By Lori Turnbull

October 15, 2025

The provincial election campaign in Newfoundland and Labrador did not seem seized with a “throw the rascals out” vibe but, in the end, it was a change election.

Premier-designate Tony Wakeham and the Progressive Conservatives will form a majority government with 21 seats in the 40-member legislature, having won the popular vote by less than one point – 44.3 per cent to 43.5 per cent.

Wakeham campaigned on a promise to improve upon the Churchill Falls Memorandum of Understanding (MOU) between Newfoundland and Labrador Hydro and Hydro Quebec. The pact was signed in December of last year and is still under negotiation.

His vow to “fix this deal or demand a better one” could mean great things for his province if he is successful, but it could also put him on a collision course with the government of Quebec — not to mention the people of Newfoundland and Labrador — that could ultimately blow up in his face.

The Churchill Falls MOU would replace the interprovincial deal that was brokered back in 1969. As it stands now, the agreement would, among other things, increase the price of power generated by Churchill Falls from 0.2 cents per kilowatt hour to an average of 5.9 cents – a thirtyfold increase.

According to Newfoundland and Labrador Hydro, this change in the price structure would result in over $225 billion in profits for the province over the 50-year lifetime of the deal. Liberal leader and soon to be former Premier John Hogan built his campaign around defending the agreement as it is. As he conceded the election, he urged his opponent to “stay the course” on the Churchill Falls MOU.

As an opposition leader looking to win an election, it made a world of sense for Wakeham to tell voters that the deal the Liberals negotiated was not good enough and, if given the chance, he would do better. The province’s finances are a mess and affordability challenges are top of mind for the public.

This deal represents a new lease on life. For years, Newfoundlanders and Labradorians have had to accept an arrangement that is unfair to them. Getting it right is essential for the future of the province.

A Parti Quebecois government would surely be a more prickly dance partner than Legault’s ever was.

Wakeham is not the only one raising questions about fairness. Former Premier Danny Williams has expressed his concern that the price point is too low compared to the average market value and so money would be left on the table if the current MOU holds. He has said that the December agreement is far too similar to the 1969 arrangement in the sense that Quebec is the beneficiary and Newfoundland and Labrador continues to get the short end of the stick.

The timeline for the finalized agreement is to have all of the Ts crossed and Is dotted by April of 2026, which would give Wakeham roughly six months to do the following things he has promised to do: hold an independent review of the current MOU; negotiate a better one; and, put the decision to the public in the form of a binding referendum. There is flexibility on the deadline, but other variables in Wakeham’s plan largely fall outside his control.

First, he does not know what an independent review will lead to but it’s possible that the conclusion won’t be the same as his and won’t be politically convenient for him.

Second, any attempt to extract a better deal from Quebec will be met with significant resistance, to put it mildly. The morning after the election, Premier Francois Legault took to social media to congratulate Wakeham on his win to and to reiterate his support for the current energy agreement.

Though Premier Legault says he’s willing to continue the collaboration with his provincial counterparts, it would make no political sense for him to go back to the drawing board on the guts of the MOU after he and former Premier Andrew Furey already shook hands on it – particularly with a Quebec election on the horizon and when the momentum for change in the province already palpable.

Third, the referendum plan is an all-but-guaranteed fiasco for the government. It is going to be very difficult to get the public united on the granular details of an MOU. Loud voices on both sides of the argument will likely pull apart any emergent consensus, which would then undermine the legitimacy of an agreement even if it were approved by a majority of voters.

If the MOU isn’t ratified by the referendum, then Wakeham is back to square one and, by that point, Legault might not be in office any longer. A Parti Quebecois government would surely be a more prickly dance partner than Legault’s ever was.

Election campaigns are all about promises, many of which end up falling by the wayside once the votes are counted. But this one is front and centre. He, rather than the Liberals, will be held to account for where the MOU lands.

Though Wakeham’s promise for a better deal helped him win the election, it could make his first months as premier extremely difficult.

Policy Contributing Writer Lori Turnbull is a Senior Advisor at the Institute on Governance.