Gull Island Hydroelectric Project
The Gull Island Hydroelectric Project is a proposed generating station of up to 2,700 MW on the Lower Churchill River in Labrador, forming part of a broader Churchill River development programme announced on 17 August 2026 by the governments of Canada, Quebec, and Newfoundland and Labrador. The combined programme, valued at nearly C$70 billion, has been described by the federal government as the largest clean energy investment in North American history.
The project will be developed under a Definitive Cooperation and Implementation Agreement (DCIA) signed between Newfoundland and Labrador Hydro (NLH), Hydro-Quebec (HQ), and Churchill Falls (Labrador) Corporation Limited (CF(L)Co). The federal government has committed up to C$10 billion in financing and investment support for the combined Churchill River programme, including a loan guarantee for Gull Island construction costs. The Newfoundland and Labrador House of Assembly voted 21 to 18 on 17 September 2026 to approve proceeding with the DCIA.
Source: Government of Canada, 17 August 2026; Government of Newfoundland and Labrador, 17 August 2026; CBC News, 17 September 2026
Gull Island is located on the Churchill River approximately 100 km southwest of Happy Valley-Goose Bay, downstream from the existing Churchill Falls Generating Station and upstream from the Muskrat Falls Generating Station. The project will be owned by a new joint venture entity held 60 per cent by NLH and 40 per cent by Hydro-Quebec. Hydro-Quebec's subsidiary, Société d'énergie de la Baie James (SEBJ), will serve as project manager, leading development and construction of the generating facility and associated 735 kV transmission lines.
The project is expected to come online between 2036 and 2037 and to produce approximately 12 TWh of electricity per year. Hydro-Quebec will also make C$3.5 billion (NPV) in incentive and development payments to NLH, funding NLH's equity contribution.
Source: Government of Canada, 17 August 2026; WaterPower Canada, 21 August 2026
| Category |
Information |
| Location |
Lower Churchill River, approximately 100 km southwest of Happy Valley-Goose Bay, Labrador |
| Proponents |
Newfoundland and Labrador Hydro (60 per cent) and Hydro- Quebec (40 per cent), through a new joint venture entity |
| Construction Manager |
Société d'énergie de la Baie James (SEBJ), subsidiary of Hydro- Quebec |
| Capacity |
Up to 2,700 MW (final installed capacity to be confirmed through detailed engineering and environmental studies) |
| Annual Generation | Approximately 12 TWh |
| Combined Programme Value | Nearly C$70 billion (Churchill Falls upgrades, Gull Island, transmission, wind) |
| Federal Support | Up to C$10 billion, including federal loan guarantee for Gull Island |
| NL Total Value | C$49 billion (2026 NPV), up from C$36 billion (2024 NPV) under previous MOU |
| Status | DCIA signed 17 August 2026; House of Assembly approved 17 September 2026; definitive agreements targeted by 31 December 2026 |
| Target Commissioning | 2036–2037 |
Source: Government of Canada, 17 August 2026; Government of Newfoundland and Labrador, 17 August 2026; WaterPower Canada, 21 August 2026; CBC News, 17 September 2026
The Gull Island site has been studied for hydroelectric development since the 1960s. In December 2006, Newfoundland and Labrador Hydro (then operating through Nalcor Energy) registered the Lower Churchill Hydroelectric Generation Project, covering both Gull Island and Muskrat Falls, for joint federal-provincial environmental assessment. A Joint Review Panel was established on 8 January 2009 and released its report on 25 August 2011. The Government of Canada's response, issued on 15 March 2012, released the project from environmental assessment.
Development at Muskrat Falls proceeded first. Muskrat Falls was sanctioned in December 2012, first power flowed on 23 September 2020, and the project reached final commissioning in April 2023. The total cost was approximately C$13.5 billion, against an original estimate of approximately C$7.4 billion at sanction. The Gull Island component was deferred.
On 12 December 2024, NLH and Hydro-Quebec signed a Memorandum of Understanding to develop additional hydroelectric capacity on the Churchill River, including Gull Island, with the support of the Innu Nation. In July 2025, SEBJ commenced geotechnical and environmental field studies at the Gull Island site, with an allocated budget of C$10 million to C$15 million.
