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Manitoba Premier Brian Pallister speaks before the provincial throne speech in Winnipeg, Tuesday, Nov. 21, 2017.JOHN WOODS

All the non-government members of Manitoba Hydro's board resigned Wednesday after Premier Brian Pallister indicated his government would assume greater oversight over the debt-burdened Crown corporation and had vetoed its planned $67-million payment to the province's Métis Federation.

In a written statement, chairman Sanford Riley said nine directors – all appointed by Mr. Pallister – were stepping down because they had reached "an impasse" with the government, which intended to replace Mr. Riley. The lone holdout was Progressive Conservative MLA Cliff Graydon.

"For over a year, we have attempted to meet 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 relationship with Indigenous peoples," said Mr. Riley, who is also chief executive officer of Winnipeg's Richardson Financial Group Ltd.

Mr. Pallister said the board resigned because the government had rejected Manitoba Hydro's planned payment of $67-million to the Métis Federation to win its support for a planned transmission line to Minnesota that would traverse Métis land. In vetoing the payment, the government had also indicated it would establish new rules giving it a greater role in the utility's decision-making, the Premier told reporters in Winnipeg.

"The reason for the resignations … is that the board wants to proceed with a payment to a group in an attempt to make the process on the Minnesota-Manitoba transmission go smoother and we don't agree with that payment," he said, calling the proposed payment "persuasion money."

The Premier said such an arrangement would have dire consequences if every Indigenous group across the province insisted on receiving payments in order not to oppose something a Crown corporation or government department planned to do on land claimed by the group.

"We're going to change the process so that is more aligned, so that the government can actually have influence and can oversee decisions which have impact over all Manitobans," he said, despite assuring the board when it was appointed that it would be autonomous.

Manitoba Métis Federation president David Chartrand accused the Premier of using "race card" tactics to "divide Manitobans for his own failings."

He said the federation had reached an agreement with the hydro board that would save taxpayers money and prevent unnecessary delays, and would compensate Métis for ceding rights to their land. Rejection of that payment will now cost all Manitobans in project delays, litigations and damages, he said.

"Premier Pallister has got to find a scapegoat" for his inability to get along with his own appointees," Mr. Chartrand said in a telephone interview. "All Manitobans should question the path this Premier is taking us down."

The Tory-appointed board has been at odds with the government since assuming the job shortly after Mr. Pallister took office in May, 2016. Faced with a spiralling debt problem, the board urged the government to provide an equity injection of up to $2-billion in order to improve its balance sheet.

However, the government was facing its own debt and deficit problems and rejected that proposal.

The Crown corporation has asked the Public Utilities Board for a rate increase of 7.9 per cent per year over the next five years, and the board's decision on that request is now pending. Mr. Pallister said Thursday it would have been inappropriate for him to meet with Mr. Riley while that rate request was being heard and considered by the PUB.

The provincially owned utility has two major projects that are facing delays and cost overruns: the Keeyask dam, which has increased to $8.7-billion from $6.5-billion, and the $4.65-billion BiPole III transmission project.

Its long-term debt sat at $16-billion at the end of March, 2017, and that is expected to balloon to $25-billion over the next three to four years. Although the additional assets will support export electricity sales to Minnesota, the new board questioned whether Hydro will be receiving an adequate rate of return.

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