Université d’Ottawa | University of Ottawa Canada West Foundation A Matter of Wuskwatim Hydroelectric TRUST Facility THE ROLE OF COMMUNITIES Case Study Nisichawayasihk Cree Nation IN ENERGY DECISION-MAKING Manitoba SHAFAK SAJID NOVEMBER 2016 canada west foundation 2016 patrons & university of ottawa Centre for Natural Resources Policy We would like to thank those who agreed to be Arthur J.E. Child Foundation Endowment interviewed for this study. Their insights and Fund at the Calgary Foundation contributions were invaluable in preparing this report. Enbridge Inc. Government of Alberta, Ministry of Culture and Tourism As is customary, any errors of fact or interpretation Government of Manitoba remain the sole responsibility of the authors. Government of Saskatchewan, Crown Investments Corporation of Saskatchewan Copies of the A Matter of Trust: The role of comminities Government of Saskatchewan, Ministry of the Economy in energy decision-making report and the six case studies are available for download on the Canada West Imperial Oil Limited Foundation and Positive Energy websites. Max Bell Foundation N. Murray Edwards/Canadian Natural Resources Limited Richardson Foundation Ron Mannix/Coril Holdings Ltd. positive energy’s Financial Supporters Alberta Energy Canadian Energy Alberta Energy Regulator Pipeline Association BC Oil and Gas Canadian Gas Association Commission Cenovus Canadian Association Encana of Petroleum Producers Natural Resources Canada © Canada West Foundation and University of Ottawa 2016 Canadian Electricity ISBN 978-1-927488-39-3 Association Canada West Foundation is a registered Canadian charitable organization incorporated under federal charter. Nanos Research is our official pollster and our national (#11882 8698 RR 0001) media partner is The Globe and Mail. II a matter of trust: the role of communities in energy decision-making Nisichawayasihk Cree Nation contents introduction perspectives 02 06 & issues community regulatory 02 context 09 process the development and outcome 03 approval process 11 regulatory assessment against 03 process 11 the frame local conclusion: 04 benefits 14 transforming the discourse canada west foundation & university of ottawa 01 introduction community context The case study focuses on Manitoba Hydro The Nisichawayasihk Cree Nation (NCN) is based and Nisichawayasihk Cree Nation’s (NCN) in Nelson House, Man., 80 kilometres west of Wuskwatim project. Thompson. About 4,600 members of the NCN live in Nelson House, South Indian Lake, Leaf Rapids, Project overview Thompson, Brandon and Winnipeg. The Wuskwatim project was the first time a utility In the 1970s, Manitoba Hydro constructed the company and an Aboriginal community entered Churchill River Diversion, which had a great impact a partnership to develop a major generating station, on the First Nations community because it led to where NCN would purchase 33 per cent of the increased flooding. This affected hunting, fishing, project’s shares. Primary Wuskwatim components trapping, and sacred sites. The NCN claims Manitoba include the 200 MW generating station and dam on Hydro and the government took few steps to consult the Burntwood River at Taskinigup Falls, transmission with the community before constructing the site. lines to the provincial power grid and an access road. Construction of the generating station ran from 2006 to late 2012 at a cost of $1.3 billion. The $300-million transmission line was a separate Manitoba Hydro project. Manitoba Hydro: The province’s major energy utility, this Crown corporation was established in 1949. Manitoba Hydro has 14 hydroelectric generation stations on the Winnipeg, Saskatchewan, Nelson and Laurie rivers that produce approximately 5,000 MW. timeline NCN starts Environmental Agreement Regulatory Agreement Agreement Revised Construction negotiating impact in principle hearings signed & review starts supplementary completed with MB Hydro statements is signed take place construction agreement submitted starts 1997 2000 2001 2004 2006 2009 2011 2012 02 a matter of trust: the role of communities in energy decision-making Nisichawayasihk Cree Nation The Development and approval regulatory process process In 1996, Manitoba, Canada and Manitoba Hydro In Manitoba, generation projects undergo both a signed the Northern Flood Implementation federal and provincial regulatory process, under the Agreement. A key feature of this agreement is Department of Fisheries and Oceans (DFO) and the the process for future development – if Manitoba Clean Environment Commission (CEC). Hydro wants to build new projects that will affect the community, it has to reach compensation The Manitoba Public Utilities Board (PUB) regulates arrangements with the NCN before it can build. the rates charged by Manitoba