Newfoundland and Labrador House of Assembly, Tuesday 15 September 2026
The House sat in an extraordinary debate under Standing Order 8(7) to examine the Definitive Cooperation and Implementation Agreement (DCIA) between Newfoundland and Labrador Hydro, Hydro-Québec and Churchill Falls (Labrador) Corporation Limited, hearing testimony in successive panels from federal Natural Resources Canada officials, Power Advisory energy consultants, J.P. Morgan financial advisors, and the provincial negotiating team (Barry Perry, Jennifer Williams, John Kennedy, with the Premier). Members from all parties questioned the panellists on federal financing tools and loan guarantees, the proposed 2,000-megawatt wind project, Gull Island and the 60/40 ownership split, pricing structures, inflation escalation and the removal of the 2 per cent escalator, the avoided debt balloon, net present value, Indigenous consultation, and compliance with the Independent Review Committee's recommendations. Evening Question Periods featured pointed exchanges over the abandoned referendum promise, trust, the late release of Gull Island pricing, and whether Quebec benefits more, with government defending the deal as delivering more power, transmission and value than the 2024 MOU. The House adjourned until the following morning.
Other business
Welcome of federal panellists and debate format
The Speaker (Lane)
The Speaker welcomed federal Natural Resources Canada officials Drew Leyburne (ADM, Energy Systems Sector) and Sharonne Katz (Director General) as panellists, and outlined the format of 15-minute increments with one-minute questions directed through the Chair.
Federal role in bringing NL and Quebec together
Premier Wakeham
The Premier asked what role Ottawa played in bringing the parties together; Leyburne credited the two provinces and utilities for the agreement while noting the federal government committed up to $10 billion, referred the Labrador Trough Corridor to the Major Projects Office, and provided nearly $20 million for mining-enabling infrastructure via the First and Last Mile Fund.
Federal funding contingent on definitive agreements
Premier Wakeham
Katz confirmed that the federal funding is contingent on the two parties reaching definitive agreements and that Canada would work closely with the parties.
Fit within Canada's electricity strategy
Premier Wakeham
Leyburne described Canada's draft electricity strategy, 'Powering Canada Strong,' aiming to double the grid by 2050, and explained that large hydro projects offering clean, firm power are rare and drove federal interest.
Labrador Trough Corridor as transformative strategy
Premier Wakeham
Katz explained the August 17 coordinated package referring the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor to the Major Projects Office, emphasizing high-purity iron ore's role in decarbonizing global steel and projects like Champion Kami and Julienne Lake.
Whether federal support lowered Quebec's price
Premier Wakeham
Katz stated the federal government does not involve itself in provincial matters such as rate setting, but creates conditions for investment.
Federal loan guarantee for Gull Island
Premier Wakeham
Katz and Leyburne explained the federal loan guarantee for the debt of the Gull Island project is critical to derisking and advancing it, similar to past federal support for NL projects.
Extension of investment tax credits to 2040
Premier Wakeham
Leyburne explained the tax credits were extended from 2035 to 2040 to align with the long timelines required for large hydro projects, a measure not unique to this project.
Labrador West transmission line investment
Premier Wakeham
Katz said the over-$1-billion transmission line to Labrador West is critical to unlocking high-purity iron ore mining and was requested by NL Hydro and government; Canada intends to fund it as definitive agreements advance.
Role of the Major Projects Office
Premier Wakeham
Katz described the Major Projects Office as a single point of contact to get nation-building projects built faster by coordinating federal financing, permits, approvals and certifications.
Investment tax credits and NL benefit
E. Loveless
Loveless welcomed the panellists; Leyburne explained the pan-Canadian tax credits are retroactive to 2024 and accrue to those making capital investments, estimating direct net present value to NL of about $1.5 billion.
Previous provincial government requests for federal ITC involvement
E. Loveless
Leyburne confirmed ongoing conversations with provinces and territories about implementing the tax credits but could not speak to specific correspondence; Katz confirmed Churchill Falls and Gull Island were mentioned in the September 2025 Atlantic Energy Strategy referral.
2024 MOU and federal involvement
E. Loveless
Leyburne confirmed nothing in the 2024 MOU prevented federal involvement and that the tax credits would have applied to capital investments; Katz noted the federal government had other tools in 2024, including a minimum $10 billion from the Canada Infrastructure Bank.
Timing of federal-NL negotiations on the DCIA
E. Loveless
Leyburne said there were continual conversations but the federal government began having conversations with both parties and encouraging progress from early 2026 onward.
Federal versus provincial responsibility
E. Loveless
Leyburne agreed that primary responsibility for electricity lies with provincial governments, while the federal government plays an important supporting role on major projects.
Distribution of federal $10 billion between Quebec and NL
E. Loveless
Loveless raised concerns that Quebec receives $6.5 billion versus $3.5 billion for NL; Katz and Leyburne explained federal support tracks investments and accrues to those making them, noting Quebec bears a large portion of costs and risk, while NL stands to benefit through up to 23,000 jobs, royalties and GDP.
Bay d'Espoir Unit 8
E. Loveless
Katz noted the panel was there to discuss Labrador projects but confirmed ongoing conversations about clean electricity projects on the Island, including Bay d'Espoir Unit 8.
Scale of the project and officials' experience
L. Parrott
Minister Parrott asked about the officials' tenure (Katz ~10 years, Leyburne ~20 years) and whether they had seen a project of this magnitude; both said no, describing it as potentially the largest clean energy enterprise in North American history.
