1638 1 MANITOBA CLEAN ENVIRONMENT COMMISSION 2 3 VERBATIM TRANSCRIPT 4 Volume 7 5 6 Including List of Participants 7 8 9 10 Hearing 11 12 Wuskwatim Generation and Transmission Project 13 14 Presiding: 15 Gerard Lecuyer, Chair 16 Kathi Kinew 17 Harvey Nepinak 18 Robert Mayer 19 Terry Sargeant 20 21 Monday, March 15, 2004 22 Radisson Hotel 23 288 Portage Avenue 24 Winnipeg, Manitoba 25 1639 1 LIST OF PARTICIPANTS 2 3 Clean Environment Commission: 4 Gerard Lecuyer Chairman 5 Terry Sargeant Member 6 Harvey Nepinak Member 7 Kathi Avery Kinew Member 8 Doug Abra Counsel to Commission 9 Rory Grewar Staff 10 CEC Advisors: 11 Mel Falk 12 Dave Farlinger 13 Jack Scriven 14 Jim Sandison 15 Jean McClellan 16 Brent McLean 17 Kyla Gibson 18 19 Nisichawayasihk Cree Nation: 20 Chief Jerry Primrose 21 Elvis Thomas 22 Campbell MacInnes 23 Valerie Matthews Lemieux 24 25 1640 1 LIST OF PARTICIPANTS 2 3 Manitoba Conservation: 4 Larry Strachan 5 6 Manitoba Hydro/NCN: 7 Ed Wojczynski 8 Ken Adams 9 Carolyn Wray 10 Ron Mazur 11 Lloyd Kuczek 12 Cam Osler 13 Stuart Davies 14 David Hicks 15 George Rempel 16 David Cormie 17 Alex Fleming 18 Marvin Shaffer 19 20 Community Association of South Indian Lake: 21 Leslie Dysart 22 Merrell-Ann Phare 23 24 CAC/MSOS: 25 Byron Williams 1641 1 LIST OF PARTICIPANTS 2 3 Canadian Nature Federation/Manitoba Wildlands: 4 Eamon Murphy 5 Gaile Whelan Enns 6 Brian Hart 7 8 Time to Respect Earth's Ecosystems/Resource Conservation Man: 9 Peter Miller 10 Ralph Torrie 11 12 Trapline 18: 13 Greg McIvor 14 15 Displaced Residents of South Indian Lake: 16 Dennis Troniak 17 18 Environment Approvals (Manitoba Justice): 19 Stu Pierce 20 21 Presenters: 22 Billy Moore - Private 23 Bill Turner - MIPUG 24 Caroline Bruyere - Private 25 Grand Chief Margaret Swan - Southern Chiefs 1642 1 INDEX OF EXHIBITS 2 3 Number Page 4 MH-NCN 1008: Response to the 5 Community Association of 6 South Indian Lake 7 motion of March 10th 1698 8 CEC 1002: Correspondence dated March 9 11, 2004 from the Commission 10 secretary to the Manitoba 11 Wildlands Canadian Nature Federation 1702 12 MH-NCN 1009: Correspondence dated 13 March 12, 2004 to CEC signed by 14 Valerie Matthews Lemieux 15 and Doug Bedford 1703 16 17 CEC-1003: Response to motions 18 19 MH/NCN-1010: Wuskwatim Agreement in Principle 2001 20 Referendum Results 21 22 23 24 25 1643 1 INDEX OF UNDERTAKINGS 2 3 UNDERTAKING NO. PAGE 4 5 MH-38: Advise if negotiations of the 6 Adverse Effects Agreement are between NCN and 7 Manitoba Hydro and then later, as proposed, 8 that they will be between the general 9 partner and NCN 1719 10 MH-39: Advise if Excel Energy 11 purchase up to 40 percent of Manitoba 12 Hydro power 1770 13 MH-40: Advise what non-binding 14 mediation with respect to settlement 15 of disputes on price of power means 1778 16 MH-41: Advise date of consultation 17 meeting and who from Trapline 18 was in 18 attendance 1804 19 20 21 22 23 24 25 1644 1 MONDAY, MARCH 15, 2004 2 Upon commencing at 9:09 a.m. 3 4 THE CHAIRMAN: We will begin this morning as 5 we indicated just prior to our adjournment on Friday 6 by first dealing with a motion which was presented. 7 We'll call upon the presenters of the motion to speak 8 to the motion. We will ask all the other registered 9 presenters to speak in turn, given a limited amount 10 of time of five minutes each. And we will then 11 invite the proponents to close that debate. 12 MR. GREWAR: Mr. Chairman, were you going to 13 call for opening prayer? 14 THE CHAIRMAN: Yes. I'm just establishing the 15 procedure in regards to that motion. Now, before we 16 begin then, I should have maybe proceeded first with 17 the prayer. That would have been normal. I will now 18 call upon Elder Dysart, Sam Dysart, to come forward. 19 ELDER DYSART: Thank you. First of all, I'd 20 like to thank everybody being back here. And I had a 21 little trip while you guys were resting. I went to 22 the States. I noticed there's a lot of bulbs there. 23 And I had a nice trip and I enjoyed it. And I hope 24 that we have a good meeting this week. Thank you. 25 Let us pray. 1645 1 (PRAYER) 2 3 ELDER DYSART: Thank you. 4 THE CHAIRMAN: Thank you, Mr. Dysart. I 5 reiterate what I said. The presenter of the motion 6 will be first to speak on that motion. Then the 7 registered participants will get a five minute limit 8 time to speak if they so wish to speak. And then the 9 proponents get to speak on the motion afterwards. So 10 I call upon Mr. Dysart to come and speak on his 11 motion. Proceed. 12 MR. DYSART: Good morning, everyone. My name 13 is Leslie Dysart. I am a Nisichawayasihk Band 14 member. I'm here representing the Community 15 Association of South Indian Lake which is 16 predominantly members of the NCN Band. 17 With respect to our motion, the motion 18 basically speaks for itself. I will proceed by just 19 reading the motion again and making comments for 20 clarification. 21 We are aware that the Clean Environment 22 Commission does not have jurisdiction to deliberate 23 on the compliance or lack thereof by the 24 co-proponents with the Northern Flood Agreement 25 Implementation Agreement between NCN and Manitoba 1646 1 Hydro. I understand that's not what we are trying to 2 address here. We're calling that the Commission is 3 required to receive all necessary information that 4 may relate to or indicate an impact on the financial 5 feasibility of the Wuskwatim projects. 6 Noting that the Commission has heard testimony 7 indicating that the process, as set out in Article 8 8 of the Northern Flood Agreement Implementation 9 Agreement between NCN and Manitoba Hydro for 10 identifying, quantifying and reaching final agreement 11 on the compensation that may be required to be paid 12 to NCN as a result of the Wuskwatim projects has not 13 been concluded prior to the formal commencement of 14 the current environmental review and licensing 15 process. 16 We are concerned that the Commission has not 17 yet been presented with the required information 18 regarding the extent of financial obligations that 19 may be incurred by Manitoba Hydro and form of 20 compensation for impacts to NCN as a result of the 21 Wuskwatim projects. And as a result, is not 22 currently apprised of sufficient information to be 23 able to fully assess the financial feasibility of the 24 Wuskwatim projects. 25 Some examples of these are like the loss of 1647 1 the falls. The value of that to the NCN people has 2 not been determined and really hasn't really been 3 discussed as admitted by NCN and Manitoba Hydro. 4 Just basically in preliminary negotiations. Some 5 other costs are cultural, social, economic, that 6 again have not been discussed with NCN membership as 7 a whole. 8 Then they have process costs. There has to be 9 consultation, negotiation, ratification of any 10 agreements that will potentially impact the 11 feasibility of the Wuskwatim project. The Commission 12 needs to know these things. 13 CASIL hereby moves that the Commission 14 immediately suspend the current Wuskwatim hearings, 15 require Manitoba Hydro and NCN to provide to the 16 Commission, within the time period specified by the 17 Commission, full and sufficient information from NCN 18 and Manitoba Hydro regarding the nature and amount, 19 if any, of compensation that will be paid for impacts 20 to NCN as a result of the Wuskwatim projects. And 21 then after at which time the Commission resume these 22 hearings for full consideration by the Commission and 23 the public for the information provided. 24 Or in the alternative, CASIL moves that the 25 Commission continue with the current Wuskwatim 1648 1 hearings as scheduled, require Manitoba Hydro and NCN 2 to provide to the Commission within the time period 3 specified by the Commission, full and sufficient 4 information from NCN and Manitoba Hydro regarding the 5 amount, if any, compensation that would be paid for 6 impacts to NCN as a result of the Wuskwatim projects. 7 Keep open the current sitting of the 8 Commission regarding the Wuskwatim project until the 9 Commission has received full and sufficient evidence 10 from NCN and Manitoba Hydro regarding the amount, if 11 any, compensation that will be paid for impacts to 12 NCN as a result of the Wuskwatim projects. 13 And then after which time the Commission 14 continue with these hearings for a full consideration 15 by the Commission and the public of the information 16 provided. Respectfully submitted by the Community 17 Association of South Indian Lake. 18 I really don't have any arguments to present. 19 Again, reiterating that the motion speaks to itself. 20 And I leave it at that. Thank you. 21 THE CHAIRMAN: Thank you. Mr. Grewar. 22 MR. GREWAR: Mr. Chairman, I don't know if you 23 just want to open the floor, so to speak, to any of 24 the registered participants who may wish to come 25 forward and speak to the motion in response to the 1649 1 motion. 2 THE CHAIRMAN: Yes. And I was going to call 3 it on the basis of the alphabetical list or the list 4 that we were calling the registered participants to 5 intervene in the process. So I will first call upon 6 Pimicikamak Cree Nation. No one here from PCN? 7 Boreal Forest Network? Consumers Association of 8 Canada/Manitoba Society of Seniors? 9 MR. WILLIAMS: Good morning, Mr. Chairman, 10 Members of the Panel. My name is Byron Williams for 11 the record. I'm here on behalf of the Consumers 12 Association of Manitoba Inc. and the Manitoba Society 13 of Seniors. 14 Just to give you an idea of where I'm going, I 15 guess the starting point of my clients on this motion 16 is that they will not be endorsing it. And I'll go 17 through their reasoning. They considered the issues 18 raised by CASIL as framed to be relevant but they do 19 not believe that the uncertainty associated with this 20 specific issue is material to the final deliberations 21 of the Panel. And I want to be clear what my clients 22 mean by material. 23 This is a project replete with uncertainty. 24 There's uncertainty in terms of export prices and the 25 export market. There's uncertainty in terms of water 1650 1 flows. There's uncertainty in terms of the success 2 of the partnership arrangement between NCN and 3 Manitoba Hydro. There's uncertainty in terms of the 4 capital project. 5 So when my clients look at how material the 6 risk is, they look at three questions. Is there a 7 risk that is either not already provided for in the 8 analysis or inadequately provided for in the 9 analysis? And is that risk of such a magnitude that 10 is likely to materially affect the Panel's 11 deliberations. 12 When you look at the record in this 13 proceeding, and it's clear I guess the starting point 14 is where is CASIL -- CASIL's message is that this 15 Panel cannot adequately consider the financial 16 viability of this project absent this information. 17 The record of the proceeding shows that there 18 is an amount in terms of the mitigation costs built 19 into the estimates for the costs of the generation 20 program, that there is a material contingency fund 21 developed as well and that this capsule amount has 22 been tested in terms of sensitivity testing. A 15 23 per cent deviation being $95 million will result in a 24 1.1 per cent change in the IRR. 25 So the issue is would an error in the amount 1651 1 of mitigation material affect the financial viability 2 of the project? And in my client's view, it would 3 not recognizing that there's already a major 4 contingency built in, recognizing that there is 5 already a -- it's been sensitivity tested to the tune 6 of deviation of $95 million. And we're not clear 7 what the amount of the mitigation costs will be but 8 we're relatively confident it will be nowhere near 9 $95 million. 