Premier says new Manitoba Hydro board will be in place in less than 24 hours

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.

Pallister made the pledge Thursday after question period at the Manitoba Legislative Building.

The news comes as the former board chair tells CBC News the premier is wrong about why all board members but one — Conservative MLA Cliff Graydon — made the unprecedented decision to resign en masse Wednesday morning.

The Manitoba Metis Federation accused Pallister Wednesday of using "race card tactics" over a $67-million agreement it said it had made with the Manitoba Hydro board connected with the Minnesota-Manitoba transmission line.

MMF president David Chartrand said the agreement would have saved taxpayers millions by avoiding unnecessary litigation and delays over major Hydro projects.

Not compensating for lost land, displacement

The planned payment was unusual, Pallister said, because it did not appear to compensate anyone for lost land or displacement. Instead, the money would have been in exchange for a federation promise not to oppose several projects, including the new transmission line to the United States, the premier said.

The government halted the deal, partly to protect taxpayers from having to pay what the premier called "persuasion money" and partly to protect the rights of future generations of Métis to seek regulatory reviews or question future projects.

"I don't think ... that signing off on your rights, at the expense of your children, is the right thing to do," Pallister said Thursday.

​​"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."

Watch: Premier Pallister grilled on when he knew about agreement

A copy of the proposed deal said the Metis Federation would not oppose projects currently underway or future domestic transmission lines, less than 250 kilometres in length, for up to 50 years.

The proposal said the federation would have to support Manitoba Hydro licence applications and "agree not to appeal or contest any approvals or licences issued."

Former Hydro board chair Sandy Riley said the proposal made sense in light of recent court rulings that have supported ​Métis rights. In 2016, the Supreme Court of Canada ruled the country's 600,000 Metis have many of the same rights as First Nations individuals, including the right to be consulted on Crown activities that may impact their rights or interests.

Riley said the payment could be lower than the cost of legal challenges and compensation for upcoming Manitoba Hydro projects.

"This made more sense from a financial and from a social perspective."

Stunned by offer

Riley says he tried to talk to other government officials about Hydro business and was told Pallister was the final arbiter.

However, Riley says, Pallister refused to meet with the board.

"We were basically told that it was above the pay grade — literally using those words, above the pay grade — of the people we were talking to, and that those issues were really issues that sat on the desk of the premier," Riley said Thursday.

"So on the big issues, like financing and how we managed our relationship with the Indigenous communities, these were issues that were clearly on the desk of the premier, and he was not prepared to meet with us to discuss them."

After not getting the chance to meet with the premier for months, Riley says at one point he suggested he could go to Pallister's house or the premier could come to his.

He says he was stunned Pallister offered him the chair of another Crown corporation when the two weren't even talking.

The resignations on Wednesday stemmed from several points of disagreement with the province, Riley says — most importantly that they couldn't get an audience with the premier.

The premier said at a news conference Wednesday he believes the board resigned because the province refused to agree to the payment.

On Thursday, Riley called that assertion wrong, saying he resigned because he couldn't get a sit-down with the premier.

"The fact that I can't have a conversation with the premier in a 15-month period, or whatever it is, is just unimaginable and very disturbing."

Directive from province to Hydro

CBC News obtained a copy of a 2018 directive from Minister of Crown Services Cliff Cullen's office to the Manitoba Hydro Electric Board, which states: "Manitoba Hydro is directed to not proceed with the agreement with the Manitoba Metis Federation at this time.

"Going forward, all relationship agreements, community benefit agreements other similar agreements to which this directive applies between Manitoba Hydro and Indigenous communities and groups require review by the Minister of Crown Services before being executed."

The third and final line directs "Manitoba Hydro ... to collaborate with Manitoba Crown Services to develop a strategy to advance reconciliation with Indigenous communities and groups."

Letter of resignation

The letter of resignation sent from Riley and the eight other Conservative-appointed members of Hydro's board to Minister Cullen echoed the chair's concerns.

The members called the governance over the Crown corporation by the government "irresponsible."

They say they received "no guidance or support in terms of how to proceed to tackle the financial challenges at Manitoba Hydro."

"It is clear that the premier does not have confidence in the board, nor does he have the intention to take responsibility for the workout of Hydro's financial problems," reads the letter, provided to CBC News by Riley.

"The lack of engagement from the principal decision maker in the province of Manitoba has made it impossible to fulfil our fiduciary obligations."

The letter goes on to say members had been trying to engage with the government "on the need for its leadership and involvement" since the board delivered its first report in 2016.

It says the last time Riley was granted a face-to-face meeting with Pallister was October 2016.

"The previous government rightly deserves to be criticized for putting Manitoba Hydro into such a perilous state. But those who become aware of the problems and fail to deal with them are perhaps equally responsible," it reads.

"The ultimate responsibility for Hydro rests with the government. Manitoba Hydro's issues still ultimately belong to the premier and the government of the day."

​Negotiations important: Carr

"It just shows that this issue is entirely caused by the premier's mismanagement," said NDP Leader Wab Kinew in reaction to the letter.

"The premier was asleep at the wheel, and all of a sudden he wakes up, and he tries to find a scapegoat to blame. It's just not right."

In Ottawa Thursday, Natural Resources Minister Jim Carr said Manitoba Hydro and agreements with Manitoba's Indigenous people are both important.

"I spent two hours in committee this morning talking about Bill C-69 [which proposes an overhaul of the approval process for major natural resources projects] and one of the pillars of our strategy is respect for Indigenous people, understanding both our constitutional and our moral obligations when it comes to developing major energy projects — Indigenous communities must be consulted," Carr said.

"We say that in the legislation and I spent a couple of hours this morning along with [Environment] Minister [Catherine] McKenna talking quite a bit about the importance of that relationship."