Labrador Trough iron ore significance
L. Parrott
Parrott described the Labrador Trough as holding roughly double the Pilbara's iron ore (450 billion tons); Leyburne agreed these are significant, potentially transformative assets at a time of high global demand for critical minerals and clean energy.
Federal absence from 2024 MOU
L. Parrott
Katz confirmed the federal government was neither involved in nor a signatory to the December 2024 MOU, which contained no federal support, though projects would have been eligible for later-legislated clean electricity tax credits.
Loan guarantee structure
L. Parrott
Katz confirmed loan guarantees track the entity taking out the loan, so it makes sense for the Gull Island loan guarantee to be granted to Hydro-Québec.
Future federal opportunities for province, Innu and Quebec
L. Parrott
Katz outlined the 2,000-megawatt wind project (federal equity stake with a future independent power producer and Innu Nation participation) and a federal equity stake in the Labrador West transmission project.
Origin of federal support request
L. Parrott
Katz noted that after the September referral of the Atlantic Energy Strategy, the federal Energy and Natural Resources Minister and others had conversations with the Premiers of both provinces.
Departmental communications on the Labrador Trough
L. Parrott
Katz confirmed extensive conversations between federal officials and NL's Energy and Mines department, as well as the Major Projects Office, on Labrador Trough opportunities.
Unprecedented federal push for resource development
L. Parrott
Both Leyburne and Katz agreed they had never seen a period of such urgency and momentum for advancing natural resource projects, citing international politics, changing demand and the Major Projects Office.
Nation-building opportunity
L. Parrott
Katz and Leyburne characterized Gull Island, Churchill Falls and the Labrador Trough as a critical, exceptional set of projects worth over $70 billion across two jurisdictions, with mining aspects reinforcing their national importance.
First and Last Mile Fund and transmission feasibility study
L. Parrott
Katz described a $1.5-billion First and Last Mile Fund and a $2.341-million study announced August 17 for front-end engineering of the Labrador West transmission, involving Tacora, Rio Tinto IOC, Champion Iron and the Government of NL for Julienne Lake.
Need for additional electricity for Labrador development
L. Parrott
Katz stated that per NL Hydro there are no extra electrons to support mining expansions and Goose Bay work, underscoring the importance of Churchill Falls upgrades, Gull Island and the wind project.
Major Projects Office project status
J. Dinn
Katz estimated about 18 projects approved and six to eight transformative strategies, noting Darlington in Ontario has shovels in the ground and other projects are advancing, though she lacked the full list.
Impact on environmental assessment process
J. Dinn
Katz said the Major Projects Office coordinates federal regulatory processes and permitting with all relevant departments to ensure timely review and assessment so projects can proceed quickly.
Indigenous consultation and reconciliation
J. Dinn
Katz stated Canada will respect its duty to consult and UNDA obligations, noting the existing New Dawn Agreement with the Innu Nation, that Minister Hodgson met the Innu Grand Chief before August 17, and that the provincial negotiating team also met the Innu Nation multiple times.
What made the agreement possible now
Premier Wakeham
Leyburne explained new tools in the federal toolkit—recently emerging tax credits, the new Major Projects Office, and the Building Canada Strong agenda—made this agreement possible when it may not have been at earlier times, and emphasized urgency amid rising electricity demand.
2,000-megawatt wind project and 40% federal equity stake
Premier Wakeham
Katz explained the federal government is taking up to a 40% equity stake in what would be Canada's/North America's largest wind project because there is clear off-take interest and it can earn returns, with the Innu Nation offered participation; she confirmed no NL taxpayer investment and no additional transmission required due to pairing with Churchill Falls hydro.
Value of pairing wind with Churchill Falls hydro
Premier Wakeham
Leyburne and Katz explained that pairing variable wind with base-load hydro provides predictable power attractive to industrial consumers like data centres, and Katz noted the wind can be built around existing transmission, avoiding significant new transmission costs.
Viability of the wind project
Premier Wakeham
Katz reported that several major wind developers reached out after the announcement, indicating the project is quite viable, following a required feasibility study.
Provincial buy-out option of federal equity stake
Premier Wakeham
Katz confirmed the province (or First Nations) has the option to buy out the federal equity stake over time, a typical feature in such projects, and that the project would proceed without risk to NL taxpayers.
Application of investment tax credits to wind versus hydro
Premier Wakeham
Katz clarified the federal government is taking an equity stake in the wind project but providing a loan guarantee for the hydro project, and that financing details are still being negotiated.
Labrador Trough and Major Projects Office
Premier Wakeham
The Premier and Ms. Katz discussed the Labrador Trough mining corridor referral to the Major Projects Office, timelines for federal decisions on referred projects, and which referred projects are currently under construction.
Proposed wind project details and feasibility
P. Pike
The Member for Burin-Grand Bank questioned Ms. Katz about the 400 megawatts of wind for Labrador, the required feasibility study, uncertainty over ownership and timelines, and Quebec's 1,600-megawatt off-take, with Katz deferring many specifics to Hydro-Québec and the future proponent.
Standard project development steps and off-take agreements
L. Parrott
The Minister of Energy and Mines led Katz and Leyburne through confirmation that prefeasibility, feasibility, environmental studies and FID are standard requirements for major projects, explained off-take agreements, and confirmed the federal billion-dollar commitment could be redirected if the wind project does not proceed.
Wind, hydro firming, transformative value and federal funding tools
L. Parrott
The Minister questioned the witnesses on why wind pairs well with hydro facilities like Churchill Falls and Gull Island as firm power, the roughly $30 billion transformative economic potential, the Gull Island loan guarantee being negotiated with Hydro-Québec, and various federal funding programs (Clean Growth Fund, CIB, SREPs, Indigenous Loan Guarantee) for electrification of Labrador.
