Judge sides with province in appeal of decision on $67.5M payout to Manitoba Metis Federation

The Manitoba government acted reasonably in its decision to cancel a $67.5 million agreement with the Manitoba Metis Federation, a Court of Appeal judge has ruled.

In a judgment delivered Thursday, Chief Justice Richard J. Chartier dismissed an appeal from the Manitoba Metis Federation, which sought to overturn a March 2020 ruling.

The previous court ruling said the provincial government was within its rights to cancel a deal between the federation and Manitoba Hydro, which would have resulted in the Crown corporation paying $67.5 million in total to the Metis Federation in exchange for support of hydro developments.

In a decision dated May 6, Chartier agreed with the Metis Federation's argument that the judge who delivered the earlier decision erred in ruling that the principle of "the honour of the Crown" did not apply to the case. That principle requires the province to act with "integrity and in good faith" when dealing with Indigenous peoples.

But when that principle was applied, Chartier said he was satisfied the Manitoba government "acted reasonably as to its obligation to act honourably," his decision states.

The Metis Federation took Premier Brian Pallister's government to court in 2019, arguing its decision to force Manitoba Hydro to cancel a $67.5-million payment to the federation was unconstitutional, and violated both the contract and Indigenous rights.

In June 2017, the federation and Manitoba Hydro finalized a point-form term sheet — a non-binding agreement that outlines the basic terms and conditions of a deal — that would have had Hydro pay the federation $67.5 million in exchange for the federation's agreement not to file legal challenges to existing, identified or future hydro projects. 

That followed an earlier agreement — the Kwaysh-kin-na-mihk la paazh Agreement, also called the Turning the Page Agreement. That 20-year arrangement promised $20 million in payments to the Metis Federation, in exchange for withdrawing its appeals on two major Manitoba Hydro projects — the Bipole III transmission project and the Keeyask generation project.

The federation had previously appealed the decision to license those projects, arguing the provincial government failed to consult and accommodate Métis people on the developments.

But in March 2018, the province cancelled the $67.5 million agreement, with Premier Brian Pallister calling it "persuasion money." He said the agreement was for discussion purposes and wasn't legally binding.

Nine Hydro board members resigned the same day the agreement was cancelled, after learning the province intended to oust the board chair, Chartier's decision says.

In June of 2018, the Metis Federation filed for a judicial review, asking the Court of Queen's Bench to overturn the province's decision and reinstate the deal.

Later that year, the province also cancelled the $20-million Turning the Page Agreement.

'Lawful and reasonable exercise'

Court of Queen's Bench Chief Justice Glenn Joyal ruled against the federation in March 2020, saying the decision to cancel the deal was a "lawful and reasonable exercise" of the provincial government's authority over Hydro, a Crown corporation.

The federation appealed Joyal's decision, arguing in part that he failed to consider the principle of the honour of the Crown.

Chartier agreed with that argument, but ruled that the province acted honourably with regard to the issues around the unsigned deal between Hydro and the federation.

His decision says that three meetings were held in early 2018 involving a tripartite steering committee, attempting to resolve the dispute.

The steering committee meetings "provided the MMF with the opportunity to be heard both prior to and after" the province's decision, he said, but following a March 8, 2018, meeting, the Metis Federation indicated it intended to pursue legal action.

The provincial government's directive to renegotiate the term sheet was "neither an unreasonable request nor dishonourable conduct," because the principle of the honour of the Crown doesn't include a duty to reach an agreement, nor compel the Manitoba government to accept a deal, Chartier ruled.

His ruling also says the provincial government is responsible for the spending of public funds, so asking for a revised deal was a matter of government policy.

Dangerous precedent: Metis Federation

In a statement sent through a spokesperson, Manitoba Crown Services Minister Jeff Wharton said he was pleased by the ruling.

But in a news release, Manitoba Metis Federation president David Chartrand said the Court of Appeal "turned a blind eye to Manitoba's duplicity."

Chartrand said he is concerned the ruling sets a precedent that could allow the Manitoba government to cancel other agreements with Indigenous peoples.

Ian Bushie, the Opposition NDP's Indigenous affairs critic, said the entire case indicates the Progressive Conservative government's intention to fight in court rather than collaborate with Indigenous communities.

Bushie also said Chartier's ruling brings into question what the standard of meaningful consultation is.

"It's the definition of 'supposed to,'" he said in an interview.

"That's where the grey area exists, in terms of the government saying, 'we did what we needed to do.' But that's by your standards, and not the standard set up in collaboration with the communities that are affected and Indigenous people."

Chartrand said the Metis Federation will seek leave to appeal the case to the Supreme Court of Canada.