10 So what my clients would suggest is that the 11 CEC find that the issues raised by CASIL in terms of 12 the economic and financial impacts to the project are 13 relevant but not material given the kind of criteria 14 that I have suggested. 15 If the panel is uncomfortable with the 16 information on the record, I guess one recommendation 17 we could suggest would be that it could ask for 18 additional sensitivity analysis in terms of let's say 19 there is a 10 to 15 -- a 10 to 20 million dollar 20 error in terms of the amount set aside for the 21 mitigation costs, what impact would that have on the 22 bottom line for Manitoba Hydro? We've done our own 23 analysis and we think that would be a 0.1 to 0.2 per 24 cent difference in the IRR. 25 Mr. Chairman and members of the Panel, this 1652 1 doesn't speak directly to the motion of CASIL but my 2 clients did want to add a couple of additional 3 comments recognizing that I have a whole minute left 4 in which to do so. 5 My client's response is restricted to -- this 6 motion is aimed at whether or not there's enough 7 information on the record to address the financial 8 viability of the project. My clients do note that on 9 the NFAAT side of the analysis, this panel is also 10 charged with looking at the environmental, social, 11 cultural and economic impacts of the project at a 12 high level. And certainly in the course of this 13 proceeding, and I'm not that familiar with the record 14 on this area, but this Panel would want to be 15 confident that it knew the likely areas where 16 mitigation would be required. That it had a sense of 17 Hydro's analysis of why it was required in this area. 18 And it certainly would be open to this Panel, 19 if it wanted to on the social, cultural and economic 20 aspects on the project, to at least ask Hydro and 21 NCN, as co-proponents, to give it a sense of the 22 order of magnitude of the mitigation cost that they 23 expect and kind of a sense of why they think it would 24 be in that order of magnitude. 25 So in terms of the specific motion, my clients 1653 1 oppose it. But we just are trying to offer some 2 helpful advice in terms of the social, cultural and 3 economic impacts. And subject to any questions by 4 the Panel, those are our comments. 5 THE CHAIRMAN: Thank you. Manitoba Future 6 Forest Alliance? I see no one. Manitoba Industrial 7 Power Group User Groups? Manitoba Metis Federation? 8 Manitoba Wildlands Canadian Nature Federation? 9 Mosakahiken Cree Nation? Opaskwayak Cree Nation? 10 O-Pipon-Na-Piwin Cree Nation? Association of 11 Displaced Residents of South Indian Lake? 12 MR. TRONIAK: Good morning. My comments will 13 be brief. This is Dennis Troniak. I'm counsel for 14 the Association of Displaced Residents of South 15 Indian Lake. Our group supports the motion brought 16 by CASIL. In our view, there is a complete or almost 17 total or very significant lack of information. NCN 18 members, of which my group are comprised of, majority 19 of NCN members just don't know what they are to 20 ratify, either financially, environmentally, socially 21 or culturally. The information is not there. 22 For the project to go ahead, the approval of 23 NCN Band members will be required. And if the 24 Commission goes ahead and approves the proposal, in 25 our opinion, it would place NCN Band members in a 1654 1 very untenable position because they would be placed 2 under severe pressure because when they vote on 3 whether they ratify the agreement, it should be 4 solely for their best interests. And they should 5 determine what's in the best interest of NCN Band 6 members and not necessarily what's in the interest of 7 the province as a whole. 8 And if all the hurdles are overcome, then they 9 would be seen as the stumbling block or placed in a 10 position where the project is in their hands without 11 having enough information for them to make a reasoned 12 and informed decision. Thank you. 13 THE CHAIRMAN: Thank you. Provincial Council 14 of Women of Manitoba Inc.? Tataskweyak Cree Nation? 15 Time to Respect the Earth's Ecosystems/Resource 16 Conservation Manitoba? Trapline 18? York Factory 17 First Nation? Okay. There being no other 18 presenters -- 19 MR. GREWAR: Mr. Chairman, I believe that 20 Manitoba Conservation had indicated a desire to offer 21 some comments. 22 THE CHAIRMAN: All right. 23 MR. PIERCE: Good morning, Mr. Chair, members 24 of the Commission. My name is Stewart Pierce. I am 25 with Manitoba Justice and I'm here on behalf of the 1655 1 regulators, the Director and the Minister. As you 2 are aware, this is a project involving a Class 2 and 3 a Class 3 proposal. And as such, there are licensing 4 functions to be exercised by both the Minister and 5 the Director. 6 These hearings, as you are well aware, have 7 been mandated by the Minister. You have been asked 8 by the Minister to hold hearings in regard to these 9 proposals. And speaking on behalf of the regulators, 10 the Minister and the Director, it will be our 11 position that the CEC hearings should not be 12 suspended or a completion delayed as has been 13 suggested in the alternative in the CASIL motion. 14 Our view in that regard would be that the 15 issues raised by CASIL in their motion are not such 16 as to justify a holding up of the hearings at this 17 time. And so again, very briefly, we just ask in 18 summary that the Commission dismiss the motion and 19 continue with the review in keeping with the 20 Minister's direction to you and in keeping indeed 21 with the terms of reference that have been provided 22 to the Commission. Thank you. 23 THE CHAIRMAN: I would ask the representative 24 of the proponents to come and speak on the motion. 25 MR. BEDFORD: Mr. Chairman, Ms. Matthews 1656 1 Lemieux will go first and I will follow her. 2 THE CHAIRMAN: Thank you. 3 MS. MATTHEWS LEMIEUX: I just want to make 4 sure first that everybody has copies of the material 5 that we will be relying on this morning. We have 6 pulled most of them out of various parts of the 7 materials that have already been before you, and in 8 addition, there are several other documents in those 9 materials. I have provided CASIL with a copy. If 10 there's anybody else who would like a copy, I will 11 provide those now. 12 I'm going to ask the Commission just to bear 13 with me because my argument is going to be somewhat 14 longer than the ones that you've heard up to this 15 point. I think it's very important for you to 16 understand in some considerable detail Article 8 of 17 the 1996 agreement. Also the relevant provisions 18 about adverse effects in the Agreement in Principle 19 between Manitoba Hydro and Nisichawayasihk Cree 20 Nation and how that impacts in terms of the motion 21 that is before you. 22 So just to start, it is very important to note 23 that Chief Primrose, in his opening comments for this 24 hearing on March 1st, 2004, indicated that NCN had 25 entered into the Northern Flood Agreement in 1977. 1657 1 He also noted that by the fall of 1992, NCN had 2 decided to look for a new approach to implementing 3 the Northern Flood Agreement. 4 As I was indicating, in 1992, the fall of 5 1992, NCN made a decision to enter into negotiations 6 with Manitoba Hydro, the Governments of Canada and 7 Manitoba to agree how to implement the Northern Flood 8 Agreement. Following a community referendum that was 9 again ratified through a double majority vote, the 10 1996 agreement was put into effect. It was signed in 11 March of 1996. And it is that agreement that 12 contains Article 8. 13 Article 8 is a planning process for NCN and 14 Manitoba Hydro with respect to any future development 15 initiatives that were not in existence in 1996 when 16 the agreement was signed. 17 It is also important for the Commission to 18 know that when NCN entered into those negotiations in 19 1992, CASIL and its members living at South Indian 20 Lake were already in their own separate negotiations 21 with Manitoba and Manitoba Hydro about adverse 22 effects, compensation arising from the Churchill 23 River Diversion including the augmented flow program. 24 And you have heard a fair amount about the augmented 25 flow program over the last couple of weeks. 1658 1 So at a time when NCN had barely started its 2 negotiations, CASIL was signing its 1992 agreement. 3 And that document was filed by CASIL as part of its 4 materials about a month ago but I've put it in this 5 booklet that we've handed out this morning because I 6 think it's important for you to understand this 7 document. 8 I would ask that you take a look at tab 1. 9 The schedules are missing and they were just being 10 photocopied so I just want to make sure we've got 11 those. I'll go through the rest of it and we'll just 12 get the schedules because they were missing from tab 13 1. 14 You'll note that in the agreement, there are 15 detailed provisions about the augmented flow program 16 and that starts at page 22, and it's page 22 at tab 17 1. And you'll note that in accordance with Article 18 6.01, CASIL was paid $2 million on August 29, 1991 in 19 full satisfaction of Manitoba Hydro's obligations 20 pursuant to the augmented flow program. That is 21 found in one of the schedules and we're just getting 22 those for you. 23 What's also important, though, is to take a 24 look at Article 6.03 as it relates to these matters 25 before you. You will note there that in addition, 1659 1 what the agreement was is that the compensation would 2 be for augmented flow to 848 feet. And you'll recall 3 the evidence to date has been that the licence limits 4 and the annual permit allows Manitoba Hydro to go to 5 847.5. So that is the limit that they have operated 6 within yet this agreement allows them to go, if there 7 was such a licence, to 848 without paying any 8 additional compensation. 9 You'll also recall the evidence to date has 10 been that with respect to the Wuskwatim project, 11 there is no intention to go beyond the existing 12 limits of the augmented flow program. 13 You'll also note that in this particular 14 agreement, and I draw your attention to Article 6.02, 15 at the bottom of page 22 and 23. What it says is, 16 "CASIL has further represented to 17 Manitoba Hydro that as a 18 representative of its members, it does 19 not intend to and shall not commence 20 any action, institute any proceeding 21 or otherwise take any steps contrary 22 to this covenant." 23 Which is basically to argue that the augmented 24 flow is not properly in place. 25 You'll also note where they can protect their 1660 1 rights in terms of any environmental hearing should 2 there be a proposal to increase the limits from 847.5 3 to 848. It's only in that circumstance, according to 4 the agreement that they entered into, without any 5 discussion with the rest of NCN or to NCN Chief and 6 Council. What it says is that they can attend and 7 actively participate in any environmental study, 8 review or hearing that may be conducted in relation 9 to the AFP in general, and at such hearing, oppose 10 any proposed increase and permissible level on South 11 Indian Lake above 847.5 ASL. 12 As you've heard already from the evidence in 13 the last two weeks, there is simply no intention to 14 go above that level. 15 It's also important to note paragraph 8 in the 16 agreement and that paragraph starts at page 31. Now 17 the agreement sets out a series of releases between 18 CASIL and Manitoba Hydro and the Government of 19 Manitoba. What it also does, though, it sets out a 20 process under the NFA and it also clearly sets out 21 that there are certain things that are accepted from 22 this agreement in terms of adverse effects. 