CF Contract Renewal and Muskrat Falls

A dozen points of light (IYKYK)

Apr 17, 2026

Government and Opposition Battle Over Bay du Nord Deal — Former Premier John Hogan (left) and energy minister Lloyd Parrott (right) in the House of Assembly. (Image: VOCM)

For those new to the issue or for those needing a refresher, here are a few observations that explain the humour of watching Danny Williams and John Hogan fighting over Muskrat Falls and the Churchill Falls contract renewal.

Danny Williams Wants Meeting With Premier on Hydro MOU | VOCM — Danny Williams (Image: VOCM)

Both Muskrat Falls (MF) and the renewal of the 1969 Churchill Falls power contract John Hogan is pushing make people outside Newfoundland and Labrador the main beneficiary of Newfoundland and Labrador resources.
Under Muskrat Falls, Nova Scotia gets electricity for free for 35 years. NS can option a second block at New England Market prices.
Under Churchill Falls Contract Renewal (CFCR), Hydro-Quebec gets the majority of the electricity from the original CF plant at a fixed price (roughly 2.5 cents per kilowatt hour valued in 2024) for 50 years. That’s far below market prices currently and in the future, just as in the original 1969 deal.
Under CFCR, Newfoundland and Labrador would sell any surplus electricity from its allocation to Hydro-Quebec at the low fixed rate, not at market price.
In the MF project approved in April 2010, local ratepayers in NL are the only people paying fully for Muskrat Falls plus profits (return on investment or equity) and a de facto new tax for the provincial government.
The Andrew Furey “rate mitigation” plan for MF is exactly the scheme approved for the project under Danny Williams to pay for the project. Only some minor details changed.
All three political parties in Newfoundland and Labrador supported Muskrat Falls either outright or by not opposing it. Both the NDP and Liberal leaders said from the opposition benches that “we” could not afford to let the project fail.
CFCR treats Quebec as a co-owner of NL resources equal to NL, despite being a minority shareholder in CF and a minority shareholder in the proposed development of Gull Island.
This continues the effect of the 1998 shareholders agreement, reinforced by arguments make by Churchill Falls (Labrador) Corporation in the so-called fairness case against the 1969 contract heard in Quebec courts and upheld ultimately by the Supreme Court of Canada. CF(L)Co - owned roughly 65% by NALCOR on behalf of the Government of Newfoundland and Labrador and almost 35% by HQ - argued that the two were co-venturers.
While strictly speaking the companies are co-venturers - the companies are both partners in a project - the term implies an equality between the two not reflected in the history of the project or the shareholding arrangement from 1975 onwards. It also suggests some permanence, reflected in the CFCR’s preservation of the pattern of the minority shareholder Hydro-Quebec controlling production, construction, financing etc..
Danny’s victory lap is premature. While technically the original CFCR is dead - the deadline in it expires the same day the review report is due - there’s nothing to stop GNL and the Government of Quebec (GQC) from extending the deadline on the existing deal (oooooh yeah) or starting talks again with an eye to tweaking the existing memorandum of understanding.
We live in the Age of Managers, not Leaders. In the broadest sense, Tony Wakeham’s administration continues the manager approach to government that has dominated GNL since at least 2010 and arguably since 2003. That means minmum change in fundamental direction, even while making modest adjustments to deal with shifting public opinion. As with his predecessors and other provincial party leaders to 2003, Premier Wakeham has very carefully avoided any statement that even hints at a significant change to the current course the province is on.