The largest clean energy investment in North American history announced by Canada’s Prime Minister Mark Carney
With electricity demand climbing across North America and critical minerals supply chains under strain, Canada is moving to underwrite new generation at a scale not attempted in a generation. VX News here republishes the Government of Canada's backgrounder on the August 17, 2026 announcement by Prime Minister Mark Carney, alongside the premiers of Québec and Newfoundland and Labrador, of up to $10 billion in federal support for a nearly $70-billion package
Backgrounder
On August 17, 2026, the Prime Minister, Mark Carney, alongside the Premier of Québec, Christine Fréchette, the Premier of Newfoundland and Labrador, Tony Wakeham, and the CEOs of Hydro-Québec and Newfoundland and Labrador Hydro, announced a package including up to $10 billion in federal financial support and investments to expand clean electricity generation and transmission in Labrador through upgrades to Churchill Falls, development of the Gull Island hydroelectric project, and enabling infrastructure needed to support critical minerals development in the Labrador Trough. As part of this agreement, the federal government will guarantee the financing to develop the massive and long-discussed Gull Island power project.
Enabled by a landmark Definitive Cooperation and Implementation Agreement (DCIA) signed between Hydro-Québec and Newfoundland and Labrador Hydro, these combined construction projects – valued at nearly $70 billion – represent the largest clean energy investment in North American history. They will create thousands of jobs and economic prosperity for the region, including the Innu Nation of Labrador.
Envisioned as a key component of Canada’s forthcoming National Electricity Strategy, these energy projects will help us meet growing energy demand and support our goal of doubling the capacity of our electricity grid by 2050.
Canada is also announcing the referral of the ‘Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor’ to the Major Projects Office (MPO) for coordinated federal review.
The Labrador Trough is a massive geological belt and mining region, stretching approximately 1,100 kilometres across Labrador and Quebec. Having produced more than 2 billion tonnes of iron ore over the past half-century, the region remains one of Canada's most significant sources of high-purity iron ore and a strategic asset for low-carbon steel supply chains.
Canada is also making a federal investment of nearly $20 million to support feasibility work for mining-enabling infrastructure through the First and Last Mile Fund (FLMF). Together, these measures will help meet Canadian industry’s growing energy needs, accelerate responsible resource development and unlock new opportunities for workers, communities, and Indigenous partners across Labrador and the country.
Definitive Cooperation and Implementation and Agreement between Hydro Québec and Newfoundland and Labrador Hydro
Newfoundland and Labrador Hydro and Hydro Québec have signed the historic Definitive Cooperation and Implementation Agreement to terminate and replace the 1969 Churchill Falls Contract and develop Gull Island and expand capacity of the Churchill Falls Generating Station. With this agreement, Hydro Québec and Newfoundland and Labrador Hydro pave the way to a mutually-beneficial and long-lasting partnership that will provide the clean, reliable, and abundant energy necessary to build a prosperous future. The additional power will secure the future growth of Québec’s energy-intensive industries and competitiveness, while in Newfoundland and Labrador, it will accelerate economic growth in a strategic mining region and support Labrador communities that need power to deliver critical services to a growing population.
Major Projects Office
Working alongside provincial, territorial and Indigenous and industry partners, the Major Projects Office identifies projects that offer the greatest benefits to Canadians and works to bring them to approval, final investment decision, construction and production. By leveraging federal expertise and tools, including the Canada Infrastructure Bank and the Indigenous Loan Guarantee Program, the Major Projects Office works to streamline regulatory processes and coordinate project financing to help fast-track project development.Since 2025, 18 major projects, including 5 mining projects and 8 energy projects, have been referred to the Major Projects Office.
First and Last Mile Fund
The First and Last Mile Fund (FLMF) is an envelope of $1.5 billion for infrastructure that will unlock and bolster new critical minerals mines and economic growth, including projects that move Canada’s resources to customers at home and abroad. Recognising that many of these projects occur on Indigenous territory, the FLMF also provides dedicated funding to support Indigenous leadership, engagement and participation in critical minerals development and enabling infrastructure projects.
