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 know, I'd have to take an 24 undertaking on that because I think we're getting 25 into legal terminology that I don't feel I'm fully 1719 1 qualified to respond to. 2 MR. TRONIAK: Thank you. 3 4 (UNDERTAKING MH-38: Advise if negotiations of the 5 Adverse Effects Agreement are between NCN and 6 Manitoba Hydro and then later, as proposed, that they 7 will be between the general partner and NCN) 8 9 MR. TRONIAK: Now, Mr. Thomas, you stated that 10 the total project was considered for negotiating only 11 as NCN as a partner and that NCN have not approached 12 it as not being a partner. I'm just wondering why is 13 it assumed that prior to any ratification or vote of 14 the PDA that NCN was already a partner and what if 15 the NCN membership vote down the PDA or decided by 16 2010 not to be a partner? Will a thorough analysis 17 of the financial implications of NCN not being a 18 partner be completed and reported to membership prior 19 to the vote on the PDA? 20 MR. THOMAS: Could you be, no offence 21 intended, but a little bit more direct with the 22 question? 23 MR. TRONIAK: Sure. Well, it seems to me that 24 everything is being brought forward or determined on 25 the premise that NCN is going to be a partner. Has 1720 1 an analysis been done if the Band membership refused 2 to ratify it or if by 2010 the Band membership 3 decided not to be a partner, has a financial analysis 4 of that situation being done? 5 MR. THOMAS: We explored the financial 6 implications of being involved in this project and we 7 are making our assessments to find out what 8 information there is. And if we weren't to go 9 forward, then whatever it is that we believe that we 10 were going to get obviously will not be there. So -- 11 MR. TRONIAK: Okay. 12 MR. THOMAS: That's my answer. 13 MR. TRONIAK: Yes, I agree with that. You're 14 not going to get at anything if you don't go ahead. 15 But has an analysis been done of the implications 16 that would have on the First Nation? 17 MR. THOMAS: I have indicated previously in 18 one of my answers to a question that was relatively 19 similar where I said that we were coming into 20 exploring the partnership from the perspective that 21 we are going to try and do our best to go forward to 22 try and actually become a partner in this process. 23 We've not, although we've considered it, we hadn't 24 extensively focused on the other side of things in 25 terms of if it's not going to go ahead. 1721 1 MR. TRONIAK: Right. But you would agree that 2 it would be important for NCN Band members to know 3 the downside of rejection if they chose to reject it? 4 MR. THOMAS: Yes, I agree. 5 MR. TRONIAK: Yes. And that will be made 6 available to NCN members prior to the vote? 7 MR. THOMAS: It will be an issue that will be 8 discussed with our membership, yes. 9 MR. TRONIAK: Thank you. And will an analysis 10 be done on that or will there just be discussions 11 held? 12 MR. THOMAS: Well obviously, as part of our 13 efforts to do our due diligence, an analysis will be 14 done and will be provided to our members. 15 MR. TRONIAK: Thank you. Now, I'm just 16 wondering with respect to Wuskwatim, who approached 17 whom about the possibility of entering into the joint 18 ownership. 19 MR. THOMAS: Manitoba Hydro initially came to 20 us to advise us that they wanted to explore the 21 potential associated with the development of the 22 Wuskwatim project. 23 MR. TRONIAK: Thank you. Now, Mr. Abra I 24 believe asked if NCN had looked at other models 25 beyond a limited partnership for the Wuskwatim 1722 1 project. And I believe the answer was that other 2 structures were looked at. I am just wondering what 3 they were. 4 THE CHAIRMAN: Mr. Adams. 5 MR. ADAMS: Again, we are going to have to fly 6 a little bit by memory because we've been in 7 discussions for a long time. But certainly we would 8 have looked at the -- of share companies. An issue 9 with them of course is if it's more than 10 per cent 10 owned by somebody other than Manitoba Hydro, it loses 11 the protection from income tax under the Income Tax 12 Act. 13 We would have looked at a more general form of 14 partnership without the limited liability aspects of 15 the LLP. We have looked at probably several 16 different alternative versions. And again, we can 17 give you an undertaking if you want but I don't know 18 that it's productive to follow along that route 19 because we have acted on legal advice received both 20 with us and NCN at the time and the LLP is the one 21 that we chose. 22 MR. TRONIAK: All right. So you are saying 23 you looked at a number of alternatives and this is 24 the one you chose? 25 MR. ADAMS: Yes. 1723 1 MR. THOMAS: If I may respond to that question 2 as well, please? 3 THE CHAIRMAN: Mr. Thomas. 4 MR. THOMAS: The question that you pose is 5 something that NCN has considered. We look to a wide 6 variety of situations to see what is the best way to 7 go forward. We have looked at the Quebec situation. 8 We've looked at the possibility of owning some what 9 Mr. Adams referred to as shares I believe. And we've 10 looked to other avenues, i.e., a compensation package 11 and maybe royalties. 12 However, the mandate that we got from our 13 people under the auspices of the Agreement in 14 Principle was to move forward and to seek the 15 establishment of a partnership with Manitoba Hydro 16 and we are looking at what is the best possible 17 mechanism that exists that will ensure that our 18 rights are protected to the maximum extent possible. 19 And the limited partnership structure under a general 20 partnership is the mechanism that we found to be the 21 most suitable. 22 MR. TRONIAK: All right. And you say you 23 found it to be most suitable. That was the proposal 24 you put before the membership, correct? 25 MR. THOMAS: I beg your pardon? 1724 1 MR. TRONIAK: That was the proposal you put 2 before the membership so I'm assuming that's the 3 proposal you found most suitable? 4 MR. THOMAS: I do believe that we have 5 provided that information, yes. 6 MR. TRONIAK: Yes, okay. Now, you indicated 7 that you looked at the Quebec situation. Were NCN 8 Band members made aware of what's going on in Quebec? 9 Did you give information as to how the Quebec Cree 10 and Hydro Quebec are dealing with the hydro 11 development in Quebec, Mr. Thomas? 12 MR. THOMAS: With respect to the people, these 13 are issues that we've talked about in general. We've 14 talked about these issues in our open houses. I 15 believe that my community consultants have talked 16 about or are aware of these different options and 17 would have discussed them with our NCN people. 18 MR. TRONIAK: Okay. And, Mr. Thomas, you were 19 aware that there was a conference held at the 20 University of Winnipeg late last month comparing 21 Hydro development in Manitoba and Quebec and the 22 relationship between the Cree of Manitoba and Quebec 23 with their provincial governments and Hydro Quebec 24 and Hydro Manitoba? 25 THE CHAIRMAN: Ms. Valerie Lemieux. 1725 1 MS. MATTHEWS LEMIEUX: Yes. I'm just 2 wondering now again about the relevance of this line 3 of questioning where we get into conferences that are 4 held. There's lots of conferences that are held from 5 time to time. 6 MR. TRONIAK: Well, he opened the door. He 7 indicated that they looked at the way things are done 8 in Quebec and there was a conference a couple of 9 weeks ago which dealt with that issue. I was just 10 wondering if he was aware of it. 11 THE CHAIRMAN: Maybe you should have asked 12 that as a question. 13 MR. TRONIAK: Okay. You are aware there was a 14 conference held on February 23rd in Winnipeg? 15 THE CHAIRMAN: Well, he may or may not be. 16 What we're saying is if you want to ask him a 17 question -- 18 MR. TRONIAK: Ask about it, all right. 19 THE CHAIRMAN: -- ask something that came out 20 of that. 21 MR. TRONIAK: Sure. Did anyone from NCN in 22 their official capacity attend that conference? 23 MR. THOMAS: No. 24 MR. TRONIAK: But you indicated it was 25 important that you get a handle on how things are 1726 1 done in Quebec? 2 MR. THOMAS: I beg your pardon? 3 MR. TRONIAK: Well, you had indicated despite 4 the fact -- no one attended despite the fact that you 5 indicated that how things were done in Quebec was an 6 option that NCN looked at? 7 MR. THOMAS: My understanding of the situation 8 is that a number of my people, my NCN members did 9 attend. 10 MR. TRONIAK: Okay. But nobody from Chief and 11 Council as you said? 12 MR. THOMAS: No. We didn't feel it was 13 appropriate to be attending conferences and taking 14 positions prior to a hearing. 15 MR. TRONIAK: But by attending, you wouldn't 16 have taken a position. You just gathered 17 information, correct? 18 MR. WOJCZYNSKI: We had discussions as 19 partners about the partnership models and about all 20 the general information and the issue of this 21 conference came up. Manitoba Hydro also chose not to 22 participate in it in large part because it was just 23 before this process and we felt that it was an 24 inappropriate time for proponents to be involved in 25 such a thing. We did have observers there as well. 1727 1 I might add that another part was that we felt 2 that that colloquium wasn't an appropriate thing to 3 explore such an issue because we felt it wasn't a 4 fair and open enough process. 5 But the more important issue in the end is 6 that the arrangements that are in place and have been 7 negotiated in Quebec recently are not at all an 8 apples to apples comparison to the kind of agreement 9 we have here. In Quebec, what was negotiated is an 10 agreement that does many things in addition to a 11 future development agreement. 12 In Quebec there, they don't have the same kind 13 of treaties in place. There is a land settlement 14 process. There is a whole bunch of agreements in 15 place in Manitoba including the treaties that in 16 Quebec, Northern Quebec haven't been in place. So 17 what they had to do in Quebec was come forward with 18 an agreement that dealt with many issues at the same 19 time. 20 Here in Manitoba, and others can speak on this 21 more knowledgeably than I could, but there's been a 22 treaty in place for many years, there have been 23 agreements including the Northern Flood Agreement, 24 the Comprehensive Limitation Agreement prior to our 25 Future Development Agreement. 1728 1 So it's a totally incompatible comparison and 2 that was another reason why we didn't feel that it 3 was as useful a colloquium as it might have been. 4 MR. TRONIAK: All right. So in other words, 5 you're saying that what goes on in Quebec really has 6 no relevance to what's going on in Manitoba? 7 MR. WOJCZYNSKI: That's obviously not what I 8 was saying. 9 MR. TRONIAK: Well, has little relevance or 10 have you looked into what's been going on in Quebec? 11 MR. WOJCZYNSKI: We are in continual 12 communication with our sister utility in Quebec and 13 we are -- and look at what happens elsewhere in the 14 industry. For instance, the pipeline industry, the 15 gas industry, oil, mining and we're continually 16 talking to others and being knowledgeable of what's 17 there. And one of the conclusions we've garnered is 18 that we judge that what we're doing here is at the 19 leading edge and as good as or better than anything 20 anywhere else. 21 MR. TRONIAK: You are aware that about 10 22 years ago, Hydro Quebec made a proposal to the Cree 23 in Quebec similar to the Wuskwatim proposal in that 24 the Cree would be allowed to buy an interest in the 25 project? Are you aware of that? 1729 1 MR. WOJCZYNSKI: We are aware that Hydro 2 Quebec has been having various arrangements and 3 discussing various forms of arrangements with them. 4 And we have had discussions with our peers at Hydro 5 Quebec on an ongoing basis on those kinds of issues. 6 MR. TRONIAK: Yes. But you are aware that an 7 actual vote was -- and a referendum was held and a 8 vote taken by the Quebec Cree with respect to an 9 equity arrangement? 10 MR. WOJCZYNSKI: I can't remember all of the 11 specifics of all that's transpired over the last 10 12 years but we certainly had detailed discussions with 13 Hydro Quebec. 14 MR. TRONIAK: Mr. Thomas, are you aware that 15 about 10 years ago, Hydro Quebec offered a similar 16 type deal to Wuskwatim to the Cree in Quebec? 17 MR. THOMAS: I am not familiar with -- I 18 understand that there are agreements between Quebec 19 Hydro and the Cree in the northern part of Quebec. I 20 am not aware of all the details associated with it. 21 MR. TRONIAK: All right. So you wouldn't be 22 aware then that when the referendum was held, that 23 the Quebec Cree rejected the proposal made to them by 24 Hydro Quebec? 25 MR. THOMAS: No, I wasn't aware of that. 1730 1 MR. TRONIAK: Okay. Now, at the conference, a 2 representative for the Grand Cree of Quebec gave 3 reasons why the Quebec Cree rejected the referendum. 4 And I'm paraphrasing again, but I'm advised that it 5 was rejected because the Quebec Cree felt they were 6 already putting equity in the project through the use 7 of their resources. The Quebec Cree felt that they 8 shouldn't have to borrow money for Hydro to exploit 9 their resources. They also indicated that the 10 consultation process shook the unity of the Cree 11 community. It was quite divisive. And the proposal 12 did nothing with respect to the problems with the 13 James Bay Agreement. 14 Mr. Thomas, you will agree with me that or you 15 can agree with me or disagree with me, but the first 16 two provisions or reasons would apply somewhat to the 17 decision facing NCN that many members in the NCN 18 community feel that NCN is already putting equity 19 into the project to the fact that their resources are 20 being used. Would you agree with that? 21 MR. THOMAS: No, I can't just give you 22 outright agreement to what -- 23 MR. TRONIAK: No, I'm not asking you to agree 24 with that position but I'm asking you to admit or 25 agree that some NCN Band members take that position; 1731 1 is that fair to say? 2 THE CHAIRMAN: I'm not sure that you are 3 asking a direct question here because I think you 4 have not indicated what comparisons you are wanting 5 him to base an answer on. 6 MR. TRONIAK: Okay. Thank you. 7 THE CHAIRMAN: Ms. Valerie Lemieux, please. 8 MS. MATTHEWS LEMIEUX: One small point. It's 9 happened a couple of times where Mr. Troniak has cut 10 off Mr. Thomas when he's tried to give a response. I 11 think it would be helpful if Mr. Thomas could at 12 least try and respond to the question when he starts 13 his answer. 14 MR. TRONIAK: Yes, I will try to hold myself 15 back. 16 MS. MATTHEWS LEMIEUX: Thank you. 17 MR. TRONIAK: Mr. Thomas, have you completed 18 your answer? 19 MR. THOMAS: Could you repeat the question, 20 please? 21 MR. TRONIAK: Okay, all right. Well, the 22 first part I guess it's difficult for you to reply 23 because again, that's a reason in Quebec with respect 24 to their position that they felt that they were 25 already putting equity into the project so why should 1732 1 they put anything more into it. The second reason, 2 as indicated, the Quebec Cree felt that they 3 shouldn't have to borrow money for Hydro Quebec to 4 use their resources. 5 You've been advised by members of your 6 community in debates that they have concerns as to 7 why NCN has to borrow money, correct? 8 MR. THOMAS: First of all, the comparison of 9 NCN matters and Quebec Cree matters are different. 10 As indicated previously, the Cree in Northern Quebec 11 do not have treaties that are applicable over there. 12 So the comparison that is being used is inappropriate 13 in my view. But these are issues that have been 14 identified. 15 We've recently been made aware that the Quebec 16 Cree have an agreement that involves a lot more than 17 what we're dealing with. But like I said previously, 18 that's a totally different situation. And the facts 19 of that situation are not readily applicable to the 20 NCN context. 21 MR. TRONIAK: So you based that position after 22 having made a thorough review of the Quebec situation 23 or what do you base that on, that it's not 24 applicable? 25 MR. THOMAS: Didn't I just answer that 1733 1 question, Mr. Chairman? 2 THE CHAIRMAN: I am not sure but if you wish 3 to state that as your answer, that's fine. Up to 4 you. 5 MR. THOMAS: I do believe I answered the 6 question. 7 MR. TRONIAK: Okay. So to paraphrase it, and 8 you can agree or disagree, after a careful analysis 9 of the situation in Quebec, you decided that the 10 Quebec situation is not applicable to Manitoba. Is 11 that fair to say? 12 THE CHAIRMAN: That's what I heard him say 13 just a moment ago. 14 MR. TRONIAK: Would you agree that's what you 15 said then, Mr. Thomas? 16 MR. THOMAS: Yes. 17 MR. TRONIAK: Now, you will agree, Mr. Thomas, 18 that the Wuskwatim agreement does nothing to or does 19 little to deal with the NFA. Is that fair to say? 20 MR. THOMAS: Could you clarify your question? 21 MR. TRONIAK: Well, you have the Northern 22 Flood Agreement and the proposal and there have been 23 problems with the Northern Flood Agreement you will 24 agree. Would you agree with that? 25 MS. MATTHEWS LEMIEUX: What kind of problems? 1734 1 MR. TRONIAK: All right. Well, you will agree 2 with me that the proposal does nothing with respect 3 to the NFA or problems which may arise with respect 4 to its implementation. It's a separate deal, a deal 5 separate from the NFA. Is that fair to say? 6 MR. THOMAS: My community ratified the 7 Northern Flood Implementation Agreement in 1996. And 8 the terms and conditions that are contained in it 9 have been dealt with to the satisfaction of the 10 parties, i.e., and that's evidenced by the fact that 11 it's been ratified. So the NFA issues have been 12 primarily dealt with. 13 What we're exploring is an Article 8 process. 14 Yes, under the NFA but dealing with different 15 matters. And the whole context of it is quite 16 different from NFA related matters. 17 MR. TRONIAK: All right. Now, you are aware, 18 Mr. Thomas, that the NFA was reviewed in some detail 19 by the Royal Commission on Aboriginal Peoples? 20 MS. MATTHEWS LEMIEUX: If there's going to be 21 questions about the documents, perhaps my client 22 could have them in front of him. 23 THE CHAIRMAN: Yes. 24 MR. TRONIAK: Well, I'm basically going to 25 read a finding or a summary of what the report 1735 1 concluded and ask Mr. Thomas if he agrees or 2 disagrees with that. 3 THE CHAIRMAN: Do you wish to have those 4 documents in front of you? 5 MR. THOMAS: I would prefer to have them in 6 front of me, yes. 7 MR. WOJCZYNSKI: I think the rest of the 8 participants would also like to have that. 9 MR. TRONIAK: All right. Well, I don't have 10 the Royal Commission in front of me. We can provide 11 that too, I guess if finances are available. But I 12 just planned to read the conclusion of the Royal 13 Commission which is a public document with respect to 14 their opinion as to the effects of the NFA. 15 THE CHAIRMAN: Are you prepared to table that 16 section of the document that you are going to read 17 from? 18 MR. TRONIAK: Well, I can. I don't have it 19 with me. It's part of another document. 20 THE CHAIRMAN: But will you take that 21 undertaking? 22 MR. TRONIAK: I will take that undertaking, 23 provide you with that portion of the document. 24 THE CHAIRMAN: Thank you. 25 MR. TRONIAK: And I can provide it probably, 1736 1 we'll be breaking for lunch soon, so I can provide 2 that probably over lunch. 3 THE CHAIRMAN: Yes. And would you please in 4 that case proceed with maybe some of the other 5 questions and then -- 6 MR. TRONIAK: Yes, I can come back to that, 7 thank you. 8 Now, I'd like to deal with the partnership 9 aspect and the information I have that it's the 10 opinion of both NCN and Manitoba Hydro that this is, 11 in their opinion, an important step forward. 12 I have reviewed it and you would agree that 13 this is not an equal partnership. Is that fair to 14 say? 15 MR. ADAMS: I think it's a partnership between 16 equals. 17 MR. TRONIAK: But it's not an equal 18 partnership, is it? 19 MR. ADAMS: It's a partnership between equals 20 where Manitoba Hydro, as a limited partner, has 66 21 per cent and NCN has 33 per cent. 22 MR. TRONIAK: A partnership between equals but 23 Manitoba Hydro is more equal then; is that fair to 24 say? 25 MR. ADAMS: Absolutely not. 1737 1 MR. TRONIAK: But they do have the final say 2 or 60 or two-thirds of the votes, right? 3 MR. ADAMS: Manitoba Hydro also is the general 4 partner and as it's a limited partnership, there is 5 very limited opportunity for the limited partners to 6 have a say in the operation of the company. 7 MR. WOJCZYNSKI: Also I might add that in the 8 agreement, there are a number of issues which NCN has 9 equal say in Manitoba Hydro. We can't change the 10 major components in the project description and they 11 are outlined in the SOU and we can go through that if 12 you wanted. But those fundamental features of the 13 project cannot be altered unilaterally by Manitoba 14 Hydro. So there are a number of provisions such as 15 that to protect NCN. 16 MR. TRONIAK: So I guess you would say those 17 are fundamental provisions with respect to the 18 agreement? Is that fair to say? 19 MR. WOJCZYNSKI: I was referring to 20 fundamental features of the project. 21 MR. TRONIAK: All right. Okay. So those are 22 features that go to the heart of the project then; is 23 that right? 24 MR. WOJCZYNSKI: They are fundamental to the 25 design and operation of the project. 1738 1 MR. TRONIAK: All right. But they don't go to 2 the -- again, I'm a little confused with what you're 3 saying. So they go to the fundamental, to the heart 4 of the project but other provisions or other parts 5 are not subject to equal say; is that correct? 6 MR. ADAMS: Ultimately, the management of the 7 partnership is the responsibility of the general 8 partner. The general partner obviously will take 9 advice from the limited partners but in the end, the 10 day-to-day operation of the project is the 11 responsibility of the general partner. 12 MR. TRONIAK: And that would be? 13 MR. ADAMS: Which is Manitoba Hydro. As Mr. 14 Wojczynski said, there are many many avenues for NCN 15 to advise the general partners what they think is the 16 appropriate way to proceed with virtually every 17 aspect of the project. 