfoundland and Labrador as lopsided in favour of Hydro-Québec.

The Tories opened the legislature on Monday for four days of debate, after walking back their promise to subject any final agreements to a referendum. Outside, at least one protester held up a sign saying, “Tony lied,” denouncing the broken referendum promise.

Des Sullivan said the proposed agreement was a “travesty” because it gives Quebec decades of energy at rates below market value, just as the 1969 contract did. Sullivan is well known in the province for his energy blog, called Uncle Gnarly.

“I don’t think that’s well understood by Newfoundland and Labrador people.” Sullivan said.

Kaitlyn Duff said the memorandum of understanding surrenders too much control over the Churchill River to Hydro-Québec.

“Fifty years is too long,” she said. “We’re acting out of desperation because Newfoundland is in a deficit. We should be acting for our future, not in desperation.”

Inside the legislature, Lloyd Parrott, the province’s energy minister, took a swipe at some critics of the draft deal, particularly those online. “The price tag for your self-righteousness means that everybody else stays poor,” Parrott said.

Wakeham told reporters he was confident his party stood behind the tentative deal, despite Russell’s sudden exit. Russell was a member of the government’s Team Labrador group, which Wakeham assembled last month to advocate for Labrador’s interests in the Churchill River deal. The premier said the team would proceed as planned.

The Tories continue to control the legislature because the Speaker — who only votes in the case of a tie — is an Independent, and that means the Progressive Conservatives still have 20 regularly voting members.

Meanwhile, lead negotiator Barry Parry addressed calls from some critics to wait until the 1969 contract ends in 2041 before negotiating with Hydro-Québec.

He said Hydro-Québec would have to agree to pay 18 cents per kilowatt hour for Churchill Falls power in 2041 in order to compensate for money left on the table if Newfoundland and Labrador walked away from the current draft deal.

“With no deal, there is no money coming to Newfoundland and Labrador in the next 15 years,” he said.

Under the current contract, Hydro-Québec gets the lion’s share of the power from the Churchill Falls plant, at the basement-bottom rate of 0.2 cents per kilowatt hour. About 15 per cent of Québec’s electricity comes from Churchill Falls.

The new agreement proposes higher rates from Churchill Falls and a new, 2,700-megawatt generating station at Gull Island on the Churchill River. It also includes plans for feasibility studies for a second powerhouse at Churchill Falls and a 2,000-megawatt wind farm in the Churchill River area.

The arrangement would earmark about 2,750 megawatts of power for Newfoundland and Labrador Hydro and 8,515 megawatts for Hydro-Québec, though the figures could increase if the partners proceed with the expansion of the Churchill Falls plant.

Officials have said the expected return for Newfoundland and Labrador over the 50-year agreement is an estimated $49 billion.

The federal government would kick in about $10 billion in financing for several proposed projects including transmission lines and the Gull Island development, according to a news release last month.