Ottawa Announces $10B Financing for Churchill Falls Expansion

10 Your biggest energy bill might be about to change. On August 17, 2026, Prime Minister Mark Carney stood in St. John’s, Newfoundland and Labrador, and announced the largest clean energy investment in North American history. Nearly $70 billion is going into hydroelectric power, transmission lines, and a critical minerals corridor. The deal involves Québec, Newfoundland and Labrador, two provincial utilities, and the federal government. It reshapes who powers eastern Canada, who gets the jobs, and who controls the electricity. The announcement is not a small funding tweak. It is a structural shift in how Canada builds energy infrastructure. Here is what you need to know about the projects, the money, the jobs, and what comes next.

What Exactly Was Announced in St. John’s?

The federal government, the Government of Québec, and the Government of Newfoundland and Labrador reached a historic agreement. The main players: Prime Minister Mark Carney, Premier of Québec Christine Fréchette, Premier of Newfoundland and Labrador Tony Wakeham, and the CEOs of Hydro-Québec and Newfoundland and Labrador Hydro. The agreement covers four big pieces of work:

• Upgrading and expanding the Churchill Falls Generating Station.
• Developing the Gull Island hydroelectricity project.
• Building associated transmission lines.
• Unlocking co-investment opportunities with the Innu of Labrador in a major new Labrador onshore wind project.

The federal government is putting $10 billion in federal financing behind these projects. That financing acts as the lever to pull in the rest of the nearly $70 billion total investment. Together, these projects will generate 14,000 megawatts of clean, renewable power. That nearly triples the current generating capacity of Churchill Falls. The scale is hard to picture until you hear the comparison. 14,000 megawatts is enough power to light, heat, and cool all the homes in Toronto, Montréal, and Vancouver combined. The projects will support 23,000 jobs during the construction phase alone. They will contribute $31 billion to Canada’s GDP through the early 2040s.

Why Churchill Falls and Gull Island Matter So Much

Churchill Falls is not a new name to anyone in Newfoundland and Labrador. The original 1969 Churchill Falls deal has been a sore point for decades. Many in the province feel the old contract locked them into selling power to Québec at prices far below market value. Premier Tony Wakeham addressed that directly: “We are finally replacing the notorious 1969 Churchill Falls deal and the 2024 MOU with a new deal that will guarantee us more power, more value, and more transmission.” That is not just political language. It changes the economic position of the province. Wakeham added: “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.” The Gull Island project is the second big piece. Gull Island sits downstream from Churchill Falls on the Churchill River in Labrador. It has been talked about for years as one of the best undeveloped hydro sites in North America. The new agreement moves it from a plan to a project.

The Numbers Behind the Largest Clean Energy Investment in North America

Here is the breakdown of what was announced: The 23,000 jobs are construction-phase jobs. They range from skilled trades to engineering positions. The economic impact extends well past construction, but the announced job number is specific to that phase.

What the Labrador Trough Adds to the Deal

The hydro projects are not the only part of the announcement. The Labrador Trough is a world-class mining region stretching across Newfoundland and Labrador and Québec. It holds significant sources of high-purity iron ore. That iron ore matters for one big reason: decarbonising global steel supply chains. Steelmaking is one of the dirtiest industries on earth. High-purity iron ore, paired with clean electricity, can change that. The government announced the referral of the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor to the Major Projects Office (MPO). The MPO will:

• Coordinate and structure federal financing.
• Accelerate permitting requirements.
• Work with Indigenous Peoples to forge meaningful partnerships.

This is the federal government signalling that the corridor is treated as a major national project, not a regional one. Faster permitting is the promise. Structured financing is the tool.

Four First and Last Mile Fund Projects You Should Know About

The federal government also announced support for strategic, pre-development projects in the Labrador region. These are funded under the First and Last Mile Fund (FLMF) through Natural Resources Canada. The FLMF is backed by $1.5 billion in federal funding announced in Budget 2025. It exists to support infrastructure that unlocks new mines and moves Canadian resources to customers at home and abroad. Here are the four projects announced: Graphite from Lac Knife is specifically tied to battery and energy storage technologies. SFP Pointe-Noire handles rail and port capacity. Each project plays a different role in moving minerals from mine to market.