Comparison of federal funding to Quebec and equalization
K. White
The Member for St. John's West questioned why Quebec receives $6.5 billion versus Newfoundland and Labrador's $3.5 billion, how investment tax credits and the loan guarantee benefit Hydro-Québec, equalization impacts, Michael Sabia's role, electricity prices, and Indigenous requirements, with witnesses noting much support flows as tax credits tracking investment.
Wind fallback, Churchill Falls expansion, Indigenous sign-off and timing
K. White
The Member questioned witnesses on the federal fallback if wind does not proceed, the discrepancy over the Churchill Falls expansion's 2,500 megawatts, federal Indigenous commitments and the Innu Nation's possible refusal to sign by December 31, national unity, and whether timing was tied to Quebec's election.
Premier's closing questions on loan guarantee, ownership and Major Projects Office
Premier Wakeham
The Premier questioned whether a prime ministerial letter existed for the previous Liberal MOU, confirmed the loan guarantee reduces financing costs, emphasized Newfoundland and Labrador's 60 per cent ownership of Gull Island, and explored the Major Projects Office's one-window financing role and coordination authority, before thanking the federal witnesses.
Power Advisory panel on pricing structures
J. Chee-Aloy
After the recess, Power Advisory consultants Jason Chee-Aloy and Brady Yauch appeared; Chee-Aloy described their firm's market-assessment role in the 2024 MOU and the current agreement, explained that the new deal replaces Schedule F block pricing with a fixed, inflation-adjusted price, discussed long-term PPA structures, contract administration costs, Quebec pricing sources, and the Schedule G payment escalation from $2 billion in 2041 to $8.4 billion by 2075.
Power Advisory's role in the former MOU Schedule F and payment schedule
J. Chee-Aloy
Chee-Aloy explained the firm had no input into the Schedule G payment numbers but worked on the Schedule F 'blocks' to adjust price annually toward fair value, and that reconciling those blocks with the Schedule G payment schedule proved extremely challenging.
Who receives future electricity price upside under the new DCIA
S. Stoodley
Stoodley welcomed Power Advisory and asked who gets the upside if electricity becomes more valuable in future; Chee-Aloy explained upside depends on the fixed-price PPA structure and whether contract prices exceed prices realizable without the agreement.
Whether the DCIA embodies Schedule F fairness and market-based pricing
S. Stoodley
Stoodley questioned whether the DCIA reflects the spirit of 'Schedule F for fairness' and whether it lacks direct market-based pricing per Annex F; Chee-Aloy affirmed the new agreement is fair and provides market pricing through optionality (New England, New York, synthetic, and premium tranche options), while explaining the logical move away from Schedule F.
Removal of replacement value reference and impact of Quebec infrastructure investment
S. Stoodley
Stoodley asked whether the DCIA removed the direct reference to replacement value and whether Quebec investment would impact the price; Chee-Aloy confirmed the explicit replacement-cost block is gone but replacement cost is baked into the underlying valuation, and that Quebec's investments do not directly impact the price, which he considers strong at 11 cents/kWh in 2041 rising to 20 cents by 2060.
Whether this is the last chance to develop Gull Island
S. Stoodley
Stoodley noted the difficulty of asking all questions in limited time and asked whether Power Advisory agrees this is the last chance for Gull Island; Chee-Aloy said he doesn't know if it's the last chance but sees two motivated parties and favourable federal conditions making it an ideal time to execute.
Wind energy component and potential conflicts of interest
S. Stoodley
Stoodley asked about the DCIA's wind feasibility study, the likelihood of the ~400 MW project's realization, and any Power Advisory conflicts; Chee-Aloy praised Labrador's wind resource, clarified the firm advises Nova Scotia on onshore (not offshore) wind, and said it has no specific mandate on the Labrador project.
Annex D payment schedule versus the former formula and smoothing
L. Parrott
Minister Parrott asked about Annex D's year-by-year dollar figures versus the formula and the effect of smoothing; Yauch explained Annex D and the former Schedule F are generally the same on an NPV basis but the payment shape was smoothed, moving some back-end payments to the short and medium term (e.g. 2041 payment rising from $2 billion to $2.8 billion).
Escalation, inflation adjustment and CPI in the contract
L. Parrott
Parrott raised critics' claims of insufficient escalation and asked about the Annex F inflation adjustment; Chee-Aloy defended the 2.6 per cent escalation as good compared to typical CPI-indexed PPAs, and Yauch explained the deadband mechanism that compensates NL Hydro if inflation exceeds expectations over the 51-year term.
Premium tranche and recall of power
L. Parrott
Parrott asked about the premium tranche; Chee-Aloy and Yauch explained NL Hydro/CF(L)Co can sell recalled power back to Quebec at a 150 per cent premium if not needed domestically, and if recalled for domestic use with three years' notice, the PPA price applies rather than the premium.
Market-based pricing, the 985 MW transmission portfolio and synthetic export price
L. Parrott
Parrott questioned the difference between market-moving prices and selling into markets, the 985 MW portfolio, and how the synthetic price is set; Chee-Aloy and Yauch explained NL Hydro's new optionality to declare megawatts three years in advance and receive New England, New York, Ontario or synthetic (one-third each) pricing without booking transmission, contrasting with the former MOU's limited recall and no direct pricing.
Annex H annual averages, price reference changes, and export access
L. Parrott
Parrott asked about Annex H annual averages, what happens if a price reference disappears, and export access; Yauch explained annual averages include winter price spikes and cited the 265 MW firm transmission block, while Chee-Aloy said a replacement price would be negotiated if references cease to exist.