18 MR. TRONIAK: Now, I may get lost when I ask 19 this question because I'm not an economist but I'm 20 just wondering will NCN's share of future profits be 21 based on the gross revenue of Wuskwatim and will 22 NCN's profits be based on the total before or after 23 the Government of Manitoba receives its 75 per cent 24 share of profits from Manitoba Hydro? 25 MS. WRAY: We're not aware of any 75 per cent 1739 1 share going to the government. If you are referring 2 to a time limited procedure that occurred during the 3 last three years, that's now over. 4 MR. TRONIAK: Oh, okay. So that wouldn't have 5 any effect. As I said, I may be misconstruing what 6 was done there. 7 MS. WRAY: It wouldn't have any effect in any 8 event because the partnership is structured such that 9 it has its own financial statements and the net 10 profits are divided between NCN and Manitoba Hydro. 11 MR. TRONIAK: Thank you. Now, Mr. Thomas, you 12 are a proponent or NCN is a proponent of the project. 13 And you will agree with me that it's important that 14 NCN members get full and balanced information or as 15 much information as we can reasonably be expected to 16 receive. Have you raised or do you have any concerns 17 about whether or not independent counsel should be 18 retained to review and explain the agreements to NCN 19 members? 20 MR. THOMAS: We have hired an independent 21 lawyer to provide us with advice. So we have taken 22 care of that. In terms of the need for full and 23 balanced information, yes, I agree that the NCN 24 membership will be provided with as full information 25 as we can possibly provide and as balanced as 1740 1 possible. 2 MR. TRONIAK: But, Mr. Thomas, the counsel you 3 have retained, and of course they are competent 4 counsel, but they are associated with the 5 negotiations with respect to the AIP, the SOU and the 6 Project Development Agreement. I'm just wondering 7 had you considered hiring another lawyer outside with 8 no connection to this to explain the pros and cons or 9 explain the documents to the membership? 10 MR. THOMAS: No. Why would I want to do that? 11 MR. TRONIAK: Okay. Thank you. I'm just 12 wondering, Mr. Thomas, or I guess Hydro can answer 13 this question, will the Summary of Understanding and 14 the Project Development Agreement be translated into 15 Cree and will the non-technical language be put in a 16 form which NCN Band members could thoroughly 17 understand? 18 MR. THOMAS: Are you asking me or Hydro? 19 MR. TRONIAK: Well, I'm asking both. 20 MR. THOMAS: Okay. During our process, we've 21 hired various people from our community that deal 22 with those kind of issues. One of them is sitting 23 over there in the rear by the name of Jimmy D. 24 Spence, very fluent in Cree, very knowledgeable about 25 our process and has been involved in translating 1741 1 information previously with regard to the Northern 2 Flood Implementation Agreement. And translation 3 services are provided by a team of my people. 4 MR. TRONIAK: All right. 5 MR. THOMAS: I should include my other 6 employee there, Terry Linklater, along with one of my 7 colleagues. They do a lot of that kind of work. 8 MR. TRONIAK: All right. So from what you're 9 saying, that translations will be made available to 10 NCN Band members then. But I'm just wondering will 11 the actual documents be in Cree or will they just be 12 explained to the members in Cree? 13 MR. THOMAS: What we've done previously was 14 that we have provided translation in Cree in written 15 form to a summarization of the very key points of 16 say, for example, the 1996 implementation agreement 17 along with other translations that needed to be 18 provided to the people. So we've done that 19 previously and I don't see any reason why we wouldn't 20 do that at this time around either. 21 MR. TRONIAK: So will you be doing it this 22 time around? 23 MR. THOMAS: Yes. 24 MR. TRONIAK: Thank you. Now, Mr. Thomas, you 25 gave evidence -- 1742 1 THE CHAIRMAN: Ms. Valerie Lemieux. 2 MS. MATTHEWS LEMIEUX: Just on that latter 3 point, the SOU and the snapshot that my friend 4 referred to I am advised are in the process of being, 5 there's translation being done at the moment. 6 THE CHAIRMAN: Thank you. 7 MS. MATTHEWS LEMIEUX: Into Cree syllabics. 8 THE CHAIRMAN: Thank you. 9 MR. TRONIAK: Thank you. Mr. Thomas, you 10 earlier gave evidence with respect to the referendum 11 vote with respect to the AIP. And I am not saying 12 whether these concerns are valid or not but there was 13 some controversy with respect to the conduct of the 14 vote. You will agree with that or some people were 15 concerned about that? No? 16 MR. THOMAS: At the time that the referendum 17 was done for the Agreement in Principle, no, there 18 wasn't any indication of a controversy surrounding 19 that referendum. 20 MR. TRONIAK: All right. And you indicated 21 earlier that the referendum for the AIP was not 22 supervised by independent parties; is that correct? 23 THE CHAIRMAN: Mr. Troniak, that was already 24 answered previously. 25 MR. TRONIAK: Yes. And that was in the 1743 1 affirmative? There was nobody outside the First 2 Nation who -- 3 THE CHAIRMAN: Mr. Thomas already said that 4 was the case, yes. 5 MR. TRONIAK: Yes, okay. 6 MR. THOMAS: I should point out that if you're 7 looking for independent influence, that is supposed 8 to be coming from our feduciaries, the Department of 9 Indian Affairs. The Government of Canada does put or 10 enforce the Indian Act upon us as a people. And we 11 follow the very rigid guidelines and laws that have 12 to be applied in those kind of circumstances. 13 So to that extent, we do have very -- we do 14 have independence. 15 MR. TRONIAK: All right. But those guidelines 16 and laws are not followed with respect to the 17 referendum on the AIP; is that correct? 18 MR. THOMAS: I believe I answered that 19 question already, Mr. Chairman. 20 THE CHAIRMAN: That's what I said earlier. 21 MR. TRONIAK: All right. Now, can you confirm 22 today that there will be an independent third party 23 such as Elections Canada or somebody from Indian 24 Affairs supervising the referendum? 25 MR. THOMAS: The need for Elections Canada or 1744 1 other outside people to come in and conduct 2 referendums is not an avenue that we have 3 contemplated in pursuing. We will follow the 4 requirements as set out by legislation. 5 MR. TRONIAK: Now, if a non-favourable vote on 6 the PDA is obtained, will it be binding or will there 7 be another vote held? 8 MR. THOMAS: We will follow the requirements 9 of the Indian Act with respect to referendums and the 10 results under that process will be binding. 11 MR. TRONIAK: All right. 12 THE CHAIRMAN: Maybe while you're reviewing 13 documents there, Mr. Troniak, for continuing with the 14 questioning, maybe this is an appropriate time to 15 stop for lunch and we can reconvene at one o'clock. 16 MR. TRONIAK: Thank you. 17 THE CHAIRMAN: Mr. Grewar, do you have any 18 documents to file? 19 MR. GREWAR: No, Mr. Chairman. 20 THE CHAIRMAN: Thank you. 21 22 23 (PROCEEDINGS RECESSED AT 12:00 AND 24 RECONVENED AT 1:00 P.M.) 25 1745 1 THE CHAIRMAN: Ladies and gentlemen, 2 we resume the hearing. 3 MR. WOJCZYNSKI: We have some 4 undertakings. Do you want us to do them now? 5 THE CHAIRMAN: Correct. 6 MR. WOJCZYNSKI: I had an undertaking 7 just this morning, we tried to do it as quick as 8 we could, and that was with Mr. Troniak, and this 9 is regarding the limited partnership roles of the 10 entities. And as we all know, the Wuskwatim 11 project will be owned and operated by a limited 12 partnership. NCN/Manitoba Hydro act through a 13 general partner who speaks for and is able to make 14 the binding commitments on behalf of the 15 partnership. Limited partners cannot take an 16 active part in the operation of the partnership 17 and expect to remain limited as partners. So the 18 limitations would fall off if there was an active 19 part. 20 The adverse effects negotiations are 21 presently underway, as we have already heard, 22 between Hydro and NCN. However, at the end of the 23 day, the adverse effects agreement compensation 24 will be the responsibility of the limited 25 partnership, and the obligations will be assumed 1746 1 by the limited partnership through the action of 2 its general partner executing the agreements, the 3 adverse effect agreement in this case with NCN. 4 So it is the general partner that will execute the 5 adverse effects agreement with NCN. 6 This agreement will be part of the 7 package to be ratified by NCN. Perhaps a little 8 bit of clarification there. We were talking, and 9 Mr. Troniak I believe used the word "side deals" 10 or something of that ilk. We should perhaps make 11 clear that all of the PDA and LLP agreements will 12 be negotiated and in final form before Manitoba 13 Hydro ratifies, and before NCN votes and ratifies 14 on these. All of these agreements will be 15 schedules to the PDA itself. So hopefully that 16 clarifies matters. 17 I believe we had another undertaking? 18 MR. SARGEANT: I had one on 19 Mr. Wojcznski's response. Will this, the 20 compensation agreement, be a process? I mean, how 21 can you set numbers on some of the stuff that you 22 probably won't know until after the dam is 23 completed? 24 MR. WOJCZYNSKI: What we have is, we 25 will have all of the information from the EIS and 1747 1 all of the consultations, and then we will have 2 estimates of what all of those impacts will be. 3 And we will consider, each entity will consider 4 the uncertainties associated with that, and then 5 we will have an overall number on that. But also 6 in certain areas where there is any significant 7 uncertainty, and it is material enough to be of a 8 concern, there would be monitoring in place. And 9 if it turns out that the forecasts of what was 10 going to happen were materially incorrect, then 11 the mitigation -- pardon me, the monitoring would 12 detect that, and then there would be mutually 13 agreed arrangements to deal with those. 14 MR. SARGEANT: Thank you. 15 THE CHAIRMAN: And that is provided, 16 would be provided in these agreements? 17 MR. WOJCZYNSKI: Yes, sir. 18 THE CHAIRMAN: Mr. Kuczek. 19 MR. KUCZEK: The undertaking was MH-32 20 from page 1295 of the transcript. Mr. Miller of 21 TREE/RCM asked if previous environmental 22 consultations in late 1999, early 2000, had any 23 impact on Manitoba Hydro's DSM planning. And I 24 think I mentioned, although it is difficult to tie 25 a specific action to a specific event, when I 1748 1 talked to staff back at the office, they told me 2 that these consultations did contribute to one 3 event in particular, and it is probably worth 4 mentioning, and that was the creation of the 5 Northern Building Consensus Forum. 6 One of the purposes of this forum was 7 to identify synergies for working together to 8 address energy efficiency problems in Northern 9 housing. The participants in the forums were 10 Manitoba Hydro, Manitoba Housing, First Nation 11 representatives, and also Canada Mortgage and 12 Housing Corporation. An outcome of that forum was 13 the construction of the northern model house in 14 Thompson, which was a demonstration project, using 15 structurally insulated panel technologies. 16 We participated, Manitoba Hydro 17 participated to ensure that the application of the 18 technology included meeting energy efficiency 19 concerns, and our involvement was pertaining to 20 funding and also undertaking monitoring and 21 testing of the energy efficiency of the home. 22 Mr. Chairman, if I could take this 23 time to clarify some information that was provided 24 last Wednesday, I would like to do that as well. 25 I was asked whether or not Manitoba Hydro had the 1749 1 capability to track electricity use of the two 2 digit standard industrial classification level of 3 the economy and compare that with the output of 4 the same level within the Manitoba economy. I 5 responded by saying that I believe the answer to 6 this is no. In checking with staff, we actually 7 do have the capability to do this, and not only at 8 the two digit level, we have the capability to do 9 it at the four digit level, but we don't do it 10 because we don't see any need to do it. 11 THE CHAIRMAN: Mr. Fleming. 12 MR. FLEMING: Yes, I have the final 13 undertaking MH-34 and it is in regard to the GDP 14 growth rates that were found in the exhibit 3.1 in 15 the industrial DSM study. And this is in response 16 to Mr. Torrie's query on the growth rate forecasts 17 that were questioned. We are resubmitting exhibit 18 3.1 with clarification of those growth rates. 19 This information does not change the forecast for 20 the industrial DSM, but there are clarifications 21 where there are three errors in values that were 22 given in that table. I have the revised table. 23 THE CHAIRMAN: So you will be 24 submitting that particular report to replace the 25 one that was submitted before? 1750 1 MR. FLEMING: Yes, and we have also 2 issued this as an addendum to the original report 3 to Manitoba Hydro. 4 THE CHAIRMAN: Thank you. All right, 5 Mr. Troniak. 6 MR. TRONIAK: Thank you. Prior to the 7 break I was going to quote from the Royal 8 Commission on Aboriginal Peoples, and you 9 requested that I provide a copy of that quote for 10 people to review, the Board and others to review. 11 I have copies of that which I provided to Mr. 12 Grewar. 13 The quotes come from an article 14 prepared and presented to the forum, Old 15 Relationships and New Partnerships, that was 16 conducted in the University of Winnipeg on 17 February 23rd. The paper was presented by 18 Dr. Steve M. Hoffman, who is a professor of 19 Political Science and Director of Environmental 20 Studies at the University of St. Thomas in St. 21 Paul, Minnesota. I am filing it just to provide 22 the quote that was provided in the article with 23 respect to the Royal Commission. 24 THE CHAIRMAN: Mr. Nepinak. 25 MR. NEPINAK: Mr. Chairman, I was 1751 1 wondering if I could ask our counsel to perhaps 2 elaborate a bit on, you know, on the report 3 outlined here from RCAP. And I guess my question 4 is the validity of RCAP, are those recommendations 5 implemented by Canada? I am still unclear, 6 because from past experience, RCAP was never 7 totally implemented. So I question -- you could 8 answer or counsel. 9 MR. TRONIAK: I don't know if I am the 10 right person to answer that question. The 11 Commission was formed by the Federal Government to 12 investigate the relationship between Aboriginal 13 Peoples and Canada. And this is a conclusion of 14 the report. Whether it was implemented or not, I 15 don't know, or how much of the report was 16 implemented or not, I can't really answer that 17 question. 18 THE CHAIRMAN: Mr. Nepinak, were you 19 asking Mr. Abra to answer this? 20 MR. NEPINAK: Yes. 21 MR. ABRA: The concern that I have, 22 Members of the Commission, is that I gather from 23 what Mr. Troniak is saying, is that the quotation 24 that is being given to you is, in fact, taken from 25 a paper that was given by another person at a 1752 1 different seminar who apparently is interpreting 2 what he thinks RCAP says. And that is not proper 3 cross-examination. 4 MR. TRONIAK: It is not an 5 interpretation, this is a direct quote. 6 MR. ABRA: But it seems to come, I 7 gather, from the paper given by Steven M. Hoffman 8 of the University of St. Thomas. Now, we don't 9 have his whole paper, and he has taken one 10 quotation out of that report and put it into a 11 paper that he has delivered, and that is all that 12 you have provided us with. 13 Mr. Nepinak is familiar with RCAP, as 14 are some of the other members of the Commission. 15 Mr. Nepinak has advised us that it is his 16 understanding that RCAP itself has been a matter 17 of considerable debate and discussion over many 18 years, and that many of the recommendations in it 19 were never implemented. So, in view of that, to 20 take one quotation out of -- at least to take one 21 quotation that is in a paper delivered by 22 Mr. Hoffman, when we don't know even what 23 Mr. Hoffman has had to say about it, really is in 24 my view not fair cross-examination. 25 MR. TRONIAK: I can provide a copy of 1753 1 the paper. But I am just setting out the quote to 2 see -- and my question would be to Mr. Thomas, if 3 he agreed or disagreed with that quotation. It is 4 not going to the veracity of it, or it is just a 5 question of does he agree or disagree with what 6 the quote is? 7 THE CHAIRMAN: Thank you. I don't 8 know how relevant that is, but if that is all you 9 are using this paper for the purpose of asking 10 Mr. Thomas for his opinion on that, we will let it 11 go. 12 MR. TRONIAK: Thank you. 13 THE CHAIRMAN: Mr. Thomas. 14 MR. THOMAS: Mr. Chairman, I would 15 hate to be put in a position where I have to agree 16 or disagree to something that I don't have access 17 to with regard to having full information on the 18 issue. 19 THE CHAIRMAN: That is Mr. Thomas's 20 reply. 21 MR. TRONIAK: So you are not prepared 22 to provide an opinion whether you agree or 23 disagree with the quotation. And I will just read 24 it for the record, if I may, Mr. Chairman? And 25 this states that, 1754 1 2 "The Royal Commission on Aboriginal 3 Peoples found that the history of the 4 NFA, Northern Flood Agreement, has 5 been marked by little or no action on 6 implementation of its obligations and 7 a long drawn out and continuing 8 process of arbitration to force 9 governments to implement their 10 obligations." 11 12 And that is taken from volume 2 of the 1996 report 13 at page 517. 14 The report concluded that Canada, 15 Manitoba, and Hydro, and this is page 120, and 16 this is a quote from the Commission, 17 18 "Canada, Manitoba and Hydro did not 19 intend and have never intended to 20 cooperate energetically in measures 21 designed and determined to be 22 effective in confronting the adverse 23 impacts of the project. They have 24 instead used every legal device to 25 limit their individual liabilities 1755 1 under the agreement. The 16-year 2 history, as it was in 1996, of the 3 Northern Flood Agreement is largely a 4 record of the deployment of those 5 devices. To the communities, the 6 history of the Northern Flood 7 Agreement is a manifestation of bad 8 faith by both levels of government. 9 It has done little to address the 10 impacts which continue to confront the 11 communities." 12 13 Now, I am not asking you to agree or 14 disagree with this, Mr. Thomas, but Chief Primrose 15 was quoted -- and I know this is not quoted 16 correctly -- that one of the reasons that NCN 17 entered into the implementation agreement was that 18 they were just tired of fighting with Hydro, 19 Canada, and Manitoba, with respect to 20 compensation. Is that correct? 21 THE CHAIRMAN: Mr. Bedford? 22 MR. BEDFORD: I was simply going to 23 observe, Mr. Chairman, for the record, that given 24 that we were engaged in an exercise of reading 25 into the record a quotation from a document, that 1756 1 what Mr. Troniak failed to note for the record is 2 that when he read in the abstract, it is quite 3 clear when I look at the abstract that he was 4 reading that a portion of the original document 5 has been left out of the abstract. So after the 6 word "devices," something is missing -- how much 7 we don't know -- before you move on to the words 8 "to the communities." Thank you. 9 THE CHAIRMAN: That's correct. 10 Ms. Matthews-Lemieux. 11 MS. MATTHEWS-LEMIEUX: What I would 12 like to do is just be able to make sure that 13 Mr. Thomas has in front of him the actual words 14 that Chief Primrose said in the opening address 15 before he responds to those questions. 16 THE CHAIRMAN: Mr. Wojcznski. 17 MR. WOJCZYNSKI: While that is 18 happening, I would just like to make a few small 19 points to indicate our concern with this one piece 20 of paper, and particularly in the lack of context, 21 and also the gross inaccuracies and errors in this 22 one piece of paper. And we haven't had a chance 23 to really go through it thoroughly. 24 You go to the first paragraph, it 25 suggests, for instance, that the NFA did not 1757 1 include South Indian Lake. But actually it was 2 part of the Nelson House band at that time. 3 You go on to the little excerpt from 4 the RCAP, and if you just read the 16-year history 5 of the NFA, da, da, da, da -- well, given that the 6 NFA was 1977, 16 years history is 1983 -- sorry, 7 '93, I can't add quickly here. And a lot of the 8 work that was done over the intervening years, 9 including implementation agreements, were to 10 address the same concerns that others had earlier. 11 There are other difficulties here 12 talking about the implementation agreements being 13 an extinguishment of all Aboriginal land claims. 14 There is just error after error in these papers, 15 so we do have difficulties with the use of this. 16 MR. TRONIAK: I am not filing the 17 paper, I am filing the quotation taken from -- 18 THE CHAIRMAN: That is the problem, 19 though, Mr. Troniak, that is being pointed out. 20 That it is, as Mr. Abra has indicated, a quotation 21 within a paper and an incomplete one at that, and 22 therefore, it is not a complete -- no one has in 23 front of them the complete picture of the actual 24 RCAP document. I believe perhaps -- I am at a 25 difficulty to allow further questioning on that 1758 1 particular paper. 2 MR. TRONIAK: Not much turns on it, 3 because you requested it this morning, I wasn't, 4 you know, going to file that with the Commission, 5 I was just going to ask a question with respect to 6 the Royal Commission. 7 My question to Mr. Thomas is, one of 8 the reasons that the implementation agreement was 9 entered into between NCN and Hydro, the various 10 levels of Government, was the fact that to put an 11 end to this fighting or controversy with respect 12 to implementing the NFA. Is that correct? 13 MR. THOMAS: The length of time that I 14 took to respond to the issues that arose from the 15 Northern Flood Agreement that was signed in 1977 16 was not seen as being conducive to our best 17 interests by our community. A decision was made 18 by the leadership at the time to take a different 19 approach to the issue, and the result was the 20 implementation of the 1996 agreement in 1996. 21 MR. TRONIAK: Now, Mr. Wojcznski seems 22 to indicate that the implementation agreement did 23 not affect or extinguish any -- or am I correct 24 that it did not extinguish the obligations of 25 Hydro under the NFA, or are you referring just to 1759 1 Treaty rights? 