Canadian Manufacturing

Retired Hydro-Quebec exec suggests trading Labrador for 1,000 megawatts of energy

Energy is a contentious issue in the relationship between the two provinces; Hydro-Quebec disavowed the former executive's comments

September 20, 2016  by Keith Doucette, The Canadian Press

Construction of the cofferdam at Muskrat Falls. The major infrastructure project is currently behind-schedule and over-budget. PHOTO: Nalcore Energy

Construction of the cofferdam at Muskrat Falls. The major infrastructure project is currently behind-schedule and over-budget. PHOTO: Nalcore Energy

ST. JOHN’S, N.L.—A retired Hydro-Quebec executive has raised eyebrows in Newfoundland with his proposal that Labrador should be given to Quebec in exchange for 1,000 megawatts of energy.

“It caused me to chuckle,” said Paul Davis, leader of Newfoundland and Labrador’s Opposition Progressive Conservatives. “Is this for real? We’re going to exchange Labrador for 1,000 megawatts of power?”

The idea was floated by F. Pierre Gingras in an opinion piece that appeared in Montreal newspaper La Presse on Saturday. Gingras suggests that the Muskrat Falls hydroelectric project, which is now more than $4 billion over its estimated construction cost, is too ambitious for a small province like Newfoundland and Labrador.

“This is a catastrophic situation for a population of barely 530,000 people, especially when the falling price of oil is factored in,” wrote the former head of planning, costs and power plant construction for Hydro-Quebec.


Gingras said Newfoundland has continued “in vain” to take Hydro-Quebec to court to change the terms of a 1969 contract that led to the development of the Churchill Falls project in Labrador.

“However, still today, the province remains incapable of developing the 824-megawatt project for a market that is smaller than a city such as Laval, Que.,” he said.

Gingras said the offer is fair because it would correct a 1927 British Privy Council ruling that gave Labrador to Newfoundland and also allow for the development of several rivers in disputed boundary areas between the two provinces.

Davis said the suggestion gives insight into how Hydro-Quebec has “robbed” his province for so many years.

“Hydro Quebec has had a stranglehold on our hydro resources in Labrador for decades,” said Davis. “One of the things that Muskrat Falls did was found us a way around Hydro-Quebec, who refused to work with Newfoundland in the past.”

Davis said there appears to be renewed interest in the Muskrat Falls project from Hydro-Quebec now that the project is facing financial challenges.

“The most disturbing in all this is that the premier (Dwight Ball) won’t speak to it and the minister of natural resources won’t speak to it,” said Davis.

A request seeking comment from the premier’s office on the newspaper opinion piece did not draw a response.

Hydro-Quebec, in a tweet Monday night, said the the person who wrote the opinion piece retired in the ’90s and “does not speak on our behalf.”

Hydro power has been a contentious issue between the two provinces since the Churchill Falls agreement ended up being lopsided in favour of Quebec. The agreement to ship power from Labrador to Quebec for sale has seen Quebec realize more than $22 billion in profits, while Newfoundland and Labrador has seen only about $1 billion.

The Muskrat Falls project was pitched as a way of skirting Quebec by bringing power through Newfoundland and then Nova Scotia by using subsea cables.

However, costs for the troubled project ballooned to around $11.4 billion, mostly due to problems stemming from delays involving the power generating station.

The situation prompted Nalcor Energy CEO Stan Marshall to describe the project as a “boondoggle” during a news conference held in June.

Marshall also said first power, which had been expected to flow next year and was then delayed until 2018, won’t be available until the fall of 2019.