High-level comparison of the DCIA versus the 2024 MOU
J. Chee-Aloy
Chee-Aloy gave an extended explanation of why negotiators moved from the complex Schedule F blocks (which were hard to reconcile with the Schedule G payment schedule) to a traditional fixed price escalated by inflation, praising the resulting prices and negotiated enhancements as an overall good deal.
Reconciling Annex D and Schedule G payment totals
J. Dinn
Third Party Leader Dinn noted Schedule G appears to contain more money than Annex D and asked why; Yauch explained that in nominal dollars Schedule G was higher due to back-end payments, but on an NPV basis the two contracts are the same.
Complexity of bundled pricing formulas and renegotiation mechanisms
J. Dinn
Dinn asked how common Schedule F-style bundled pricing is, whether a CPI model could still capture market pricing, whether the deadband protects against high inflation, and why other jurisdictions (BC Hydro, Iceland, UK) use renegotiation mechanisms while NL cannot; Chee-Aloy said the Schedule F framework was unique and complex to reconcile with payments, defended the CPI bands and escalation as reasonable, and cited comparator hydroelectric prices in Ontario, Manitoba and New York to argue the NL deal is good, noting reopeners are up to negotiators.
Durability of the pricing structure and meaning of optionality
L. Parrott
Parrott asked whether the combined structure is more durable than the 2024 MOU and to explain optionality in layman's terms; Chee-Aloy described a balance of certainty (fixed CPI-escalated prices) and optionality (selling megawatts at market prices or recalling power with three years' notice for domestic/mining use), calling it an extraordinary benefit not seen elsewhere and comparing NL's advantage to Ontario's supply constraints.
Cost of building own transmission, synthetic net pricing, clean energy credits, and price verification
L. Parrott
Parrott asked about the cost of building NL's own power lines (Chee-Aloy agreed with the $20-30 billion range and long timelines), what 'net' means in the synthetic price (Yauch: transmission costs deducted), who keeps clean energy credits (Chee-Aloy: retained by NL Hydro), and how CHPE/NECEC pricing can be verified (Yauch: both are public contracts with publicly available prices).
Three-year notice optionality and fit with federal electricity strategy
L. Parrott
Parrott asked about the practical importance of the three-year notice for recalling/selling power and how the deal fits the federal electricity strategy; Chee-Aloy emphasized the planning flexibility for utilities in a fast-changing environment and argued the deal, Gull Island, and 2,000 MW of Labrador wind are critical to the national electricity strategy and better east-west connections, calling it a win-win that others across the country admire.
Block structure still to be negotiated and complexity versus fundamental principles
J. Hogan
Opposition Leader Hogan confirmed with Chee-Aloy that the Schedule F block structure was still to be negotiated (not inherently good or bad) and explored whether complexity carries its own cost; Chee-Aloy agreed Schedule F could have been structured but the difficulty was reconciling it with the Schedule G payment schedule, leading both negotiating teams to move to a different construct.
Percentages in the formula, NPV forecasts, and replacement cost weighting
J. Hogan
Hogan explored how the market/domestic/replacement cost percentages in the Schedule F formula could have moved during negotiation, how forecasting drives the choice of formula weighting, and confirmed the NPV of $33.8 billion for both agreements was a forecast; Chee-Aloy agreed the DCIA is akin to a detailed term sheet still subject to negotiation and reiterated that the 11-to-20 cent prices are 'in the money.'
Schedule G payment structure and premium pricing questions
B. Yauch / J. Hogan
Advisor Brian Yauch explained the $33.8 billion Schedule G value was based on a multi-year analysis of Quebec's supply value, tied to market via Schedule F. In rapid exchanges with Leader of the Official Opposition J. Hogan, Yauch confirmed the 1.5x premium price applies only to recall power not needed domestically, is effectively a cap tied to the Churchill Falls PPA fixed-price schedule, and that using power domestically reduces market exposure.
Premium pricing, Gull Island timing and recall allocation
B. Yauch / J. Hogan
Yauch confirmed the premium applies to the entire recall amount (per Annex B) and that Churchill Falls power is cheaper than Gull Island in early years. He explained Gull Island recall does not exist until later years, so the premium in early years applies to lower-priced Churchill Falls power but escalates significantly in later years.
Judgment call to pivot from Schedule F to the DCIA
J. Chee-Aloy
Advisor Jamie Chee-Aloy explained the negotiating judgment to pivot away from Schedule F market-based pricing, citing Quebec's demonstrated need for supply (procuring wind, solar, battery storage, and an RFI for Nova Scotia offshore wind) and federal supports (loan guarantees, ITCs, equity) as factors favouring executing the DCIA.
Questions on waiting until 2041, CPI indexing, separating Upper Churchill and Gull Island, and US market access
E. Joyce / J. Chee-Aloy / B. Yauch
Member for Humber-Bay of Islands E. Joyce questioned the wisdom of letting the deal expire; Chee-Aloy said waiting is not a good idea given Quebec's motivation. Yauch explained the CPI/inflation deadband mechanism protecting the CF PPA value, why separating the projects is not viable, and how transmission access (265 MW reservation plus synthetic options) allows power to reach US markets.
Comparison of pricing certainty and stability between the 2024 MOU and current agreement
L. Parrott / B. Yauch / J. Chee-Aloy
Minister of Energy and Mines L. Parrott asked whether the current fixed-escalation, CPI-linked scheme is more stable than the MOU's market-tied pricing. Yauch said it provides more certainty and a simplified structure, and Chee-Aloy emphasized the generational value (billions annually) and that letting the deal expire is not advisable given Quebec's supply needs.
