Cutting down deficit: Coady says Churchill Falls deal means a stronger, sustainable province

Newfoundland and Labrador Finance Minister Siobhan Coady believes the newly renegotiated — though still tentative — Churchill Falls deal is the best possible move for the province, and that billions in injected cash could mean an end to running deficits.

"We're going to get $17 billion between now and 2041 that we would not have gotten if we had not renegotiated. And there are off ramps and upgrades all throughout that contract," Coady told CBC News on Wednesday. 

"It transforms everything. We've been working hard toward that stronger, smarter, self-sufficient, sustainable Newfoundland and Labrador that we all want. I think with this deal, that's exactly what we have."

The memorandum of understanding signed between Newfoundland and Labrador and Quebec is being sold as a deal that changes history. That money could be used to address Newfoundland and Labrador's debt — nearly $18 billion.

Coady said the money the province earns can also increase thanks to escalator clauses in the MOU and the economic spin-offs that come with new hydroelectric projects. The first dividend, retroactive to Jan. 1, 2025, will be nearly $500 million, she said.

When asked if the money means the end of Newfoundland and Labrador running a financial deficit, Coady was blunt.

WATCH | The money is real and it will have an impact, says Coady:

Churchill Falls’ billions will help with new spending, but paying down debt is key: finance minister

3 days ago

Duration 1:26

The hundreds of billions of dollars Newfoundland and Labrador could see under the terms of a deal with Quebec tied to Churchill Falls could see the province stop relying on its credit cards, so to speak. N.L.’s net debt is double the national average. But Finance Minister Siobhan Coady says this could be a turning point.

"I think in a general sense, the years of deficits are over," she said.

"We were working so hard in the Department of Finance to get our fiscal house in order … remove the deficits or get them as close to zero as possible.".

N.L. can't rush House debate, Wakeham says

Elected officials are preparing to debate and review the MOU in the House of Assembly on Jan. 6.

PC Leader Tony Wakeham says he has concerns over the short timeline to prepare and the fact the Liberal government hasn't addressed his party's concerns yet.

He says his party is compiling questions they'd like Premier Andrew Furey to answer.

"We want to ask questions that I think the people of Newfoundland and Labrador would want answers to," Wakeham said Wednesday. "We're tasked with trying to do this now, with less than three weeks to go, over the Christmas period."

Wakeham says he wants the premier to explain the process of how the new purchase price for Quebec — 5.9 cents per kilowatt hour — was reached and what the annual rate Quebec will pay Newfoundland and Labrador.

Meanwhile, consumer advocate Dennis Browne told CBC News he believes the deal will bring benefits to the entire province, specifically Labrador.

"We're moving from $20 million annually to nearly a billion annually. That is significant, and that will help out the province in every way. And some of it might very well assist in terms of the rate mitigation," he said.

Browne also commended the province for utilizing a panel of experts to explore the future of Churchill Falls, which was a recommendation that came out of the Muskrat Falls Inquiry from commissioner Richard LeBlanc in 2020.

He said the televised debate in the House of Assembly will give all residents a front row seat to learn more.

"The whole province can get some first-hand information as to how this transpires, and not just go by what they are being told politically."

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