23 What it says is that damages caused by 24 flooding which are unforeseen and reasonably 25 unforseeable, human disability, illness or death 1661 1 arising from the ingestion of methyl mercury caused 2 by such flooding would be excluded. Otherwise 3 adverse effects are captured by this agreement and 4 there has been compensation paid. 5 This becomes particularly relevant and I would 6 ask the Commission to recall that Manitoba Hydro and 7 NCN requested information through the interrogatory 8 process about a report that NCN -- or that CASIL was 9 in the process of obtaining from independent experts 10 who were reviewing the EIS in these proceedings. 11 And you'll recall that the response that CASIL 12 gave to you and to us was that the Dowell Report was 13 not relevant in their view to the proceedings before 14 you. If necessary, and I want to indicate that the 15 Dowell Report is a report by Duncan & Associates who 16 are the independent experts who were retained by 17 CASIL to review the EIS conclusions. In other words, 18 to determine whether in fact the conclusions that the 19 proponents have brought before you were reasonable 20 and could be sustained in their expert opinion. 21 One of the conditions for the provision of 22 funding of that report was that the conclusions would 23 be shared with NCN and Manitoba Hydro. Yet you have 24 on the record the response that was provided to us in 25 relation to that report. 1662 1 Subsequently to that, NCN and Manitoba Hydro, 2 through the process that has been established, namely 3 re-examination, which I'm assuming we will get to 4 within the next couple of days on the NFAAT 5 submission, if necessary, NCN and Manitoba Hydro will 6 call evidence to establish that Manitoba Hydro, over 7 the course of the last month, has been urging Dowell 8 to meet with CASIL prior to the hearings in this 9 process to report its conclusions to Manitoba Hydro 10 and NCN. 11 We also, if necessary, intend to call evidence 12 to establish that a meeting finally took place, we 13 are advised, on February 27th, 2004, between Dowell 14 and CASIL. And subsequently, I can inform the 15 Commission, but again we can certainly call evidence 16 and are prepared to call evidence on this point, at a 17 meeting on March 6, 2004, after these hearings had 18 already started, Dowell representatives informed NCN, 19 Manitoba Hydro and EMT that Dowell agrees that the 20 Wuskwatim project will not change water levels and 21 flows upstream of early morning rapids. 22 From the maps, although we don't have the 23 large maps here today, you will recall that early 24 morning rapids is quite close to Taskinigup Falls. 25 It is nowhere near South Indian Lake. In other 1663 1 words, on the basis of this report, if necessary, we 2 will understand that there will be no change on 3 either South Indian Lake or on Footprint Lake where 4 most of NCN members reside. 5 The Commission also I think needs to 6 understand and there was some evidence before you 7 last week through the questions that CASIL asked of 8 Councillor Thomas about whether the revenues from the 9 Wuskwatim project would also be shared with members 10 living at South Indian Lake. It's important for the 11 Commission to be aware that South Indian Lake has 12 been seeking separate nation status from NCN for many 13 years. 14 On April 4, 1995, a four party Memorandum of 15 Understanding was entered into in relation to the 16 separation process. And we have included in the 17 materials that document. You'll find it at tab 2. 18 And it set the process in place for the separation 19 discussions. 20 And you will note that it was signed by the 21 Governments of Manitoba, Canada, a representative of 22 behalf of the South Indian Lake people as well as 23 Chief Primrose on behalf of Nisichawayasihk Cree 24 Nation. 25 You'll also note at tab 3 that South Indian 1664 1 Lake members had requested a Band Council Resolution 2 from the Chief and Council of the Nisichawayasihk 3 Cree Nation in support of that separation process. 4 That Band Council Resolution is found at tab 3. 5 It's particularly relevant when one looks at 6 issues related to the distribution of assets and the 7 questions that were addressed to Councillor Thomas 8 last week. And I would draw your attention to pages 9 5 and 6 in particular of that Band Council 10 Resolution. 11 You'll note there that the basis for the 12 separation discussions to proceed was that none of 13 the assets or settlement proceeds paid or payable to 14 the Nelson House First Nation or any trust settled by 15 the Nelson House First Nation pursuant to the 16 Northern Flood Agreement, the Atoskiwin trust 17 indenture or the proposed Nelson House NFA 18 Implementation Agreement would be divided between the 19 two First Nations. And this Band Council Resolution 20 as you can see was in 1995, it predated the 1996 21 agreement. 22 In addition to that, and in exchange for that, 23 the quid pro quo, which is found on page 6, is that 24 none of the assets or settlement proceeds paid or 25 payable by CASIL, any South Indian Lake member, any 1665 1 other corporation, organization or body composed of 2 South Indian Lake members pursuant to the terms of 3 the South Indian Lake, Manitoba, Manitoba Hydro 4 agreement dated December 22, 1992 be divided between 5 the two First Nations. That's the CASIL agreement 6 that I referred you to a few moments ago. 7 So essentially, the separation discussions 8 have proceeded on the basis that those assets that 9 flow in any way from the NFA arrangements would not 10 be shared. CASIL would receive it. That would go to 11 the new First Nation. NCN would keep its proceeds 12 for the remaining members of the Nisichawayasihk Cree 13 Nation. 14 Now those questions, and in particular the 15 issue of whether revenue from the Wuskwatim project 16 would be shared with off-reserve members were 17 addressed to Councillor Thomas and they can be found 18 in Volume 4, pages 839 to 842. 19 Mr. Thomas, you will recall, responded that 20 there were discussions that were currently under way. 21 It should be noted that the Minister of Indian 22 Affairs has a role in those discussions and that the 23 ultimate division of any assets in the separation 24 process is not a matter before this Commission. It's 25 clearly beyond the terms of reference of this 1666 1 Commission to make any recommendations about the 2 separation issues including the division of assets 3 between these two First Nations. 4 In addition to understanding that background, 5 it is our submission that it is important, as I said 6 at the outset, to understand how the 1996 agreement 7 impacts on the matters before you. The basis for 8 this motion to adjourn or, alternatively, to keep 9 these hearings open is premised on Article 8 of the 10 1996 agreement not being complied with. It is 11 important that the Commission understand what the 12 rights of NCN members are pursuant to Article 8, how 13 those rights have been dealt with in the Agreement in 14 Principle, the SOU and throughout this process. 15 And I'd ask that you now take a look at and 16 I'm going to ask you to go through with me Article 8 17 because I think it is very important to understand as 18 we proceed through these hearings. 19 It is found at tab 4 and there's various parts 20 of the '96 agreement including the definitions which 21 I'll have to come back to as there were questions 22 about it. That's at tab (A). But if you go to tab 23 (C), 4(C), you'll find Article 8. 24 An important point is as Councillor Thomas has 25 just reminded me of course the O-Pipon-Na-Piwin 1667 1 Nation, while it is currently in separation 2 discussions, is not established and has not yet been 3 recognized as a separate First Nation by the Minister 4 of Indian Affairs. 5 Okay. Looking at the 1996 agreement then, the 6 starting point is Article 8.2.2. And you will see 7 there that there was an acknowledgment, and this is 8 back in 1996 when the agreement was signed, that 9 Hydro could, within the foreseeable future, undertake 10 future development and initiate preparatory and other 11 work related to future development. And the 12 Wuskwatim project was, you know, reviewed at that 13 point in time, although there were no planning 14 processes that were begun at that date but it was 15 clearly contemplated that there might be other future 16 development initiatives. 17 If we take a look at and if I ask you if you 18 could please go to the next page, page 2 and 3. It 19 is critical to an understanding of the process that 20 the parties have been involved in that the proponents 21 have been involved in to understand the planning 22 process that is set out in Article 8.3. It sets out 23 a complex set of arrangements that have been followed 24 by the parties. 25 Firstly, following the 1996 agreement being 1668 1 signed, there had to be annual meetings between NCN 2 and Manitoba Hydro to discuss issues related to 3 future development. Any initiatives that Manitoba 4 Hydro intended to undertake had to be discussed at 5 those annual meetings. And they took place in 1997, 6 1998 and then 1999 and you've heard that the formal 7 planning process then started for this project in 8 1999. That process is a process set out in Article 9 8.3.2. And that's found starting on page 3. 10 And what it says there is prior to making its 11 final selection of its option for future development, 12 Hydro shall do a number of things. And you'll recall 13 that the evidence from both NCN and Manitoba Hydro is 14 that there has been no commitment yet to proceed with 15 this project. That will be later. What will happen 16 first is the licensing approvals are being sought 17 through this process. Then the approvals both from 18 NCN and from Manitoba Hydro will be sought 19 separately. The issue here is whether the planning 20 process that is set out in Article 8.3 has been 21 followed. And we certainly submit that it has. 22 You'll see that there's a detailed set of 23 information and discussions that are to take place 24 between NCN and Manitoba Hydro. There are maps that 25 are to be provided, there's descriptions, there are 1669 1 various options that, if an easement is required, 2 would have to be provided. 3 In consultation with NCN, and I'm reading from 4 page 4, there's a requirement to identify any issues 5 of particular concern or importance to Nelson House 6 and its members. In consultation with Nelson 7 House -- and I should just note here that the name of 8 the nation became its Cree nation following the 9 signing of the agreement. So that's why you see 10 Nelson House instead of Nisichawayasihk. 11 In addition in consultation with NCN, Hydro 12 has to identify and review potential positive and 13 negative effects on NCN and members which could 14 result from each option for future development. It 15 must undertake studies and investigations that are 16 necessary to obtain a reasonable assessment and 17 understanding of those potential effects that have 18 been identified. And after consultation with Nelson 19 House, consider reasonable design modifications which 20 could eliminate or alleviate any identified adverse 21 effects. 22 You'll recall from the evidence that these 23 steps have been taken from the outset from the start 24 of discussions to move from a high-head project to a 25 low-head design. That was as a result of the 1670 1 discussions that occurred pursuant to this process 2 between NCN and Manitoba Hydro. 