What you need to know about the Manitoba Hydro board exodus

The Crown corporation got a nearly all-new board Friday after nine of 10 members resigned earlier this week.

9 of 10 Hydro board members resigned Wednesday; 5 new members announced Friday

Premier Brian Pallister answers questions about the resignation of Manitoba Hydro's board Wednesday at the Manitoba Legislative building. (CBC)

It's been a whirlwind week for Manitoba Hydro.

The Crown corporation got a nearly all-new board Friday, two days after nine of its 10 members left in an unprecedented mass exodus, leaving only Progressive Conservative MLA Cliff Graydon (Emerson) remaining.

Their exit gave rise to questions about why they left and heated debate about the nature of a nearly $70-million proposed payment between the corporation and the Manitoba Metis Federation, which Premier Brian Pallister has said his government will not support.

Pallister's opposition, and his characterization of the payment as "persuasion money," prompted federation president David Chartrand to suggest Pallister should resign, and to promise a legal challenge if the province won't move forward with the payment.

In case you missed any of it, here's what you need to know.

1. What's the issue?

You'll get a different answer depending on who you ask.

According to a letter signed by all nine outgoing board members to Crown Services Minister Cliff Cullen, the problem was the board couldn't get a meeting with the premier "to resolve a number of critical issues related to the finances and governance of Manitoba Hydro, including matters related to Hydro's efforts to further develop its relationships with Indigenous peoples."

In the letter, the board said outgoing chair Sanford Riley hadn't been granted a face-to-face meeting with Premier Brian Pallister since October 2016, "notwithstanding numerous requests," and board members "have never been permitted to make a presentation to the cabinet or the caucus to explain the problems we face at Manitoba Hydro, and how these problems are a risk to the province."

Premier Brian Pallister, for his part, said that accusation is not fair. He told reporters Wednesday the government has been in "regular communication … collectively and individually on an ongoing basis" with the board.

But the premier also turned the focus away from a lack of meetings, and said the resignations were actually because the province won't agree to a $67-million payment Hydro wants to make to the Manitoba Metis Federation, spread over 50 years.

"I would describe it as more persuasion money," Pallister told reporters after question period Wednesday, saying it was to smooth the process for the Manitoba-Minnesota Transmission Line.

On Wednesday, Crown Services Minister Cullen sent a directive to the board instructing it not to proceed with the agreement with the MMF, and stating all agreements between Hydro and Indigenous communities require Cullen's review before being executed.

In a statement sent on Wednesday, Riley dismissed Pallister's characterization of the agreement as "cynical, offensive and wrong."

Watch Pallister call the payment 'persuasion money':

Brian Pallister says 'persuasion money' reason for Hydro board resignations

5 years ago
Duration 1:04
Premier Brian Pallister told media Wednesday he believes the board resigned because the province won't agree to a $70 million payment to the Manitoba Metis Federation to smooth the process on the Minnesota-Manitoba transmission line.

2.  What's this agreement with the Manitoba Metis Federation?

According to Jason Madden, legal counsel for the federation, the deal is what's officially called an impact and benefits agreement, designed to help develop projects in partnership with Indigenous people regarding land rights and to address potential impacts ahead of time. The goal is to "get to consent and win-win scenarios," Madden said.

According to a copy of the agreement proposal obtained by CBC News, the deal would see Manitoba Hydro pay the MMF $1.5 million per year over 20 years, plus a lump-sum payment of $37.5 million. The money would be used at the sole discretion of the MMF, "for short-, medium- and long-term investments in capacity and other socio-economic areas designed to improve the overall quality of life for the Manitoba Métis community."

Under the deal, Hydro would also have provided funding to the MMF to cover studies and other engagement on future Hydro transmission projects, based on the length of the project. Hydro also included a commitment to create a preference in its public tenders for Indigenous peoples, including Métis people and businesses, under the Indigenous Content portion of its procurement policy.

In exchange, the MMF agreed not to oppose current projects — barring any material changes — or future domestic transmission lines less than 250 kilometres in length for up to 50 years.

The federation would also have to support Manitoba Hydro licence applications and "agree not to appeal or contest any approvals or licences issued," according to the deal.

That document says the payments "fully and finally address and satisfy all concerns of the Métis with respect to existing transmission projects as well as identified projects," including Bipole III and the Manitoba-Minnesota transmission line.

3. Is this unusual?

Manitoba's Métis community has a right to be consulted on major resource development projects like Hydro transmission lines, and that right is enshrined by the courts, said Paul Thomas, a Manitoba political science professor.