2 MS. MATTHEWS-LEMIEUX: Just -- 3 THE CHAIRMAN: Ms. Matthews-Lemieux. 4 MS. MATTHEWS-LEMIEUX: I think on that 5 question he is asking for a legal opinion. And I 6 am just not sure that Mr. Thomas would want to 7 give a legal opinion. I went through and provided 8 you this morning with article 14, which has the 9 releases. They speak for themselves. 10 MR. WOJCZYNSKI: And just for the 11 record, when I was speaking -- what I was saying 12 was that on behalf of Manitoba Hydro, and again I 13 am not a lawyer, but it is very clear that what 14 the implementation agreements were doing was not 15 extinguishing any Aboriginal rights under the NFA, 16 or any other ones for that matter. And what the 17 implementation agreements were doing was taking 18 the NFA and providing a good means of implementing 19 the obligations under the NFA. 20 THE CHAIRMAN: Thank you. 21 MR. WOJCZYNSKI: So that is probably 22 the limit of my legal knowledge. 23 MR. TRONIAK: I won't press you any 24 further. 25 Now, I will deal now -- I think we 1760 1 touched briefly on it this morning -- with the 2 ratification vote with respect to the AIP. Now, 3 prior to the vote being held, I think your 4 evidence was, or I am assuming that the NCN 5 membership was provided with such information as 6 they felt to be needed to make an informed 7 decision. Is that correct, Mr. Thomas? 8 MR. THOMAS: Yes. 9 MR. TRONIAK: So, how many meetings 10 were held, informational meetings were held, and 11 where were they held? 12 MR. THOMAS: The exact number, I can't 13 just recall off the top of my head, but we have 14 had a very significant number of meetings with our 15 membership to provide them with information. I 16 believe that we have submitted some of that 17 information in terms of our consultation efforts 18 and it should be on the record. 19 MR. TRONIAK: And I take it that the 20 intention is to have the similar type number of 21 meetings held prior to the ratification vote on 22 the PDA? 23 MR. THOMAS: We are engaging in 24 ongoing consultative processes, and we will be 25 engaged in ongoing consultation with our people. 1761 1 MR. TRONIAK: And these meetings, they 2 will be held at Nelson House and other places 3 or -- 4 MR. THOMAS: Many of our meetings are 5 at Nelson House, yes, but we also do have other 6 members that are elsewhere. We do have meetings 7 in South Indian Lake. We do have meetings in 8 Thompson, in Brandon, and in Winnipeg. We try to 9 do the best that we can to try and inform as many 10 of our people as possible. 11 MR. TRONIAK: All right. Now, you can 12 correct me if I am wrong, because I wasn't at any 13 of the informational meetings, but I am advised 14 that at these informational meetings with respect 15 to the AIP, no mention was made that if a vote, if 16 the AIP was ratified, that the NCN would become a 17 co-proponent of the project. Is that correct? 18 MR. THOMAS: If you -- I don't know if 19 you have a copy of it, but with respect to our 20 Agreements in Principle under section 11, 11.1 21 does make reference to the possibility that we 22 will be producing a joint document in a joint 23 process with respect to the regulatory processes 24 that we have to go through. In essence, under 25 11.1 it states that the parties have a mutual 1762 1 interest in the environmental assessment of the 2 proposed projects and developments described in 3 this AIP, and that the development of an EIS for 4 any of the proposed projects or developments by 5 the proponent will proceed in a manner consistent 6 with all legal and technical requirements of the 7 Federal and Provincial regulatory review and 8 approval processes. 9 So we did contemplate that we would be 10 involved in such a process, and this information 11 was available, made available to our membership. 12 MR. TRONIAK: But were memberships 13 specifically -- was the membership specifically 14 advised that NCN would become a co-proponent as 15 they are now? 16 MR. THOMAS: Because we were looking 17 at, or we are looking at the partnership 18 arrangement, it was understood I believe by our 19 people that we would be engaged in a partnership, 20 or the development of a partnership arrangement, 21 whereby we have to go through certain processes 22 prior to the actual finalization of any agreement. 23 And in that kind of situation we do have to, when 24 we jointly submit a document for review through 25 the regulatory bodies, we have to do so jointly, 1763 1 and as a result we are referred to as 2 co-proponents. 3 MR. TRONIAK: So you are saying if a 4 member would have read the AIP, they would have 5 come up with that conclusion? 6 I am just asking, were the people 7 specifically told, if you ratify this agreement or 8 the AIP, we will become co-proponents with Hydro 9 of the Wuskwatim project? 10 THE CHAIRMAN: Yes, 11 Ms. Matthews-Lemieux. 12 MS. MATTHEWS-LEMIEUX: I am just 13 wondering, in terms of that particular question, I 14 don't know how Mr. Thomas can answer what any 15 particular member might conclude from reading the 16 materials. He has given his answer as it pertains 17 to the actual document, but to ask him what an 18 individual member might conclude from their own 19 reading of it, I fail to see how he can respond to 20 that. 21 MR. TRONIAK: My question is simple. 22 I am just asking, to the best of his knowledge, 23 was it made clear to NCN members, or were they 24 advised that NCN would become a co-proponent, not 25 whether they -- he is relying on that document for 1764 1 people to have read it, and he said because of 2 that they would know that, but I am asking, were 3 they specifically told that? 4 THE CHAIRMAN: Are you asking 5 Mr. Thomas whether, in his opinion, the members of 6 NCN were advised that they could be, that NCN was 7 interested in looking at the possibility of 8 becoming co-proponents? Is that what you are -- 9 MR. TRONIAK: I guess, was it made 10 clear that that was a possibility? It became a 11 fact, but was that put before the people prior to 12 them voting on the AIP? 13 THE CHAIRMAN: Mr. Thomas? 14 MR. THOMAS: I believe the process for 15 talking to the people about these issues started 16 in 1999. We had indicated to the community that 17 we were involved in a joint process where we would 18 explore all that the pursuit of a partnership 19 would entail. And within that context, I would 20 expect that there would be some understanding that 21 when you go through some processes, you have to 22 identify yourself as a co-proponent when you 23 submit documentation for review to a regulatory 24 body. 25 MR. TRONIAK: The AIP is, I take it, 1765 1 is non-binding, it just sets out what is proposed. 2 My question is, and I am advised by members that 3 many believe that what they were ratifying was 4 basically, simply, giving NCN permission for the 5 Chief and Council to continue negotiations with 6 Hydro. Would they be mistaken then if they had 7 that assumption? 8 MR. THOMAS: I can't remember the 9 specific wording of the referendum question, but I 10 think it may have been included in that question. 11 There is more to, I believe more to the answer 12 than just a simple yes to the question that you 13 put forward. The people do have an understanding 14 that, yeah, go forward, discuss the possibility of 15 doing a partnership with Manitoba Hydro, which 16 involves the exploration of all of the different 17 aspects that have to be considered, which also 18 includes being a co-proponent for the purpose of 19 having information processed through this hearing. 20 MR. TRONIAK: All right. And again, I 21 wasn't there, but I am advised, and you can 22 correct me if I am wrong, but I am advised that 23 members were advised that the project would only 24 deliver power to the nearest power grid, the 25 proposed Birchtree station. Is that correct? 1766 1 MR. THOMAS: I will get my engineer to 2 answer that question -- I am not entirely 3 proficient on those kind of matters. 4 THE CHAIRMAN: Mr. MacInnes? 5 MR. MACINNES: Mr. Troniak, would you 6 repeat the question, please? 7 MR. TRONIAK: I am advised that when 8 these discussions or meetings were held with 9 respect to the AIP prior to its ratification, that 10 the members were advised that the project would 11 only deliver power to the nearest power grid, 12 which is the proposed Birchtree station. And I am 13 just wondering if that is correct or not? I 14 guess, is the statement correct that is what was 15 intended? I know you weren't at the meeting to 16 determine whether or not that was said to the 17 members, that is where Mr. Thomas was present. 18 MR. MACINNES: Actually, I was at 19 numerous meetings. And I believe that your 20 statement is incorrect. At the time of preparing 21 for the 2001 AIP vote, discussions were underway 22 about transmission line development, that is a 23 part of this project. And the routes were clearly 24 described before that time. So, the information 25 presented to the people of NCN was that the 1767 1 project would deliver power to a transmission line 2 that would pass by the site. 3 MR. TRONIAK: All right. I am advised 4 by members that they were not advised that there 5 would be a new transmission line to cut across 6 their traditional NCN territory. So that would be 7 incorrect as well? 8 MR. MACINNES: Could you repeat that 9 one? 10 MR. TRONIAK: I am advised by members, 11 and again this is hearsay -- this is what lawyers 12 talk about -- but I am just saying what I have 13 been told, certain members have advised me that 14 they were not advised that there would be a new 15 transmission line to cut across traditional NCN 16 territory. Is that correct or not? Were they so 17 advised or were they not? 18 MR. MACINNES: I believe they were 19 advised, yes. 20 MR. TRONIAK: And Mr. Thomas, you 21 believe that as well? 22 MR. THOMAS: Yes. 23 MR. TRONIAK: Thank you. 24 With respect to -- and this is dealing 25 with the sale and then somewhat of the economic 1768 1 impact -- and again I am not an economist -- I 2 have to put on the record that my clients are in 3 favour of development in the North and in favour 4 of prosperity, they would just like to share in 5 some of it. If there is no firm power sale for 6 Wuskwatim power, will Manitoba Hydro have to buy 7 the power, guaranteeing revenue to NCN? 8 MR. WOJCZYNSKI: Manitoba Hydro's 9 agreement with the partnership is that we would 10 buy the power, and that we are absolutely 11 confident that we will be able to sell it on the 12 export market. 13 MR. TRONIAK: All right. But if you 14 are not able to sell it on the export market, do 15 you guarantee that you will be buying it from NCN? 16 MR. WOJCZYNSKI: We are not buying it 17 from NCN. 18 MR. TRONIAK: Or buying the power? 19 MR. WOJCZYNSKI: We would be buying it 20 from the partnership, and we would be buying from 21 the partnership regardless of what is happening on 22 the export market. 23 MR. TRONIAK: Okay. 24 MR. WOJCZYNSKI: And we are absolutely 25 confident that we will be able to sell the power 1769 1 on the export market. 2 MR. TRONIAK: Yes, I know that you are 3 confident that you will be able to sell it, but 4 you are saying that even if you are not able to 5 sell it, you are still going to buy it? 6 MR. WOJCZYNSKI: That's correct. 7 MR. TRONIAK: Thank you. And dealing 8 with the export market, and again I can be 9 corrected if I am wrong in some of the statements 10 that I make here, but I understand that the major 11 export customer for the power is Excel Energy out 12 of Minnesota. Is that correct? 13 MR. CORMIE: We haven't negotiated a 14 sale, and Excel could be a customer of Manitoba 15 Hydro, but we haven't concluded any agreement with 16 any customers yet. 17 MR. TRONIAK: But you export power 18 now, don't you? 19 MR. CORMIE: We export power, yes, to 20 Excel Energy. 21 MR. TRONIAK: And Excel at the present 22 time is the major purchaser of Hydro power, or 23 export power? 24 MR. CORMIE: Excel Energy is our 25 largest customer, yes. 1770 1 MR. TRONIAK: I understand they 2 purchase up to 40 percent of Manitoba Hydro power; 3 is that correct? 4 MR. CORMIE: I don't know the answer 5 to that. I can find that out for you, if you 6 wish? 7 MR. TRONIAK: If you would -- but it 8 is a significant amount, in any event. 9 MR. CORMIE: Yes, it is a significant 10 amount. 11 12 (UNDERTAKING MH-39: Advise if Excel Energy 13 purchase up to 40 percent of Manitoba Hydro power) 14 15 MR. TRONIAK: Now, you say you don't 16 have anything firm. Is it true or not -- or I am 17 advised that Excel Energy is planning to purchase 18 less rather than more power from Manitoba Hydro in 19 the future. Can you comment on that? 20 MR. ADAMS: We have absolutely no 21 indication from Excel that they intend to change 22 their purchasing practices with Manitoba Hydro. 23 Mr. Cormie and his colleagues are in more or less 24 constant contact with Excel. I was at a meeting 25 on Friday with Excel people there, and there is 1771 1 absolutely nothing to suggest that they want to 2 reduce their purchases from us, and we are 3 somewhat optimistic that they may want to increase 4 their purchases from us. 5 MR. TRONIAK: And an increase would be 6 by way of new contracts, or under the existing 7 contracts? 8 MR. ADAMS: It would be a new 9 contract. 10 MR. TRONIAK: Thank you. So, you are 11 confident that the existing contracts, Excel will 12 live up to, but you have no indication of whether 13 new contracts will be entered into, except for 14 your optimism; is that fair to say? 15 MR. ADAMS: I don't think -- that is 16 not what I said. What I said is that we are in 17 continual contact with them. Excel has to go 18 through a bidding process under the direction of 19 the Minnesota Public Utilities Commission. We 20 expect to lose some of those bids, we expect to 21 win some of those bids. 22 MR. TRONIAK: All right. Now, I 23 understand in Minnesota, or in the States, there 24 is what is known as the Minnesota Public Utilities 25 Commission. You are aware of that Commission -- 1772 1 someone from Hydro? Mr. Adams? 2 MR. ADAMS: I think I just told you 3 that they mandate a bidding process for Excel in 4 the U.S. 5 MR. TRONIAK: So, Hydro would have to 6 appear in front of that Commission? 7 MR. ADAMS: No. 8 MR. TRONIAK: Okay. Would anyone on 9 behalf of Manitoba Hydro -- 10 MR. ADAMS: Not unless we choose to. 11 MR. TRONIAK: So, no one from the 12 Government of Manitoba or Manitoba Hydro has been 13 before the Public Utilities Commission? 14 MR. ADAMS: We have had people argue 15 on our behalf in front of the Public Utilities 16 Commission. We are not obligated to be there. 17 MR. TRONIAK: But you go there if you 18 feel it is in Hydro's best interest to do so? 19 MR. ADAMS: Yes. 20 MR. TRONIAK: Now, I understand that 21 the Minnesota Public Utilities Commission was 22 advised by either Hydro or representatives of the 23 Province that any new contracts, or any further 24 exports would not involve new construction of 25 dams; is that correct, or not? 1773 1 MR. ADAMS: No. 2 MR. TRONIAK: That is incorrect? 3 MR. ADAMS: What the Minnesota Public 4 Utilities Commission was advised is that the 5 500-megawatt sale that we have just consummated 6 with Excel Energy would not involve the 7 requirement for new dams. 8 MR. TRONIAK: So there was nothing to 9 say about new power sales -- not involving new 10 construction? That's correct then? 11 MR. ADAMS: If I understand the double 12 negative -- we have never told the Public 13 Utilities Commission that we would not build new 14 dams and try to sell the energy in the U.S. 15 MR. TRONIAK: All right. 16 MR. ADAMS: What we did tell them was 17 that for the 500-megawatt sale with Excel, that 18 they approved about a year and a half ago, was 19 that we didn't need to build anything new to meet 20 our obligations under that contract. 21 MR. TRONIAK: Yes, under the current 22 contracts, right. And Wuskwatim is being built 23 for export; is my understanding of that correct? 24 MR. ADAMS: I think we have probably 25 said about 15 times in front of this Commission 1774 1 that Wuskwatim is being advanced about ten years 2 so we can meet, respond to the opportunity to 3 export that energy in the interim. 4 MR. TRONIAK: All right. Because I 5 was a little confused, because I know that with 6 respect to whether it is for export or not, and 7 again -- 8 MR. ADAMS: I don't know what you 9 expect, Mr. Troniak, I think you are the only 10 person in this room that is confused by now. 11 MR. TRONIAK: I may be. But if I 12 understand you correctly -- and I guess I will 13 just be a brief moment on this -- initially 14 Wuskwatim will be used for export, but when the 15 Provincial economy requires it, it will be used 16 for domestic consumption. Is that correct? Am I 17 misunderstanding that? 18 MR. ADAMS: No, I think you understand 19 it. 20 MR. TRONIAK: Thank you. 21 Now, one of the concerns expressed by 22 my client and other members of NCN are the 23 guarantees or safeguards that are in place to make 24 sure that if the project goes ahead that NCN gets 25 what they are entitled to. And my understanding 1775 1 is that NCN shares only in the income generated 2 from Wuskwatim; is that correct? 3 MR. ADAMS: Yes, Wuskwatim has a 4 contract with Manitoba Hydro, or the Wuskwatim 5 partnership will have a contract with Manitoba 6 Hydro, and any profit that is left over after the 7 expenses of the partnership are accounted for, NCN 8 will get a share of that. They don't get a share 9 of Manitoba Hydro's other revenues. 10 MR. TRONIAK: Now, what safeguards are 11 in place to ensure that Manitoba Hydro doesn't 12 shift operating costs on to Wuskwatim that maybe 13 shouldn't be there? Is there independent audits 14 done, or how is that done so that there is -- so 15 it is clear that any income generated from 16 Wuskwatim is accounted for, plus the expenses? Is 17 there a way that that is done or -- 18 MS. WRAY: There will be independent 19 audits taking place, both with regard to Manitoba 20 Hydro and the partnership. 21 MR. TRONIAK: And who will conduct 22 those independent audits? 23 MS. WRAY: That hasn't been decided 24 yet. 25 MR. TRONIAK: So they will be 1776 1 independent accounting firms then, not associated 2 with Hydro; is that fair to say, or you haven't 3 decided? 4 MS. WRAY: They would be independent 5 accounting firms. 6 MR. TRONIAK: All right. Now, one 7 other question that we have, as you know, Hydro is 8 projecting significant losses this year. Is there 9 any protection for NCN with respect to potential 10 losses? 11 MR. ADAMS: The losses that Manitoba 12 Hydro is experiencing this year have really got 13 nothing to do with the Wuskwatim project which 14 won't come into service for at least another six 15 years. But to the extent that the project will 16 produce varying amounts of power, based on the 17 varying flows in the river, then NCN is at some 18 risk. 19 MR. TRONIAK: Okay. 20 MS. WRAY: Maybe I can clarify that 21 NCN per se may not be at risk, but there is a risk 22 associated with the amount of income that will be 23 generated by the partnership. And we have 24 provided quite a number of scenarios which show 25 what would happen, for example, if there is a 1777 1 drought, if there are low export prices. And even 2 under those scenarios, there will be dividends 3 paid out to both partners in a time period of, for 4 the most part, under ten years. 5 MR. TRONIAK: All right. And so I 6 take it that NCN would still have to pay the debt 7 and operational costs if there were potential 8 losses? 9 MS. WRAY: The debt is serviced by the 10 partnership itself. In other words, the interest 11 expense is charged to the partnership, not to the 12 individual partners. NCN, apart from that, is 13 expected to have some loans outstanding with 14 Manitoba Hydro to finance part of its equity, and 15 the interest that is payable on those loans would 16 be paid out of NCN's share of dividends. 17 MR. TRONIAK: Thank you. The AIP and 18 SOU, I believe both refer to non-binding mediation 19 with respect to settlement of disputes on the 20 price of power. What exactly does that mean? 21 MR. WOJCZYNSKI: We would have to take 22 an undertaking on that. 23 MR. TRONIAK: Thank you. 24 25 (UNDERTAKING MH-40: Advise what non-binding 1778 1 mediation with respect to settlement of disputes 2 on price of power means) 3 4 MR. TRONIAK: Also -- and this may be 5 part of your undertaking -- isn't it true that 6 Manitoba Hydro will have the final say on the 7 price of the power, at the end, that is set and 8 paid for Wuskwatim? 9 MR. WOJCZYNSKI: The price for the 10 power under the power purchase agreement is based 11 on a formula. The exact reason that we decided to 12 go to a formula approach is so that there is 13 clarity and no ambiguity as to what the price will 14 be. So going forward, NCN and Hydro both know 15 what that formula is going to be, and we can apply 16 it, it can be audited, and thus we won't run into 17 business partnership arguments and difficulties. 18 So, it is -- I would have to say no to your 19 question. 20 MR. TRONIAK: To my question -- thank 21 you. 22 One of the concerns that my clients 23 have with respect to what is being proposed is 24 that they strongly believe that there should be, 25 you know, a monitoring of the environmental and 1779 1 social and economic impacts of the projects, 2 because they believe that was one of the flaws 3 with respect to the NFA, that those impacts 4 haven't been monitored, and they should be 5 monitored for the life time of the project. And 6 they are wondering why this isn't included in the 7 summary of understanding, and will it be included 8 in the PDA? 9 MR. WOJCZYNSKI: First of all, I want 10 to deal with the premise of your question that 11 essentially said there has been no monitoring of 12 the projects -- the project, meaning the existing 13 projects -- there has been a vast amount of 14 studies and monitoring. And the monitoring that 15 was done initially with the projects don't meet 16 today's standards, Manitoba Hydro would fully 17 agree with that. But in the meantime, a large 18 number of studies and monitoring has been 19 undertaken. 