3 In addition, after consultation with NCN, 4 there is to be the identification design and costing 5 of mitigatory and remedial measures which are 6 reasonable to alleviate anticipated adverse effects 7 which cannot be eliminated by such design 8 modifications. And I will address that in a moment 9 in terms of the ongoing plans that are under way and 10 have been filed also with the Commission. 11 In consultation with NCN, there is to be 12 consideration of the practical and reasonable ways in 13 which NCN can benefit from future development. 14 You've heard plenty of evidence already without even 15 getting to the EIS submissions about how NCN and 16 Manitoba Hydro have considered these issues both in 17 terms of training, employment, the equity 18 participation, financial arrangements. All of those 19 matters have been considered and they are already 20 before you. 21 In addition to that, there's to be 22 consultation with NCN to determine which option for 23 future development, if any, is preferred by NCN. 24 Clearly that has also occurred pursuant to this set 25 of arrangements. 1671 1 There are no anticipated amendments to an 2 easement on reserve land required for this project at 3 this time. In addition, in "J", you'll see that 4 pursuant to Article 8.4, there is to be consultation 5 to develop a proposal to compensate NCN for adverse 6 effects which are not offset by benefits. So what 7 the governing principle is is that you look at the 8 positive, you look at the negative and it's only 9 where those cannot be offset that you move to a 10 consideration of compensation. 11 In addition, you look at identification in a 12 timely manner of employment opportunities and the 13 prerequisite education or training and any business 14 opportunities that are available. And already, the 15 evidence before you, without even again getting to 16 the EIS materials, is all of those steps have been 17 taken. 18 In addition, there's to be consultation with 19 NCN about any relevant matter related to selecting an 20 option for future development. You have heard a lot 21 about the various discussions that have occurred to 22 date. You will hear plenty more when we get to the 23 EIS part of the submissions about how these processes 24 that are outlined have been clearly implemented. 25 What is central to this entire process and the 1672 1 entire set of arrangements and the non-adversarial 2 approach that has been followed by these two 3 proponents starts with Article 8.3.6. And if you 4 could look at that, it's found on page 6. 5 You'll see that even back when this agreement 6 was negotiated, it was intended that the parties 7 would undertake a joint assessment through the joint 8 establishment of terms of reference. And you even 9 heard on March 1st in the overview how NCN and 10 Manitoba Hydro jointly selected an environmental 11 management team to assist the two parties in carrying 12 out studies. You heard how there has been 13 traditional knowledge involved in the establishment 14 of the terms of reference for these studies alongside 15 of scientific information. Clearly this was a joint 16 process. It was jointly established. It has jointly 17 been followed in compliance with Article 8. 18 There is funding provided through Article 19 8.3.4 so that there is a budget that is followed, 20 established and followed for NCN and its members to 21 participate in this process. In addition, it's 22 important to take a look at Article 8.3.5 because 23 that imposed an obligation on NCN to cooperate in 24 this process. And what it indicates is that subject 25 to Article 8.3.7, and we'll get to that in a minute, 1673 1 NCN indicated and it agreed and this was ratified by 2 a double majority vote that NCN would cooperate with 3 Manitoba Hydro on a timely basis as contemplated in 4 the other provisions that we've already looked at. 5 And it would also cooperate with Manitoba Hydro to 6 identify areas of concern and importance to NCN and 7 its members. It would facilitate the gathering of 8 information from members in relation to the reserve 9 and the resource management area. It would 10 facilitate communication between Hydro and its 11 members. And if applicable, it would inform Hydro 12 and Canada whether an easement was required. 13 You will hear more about this but you have 14 lots of documentation that has already been provided 15 to you in the submissions. You have opinion surveys 16 that were conducted not only with NCN members living 17 on reserve but also off reserve at South Indian Lake, 18 at Thompson, at Brandon. Those materials are before 19 you. All of these steps have been taken. And as a 20 result of that, when we apply that to the motion 21 before you, it's our submission that there is no 22 basis for the motion. 23 However, let's go on and take a look at 24 Article 8.4. And it's very important to understand 25 how Article 8.4 works. Just before I get to Article 1674 1 8.4, I think it's also important although these are 2 rights that are still in existence but they have not 3 been exercised yet by either party. If NCN decides 4 it's going to reconsider the process that it's 5 involved in, it has that right. It can have a 6 meeting of its members and then decide that they no 7 longer want to pursue this avenue in which case then 8 Manitoba Hydro has certain rights under the agreement 9 and it's relieved of its obligations under Article 8. 10 However, as you've heard, that's clearly not a 11 case. There has been no impasse reached. There's 12 been no reason to invoke any of those rights which 13 continue to exist in the agreement. 14 Article 8.4. Now, what you have before you, 15 we submit, is that one sentence out of an entire set 16 of arrangements has been read to you and you are 17 being told that this simply speaks for itself. And 18 that the answers that you receive to questions last 19 week support the contention that there has been no 20 compliance with Article 8. 21 First let me say this. I'm in a situation 22 where last week, my client, Councillor Thomas, in 23 these proceedings wanted to clarify the record. And 24 what I indicated to him was that we would have our 25 opportunity to do so through re-examination because 1675 1 that was the process of course that has been 2 established by the Commission and we wished to ensure 3 that we respected the procedures that had been set 4 out by the Commission. So we were going to address a 5 series of these matters in re-examination which we 6 still propose to do when we get to that point. 7 As a result, however, in the meantime, I am 8 going to provide you with our assessment of where we 9 are with Article 8.4. 10 8.4.1 sets out that there is to be, in 11 selecting an option for future development, and this 12 is on page 10 for the Commissioners who are still 13 with me following through this article. 14 MR. SARGEANT: We're all with you. 15 MS. MATTHEWS LEMIEUX: You're all with me, 16 good. Then in Article 8.4.1, what it says is that in 17 selecting an option for future development, the 18 impacts upon Nelson House and the costs and methods 19 for compensating NCN and its members for adverse 20 effects are relevant considerations to be addressed 21 as early as possible in the process as feasible. 22 And for a minute, I'd like to just ask you to 23 go back to the definition of adverse effects. And 24 that's found at tab "A" in the materials. This is 25 Article 1 of the 1996 agreement. And it includes all 1676 1 the trust arrangements and the definition and the 2 financial arrangements. But for our purposes, I'm 3 going to just take you through a couple of 4 definitions that are relevant to the motion before 5 you this morning. 6 The first one is found on page 5. It's 7 adverse effects. And you can see that compensation 8 relates to adverse effects. And it means, 9 "The direct or indirect negative 10 consequences of the project or the 11 operation thereof by Hydro which 12 consequences impact or change the 13 physical, chemical or biological 14 characteristics of the environment and 15 include, without limitation, risks or 16 injuries to the health, safety, 17 well-being, comfort or enjoyment of 18 NCN or members, impacts or interests 19 in and the exercise of rights in 20 relation to lands, pursuits, 21 activities, opportunities, lifestyles 22 and assets of NCN and members." 23 In addition to that provision, I would also 24 ask that you take a look at, because I'm going to be 25 referring to certain other definitions, you need to 1677 1 take a look at future development which is found on 2 page 11 because of course, these two definitions are 3 central to an understanding of Article 8. And what 4 it says is that future development means a 5 construction of any part or parts of the project not 6 physically constructed at the date of the agreement 7 which has, and then major redevelopment or 8 reconstruction. But what we're dealing with is 9 Wuskwatim which at the date of the agreement in March 10 of 1996 was not yet constructed. 11 So the Wuskwatim project which has a 12 reasonable likelihood of having a material and 13 continuing physical, chemical or biological impact 14 upon a water body within the resource management 15 area. And you will note that "resource management 16 area" is also a defined term. 17 Wuskwatim Lake, for our purposes, falls within 18 the resource management area. That definition is 19 found on page 14. You will note there that it says 20 it means the area described and shown on Schedule 6.1 21 and includes the rivers, lakes and any reserve land 22 subject to any changes that be made in accordance 23 with Article 6 which is the resource management 24 provisions. 25 For your purposes and I think it's very 1678 1 important to just go on and take a look at the bottom 2 of that page, you'll note that there's a definition 3 of the SIL trapline zone which is different. The 4 Wuskwatim project is within the NCN resource 5 management area. As we have seen, Article 8 refers 6 to adverse effects within the NCN resource management 7 area, not adverse effects as they relate to the SIL 8 trapline zone. 9 Before we leave the definitions section, 10 though I would also ask that you take a look at SIL 11 claim, it's a definition that becomes important to a 12 complete understanding of the 1996 agreement. You 13 will see there that it says, 14 "SIL claim means a claim for loss or 15 damage caused by an adverse effect 16 advanced by a claimant who, at the 17 date of this agreement or at the date 18 that loss or damage arose was not 19 ordinarily resident on reserve but 20 only if the damage or loss arose 21 within the SIL trapline zone." 22 So in other words, outside the NCN resource 23 management area. And in addition, the claimant was 24 ordinarily resident at or near the community of South 25 Indian Lake regardless of where the damage or loss 1679 1 arose. So in other words, if you are a resident of 2 South Indian Lake or you live near South Indian Lake, 3 then you fall within the definition of an SIL claim. 4 And what it goes on to indicate is where the 5 claimant is a corporation or association or group, 6 such as CASIL, will not be considered to be 7 ordinarily resident at or near the community of South 8 Indian Lake unless at the date the damage or loss 9 arose, the majority of its shareholders or members 10 were so resident. 