Canada’s next great power build is taking shape in Labrador. Prime Minister Mark Carney on August 17 unveiled a package centred on Churchill Falls, Gull Island, new transmission and proposed wind development that Ottawa values at nearly $70 billion. The federal government is calling it the largest clean-energy investment in North American history.
The scale is striking: the package is designed to deliver as much as 14,000 megawatts of renewable power, support 23,000 construction jobs and add an estimated $31 billion to Canadian GDP through the early 2040s. But this is not a single, shovel-ready project. It is a collection of upgrades, new generation, transmission and projects still under study, backed by a new agreement between Hydro-Québec and Newfoundland and Labrador Hydro and up to $10 billion in federal financing.
Nearly $70 Billion Changes the Scale of the Conversation
The headline number is difficult to visualize. Ottawa puts the combined value of the Labrador clean-power buildout at nearly $70 billion, with generation potentially reaching 14,000 megawatts. The federal government says that would be enough electricity to light, heat and cool every home in Toronto, Montréal and Vancouver combined. It is also close to three times the current generating capacity of Churchill Falls, which today has a current rated capacity of 5,428 megawatts.
That total comes from several pieces rather than one enormous generating station. The plan combines work at the existing Churchill Falls complex, a new Gull Island hydro project, major transmission construction and a proposed onshore wind development. For Carney, that makes Labrador more than a source of electricity. It becomes a platform for industrial growth, interprovincial power trading and critical-minerals development. The announcement also fits Ottawa’s goal of doubling Canada’s electricity-grid capacity by 2050 as demand rises.
Churchill Falls Will Be Rebuilt While Gull Island Finally Moves Forward
The existing Churchill Falls plant is a giant, rated at 5,428 megawatts. Under the new plan, all 11 turbine-generator units are slated for upgrades expected to add about 1,275 megawatts of capacity. Natural Resources Canada says the work is intended to extend the facility’s life while increasing output from infrastructure that has operated for more than half a century. The broader Churchill Falls expansion could ultimately add as much as 2,500 megawatts.
Farther down the Churchill River, Gull Island is the biggest new hydro component. Ottawa’s backgrounder describes a planned 2,700-megawatt facility expected to produce roughly 12 terawatt-hours of electricity annually, with an in-service target around 2036 or 2037. The development agreement allows for a final configuration between roughly 2,250 and 2,700 megawatts, so engineering and environmental work still matters. More than 660 kilometres of related transmission infrastructure is planned to move Churchill River power toward Québec and other markets.
The Deal Rewrites One of Canada’s Most Bitter Energy Relationships
For Newfoundland and Labrador, the announcement carries emotional weight beyond megawatts. The 1969 Churchill Falls contract gave Hydro-Québec access to most of the plant’s electricity at a fixed price that eventually fell to about 0.2 cents per kilowatt-hour. For decades, the arrangement became a provincial symbol of a resource deal that delivered far more value to Québec than to the province where the power was generated. Its legacy has shaped politics for generations.
The new framework is meant to terminate and replace that contract before its 2041 expiry. Newfoundland and Labrador’s government values the package at $49 billion on a 2026 net-present-value basis, compared with $36 billion under the 2024 memorandum it replaces. In nominal terms, the province says the value reaches $273 billion over the deal’s life. Those are provincial estimates, but they help explain why the agreement is being presented locally as a generational reset in the relationship.
Ottawa Is Using Federal Financing to Make the Build Possible
The federal role is unusually large. Carney announced up to $10 billion in federal financing tied to Churchill Falls upgrades, Gull Island, wind development and associated transmission. Newfoundland and Labrador values the federal support flowing to its side of the agreement at $3.5 billion in 2026 net-present-value terms, a different accounting measure that should not simply be added to Ottawa’s $10-billion headline figure. The figures describe support from different accounting perspectives.
The provincial breakdown includes a possible federal equity stake of up to 40 per cent in a proposed Labrador wind project, support for a Labrador West transmission line, a federal loan guarantee for Gull Island and further backing for hydro and transmission. The guarantee matters on a project measured in tens of billions of dollars because lower financing risk can reduce borrowing costs. Ottawa is routing key components through its Major Projects Office to coordinate financing, approvals and permitting.
