Hydro–Québec fought to hide parts of letters from the 1960s showing what it offered to lure a French aluminum company to the province, including its internal comments about an energy deal with Newfoundland and Labrador.
In a 2024 fight in front of Quebec’s access-to-information commission, the utility claimed the correspondence could jeopardize its present-day energy negotiations with Newfoundland and Labrador about Churchill Falls. Hydro-Québec lost the battle and released the information — including to The Canadian Press last month.
The letters reveal internal strategies and discussions as Quebec officials tried to persuade Pechiney, an aluminum company, to build a smelter in Sept-Iles, Que., on the northern shore of the St. Lawrence River. At the time, the company was also considering building in the United States.
“We should remember we told [Pechiney] that Hydro-Québec could not make a firm commitment before next spring, or more specifically before signing the [Churchill Falls] contract,” a Hydro–Québec official wrote to the utility’s director of sales in December 1966.
The official was referring to a meeting the previous month between Quebec officials and a Pechiney executive. The Quebec official also said in the correspondence that the government needed to correct the company’s mistaken impression that it was getting an offer that was directly tied to the Churchill Falls agreement.
Hydro–Québec eventually signed the Churchill Falls deal in 1969. The deal has been financially rewarding for Hydro–Québec, but much less so for Newfoundland and Labrador, where many feel cheated by the arrangement.
Every time Newfoundland and Labrador and Quebec sit down to talk about Churchill Falls, there’s a third party at the table. It’s the hated 1969 contract, which shadows our every move. How did this province walk into what has been called the most one-sided resource contract in Canadian history? CBC’s Jamie Fitzpatrick explains in the first of a four-part series.
The revelations that Hydro–Québec and government officials discussed Churchill Falls with industry in the 1960s are coming to light as the provinces try to negotiate a new agreement to replace the 1969 contract, which is set to expire in 2041.
Why censor the letters?
The talks are unresolved and the stakes are high. But it’s not clear why Hydro-Québec was so determined to censor the decades-old letters.
The Canadian Press showed the documents to several energy experts and professors, none of whom could point to anything that would give Quebec or Newfoundland and Labrador an unfair advantage as the provinces try to hammer out a new Churchill Falls agreement.
“Your guess is my guess,” said Marie-Claude Premont, an associate professor at Ecole nationale d’administration publique in Quebec City, in an email.
Premont said the battle shows it’s too easy for public bodies in Quebec to censor historical information.
The professor unwittingly triggered the fight in 2022, when she filed an access-to-information request with Hydro-Québec looking for records of its negotiations with Pechiney about the smelter.
Premont noted in her correspondence with the utility that the material was nearly 60 years old and the smelter was never built, according to a ruling on the case from Quebec’s access-to-information commission.
Hydro–Québec gave her documents with several sections blacked out. She got a lawyer and successfully fought the redactions.
The Canadian Press learned in May about her battle and asked Hydro-Québec for the uncensored records. The utility took two weeks to release them. As of Monday, it had not posted the documents to its website, as it does with completed access-to-information requests.
Among the text the utility tried to censor are comments from officials about benefits Quebec would get from the 1969 Churchill Falls deal. These include statements about how the added power from Churchill Falls would allow Hydro-Quebec to freeze the power rates for Pechiney for a few years, the letters said.
The government of Quebec was also involved and enthusiastic about the project, the letters show. Pechiney wanted a better deal from Hydro-Québec and a deputy minister said he planned to discuss the matter with then-premier Daniel Johnson Sr.
Churchill Falls is controversial: professor
Although Pechiney never built the Sept-Iles smelter, Quebec did ultimately foster a thriving aluminum sector, in part by offering cheap energy.
But that had little to do with Churchill Falls, said Jean-Thomas Bernard, an adjunct economics professor at the University of Ottawa.
The aluminum boom in the 1980s was driven by surpluses from the massive James Bay hydroelectric development, launched in 1971, Bernard said in an interview.
In an email, Premont said she could not see any way the information Hydro–Québec tried to censor would have harmed the utility’s current negotiations with Newfoundland and Labrador. She pointed to legislation that says Quebec’s executive council can only keep certain documents secret for 25 years.
“The problem is that even after the 25-year secrecy period has expired, organizations can still [provide reasons to refuse] access,” she wrote.
Hydro–Québec defended its fight to hide the information. In a statement, spokesperson Lynn St-Laurent said the documents related to “a period marked by major structuring negotiations.”
“In that context, a high level of prudence has always been applied to protect not only specific commercial terms, but more broadly the strategic approaches and analytical frameworks that supported those discussions,” St-Laurent said.
“Even when these documents date back several decades, they can still reflect ways of structuring negotiations or long-term planning.”
Daniel Beland, a political science professor at McGill University, described the redactions as an “overreaction,” though he said he wasn’t surprised.
Governments and bureaucrats are inherently risk-averse and everything related to Churchill Falls remains controversial, he said.
Hydro–Québec wanted to avoid controversy, “and now we are talking about it because they were too careful,” he said in an interview.
It’s not yet clear if Quebec and Newfoundland and Labrador will reach a new deal for Churchill Falls energy. The provinces arrived at a non-binding framework agreement in 2024, but Newfoundland and Labrador Premier Tony Wakeham recently announced he’d like to renegotiate its terms.
In a statement last month, Hydro-Québec said it still believed an agreement was possible.
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