Debate over Churchill Falls MOU begins with government on defensive

The Liberals were on the defensive Monday, as a unique debate on the Churchill Falls memorandum of understanding kicked off with Premier Andrew Furey rebutting claims his government is sidestepping proper scrutiny of the historic framework agreement with Quebec.

"Completely not true," Furey replied when asked about the criticism, adding there is "significant independent oversight."

As MHAs debated the rules of the four-day session Monday morning in Newfoundland and Labrador's House of Assembly, opposition politicians hammered the government with demands for an independent review — perhaps led by the public utilities board, the province's utility regulator — of the MOU, which was signed Dec. 12.

"You should not be afraid to open it up for review," PC Leader Tony Wakeham said during a scrum with reporters. "The premier should be open and say, absolutely, let's bring the MOU before an independent panel. It's exactly what I would be doing."

"This project demands an independent, regulated review. It can be done concurrently with negotiations," NDP Leader Jim Dinn said in the legislature.

But Furey said there's been extensive input by expert independent advisors from firms such as JP Morgan and Power Advisory, and several firms that specialize in business law.

"They're staking their reputations on this. They're independent and will provide their independent advice," he said.

Furey also revealed plans for a new expert advisory committee — separate from the province's negotiating team — to advise his cabinet before signing any formal agreements. It's not yet known who will be on the committee, but Furey said they will have expertise in areas such as energy sales, finance and business law.

"That's yet an additional level of independent expert analysis," said Furey.

Comments like those set the tone Monday as MHAs assembled in the legislature for what's being called an extraordinary debate, with N.L. Hydro CEO Jennifer Williams and other top officials in the hot seat, fielding questions about the MOU.

The sole issue? A tentative deal that could see the lopsided 1969 Churchill Falls agreement with Hydro-Quebec ripped up 16 years ahead of schedule, and billions spent over the next decade to develop more hydroelectric capacity on the Churchill River, including the Gull Island project.

MHAs are expected to vote on Thursday evening on a motion that will allow Crown-owned Newfoundland and Labrador Hydro to continue negotiating toward formal agreements with Hydro-Quebec.

If the two sides can reach an agreement by April 2026, the province stands to receive more than $225 billion in revenue over the next 50 to 60 years, said the premier.

Roughly $17 billion of that revenue, or an average of $1 billion annually, will flow to the provincial treasury by 2041 from the new power-purchase agreement for Churchill Falls. The first instalment, which will be retroactive to 2025, is estimated at roughly $450 million.