Following a change of government in October 2025, the new Premier suspended work on the MOU pending independent review. On 15 January 2026, Premier Wakeham commissioned an Independent Review under Part II of the Public Inquiries Act, 2006. The Independent Review Committee reported on 30 April 2026, concluding that the MOU as configured was not in the overall best long-term interest of the people of the province, and recommending negotiation of improved terms.
A three-member negotiating team, comprising former Fortis CEO Barry Perry, NLH CEO Jennifer Williams, and St. John's lawyer Jerome Kennedy, represented the province in new negotiations, which produced the DCIA signed on 17 August 2026.
Source: NL Department of Environment, Conservation and Climate Change; Impact Assessment Agency of Canada, archived registry; Atlantic Business Magazine, May 2024; CBC News, 9 July 2025; Government of Newfoundland and Labrador, 17 August 2026
Status: DCIA signed; House of Assembly approved; definitive agreements under negotiation
Source: Government of Canada, 17 August 2026; WaterPower Canada, 21 August 2026; Hydro-Quebec, project page; CBC News, September 2026; Government of Newfoundland and Labrador, 10 September 2026; CBC News, 17 September 2026
| Date |
Milestone |
| December 2006 |
Lower Churchill Hydroelectric Generation Project registered for environmental assessment |
| 8 January 2009 |
Joint Review Panel established |
| 25 August 2011 |
Joint Review Panel report released |
| 18 November 2011 | Tshash Petapen (New Dawn) Agreements signed, including Lower Churchill Innu Impacts and Benefits Agreement |
| 15 March 2012 | Government of Canada response to Joint Review Panel; project released from environmental assessment |
| December 2012 | Muskrat Falls sanctioned (Gull Island deferred) |
| 23 September 2020 | First power from Muskrat Falls flows into Labrador grid |
| April 2023 |
Muskrat Falls reaches final commissioning |
| 12 December 2024 | NLH and Hydro-Quebec sign Memorandum of Understanding on Churchill River development |
| 15 January 2026 | Provincial government commissions Independent Review of December 2024 MOU |
| 30 April 2026 |
Independent Review Committee reports |
| 17 August 2026 | DCIA signed; federal government announces up to C$10 billion in support |
| 14–17 September 2026 | Special sitting of House of Assembly; vote 21–18 to approve proceeding |
| 31 December 2026 | Target date for definitive agreements |
| 2036–2037 | Target commissioning |
Source: NL Department of Environment, Conservation and Climate Change; Impact Assessment Agency of Canada; Governments of Canada and NL, 15 March 2012; Government of Canada, 18 November 2011; CBC News, 24 September 2020; CBC News, 9 July 2025; Government of Canada, 17 August 2026; Government of Newfoundland and Labrador, 17 August 2026; Government of NL, 10 September 2026; NTV News, 17 September 2026
The DCIA encompasses several interconnected components beyond Gull Island.
The existing Churchill Falls Generating Station, with 5,428 MW installed capacity across 11 generating units, will undergo turbine upgrades to increase installed capacity by approximately 23.5 per cent, or about 1,275 MW, for a total rated capacity of roughly 6,703 MW. One turbine is expected to come online per year. New long-term power purchase agreements will run to 2077, replacing the 1969 contract.
Construction of more than 660 km of transmission lines and power infrastructure will enable Churchill Falls and Gull Island to deliver electricity to the Quebec border. A new 735 kV transmission line from Churchill Falls to Labrador City will support population growth and critical minerals development in the Labrador Trough. The federal government is committing C$1 billion (2026 NPV) towards the Labrador West transmission line.
A proposed 2,000 MW onshore wind development in Labrador is also under consideration, with the federal government signalling an equity position of up to 40 per cent and co-investment opportunities with the Innu of Labrador. This remains subject to feasibility study and is not a commitment to build.
Source: Government of Canada, 17 August 2026; WaterPower Canada, 21 August 2026; Government of Newfoundland and Labrador, 17 August 2026; CBC News, 18 August 2026
The DCIA terminates and replaces the 1969 power purchase agreement between the Quebec Hydro-Electric Commission and Churchill Falls (Labrador) Corporation Limited. Under that contract, signed in 1969 with a term of 40 years plus a 25-year renewal, Hydro-Quebec purchased virtually all Churchill Falls output at fixed rates with no escalation clause. The Government of Newfoundland and Labrador has described the contract as purchasing power at 0.2 cents per kWh.
