A prominent member of the negotiation team for Newfoundland and Labrador’s Churchill Falls expressed that there has been no communication with Tony Wakeham since his election as premier in October. Karl Smith, the former Fortis chief financial officer, mentioned in an interview with Radio-Canada that he was uncertain about his current status as a member of the team responsible for negotiating the Churchill Falls and Gull Island hydroelectric projects with Quebec. Smith stated that he has not received any updates regarding his involvement.
This information contrasts with previous statements made by Wakeham during a press briefing on December 15, where he indicated that Smith and other lead negotiators representing the province were actively engaged in the negotiation process. Newfoundland and Labrador Hydro has refrained from disclosing whether the negotiation team has convened since the election on October 14. The CEO of the Crown utility, Jennifer Williams, is also part of the negotiation team, while the third member, former executive council clerk Dennis Mahoney, retired from public service on October 31 and has yet to be replaced.
Wakeham declined an interview request on the matter. In response to inquiries about Wakeham’s lack of communication with Smith, a spokesperson for the premier emphasized that discussions had taken place between Wakeham and Jennifer Williams regarding the Churchill River memorandum of understanding and the transition following Mahoney’s retirement. The statement indicated that an update on the negotiation process is forthcoming.
Smith, who was enlisted by the previous Liberal government, played a pivotal role in negotiating the memorandum of understanding unveiled in December 2024. Notably, a breakthrough in discussions between Newfoundland and Labrador and Quebec occurred during a meeting between Smith and former Hydro-Québec CEO Michael Sabia. Despite being approached for an interview by Radio-Canada, Smith, currently traveling, declined to comment.
The memorandum of understanding with Quebec, once finalized, was promised by the former Liberal government to have significant economic implications for Newfoundland and Labrador, potentially generating $225 billion for the provincial treasury over the next five decades. However, the current government under Wakeham’s Progressive Conservative Party has adopted a more cautious approach towards the agreement and negotiations with Quebec.
During the election campaign, Premier Wakeham expressed intentions to seek more favorable terms from the Quebec government and criticized the initial deadline set for finalizing the agreements as “arbitrary.” Wakeham also highlighted discrepancies in the perceived benefits for Quebec and Newfoundland and Labrador in negotiations with Hydro-Québec.
As part of the government’s response, an independent review panel was established in December to evaluate the memorandum of understanding and submit a report by April 30. The panel, composed of three members, including former Ernst & Young executive Michael Wilson, has paused most negotiations between Newfoundland and Labrador Hydro and Hydro-Québec.
Wakeham reiterated his commitment to holding a referendum on the final agreements during an interview with CBC News, expressing confidence despite Quebec’s upcoming provincial election and the impending departure of Premier Françoise Legault.
The memorandum of understanding aims to replace the existing Churchill Falls agreement, which has been a subject of controversy since its signing in 1969. The new terms would immediately increase the price of Churchill Falls power, transitioning from the current fixed rate to a higher rate that would escalate until 2075. The agreement also involves allowing Hydro-Québec to construct new power plants and transmission assets in exchange for increased revenue for Newfoundland and Labrador.
While proponents of the deal believe it could significantly benefit the province’s finances, critics are concerned about the duration of the agreement, the pricing structure, and the effectiveness of certain clauses.