20 So now moving on to your question, as 21 I said earlier today and in other days, there are 22 comprehensive environmental studies that we are 23 eventually going to get to under the hearing 24 process here. And where there is some uncertainty 25 as to what those effects are going to be, there 1780 1 will be monitoring of those. And that is built 2 into the project plans and into the project cost 3 estimates. 4 MR. TRONIAK: Okay. 5 MR. WOJCZYNSKI: And there are 6 processes in place, are and will be processes in 7 place to deal with if there are any deviations 8 from what was expected. 9 MR. TRONIAK: And I take it that these 10 will be forming part of the PDA then? 11 MR. WOJCZYNSKI: I don't know to what 12 degree they will be part of the PDA, but they will 13 be in place under various agreements and 14 arrangements. 15 MR. TRONIAK: And those would be made 16 available to NCN members prior to them voting on 17 the ratification? 18 MR. WOJCZYNSKI: I don't know if they 19 are all going to be in place, but the general 20 nature of them will be available and known. I 21 don't know that all of the detailed environmental 22 protection plans and all of the other ones will be 23 finalized at that time yet. That is an ongoing 24 process, including interactions between NCN, 25 Manitoba Hydro, its consultants, and various 1781 1 specialists and regulatory agencies, both Federal 2 and Provincial. 3 MR. TRONIAK: On page 36 of the SOU 4 deals with treaty obligations, and I have some 5 questions with respect to -- not necessarily -- I 6 think it is accepted that it has no effect, or 7 doesn't alter any treaty rights which are under 8 the Constitution Act. These are questions that I 9 believe I think Mr. Thomas could answer, if he can 10 possibly. 11 And you can correct me again if I'm 12 wrong, I'm trying to paraphrase something that you 13 said earlier. You stated that you believed the 14 consultation and treaty and Aboriginal rights 15 would be completed before the community vote, am I 16 correct in that assumption? 17 MR. THOMAS: Yes. 18 MR. TRONIAK: And you said that you 19 hoped or the vote would likely occur in August or 20 September of this year, is that correct? 21 MR. THOMAS: That is what we expect, 22 that is if everything is done by that time, 23 then -- 24 MR. MAYER: Assuming we finish these 25 hearings. 1782 1 MR. THOMAS: Assuming that we don't 2 have thousands more questions that will take up a 3 lot more time. But yes, around that time if 4 everything goes okay. 5 MR. TRONIAK: All right. So you are 6 planning then or hoping that whatever treaty or 7 Aboriginal rights issue NCN has will be dealt with 8 by then, is that fair to say? 9 MR. THOMAS: Yes. 10 MR. TRONIAK: Now, you are aware that 11 there are numerous other First Nation and Metis 12 communities involved in these consultations, is 13 that right? 14 MR. THOMAS: Yes. 15 MR. TRONIAK: Okay. And you are aware 16 that's the Federal and Provincial governments 17 responsibility to conduct these consultations, 18 right? 19 MR. THOMAS: Yes. I believe I 20 indicated that in a previous answer, that the 21 Federal Government has its own duty to consult and 22 has to engage in those processes on their own. 23 MR. TRONIAK: And you will agree that 24 that they have to meet and have discussions with 25 all potentially impacted First Nations and Metis 1783 1 communities, correct? 2 MR. THOMAS: I think the answer is 3 yes, but I'm not sure whether or not there is an 4 actual obligation to consult with a particular 5 entity in a particular way, and I'm thinking of 6 when you say the Metis, I'm not sure if there is 7 an obligation there. 8 MR. TRONIAK: Okay. And you are aware 9 that the Government has to -- well, should do this 10 any way -- and conclude these consultations before 11 it makes any decisions with respect to licencing 12 and things like that? The consultations should be 13 concluded before decisions are made, correct? 14 MR. THOMAS: Before the final decision 15 to proceed with the construction of the project. 16 MR. TRONIAK: Okay. So, really you 17 don't know when this might be concluded or these 18 consultations might be concluded because they are 19 to a large extent out of NCN hands, isn't that 20 correct? 21 MR. THOMAS: Yes, to a large extent it 22 is. 23 MR. TRONIAK: Thank you. 24 MR. WOJCZYNSKI: One thing is clear, 25 though, that we will not receive and cannot 1784 1 receive our licences and authorizations and 2 approvals through the Provincial and Federal 3 governments, and they require a Section 35 4 consultation before making resource allocations 5 and before making the various decisions. And so 6 we will not receive any licences until the Section 7 35 consultations are done. So that much we have 8 certainty of. 9 MR. TRONIAK: But you don't know when 10 those will be done? 11 MR. WOJCZYNSKI: No one knows with any 12 absolute certainty, no. 13 MR. TRONIAK: Thank you. In reviewing 14 the documents, the AIP and the SOU, there appear 15 to be a number of commitments or promises with 16 respect to training, employment and business 17 opportunities in these documents; is that correct? 18 MR. THOMAS: Could you repeat that 19 question, please? 20 MR. TRONIAK: A lot of the terms in 21 the AIP and the SOU deal with the economic 22 development in the north and promises of training 23 and employment and business opportunity to NCN 24 members. I'm asking if I'm correct in that 25 assumption. 1785 1 MR. THOMAS: Yes. 2 MR. TRONIAK: So there are promises of 3 jobs, training and education. My understanding is 4 that these jobs relate mainly to the construction 5 of the Wuskwatim dam, is that correct? 6 MR. THOMAS: If I just may make an 7 additional comment to your previous question. The 8 word promise is not something that we have used. 9 We do explore potential and we do try to prepare 10 as best we can, but we have not offered any kind 11 of guarantees in terms of employment on the 12 project. 13 MR. TRONIAK: Yes. And there are no 14 guarantees. Will there be guarantees in the PDA 15 guaranteeing a certain amount of employment 16 opportunity to NCN band members? 17 MR. THOMAS: Not guarantees per se in 18 terms of the employment and training component of 19 things. However in the business opportunities 20 side of things, wherever we can attain a direct 21 contract we can provide employment for our people. 22 But I wouldn't necessarily classify them as 23 guarantees. 24 MR. TRONIAK: So, Hydro seems to be 25 saying that they will do -- what is Hydro 1786 1 promising or what is Hydro undertaking, if promise 2 is too strong a word with respect to employment 3 opportunities then? 4 THE CHAIRMAN: Mr. Adams. 5 MR. ADAMS: Again, we have been 6 through this several times but I will try to 7 repeat it for the record. There is two distinct 8 areas. One is that there is a preferential clause 9 in the Burntwood/Nelson agreement that requires 10 the contractor to seek first qualified northern 11 Aboriginal candidates. And in the process of 12 renegotiating the agreement with the Allied Hydro 13 Council we would be seeking to at least reaffirm 14 that and preferably strengthen it. 15 The second activity related to that is 16 an extensive pre-project training initiative 17 conducted jointly by Manitoba Hydro, Manitoba, 18 Canada and the five First Nations involved in the 19 two potential projects to ensure that local 20 Aboriginal candidates will in fact be qualified to 21 work on the projects when they start. 22 The third leg is a requirement in the 23 contracts with contractors that they seek out and 24 employ subcontractors with local content to the 25 maximum extent possible, and that that will be a 1787 1 criterion in the selection process. 2 And the fourth one is where we can 3 identify specific contracts that we believe and 4 that the local First Nations believe can be 5 constructed or performed by the local communities, 6 then we will try to negotiate satisfied contracts 7 with them. 8 MR. TRONIAK: And that is at the I 9 guess discretion of Manitoba Hydro? There is no 10 firm, as you said, commitment. All of the 11 language is conditional? 12 MR. ADAMS: The commitment is to work 13 with the First Nations, and in this case 14 particularly NCN, to ensure that they and their 15 members can get work on the job and supply 16 materials and equipment to the job to the maximum 17 extent possible. Are we going to guarantee that 18 any particular person or any number of people 19 works on the job? We can't do that. 20 MR. TRONIAK: And I understand Hydro 21 retains the right to adopt, amend or terminate its 22 on the job employment and business opportunities, 23 and that is article 6.13 of the AIP, I believe, is 24 that correct? 25 MR. ADAMS: Sorry, I don't have it 1788 1 with me. 2 MR. TRONIAK: That is a clause there, 3 so Hydro again has the discretion to terminate the 4 employment or business opportunity policies that 5 may be agreed to. 6 MR. ADAMS: I don't know where you get 7 the word terminate from. And I don't have the AIP 8 in front of me, but we have had northern 9 employment policies now for 25 years that I know 10 of and there is certainly no intention to 11 terminate them. We modify them and improve them, 12 and based on feedback we go ahead and ultimately 13 hopefully get to all of our employees in Northern 14 Manitoba from the Aboriginal communities. 15 MR. TRONIAK: And you made reference 16 to, you have been doing this, or Hydro has been 17 doing this for over 25 years. And I take it that 18 the NFA has been filed as an exhibit with the 19 Commission, is it a document that is available? 20 MR. ADAMS: I can't imagine why we 21 would, but I don't think it has been filed. 22 THE CHAIRMAN: I don't think so. 23 MR. TRONIAK: I may get into the same 24 problem that I had with respect to the Royal 25 Commission. I just want to refer to section 18.5 1789 1 of the NFA, which I have a copy, not of the whole 2 agreement, but just that article. I may just -- I 3 don't know if the Commission wants a copy of that 4 or -- 5 THE CHAIRMAN: You would have to, I 6 don't know how you proceed with -- you would have 7 to explain why this is relevant. 8 MR. TRONIAK: The promises or I guess 9 the language in the AIP and in the SOU is very 10 similar to the language in the NFA. And I just 11 wanted a comparison of, again, it was opened up by 12 Mr. Adams. He said we have been dealing with it 13 for 25 years and we know what we should be doing, 14 I just want to see how that has worked. 15 THE CHAIRMAN: So you are asking a 16 question of Mr. Adams based upon his wording, his 17 reply and how that compares with the NFA? 18 MR. TRONIAK: Yes, because he said, 19 well, you know, we would never do that even if we 20 had the power to do it -- 21 THE CHAIRMAN: I think he knows how to 22 answer. Go ahead and ask him. 23 MR. TRONIAK: But there were promises, 24 I don't know if promise is the right word, but in 25 the NFA there were potential, or I guess the wish 1790 1 of the NFA was to develop economics for Northern 2 Manitobans and First Nations peoples and do what 3 could reasonably be done so that they would 4 benefit from the development of the projects. Is 5 that fair to say? 6 MR. ADAMS: I don't have the NFA in 7 front of me and I haven't had a chance to read it 8 in some time, so I'm not prepared to comment on 9 what it was intended to do or not. 10 MR. TRONIAK: All right. But that was 11 the intent or the hope of the AIP and the SOU to 12 stimulate economic development and have NCN 13 members share in the prosperity, is that right or 14 wrong? 15 MR. ADAMS: I think it was more than a 16 hope. I think it is part of the intention. 17 MR. TRONIAK: Now, I understand under 18 the NFA, section 18.5, Manitoba, and I guess this 19 is to Mr. Thomas because it is an obligation of 20 Manitoba which is to the members, I understand 21 that Manitoba is to report every three months to 22 each band regarding the practical steps 23 implemented and the results obtained in obtaining 24 the objectives under the NFA. I understand that 25 regular quarterly reports have been provided to 1791 1 NCN by Manitoba? 2 MR. THOMAS: What we have in terms of 3 any obligations that exist of Manitoba Hydro to 4 NCN is contained in the implementation agreement 5 that was ratified in 1996. 6 MR. TRONIAK: Okay. So, there are no 7 commitments or obligations from Manitoba Hydro to 8 report to NCN under the NFA? And I don't want to 9 trick you, but I do have, and it may not have come 10 to your attention, but I do have a copy of the 11 latest report provided by the Province of Manitoba 12 to the Chiefs and Council of Nelson House, Norway 13 House, York Factory, Cross Lake and Split Lake, 14 those are the five members of the Northern Flood 15 Committee, and it is dated February 19, 2004. And 16 it says with respect to a copy of Manitoba Hydro's 17 quarterly report and reserve residence employment 18 from April 1 to December 31 of 2003. So, there 19 are -- reports have been made on a regular basis 20 to NCN? 21 THE CHAIRMAN: Mrs. Lemieux. 22 MS. MATTHEWS-LEMIEUX: Councillor 23 Thomas responded to the question, he said NCN 24 rights with relation to the NFA were implemented 25 in the '96 agreement. I'm not sure why we are 1792 1 pursuing this line of questioning as it relates to 2 these provisions in the article, or I should say 3 in the NFA. Surely any issues about whether the 4 NFA has been implemented would be properly within 5 the jurisdiction of the NFA arbitrator. 6 THE CHAIRMAN: I believe that's 7 correct. I'm not too sure where you are leading 8 in that. I would make that clear. And you have 9 also indicated, Mr. Troniak, in the question you 10 are referring to a quarterly report, they are 11 submitted regularly. If you are asking whether 12 these reports were submitted, you stated they were 13 submitted quarterly. 14 MR. TRONIAK: They were submitted and 15 they set out the quarterly reports. 16 THE CHAIRMAN: And you just wanted to 17 know whether they were submitted, which is the 18 case. 19 MR. TRONIAK: All right. So, I take 20 it then -- well, you will do your best efforts, 21 there is no set number of jobs being reserved for 22 NCN members? 23 MR. ADAMS: No. 24 MR. TRONIAK: Thank you. 25 MR. ADAMS: But I would expand on that 1793 1 a little bit. In the initial presentation on 2 Monday the 3rd of March we did present a slide 3 which indicated -- and I will take a breath while 4 my colleagues dig it up. 5 It is page number 52 in the slides 6 that were handed out as part of the original 7 presentation, which suggested that during the 8 first two to three years of the job we would 9 expect somewhere between 81 and 93 positions to be 10 attained by NCN residents, including those at SIL. 11 And in stage two, which is the main civil 12 construction and installation of the units, we 13 would expect somewhere between 80 and 113 14 potential jobs to go to the same, to NCN including 15 SIL again. 16 MR. TRONIAK: And those jobs would be 17 provided at the discretion of Manitoba Hydro? 18 MR. ADAMS: No. 19 MR. TRONIAK: You have no absolute say 20 as to employment and -- 21 MR. ADAMS: There will be a very 22 sophisticated referral process, where the 23 contractors will have to go to the referral agency 24 to get people employed. People who are looking 25 for jobs will register with the referral agency, 1794 1 and there will be a preference order of which they 2 get referred. And subject to meeting the 3 appropriate qualifications, the contractor will 4 employ them. Hydro will only get involved in the 5 event there is a dispute over qualifications or 6 other related issues. 7 MR. TRONIAK: So the decisions 8 regarding employment of NCN band members would be 9 the responsibility of the independent contractors 10 then retained? 11 MR. ADAMS: Yes, but the contractor 12 has obligations under the contract to follow 13 specific procedures. 14 MR. TRONIAK: If I may have a moment, 15 I think that may be it. I believe those are my 16 questions, thank you. 17 THE CHAIRMAN: Thank you. Just a 18 moment here until we -- 19 MR. WOJCZYNSKI: Could I add one piece 20 of information that we were saying earlier on the 21 transmission? There was some concern as to 22 whether transmission had been made clear in the 23 AIP. 24 THE CHAIRMAN: Yes. 25 MR. WOJCZYNSKI: For the record I 1795 1 thought I would point out that under 4.5, 2 Wuskwatim transmission facilities, it says in the 3 AIP that permanent transmission lines, switching 4 stations and associated facilities will be 5 constructed inside and outside of the resource 6 management area to incorporate the Wuskwatim 7 project in the integrated power system. There is 8 some other clauses as well. But I think it makes 9 clear that transmission was going to be built 10 inside and outside of the RMA. 11 THE CHAIRMAN: Thank you. Now with 12 the indulgence of everyone, picking up where we 13 left off on Wednesday night last, I believe. I 14 have been told, and to a certain extent correct, I 15 suppose, we did put some pressure on Mr. McIvor to 16 agree to adjourn, or the point that is being made 17 is that we basically forced adjournment without 18 having Mr. McIvor completed his questions. And 19 with the understanding, Mr. McIvor, that you did 20 have but one or two or three at the most questions 21 left -- 22 MR. MAYER: We are serious about that. 23 MR. MCIVOR: I am too. 24 THE CHAIRMAN: Go ahead and proceed. 25 MR. MCIVOR: Maybe just for 1796 1 clarification, there were some questions on 2 Wednesday, between 4:00 and 5:00 p.m. just before 3 the lunch break. There were also some questions 4 towards the end, I think I started approximately 5 9:10 to about 10:30 p.m. As part of my questions 6 to Manitoba Hydro and NCN, I did ask specifically 7 for copies of 13 supplementary agreements that Mr. 8 Adams referred to as Cross Lake, Wabowden, Thicket 9 Portage and some other communities and I think Mr. 10 Mayer mentioned Churchill as well. Mr. Adams had 11 responded that he would provide a list. And I had 12 asked if I can get those agreements. So I was 13 just wondering if I can have access to those? 14 THE CHAIRMAN: I think he answered 15 that part of the question. But who am I to say 16 that? 17 MR. MCIVOR: It was just in 18 consultation with Mr. Beddows this morning and he 19 said no, you are not getting the agreements. 20 THE CHAIRMAN: I think that is what he 21 told you the other day, sorry. 22 MR. MCIVOR: No, he didn't say that, 23 he didn't say he wasn't going to give me the 24 agreements. 25 THE CHAIRMAN: I misunderstood. 1797 1 MR. ADAMS: Let me try to recall what 2 I said, Mr. Chairman. Firstly, I don't know that 3 it is 13. As I recall, what I said is I think it 4 is something in the order of 13 because that is a 5 number that registers with me. But it may be 6 more, it may be less. We have agreements with a 7 huge number of communities and organizations 8 throughout Northern Manitoba. Secondly, I'm quite 9 sure, and I haven't checked the transcript, but 10 people have told me that I certainly did not 11 promise to provide copies of all of the 12 agreements, whether it is 13 or 12 or whatever. 13 And quite frankly I'm reluctant to agree to do 14 that because I don't see what the relevance has to 15 do with Wuskwatim. I am prepared to give you a 16 list of the agreements, and I'm quite prepared to 17 identify wherein those agreements it does refer to 18 the various definitions of adverse effects. But I 19 don't see the value in going much further than 20 that. 21 MR. MCIVOR: I was just under the 22 impression that those agreements would be 23 provided, and -- 24 THE CHAIRMAN: Mr. McIvor, did you get 25 copies of the list -- 1798 1 MR. MCIVOR: No, he hasn't provided 2 that either. 3 MR. ADAMS: Point of clarification, 4 I'm not too sure we actually agreed to provide the 5 list. We offered to make it available, and this 6 is the first time that I'm aware of that it has 7 been confirmed that we will provide it. 8 MR. MCIVOR: Well, I don't have a copy 9 of the transcripts, Mr. Adams. But you did say 10 you would give me a list of those agreements, and 11 I said I don't want a list, I want the agreements. 12 MR. ADAMS: That's correct. 13 MR. MCIVOR: But, you know, you 14 haven't given me anything. So I'm asking you if I 15 can get those agreements. Just maybe as a point 16 of clarification as well, one of the other 17 questions that I had asked was related to the 18 augmented flow programs, the Churchill River 19 Diversion. And some of the responses that I 20 received from Ms. Wray, I believe, and Mr. Cormie, 21 indicated that the augmented programs were 22 basically provided at ministerial direction. And 23 in clarifying that they also said there was no 24 application process. It was just a letter written 25 by Hydro to the minister. But when I first asked 1799 1 if, you know, these augmented flow programs, if 2 the minister had taken a chopper ride, and took a 3 GPS and a video recorder to document whether or 4 not to issue a licence, I wanted, you know, a 5 response. 6 MR. MAYER: How would Hydro answer 7 that question? You have to ask that to the 8 minister. The minister is not here. 9 MR. MCIVOR: They provide a written 10 document to the minister to get approval -- 11 MR. MAYER: They told us at the 12 beginning of these hearings, Mr. McIvor, what it 13 was. 14 MR. MCIVOR: So you are saying that 15 the chopper ride, GPS video is not an appropriate 16 method for -- 17 MR. MAYER: The chopper ride, GPS ride 18 and all of that other stuff, you said did the 19 minister do that. You can't ask Hydro whether the 20 minister did that. Ask the minister. 21 MR. MCIVOR: I was asking how did they 22 get direction? 23 MR. MAYER: They told you, Mr. McIvor. 24 MR. MCIVOR: Is there somebody that 25 can answer that? 1800 1 THE CHAIRMAN: Which specific 2 questions are you asking? 3 MR. MCIVOR: The one Mr. Mayer has 4 some concern with. 5 THE CHAIRMAN: That is indeed a proper 6 concern, because you are asking them to say 7 whether the minister did something, and they are 8 not in a position or should not be in a position 9 to tell you that. 10 MR. MCIVOR: So, can I get an answer 11 to that from somebody, or are you a representative 12 of the minister at this point or who does that? 13 MR. SARGEANT: I think it is incumbent 14 upon you to write to the minister and ask him 15 that. It is not a matter that we can provide. 