Nfld. & Labrador

Innu Nation repeatedly blindsided by Muskrat Falls announcements, letters show

Weeks before Ottawa and Newfoundland and Labrador unveiled their $5.2-billion agreement in principle on rate mitigation, the Innu Nation warned Liberal Premier Andrew Furey it would "not tolerate" a deal reached without its input.

Innu learned of major decisions at last minute — or through media

Last July, Ottawa and the Newfoundland and Labrador government announced a $5.2-billion agreement in principle to avoid electricity rates from skyrocketing due to the overbudget Muskrat Falls project. (Nalcor Energy)

Weeks before Ottawa and Newfoundland and Labrador unveiled their $5.2-billion agreement in principle on rate mitigation, the Innu Nation warned Liberal Premier Andrew Furey it would "not tolerate" a deal reached without its input.

Letters obtained by CBC/Radio-Canada show the Innu repeatedly complained they learned of major announcements affecting Muskrat Falls — and, they feared, the royalties the Labrador First Nation would derive from the hydroelectric project — with little or no prior notice from the provincial government.

The letters, spanning 16 months, form part of the exhibits to an injunction request filed by the Innu Nation in August days after Ottawa and the provincial government announced their agreement in principle. 

The deal aims to avoid a sudden spike in electricity bills for ratepayers due to cost overruns at Muskrat Falls but will also reduce benefits paid to the Innu, whose ancestral lands were flooded to build the project. 

"We were very upfront and our position was known for a very long time," Peter Penashue, a member of the Innu Nation's rate mitigation team, said Wednesday.

"We had some idea that there was a flaw in this process, and eventually our suspicions were confirmed.… They're trying to reduce our benefits by a billion dollars [over 50 years] and that's not acceptable."

Early complaints

In a March 2020 letter, written a month after then premier Dwight Ball and federal Natural Resources Minister Seamus O'Regan announced they would "undertake a financial restructuring" of the Muskrat Falls project, the Innu Nation complained it had been informed of the new negotiations by phone the day of the announcement.

"We would have appreciated an earlier notice of the announcement and its contents," wrote Gregory Rich, then grand chief of the Innu Nation, in a letter to Ball. "We need to know the big picture of what GNL [the government of Newfoundland and Labrador] is considering as rate mitigation options … in order to achieve the shared objective of holding the Innu harmless."

In an April 2020 response, Ball promised the Innu "regular monthly meetings, or as required, to provide updates and allow for adequate discussion" on negotiations with Ottawa.

Those meetings appear to have ceased in the months after Furey replaced Ball as Liberal leader and premier in August 2020. Furey declined an interview request from CBC News.

"In recent months GNL has cancelled our meetings, and we have not been kept informed about recent developments," wrote Deputy Grand Chief Mary Ann Nui in a missive sent last January to Furey, in which she complained the Innu Nation had learned through the media of a decision to defer $844 million in Muskrat Falls debt repayments.

"It was particularly disappointing to learn about the Muskrat Falls restructuring announcement with Prime Minister [Justin] Trudeau on Dec. 17 only through the media," Nui wrote.

Former Newfoundland and Labrador premier Dwight Ball retired from politics in August 2020. (Paul Daly/The Canadian Press)

Promise from Ball

In the same letter, Nui also sought assurances the government would keep a promise she said Ball had made in February 2020.

"Your predecessor, Premier Ball, recognized the importance of the relationship when he promised us … that whatever financial restructuring needed to be done with Muskrat Falls, that the Innu people would be held harmless against any negative effects on the Innu as a result of rate mitigation," she wrote.

CBC News asked Ball to clarify this statement but did not receive a response.

In an undated reply, Furey responded he was "very surprised" to receive Nui's letter, given officials "were directed to contact you in advance of the announcement" on deferring debt repayments.

"My position, and that of my government, is to fully apprise you on this matter," Furey wrote. "Please be assured that the announcement on December 17th does not have any ramifications for the IBA."

The IBA, or impacts and benefits agreement, is the document governing Innu royalties from Muskrat Falls.

"An official had reached out to the Innu Nation in November to communicate that with the reorganization of the rate mitigation team and process, we would re-engage with you once our discussions are at a point with the federal government when we can provide meaningful information," Furey added.

Warning from Innu grand chief

In a July 5 letter to Furey, penned just three weeks before he and Trudeau announced the agreement in principle on rate mitigation, Grand Chief Etienne Rich reiterated his request that "the Innu Nation be kept up to date" on the status of negotiations with Ottawa.

After twice learning of announcements related to Muskrat Falls at the last minute, Rich also gave the premier a stark warning.

"It would be unfair if what happened was that we were simply informed about what has been arranged after it has happened. The Innu people will not tolerate that. We gave our consent to Muskrat Falls based on the terms of the IBA, and to not honour those arrangements would breach legal as well as moral obligations," wrote Rich.

In the end, as revealed during hearings into the Innu Nation's injunction request in September, the provincial government informed Innu leaders by phone of the agreement in principle the day before it was announced. 

The Innu Nation would learn the first details of the deal in a technical briefing organized for media. It would wait weeks for more specific modelling on the financial benefits of the new deal's impact on future benefits for the Innu.

'An attack on reconciliation'

In an Aug. 3 letter, Rich scolded the prime minister for cutting a "backroom deal which could destroy the benefits that were the basis of our consent to this project."

"Your backroom deal with Premier Furey could mean that the Innu people will end up with no benefits from this project," Rich wrote. "That is unacceptable. Your decision is an attack on reconciliation."

Rich also demanded commitments to revise the agreement in principle, provide financial modelling on the impact of the deal on Innu Nation royalties and ensure a seat at the negotiating table for the Innu alongside Ottawa and Newfoundland and Labrador.

Two days later, Furey assured Rich that "my government's commitment to you has not wavered. We are committed to being open and forthright and to providing information when we have it."

Despite that assurance, the Innu Nation subsequently sued the federal and provincial governments, and filed a request for an injunction to quash the deal before a signing ceremony initially expected Sept. 30.

Before Judge Alexander MacDonald could rule on the injunction request, the province, federal government and Innu Nation announced discussions on the agreement in principle had resumed.

Talks ongoing

"We have a process agreement in place and the Innu leadership and myself and the provincial government leadership have agreed amongst ourselves that we wouldn't comment on that publicly. It's an ongoing, active discussion between the two parties," Furey said Tuesday, following a meeting of the Premier-Indigenous Leaders' Roundtable.

Members of the Innu Nation were not present at the roundtable meeting. A spokesperson for the Innu Nation said recent deaths in the community were to blame, not ongoing negotiations on rate mitigation. 

In a statement Wednesday, the provincial government said it "is committed to reconciliation and continues to work closely with Indigenous governments and organizations."

"The process agreement signed by Innu Nation, Canada and the government of Newfoundland and Labrador is in place, which provides for information to be shared with and input provided by the Innu Nation as work on the definitive agreements progresses."

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