Did Quebec get a better deal? Hydro-Québec comments spook critics in Newfoundland

Former Newfoundland and Labrador premier Danny Williams talks to media before a memorial service in St. John's, Friday, May 3, 2024. THE CANADIAN PRESS/Paul Daly

ST. JOHN’S, N.L. — A former Newfoundland and Labrador premier says he was alarmed by comments from Quebec’s hydro utility suggesting Canada’s easternmost province has once again signed an unfavourable energy deal.

Former Progressive Conservative premier Danny Williams is urging officials with Newfoundland and Labrador Hydro to ask Hydro-Québec to pay more as the two public utilities negotiate a final deal on electricity rates from Labrador.

He pointed to recent comments in media reports from a Hydro-Québec official saying the recently announced draft deal offers remarkable prices at rates the province could not refuse.

In response to critics, Newfoundland and Labrador Hydro executives have said repeatedly that Hydro-Québec must sell the new deal to the Quebec public — and play up the benefits.

The agreement in principle replaces a 1969 contract that gave Hydro-Québec power rates from Labrador that are far below market value, and it ends that lopsided deal about 16 years before it was set to expire.

Newfoundland and Labrador Hydro executives have also noted that the new tentative agreement provides for rates to increase with the energy market — something the 1969 contract didn’t have.

Last week, members of the Progressive Conservative Opposition brought up the Hydro-Québec comments during a four-day debate in the legislature about the draft energy deal.

In particular, they pointed to Montreal’s La Presse, which quoted Hydro-Québec vice-president Dave Rhéaume saying provisions in the new agreement to build additional hydro projects in Labrador are similar to the 1969 deal.

Walter Parsons, a vice-president with Newfoundland and Labrador Hydro, says Hydro-Québec is saving money with the new agreement, compared to the cost of energy from other sources, and that the utility wouldn’t agree to a new contract if it didn’t benefit Quebec.

He says Canada’s easternmost province also stands to reap benefits from the deal, including a $3.5-billion payment from Hydro-Québec for the right to co-develop new dams in Labrador, of which Newfoundland and Labrador Hydro will be the majority owner.

This report by The Canadian Press was first published Jan. 15, 2025.

The Canadian Press