16 MR. MCIVOR: All right. Thank you. 17 And there was just another question 18 that I had, and -- I think, you know, we did have 19 some arrangement to come back to these as part of 20 the EIS because I wasn't sure what the process was 21 here at all. And I do need to -- I do have some 22 questions, but I just wanted to get that, because 23 you know, these questions that I'm asking have an 24 impact on how we will participate in the EIS 25 portion. 1801 1 THE CHAIRMAN: Mr. McIvor, there will 2 be an opportunity to participate on the EIS 3 issues. 4 MR. MCIVOR: Yes. But I do need 5 answer to some of those questions and having some 6 information available, you know, your Commission 7 member did indicate that the agreement of Wabowden 8 was irrelevant. And I need to know to what point 9 is it irrelevant, why is it irrelevant, if it was 10 a supplemental agreement to the Northern Flood 11 Agreement? 12 THE CHAIRMAN: You should ask that in 13 the EIS process. If you are asking again for the 14 same answer that you were looking for before, I 15 think you were told by everyone here that it is 16 not the responsibility of the panel, nor of 17 Manitoba Hydro or NCN to tell you how the minister 18 proceeds to decide to respond to an application 19 for an augmented flow. That's his decision to 20 make based on what -- it is up to the minister 21 that you will ask that question. 22 MR. MCIVOR: That is -- I think we 23 resolved that, yes. But what I was asking about 24 was the availability of agreements, supplemental 25 agreements, because they do have some relevancy I 1802 1 think to the NFAAT portion, because if Manitoba 2 Hydro has any obligations to any other communities 3 within the NFA communities, and specifically with 4 NCN as a result of supplemental agreements like 5 the one at Thompson which is measured by height 6 rather than water CSF measurements or at 7 Churchill. 8 THE CHAIRMAN: So you are asking if 9 there are supplementary agreements and whether 10 someone can provide responses to that in regards 11 to Wuskwatim. Mr. Wojczynski is prepared to 12 answer. 13 MR. WOJCZYNSKI: What I'm prepared to 14 say is that I believe that the question is 15 pertaining to someone who resides in the Wabowden 16 area, and there are agreements with the community 17 of Wabowden that surely a resident in the area 18 where the agreement is applicable to them can go 19 and ask the mayor and council of that municipality 20 for a copy of the agreement that they made. And 21 the other thing that I note, and this could come 22 up further in the public involvement process that 23 was there, Mr. McIvor was there, and did ask 24 questions and answers were provided. So it is not 25 that there has been no information provided. But 1803 1 I would suggest respectfully that there are other 2 avenues to get that. 3 MR. MCIVOR: Mr. Wojczynski, on that 4 note, you indicated that I was at these 5 consultations? You said I was at the 6 consultations, Mr. Wojczynski, is that correct? 7 MR. WOJCZYNSKI: One second, we 8 understood -- 9 MR. MCIVOR: You just said that I was 10 at the -- 11 MR. WOJCZYNSKI: Either your client or 12 yourself. I'm not sure which one. 13 MR. MCIVOR: Either myself or the 14 client? 15 MR. WOJCZYNSKI: Yes. 16 MR. MCIVOR: Can you clarify who that 17 was? 18 MR. WOJCZYNSKI: I will in a second. 19 MR. MCIVOR: If you didn't already 20 know, why would you make a statement like that? 21 MR. WOJCZYNSKI: Because I was 22 understanding that it was either your client or a 23 representative of your client. 24 THE CHAIRMAN: Mr. Bedford. 25 MR. BEDFORD: We can undertake to 1804 1 provide the date of the consultation meeting and 2 who was in attendance at the meeting. 3 THE CHAIRMAN: Thank you. 4 5 (UNDERTAKING # MH-41: Advise date of consultation 6 meeting and who from Trapline 18 was in 7 attendance) 8 9 MR. MCIVOR: All right. So am I going 10 to get some agreements or -- 11 THE CHAIRMAN: There has been an 12 undertaking that you will get that response. 13 MR. MCIVOR: No, I think Mr. Bedford 14 was just referring to consultations that I was at. 15 THE CHAIRMAN: The consultation and 16 who was there. 17 MR. MCIVOR: Am I going to get some 18 agreements on -- the 13 supplemental agreements? 19 THE CHAIRMAN: No, you were just told 20 where you could get a copy of that agreement, from 21 the mayor of Wabowden or council. 22 MR. MCIVOR: That is one of the 23 agreement holders. Manitoba Hydro signed the 24 agreement. Why wouldn't they have made it 25 available? 1805 1 MR. ADAMS: The agreements are not 2 unilateral agreements, they are agreements between 3 us and the various communities, and we are not in 4 the habit of papering the countryside with 5 agreements between us and somebody else without at 6 least discussing the relevance of it with the 7 other party. In this particular case I think I 8 just testified about ten minutes ago that I simply 9 don't see the relevance to these proceedings of 10 providing copies of implementation agreements, 11 compensation agreements or other agreements with 12 communities throughout Manitoba. 13 MR. MCIVOR: I don't think it was 14 throughout Manitoba. 15 MR. ADAMS: I did agree to give you a 16 list and identify where in those agreements there 17 would be -- what we were specifically talking 18 about was the definition of adverse effects. 19 MR. MCIVOR: I think it was under the 20 '96 implementation agreement with NCN that you 21 identify that. I acknowledge that, that you 22 provided a definition that was in the agreement, 23 one of your agreements. So I wanted to find out 24 in these 13 other agreements how much did they 25 vary, because you mentioned there is a variable in 1806 1 terms of how you describe or define adverse 2 effects. 3 THE CHAIRMAN: I believe the question 4 is how do you define adverse effects, and I 5 believe the answer was provided the other day. 6 MR. ADAMS: The definition in the 7 agreement with NCN was provided at the end of the 8 day. 9 MR. MCIVOR: But that wasn't my 10 question either. My question was in order to look 11 at the various agreements which Mr. Adams had 12 indicated last week, there are variances from one 13 agreement to the other in terms of the definition 14 of adverse effects, and I was asking for copies of 15 the agreements so that I can view the definitions 16 of those adverse effects if there are differences. 17 THE CHAIRMAN: Well, it is -- I have 18 heard one thing so far and I don't know how to 19 allow you to proceed with that. Because I have 20 heard from Mr. Adams that you will not get copies 21 of these agreements that are distributed by Hydro. 22 You will get a list. Based on the list, you can 23 then access those agreements and you can then 24 compare how adverse effects are defined, if you 25 believe they are defined differently. Unless 1807 1 someone from Hydro wishes to respond whether there 2 are, and for what reason, there are differences in 3 the interpretation of adverse effects. 4 MR. MCIVOR: Excuse me, maybe -- I 5 will just ask. 6 THE CHAIRMAN: I'm not sure where you 7 are going. 8 MR. MCIVOR: I mean last week we 9 agreed that some of the these supplemental 10 agreements may have an impact on the capital costs 11 of Wuskwatim. And one of the examples that I 12 cited was Cross Lake and Norway House. The 13 communities' councils there just renegotiated new 14 deals to the value of 9 and 6 million dollars 15 respectively last fall. So those agreements were 16 similar and included in the 13 that he is talking 17 about. And all I'm asking for is, you know, 18 through this public process, is this information 19 going to be made available? If Hydro doesn't want 20 to provide it, then what alternative do I have? I 21 will accept the list, if that is all they have 22 got, and I will try and work with that. But 23 keeping in mind that, you know, you guys provided 24 Trapline 18 with $20,000. I mean look at the kind 25 of resources that they have. How am I supposed to 1808 1 go and do all of this stuff? I don't have a crew 2 of researchers and lawyers and experts that I can 3 call on to say, well, you know, Mr. Adams, you are 4 right, there are 13 different definitions of 5 adverse effects, or no you are not right, there is 6 only two. I mean, we don't have the resources to 7 do all of that kind of stuff. All I was trying to 8 ask is can I get those available so I can review 9 them. 10 THE CHAIRMAN: The funding provided, 11 Mr. McIvor, for your presentations, the group you 12 represent, presentation to this hearing, were in 13 terms of the adverse effects this project, this 14 proposal would have on your area of interest. 15 That is what it was for. Now, if you had to 16 access one of these agreements prior to or to show 17 what effect that might be, I suppose you should 18 have accessed it. 19 MR. MCIVOR: I did. I tried. I 20 looked at the websites that people kept citing, 21 Aboriginal Affairs, Manitoba Hydro, Conservation, 22 you know, we have checked all of these sites. And 23 I don't know if it is something that I'm doing 24 wrong. I figure I have spent a lot of time 25 researching for that and looking for it, and I 1809 1 just can't find it. I thought it would be 2 appropriate in this process to ask for that type 3 of information. You have heard presentations from 4 other participants that you have similar type 5 agreements. 6 THE CHAIRMAN: Your question is simply 7 whether the various agreements treat the issue of 8 adverse effects uniformly or differently, is that 9 your question? 10 MR. MCIVOR: Yes. And are they 11 available so that we could view those. 12 THE CHAIRMAN: That is the other 13 question. You were answered that part. Now maybe 14 you can get some form of answer to the first part 15 of the question. 16 MR. ADAMS: The essence of the 17 definition of adverse effects is the same in 18 almost every, in every agreement that we come to. 19 The actual specific definition may vary marginally 20 from community to community, simply based on the 21 fact that you have to negotiate these agreements 22 and not everybody buys the same boiler plate as 23 the next group. But the sum and substance of the 24 definition is pretty much the same. It is a very 25 broad definition, and it would be hard to -- 1810 1 frankly it would be hard to think of a way to 2 create a broader definition. The major agreements 3 are available on the website, Manitoba Hydro 4 website. But a lot of the minor agreements are 5 not. And it is those ones that we are reluctant 6 to go to the trouble and effort of digging out, 7 copying and providing to everybody participating 8 in this hearing, when it is really difficult to 9 see how they are relevant to the issues at hand. 10 MR. MCIVOR: Okay. 11 THE CHAIRMAN: Mr. Mayer. 12 MR. MAYER: Mr. McIvor has indicated 13 that one of the reasons he wants this information 14 is because he is afraid that the adverse effects 15 and compensation in some of those 13 agreements 16 could somehow adversely affect the economics of 17 Wuskwatim. Am I correct in assuming, anyone at 18 that table, that all of these agreements, that 19 none of these agreements or any compensation 20 payable under those 13 agreements could possibly 21 affect the, or be charged to the Wuskwatim 22 project? 23 MR. WOJCZYNSKI: Perhaps I can -- the 24 agreements, you just mentioned Cross Lake 25 community council, for example, the agreement 1811 1 there and the compensation that would be flowing 2 from that at this time clearly is related to the 3 existing projects, Lake Winnipeg Regulation, CRD, 4 whatever. So those clearly would not be 5 chargeable to Wuskwatim. If it were to happen in 6 a certain case that in one of the communities 7 there was going to be some incremental adverse 8 effect from Wuskwatim, then that would be 9 chargeable to the project. But as we've indicated 10 before, we have an estimate of our adverse effects 11 compensation, and that is already included in the 12 project estimate, and we will be addressing that 13 some more later. 14 THE CHAIRMAN: Okay. 15 MR. MCIVOR: Thank you. Mr. Adams, 16 you just mentioned that there was no possible way 17 to define adverse effects that would cover the 18 broad spectrum that is included in these 19 agreements that you enter into with various 20 communities. I don't have the article with me, 21 but I know Minister Ashton on Friday, and I think 22 it is the Friday Free Press, did exactly what you 23 said was impossible, as it relates to the Red 24 River floodway. There is an adverse effect 25 definition that is very broad, that includes not 1812 1 only the loss of use of land, but it includes loss 2 of wages, loss of income, loss of access, and I 3 think, you know, all of these agreements that you 4 have just mentioned that you couldn't define a 5 broader term, you know, the department is using 6 that exact term that you said you can't find. You 7 know, is that something that should be 8 re-considered and included in these future 9 agreements so it is comparable to what people 10 along the Red River floodway would get in terms of 11 entering into new partnerships, as you so call it? 12 MR. ADAMS: I haven't read Minister 13 Ashton's statement, but I didn't hear you list 14 anything there that is not already incorporated 15 into all of the compensation agreements that we 16 have with all of the communities that we deal with 17 and then some. 18 MR. MCIVOR: I was just given some 19 information here as well, Mr. Adams. You 20 mentioned on the 10th of March, you said I can 21 give you the copy of the definition of adverse 22 effects that we have in all of our agreements, but 23 they are not going to change much from this. And 24 you read the definition from the implementation 25 agreement that you have with NCN. You just 1813 1 admitted that, you know, all of these other 2 agreements are so different that you couldn't come 3 up with a defined -- 4 MR. ADAMS: I didn't admit anything 5 and I think you are misrepresenting what I said. 6 MR. MCIVOR: It is in the verbatim -- 7 THE CHAIRMAN: Let Mr. Adams answer 8 that question. 9 MR. ADAMS: What I just said is in 10 every agreement that we have there is a definition 11 of adverse effects. For the most part the sum and 12 substance of that definition is the same. There 13 will be some variation between agreements because 14 they are negotiated individually with individual 15 communities who, because they are individual 16 communities, see things a little bit differently. 17 The definition is extremely broad and what I said 18 is I don't think that it would be possible to come 19 up with a definition that is any broader than the 20 one that's in the definition adverse effects in 21 the agreements that we have. And certainly what 22 you have just read to me from Minister Ashton 23 isn't as broad as the one that we have in our 24 agreements. 25 MR. MCIVOR: I think it is all 1814 1 encompassing. Maybe not as broad and open ended. 2 In terms of -- 3 THE CHAIRMAN: Mr. McIvor, would you 4 ask your question, please, or questions. This is 5 not a debating forum. 6 MR. MCIVOR: No, it isn't, but you 7 know what, like I said, in order for me to be able 8 to participate in this process, given the 9 resourcing that I have been provided, given the 10 fact that Hydro has refused to provide 11 information, you know, that would allow us to make 12 some decisions, or at least ask the proper 13 questions. You know, I find it very difficult 14 given that, you know, how do you expect a fair and 15 equal process when you can't have access to the 16 information, you know, varying obligations that 17 Manitoba Hydro has, not only at NCN but in other 18 locations as well. So, you know, we need all of 19 the information to be able to participate. And I 20 think, you know, at this point, I would like to 21 continue discussing some of these questions that 22 haven't been answered but, you know, I know there 23 is a lot of work ahead of you, and there is also a 24 lot of work ahead of me in terms of trying to 25 participate in this process so that we can get the 1815 1 type of answers that we need to be able to give 2 you the information to make a decision that may or 3 may not impact Trapline 18. And some of the 4 references of, you know, having participated, some 5 of the methods that Manitoba Hydro has used and 6 has included in the environmental impact 7 statement, we don't know if those are acceptable 8 methods for gathering information, for preparing 9 engineering reports. You know, we don't know of 10 any other department or Government agency that 11 would be able to do those types of things and 12 include that as information, in particularly in 13 the environmental impact statement that has been 14 provided to you. So how do we challenge or how do 15 we access the information that we need to be able 16 to ask the right questions? 17 THE CHAIRMAN: Well, it is not my role 18 to answer your questions, Mr. McIvor, but I will 19 answer this one. You are asking a question how do 20 you get your information? You do your work and 21 you get some of the information by being here. So 22 you have gotten some information, you have got all 23 of the documents, you went through the 24 interrogatories. If you need some of the 25 agreements, you have been told how you could get 1816 1 access to some of these agreements, either through 2 Hydro's website, either through your council or 3 mayor's office. And you will then be able to use 4 that information, use it as part of your 5 presentation, because you still have that to come 6 up with. 7 MR. MCIVOR: I do, yes. I appreciate 8 so far what has been happening. And I know that 9 through the interrogatories we have asked 10 information. But, you know, a lot of the 11 responses vary on some of the information that I 12 don't have access to. So, you know, I think at 13 some point -- I think, you know, we may just have 14 to throw our gloves in the ring and walk away 15 before the tenth round sort of thing if we can't 16 have access to this information. 17 THE CHAIRMAN: But you are not alone, 18 Mr. McIvor, to ask questions. There are a number 19 of other groups also asking questions and getting 20 answers. The answers that are provided to them 21 are also valid for you, and you can draw from 22 those. 23 MR. MCIVOR: That is what I have tried 24 to do, utilizing all of the existing resources, 25 because we don't have the type of resources -- we 1817 1 need to go and do all of this stuff ourselves. 2 THE CHAIRMAN: I will ask you, 3 Mr. McIvor, have you got any additional questions 4 that you want to ask at this time? 5 MR. MCIVOR: Not at this time. I will 6 just save that for the EIS portion and hopefully 7 be able to frame it in that regard. 8 THE CHAIRMAN: Thank you. Mr. 9 Wojczynski. 10 MR. WOJCZYNSKI: I have the 11 undertaking that we made when Mr. McIvor was 12 sitting there earlier, just to finish that off so 13 we can move on. Mr. McIvor was speaking about the 14 ability to get information and have a good 15 process. I would like to note that we had a 16 public involvement process. His client was 17 involved in that. We have one particular 18 reference that at a public involvement meeting, 19 May 2, 2003, in Thompson, Mr. Glenn McIvor was at 20 that meeting. Mr. Nick Barns, who is a Manitoba 21 Hydro employee who was part of the consultation 22 process, discussed his concerns. There was a 23 particular concern that his client has, 24 Mr. McIvor's client here, Glenn McIvor, had with a 25 potential underground river, so there were 1818 1 discussions about that. 2 Subsequent to that May meeting, the 3 two McIvor brothers were accompanied by Manitoba 4 Hydro on a special field trip, a helicopter field 5 trip to their trapline to go and investigate the 6 problem again. And so that was part and parcel of 7 the Wuskwatim process. I do have to note that 8 Mr. McIvor's client has for 15 years been engaged 9 in discussions with our mitigation representatives 10 on the same type of issues, and so there has been 11 a significant amount of process on this type of 12 issue already. Thank you. 13 THE CHAIRMAN: Thank you. 14 MR. MCIVOR: Can I -- just for the 15 record, I'm not going to ask a whole bunch of 16 questions, just a statement. Mr. Wojczynski 17 refers to September 2003 -- 18 MR. WOJCZYNSKI: May 2, 2003. 19 MR. MCIVOR: There was a letter 20 forwarded to the various ministers and also the 21 CEO for Manitoba Hydro that indicated that the 22 representative for Trapline 18 would be myself. 23 My name is not Glenn McIvor, it is Greg McIvor. 24 The reference to 15 years of consultations -- 25 THE CHAIRMAN: The point that was 1819 1 said, either you or your client -- 2 MR. MCIVOR: No, no. 3 MR. SARGEANT: Who is Glenn McIvor? 4 MR. MCIVOR: He is a brother of ours. 5 He doesn't hold a licence, up until the last year 6 or so on the trapline. So, you know, it is -- 7 THE CHAIRMAN: Is he a client of 8 yours? 9 MR. MCIVOR: No. 10 MR. MAYER: Who is the client? 11 MR. MCIVOR: Donald McIvor. 12 THE CHAIRMAN: I think the point that 13 was made was that you asked about consultations. 14 There was an undertaking to provide a date and 15 name, and that is what was done, and I guess -- 16 MR. MCIVOR: That isn't accurate as it 17 was. I think the reference that Mr. Wojczynski 18 was talking about had G. McIvor. There is Geoff, 19 George, Glenn, Geraldine, Grace. It just says G. 20 McIvor. I mean, I don't go talk to Manitoba 21 Lotteries about what Manitoba Hydro is doing. 22 THE CHAIRMAN: We will accept that, it 23 was not as specific as you are saying. We will 24 leave it at that. 25 MR. SARGEANT: Let's get this 1820 1 straight. At least what Mr. Wojczynski told us 2 was that Glenn McIvor was making inquiries about 3 Trapline 18. 4 MR. MCIVOR: For whatever reason, you 5 know, he might have picked all of that up through 6 the discussions that we have had. But not for 15 7 years with Manitoba Hydro. I would like to put 8 that on the record, that that hasn't happened. We 9 have asked that question in interrogatories and -- 10 MR. MAYER: You got a free helicopter 11 ride anyway. 12 MR. MCIVOR: But, Mr. Mayer, it didn't 13 take 15 years to go on that ride. And there 14 wasn't two free helicopter rides either. I take 15 exception to that, Mr. Mayer. I think as a member 16 of the CEC, you have to have some at least ability 17 to be objective in this process. 