When the Hydro-Electric Power Commission decided to build the second generating station at Queenston, additional capacity was required, far beyond that of the existing canal. In order to divert sufficient water from the upper Niagara River to the new station, three times the existing capacity would be required.
In 1954 two tunnels were completed which run under the city, approximately parallel to the river, from the intake structures at Chippawa to the reservoir at Queenston.
The tunnels are approximately 8 kilometres long, 13.75 metres in diameter, and are spaced 76 metres apart. Water flows at a rate of 1,200 cubic metres per second through the two tunnels.
In 2005 Ontario Power Generation began work on the Niagara Tunnel Project. This project is expected to increase the generating capacity of the existing stations at Queenston by approximately 14%. This will be accomplished by diverting an additional 500 cubic metres per second of water through a new third tunnel. The tunnel will be approximately 10.4 kilometres in length, with an average diameter of 12.7 metres.
In contrast with the previous methods of tunnelling used in Niagara River projects, Tunnel 3 will be constructed by a tunnel boring machine, similar to that used to tunnel under the English Channel.