Critics question Quebec-Newfoundland hydro deal

The premiers of Newfoundland and Quebec have reached a tentative agreement on a major hydroelectric project.

The Gull Island hydroelectric dam would be built on the Churchill River in Labrador. But even if the provinces reach a final agreement on the $4 billion project, the dam could take 10 years to complete.

The project is projected to generate 2,000 megawatts of electricity.

And already the critics are raising objections. John Hickey, mayor of Happy Valley-Goose Bay, fears Quebec will benefit at Labrador's expense.

Thats what happened when the two provinces signed a Labrador hydro deal in the 1960s. Quebec made all the gains as prices rose. Newfoundland fought to rewrite the deal for years, without success.

But this time, there will be a price escalator, so that Newfoundland will get more money as prices rise.

"There is greater value to be realized from Gull Island as an energy supply when it's added to Hydro Quebec's own system," Newfoundland Premier Roger Grimes said.

Environmentalists don't like thei dea that Gull ISland will flood 85 square kilometres, and Innu Nation president Peter Penashue says there will be no development until land claims are settled.

But in a joint statement, the premiers said "meaningful aboriginal participation is an essential element to the success of the project."

Quebec's Bernard Landry says the final signing of the deal may happen before Christmas. "We are hopeful that the lawyers within six or eight weeks will give us a document ready to sign," he said.

The proposed deal will see Newfoundland and Labrador own the facility and transmission lines. All the power must be sold to Quebec.

Neither Landry nor Grimes would say how the project will be financed. But Grimes says that shouldn't be an issue. "We're confident in the work that's been done. We know it can be accomplished."