In Quebec, one man wages a solitary war against 'unjust' Churchill Falls deal
Deal seen as injustice by many people in Newfoundland and Labrador but greatly benefits Quebec
Lucien Beauregard readily admits it. In his circle of friends, his neighbourhood, probably all of Quebec, he has few supporters when it comes to the fight of his life: challenging the Churchill Falls deal.
In Newfoundland and Labrador, the contract is seen by many as an historic injustice — an iron-clad agreement lasting 65 years that allows Quebec to buy its neighbour's hydroelectricity at an embarrassingly low rate.
But in Sainte-Julie, the Montreal suburb where Beauregard lives, Churchill Falls inspires hardly any interest, much less any vitriol. After all, the deal's extremely favourable to Quebecers.
"I'll tell you right now, the majority of people [in Quebec] say the same things the Supreme Court said in 2018: it's a contract, they signed it, so live with it," said Beauregard, a 73-year-old engineer.
"For me, it's a question of equity.… It's a bad deal that doesn't make any sense."
'Enraged' by deal
In 2000, Beauregard moved to St. John's on a 10-month contract. One day, at work, a colleague started teasing him.
"He said, 'You Quebecers, we like you, but don't forget Churchill Falls,'" Beauregard recalled in an interview last week. "I had no idea about Churchill Falls. I'd heard of the name, I knew it was a hydroelectric dam, but nothing else."
Beauregard called Newfoundland and Labrador Hydro and asked for a copy of the infamous deal. A few days later, a brown envelope showed up on his desk.
"I was enraged," said Beauregard, whose home office now hold 14 binders of research on the contract — speeches from former premier Brian Tobin, St. John's Telegram columns by Russell Wangersky, and a trove of information about the Hydro-Québec chair who oversaw the Churchill Falls agreement, Jean-Claude Lessard, whom Beauregard refers to as the "spawn of Satan."
"For 20 years now, every day, I'm into the weeds on Churchill Falls."
Watertight agreement
In 1966, Hydro-Québec agreed in a letter of intent to buy the vast majority of electricity produced at the Churchill Falls dam, a preliminary commitment that allowed Brinco, a consortium of British companies, to borrow the necessary funds and start construction on the massive 5,428-megawatt dam.
But the final contract wasn't signed until three years later, when construction was still ongoing and Brinco was bleeding money. Hydro-Québec's bargaining position had strengthened considerably — and it took full advantage.
The final agreement continues to be highly advantageous to Hydro-Québec, which currently pays 0.2 cents per kilowatt-hour for electricity at Churchill Falls. By comparison, in the third quarter of 2022, Hydro-Québec made 8.2 cents per kilowatt-hour — 41 times more — for its electricity exports.
After the first 40 years of the deal, it automatically renewed for another 25, with no chance of renegotiation. The price of electricity is not indexed to inflation and has actually gone down over time. Successive Newfoundland and Labrador governments tried time and again to reopen the deal, losing once and for all at the country's top court in 2018.
Time to bury the hatchet?
The Churchill Falls contract comes to an end in 2041 and given Hydro-Québec's strategic planning spans decades, not years, the Quebec and Newfoundland and Labrador government must soon decide the future of the dam — and their energy partnership.
Churchill Falls produces 15 per cent of Quebec's electricity. The province's power surplus is projected to dry up by 2026 and its premier, François Legault, is on the hunt for energy sources.
Legault has made no secret of his interest in developing the 2,200-megawatt Gull Island project, another hydroelectric dam on the Churchill River in Labrador. But to do so, he would need co-operation from the Newfoundland and Labrador government, for whom a fair price on Churchill Falls power is necessary.
For Lucien Beauregard, the upcoming negotiations are a golden opportunity to bury the hatchet and apologize to Newfoundland and Labrador for what he calls an "ignoble" deal.
"It's a unique opportunity to tear up the contract, today, and for you [Newfoundlanders and Labradorians] to get the price you deserve," he said.
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