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"Unfortunately there was an election (in Newfoundland and Labrador) in recent months. The new government of Newfoundland basically considered that the agreement was too advantageous for Quebec," Legault said. 

"But I am confident we will find a win-win agreement in the coming months, because it's important for Quebec and it's important for Newfoundland to profit from this enormous opportunity."

Tony Wakeham, Newfoundland and Labrador's new Progressive Conservative premier, said Legault's resignation has no effect on the agreement's future.

"From my standpoint, it doesn’t matter who leads the province of Quebec or who will be sitting across from me at the negotiating table," Wakeham said in a statement which thanks Legault for his leadership.

Wakeham said he is focused on ensuring Newfoundlanders and Labradorians benefit most from the province's resources.

The draft deal was unveiled in 2024, shepherded by Legault and former Newfoundland and Labrador Liberal premier Andrew Furey, who stepped down last year.

If finalized, the tentative deal would see Hydro-Québec pay much more for hydroelectric power from the Churchill Falls plant in Labrador. Under the existing contract, signed in 1969, Hydro-Québec buys the majority of the power from the 5,428 megawatt plant for just 0.2 cents per kilowatt hour. The utility can then sell that power for much higher market rates.

Under the new deal ending in 2075, Hydro-Québec would pay increasingly higher rates for electricity, reaching an effective average rate of 5.9 cents per kilowatt hour. The agreement could also lead to new developments on the Churchill River, including a 2,250-megawatt power station at Gull Island.

The Liberals have said the new arrangement could bring roughly $225 billion to Newfoundland and Labrador over the next 50 years. Before he was elected premier in October, Tory Leader Tony Wakeham said he believed the province could get a better deal.

He has since ordered a panel to review the memorandum of understanding by the end of April, which is when officials had hoped to have reached final, binding agreements.

That review is ongoing, no matter who is premier of Quebec, Wakeham said.

"Serving as a first minister carries immense responsibility, and I wish (Legault) and his family well as he transitions from public life," he said.

John Hogan, leader of the Liberal Opposition in Newfoundland and Labrador, said Legault's mention of the draft deal in his resignation speech shows just how important it is to Quebec.

"There is still an opportunity, and I don't want to see this opportunity slip through the province's fingers," Hogan said in an interview. "I would encourage our government to reach out to Premier Legault while he's still in office to try and finalize the deal."

The government in Quebec must hold an election by October. Polls have suggested Legault's Coalition Avenir Québec party is unpopular, with more voters favouring the separatist Parti Québécois, whose leader has spoken out against the draft deal with Newfoundland and Labrador.

This report by ºÃÉ«tvwas first published Jan. 14, 2026.