18 MR. MAYER: Mr. McIvor, you had a 19 significant amount of time. I remember very 20 clearly your presentation to the participants 21 committee, and very specifically what you wanted 22 to talk about. Strangely enough it sounded very 23 similar to that underground river and the height 24 of water on Trapline 18. Raised specifically, and 25 you raised specifically, I have a clear 1821 1 recollection of this, Mr. McIvor, it is not a 2 question of bias, it is a question of I remember 3 what you told me. And what you told me is you 4 were concerned about the underground, about the 5 raise in the river or the water levels on the 6 trapline and how much that was costing you. You 7 were very specific about that. And that sounds to 8 me like exactly what your brother was discussing 9 with Manitoba Hydro, and taking the one or two 10 helicopter rides with them. 11 MR. MCIVOR: But I think we also 12 understand, Mr. Mayer, and I'm sure you are quite 13 educated in this process being a lawyer, that, you 14 know, you don't go and discuss somebody else's 15 case without actually talking to the client, and 16 that is my point exactly. I don't go and talk to 17 Manitoba Lotteries or anybody else about what 18 Manitoba Hydro's business is, and I would 19 appreciate the same respect. And I think that is 20 something that I have tried to work with you guys 21 on this whole process. And being bumped here and 22 there, you know, like I said, I don't really want 23 to have any ill feelings on either side, because 24 we are just trying to participate. 25 THE CHAIRMAN: Thank you. 1822 1 MR. MCIVOR: Thanks. 2 THE CHAIRMAN: Seeing that it is very 3 close to 3:00 o'clock, we will adjourn and be back 4 here at 3:10. 5 6 (PROCEEDINGS RECESSED AT 3:00 P.M. AND 7 RECONVENED AT 3:10 P.M.) 8 9 10 THE CHAIRMAN: All right, we are ready 11 to proceed. First, on the order of business, the 12 Commission would like to present its ruling on the 13 motion which was heard and debated this morning. 14 The first portion of the first motion 15 stated the Commission immediately -- that the 16 Commission immediately suspend the current 17 Wuskwatim hearings and require Manitoba Hydro and 18 NCN to provide the Commission within a time period 19 specified by the Commission further and sufficient 20 information regarding the nature and amount, if 21 any, of compensation that will be paid for impacts 22 to NCN as a result of the Wuskwatim projects. 23 Then after such information is 24 provided, the Commission resume its hearings for 25 full consideration by the Commission and the 1823 1 public of the information provided. 2 The Commission responds by saying: 3 While article 8 in the motion brought forward by 4 CASIL are relevant to this proceeding, the 5 Commission is of the view that the Wuskwatim 6 hearings should continue as currently scheduled. 7 The Commission has already heard 8 evidence about the need for possible compensation 9 for adverse effects being included in the capital 10 cost projections for the project. In addition, 11 the Commission has heard evidence about 12 contingency factors being included in the capital 13 cost projections. 14 The Commission is of the view that the 15 issue of specific costs of possible compensation 16 is not of enough significance to adjourn the 17 hearings, therefore, the first motion is hereby 18 dismissed. 19 With respect to CASIL's alternative 20 motion that the Commission continue with the 21 Wuskwatim hearings as scheduled, and that the 22 Commission require Manitoba Hydro and NCN to 23 provide it, within a specified time period, full 24 and sufficient information regarding the amount, 25 if any, of compensation that will be paid for 1824 1 impacts to NCN as a result of Wuskwatim projects, 2 and keep open the current sitting of the 3 Commission regarding the Wuskwatim projects until 4 the Commission has received full and sufficient 5 evidence from NCN and Manitoba Hydro regarding the 6 amount, if any, of compensation that will be paid 7 for impacts to NCN as a result of the Wuskwatim 8 projects. Then, after which time the Commission 9 will continue with these hearings for full 10 consideration by the Commission and the public of 11 the information provided. 12 The Commission has decided that -- 13 recognized that the compensation costs are an 14 important part of total capital costs put forth by 15 Manitoba Hydro and NCN. The Commission also 16 understands that the provision of full information 17 regarding compensation may prejudice negotiations 18 between parties. At the conclusion of the 19 hearings, and in its final deliberations, the 20 Commission will consider all the evidence given by 21 Manitoba Hydro and NCN and the participants with 22 respect to projected costs, which include the 23 evidence about compensation and contingencies. If 24 the Commission is of the view that further 25 information with respect to compensation costs is 1825 1 required, it may make recommendations in that 2 regard in its final report. 3 Therefore, the second motion is 4 dismissed. 5 Copies of this document will be made 6 available as soon as possible. 7 MR. GREWAR: Mr. Chairman, if I might 8 suggest that be entered as Exhibit CEC 1003, 9 response to motions, and I will make copies now. 10 11 (EXHIBIT CEC-1003: Response to 12 motions) 13 14 THE CHAIRMAN: Are you ready? All 15 right. 16 All the registered participants who 17 wish to intervene in the NFAAT questioning have 18 had the opportunity to do so. I would like to ask 19 whether any other people present wish to avail 20 themselves of this opportunity as well? If there 21 is anyone in the room here who wishes to proceed 22 or ask questions of the Manitoba Hydro/NCN panel, 23 they may come forward now and ask questions. 24 Looking around, I am not seeing 25 anybody getting up, so I assume that no one here 1826 1 is intending to do so. Therefore, I will pass the 2 ball to Mr. Abra to ask questions as part of the 3 final cross of Hydro and NCN in regards to needs. 4 MR. ABRA: Thank you, Mr. Chair. 5 Members of the NFAAT panel, to our 6 recollection or knowledge, there are still two 7 outstanding undertakings that were given to us 8 during the course of our cross-examination. One 9 of them was the ten-year history of the Provincial 10 guarantee fee, which I believe Ms. Wray, you said 11 you would get for us. We haven't received that 12 yet. 13 MS. WRAY: I think Mr. Cormie was 14 getting information on water rentals, but I 15 thought I had actually answered the question on 16 the guarantee fee. I will check the record, but I 17 believe I had. 18 MR. ABRA: If you could, thank you. 19 I excuse Mr. Cormie because he said he 20 had another commitment, but if that information 21 can be provided on the ten-year water rental fee 22 then? 23 The other issue related to -- you will 24 recall that we asked you for financial statements 25 for Wuskwatim 2009/2010 based on two times DSM and 1827 1 250 megawatts of wind. We haven't received those 2 yet. 3 MS. WRAY: Yes, Mr. Abra. We have 4 been working diligently on those. I had thought 5 that it would be a matter of just using some 6 information that we already had on hand from other 7 sensitivities that we had run, but that's not the 8 case. In fact, in the case of DSM, we do not have 9 estimates for utility costs for two times DSM. 10 What we have decided to do is to use a place 11 holder, just use an estimate of utility costs, 12 just to get the thing under way. I am hopeful 13 that within the next day or two we will have that 14 sensitivity and also the one that you had 15 requested combining the effects of drought, low 16 export prices, and a capital cost increase. 17 MR. ABRA: Mr. Chair, Members of the 18 Commission, I invite any of you to comment if you 19 wish. I do have two questions by way of 20 re-examination from evidence that was given, 21 primarily by Mr. Wojczynski in cross-examination 22 by some of the other participants. But it may be 23 best to wait on those matters and then deal with 24 the issues of the undertakings at the same time, 25 and we can deal with them all at the same time or 1828 1 I can do it now, whichever you wish. If it is 2 going to take some time to get the answers to the 3 undertakings -- excuse me, to the re-examination, 4 then maybe it is best I do them now? 5 MR. WOJCZYNSKI: Whichever you prefer. 6 MR. ABRA: Okay. Why don't we do them 7 now, and if you are able to answer them, great. 8 If not, then you can come back with the 9 information when we deal with the outstanding 10 undertakings. 11 Dealing firstly -- I would like to 12 take you, please, to page 1397 of the transcript, 13 which is in volume 6, March the 10th of 2004. 14 MR. WOJCZYNSKI: What was that number 15 again? 16 MR. ABRA: Page 1397, which is in 17 volume 6, it was Mr. Torrie's cross-examination of 18 your NFAAT panel. 19 MR. WOJCZYNSKI: Yes, I have it. 20 MR. ABRA: I take you to, beginning at 21 page 9, Mr. Torrie made the comment: 22 "Right, but you went to the trouble of 23 analyzing Wuskwatim to show the 24 numbers in your evidence for both low 25 and high export price ends of the 1829 1 range, but in the DSM analysis, we 2 just work with averages; is that 3 correct?" 4 Your response, Mr. Wojczynski, was: 5 "Looking at the alternatives, the 6 process is twofold. One is to look at 7 the need for Wuskwatim. In other 8 words, is Wuskwatim economic and 9 profitable? That in itself is a major 10 component. The other major component 11 is Wuskwatim compared to the 12 alternatives. When comparing 13 Wuskwatim to the alternatives, as per 14 the terms of reference for CEC review 15 of this, that will be done at a 16 screening level. Naturally, when you 17 are looking at the primary alternative 18 and looking at the need for part as 19 opposed to the alternative part, then 20 you have to go into more detail. That 21 is what we did." 22 What I want to ask you, Mr. Wojczynski, is 23 firstly, what do you mean by a screening level? 24 And then on what basis do you say that the terms 25 of reference, in essence, authorize you to do that 1830 1 comparison on a screening level as opposed to high 2 export price and a low export price in the manner 3 that you have told Mr. Torrie you did? 4 MR. WOJCZYNSKI: First, I should just 5 say on the transcript there it says, looking at 6 the alternatives the process is twofold. What I 7 should have said is looking at the needs and 8 alternatives. I was referring to the NFAAT. I 9 don't think that is critical to your question, it 10 is just a point of clarification. 11 What I was referring to was that when 12 going into this process, in the NFAAT and the need 13 for an alternative, I was trying to say there are 14 two parts to it. One is looking at Wuskwatim 15 relative to its alternatives, and the other is 16 looking at, is Wuskwatim itself, compared to what 17 it could do, let's say in the export market, is it 18 justified in and of itself, without regard to 19 alternatives to it? That was the first point I 20 was trying to make. 21 Then, what I was saying is, when 22 comparing Wuskwatim to the alternatives, that it 23 wouldn't be done to the same level of details than 24 when assessing Wuskwatim's justification, say 25 compared to the export market per se. 1831 1 If one goes to the scope of the review 2 and the terms of reference, there is a number of 3 paragraphs in there, and I guess the one that -- 4 one area where it is clear what I am referring 5 to -- although, in the terms of reference, it 6 doesn't use the word screening, it uses 7 conceptual, but in the second page it talks about 8 "give consideration at a conceptual level to the 9 environmental, socio-economic and cultural effects 10 of the Wuskwatim proposals relative to available 11 alternative resources." There it is quite 12 explicit that we would be doing a comparison to 13 the alternatives at a more conceptual level. 14 For example, for Wuskwatim, obviously 15 we need very detailed environmental studies to 16 assess the environmental, socio-economic, cultural 17 effects, but when comparing Wuskwatim to wind or 18 DSM or Conawapa or Gull or thermal or gas, you 19 wouldn't expect the same level of detail. So in 20 there it is quite explicit in the terms of 21 reference and the scope that that is the case. 22 When I am referring to screening, I am 23 referring to at a more conceptual level rather 24 than the full detail that one would except when it 25 is the actual project you are trying to take 1832 1 forward. 2 In terms of DSM versus Wuskwatim, we 3 did for both Wuskwatim and DSM a range of export 4 prices, what we call the reference, or no 5 environmental premium, the low, medium and high. 6 So we did look at a range of export prices for the 7 DSM. We didn't include the low and the high, and 8 the reason for that is, when looking at Wuskwatim, 9 what we were primarily concerned with was a risk 10 analysis on the low side. By presenting the low 11 export price for Wuskwatim, you do two things. 12 You are able to demonstrate in the worst case kind 13 of scenario, the reasonable worst case scenario, 14 that Wuskwatim would still look okay, that it 15 would still be profitable. So, it is sort of a 16 risk analysis of proceeding with Wuskwatim. It is 17 not really necessary to have that as comparison to 18 alternatives. It is really assessing the risk 19 of -- if we proceed with Wuskwatim, and the bad 20 scenario happens for export prices, how bad will 21 Wuskwatim's economics look? So, that is more 22 dealing with the need for Wuskwatim. 23 The second point is that as part of 24 our effort to make sure that export price 25 information could be freely available for 1833 1 participants to look at, we provided the low and 2 the high, because that information isn't 3 confidential like the expected. That way there 4 could be a free open sharing of all the 5 calculations we did on the low and high, and so 6 that's why we have very detailed calculation 7 sheets made available for that. 8 MR. ABRA: On DSM? 9 MR. WOJCZYNSKI: No, I am talking 10 about on the -- looking at Wuskwatim. 11 MR. ABRA: On Wuskwatim? 12 MR. WOJCZYNSKI: So we could have for 13 open verification and confirmation how we did our 14 calculations. So, that is the other reason we 15 used the low. 16 In the end, when comparing Wuskwatim 17 to other alternatives, all that should be 18 sufficient is looking at the expected number 19 rather than -- well, looking at the risk scenario, 20 for example. That was the basis here. 21 MR. ABRA: Okay. Nextly, if we could 22 go please to page 1460, 1461, which is in the same 23 volume. Again, it is Mr. Torrie's 24 cross-examination -- sorry, it was Mr. Miller, he 25 had taken over in the end from Mr. Torrie. 1834 1 Beginning at line 19 on page 1460. 2 "Okay, you have made right at the 3 beginning, and now repeated the 4 commitment that you are not just 5 committed to doing what currently is 6 estimated as achievable, but basically 7 everything that is economic. One 8 question is, how is the..." 9 I think it should be, 10 "... how are the economics of these 11 alternatives affected by Wuskwatim? 12 You talk about the effects on 13 Wuskwatim economics. What are the 14 effects on the DSM economics?" 15 Mr. Adams responded: 16 "Within the range of reasonable 17 probabilities, or possibilities, we 18 don't believe there is any significant 19 impact." 20 Then Mr. Wojczynski, you went on to say at line 21 18, as an addendum to Mr. Adam's comment, and I 22 quote at line 18: 23 "We looked at doubling the DSM. You 24 will recall Mr. Kuczek said the other 25 day that we expect that with all the 1835 1 latest information and with Winnipeg 2 Hydro in the picture now, with the 3 latest evolution in technology, with 4 the new study that we have got, with 5 everything else that we have talked 6 about, his guesstimate is that we 7 would likely increase the DSM 1 and a 8 half to 2 times at most, 2 times 9 compared to what we already had. And 10 I believe that was in response to 11 yourself, Mr. Miller, yesterday, so 12 you take that." 13 And you then you go on to say that you did 14 sensitivities, double the DSM, kept everything 15 else the same. And then at page 11 -- excuse me, 16 line 11 page 1462, are you still with me okay? 17 MR. WOJCZYNSKI: Yes. 18 MR. ABRA: "I mean, you look at the 19 amount of quantities there. So 20 doubling DSM didn't affect the 21 economics of Wuskwatim, and conversely 22 if you put in Wuskwatim, it would not 23 have hurt that doubling of DSM." 24 What we are wondering is, how can you conclude 25 that the converse would not have hurt the 1836 1 doubling? When you do your IRR sensitivity for 2 using Wuskwatim, and 2 times DSM, how can you do 3 the IRR sensitivity and 2 times DSM to conclude 4 that Wuskwatim does not impact 2 times DSM? Do I 5 make myself clear? 6 MR. WOJCZYNSKI: Yes, you do, and 7 thank you for the question. I can understand why 8 the question is being asked, because what I was 9 using was my own expert -- I don't want to use the 10 word expert -- my own experience and judgment, and 11 making a leap to drawing that conclusion without 12 going through the details of explaining it. What 13 I can try and do is a very quick, brief 14 explanation of why I made that leap, and then we 15 can go into a broader, deeper explanation. Let me 16 try a quick, brief one. 17 Fundamentally, leaving the details and 18 the second order issues alone, let's just deal 19 with the first order, when you are adding 20 Wuskwatim or adding DSM, and let's say it is the 21 same amount of energy for the sake of discussion 22 here, they are in the same order of magnitude. 23 The economics of putting in Wuskwatim, or putting 24 in DSM, is more or less the same on a system when 25 you looking at going into the export prices, use 1837 1 of the system, use of tie lines. 2 So, if you are going to be changing 3 the export prices of the tie line, you would see a 4 similar kind of impact on the economics of 5 Wuskwatim or on DSM. They are essentially, as a 6 first cut -- they are both a energy resource. If 7 you had 1000 GWh of DSM or 1000 GWh of Wuskwatim, 8 everything else being the same, you will get the 9 same sort of economics for the two on the export 10 market. 11 So, the concern everybody has, and 12 what we assessed, if you add more resources before 13 you add the DSM, or before you add Wuskwatim, is 14 that going to fill up the tie line and affect the 15 export market to the degree when you add this new 16 resource it is less economic? That's the issue at 17 hand. That's what it is all about. 18 So, now the reason I can draw my 19 conclusion is the following: If you add -- if you 20 do something to change the base case and to fill 21 up the tie line a little bit more, and then you 22 assess what happens when you add Wuskwatim, and 23 you see it is immaterial, you can very confidently 24 conclude that it will also have an immaterial 25 impact on the other energy resources you would add 1838 1 to that same base case. 2 So, if by doing something different in 3 the base case, the IRR for Wuskwatim only drops 4 .05, and you did the same change in the base case 5 for DSM, you would expect the IRR for DSM to only 6 drop .05, so long as the amount of energy was 7 roughly the same between the two. Does that help? 8 MR. ABRA: I think I understand it, 9 but let me make sure. Yes, it does. 10 That is fine, Mr. Chairman, that is 11 all I have -- I am sorry, Ms. Wray? 12 MS. WRAY: I do have that reference, 13 Mr. Abra, in terms of giving you some information 14 on the guarantee fee. I am not sure if it is all 15 that you wanted, it was in volume 2, page 528. 16 Just to give you a -- 17 MR. ABRA: That's volume 2, page 528? 18 MS. WRAY: 528 -- but just to give you 19 a full picture, because I am not sure whether this 20 was all that you were asking for, I can give you 21 all of the changes that I am aware of, and for 22 each year, it is the fiscal year I am talking 23 about, the year ended March 31. For back in the 24 year ended March 31, 1990, the guarantee fee was 25 0.125 percent. 1839 1 MR. ABRA: 0.125, that's 1990? 2 MS. WRAY: Fiscal year ended March 31, 3 1990, and then it moved up to .25 percent. 4 MR. ABRA: That's 1991? 5 MS. WRAY: That's '91 to '93. It then 6 moved up O.5 percent for '94 to '99; 0.65 percent 7 for the year 2000; 0.7 percent for the year 2001; 8 and 0.95 percent, 2002. 9 MR. ABRA: Thank you very much. So 10 that just leaves the one outstanding undertaking, 11 Mr. Chair, that I may have questions arising from 12 once we get the response. I will just leave that 13 in abeyance, if that is satisfactory? 14 THE CHAIRMAN: That is agreeable then, 15 when that information is available, Mr. Abra will 16 have the opportunity to raise a question on that? 17 MS. WRAY: Yes, Mr. Chair. There 18 might be an opportunity, for example, when the 19 panel is reconvened up north. 20 THE CHAIRMAN: Thank you. 21 Mr. Bedford? 22 MR. BEDFORD: Mr. Chairman, Mr. Abra 23 indicated that he was also looking for 24 Mr. Cormie's answer on the history of the water 25 rental rates. That's at page 621 of the 1840 1 transcript. I won't read the answer again into 2 the record, but if Mr. Abra has any follow-up -- 3 MR. ABRA: 621? 4 MR. BEDFORD: Yes. If it is not what 5 you were expecting, you can certainly follow up 6 with me. 7 THE CHAIRMAN: Thank you, Mr. Bedford. 8 MR. WOJCZYNSKI: I had an undertaking 9 from earlier this afternoon that I would like to 10 do now, if that suits you? 11 THE CHAIRMAN: Okay. 12 MR. WOJCZYNSKI: The question was 13 pertaining to the process, the dispute resolution 14 process on pricing and the partnership agreement. 15 And I would like to add that this is still under 16 negotiation. In general terms what I can say is 17 what we are looking at is that there would be a 18 process where a third party, if there was some 19 issue on the pricing and it wasn't immediately 20 resolvable between the partners, then there is a 21 provision to go to a third party expert, who would 22 have 90 days to report and recommend. 23 After the parties received this, they 24 could use the third party expert as a non-binding 25 approach, as a mediator. If there is no agreement 1841 1 in 90 days, then the more general process in the 2 agreement kicks in where we go to an arbitrator 3 who has expertise in the area. So there are 4 various processes put in place to resolve such 5 issues. 