11 And you can see from the CASIL agreement that 12 the majority of its members would fall within the 13 definition because they are ordinarily resident, 14 according to the information you have before you, 15 near South Indian Lake. 16 This becomes important and I will take you 17 through in a moment some of the other provisions in 18 the 1996 agreement which, as I said, is a very 19 complex set of arrangements between the parties that 20 you need to understand when you're looking at this 21 motion to determine whether in fact the motion simply 22 speaks for itself or not. 23 So with that background and those definitions, 24 I'd like to ask you to go back firstly to Article 25 8.4. As I said, Article 8.4 establishes then a 1680 1 framework for compensation to be resolved. The first 2 step in the process is to determine what the impacts 3 are upon NCN and its members. You have heard the 4 evidence. NCN and Manitoba Hydro started examining 5 this issue in 1999 once Manitoba Hydro gave formal 6 notice to protect an inservice date for Wuskwatim. 7 The provision also refers to the cost and 8 method of compensating NCN for adverse effects. The 9 evidence before the Commission and the EIS in 10 subsequent documents through the IRR process and the 11 overview presented the first day of the hearing and 12 the subsequent testimony that has been heard over the 13 following -- or the past two weeks, I should say, 14 indicates very clearly that NCN and Manitoba Hydro 15 have considered the impacts of adverse effects upon 16 NCN and its members. That definition in Article 1, 17 as we saw, is broad and it is being considered 18 throughout the process. And I'm going to just give 19 you some examples in case you're not clear whether 20 we're simply stating that the record speaks for 21 itself or whether we in fact can draw you to certain 22 references which we intend to do. 23 One of the issues that was mentioned this 24 morning was the disappearance of Taskinigup Falls. I 25 would draw your attention to Section 6 in the 1681 1 overview, Volumes 4.3 and 4.4 in the EIS. 2 There's a loss of about 90 or so acres, we've 3 heard about it described as the size of a small golf 4 course or a golf course, in the resource management 5 area, NCN's resource management area you will recall 6 due to flooding. Those issues are addressed in the 7 overview in Sections 5 and 6. They are referred to 8 in more detail in Volume 4.4 of the EIS. The loss of 9 land in the resource management area to transmission 10 lines. That's dealt with in Volumes 3.8 to 3.10. 11 The loss of acres -- 12 THE CHAIRMAN: Just could I interrupt here? 13 MS. MATTHEWS LEMIEUX: Yes. 14 THE CHAIRMAN: Ms. Lemieux, you're reviewing 15 all of the clauses that are part of the agreements 16 and referring to all of the file documents about all 17 of the issues that might be subject to compensation. 18 And I'm not so sure that that is narrowly speaking on 19 the motion because the motion was speaking to the 20 cost of these issues not being known and that having 21 an impact on justification for the project. 22 So I don't know. We're taking it from a very 23 wide side. I don't know if that is necessary for the 24 case to be made. 25 MS. MATTHEWS LEMIEUX: Well, let me say this. 1682 1 This morning and last week, you heard two parts to 2 the issue. One part was that in fact, the adverse 3 effects had not been considered. That was reinforced 4 this morning in Mr. Dysart's submission. And you 5 heard reference to Taskinigup Falls. 6 What I'm trying to demonstrate for you, and I 7 certainly don't need to go through my whole list 8 because we're going to get to the EIS at some point 9 in these proceedings and we'll be able to deal with 10 all of these issues in some considerable detail. 11 THE CHAIRMAN: That's my point. 12 MS. MATTHEWS LEMIEUX: And I won't bore you by 13 going through them all now but I think it's 14 instructive to note that these issues clearly have 15 been dealt with by the parties in the many many 16 volumes of materials. And I'll just skip over that 17 point and I'll get on to the issue of the cost. 18 Article 8.42 does go on to address 19 compensation issues and it indicates that NCN will 20 work together with Manitoba Hydro to fully assess any 21 of the benefits and the costs. Again, the Commission 22 may very well say, well, what are the methods for 23 compensating members? It's very important to look at 24 the AIP. Because you'll remember the AIP came after 25 Article 8 in the 1996 agreement. It also was 1683 1 ratified by a double majority of NCN members. 2 And the AIP, and I have to admit I can't 3 recall which volume it is in at the moment, but we 4 have included a portion of it I think in our 5 materials. Now, I'm just going to actually refer you 6 to the relevant sections. It's in Article 9 of the 7 AIP. 8 And what Article 9 of the AIP says is that, 9 "The parties will identify and resolve 10 all potential Wuskwatim Notigi adverse 11 effects which are not offset by 12 benefits. Where the Wuskwatim, Notigi 13 adverse effects have been identified 14 and cannot reasonably be prevented, 15 minimized or mitigated, just and 16 reasonable compensation shall be 17 determined." 18 What's important is that the AIP in Article 19 9.10 says that the PDA, the Project Development 20 Agreement which is yet to be ratified, will specify 21 the total amount of compensation determined in 22 accordance with Articles 9.5 to 9.8 of the Agreement 23 in Principle. And it will set out how that will be 24 paid to NCN on behalf of NCN and its members. 25 Clearly this was an issue that was before 1684 1 members following the ratification of the 1996 2 agreement when the AIP itself went to members and was 3 ratified. 4 Then let's look at Article 8.4.3 because 5 that's the basis upon which the motion has been 6 brought in part. What it indicates is that it's in 7 the best interest of Nelson House and Hydro to fully 8 assess and finalize compensation issues prior to 9 formal commencement of the regulatory review 10 processes, and accordingly, and then it sets out a 11 number of factors that are to be taken into 12 consideration. 13 What this provision also does, however, and 14 remembering, this is a preamble to the article, the 15 rights that NCN has and the rights that Manitoba 16 Hydro has are found in the rest of the article. And 17 what it says is if compensation can't be agreed to, 18 there's an arbitration provision that's established. 19 Those rights that NCN has to go to arbitration, if 20 ultimately the dollar figure cannot be determined, 21 since we've seen clearly that NCN and Manitoba Hydro 22 have followed all of the other steps in Article 8, is 23 still in effect. 24 The actual right that NCN has in this 25 provision, not just reading one sentence out of 1685 1 context, but looking at the entire set of 2 arrangements is still there for NCN and its members. 3 And Manitoba Hydro I'm sure will confirm whether, in 4 its view, it believes that this provision is still in 5 effect. 6 Even more importantly, I would ask that you 7 take a look at page 15. This is the critical section 8 in this entire article that NCN ensured was in the 9 agreement way back in 1995/1996 when it agreed to the 10 provisions. What there is is an undertaking by 11 Manitoba Hydro and what it says is Hydro will not 12 proceed with physical construction of any permanent 13 dam or generating facility constituting part of 14 future development, in other words part of Wuskwatim, 15 until Hydro and NCN have agreed upon a compensation 16 proposal or the arbitrator has approved a 17 compensation proposal. 18 So clearly, Manitoba Hydro cannot proceed with 19 the construction of the Wuskwatim generating station 20 until such time as those agreements have been 21 finalized. You've heard the evidence, it will be in 22 the PDA which will be voted on through a double 23 majority system for NCN members. 24 The only issue that is up in the air in terms 25 of who will get to vote on that agreement is whether 1686 1 the O-Pipon-Na-Piwin Cree Nation will be established. 2 If it's established and they are separated members, 3 then they would have no right to vote on this 4 agreement. Barring that, you've heard the evidence. 5 There will be a vote on the PDA. 6 It's also, however, important to take a look 7 what else is in Article 8.4.7. And what it says is 8 subject to Hydro obtaining all required federal and 9 provincial licences and approvals for any preliminary 10 works, the undertaking of Hydro under Article 8.4.7 11 shall not prevent Hydro from proceeding with all of 12 its preliminary works including, without limitation, 13 the construction of infrastructure such as access 14 roads, construction camps, dikes, clearings, supply 15 of power necessary to support and further the 16 construction of such future development. 17 So according to Article 8, if Hydro gets a 18 licence through this process, it could go ahead with 19 all of those preliminary works. But the evidence 20 that you've heard before you is that Hydro and NCN 21 have reached an agreement that Manitoba Hydro will 22 not exercise that right under this agreement. What 23 more I ask you to think about or to consider could 24 NCN do to protect the rights of its members than 25 that? What more could it do? 1687 1 MR. MAYER: That's not the point of South 2 Indian Lake's motion. What the South Indian Lake 3 motion is, as I read it, probably is based on the 4 second paragraph of recalling that the Commission is 5 required to receive all necessary information that 6 may relate or indicate an impact on the financial 7 feasibility of the Wuskwatim project. 8 Their argument, as I understand it, is if we 9 don't know how much it's going to cost, then we can't 10 proceed because we can't tell you whether the other 11 rate payers of Hydro would be adversely impacted. 12 We heard Mr. Williams very clearly on that 13 point. I think we've heard evidence from Manitoba 14 Hydro that they have included in their projections an 15 allowance for compensation costs which I think the 16 Commission understands you're not likely to disclose 17 before you're finished negotiating, and I think we 18 probably understand that. 19 But I think that's the issue, Ms. Matthews 20 Lemieux. I don't think the issue is whether or not 21 NCN has protected its members. The documentation is 22 probably fairly clear on that point. 23 MS. MATTHEWS LEMIEUX: Thank you. I think, 24 and as I've said at the outset I would ask that the 25 Commission just bear with me because I think it is 1688 1 very important to understand that background. We are 2 getting to the point though and I think it is very 3 clear, as was indicated by my learned friend Mr. 4 Williams this morning, that the cost estimates that 5 are before you have clearly contemplated this. And 6 there's been sensitivities that have been developed. 7 And I'm not going to repeat the references that he 8 gave you. 9 The bottom line on both parts of this is, 10 number 1, the adverse effects have been considered. 11 There are steps in place that are between the parties 12 where they are looking at mitigation and there are 13 plans that are in place to look at those various 14 issues. 15 Ultimately, the Both Belle Robb Report, which 16 you also heard evidence about last week, indicated 17 that the cost estimates, there was a low probability 18 that the cost estimates were understated in this 19 area. And the evidence is before you. 20 It's our submission that this motion ought to 21 be dismissed. It's without merit on a number of 22 substantive grounds including the fact that you have 23 all of the sufficient information on adverse effects 24 and costs before you. 25 If you have any questions, I'd be pleased to 1689 1 entertain them. 2 MR. SARGEANT: Ms. Matthews Lemieux, I think 3 you're implying but you haven't stated directly, is 4 it your belief that CASIL is bound by these 5 agreements? 