Recess and introduction of J.P. Morgan panellists
The Speaker
The House recessed briefly to change panellists and the Speaker introduced J.P. Morgan advisors Jonathan Dickman-Wilkes (vice-chair, Investment Banking) and Taras Koval (vice-president), reviewing the rules for the 3-5 p.m. questioning block.
J.P. Morgan's role as financial advisor to NL Hydro
C. Pardy / J. Dickman-Wilkes
Minister of Finance C. Pardy asked about J.P. Morgan's role; Dickman-Wilkes explained the firm has advised Newfoundland and Labrador Hydro on the Churchill River file since 2022, providing valuation, financial modelling and financeability advice, with a highly consistent mandate before and after the 2024 MOU.
Financing changes between the 2024 MOU and current agreement and federal support
C. Pardy / J. Dickman-Wilkes / T. Koval
The advisors explained the key financing change is restructuring Gull Island from a fixed-escalation contract to a regulated utility rate-based (cost-of-service) model, which lowers financing risk. They detailed federal supports including the loan guarantee (potentially the largest powerplant financing in Canadian history) and an investment tax credit available during construction.
Value of federal loan guarantee and cost-plus pricing model
C. Pardy / J. Dickman-Wilkes
Dickman-Wilkes confirmed the federal government's AAA-backed guarantee lowers borrowing costs, estimating its value at roughly a billion dollars NPV. He explained the cost-plus (cost-of-service) pricing model with a fixed 8.5 per cent regulated rate of return on equity as the lowest-risk, lowest-cost way to finance a large utility project.
Gull Island revenue requirement, pricing, equity and risk
J. Parsons / J. Dickman-Wilkes / T. Koval
Member for Corner Brook J. Parsons pressed for the Gull Island revenue requirement and pricing model. The advisors said estimates exist but were not brought, noting the biggest variable is final capital cost. They said NL Hydro's $3.5 billion equity and rate of return are fixed and low-risk, while Hydro-Québec bears capital cost overrun risk; Koval confirmed overrun debt would be borne by the joint venture (60 per cent NL-owned).
Churchill Falls upgrades financing, capital cost and capacity pricing
J. Parsons / T. Koval
Koval confirmed the upgrades' $4.8 billion figure is net of $700 million of capital that CF(L)Co would have spent regardless. He confirmed CF(L)Co fully finances the upgrades under a declining cost-plus PPA, that the upgrades are capacity-priced, and that models and revenue requirements exist but the figures were not available at the session.
Comparison to 1969 deal and the 2 per cent escalator financing implications
C. Pardy / J. Dickman-Wilkes / T. Koval
Responding to a Facebook post comparing declining Gull Island prices to the 1969 deal, Dickman-Wilkes stressed important differences and that cost-of-service is standard for large utilities. The advisors said the current agreement will likely finance Gull Island more cheaply, that the removed 2 per cent escalator would have made financing more expensive and harder due to weaker early-year debt-service coverage, and that the escalator was the previous government's idea which they were least comfortable with.
Who benefits from the federal loan guarantee and the $6.5B/$3.5B split
C. Pardy / J. Dickman-Wilkes
Dickman-Wilkes said the federal loan guarantee lowers debt costs for all off-takers, with Hydro-Québec benefiting more as majority off-taker. Pardy then asked the advisors to explain the difference between Quebec receiving $6.5 billion and Newfoundland and Labrador receiving $3.5 billion of the federal payment.
Federal participation, off-take and CapEx shares in the agreement
J. Dickman-Wilkes
The J.P. Morgan advisor explained that federal benefits (loan guarantees, investment tax credits) flow more to Hydro-Québec because it holds more off-take and puts up more of the CapEx, bearing more development risk.
Comparison of debt balloon: 2024 MOU 2 per cent escalator vs current cost-of-service model
C. Pardy
The Finance Minister questioned advisors on the escalator; Dickman-Wilkes confirmed the current cost-of-service model results in roughly $5 billion outstanding at the end of the PPA versus approximately $30 billion under the 2024 MOU's 2 per cent escalator model.
Gull Island power pricing under the PPA
J. Korab
The Member for Waterford Valley asked about the starting and ending price Quebec will pay for Gull Island power; advisors confirmed the price decreases over the life of the asset but could not provide specific figures and undertook to provide them.
Federal loan guarantee and borrowing costs
J. Korab
Advisors confirmed the federal loan guarantee lowers the cost of raising financing at Gull Island but does not directly address the debt balloon at the end of the PPA, and declined to opine on Quebec's overall provincial borrowing costs.
CPI escalation and price variation under Annex D/F
J. Korab
Advisors explained that Churchill Falls power prices vary based on a negotiated target inflation rate of 2.06 per cent with a 40 basis point deadband, so the province or Hydro-Québec absorbs the first 40 basis points of deviation before prices adjust.
Selling power through Quebec's transmission and external markets
J. Korab
Advisors confirmed NL Hydro can sell excess power through Quebec transmission paths (CHPE, NECEC) at prices Hydro-Québec negotiates, with three years' advance notice, but cannot directly contract with external buyers or quickly access spot markets, and that Hydro-Québec would renegotiate contracts on expiry.
Debt cap, Gull Island risk and equity funding
C. Pardy
The Finance Minister questioned advisors on whether the ~$5 billion debt is capped, on the province's minimal Gull Island risk, and on funding the province's equity; advisors confirmed the province's equity comes from a development fee paid by Hydro-Québec, the province will hold a 60 per cent interest that cannot be diluted, and Hydro-Québec pays any cost overruns above $29 billion with no provincial guarantee.