6 THE CHAIRMAN: Thank you. There may 7 be colleagues here on the panel that have 8 questions. I would like to ask one, which I see 9 it is difficult to separate between the NFAAT and 10 the environmental impact features. But seeing 11 that we will eventually get to the EIS some time 12 in the near future, I was wondering if it was 13 possible for Hydro/NCN to maybe, as we go into the 14 EIS, show us, if that is available, a video of the 15 actual site and the corridors that are going to be 16 followed by the transmission lines? Because, if 17 we raise questions -- I know that in the location 18 of the transmission lines there are a number of 19 aspects attached to that. One of them, of course, 20 is having to do -- to benefit the NCN. Another 21 one has to do with the impacts or potential 22 impacts to the environment. Some places may be 23 large bodies of water, some places may be 24 cultural, historical, or features, or things of 25 this nature. A lot of these things might be 1842 1 visible or understandable from seeing a video of 2 the routes that you have selected? 3 MR. WOJCZYNSKI: We could provide 4 something on the generation site area and the 5 immediate area. It is not clear whether we have 6 something on the transmission corridors. Someone 7 is checking as we speak. 8 THE CHAIRMAN: Okay. If you do have 9 that, would you be willing to show us or let us 10 see this? 11 MR. WOJCZYNSKI: Speaking on behalf of 12 Hydro, we would. 13 THE CHAIRMAN: Thank you. 14 MR. WOJCZYNSKI: When would you like 15 that? 16 THE CHAIRMAN: Pardon me? 17 MR. WOJCZYNSKI: When you would like 18 that? 19 THE CHAIRMAN: It would be very 20 interesting as an introduction to the EIS. 21 MS. MATTHEWS-LEMIEUX: What we were 22 going to do actually for our presentation in 23 Thompson is show a video of the Taskinigup site 24 and NCN, the community. So I don't know if you 25 would like us to move that up to this week rather 1843 1 than next week? 2 THE CHAIRMAN: It wasn't -- there is 3 no specific right time. It could be, yes, it 4 could be appropriate to be shown then, hopefully 5 including the transmission line corridors? 6 MS. MATTHEWS-LEMIEUX: This video 7 doesn't have that. 8 THE CHAIRMAN: I have another 9 question, it might sound as an odd question but it 10 is also one that sort of, it gibes over from NFAAT 11 and EIS. 12 I just thought it would be interesting 13 to ask Mr. Thomas -- I know the process that you 14 have described, the path that you have followed to 15 look into how this could be most beneficial for 16 NCN and what part they could play in this project, 17 and decided in the final analysis to look at 18 negotiating an arrangement to become a partner 19 with Hydro in the development of this project. 20 I was wanting to know whether you had, 21 even before going that route, if you had 22 considered at one point, that is interesting, we 23 will see how we can benefit from this project by 24 simply seeking and negotiating the compensations 25 that you felt you deserved for the project being 1844 1 implemented, never mind being partners? 2 MR. THOMAS: Have we considered the 3 other options, other than partnering? Yes. We 4 did consider the possibility of allowing the 5 project to be developed in our traditional 6 territory and exploring a compensation package 7 from that perspective, similar to what was done 8 with the Northern Flood Implementation Agreement 9 where you get a lump sum as a compensation 10 package. We felt that perhaps maybe the better 11 option would be to get involved in a partnership 12 situation where we would enjoy the benefits of 13 ongoing earned revenues from a project that would 14 result in something that would be a lot more 15 beneficial to the community now and well into the 16 future. 17 If you look at our existing agreement, 18 we have a $40 million Hydro bond and we earn 19 interest from that every year. Of course, when 20 you calculate all of that together, it produces a 21 nice chunk of change for the community to use. 22 But by exploring a partnership, we feel that it is 23 a better option to pursue because in the end, if 24 everything works out successfully, as we think it 25 will, we will have a lot more revenue to work with 1845 1 now and into the future. 2 We look at this from the perspective 3 that our people are going to be around a lot 4 longer than I will, but maybe two, 300 years down 5 the road they will have a nice size trust that the 6 revenue will be put into that will allow them to 7 earn a lot more interest than if we were to go 8 with a lump-sum payment. 9 THE CHAIRMAN: Thank you for that. 10 So, I hear you say that we have considered that 11 possibility, but looking at it in great depth, you 12 have considered that the overall and long-term 13 benefits were better from a partnership. Like, I 14 suppose in the end if your people don't see it 15 that way, you will fall back to the other option 16 anyways, automatically? 17 MR. THOMAS: There is that 18 possibility, and you can rest assured that if 19 anything does occur within our territory to result 20 in the creation of another energy producing plant 21 that we are going to have some very serious 22 discussions with Hydro on the issue. 23 THE CHAIRMAN: Thank you. Mr. Mayer? 24 MR. MAYER: I suppose before I ask the 25 question, a comment; listening to Mr. Thomas and 1846 1 to the Chair's discussion, it seems to me that 2 this whole idea of partnership with Hydro gives 3 sort of new meaning to the words "for so long as 4 the river shall run." 5 That's not the question. 6 MR. THOMAS: I would agree with your 7 comment. 8 MR. MAYER: I have been sort of 9 tangentially addressing this issue about the cost 10 of the transmission line, and I was never quite 11 sure as to which part of the proceedings it should 12 come in, and that's the possibility of rerouting 13 the transmission line. Let me just give you an 14 example. Rather than the transmission line site 15 you have chosen, if the Commission were to 16 recommend that you go directly east of the 17 Wuskwatim site with all of your lines, all three 18 230 kV lines, straight east to Highway 6, and run 19 them north and south, north to Birchtree and south 20 to Herblet Lake, along existing rights-of-way or 21 adjacent to existing rights-of-way, I would really 22 like to know how much extra that would cost you? 23 I know that you have been able to figure out, 24 based on the number of turns you have to make and 25 the number of insulators, but I don't think that 1847 1 really answers the question. Because when we 2 heard the discussions about building the Hydro 3 lines through the middle of the boreal forest, we 4 talked about the extra clearing, we talked about 5 the problems you would create by providing extra 6 access into resource areas, which I am assuming 7 you would then have to compensate for. You also 8 talked about the possibility and necessity of 9 having to use helicopters and a number of other 10 off-road vehicles to build your hydro lines. 11 I have got to assume that there is a 12 significant difference in price if you can 13 actually access those hydro lines, firstly, for a 14 good portion of the way along Highway Number 6. 15 That should virtually eliminate the need for your 16 helicopters for both construction and maintenance, 17 and it would seem to me that being able to build 18 these things basically from the road, where you 19 already have not only -- at least one, and in some 20 cases more than one existing hydro line 21 right-of-way, you also have, if I recall 22 correctly, the right-of-way for your fiber 23 optics -- I recall seeing those trenches being dug 24 last summer. I am wondering if you are going to 25 be able to give me some estimate on what extra 1848 1 costs there will be? I don't expect you to do it 2 now, because I don't think it is going to affect 3 the viability of project, because the transmission 4 portion of it is such a small portion of the whole 5 project, but I think it may have some influence on 6 whether the Commission would be interested in 7 making a recommendation on rerouting your lines? 8 I guess I am giving you notice that we might want 9 to discuss the extra costs of rerouting those 10 lines along existing routes. I recognize that 11 there may be a security issue, and if that is an 12 issue, I suspect we will hear about that when we 13 get into the EIS. 14 THE CHAIRMAN: Mr. Mazur? 15 MR. MAZUR: I don't know if I have a 16 complete answer at this point for your question. 17 Essentially, your proposal to go directly east and 18 then north to Thompson, and then south and back 19 west, presumably to Herblet Lake, I guess once we 20 calculate the increased distance, essentially, the 21 cost increase will be proportional to the 22 increased distance, roughly in service dollars 23 perhaps $275,000 a kilometre times the increased 24 distance. That in service dollar really depends a 25 lot on the escalation in construction time, so, we 1849 1 would have to look at that a little closer. 2 MR. MAYER: Just supplementary to 3 that, I find that hard to believe that if we can 4 eliminate the use of very expensive helicopters in 5 your construction, if you can eliminate the use of 6 having to go as deep into the forest as you would 7 on your original route, and could access it from 8 the road, I find it hard to understand that that 9 wouldn't be cost saving, both in your capital 10 construction and in your subsequent maintenance 11 cost? 12 MR. MAZUR: I would have to check into 13 details of whether we are using helicopters or 14 not. Essentially, some portion of the 15 transmission cost is broken up into materials and 16 construction. Subject to check, I think 17 construction is about half. And so the longer the 18 transmission line, the more expensive the final 19 cost is going to be. 20 MR. ADAMS: Mr. Mayer, we will answer 21 your questions, hopefully before we get too far 22 into the EIS. 23 MR. MAYER: Thank you. 24 THE CHAIRMAN: Yes, just as an adjunct 25 to that, perhaps what I was asking about a while 1850 1 ago might help to clarify that in terms of seeing 2 where the layout of this is. Mr. Sargeant? 3 MR. SARGEANT: Thank you. I just have 4 a question about wind power. We heard a fair bit 5 last week about the viability of wind power and 6 how efficient it might be, and how in many parts 7 of Manitoba there really isn't enough wind to run 8 it. 9 It got me to wondering, given that 10 lovely little cold snap we had in January, whether 11 or not extreme weather affects the operation of 12 wind turbines and wind plants? 13 MR. WOJCZYNSKI: Yes, extreme weather 14 would. I think I have already talked on the 15 record how if you get -- people tend to think of 16 high wind speed, well, if you have high winds, 17 that is good for wind farms, you get lots of 18 energy. Actually, it levels off when you get 19 higher wind speed. At some point the wind speed 20 becomes so great that you have to shut down the 21 wind turbine. So, that's an example where extreme 22 weather conditions are not positive for the wind 23 farm. 24 You were referring to a cold snap. 25 Actually, in most areas of the world they are not 1851 1 too worried about that, Europe, or New York, or 2 California, even Minnesota not as much. Our 3 understanding of the current technology and of the 4 new technologies, the state of the art that is 5 just coming out now, is that cold temperatures are 6 a major issue. 7 For instance, the wind farm that is 8 going in, potentially going in, pardon me, in the 9 St. Leon area, if we hit minus 30 degrees for an 10 hour let's say, or more, the whole facility has to 11 shut down. It cannot start up again until the 12 temperature goes up to minus 28, because they need 13 a bit of a buffer. The concern is about 14 mechanical damage to equipment. It is not 15 something you can just tack on a little bit more 16 insulation, because you are talking about the 17 blades are outside, you cannot insulate those, 18 they go through a shaft, a very strong big shaft. 19 It is a thermal conductor. There are lots of 20 heaters put in these things to heat them in the 21 winter for the controls and whatnot, but the big 22 bearings and things, you cannot really do as much 23 with them. 24 So, unfortunately, in Manitoba, our 25 peaks tend to happen in cold weather. So, it 1852 1 could very well be that we will run into 2 situations where we are hitting our peak, and it 3 is cold weather, and we know we are not going to 4 get anything out of any wind generation in 5 Manitoba. So that is a definite factor for us in 6 thinking about them. 7 Even in Minnesota there is an issue. 8 Excel, just a little while ago, the chairperson, 9 Mr. Brunetti, is reputed to -- we know he said, 10 and we have heard from others at Excel -- it was a 11 few years ago, I can't remember when it was -- 12 that at their system peak, and if I am not 13 mistaken, it was a summer peak, so it wasn't due 14 to cold temperature, in that case there was no 15 wind, so it is a bit different than your question, 16 but it had the same effect, that they couldn't 17 operate at the system peak. Their experience is 18 that the wind generation in those conditions 19 actually is a net load, because there is controls, 20 oil pumps, other things that need electricity. 21 So, when the wind generator can't run, it still 22 needs some electricity, it is called station 23 service. This has been a significant issue in our 24 negotiations for the wind NUG in Manitoba. So in 25 the case of the St. Leon facility, when its 30 1853 1 below or 40 below, we have to provide them power, 2 and there is none coming back to us. 3 It is a couple of megawatts, it is a 4 100-megawatt facility, I think it is in the order 5 of 2 megawatts, 1 to 3 megawatts, somewhere around 6 there, we would have to supply that facility for 7 the whole time it is 30 below or colder. So that 8 would be a huge issue for us, that we try to take 9 into account. But it is one of the reasons the 10 integration costs for wind power is higher, let's 11 say, than hydro power. The hydro power just purrs 12 along if it is 30 or 40 below, and we can count on 13 it, whereas the wind we have this issue. 14 However, what we do with our system 15 then, if it gets to 30 or 40 below, we will use 16 our other resources, the hydro power, and then 17 essentially take the wind power from a warmer day 18 and store it and use it in that time, but we are 19 having to use the hydraulic system to make up for 20 the wind not being available then. That is a cost 21 to us. 22 The last -- and maybe I will throw 23 something in that is significant I think as well 24 here -- you can read in the literature, you can 25 hear from experts that if you get a whole bunch of 1854 1 wind farms spread out that the costs won't be as 2 high of integrating, and that you can count on 3 them because you get diversity. Well, you look at 4 the case of wind power in Manitoba, this cold 5 weather situation, if it is 30 below in St. Leon, 6 it is going to be 30 below 40 miles west and 7 40 miles east and 40 miles north, and so you have 8 all the wind generation shut down, so you lose all 9 your diversity in that case. So those are 10 significant factors for the wind and it is 11 something we are we thinking about. 12 MR. SARGEANT: This may sound a bit 13 cute and I don't mean it to be; is that 30 below 14 straight up or is that with a wind chill? 15 MR. WOJCZYNSKI: That is straight up. 16 I suspect that if you had a really high wind 17 chill, it creates more problems for the other 18 equipment, but when you talk about the bearings 19 and whatnot, you have got these huge pieces of 20 equipment exposed to the air, so the wind chill 21 isn't that important anymore. 22 MR. SARGEANT: Thank you. 23 THE CHAIRMAN: Mr. Abra. 24 MR. ABRA: Thank you, Mr. Chair. Just 25 one question, Mr. Mazur, directed to you. Are you 1855 1 on the EIS panel? And the only reason I ask is, 2 you will recall that as part of my questioning of 3 you and the NFAAT panel, we did ask you about the 4 two alternative routes for the transmission lines 5 that have been advanced or put forward by 6 Hydro/NCN up until now. You have Mr. Mayer's 7 third alternative now, or suggestion. 8 I believe your answer was that that 9 would be dealt with during the EIS section, but I 10 just wanted to make sure that at some point we 11 will get the evidence in that regard as to why one 12 alternative of two routes that have been put 13 forward to date, why is one favoured over the 14 other? 15 MR. MAZUR: I am not the main EIS 16 panel, but I was back-up, and I presumed because I 17 was sworn in I could come forward and answer those 18 questions. 19 MR. ABRA: Thank you. 20 THE CHAIRMAN: You were talking about 21 wind power just now, and I was thinking to myself, 22 of all those thoughts that flew through my head 23 during 3 hours and 20 minutes of blackout on 24 Saturday night -- I just wanted to show you, I am 25 not going to hold it against you on this -- 1856 1 MR. MAYER: Did you have a blackout? 2 We never have blackouts. 3 THE CHAIRMAN: At this point in time, 4 you have no more questions? 5 MR. ABRA: No. 6 THE CHAIRMAN: We will pass on to the 7 counsel for Manitoba Hydro/NCN for re-examination. 8 MR. BEDFORD: Thank you. 9 Mr. Wojczynski, last week on March the 10 9th, 2004, Mr. Eamon Murphy on behalf the Canadian 11 Nature Federation/Manitoba Wildlands asked you 12 some questions about the export market. He asked 13 you to comment on a hypothetical circumstance in 14 which the best price for surplus power being 15 generated in the Manitoba Hydro system would be an 16 arrangement in the Province of Saskatchewan. 17 Would you clarify for us, please, what 18 the Wuskwatim analysis that is before this 19 Commission says about where the likely market for 20 the export sale of Wuskwatim power would be? 21 MR. WOJCZYNSKI: Yes. The likelihood 22 is that the -- the additional exports that are 23 enabled by Wuskwatim would be made south of us in 24 the United States. It is possible that it would 25 be into Saskatchewan, but it is highly unlikely. 1857 1 It is most likely that it would be south to the 2 United States. The only other possibility would 3 be if the Ontario sale arrangement was struck with 4 a major new tie line, then it is likely that some 5 of the power would go to Ontario as well. But 6 right now, by far the most likely possibility 7 would be down to the United States. 8 MR. BEDFORD: Mr. Adams, you will 9 recall again last week a series of questions about 10 climate change that Ms. Gaile Whalen Enns, on 11 behalf the Canadian Nature Federation, asked you. 12 Would you please summarize for us, briefly, 13 Manitoba Hydro's position on the subject of 14 climate change? In particular, remind us all 15 where in the interrogatory responses to the 16 Canadian Nature Federation/Manitoba Wildlands the 17 detailed information can be found? 18 MR. ADAMS: Yes. On reviewing the 19 transcripts, it became apparent that there was 20 questions about greenhouse gas inventories and 21 greenhouse gas emissions. I am not too sure we 22 were asking and answering the same line of 23 questions. We would like to clarify one or two 24 points. 25 With respect to climate change, the 1858 1 NCN and Hydro have provided detailed comprehensive 2 information on Wuskwatim's impact on climate 3 change and climate change impacts on the project. 4 We have provided and will continue to 5 provide detailed GHG accounting for the emissions 6 for many aspects of our operations. Our VCR 7 report provides annual comprehensive accounting 8 for emissions from operations, including 9 electrical generation, natural gas operations, 10 buildings and fleet vehicles. Under the VCR, 11 Hydro is committed to maintain our average net 12 emissions at 6 percent below 1990 levels. For 13 major new projects, GHG implications will be 14 analyzed under future EIS processes. And I think 15 I made this clear in earlier testimony, however, I 16 want to clarify that we do not intend to provide a 17 comprehensive GHG inventory for past activities. 18 Our thinking on this issue is more fully 19 documented in our responses to CNF's round one 20 NFAAT questions, 343c, 378a, 375d, and 371c. 21 I suggest that any further discussion 22 of this issue is probably more appropriate in the 23 EIS portion of the review. 24 MR. BEDFORD: Mr. Mazur, last 25 Wednesday evening, an exchange took place between 1859 1 you and Mr. Hart, who was asking questions on 2 behalf of the Canadian Nature Federation. The 3 subject of the discussion was the length of the 4 right-of-ways for the proposed transmission lines. 5 You referred to three numbers, 45, 137 6 and 165 and on the transcript page 1595. Someone 7 managed to get those three numbers to add up to 8 337. I have consistently tried and failed to get 9 them to add up to 337. 10 Could you please, slowly take us 11 through what the actual length of the right-of-way 12 for the proposed transmission lines for the 13 Wuskwatim project adds up to? 14 MR. MAZUR: I am not sure if it was my 15 calculator not working or what, but the three 16 sections of right-of-way are from Thompson to 17 Wuskwatim Generating Station, that is 45 18 kilometers. From Wuskwatim to Herblet Lake 19 Station is 137 kilometers. From Herblet Lake to 20 Rall's Island is 165, which, by my calculator that 21 is working today, is 347 kilometers. So, I am not 22 sure if that was an error or a miscalculation. 23 MR. BEDFORD: Thank you. 24 Mr. Kuczek, some of us have not 25 forgotten that last week Mr. Torrie was asking 1860 1 questions on behalf of TREE and appeared to be 2 less than impressed with the work that you and 3 your colleagues at Manitoba Hydro do on the 4 subject of load forecasting. 5 Can you please provide all of us with 6 an indication of how well Manitoba Hydro's load 7 forecasting has performed? 8 MR. KUCZEK: We do two tests actually 9 to check to see how our forecasting methodologies 10 have been working over the past. One is referred 11 to as a five-year test and one is referred to as a 12 ten-year test. 13 To explain what that means, you 14 basically go back in your historical forecast, 15 look five years into the future and see how they 16 measured up against the actual results. 17 So, if you go back and look at our 18 historical forecast and use the five-year measure, 19 you would see over a 15-year period, the five-year 20 test has, on average, been -- or our forecasts 21 have been on average 1.8 percent on the high side. 22 So, we are getting fairly accurate results over 23 that 15-year period. 