Hydro and was initially responsible for a public review process with First Nations input was critical during the design respect to the “justification, need for the project, and and planning phase of the project, which alternatives to the proposed projects.” This process included combining traditional knowledge with was cancelled in April 2003 (Energy Manitoba, scientific knowledge during the environmental 2004). The needs process was merged into the CEC assessment studies. process, with two PUB members on the panel. Manitoba Hydro’s projections showed that Manitoba “The people [NCN leadership and Manitoba Hydro] domestic demand for new power generation for involved were working very hard to make it work… Manitobans is not required until 2020. By building It was they, and not the regulator, who established the Wuskwatim station, Manitoba Hydro expects an engaging’ environment.” exporting power to the U.S. will provide the additional revenues to justify the project. (Anonymous 3, consultant group) CEC hearings were well attended by NCN citizens, NCN’s participation was co-ordinated through its other Indigenous people, municipal governments, Future Development Team that considered economic environmental groups, businesses and other benefits to the NCN through jobs, training and organizations. In all, 32 days of hearings were held business opportunities during construction, and over four months, from March 1 to June 9, 2004. long-term benefits through sustainable income from CEC issued a report of its recommendation to the power sale. In 2001, the agreement in principle Manitoba Minister of Conservation on Oct. 4, 2004. was signed with Manitoba Hydro that would provide an equity partnership in the project if the NCN elects Under the federal process, the DFO undertook and to exercise that option. submitted a comprehensive study of the Wuskwatim Generation Project to the Minister of the Environment and to the Canadian Environmental Assessment Agency. The study was done as part of a co-operative environmental assessment with the Government of Manitoba. It concluded that the project “is not likely to cause significant adverse environmental effects.” 03 local benefits There were a number of local benefits for parts of the project without the need for competition. the community: More than $100 million in contracts were negotiated for such benefits as access road construction, catering Clean, renewable energy and security (NCN, 2016a). The Wuskwatim Generating Station produces clean, Jobs and training renewable energy that adds to the domestic supply in Manitoba and earns revenues from the export market. There was a general concern about the economic growth in the northern Manitoba area. From the Economic Benefits regulatory hearing documents, there was a sense that benefits from previous projects had flowed south, The partnership projected that NCN’s 33 per cent leaving northern Manitoba residents out. The desire ownership of Wuskwatim would produce the revenue in Thompson and the NCN was to expand on business needed to pay back the loans from Manitoba Hydro. opportunities and employment opportunities for the The NCN would also have receive a minimum community. The generating station was one of the of $3 million annually for community programs, province’s largest construction projects and provided including revenues, water power rental and dividend hundreds of jobs over six years. loans (NCN, 2016a). Wuskwatim Power Limited Partnership (WPLP) “NCN is under pressure to meet the needs of a rapidly projected that there was to be $5 million in wages growing young population. There is a critical shortage for community members for work on the project, and of jobs, housing, infrastructure and funds to support $100 million in revenues over the initial 25-year term. higher education opportunities. These challenges are felt directly by the youth of NCN and we will inherit Contracts the responsibility for meeting these challenges. To us, one of the best opportunities is the Wuskwatim project, Manitoba Hydro provided management and which we strongly support despite our First Nation’s construction services to WPLP which jointly owns the negative history with past hydroelectric projects.” generating station. Wuskwatim provided opportunities for NCN businesses and joint venture partnerships, (NCN youth, regulatory hearing document) which received first preference on contracts for certain 04 a matter of trust: the role of communities in energy decision-making Nisichawayasihk Cree Nation The NCN felt adamantly that it had built a new model for a sustainable First Nation economy that protects the Cree culture but also offers real growth opportunities to the community members. Targeted training opportunities were in place starting in 2003