Hydro president says $67M deal with Manitoba Métis Federation was not binding

The president of Manitoba Hydro says a quashed $67-million deal between the Crown corporation and the Manitoba Métis Federation was never set in stone.

Kelvin Shepherd, Hydro's president and CEO, told a legislative committee on Wednesday that the deal, which would have helped support a transmission line to Minnesota, was not written into a contract and was not legally binding.

"There is no legal agreement that had been made with the MMF," Shepherd told the committee.

"It was an agreement to enter into a negotiation process, very simple, a memorandum of understanding to sit down and talk. That agreement led to what I would call a term sheet, if you could call it that.

"The term sheet had a condition in it that required it to be turned into a legally binding agreement that was more extensive, more comprehensive, more fulsome, and that never happened."

Shepherd's statement goes against the position held by the federation, which maintains the deal was a legally binding agreement.

The deal would have seen Hydro pay $67.5 million to the federation over 50 years, as a means to forestall opposition to future projects including the Minnesota-Manitoba transmission line.

Premier Brian Pallister quashed the deal in March, calling the payment "persuasion money."

Since then, the province has contended the deal was not an agreement, but instead a proposal.

Manitoba Métis Federation president David Chartrand announced his intention earlier this week to take the province to court over the dispute, after a meeting on Tuesday with Shepherd and Crown Services Minister Cliff Cullen.

"They are not willing to sit down and they are going to overrule Hydro, which we believe they don't have the legal right to do," Chartrand told CBC News at the time.

Term sheet 'not in legal format': Shepherd

Shepherd said the agreement between the Crown corporation and the Métis Federation laid the groundwork to form a legal agreement.

"We have a sort of a two-page term sheet that the parties worked on together, and would say that we agree to the points on the term sheet. But it's not signed and it's not in legal format," he said.

The points would have included a number of elements, including compensation, he said.

"One of the key points, though, was that the agreement needed to be turned into a binding agreement before it would have any effect, and that obviously did not take place."

Chartrand released a statement Thursday afternoon saying the refusal by the Manitoba government and Hydro to recognize the agreement is another example of Crown representatives breaking promises to Indigenous people.

"Once again, the Manitoba Métis community trusted and relied on the promises of the Crown only to be deceived
and lied to," Chratrand said in the statement. 

Chartrand's statement went on to say former Hydro chair Sandy Riley called the deal an "agreement," Manitoba Hydro approved it in their minutes, and an order-in-council referred to it as an "agreement."

"It is almost comical that the premier, Minister Cullen and now president Shepherd are trying to say there was no agreement with the MMF. … Shaking hands, making commitments and board approval is, without a doubt, an agreement."

NDP MLA James Allum (Fort Garry-Riverview) said the NDP had previously understood the agreement to be legally binding, but Shepherd's comments don't change his party's position. 

"I don't think it changes anything in regard to what we understood an agreement between Hydro and MMF, undertaken in good faith," he said.

Going forward, he said the premier and minister should reach out to Chartrand to "get back to the negotiating table," and not let the matter proceed to court, Allum said. 

"This is a recognition of MMF's historical and constitutional position here in Manitoba," he said. "Really, when you think of an agreement that was to run for several decades, the price was actually a very good arrangement and allowed us to do the export to the United States that could only help Hydro's bottom line."

Crown Services minister not at meeting

A spokesperson for the Progressive Conservative government said Manitoba agrees with Shepherd's analysis.

"Our government has been clear from the start: this was a non-binding proposal, not an agreement," a spokesperson wrote in an email to CBC News.

"On this matter, we are in agreement with Manitoba Hydro. We disagree with the MMF's position, and they have indicated they will be taking this matter to court without exploring any other avenues of resolution."

Crown Services Minister Cullen was not at the committee meeting Wednesday. The meeting was intended to discuss a number of reports from Manitoba's Auditor General, including one on Hydro — not the controversial deal.

"Both the government and opposition agreed to allow Crowns to report to PAC [public accounts committee] in a way that would eliminate the potential for political interference, which means the Minister responsible is not required to attend," the spokesperson said.

"We believe in letting Hydro speak to the reports tabled and speaking for their own organization."

Chartrand has said the Manitoba Métis Federation will likely move forward with legal action within the next week.