Advice on the 2 per cent escalator to the previous government
C. Pardy
Advisors confirmed that under the 2024 MOU the escalator was not their preferred choice, that their advice against it was clear but not followed by the government of the day, and declined to speculate on the previous government's motives.
Financing policies (Annex I) and governance (Annex K)
C. Pardy
Mr. Koval explained the two financing policy documents for Gull Island and CF(L)Co act as guardrails to protect the province's interests during construction and the PPA; advisors saw no financial risk of the province losing or having its equity diluted.
Domestic use versus export and opportunity cost
K. Russell
The Member for Lake Melville asked whether J.P. Morgan quantified the cost of retaining power for domestic use versus selling to Hydro-Québec; advisors said this economic analysis was outside their mandate, though Koval noted about $3.5 billion of the $49 billion NPV relates to premium sales, ranging from zero to $3.5 billion depending on how much is sold back.
50-year contract length and construction delays
K. Russell
Advisors said a 50-year PPA is customary and that Hydro-Québec pushed for longer for system-planning reasons; Koval explained delays to Gull Island commercial operations would shift power allocations (Annex B) and delay dividends.
Premium pricing volumes and booked power for mines that don't proceed
J. Hogan
The Opposition Leader clarified with advisors that roughly 1,100 megawatts (1,630 minus 525 domestic) could be sold at premium pricing, and that if booked power is not needed (e.g. a delayed mine), NL Hydro could sell it back to Hydro-Québec at 95 per cent of cost (a 5 per cent discount).
Nominal versus NPV debt figures and the $30.8 billion figure
J. Hogan
The Opposition Leader questioned advisors on the IRC's recommendation to use NPV rather than nominal dollars; advisors confirmed the $30.8 billion is a nominal figure at year 50, equating to roughly $1.0 billion in present value, of which only about 60 per cent would be NL Hydro's responsibility, and criticized the frustration of still lacking Gull Island pricing after three requests.
Closing review questions from the Finance Minister
C. Pardy
The Finance Minister sought confirmation that Gull Island will be a valuable 60 per cent equity asset for future generations with minimal provincial risk, that the current agreement is a better financing model than the 2024 MOU, and that the key risk is the asset not being built.
Third Party questions on the 2 per cent escalator and IRC consultation
J. Dinn
The Third Party Leader pressed why J.P. Morgan did not raise concerns about the 2 per cent escalator during the 2025 debate; advisors explained they were comfortable at the time based on asset-value modelling and loan-to-value analysis, that it was their client's decision, and confirmed they met multiple times with the Independent Review Committee.
Energy Minister questions on origin of the 2 per cent escalator
L. Parrott
The Minister of Energy and Mines confirmed with advisors that the 2 per cent escalator came from their client (the government of the day) and not J.P. Morgan, that the Gull Island NPV was a small minority of the $33.8 billion figure, and thanked the advisors.
Resumption at 6 p.m. and welcome of negotiating team
Speaker (Lane)
The House recessed and resumed at 6 p.m., welcoming back the negotiating team (Ms. Williams, Mr. Perry, Mr. Kennedy) and outlining the schedule and rules for the evening question session.
Compliance with IRC recommendations — Recommendation 1 (financial vs economic value)
Premier Wakeham
The Premier questioned Mr. Kennedy on compliance with IRC Recommendation 1; Kennedy explained the negotiating team used the IRC report as a framework and sought both financial and economic value through the premium pricing tranche and 'optionality' to use power domestically or sell it externally.
Compliance with IRC Recommendation 2 (Labrador West transmission line)
Premier Wakeham
Kennedy explained how the Labrador West transmission line, prioritized by NL Hydro, was enabled when the federal government contributed approximately $300 million in investment tax credits tied to critical minerals, allowing compliance with Recommendation 2.
Compliance with IRC Recommendation 3 (Indigenous relationships)
Premier Wakeham
The Premier asked Mr. Kennedy to elaborate on Recommendation 3, to build respectful relationships with Indigenous communities, and what the negotiating team did in that regard.
Engagement with Innu Nation on the DCIA
J. Kennedy
Kennedy described the timeline of meetings with Innu Nation's land claims committee (July 24, August 4, August 13-14) to brief them on the agreement and potential equity opportunities, noting complications from the ongoing Grand Chief election, and explained that Innu Nation lands meant they were the primary group to deal with while Nunatsiavut and NCC would also be consulted.
Recommendation 4 — evaluation of alternative models for Gull Island
J. Kennedy
In response to the Premier, Kennedy explained they engaged a second national law firm (Gowlings, alongside Stikeman Elliott and McInnes Cooper) to rigorously evaluate the 60/40 joint-venture model, and both national firms confirmed the joint-venture model was appropriate for the circumstances.
Recommendation 5 — negotiating strategy and governance
J. Kennedy
Kennedy described developing a fully articulated negotiation strategy around the goals of more power, more value and more transmission, defining red lines and walkaways, and establishing an Oversight Committee and Hydro Board engagement to address prior criticism of government usurping the board's role.
Transmission line to the South Coast of Labrador and remote community supply
Jennifer Williams
Responding to L. Dempster, Williams said a South Coast transmission line has been discussed over the years and is feasible depending on cost and community expectations, and discussed the ongoing lack of a Public Utilities Board-approved solution for Charlottetown and Pinsent's Arm (on temporary mobile diesel units since 2019) and the challenges of reliable supply in remote diesel communities.
