Canada is supporting what Mark Carney is calling the “largest clean energy investment in North American history.” There will be up to $10 billion in federal financial support for nearly $70 billion of hydroelectricity, wind, and transmission development centred on Labrador. The Prime Minister said in a release that the project is a major step toward building an integrated Eastern Canadian electricity system.
“Canada is extending its unique advantage in clean, reliable, and affordable power. Because when we master energy, we master our destiny. Through cooperative federalism, we are unlocking our immense potential, building big, building sustainably, building in partnership, and building Canada strong for all.”
Ottawa Backs a 14 GW Expansion of Clean Electricity
The agreement between Newfoundland and Labrador and Quebec would upgrade and expand Churchill Falls, build the long-proposed 2,700 MW Gull Island hydro project, develop associated transmission, and help enable 2,000 megawatts (MW) of proposed Labrador wind power.
Together, this would create 14,000 MW of renewable generating capacity, supporting an estimated 23,000 construction jobs, and contributing $31 billion to Canadian GDP through the early 2040s, according to Ottawa’s background document.
Churchill Falls and Gull Island Anchor the Buildout
The centrepiece of the agreement is a massive expansion of hydroelectric generation in Labrador.
Hydro-Québec and Newfoundland and Labrador Hydro plan to upgrade the 11 existing turbines at Churchill Falls, adding 1,275 MW of capacity. Construction of a new generating facility could add another 2,500 MW. Together, the projects would significantly increase production from a hydroelectric complex that has supplied Quebec with electricity for more than 50 years.
“In the current geopolitical context, it is vital for every nation to secure its energy future,” said Quebec Premier Christine Fréchette. “Through this partnership, we are supporting the energy transition and enabling the growth of our economy through renewable energy, while ensuring our energy independence.”
The agreement would also revive Gull Island, a 2,700 MW hydroelectric project on the lower Churchill River that has been discussed for decades but never built. Gull Island is expected to generate about 12 TWh of electricity annually.
More than 660 kilometres of new transmission infrastructure would connect the expanded Labrador system with Quebec, allowing the new electricity to reach markets farther west and laying another piece of the infrastructure required for greater interprovincial electricity trade.
Wind West Could Be the Next Giant Piece
Nova Scotia’s Wind West proposal could eventually add another enormous source of clean electricity to the emerging Eastern Canadian system. The first phase calls for 5,000 MW of offshore wind capable of generating about 24 TWh annually.
The four designated offshore development areas have a combined potential capacity of almost 62,000 MW. Nova Scotia argues that the scale of the resource would allow development to continue in successive 5,000 to 10,000 MW phases as electricity demand grows.
Getting that electricity to customers is the central challenge. Atlantic Canada’s existing transmission system cannot carry gigawatts of additional generation into Quebec, Ontario and other potential markets.
Wind West depends on a major transmission expansion. Nova Scotia is considering two routes: an overland connection through New Brunswick into Quebec or subsea high-voltage direct-current cables connecting offshore generation directly with Quebec, Ontario, or potentially northeastern US markets.
The Atlantic Energy Strategy Begins Taking Shape
The Labrador projects are part of the broader Atlantic Energy Strategy already before the Major Projects Office. It envisions linking hydro, nuclear, onshore wind and Nova Scotia’s potentially enormous offshore wind resource through expanded interprovincial transmission to serve growing electricity demand across Atlantic Canada, Quebec, Ontario and potentially export markets.
“This is a win-win-win for Newfoundland and Labrador, the federal government, and Québec,” said Tony Wakeham, premier of Newfoundland and Labrador. “Newfoundlanders and Labradorians will finally be the primary beneficiary of our own resources, with complete control over whether we use our power to develop our economy or sell to outside markets. It is now time for us to roll up our sleeves and get to work to build a better and brighter future for all of us.”
Clean Power Becomes an Industrial Strategy
The Labrador agreement is part of the national electricity strategy announced by the Carney government in May. The strategy aims to expand interprovincial transmission and use abundant clean electricity to support industrial development.
Ottawa is also referring the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor to the Major Projects Office, linking the expansion of hydroelectricity in Labrador with the development of one of Canada’s most important mining regions.
The federal government will fund studies examining new transmission as well as road, rail and port infrastructure needed to develop high-purity iron ore and critical-mineral deposits across Labrador and Quebec. The strategy effectively treats electricity and industrial infrastructure as parts of the same economic project: build more clean power, improve the connections between provinces and use that energy abundance to attract mining, processing and other electricity-intensive industries.
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