The federal government is signalling a willingness to kick in some cash to facilitate progress on the idea of building a regional transmission line connecting Quebec and the Atlantic provinces, but no serious talks have yet occurred, says Siobhan Coady.

"But the intent is there to have that conversation," Coady, Newfoundland and Labrador's Minister of Natural Resources, told reporters Wednesday outside the provincial legislature.

Federal minister encouraged by thaw in relations

A report in the Quebec newspaper La Presse this week says the Liberal government in Ottawa is very supportive of such a line, describing it as a major step towards the construction of a national east-west power corridor.

Federal Natural Resources Minister Jim Carr told La Presse he welcomes the recent thaw in relations between the provinces of Newfoundland and Labrador and Quebec, and he's hoping this could result in greater collaboration in areas such as energy transmission.

Jim Carr

Jim Carr is the federal Minister of Natural Resources. (CBC)

"I am encouraged by what I have heard from elected officials from both provinces," Carr said. 

"The Atlantic provinces could be linked to Quebec and to each other," he added. "It could also open the door to exports, with such a regional network, to the northeastern United States."

Funding available

Carr said provinces seeking funding for such a project could apply under the new Canada Infrastructure Bank, or through the Government of Canada's Low Carbon Fund, which has a budget of $2 billion.

It's an enticing prospect: A new transmission line wheeling vast amounts of power from hydroelectric assets in Labrador— such as Muskrat Falls — through Quebec and into other parts of Canada and the United States.

It's a concept made all the more appealing by future development potential at Gull Island, and the expiration of the controversial Upper Churchill contract with Hydro Quebec in 2041.

'I think it's just (a) timing issue. So we are moving forward with them, and I'll check and see when the first time we can have that conversation.' - Siobhan Coady, Minister of Natural Resources

And the political landscape might be just right to make it happen, with Liberal governments in Ottawa, Quebec City and St. John's.

But it's not something being talked about at the highest levels, at least not yet, Coady acknowledged.

"I think it's just (a) timing issue. So we are moving forward with them, and I'll check and see when the first time we can have that conversation," she said.

Focused on mining right now

Coady said talks between the two provinces have focused on mining opportunities in the iron ore-rich Labrador Trough, which straddles the border between the two provinces.

But she's leaving the door wide open to future talks on energy transmission.

"I think we should be open to all of it, to be quite honest. I think we should be open to construction, we should be open to free flow," she said.

This latest development follows the signing of a Canadian internal free-trade agreement this past spring. The new interprovincial pact sets out specific rules around the transmission of electricity across provincial borders, and is based on open access and non-discrimination rules in the United States.

As part of that agreement, other provinces requested that Quebec and Newfoundland and Labrador hold talks in hopes of overcoming decades of tension over transmission rights, which many blame for the decision to proceed with the controversial Muskrat Falls project.

Both provinces have shown a willingness to bury the proverbial hatchet, and Ottawa's willingness to facilitate progress could be a game-changer.

"Once you have these discussions, and you have a federal government willing to step up, we certainly should have these discussions," Coady said.