Lower rates and subsidies for Labrador consumers
Jennifer Williams
Williams told Dempster that allocating deal revenues to lower rates in isolated communities or a Labrador subsidy would be a future public policy decision, and confirmed she had not been involved in conversations about a distinct, permanently lower rate for Labrador consumers or businesses.
Environmental assessment and Indigenous consultation
Jennifer Williams
Williams said the existing 2012 project release covering Gull Island and Muskrat Falls will be reconfirmed as the project moves to definitive agreements and execution, and described continued engagement with Innu Nation (IBA partners) plus briefings involving NunatuKavut and Nunatsiavut, with further consultation required through permitting.
Power availability for 5 Wing Goose Bay and Upper Lake Melville
B. Perry
Perry and Williams explained that early engagement with Hydro-Québec secured incremental power (25 MW rising to 50 MW) in the near years, which could supply the NORAD modernization/Northern Basing at 5 Wing Goose Bay and other regional growth, with Williams indicating no additional transmission upgrades appear needed for near-term power delivery.
Why Newfoundland customers pay higher rates than Quebec
B. Perry
In response to Deputy Premier Petten, Perry explained Quebec's lower rates result from its large paid-off 'heritage block' generation and rate subsidies, and said the returns from Churchill Falls plus rebates (including the 15 per cent rebate announced by the Finance Minister) would help close the rate gap over time as Quebec loses the benefit of the old contract.
Origins of the electricity pricing and net present value
B. Perry
Perry described how the $33.8 billion net present value of the Churchill Falls contract was translated into the Schedule G payment structure starting at 1.8 cents and escalating 14 per cent yearly to about 11 cents by 2041, then 2.6 per cent to end of contract, plus the negotiated 'premium tranche' worth about $3.5 billion NPV, characterizing the pricing as very favourable compared to market forecasts cited by Power Advisory.
Inflation mechanism and escalation of prices
B. Perry
Perry clarified that beyond the built-in 14 per cent annual escalation (to 2041) and 2.6 per cent thereafter, an additional inflation adjustment formula lets the province lift prices further if inflation runs hot, providing strong protection in a rising price environment.
Ownership of Churchill Falls and Gull Island
B. Perry
Perry confirmed CF(L)Co ownership remains unchanged (approximately 65 per cent province / 35 per cent Hydro-Québec), Gull Island is 60/40, and the Newfoundland transmission related to Gull Island is 100 per cent owned by the province.
Value of using power in Labrador for mining
B. Perry
Perry explained the deal secures 2,750 MW for use in Newfoundland and Labrador (up from about 1,960-1,990), with the option to sell Churchill Falls power to Quebec at a 150 per cent premium tranche price, but stressed that using power in Labrador for mining and industrial development would generate more value and should be the province's number one goal.
Tabling of pricing index documents
L. Parrott
Members sought and obtained leave to table the pricing index documents requested earlier in the proceedings.
Public Utilities Board exemption for Gull Island and Churchill Falls
Multiple
Responding to B. Davis's questions citing the Muskrat Falls inquiry recommendations, Kennedy and Perry argued these are export/resource projects with contractually mitigated risk (the province can decline the power to avoid cost overruns), so PUB oversight does not apply, noting this was also the plan under the 2024 MOU.
Trust factor with Quebec/Hydro-Québec
J. Kennedy
Kennedy expanded on his earlier 'trust factor' comment, distinguishing the professional Hydro-Québec negotiators from the institution's difficult history, and stressed the negotiating team approached the partnership with caution and full due diligence while still being able to do business.
Benefits agreement, hiring protocol and 85 per cent target
Jennifer Williams
Williams confirmed the existing Lower Churchill benefits agreement holds with Hydro-Québec as primary constructor, explained that the 85 per cent minimum read with the hiring protocol could yield up to 100 per cent provincial hires, and stated that while penalties are not yet written into the DCIA, there will be monitoring, measuring and reporting to hold Hydro-Québec accountable.
Independent Review Committee's independence and accountability
B. Perry
Responding to B. Davis's concerns about the IRC's oversight, lack of a bibliography and undisclosed consultations (including J.P. Morgan), Perry defended the report as clear, well-done and independent, said the team used it as a negotiation framework without needing to meet the authors, and named committee members including Chris Huskilson and Michael Wilson as highly qualified experts.
Transmission access to external markets and pricing on Quebec lines
B. Perry
Perry confirmed the province retains its 265 MW export reservation plus new synthetic access to the Champlain Hudson Power Express and New England Clean Energy Connect lines, and explained the net pricing (about 9.75 cents US/kWh on the CHPE line, netting roughly five-six cents US after transmission costs) makes these lines attractive in the early years of the reopened contract, with flexibility to switch to Quebec sales later.
Value of keeping power in Labrador versus transmission to external markets
B. Perry
Perry agreed with Petten that using the power in Labrador for mining would likely generate equal or greater value than exporting through Quebec, citing the IRC's estimate of roughly $48 billion in value from enabling mines, and reiterated that keeping power in Labrador is the province's number one goal.
Rationale for a 50-year agreement term
B. Perry
Perry explained the $30 billion Gull Island project requires at least a 50-year contract to be financed and built, that negotiations nearly collapsed over Quebec wanting a longer term, and that the reopened Churchill Falls contract (51 years, 36 beyond 2041) reflects a reasonable outcome given the existing contract's remaining life and the negotiated $10 billion NPV from the reopening.
Length of Gull Island/Churchill Falls contract (50 years)
B. Perry
Petten asked whether a 50-year term is reasonable for a project of this magnitude; Perry said Quebec sought 65 years but the province held a 50-year threshold given the Churchill Falls history, and Gull Island is a 50-year deal.
