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A judge has ruled that the Manitoba government was within its rights to cancel a $67-million agreement called “hush money” by Premier Brian Pallister with the Manitoba Metis Federation.

Chief Justice Glenn Joyal of Court of Queen’s Bench says the Progressive Conservative cabinet had the authority to overturn the deal, which had been struck between the Metis federation and Crown-owned Manitoba Hydro.

“The directive is a lawful and reasonable exercise of cabinet’s statutory power to enforce its stewardship role over Hydro,” Joyal wrote in the decision released Tuesday.

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The federation and Manitoba Hydro reached an agreement in 2017 that would have given the Metis group $67-million for supporting a variety of hydro projects such as a new transmission line to Minnesota.

That support would have helped secure faster approvals at regulatory hearings.

Pallister called the deal “hush money” for a special interest group and his cabinet cancelled it in 2018. He said it was unlike other agreements, which compensate people for lost land or encroachment on traditional territories, in that it simply paid for a group to not oppose projects.

The Metis federation filed for a judicial review, asking the court to overturn Pallister’s decision and reinstate the agreement.

Although the agreement was unsigned and had been taken by Manitoba Hydro to the government for discussion, the federation argued it was legally binding and cabinet had no authority to issue a directive to stop it.

Joyal disagreed.

“Indeed, I am of the view that using a standard of correctness, the directive falls squarely within cabinet’s authority to issue binding legal directives – in this case to Hydro – respecting important matters of policy,” Joyal wrote.

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He also ruled the government’s decision did not have an impact on Indigenous rights.

Pallister said the ruling means Metis federation president David Chartrand is now free to support or oppose energy projects.

“And I would encourage Mr. Chartrand and anyone else who has concerns about any future projects to participate fully in the (regulatory) process of engagement, and not expect to be paid to get out of the way,” he said.

Chartrand was not immediately available to comment.

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