In 2016, the Supreme Court of Canada ruled Métis people have many of the same rights as Indigenous people, including the right to consultation.

According to Premier Pallister and Crown Services Minister Cliff Cullen, the $67-million payment is unusual for Manitoba, because it's not compensating for lost land or displacement that has already happened.

That was the case in the 1977 Northern Flood Agreement, which the province and Hydro signed with four First Nations to compensate them for existing damage, and the settlement agreements that followed.

Cullen told CBC News Wednesday the government was concerned it could "set a precedent for both Crown corporations and government," and doesn't believe the deal was legally binding.

MMF lawyer Madden, however, said the idea that the agreement is unprecedented is "absolutely untrue," and said Hydro signed similar community benefit agreements during the development of the Keeyask dam project.

"As I said earlier, these agreements are signed from one end of Canada to the other," he said. "There are thousands of them, called impacts and benefits agreements, with Indigenous groups, and that is the whole point of this, to be forward-looking as opposed to doing the damage and then having to sign agreements subsequent."

Madden pointed to the 2013 Supreme Court decision that upheld a legal challenge by the MMF over the 1870 government land deal that ended the Red River resistance.

​"The courts have been extremely clear on this.… Governments are not above the law and they're not above the constitution," Madden said.

"Métis rights are a fact in law and they derive from Métis pre-existence within Manitoba before Manitoba was a province, and those are undeniable rights."

4. What is each side saying about it?

MMF president David Chartrand says the deal would save taxpayers millions by avoiding legal action and delays over major Hydro projects.

"You know this is a good deal, premier, you know this is a damn good deal," he said Wednesday.

Watch MMF president David Chartrand weigh in on the premier's comments:

'Maybe he should look in the mirror, maybe he should resign': Manitoba Metis Federation reacts to Premier Brian Pallister

5 years ago
Duration 1:42
Manitoba Metis Federation president David Chartrand says he will not allow the work of the former Hydro board to be lost through what he calls "political interference." Chartrand accuses Premier Pallister of using "race card" tactics against Indigenous people to divide Manitobans.

Outgoing board chair Sanford Riley told CBC News in an emailed statement Wednesday the board felt the deal was a "good transaction" for Manitoba Hydro. 

"The agreement with the Manitoba Metis Federation was carefully vetted by the board. It met our legal obligations, encompassed a multiplicity of projects, covered a 50-year period, and was structured to ensure the money went to the people who should benefit from it," he said.

In addition to referring to the deal as "persuasion money," Pallister told reporters Thursday the government stopped the deal in part to protect the rights of future generations of Métis people in the province.

​​"This would be like a father selling a daughter's right to vote and to me, on that basis, this agreement … is one that has real concerns," Pallister said.

5. How did Hydro and the MMF reach the agreement?

The deal builds upon a previous agreement between the MMF, Hydro and the province of Manitoba, called the Turning the Page Agreement (or Kwaysh-kin-na-mihk Ia paazh, which means "turning the page" in the Métis language Michif).

The tripartite agreement was signed in November 2014 by MMF president David Chartrand and the federation's Minister for Hydro Jack Park, as well as NDP Minister Eric Robinson and Scott Thomson, who was the president and CEO of Hydro at the time.

That agreement laid out a $2-million lump sum payment at the time, plus a $1-million payment from Hydro to the MMF for the following 19 years — which isn't included in the $67-million Minnesota-Manitoba project deal. It also stated the MMF would withdraw its appeals regarding Bipole III and Keeyask, and said any new issues could be addressed through mitigation or compensation measures.

Watch the premier being grilled on when he knew about the agreement:

Watch: Premier Brian Pallister grilled about Hydro agreement

5 years ago
Duration 1:52
Premier Brian Pallister says he'll replace the nine Manitoba Hydro board members who stepped down Wednesday amid complaints of a lack of communication with the provincial government — including with the premier himself — by noon Friday.

Madden, the MMF lawyer, said the Turning the Page Agreement gave Hydro and the MMF permission to negotiate a deal on transmission projects, and going back on it now would be "pulling the rug out from under an Indigenous people."

"What's so shocking about all this is that that agreement, which is a public agreement, and which was signed to great fanfare, expressly delegated the negotiations to Manitoba Hydro, and Manitoba Hydro did the right and honourable thing and the MMF participated in good faith, and they got to an agreement," he said.

"And then the idea that political masters could interfere at the 11th hour and attempt to pull the rug out from under an Indigenous peoples is just unconscionable."

With files from Sean Kavanagh, Bartley Kives, Karen Pauls and The Canadian Press