6 MS. MATTHEWS LEMIEUX: You know what, I 7 actually should just draw your attention to Article 8 14. I was going to do that. And that's found at tab 9 (E). This is of the 1996 agreement, page 7. There's 10 two points there. What is indicated is there was a 11 series of releases and there are a series of releases 12 and indemnities that are set out in Article 14 of the 13 '96 agreement. 14 Article 14.45 indicates that SIL claims are 15 not settled or concluded against Canada, Manitoba and 16 Hydro. So for purposes of the 1996 agreement, any 17 SIL claim is still an open matter that can be dealt 18 with by the O-Pipon-Na-Piwin Cree Nation should that 19 become necessary. In addition, we can advise the 20 Commission that NCN, on behalf of its members at 21 South Indian Lake and we can bring the necessary 22 documentation forward should that become necessary, 23 has dealt with issues related to an Article 8 type 24 planning process for the new First Nation if and when 25 it becomes established. 1690 1 So in simple response, it is bound by the 2 CASIL agreement and there's a series of releases 3 there for adverse effects. 4 We have, in fact, the evidence before you that 5 indicates there will be no change in the water regime 6 beyond early morning rapids which is a long distance 7 from South Indian Lake. And we also have this 8 provision which excludes any SIL claims. 9 So to that extent, we would say that there's a 10 set of arrangements here that's intended not only for 11 the benefit of NCN members at Nelson House but also 12 for the benefit of NCN members who are attempting to 13 obtain separate nation status. 14 MR. SARGEANT: So you're saying that insofar 15 as the members of CASIL are still members of NCN, 16 that they are bound by the undertakings in this 17 agreement notwithstanding the fact that they still 18 may have outstanding claims. 19 MS. MATTHEWS LEMIEUX: That's correct. And in 20 addition, they've got their own set of arrangements 21 which is the CASIL agreement which, as I said, they 22 entered into on their own with Manitoba and Manitoba 23 Hydro. 24 THE CHAIRMAN: Mr. Bedford. 25 MS. MATTHEWS LEMIEUX: I just wanted to make 1691 1 one last point that I forgot to mention. Eventually 2 we'll get to the water level data that has been 3 submitted by CASIL. However, I think that if you 4 review that material, you'll find that there have 5 been no days over 847.5 feet since the 1992 agreement 6 was entered into. 7 THE CHAIRMAN: We're strictly addressing the 8 motion, please. And that's not in there. 9 MS. MATTHEWS LEMIEUX: It relates to the 10 adverse effects. 11 THE CHAIRMAN: Yes, it may but it's not 12 addressed in there. Let's leave that out. 13 MR. BEDFORD: As Mr. Mayer has just noted -- 14 MR. ABRA: Mr. Bedford, excuse me. If I might 15 just ask one question on behalf of the Panel just 16 because I have to give them advice on it when they 17 are deliberating on the motion. 18 Just to follow up on what Mr. Sargeant was 19 asking you, is it your position that based on the 20 agreement, that's the December 1996 agreement, which 21 amongst other things has a definition of an SIL 22 claim, is it your position that by NCN having voted 23 thus far in favour of the development project, 24 including the December 1996 agreement, that the 25 members of CASIL that are NCN members are bound by 1692 1 the agreement including that definition of an SIL 2 claim? 3 MS. MATTHEWS LEMIEUX: Yes. 4 MR. ABRA: That's really the issue, at least 5 what some of us are concerned about, is that are they 6 bound by the agreement of December of '96 in addition 7 to the other points that you've made? 8 MS. MATTHEWS LEMIEUX: Yes. 9 MR. ABRA: Or are they not? It's your 10 position that they are? 11 MS. MATTHEWS LEMIEUX: Yes. 12 MR. ABRA: Thank you very much. 13 THE CHAIRMAN: Mr. Bedford. 14 MR. BEDFORD: Compensation costs are in the 15 capital cost estimate. Mr. Mayer's memory served him 16 well. Last Wednesday, March 10, 2004, and I quote 17 from page 1,604 of the transcript. Mr. Ken Adams, on 18 behalf of Manitoba Hydro testified, 19 "The estimate that we have for the 20 Wuskwatim project includes all the 21 costs that we can legitimately 22 attribute to the project including 23 pre-project training, including our 24 estimate of compensation which may or 25 may not be accurate. Our colleagues 1693 1 at NCN and anybody else who may be 2 affected by the project will probably 3 want to sit down and talk to us about 4 it, but we have made a provision in 5 the estimate for compensation." 6 The costs of compensation have been estimated 7 just as all the major components of the capital cost 8 have been estimated including the cost of the 9 turbines, the concrete, the labour, the equipment 10 rental, all of those costs are estimates just like 11 the costs of compensation. 12 One can ask are the estimates exactly what 13 will be paid in due course? And the answer is no. 14 The costs that will ultimately be paid could be more 15 or they could be less. And accordingly, the base 16 estimate of the capital costs already included a 17 component for contingencies, including compensation 18 costs and the component for contingencies in the 19 capital cost estimate is $52 million. 20 That was explicitly dealt with in the answer 21 to an information request posed by Mr. Williams' 22 client. It can be found at CAC/MSOS/MH/NCN 2 NFAAT 23 2-A. 24 In addition to providing for a contingency 25 allowance of $52 million, the proponents ran a 1694 1 sensitivity of 15 per cent of capital cost. That 2 means plus or minus about $135 million to the 3 estimated capital costs not with respect to Mr. 4 Williams' $95 million. 5 The conclusion we have all heard after running 6 the sensitivity was that Wuskwatim was still economic 7 in the event that you had to add a further roughly 8 $130 million to the capital cost estimate. 9 Wuskwatim, to use the words in this Notice of Motion, 10 was still "financially feasible". 11 There is nothing in the Terms of Reference 12 that you have, nothing in the Environmental Impact 13 Statement Guidelines before you that requires you, 14 sitting as this Commission, to determine, to quote 15 the words in the Notice of Motion, "the nature and 16 amount of compensation to be paid to NCN or indeed to 17 any other party and there are potentially other 18 parties who may be affected by aspects of these 19 projects." And I'm thinking of the transmission 20 project and the fact that some trappers and traplines 21 may be adversely affected. 22 The terms of reference do require you to 23 consider whether the projects have been, and I quote, 24 "selected on reasonable grounds including economic 25 viability." 1695 1 Accordingly, it is important for us all to ask 2 what are the overall capital costs? What's included 3 in that capital cost estimate? How was it 4 calculated? And what provisions for error in the 5 estimates have been made by the proponents? 6 Important for you to have engineers, accountants, and 7 a lawyer retained to provide you and us with advice 8 directly on these subjects. 9 However, there would be no sense to having 10 this hearing after all the contracts and agreements, 11 compensation costs, purchase of turbines, general 12 civil contract for construction of the generating 13 station concluded. Had that all been done, all that 14 would be accomplished would be to reduce the 15 per 15 cent sensitivity to a much smaller sensitivity. 16 Let's assume, however, for a moment that the 17 compensation agreement alone had been signed, fully 18 negotiated, signed and sealed and was before you 19 prior to the start of this hearing. What that would 20 have told us was the exact portion of the overall 21 capital costs that would be spent on compensation. 22 But would not then today the criticism and the motion 23 then be how on earth could you have finalized and 24 fixed compensation without first hearing what the 25 participants at this hearing, what the members of the 1696 1 public had to say about how they believe or imagine 2 that these projects will affect them. Would not the 3 criticism have been how were you able to fix 4 compensation costs without hearing what the eventual 5 advice and recommendations of five Commissioners to 6 the Minister will be. 7 Having a fixed and settled amount for 8 compensation costs unlike the costs of purchasing the 9 turbines, the labour on the project, the concrete to 10 be purchased for the project does nothing more, as 11 Mr. Williams has said, than remove uncertainty about 12 one element only of the overall capital cost which, 13 at best, reduces a 15 per cent sensitivity modestly. 14 Wuskwatim, we repeat, is economically viable 15 with a 15 per cent sensitivity fluctuation of about 16 $130 million. Therefore, it has to be economically 17 viable at a lower sensitivity. 18 The motion before you asks you to adjourn this 19 hearing or to hold it open until you are provided 20 with, I gather, the precise amount of compensation. 21 Well, we have told you that the precise amount to be 22 paid by way of compensation has not been determined 23 today. It's not yet resolved. In effect then, in 24 practical terms, what the motion is asking you to do 25 is to compel the two proponents Ms. Matthews 1697 1 Lemieux's client and my client, Manitoba Hydro, to go 2 away and to negotiate compensation, finalize it and 3 bring the number back to you. 4 Now with the greatest of respect to CASIL, 5 which has posed the motion, I do not believe that 6 there is jurisdiction in this Commission to compel 7 proponents to go away and negotiate an amount. 8 Certainly you have jurisdiction to ask proponents or 9 any other participant to go away and bring back 10 information that they may have in hand that you 11 believe is necessary in your deliberations. 12 In this case, I repeat, the exact amount, 13 quite obviously because we've said so, has not yet 14 been determined. 15 There's clearly a mechanism, and you've heard 16 plenty from Ms. Matthews Lemieux about that, for 17 these two proponents to proceed to complete 18 negotiations and to determine the amount of the 19 compensation. 20 I submit on behalf of my client, Manitoba 21 Hydro, that this motion be dismissed. And I could 22 perhaps finish by observing, with respect, that your 23 rules of procedure and your practice in the past, I'm 24 told, permits motions to be argued through the filing 25 of written material as opposed to orally. And you 1698 1 may, should any more motions come forward during this 2 particular hearing, want to consider whether or not 3 that might not be a more expedient way to deal with 4 such motions. Thank you. 5 THE CHAIRMAN: Thank you, Mr. Bedford. And 6 thank you for all of you who participated in the 7 debate on this motion. The Panel will consider the 8 information provided and will come forth with its 9 ruling as expeditiously and as soon as possible. In 10 the meantime, we will continue. 11 And before we do so, I ask Mr. Grewar. 12 MR. GREWAR: Mr. Chairman, just for continuity 13 sake, if we can just assign an exhibit number to the 14 document that Hydro tendered this morning as Exhibit 15 MH-NCN 1007, Response to the Community Association of 16 South Indian Lake motion of March 10th. 17 18 (EXHIBIT MH-NCN 1008: Response to the 19 Community Association of South Indian Lake 20 motion of March 10th) 21 22 THE CHAIRMAN: So before we continue at this 23 moment, we will take a break. We're at 10:30 and 24 this is the normally assigned time. So we will take 25 a 15 minute break at this point. 