Construction Could Create a Rare Multi-Decade Jobs Pipeline
Ottawa estimates the combined projects will support 23,000 jobs during construction and contribute $31 billion to Canada’s GDP through the early 2040s. The economic story is not limited to electricity sales. Electricians, heavy-equipment operators, engineers, line workers, environmental specialists and suppliers could see years of activity if the planned projects proceed on schedule. The work across Labrador would unfold over years.
The local employment rules are particularly significant in Newfoundland and Labrador. The provincial government says at least 85 per cent of person-hours on Gull Island construction will remain in the province, with priority first for qualified Labrador Innu, then qualified Labradorians and qualified Newfoundlanders. At peak construction, as many as 5,000 workers could be on the Gull Island site. For communities accustomed to workers leaving for projects elsewhere in Canada, a long construction cycle in Labrador could influence decisions about training, commuting and whether families stay closer to home.
Québec Gets a Long-Term Answer to Its Rising Electricity Needs
Québec enters the agreement from another position. Hydro-Québec needs more power as the province electrifies transportation and industry while seeking energy-intensive investment. The utility says the Labrador arrangement could provide access to more than 10,000 megawatts of potential supply, including 6,915 megawatts considered firm and another 3,850 megawatts associated with projects still under study. That would make Labrador central to Québec’s long-term supply planning.
Cost is just as important as volume. Hydro-Québec says the agreement secures power at an average competitive cost of about six cents per kilowatt-hour and argues that this is roughly one-third the cost of alternative supply options it expects to face. Churchill Falls supply would also be secured for decades. That gives Québec something utilities value almost as much as cheap electricity: visibility. Knowing where a large block of future power may come from makes it easier to plan factories, transmission upgrades, data-centre loads and electrification.
Newfoundland and Labrador Gains Power It Can Keep — or Sell
One of the biggest changes is control. Newfoundland and Labrador says it can retain access to as much as 2,350 megawatts from Churchill Falls and Gull Island, 360 megawatts more than contemplated in the 2024 memorandum. A proposed 2,000-megawatt wind project would provide another 400 megawatts of guaranteed output if built. Together, that would give the province more flexibility over electricity supply.
The province also says it secured 985 megawatts of transmission access to outside markets, including routes through Québec toward New York and New England. Electricity becomes more valuable when its owner has choices about where and when to sell it. The benefits are also being tied directly to households. Once definitive agreements are completed, the provincial government plans a 15 per cent Churchill River electricity rebate on the first 2,000 kilowatt-hours used each month by residential customers, which it estimates would save the average ratepayer about $351 a year.
Cheap Power Is Meant to Unlock a Second Boom in Critical Minerals
The energy announcement is a mining strategy. The Labrador Trough stretches roughly 1,100 kilometres across Labrador and Québec and has produced more than two billion tonnes of iron ore over the past half-century. Ottawa sees new transmission as a way to electrify mines, open new deposits and strengthen Canada’s position in high-purity iron ore and other minerals used in cleaner industrial supply chains.
Nearly $20 million in federal funding is being directed to feasibility and pre-construction work for related infrastructure. One study will examine transmission needed around Labrador City and Wabush, where existing capacity is constrained. Another project would help connect Focus Graphite’s Lac Knife project to Hydro-Québec’s grid through a new 50-kilometre transmission line and road work. At the Port of Sept-Îles, federally backed engineering work will examine expanding mineral-handling capacity from 21 million to 38 million tonnes annually. Power, mines and ports are being planned as one system.
The Announcement Is Huge, but the Hardest Work Still Comes Next
The biggest caveat is timing. The August agreement sets out detailed commercial terms, but the utilities still have to complete definitive project agreements. The signed framework says the parties will use reasonable efforts to finalize those agreements by December 31, 2026. It also makes clear that project capacities and completion schedules can change as detailed studies progress. Gull Island, for example, still requires additional technical and environmental work before its final configuration is settled.
Indigenous partnership will be another central test. Ottawa says federal financing can unlock co-investment with the Innu of Labrador in the proposed wind project, while Newfoundland and Labrador has begun discussions about Innu participation in developments tied to the deal. Hydro-Québec has also committed to continued dialogue with Indigenous and local communities. The ambition is enormous, but financing, permitting, engineering, Indigenous consultation and disciplined execution will determine whether this nearly $70-billion vision ultimately becomes operating infrastructure.