Why Indigenous Partnership Is Built Into the Funding

The federal government is explicit about one fact: most critical minerals deposits and enabling infrastructure projects in Canada are located on Indigenous territories. That reality shaped the FLMF design. The FLMF makes specific funding available to enable Indigenous leadership, engagement, and participation throughout the mining value chain. That is not an afterthought. It is a core condition of how the fund operates. The Churchill Falls agreement also includes co-investment opportunities with the Innu of Labrador in a major new Labrador onshore wind project. The wind project is part of the broader energy package announced alongside the hydro upgrades. For the Labrador Trough corridor, the Major Projects Office is directed to work with Indigenous Peoples to forge meaningful partnerships. The language is consistent across all three tracks: hydro, transmission, and mining.

How This Fits Canada’s National Electricity Strategy

Canada’s National Electricity Strategy has a simple goal: double the capacity of the grid by 2050 while supplying clean, reliable, affordable power across the country. Today’s agreement advances that strategy directly. 14,000 megawatts of new clean power is a meaningful step toward the doubling target. The agreement also advances the Atlantic Energy Strategy. That strategy was referred to the Major Projects Office in the fall of 2025. It focuses on developing renewable and non-emitting energy across Atlantic Canada. That includes onshore and offshore wind, nuclear, and hydro. The goal is to meet rapidly growing demand across Eastern and Atlantic Canada and beyond. The investments also strengthen the interprovincial grid and the export infrastructure that carry clean, affordable power and Canadian resources to markets at home and abroad. Canada starts from a position of strength on clean energy: Those rankings matter because they give Canadian projects a cost advantage. Cheap, clean power attracts industries like steel, battery manufacturing, and data centres.

The Financial Tools Behind the Build

The federal government is stacking multiple financial tools to make these projects move. The goal is certainty for builders, and the tools include:

• Clean Economy Investment Tax Credits for clean electricity, clean technology, and carbon capture, utilisation, and storage.
• Strategic financing through the Canada Infrastructure Bank, which has a $20-billion clean energy target.
• The Canada Growth Fund, which provides another financing channel.
• The Indigenous Loan Guarantee Program, with its envelope doubled from $5 billion to $10 billion.
• A new Productivity Super-Deduction, enhanced tax incentives covering all new capital investment. It allows businesses to write off a larger share of the cost of these investments right away.

The Productivity Super-Deduction is especially significant for large capital projects. Writing off a larger share of investment costs immediately improves the business case for building big.

A Concrete Example: What This Means for a Worker in Labrador West

Picture a welder in Labrador City. She has worked fly-in-fly-out jobs for years, often in Alberta, because local work was inconsistent. The new agreement changes her options. The Labrador West Transmission Expansion will assess connecting critical minerals mining operations in western Labrador to the grid. The Kami iron ore project near Wabush needs planning and feasibility work for transportation and energy infrastructure. The Churchill Falls upgrade and Gull Island development will run for years. That welder could work on transmission lines, on the hydro projects, or on mine electrification. The 23,000 construction jobs announced are not all in one place, but Labrador and eastern Québec are the centre of gravity. The $31 billion in GDP contribution through the early 2040s means this is not a one-year boom. It is a decades-long build-out. For Indigenous workers, the FLMF creates specific funding for Indigenous leadership and participation throughout the mining value chain. The Innu co-investment in the Labrador onshore wind project means ownership, not just employment.

What Premier Wakeham Said About the Old Deal

The 1969 Churchill Falls contract has been described as one of the worst deals in Canadian energy history from Newfoundland and Labrador’s perspective. Premier Tony Wakeham did not mince words. “We are finally replacing the notorious 1969 Churchill Falls deal and the 2024 MOU,” he said. The 2024 MOU was an earlier memorandum of understanding between the provinces. That MOU is now superseded by this new agreement. Wakeham framed the shift in control: “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.” He also rejected a backward-looking approach: “Today is not about what we can tear up, it’s about what we can build up. It is now time for us to roll up our sleeves and get to work.”