1699 1 MR. GREWAR: Mr. Chairman, just before we 2 adjourn for the break, the schedules that were 3 referred to as part of the presentation will simply 4 be incorporated in the presentation and won't be 5 assigned a separate number. 6 THE CHAIRMAN: Yes, thank you. And CASIL has, 7 as we come back, a final opportunity to reply. 8 9 (PROCEEDINGS RECESSED AT 10:35 A.M. and 10 RECONVENED AT 10:56 A.M.) 11 12 THE CHAIRMAN: I invite members from CASIL to 13 make their final rebut. 14 MR. GREWAR: Mr. Chairman, just while the 15 CASIL representative is taking his seat, I just 16 wonder if I can indicate a correction to the exhibit 17 list. I inadvertently assigned MH-NCN 1007 twice. 18 MH-NCN 1007 is actually Wuskwatim licences permits 19 and authorizations. It was entered on March 10th. 20 The correct exhibit number for the motion response 21 document entered today would be MH-NCN 1008. 22 THE CHAIRMAN: Thank you. Mr. Dysart, would 23 you begin. 24 MR. DYSART: Thank you, Mr. Chairman. We are 25 NCN members. We are not separate yet. As NCN 1700 1 council has acknowledged, the Dowell report that they 2 referred to is an engineering review of the proposed 3 projects. It was not commissioned for the CEC 4 hearings, it was part of a separate process. 5 Where we are trying to deal with the concerns 6 we may have, we deal with Manitoba Hydro consultants 7 directly. We will try to get the report before this 8 Commission before the hearings end. But as it wasn't 9 commissioned for this purpose, it was not proceeding 10 according to CEC schedules. 11 The CAS Agreement is an agreement for certain 12 past impacts regarding the augmented flow program. 13 That's it. It doesn't deal with future development. 14 We are NCN members and the Northern Flood Agreement 15 Implementation Agreement applies to us as members. 16 Compensation regarding the CRD is dealt with 17 separately, true. Those past impacts are one thing, 18 this is another. 19 The Northern Flood Agreement Implementation 20 Agreement states that it is in the best interests of 21 NCN to deal with specifying compensation before new 22 development and, in particular, before any licensing 23 procedure is commenced. NCN counsel is also correct. 24 Many impacts have been identified. Manitoba Hydro 25 counsel is correct, others may be impacted. 1701 1 The point is are you comfortable that the 2 social, spiritual, cultural and economic impacts have 3 been articulated and that the value in dollars of 4 those impacts have been identified? NCN can clarify 5 what they have said in testimony but the reality is 6 that all there is is an estimate of $56 million. 7 Note that the NFA compensation to NCN alone 8 from the CRD was $76 million. It is not easy to come 9 up with these numbers. That's why they have an 10 arbitration process in the agreement. 11 Another point is that the proponents have an 12 agreement to have these issues articulated before 13 this process began and all they have is an estimate. 14 I am sorry that the Northern Flood Agreement 15 Implementation Agreement is awkward for them and may 16 give them a bit more trouble in public hearings in 17 terms of chicken and egg occurrences, but it's there 18 in our agreement and that's what it says. 19 We think you need and the public needs more 20 financial information on the losses to NCN as a 21 result of this project. What is the value of 22 Taskinigup Falls? We haven't been asked yet. 23 I thank the Commission. 24 THE CHAIRMAN: Thank you, Mr. Dysart. This 25 brings an end to the motion, responses and rebuttles. 1702 1 The Commission undertakes to review the points made 2 and arrive at a decision as early as possible. 3 Now, this brings us to continuing the hearing 4 process in the meantime and I call forward the 5 representatives of the Displaced Residents of South 6 Indian Lake for the cross-examination portion on the 7 Needs, NFAAT. 8 MR. GREWAR: Mr. Chairman, just while Hydro 9 and their panel are assembling, I wonder if I can 10 enter a number of exhibits. The first is a CEC 11 exhibit. It's correspondence dated March 11, 2004 12 from the Commission secretary to the Manitoba 13 Wildlands Canadian Nature Federation regarding CEC 14 hearing procedures. It would be Exhibit CEC 1002. 15 16 (EXHIBIT CEC 1002: Correspondence dated March 17 11, 2004 from the Commission secretary to the 18 Manitoba Wildlands Canadian Nature Federation) 19 20 MR. GREWAR: And another Hydro exhibit would 21 be correspondence dated March 12, 2004 addressed to 22 the Clean Environment Commission signed by Valerie 23 Matthews Lemieux on behalf of Nisichawayasihk Cree 24 Nation, and Doug Bedford from Manitoba Hydro 25 respecting procedural matters and also Canadian 1703 1 Nature Federation, Manitoba Wildlands evidence and 2 witness lists. And that will be Manitoba Hydro NCN 3 Exhibit 1009. 4 5 (EXHIBIT MH-NCN 1009: Correspondence dated 6 March 12, 2004 to CEC signed by Valerie 7 Matthews Lemieux and Doug Bedford) 8 9 THE CHAIRMAN: Sir, would you introduce 10 yourself and proceed with your examination. 11 MR. TRONIAK: Yes. Thank you, Mr. Chairman, 12 members of the Commission. My name is Dennis 13 Troniak. I'm counsel for the Association of 14 Displaced Residents of South Indian Lake. 15 And before I proceed with the 16 cross-examination, I'd like to put on the record that 17 my clients take extreme umbrage with being called 18 economic terrorists. And the president of our 19 Association, Angus Dysart, will be asking for an 20 apology from Chief Primrose. 21 In reviewing the responses provided by Mr. 22 Thomas and Mr. Wojczynski, we're not clear if 23 Manitoba Hydro will only proceed with the 24 construction if and when NCN Band members ratify and 25 endorse the Wuskwatim PDA by referendum. We'd like 1704 1 to be advised can NCN and Manitoba Hydro clearly 2 state for the record that the project will not start 3 if NCN Band members reject the Wuskwatim partnership 4 and project development agreement? 5 MR. WOJCZYNSKI: Manitoba Hydro is committed 6 that it would not advance Wuskwatim and proceed with 7 its construction, certainly not in the foreseeable 8 future, if NCN did not support the project. And in 9 this case, we interpret that with NCN to mean 10 ratification of the PDA. 11 MR. TRONIAK: Is that NCN's position as well? 12 MR. THOMAS: It's the same position that we 13 have. 14 MR. TRONIAK: Thank you. I believe, Mr. 15 Wojczynski, you stated on March 2nd that Hydro will 16 not propose Hydro projects without the support of 17 affected First Nations and that Hydro would not 18 advance Wuskwatim from 2020 to 2010 inservice date 19 without NCN support. 20 Mr. Thomas, I believe you stated that there 21 will be a vote prior to construction starting and 22 there will be a provision up to 2010 for NCN to 23 decide if they want to move forward on the 24 partnership. 25 Does this mean that by voting for the project 1705 1 development agreement, NCN Band members will give 2 Manitoba Hydro the right to construct Wuskwatim and 3 make it operational regardless of NCN as a partner or 4 not? Mr. Thomas or Mr. Adams? 5 MR. ADAMS: In the event that the partnership 6 development agreement is signed, sealed and delivered 7 and we proceed to construct and make operational the 8 Wuskwatim station and NCN subsequently decides not to 9 take up the option of the ownership portion that's 10 available to them, certainly we anticipate that any 11 adverse effects will be compensated for and the 12 employment and other benefits provisions will 13 continue to be applicable but the project will be 14 placed into operation and operated as part of the 15 Manitoba Hydro system. 16 MR. TRONIAK: Thank you. Is that NCN's 17 position as well? 18 MR. THOMAS: I've made my statements that the 19 NCN membership will vote in the referendum to either 20 approve or not approve the PDA. And that we still 21 have an option to back out of the deal if the people 22 say that it's not in our best interest to continue to 23 proceed. 24 MR. TRONIAK: Okay. So if the PDA is approved 25 and NCN decides to back out at a later date, the 1706 1 project goes ahead then; is that correct? 2 MR. THOMAS: I'd be hard-pressed to imagine 3 how you can undo what's already been done. So I 4 believe the answer is yes. 5 MR. TRONIAK: Okay. Thank you. Mr. Lecuyer 6 stated on March 2nd that it's very disappointing that 7 NCN and Manitoba Hydro provided non-answers as to the 8 substantive side agreements that will not be part of 9 the Wuskwatim PDA. Why will the PDA not include the 10 substantive component side agreements for NCN members 11 to vote on and why are NCN members being asked and 12 expected to ratify a framework agreement without 13 knowing what it means and its implications? 14 MR. THOMAS: If you can clarify your question, 15 please? 16 MR. TRONIAK: Well, there are so many side 17 agreements that aren't before the Commission and 18 before the NCN members and we wonder why are they 19 expected to vote on, ratify the agreement without 20 knowing all that they should know? 21 MR. THOMAS: I do believe that we have 22 provided a lot of the information that is required 23 for processing through the Commission. In addition, 24 we are providing information to our membership. And 25 on top of that, the PDA itself will provide all the 1707 1 information that is going to be required for the 2 people to make an informed decision when they 3 exercise their right to vote in the referendum for 4 the PDA. 5 MR. TRONIAK: So in other words, you're 6 stating for the record that the substantive side 7 agreements will be made available for NCN members to 8 review? 9 MR. THOMAS: Yes. 10 MR. TRONIAK: Thank you. In response to a 11 question from Mr. Abra, Mr. Thomas, you stated that 12 NCN is looking for a number of options for coming up 13 with the equity share of NCN to invest and finding 14 the financial resources. You further stated, I 15 believe, that there is currently no specific 16 negotiations and that some discussions have been held 17 with Manitoba have been held with no conclusions. 18 You distributed a snapshot to members of the 19 community of membership. And it states in the 20 snapshot that NCN will be required to come up with 21 $62 million as part of their investment, that $43 22 million would be -- that $41 million will be lent to 23 NCN by Manitoba Hydro and that NCN would come up with 24 the remaining $21 million on its own. 25 We're just wondering, can you give anything 1708 1 more conclusive as to what you've indicated where 2 that $21 million will be coming from? 3 MS. MATTHEWS LEMIEUX: Excuse me. 4 THE CHAIRMAN: Ms. Lemieux. 5 MS. MATTHEWS LEMIEUX: You will recall that we 6 objected in terms of that particular question earlier 7 as the concern was, well in fact, it wasn't an 8 objection but Councillor Thomas indicated that we're 9 still in negotiations on those issues and that 10 information is confidential. 11 MR. TRONIAK: Okay. Well, I'll deal with the 12 information that you've made public then. And it 13 states in the snapshot provided to NCN members that 14 as part of the $62 million, NCN would have to come up 15 with about $21 million of its own. Every year NCN 16 gets about $4 million to spend from the 1996 trust. 17 And I take it that's the agreement that was entered 18 into between NCN and Hydro and Manitoba in 1996; is 19 that correct? 