We’re starting tonight’s newsletter with a major energy agreement.

Hydro-Québec and Newfoundland and Labrador Hydro have reached an agreement in principle that could turn the page on decades of bad blood over the massive Churchill Falls hydropower project.

Negotiating teams from both provinces hope to reach final agreements by the end of the year. But that timeline could hinge on Québec’s fall election, where the Parti Québécois (PQ), which is leading in the polls, has vowed to tear up the deal if it wins.

It’s a familiar threat. The last attempt at a Churchill Falls deal — a 2024 memorandum of understanding — died after Newfoundland and Labrador changed governments, rejected by the incoming Progressive Conservatives.

Québec Premier Christine Fréchette challenged her PQ rivals to come up with something better.

“I say, ‘Fine, tear it up.’ But what are you proposing? What are you offering to Quebecers? How will you provide 10,000 additional megawatts?”

Aya Dufour reports.

Prime Minister Mark Carney said he expects to speak with U.S. President Donald Trump before Wednesday’s tariff deadline, as trade negotiators from the two countries sat down in Washington, D.C., on Monday.

Speaking to reporters in St. John’s, Carney declined to say what he thinks a good deal would look like, but said in French that the federal government has a plan that “will cover all eventualities” if the latest round of tariffs are imposed.

He added that the negotiations “are very intense and delicate” and said he would not discuss the talks in public.

In D.C., Canada’s top trade negotiators met with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick less than two days before the tariffs are set to take effect.

Canada-U.S. Trade Minister Dominic LeBlanc and Janice Charette, the chief trade negotiator, have been in Washington since last week and are hoping for a deal that would halt the tariffs.

The Canadian Press has more. 

July’s rebound in gas prices pushed the annual rate of inflation up to three per cent last month even as there were signs cost pressures were easing at the grocery store, Statistics Canada said Monday.

The acceleration in the consumer price index for July comes after inflation fell to 2.8 per cent in June. Heading into Monday’s release, most economists had expected inflation would rise just a tick to 2.9 per cent.

Volatility in gasoline prices was once again to blame for changes in the consumer price index.

Progress on peace talks between the United States and Iran helped tame energy prices and cooled inflation sharply in June, but renewed hostilities in the Middle East last month pushed global oil prices higher again.

Excluding gas, the consumer price index rose 2.2 per cent in July for a third consecutive month, StatCan said.

CP’s got this one too. 

In Other Headlines

Internationally

Meta will head into federal court on Tuesday to fend off accusations from a group of state attorneys general that it designed its social media platforms to hook children, lied to the public about the risks those platforms posed and gathered data on kids in violation of the law.