The Manitoba Métis Federation believes it has a binding $67-million agreement with Manitoba Hydro, and will go to court to enforce it over Premier Brian Pallister's rejection of the deal, the federation's lawyer said on Friday.
The federation sent a letter this week demanding the Pallister government and Hydro's new board meet with its executive under the dispute-settlement provisions of the controversial accord, lawyer Jason Madden said.
"From a legal perspective, the MMF negotiated an agreement with the Crown corporation, and the honour of the Crown applies to those negotiations," Mr. Madden said.
"And the idea that now the Manitoba government is politically interfering and causing Hydro to potentially breach that agreement with the MMF, if that happens, there will be legal consequences."
On Friday, the provincial government appointed five new members to the Hydro board after nine previous appointees resigned en mass on Wednesday over complaints that they had reached an impasse with the Premier over decisions involving finances and Indigenous relations.
The new chair is Marina James, chief executive officer at the real estate board WinnipegREALTORS and former head of the city's municipal economic development agency. She replaced high-profile business executive Sandy Riley, who on Thursday slammed the Premier's account of the mass resignation.
Mr. Pallister has focused on the Hydro board's decision to enter into a $67-million agreement with the MMF, a deal he characterized as "persuasion money" to keep the Indigenous community from opposing Hydro projects.
The Premier insisted the deal was a proposal, not a final agreement.
Mr. Riley said on Thursday that Hydro routinely made financial agreements with Indigenous people whose traditional territories would be affected by the utility's dams and transmission projects. He said the problems went well beyond relations with the federation, and complained that Mr. Pallister had failed to meet with him or the board for more than a year. A resignation letter from the nine board members said Hydro was in a "perilous financial position" due to project cost overruns and high debt.
"In addition to having received no guidance or support in terms of how to proceed to tackle the financial challenges at Manitoba Hydro, we have been advised by the province that Hydro is not authorized to enter into agreements with Manitoba's Indigenous communities, an integral part of Hydro's activities," the letter said. "It is clear that the Premier does not have confidence in this board, nor does he have the intention to take responsibility for the workout of Hydro's financial problems."
Mr. Pallister maintains it would have been improper for him to meet with the Hydro board while the utility was seeking a series of 7.9-per-cent annual rate increases at the Public Utilities Board. And he said the MMF agreement was overly generous and improper because it would bind future generations to support projects over which they would have no control.
Mr. Riley refused to comment on Friday about whether his board had been expecting approval from the Premier on the deal or had formally approved it and merely submitted it as "advice" to the government, as Mr. Madden suggested.
"We sent it to the government in November before implementing it and never heard back from the government despite repeated requests for a meeting to discuss it and other matters pertaining to Indigenous relations," Mr. Riley said in an e-mail on Friday.
"Whether or not the agreement is binding is something the MMF, Hydro, and the province need to determine and it would not be proper for me to comment on that now that I am no longer involved."
Minister for Crown Services Cliff Cullen insisted on Friday the MMF deal was never formally approved.
"There is no signed agreement on the $67-million; it's just a proposal," he said. "We had some legal interpretation of the proposal, as a government, and felt there were a lot of holes in that particular proposal."
Mr. Madden noted that Hydro was operating under a 2014 agreement between the utility, the federation and the previous New Democratic Party government that explicitly delegated to Hydro the responsibility for concluding agreements with Indigenous groups.
He said the Pallister government has never revisited that tripartite accord, and it remains legally enforceable.