20 MR. THOMAS: That's the 1996 agreement, yes. 21 MR. TRONIAK: Yes, okay. NCN can decide 22 through the community approval process to set aside 23 some money every year on 2010 to use as part of this 24 $21 million. NCN may approach governments or others 25 for additional money. 1709 1 So my question is are you proposing to use 2 that trust monies as part of the $21 million 3 investment? 4 THE CHAIRMAN: Ms. Lemieux. 5 MS. MATTHEWS LEMIEUX: Again, we're getting 6 into the same area of questioning. And as I've 7 indicated already, we object to providing that 8 information at this stage because we're still 9 involved in various negotiations. There were a 10 series of questions, I recall, by Commission counsel 11 as well that related to really whether in fact there 12 were discussions that were under way and that's how 13 he let it go. And there are discussions under way. 14 That was confirmed for the record. So again, we 15 object to that question. 16 THE CHAIRMAN: So from what I hear, those 17 negotiations have not been complete or those 18 arrangements have not been arrived at. And for that 19 reason, we agree that they were part of the 20 proprietary information at this point in time. 21 MR. TRONIAK: However, prior to NCN members 22 voting, I take it they will be advised where the 23 extra $21 million will be coming from? Is that fair 24 to say? 25 MR. THOMAS: Yes. 1710 1 MR. TRONIAK: And one of the options you 2 currently are looking at is using the monies from the 3 trust fund to raise the $21 million? 4 THE CHAIRMAN: Ms. Lemieux. 5 MS. MATTHEWS LEMIEUX: Again, I'm just not 6 sure like how many times I'm going to have to object 7 about where the funds are coming from. There is some 8 information in the snapshot. But really, this issue 9 is not yet finalized and it will be provided in the 10 PDA. 11 THE CHAIRMAN: On the other hand, it's pointed 12 out to me that what Mr. Troniak is reading from is a 13 public document which is called Simple Snapshot 14 Summary of Understanding. So he is going to read 15 into the record questions about information that's in 16 here. It's pretty difficult to say that this is not 17 valid information. 18 MS. MATTHEWS LEMIEUX: I don't object to that. 19 It's just when we get into like the questions that 20 relate to where all the money will come from. You're 21 correct, there is a document that was provided to NCN 22 members and it lists, in general terms, information 23 about the $21 million. 24 The details of it, though, and if that's the 25 line of questioning which appears to be pursued, then 1711 1 we do object to going further than what is in that 2 document. 3 THE CHAIRMAN: Okay. We'll see how far this 4 takes us. And if it takes us beyond that, then we'll 5 try to draw that line. But in the meantime, I will 6 allow the questioning to go on. 7 MR. TRONIAK: Thank you. Basically all I'm 8 asking Mr. Thomas to confirm that that's one of the 9 options that is being looked at, using the $4 million 10 per year to be used to come up with the $21 million. 11 MR. THOMAS: With regard to the question 12 itself, we have a provision in the '96 agreement 13 that -- 14 MR. TRONIAK: Mr. Thomas, I'm just asking 15 because it states in the document that we're 16 referring to that monies can be set aside until 2010. 17 I just want you to confirm that. 18 MR. THOMAS: Well, yes, monies can be set 19 aside. But what I am telling you is that we have a 20 provision in our 1996 agreement that says that we 21 cannot make forward commitments on the money from 22 that process. So I can't say that, yes, that's where 23 the money is going to be coming from because we are 24 not allowed to forward commit monies that far ahead. 25 MR. TRONIAK: Yes, but that's an option 1712 1 available to the First Nation, correct? 2 MR. THOMAS: No. 3 MR. TRONIAK: No, okay. So you're stating for 4 the record that the simple snapshot may be incorrect? 5 You cannot use any of that money? 6 MR. THOMAS: No, I'm not saying that. 7 MR. TRONIAK: What are you saying? 8 MR. THOMAS: I'm saying that I can't make 9 forward commitments on the money that comes from that 10 trust. However, there is nothing preventing me or 11 other members from coming forward to put a proposal 12 in at the time that that is allowed. Whether it's 13 approved or not remains to be seen, but it certainly 14 can't be forward committed. 15 MR. TRONIAK: No, but subject to the proper 16 approval being given by the CAP, that money is 17 available to be used then; is that correct? 18 MR. THOMAS: If it goes through the process 19 that's allowed for it and if it's approved, then yes. 20 MR. TRONIAK: Okay. Now, the $4 million or 21 you get per year now, what is that money used for? 22 THE CHAIRMAN: Ms. Lemieux. 23 MS. MATTHEWS LEMIEUX: I'm hoping that I'm not 24 going to be objecting throughout the course of 25 cross-examination. I understand that Mr. Troniak has 1713 1 some scope to pursue questions. However, that 2 question I would submit is clearly beyond the terms 3 of reference. There are audits that are done and 4 there's material that is available to NCN members 5 about how the CAP monies are spent and how they've 6 been spent since 1996. But that's beyond the terms 7 of reference before this Commission we submit. 8 MR. TRONIAK: I think it's important for NCN 9 Band members to know where the money is spent and 10 whether or not it will be available if it's used to 11 raise the financing required. 12 THE CHAIRMAN: Do you wish to answer? 13 MS. MATTHEWS LEMIEUX: Actually, if NCN Band 14 members want to obtain that information, there's a 15 process in the 1996 agreement for trust audits to be 16 shared at annual meeting of members. And I'm sure 17 that Mr. Troniak's clients as NCN members could 18 attend those meetings if they so wished. 19 THE CHAIRMAN: These are not monies that have 20 been spent or that can be spent on a given moment or 21 an advance as was explained by Mr. Thomas, so I think 22 perhaps you're asking a theoretical question. 23 MR. TRONIAK: All right. This again may be a 24 theoretical question, Mr. Thomas, but I am assuming 25 that the $4 million is used for the purposes, for the 1714 1 benefit of NCN Band members. If that money is used 2 to finance NCN's commitment, will you not agree that 3 that money would not be available then to use for the 4 benefit of NCN Band members in other ways? 5 MR. MAYER: I think we understand he can't 6 spend it twice. 7 MR. TRONIAK: All right. Thank you. Is that 8 a confirmation? Do you agree with that, Mr. Thomas? 9 MR. THOMAS: Yes. 10 MR. TRONIAK: Thank you. Now on March 3rd, 11 Ms. Wray of Manitoba Hydro stated in response to a 12 question from Mr. Abra that Manitoba Hydro is 13 accruing interest on loans to NCN which of course 14 will have to be repaid from potential future profits. 15 Has NCN done a financial analysis of the impacts of 16 the debt to be incurred on potential profits and the 17 future financial stability of NCN? 18 MR. THOMAS: As part of our efforts to satisfy 19 our obligation for going through due diligence, these 20 are issues that we consider and that we look at. 21 MR. TRONIAK: Yes. So has that been prepared? 22 Has the analysis been prepared? 23 MR. THOMAS: If you may repeat the question, 24 please? 25 MR. TRONIAK: Okay. Well, we're just 1715 1 wondering if NCN has done a financial analysis of the 2 impacts of the debt to be incurred on potential 3 profits and the future financial stability of NCN? 4 MR. THOMAS: Had we done it? Yes. 5 MR. TRONIAK: Yes, you have? Has that 6 information been shared with NCN Band members? 7 MR. THOMAS: In the general information that 8 we provided, yes. 9 MR. TRONIAK: Okay. By general information, I 10 take it it hasn't -- will you give a commitment. 11 MR. THOMAS: We've produced a lot of 12 information, particularly in the form of an Agreement 13 in Principle and also a Summary of Understanding. 14 That information has been made public and it has been 15 given to all our members. So that information is 16 included in those documents. 17 MR. TRONIAK: Okay. So you're saying that 18 that analysis is contained in the AIP and the SOU 19 then? 20 MR. THOMAS: Yes. 21 MR. TRONIAK: So are you saying that if a Band 22 member of NCN were to read those documents and review 23 them, they would get the information they would need 24 before they would ratify the final agreement? 25 THE CHAIRMAN: Ms. Valerie Lemieux. 1716 1 MS. MATTHEWS LEMIEUX: I think the question 2 needs to be a little bit more specific. I mean 3 that's so open-ended, I am not quite sure how my 4 client can answer that question. 5 MR. TRONIAK: Well, he indicated that the 6 information is in the AIP and the SOU. I'm just 7 saying if it's his opinion that an NCN Band member 8 reviewing those documents would get enough 9 information to form an opinion with respect to the 10 financial analysis. 11 THE CHAIRMAN: I don't know. I hear the 12 question and if I were Mr. Thomas, I know how I would 13 answer it but I see Ms. Valerie Lemieux has concerns. 14 I think Mr. Thomas actually can answer that question. 15 MR. TRONIAK: Thank you. Mr. Thomas? 16 MR. THOMAS: The information that's been 17 provided to our people reflects the information that 18 they need to be aware of things. But the final copy 19 of the information will be included in the PDA and it 20 will be available to the people or to the NCN 21 membership. 22 MR. TRONIAK: Good. Thank you. On questions 23 regarding the adverse effects compensation agreement, 24 Mr. Wojczynski stated that the adverse effects 25 agreement and compensation would be essentially the 1717 1 same if NCN is a co-owner or not. And I'm just 2 wondering why is it stated on page 5 of the SOU, is 3 the agreement only to be negotiated between the 4 general partner and NCN and not Manitoba Hydro. 5 MR. WOJCZYNSKI: Could you repeat the 6 question, sir? 7 MR. TRONIAK: Yes. Why, as stated on page 5 8 of the SOU, is this agreement only to be negotiated 9 between the general partner and NCN and not Manitoba 10 Hydro? 11 MR. WOJCZYNSKI: Did you say the general 12 partner NCN? 13 MR. TRONIAK: And NCN. It's been negotiated 14 between the general partner and NCN and not NCN and 15 Manitoba Hydro. 16 MR. WOJCZYNSKI: The adverse effects agreement 17 will be with a partnership as a whole. And the 18 general partner in this diagram on page 5 is 19 representing that partnership. 20 MR. TRONIAK: All right. 21 MR. WOJCZYNSKI: So all costs of the project, 22 capital costs including compensation costs are 23 project costs and they are partnership costs. 24 MR. TRONIAK: Yes. And the agreement then is 25 negotiated between all the parties of the partnership 1718 1 or what? The general partners is one entity and then 2 NCN and Manitoba Hydro are other entities. So I'm 3 just wondering why -- it appears to me that the 4 agreement is only negotiated between the general 5 partner and NCN. I'm just wondering why that's the 6 case? 7 MR. WOJCZYNSKI: Manitoba Hydro is acting on 8 behalf of the project at this time and the general 9 partner will take on the responsibilities at the 10 project execution -- at the PDA execution. 11 MR. TRONIAK: All right. So then the general 12 partner steps into the shoes of Manitoba Hydro? Is 13 that fair to say? 14 MR. WOJCZYNSKI: We're getting into legal 15 terminology. So I'm not sure if that's -- from a lay 16 person's point of view, that sounds right. But I'm 17 not a lawyer, so I hesitate to go too far in 18 confirming that. 19 MR. TRONIAK: Okay. But up to at present, the 20 negotiations are between NCN and Manitoba Hydro and 21 then later, as proposed, that they will be between 22 the general partner and NCN; is that correct? 23 MR. WOJCZYNSKI: You kno