Premier Fréchette’s Take: Energy Security First

Québec’s Premier Christine Fréchette connected the deal to the broader geopolitical moment. “In the current geopolitical context, it is vital for every nation to secure its energy future,” she said. “Through this partnership, we are supporting the energy transition and enabling the growth of our economy through renewable energy, while ensuring our energy independence.” Québec already runs on almost entirely renewable electricity. Hydro-Québec is one of the largest clean power producers in North America. Expanding Churchill Falls and building Gull Island gives Québec more export capacity, more grid strength, and more leverage in a volatile energy world.

What Prime Minister Carney Said

Prime Minister Mark Carney tied the investment to national strength. “Canada is extending its unique advantage in clean, reliable, and affordable power,” he said. “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.” The phrase “cooperative federalism” appears twice in the announcement. It is the operating principle: Ottawa, Québec, and Newfoundland and Labrador working through a shared project rather than fighting over jurisdiction.

What Happens Next

The announcement is an agreement, not a finished project. Several things now need to move. The Major Projects Office will coordinate federal financing and accelerate permitting for the Labrador Trough corridor. The four FLMF projects will move into their funded pre-development phases: transmission assessment for Labrador West, feasibility work for Kami, pre-construction for Focus Graphite, and capacity expansion for SFP Pointe-Noire. The Churchill Falls upgrade, Gull Island development, and associated transmission will require detailed engineering, environmental assessments, and construction planning. The $10 billion in federal financing is committed, but the projects will still need regulatory approvals and commercial agreements. Watch for timelines on Gull Island specifically. It is the largest single piece of new generation, and construction schedules there will drive when the 14,000 megawatts actually arrive.

Frequently Asked Questions

Is this really the largest clean energy investment in North American history?+

Yes. The announcement states the projects represent the largest clean energy investment in North American history, at nearly $70 billion. That includes the Churchill Falls upgrade and expansion, Gull Island development, and related transmission.

How much power will the projects generate?How much power will the projects generate?+

The projects will generate 14,000 megawatts of clean, renewable power. That nearly triples the current generating capacity of Churchill Falls and is enough to power all the homes in Toronto, Montréal, and Vancouver combined.

How many jobs will these projects support?+

The projects will support 23,000 jobs in the construction phase alone. The jobs range from skilled trades to engineering positions.

What is the Labrador Trough and why does it matter?+

The Labrador Trough is a world-class mining region stretching across Newfoundland and Labrador and Québec. It holds significant sources of high-purity iron ore, which is a strategic asset for decarbonising global steel supply chains and reinforcing Canada's leadership in renewable energy and critical minerals.

What is the First and Last Mile Fund?+

The First and Last Mile Fund (FLMF) is backed by $1.5 billion in federal funding announced in Budget 2025. It supports infrastructure that unlocks new mines and moves Canada's resources to customers at home and abroad. Specific funding is available for Indigenous leadership, engagement, and participation throughout the mining value chain.

What did Premier Wakeham mean by replacing the 1969 deal?+

Premier Tony Wakeham said the new agreement replaces the 1969 Churchill Falls deal and the 2024 MOU. The new deal guarantees Newfoundland and Labrador more power, more value, and more transmission, and the province will be the primary beneficiary of its own resources.

How does this fit Canada's National Electricity Strategy?+

The agreement advances Canada's National Electricity Strategy, which aims to double the capacity of the grid by 2050 and supply clean, reliable, affordable power across the country. It also advances the Atlantic Energy Strategy, referred to the Major Projects Office in fall 2025.

Sources: Government of Canada (canada.ca), IRCC Help Centre. Last verified: August 18, 2026. This article is general information, not legal advice. Consult IRCC or a qualified legal aid service for guidance on your specific situation.

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