Under the new DCIA, Hydro-Quebec will pay 1.8 cents per kWh from the first year, rising 14 per cent per year to reach 11.5 cents per kWh by 2041.
Churchill Falls (Labrador) Corporation Limited is owned 65.8 per cent by NLH and 34.2 per cent by Hydro-Quebec.
Source: Government of Newfoundland and Labrador, 17 August 2026; CBC News, 21 November 2023; Norton Rose Fulbright; CBC News, 18 August 2026
Technical Specifications
Source: Government of Canada, 17 August 2026; WaterPower Canada, 21 August 2026; Impact Assessment Agency of Canada, archived registry; Power Advisory LLC
Under the DCIA, Newfoundland and Labrador has secured a portfolio of external market transmission access totalling 985 MW. This comprises up to 240 MW via the Champlain Hudson Power Express into New York, 200 MW via the New England Clean Energy Connect into New England, up to 280 MW of synthetic exports sold at U.S. and Ontario market prices, and 265 MW of direct transmission using power from Muskrat Falls and proposed wind development.
NLH retains optionality over whether allocated power from Churchill River facilities is used for provincial industrial development or sold externally, with Hydro-Quebec agreeing to purchase NLH's recaptured Churchill Falls power at 1.5 times the base PPA price (a 50 per cent premium over base PPA prices).
Source: Government of Newfoundland and Labrador, 17 August 2026; WaterPower Canada, 21 August 2026
Regulatory Status
Gull Island underwent a federal environmental assessment between 2009 and 2011 as part of the Lower Churchill Hydroelectric Generation Project, with the Joint Review Panel report released on 25 August 2011 and the Government of Canada's response issued on 15 March 2012. The Government of Canada has indicated the project may be clear of further impact assessment if there are no substantive changes from the assessed project. The DCIA capacity of up to 2,700 MW exceeds the 2,250 MW assessed in 2006, and the question of whether a new assessment is required remains unresolved.
The DCIA provides for referral of the Gull Island, Churchill Falls upgrades, and Labrador transmission projects to the Major Projects Office upon conclusion of binding agreements. The broader Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor has been referred to the Major Projects Office for coordinated federal review.
Hydro-Quebec holds development exclusivity for Gull Island for an initial seven years, extendable to twelve, with defined circumstances in which either party may not proceed.
Source: Impact Assessment Agency of Canada, archived registry; Government of Canada, 17 August 2026; CBC News, September 2026; WaterPower Canada, 21 August 2026
The Gull Island site is located in the traditional territory of the Innu Nation of Labrador, whose land claim, accepted by the federal government for negotiation, covers approximately 70 per cent of Labrador. Three Indigenous governments have interests in Lower Churchill development: the Innu Nation, the Nunatsiavut Government (Labrador Inuit), and the NunatuKavut Community Council.
The Tshash Petapen (New Dawn) Agreements were signed on 18 November 2011 at Natuashish between Canada, Newfoundland and Labrador, and the Innu Nation. The package comprised three documents: the Land Claim and Self-Government Agreement-in-Principle, the Upper Churchill Redress Agreement, and the Lower Churchill Innu Impacts and Benefits Agreement. The Impacts and Benefits Agreement provides a structured royalty regime, implementation funding, and priority employment and business opportunities for Labrador Innu.
Under the DCIA, assignment of the Lower Churchill Innu Impacts and Benefits Agreement to the Gull Island project entity is a condition that must be satisfied before the definitive agreements can be signed. The hiring protocol gives effect to Innu Nation commitments first, followed by qualified residents of Labrador, then Newfoundland and Labrador. The provincial government has stated that 85 per cent of all person-hours of employment in Gull Island construction will remain within Newfoundland and Labrador, with priority given to qualified Labrador Innu. An estimated 5,000 workers would be employed at the Gull Island site during peak construction.
Hydro-Quebec has confirmed a minimum of 4 million engineering and project management person-hours in the province, and construction and assembly person-hours in Newfoundland and Labrador at the greater of 85 per cent of total person-hours or 20 million hours.
The Government of Newfoundland and Labrador has stated it has begun conversations with the Innu Nation about opportunities for the Innu to engage as full partners in developments related to the agreement.
Source: Government of Newfoundland and Labrador, 17 August 2026; WaterPower Canada, 21 August 2026; Government of Canada, 18 November 2011; NL Indigenous Relations and Reconciliation
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