Market change protections
B. Perry
Perry explained pricing includes inflation/escalation protection so revenue rises annually, and the province retains optionality through its transmission portfolio and access to future market-priced New York and Boston line contracts.
Gull Island pricing mechanism and rationale for declining price
B. Perry
Perry explained the 2 per cent escalation factor that created a $30-billion debt balloon was removed in favour of a traditional cost-of-service approach; Gull power starts near 17 cents/kWh and declines to about 9 cents over 50 years, with all costs passed through to off-takers, and the province ultimately owns 60 per cent of a nearly debt-free plant.
Contingency if Quebec does not build Gull Island
B. Perry
Joyce asked whether the deal's value depends on Quebec building Gull Island; Perry said if Quebec chooses not to build Gull, the province keeps all the power negotiated under the Churchill Falls contract.
Gull Island payment amounts and pricing schedule
B. Perry
Perry said a smaller Gull would reduce allocated power, and referenced a just-tabled Gull Island price schedule starting near 17 cents and declining to 9 cents; Williams cautioned pricing reflects current estimates and could change at sanction in three to four years.
525 megawatt allocation conditions
Jennifer Williams
Williams clarified the province currently uses 525 megawatts and does not anticipate that dropping, treating it as a minimum while planning for higher usage.
Control over sale and use of Churchill Falls power
J. Kennedy
Kennedy described the optionality and flexibility to sell power to Hydro-Québec at a 150 per cent premium, recall it, use direct transmission, or use the synthetic export/New England/New York lines; Perry confirmed Newfoundland and Labrador Hydro determines where the 2,750 MW is used.
Options for selling power and comparison to 1969 contract
B. Perry
Perry cited potential options such as the Kami and other mining projects via the Lab West line and data centres; he confirmed that under the 1969 contract all power except the 525 MW used in Labrador had to be sold to Hydro-Québec.
Pricing relative to Quebec's replacement cost
B. Perry
Perry explained the starting price reflects reopening the contract at 1.8 cents coming off 0.2 cents, and that replacement cost was only one component of the previously agreed $33.8-billion Churchill Falls contract value.
Water Management Agreement and Muskrat Falls protection
Jennifer Williams
Williams explained water management agreements are standard for rivers with multiple generators, describing how Churchill Falls, Gull Island and Muskrat Falls will interact; she confirmed Muskrat Falls production is protected through replacement power or financial compensation, that an independent river coordinator ensures no plant is harmed, and that the agreement is governed by the province.
Wind payment as compensation for physical charges
B. Perry
Perry described the wind payment as an upfront payment (potentially in the $600-million range for about 1,600 megawatts) compensating for charges the province would place on a wind developer, calculated from provincial and cross-country figures.
Electricity rebate impact on rates
Multiple
King questioned Perry's earlier comment; Perry clarified the rebate would lower customer bills by about 15 per cent, and Williams estimated savings of about $350 per year (King noted roughly $29/month).
Use of 2024 MOU and IRC report; calls for another independent review
Multiple
Perry and Kennedy said the 2024 MOU and Independent Review Committee report served as frameworks for the negotiation strategy; both said they were unaware of and would not recommend a further independent review of the new deal, with Perry doubting Quebec would return through another such process.
50-year PPAs and Premier's prior objections
B. Perry
King pressed on the Premier's past criticism of 50-year deals; Perry confirmed the new DCIA has a 51-year Churchill Falls PPA and a 50-year Gull Island PPA, but said the Gull Island approach changed dramatically by eliminating the $30-billion debt balloon, and declined to speak for the Premier.
Referendum and federal/Quebec involvement in the decision
B. Perry
King asked whether Canada or Quebec asked the province not to hold a referendum; Perry said he had no conversations about that and it was not something he would have engaged in.
Quebec's differing public numbers
J. Kennedy
Kennedy said he did not know where Quebec's figures (6 cents, then 5.5 cents/kWh) came from, suggesting Hydro-Québec includes dividends and other items and moves numbers around, and expressed distrust of their numbers.
Trust, Muskrat Falls history, and assurances this is the best deal
Multiple
King raised Kennedy's past Muskrat Falls statement that the project would pay for itself; Kennedy accepted responsibility but said he acted on information provided at the time, later shown inaccurate by Justice LeBlanc's report. Perry defended the new deal as delivering $49 billion in value, more transmission and 2,750 MW and recommended proceeding.
Premier's summation on Gull Island debt, power optionality and federal involvement
Premier Wakeham
The Premier led Perry through comparisons showing the old MOU's $30-billion balloon payment replaced by roughly $5.4 billion remaining debt with the province owning 60 per cent of the asset, the 'power bank' optionality earning a 150 per cent premium, and the federal government's contributions (Gull Island loan guarantee, extended ITCs, wind farm equity, Lab West line) reducing taxpayer risk; Perry agreed the deal delivers generational value and recommended proceeding.
Recognition of former members and recess
The Speaker
The Speaker recognized former MHAs Mr. Shelley (Baie Verte - Green Bay) and Kathy Goudie in the public gallery, thanked the panel, and recessed the House briefly before moving to Question Period.
Adjournment of the House
The Speaker
Following the expiry of Question Period and given the late hour, the Speaker adjourned the House until 10 a.m. the following morning, Wednesday, September 16, 2026.
This is Tabled's summary of the sitting, written from the official record; Hansard is only ever quoted at the link above. Search Newfoundland and Labrador Hansard for the words themselves, or read this sitting in the archive.