Project name: Projet d’infrastructures de transport des minéraux critiques – Fosse du Labrador Recipient: Société ferroviaire et portuaire (SFP) de Pointe-NoireLocation: Sept-Îles, QuebecFunding amount (up to): $14,848,155Description: In order to advance the port’s readiness for future investment and expansion, this project will complete a detailed engineering study on how to expand the Sept-Îles Port’s handling capacity from 21 to 38 million tonnes per year. Planned improvements include upgrades to rail infrastructure, the addition of high-capacity unloading systems to increase the flow of iron concentrate shipments and optimising existing storage areas to improve overall efficiency.
Project name: Labrador West Regional Transmission Expansion StudyRecipient: Newfoundland and Labrador Hydro Location: Near Labrador City and Wabush, Newfoundland and LabradorFunding amount (up to): $2,341,766Description: This study will complete front-end engineering and design (FEED) for the transmission lines and stations needed to bring more power to the Labrador West area. The proposed infrastructure would help support the expansion and electrification of existing mining operations and enable future critical minerals development. The study includes geotechnical investigations, development of cost and schedule estimates, and identification of requirements for environmental assessments. Study participants include Tacora Resources (Scully Mine), Rio Tinto IOC (Carol Lake Mine), Champion Iron (Kami Iron Ore Project), and the Government of Newfoundland and Labrador (Julienne Lake Deposit).
Project name: Lac Knife Graphite Mine Connection to Hydro-Québec Power Grid and Access RoadRecipient: Focus GraphiteLocation: Lac Knife, QuebecFunding amount (up to): $1,378,700Description: This project will complete pre‑construction work for an 8‑km all‑season Class 1 gravel road that will replace an existing seasonal maintenance road and connecting the mine site to Highway 389, as well as a new 50‑km, 34.5‑kV transmission line linking the site to Hydro‑Québec’s transmission corridor near Fermont, Québec. This includes technical studies, engineering, feasibility and environmental studies, planning and design, permitting, and Indigenous engagement.
Project name: Transportation and energy infrastructure for the Kami high-purity iron ore mining ProjectRecipient: Kami Iron Mine PartnershipLocation: Southwest of Wabush and Labrador City, Newfoundland and LabradorFunding amount (up to): $439,844 Description: This contribution will support the completion of preconstruction, feasibility and regulatory planning for energy and transportation infrastructure required for the Kami high-purity iron ore mining project. High-purity iron ore plays an essential role in the decarbonisation of the global steel industry. Steel is one of the most widely used materials and is fundamental to manufacturing, construction, transportation, and infrastructure projects in Canada and around the world.
Financial Support for Clean Electricity Projects
Churchill Falls upgrades: Expand and extend the lifetime of the existing Churchill Falls strategic electricity generation facility. Upgrades will be made to the 11 turbine units (with one turbine expected to come online each year) at the existing Churchill Falls hydroelectric facility in Labrador to increase capacity by 1,275 megawatts (MW), a 30% efficiency increase for existing turbines. The Churchill Falls expansion will increase capacity by up to 2,500 MW.
Gull Island: Construction of a new 2,700 MW hydroelectric facility located on Churchill River between Churchill Falls and Muskrat Falls. The project is expected to be online between 2036-2037 and is expected to produce about 12 TWh in power which will substantially increase reliable electricity supply for Atlantic Canada and Central Canada. It will also facilitate industrial development and the buildout of more variable renewables in the region, including in neighboring provinces. Gull Island underwent a federal environmental assessment in 2012 as part of the Lower Churchill Hydro Electric Generation Project.
Transmission for Churchill River projects: Construction of transmission lines (660km+) and power infrastructure to enable Churchill Falls and Gull Island to deliver electricity to the Quebec border.
Labrador West Transmission: Construction of a new 735kV transmission line from Churchill Falls to Labrador City to provide new power to the region to serve homes and enable industrial load growth and increased critical minerals development. The existing transmission line serving Labrador City and Wabush / Labrador Trough region are running at maximum capacity. As such, a new transmission line is required to support population growth and to enable new resource development that could create hundreds of new full-time mining jobs and meaningful partnership opportunities with Indigenous groups.
Onshore Wind: Proposed development of 2,000 MW of onshore wind in Labrador, with location and other details under consideration by Newfoundland and Labrador Hydro.
This backgrounder was published by the Government of Canada on August 17, 2026.