24 The other point to note is as you move 25 forward into the future and look at improvements 1861 1 we have made in our forecasting methodologies, we 2 are seeing even better results over the last seven 3 years. The results on average are 0.4 percent 4 low. 5 On the ten-year test, you have to go 6 back further to be able to cover a 15-year period 7 because the earliest forecast you can actually 8 test right now is '92 and '93 and to measure those 9 against the results in 2002/3. 10 Over a 15-year period, the accuracy 11 has been, on average, for the ten-year measure 6.8 12 percent high. 13 As we move into a narrower period -- 14 or a period closer to today, within a seven-year 15 period, the accuracy has been within -- where it 16 has been 6.2 percent. So, it shows an improvement 17 as well. 18 MR. BEDFORD: Mr. Torrie quite ably 19 demonstrated to all of us that Manitoba Hydro uses 20 different methods when it carries out the task of 21 load forecasting. Please tell us, Mr. Kuczek, why 22 Manitoba Hydro uses different methodologies for 23 load forecasting? 24 MR. KUCZEK: I think the best way to 25 explain this is to start with a bit of a history 1862 1 story here. 2 We talked about in the 1970s that we 3 were using log-log method. It was a fairly crude 4 method. The results were not that accurate. 5 As we moved into approximately 1980, 6 we adopted the econo metric model for the 7 residential sector and we used -- what I refer to 8 as an average use analysis back then for the 9 commercial sector. That was the improvement made 10 there. What that involves is just looking at the 11 different sectors within the commercial sector and 12 making a forecast based on that. 13 In the late 1980s, we moved to using 14 an econo metric model as well within the 15 commercial sector. 16 In the early '90s, we moved from using 17 the econo metric model to what is referred to as 18 the end use model for the residential sector. 19 Moving forward to where we are today, we have been 20 making refinements to those models. 21 In terms of which model is better, the 22 end use model is generally referred to as a better 23 model, but it is not necessarily a more accurate 24 model. The reason it is a better model is because 25 it enhances your abilities to do a few other 1863 1 activities. In particular, at Manitoba Hydro, it 2 enhances our ability to do -- or pursue DSM 3 initiatives. 4 To give you some idea what an end use 5 model is, it is a fairly complex model that looks 6 at what the end uses are. If we take the 7 residential sector, for example, within a house, 8 what is consuming energy within that house? You 9 have got your refrigerators, you got your heating, 10 your hot water tanks and your computers and all 11 these elements. 12 So, by doing an end use model, you 13 have better insight to where the energy 14 consumption is. How that enhances your ability to 15 do PowerSmart activities is you can see where the 16 larger energy consumption areas are and where the 17 inefficient areas are. So, that's why it is a 18 preferred method. It is not necessarily a better 19 method for load forecasting. 20 The other reason it is considered a 21 better method is because it enhances your scenario 22 analysis capabilities. What that involves is 23 looking forward and just assessing what would 24 happen if certain events took place in the future. 25 For example, if there was a technology that was 1864 1 invented and we could quite easily, with an end 2 use model, assess what the impacts would be to our 3 load. 4 On the top customers, the general 5 service top customers, neither model is conducive 6 to either one of those modelling methods. 7 The top customers involve 19 8 customers. That is, it is 25 percent of our total 9 energy use. The market changes in more of a lumpy 10 fashion. It is not slow, steady and predictable. 11 So, those models are not conducive to modelling 12 that sector. So, we use that customer specific 13 approach that we talked about. 14 That involves talking to the 15 customers, getting information from the customers 16 on what their short-term and long-term plans are. 17 In addition to that, we take other 18 considerations into account. That involves the 19 nature of the businesses, the industry that they 20 are involved in -- the nature of those industries 21 in Manitoba, as well as outside Manitoba. We also 22 assess what the impacts could be on those 23 industries. 24 In terms of competition, the 25 competition could be in regards to competition 1865 1 from other companies or other plants within the 2 company located outside of Manitoba. 3 That deals with the large customers in 4 Manitoba that we know of today. We don't know 5 what new customers will come to Manitoba, but what 6 we do is look at the history and based on history 7 since 1980, we have experienced an average of 120 8 gigawatt-hour growth in new industries in 9 Manitoba. Since 1991, it has come down. It is a 10 shorter period. We have experienced 111 gigawatt 11 hours. 12 So, as we go forward, which we are 13 doing, we are assuming what new industries will 14 come to Manitoba and based on history, we think it 15 is reasonable to assume there will be some. We 16 use -- the number that we use is zero until 17 2007/8, and then we assume it will be 80 gigawatt 18 hours added to our system at that point. Then at 19 2013/14, we increase that to 100 and we think that 20 is a reasonable estimate. 21 THE CHAIRMAN: That is per year? 22 MR. KUCZEK: Per year. That is 23 consistent with the historical numbers I gave on 24 average per year. 25 MR. BEDFORD: Mr. Kuczek, how does 1866 1 Manitoba Hydro's load forecast compare to the 2 historical load growth in Manitoba? 3 MR. KUCZEK: Since 1960 -- 4 approximately 1960 to the present, our load growth 5 has gone up by 4.5 percent annually. We are 6 forecasting it to grow in the next 21 years by 1.2 7 percent. 8 If you compare this to GDP growth, the 9 expected GDP growth -- just to give you an idea, 10 the GDP is expected to grow at 1.9 percent. 11 Just for your information purposes, 12 our forecast that we are talking about, 1.2 13 percent, if we break that down to the residential, 14 commercial, general service, mass market and 15 industrial, we are expecting our residential 16 market to grow by 0.6 percent, our general service 17 mass to grow by 1.2 percent and our industrials to 18 grow by 1.6 percent. 19 MR. BEDFORD: Thank you. 20 Mr. Wojczynski, both you and 21 Mr. Adams, on the subject that was debated this 22 morning when we heard a motion, have indicated 23 that the project capital cost estimates have 24 adequately included an amount for adverse effects, 25 compensation that you believe is reasonable. 1867 1 Would you please tell us all why you 2 are confident in this particular estimate that has 3 been included in the overall capital cost 4 estimate? 5 MR. WOJCZYNSKI: Yes, I would be glad 6 to do that. There are four points I would like to 7 make. 8 The first is that as you have heard 9 again and again from NCN and from Manitoba Hydro, 10 throughout the process of planning and designing 11 Wuskwatim, we have undertaken many efforts to come 12 up with as low an impact as possible. The most 13 prominent aspect is that we redesigned it to -- to 14 drastically reduce the flooding, so that there is 15 a very small amount of flooding. There are many 16 other aspects that we have done and I won't repeat 17 them here because we have certainly talked about 18 them before. 19 Thus, compared to other projects that 20 has been experienced earlier in Manitoba, there 21 will be relatively little impact to compensate 22 for. So, if there is relatively little impact to 23 compensate for, there will be relatively little 24 compensation to have to pay out. So, that is the 25 first point. 1868 1 The second point is, as Mr. Adams had 2 indicated earlier today, we will provide 3 compensation for the full range of impacts, both 4 for the direct, economic loss, such as commercial 5 fishing, domestic fishing, commercial and domestic 6 trapping, country foods, and for other adverse 7 effects that one might think of as maybe being 8 more indirect, such as culture, heritage resources 9 and recreation aspects. So, we will be paying the 10 compensation for the broad range of issues. 11 The third point is -- now coming more 12 to the issue of the project estimate. The 13 generation estimate we have used in the 14 submission, that is the basis of all the work we 15 have done, was prepared over a number of years and 16 culminated in a final estimate in April of 2002. 17 That included what we referred to earlier as the 18 "range-estimating exercise", where you -- say you 19 don't know certain things within a very fine 20 range. So, you look at the uncertainty in the 21 upper and lower range, signed probabilities and 22 bring all the knowledgeable people. So, we did 23 all that and that was in April 2002. 24 For the adverse effects compensation, 25 we did all of that same process. It wasn't just 1869 1 for NCN. There are other parties that there may 2 be compensation for, or if not compensation, at 3 least processes in place to deal with the issues. 4 So, we included all of that and we did 5 it actually on the transmission side as well. 6 That was done very conservatively. So, our 7 estimate has a conservative amount in there. 8 Since that time, much more information 9 has come about as we would expect. We finished 10 the EIS, we have undertaken the community 11 consultations to a much greater degree, and we are 12 even in the process of this review process. We 13 are fairly far along. We have had our 14 interrogatories and our TAC review and everything 15 else. So, much more information is available now 16 compared to two years ago. 17 So, looking at our best information 18 that we have available today and seeing what would 19 our current best estimate be, we have determined 20 that -- without actually giving away the numbers 21 so that we don't harm our negotiations -- we have 22 determined that our estimate that we have put in 23 place, including the contingency that is allocated 24 for the compensation, that our current best 25 estimate of what the compensation will have to be, 1870 1 including the process cost into the future, would 2 be that the estimate that we are using is double 3 what our current best estimate is. That is just 4 in the basic project estimate. So, we have a lot 5 of scope in there. 6 In addition to that, we do have the 7 overall project contingency, which is plus or 8 minus roughly 9 percent, which is on the 9 generation side, which is $52 million, base 10 dollars, which was discussed this morning. 11 If we should find some huge surprises 12 and shocks that are totally unanticipated right 13 now, there is a significant margin to deal with 14 that; a very significant margin. So, those are 15 the reasons that we are very confident of our 16 estimate. 17 Related, although a separate point 18 somewhat, is we do have in our estimate for the 19 next six months -- well, six, seven, eight months, 20 a process cost for those negotiations, for the 21 remainder of the consultations for this process, 22 the adverse effects agreement we have to negotiate 23 with NCN and adverse effect processes with others. 24 That is included in that estimate that you have 25 seen in the cash flows and we have actually 1871 1 answered some questions on; why there is money out 2 to November and October and all of that. That is 3 part of that. Thank you. 4 MR. BEDFORD: I have no further 5 questions of the panel. Ms. Matthews Lemieux has 6 at least one issue she would like to raise. 7 MS. AVERY KINEW: Before that, the 8 question that you asked Mr. Kuczek -- didn't you 9 ask about the load forecast comparing it with what 10 actually happened? I don't think he answered it 11 that way, but maybe I am mistaken. 12 MR. BEDFORD: I think you are on the 13 right track. I asked him two questions that were 14 similar to what you just asked. One was to 15 provide an indication of how well Manitoba Hydro's 16 load forecasting has performed. The answer he 17 gave touched upon the 1.6 percent fraction and the 18 0.4 percent fraction, but we can ask him to 19 repeat. 20 The other question I asked him was how 21 Manitoba Hydro's load forecast compared to the 22 historical load growth in Manitoba? 23 MS. AVERY KINEW: Yeah, that was the 24 one. Comparing to the historical load growth, the 25 projection compared to ... and the actual? 1872 1 MR. KUCZEK: I am sorry -- 2 MR. BEDFORD: I will ask you again, 3 Mr. Kuczek. How does Manitoba Hydro's load 4 forecast compare to the historical load growth in 5 Manitoba; your answer? 6 MR. KUCZEK: The answer -- maybe -- I 7 think I responded by saying our historical load 8 growth has grown by 4.5 percent since 1960. And 9 our forecast is forecasting 1.2 percent, going 10 forward over the next 21 years. 11 MS. AVERY KINEW: I am sorry, I 12 thought you were trying to look at the reliability 13 of the forecasting by comparing the forecasting 14 with what actually happened. You didn't ask 15 that -- or was that the first question? 16 MR. KUCZEK: Sorry, the first question 17 that I answered? That dealt with how well our 18 forecast did relative to what actually occurred. 19 So, when -- we used two tests to do that. Maybe I 20 didn't explain it very well. 21 MS. AVERY KINEW: You did, I just 22 wanted to get it straight. 23 MR. KUCZEK: You were wondering what 24 the numbers were? 25 MS. AVERY KINEW: Yes. 1873 1 MR. KUCZEK: So, if you go back, and 2 if we use the five-year test -- just looking at a 3 previous forecast and looking at five years as the 4 results come along and how well did that forecast 5 perform. 6 So, over the latest 15-year period, 7 the five-year test would include, say, from 8 approximately 1978 to -- well, let me see. That 9 would be a 1982 forecast to a 1997 forecast -- and 10 I could be off with the numbers a bit. It is over 11 a 15-year period, our forecasts were, on average, 12 high by 1.8 percent. If you take just the last 13 seven years, it was low by 0.4 percent. 14 Then I gave the ten-year numbers -- 15 MS. AVERY KINEW: No, thank you. That 16 is good. 17 MR. KUCZEK: Okay. 18 THE CHAIRMAN: Thank you. 19 MR. KUCZEK: I am sorry, it is 20 actually in the low forecast too, but it doesn't 21 give the averages, it just gives how each one did. 22 If you look at the most current low forecast, it 23 is on page 54 and 55. I was given the numbers -- 24 I was providing numbers for energy, not the peak 25 demand. We have got numbers in the forecast that 1874 1 provide both. 2 THE CHAIRMAN: Miss Valerie Matthews 3 Lemieux. 4 MS. MATTHEWS LEMIEUX: Thank you, 5 Mr. Chairperson. I was wondering if we could just 6 have a ten-minute break and I just have one matter 7 to deal with immediately following the break and 8 we will be finished today with this. 9 THE CHAIRMAN: Okay, but we do have to 10 adjourn at 5:00. 11 MS. MATTHEWS LEMIEUX: Yes. 12 THE CHAIRMAN: Thank you. 13 14 (PROCEEDINGS RECESSED AT 4:29 P.M. 15 AND RECONVENED AT 4:40 P.M.) 16 17 THE CHAIRMAN: Ms. Matthews Lemieux, 18 are you ready? 19 MS. MATTHEWS LEMIEUX: Yes. 20 THE CHAIRMAN: All right, Ms. Lemieux, 21 you may proceed. 22 MS. MATTHEWS LEMIEUX: Thank you. 23 Mr. Thomas, you will recall that 24 Mr. Dysart asked you some questions last week 25 about the AIP vote results? 1875 1 MR. THOMAS: Yes. 2 MS. MATTHEWS LEMIEUX: And there was a 3 document that was given Exhibit Number CASIL 1000. 4 It was a two-page document that had voter results 5 on it, right? 6 MR. THOMAS: Yes. 7 MS. MATTHEWS LEMIEUX: Okay. You have 8 that in front of you? 9 MR. THOMAS: Yes. 10 MS. MATTHEWS LEMIEUX: Okay. What was 11 that document? 12 MR. THOMAS: The document was a draft 13 of the results of the referendum -- 14 MS. MATTHEWS LEMIEUX: Okay. 15 MR. THOMAS: -- on the agreements in 16 principle. 17 MS. MATTHEWS LEMIEUX: On the 18 agreement in principle, okay. You have in front 19 of you another document, which I understand 20 Mr. Grewar has now handed out to the Commission as 21 well as other parties? 22 Councillor Thomas, can you please take 23 us through -- first of all, can you tell us what 24 this document is that has just been handed out? 25 MR. THOMAS: This is a revised copy of 1876 1 the Wuskwatim Agreement in Principle 2001 2 Referendum Results. 3 MS. MATTHEWS LEMIEUX: How did this 4 document come into being? 5 MR. THOMAS: As a result of the 6 questions put forward by Mr. Dysart and the 7 numbers that were quoted in the newspaper article, 8 we felt that we should provide some accurate 9 numbers as to what the actual results are that are 10 based on a final copy as opposed to a draft. 11 MS. MATTHEWS LEMIEUX: Could you 12 please take us through and just explain what the 13 differences are between this document and the 14 draft that was tendered last week? 15 MR. THOMAS: If you look at the 16 original draft document that was referenced, what 17 we have is "Other NCN members" category, under the 18 heading of "NCN Eligible Voters" in 2001 19 referendum on Agreement in Principle. 20 MS. MATTHEWS LEMIEUX: That is the 21 number of 331 voters? 22 MR. THOMAS: There is the number of 23 331 voters. That amount -- if you go down to 24 "Voter Turnout", where it says "Nelson House" 25 right underneath, you see the number "1284", I 1877 1 believe. 2 MS. MATTHEWS LEMIEUX: Right. Okay. 3 That was on the document tendered by Mr. Dysart. 4 MR. THOMAS: Okay. Now, the numbers 5 here are included in the overall total and when it 6 is compared against the number of votes cast, the 7 result is the 65 percent turnout that is being 8 looked at. 9 MS. MATTHEWS LEMIEUX: So, that is 65 10 percent for Nelson House? 11 MR. THOMAS: Yes. 12 MS. MATTHEWS LEMIEUX: Okay. What was 13 the turnout in Nelson House? 14 MR. THOMAS: The actual turnout, if 15 you go to the new revised version, it is actually 16 953 were cast -- no. 953 were eligible, 834 were 17 cast, and the result of the turnout was 18 considerably higher than the 65 percent that was 19 put on this document. It is actually supposed to 20 be 88 percent. 21 MS. MATTHEWS LEMIEUX: Okay. And the 22 953 plus 331 is the 1284 figure; is that right? 23 MR. THOMAS: Yes. 24 MS. MATTHEWS LEMIEUX: Okay. Could 25 you also explain, there is additions to voter's 1878 1 list; what is that number? 2 MR. THOMAS: This is a situation where 3 we have walk-ins or walk-ups that come to the 4 polling stations and the number of people that we 5 had doing that who are NCN members who are 6 eligible to vote was 106. 7 So, if you include that number, you 8 will find that the total eligible turnout was 9 actually 2095 as opposed to 1989. 10 MS. MATTHEWS LEMIEUX: Councillor 11 Thomas, you were asked a series of questions about 12 compensation issues and -- before I go on, was 13 there a question from the panel on that document? 14 What we would like to do is have that marked as an 15 exhibit. 16 MR. GREWAR: Mr. Chairman, just to 17 assign a number then to this document, Wuskwatim 18 Agreement in Principle 2001 Referendum Results, 19 Exhibit MH/NCN-1010. 20 21 (EXHIBIT MH/NCN-1010: Wuskwatim 22 Agreement in Principle 2001 23 Referendum Results) 24 25 MR. GREWAR: Mr. Chairman, there are 1879 1 copies at the side. 2 THE CHAIRMAN: Do you have other 3 questions or are you looking for -- 4 MS. MATTHEWS LEMIEUX: We will have to 5 provide some additional copies, I guess, then if 6 they are all gone. 7 MR. GREWAR: We can certainly make 8 some additional copies then, yes. 9 MS. MATTHEWS LEMIEUX: Councillor 10 Thomas, there has been a lot of evidence and 11 argument today about the compensation issue and 12 last week, you responded to some questions about 13 the compensation issue. And, in particular, in 14 response to one of the questions that was asked of 15 you by Mr. Dysart regarding compensation, you had 16 indicated that schedules had been crazy and hectic 17 and so the matter had not been dealt with. What 18 did you mean by that? 19 MR. THOMAS: It is unfortunate that 20 the news person who is covering this hearing is 21 not here to hear this and to report on it. But, I 22 just want to state that the response that I 23 provided previously when I said that we are 24 involved in very preliminary discussions on issues 25 of compensation -- although, it is understandable 1880 1 as to how she could interpret what I said in the 2 way that she did or in the way they reported it -- 3 one has to think within the context of the fact 4 that we had been dealing with the Wuskwatim 5 project for a considerable period of time. 6 We had been discussing this issue for 7 five or six years and when I indicated that we 8 were in very preliminary discussions, what I meant 9 by that was that in terms of the results and what 10 possibilities exist that can be pursued with 11 regard to mitigation or compensation was that we 12 had to do -- we have hired our own people to 13 ensure that they were involved in our process. We 14 have had field workers hired. So, we have been 15 very involved in doing an environmental impact 16 assessment. 17 We have used our traditional 18 knowledge, as I indicated previously, to figure 19 out exactly what impact the project could have. 20 By doing that, we had been involved in dealing 21 with the compensation issue for quite some time. 22 So, when I say "very preliminary 23 discussions", it has to be taken within that 24 context. 25 For these kind of issues, we have the 1881 1 right under Article 8.4.3 to apply to an 2 arbitrator if we cannot agree on a monetary 3 compensation that may be required after all 4 mitigation has been agreed upon. That is a right 5 that I believe that we have in Article 8.4.3 and 6 we still have it. I think Manitoba Hydro will 7 agree with me on this one. 8 I also think that it is important to 9 note that you have to look at all of Article 8 and 10 not just one sentence which Mr. Dysart appeared to 11 do. 12 Article 8 establishes a very 13 comprehensive planning process, which our people 14 have been involved in since day one and will 15 continue to be, unless we decide to reconsider our 16 involvement as is permitted by Article 8.3.7 which 17 is also still in effect. 18 The CEC and all participants should 19 know that this is the first time that we have 20 worked with Hydro to undertake a joint planning 21 process under Article 8. So, its implementation 22 has been a bit of a learning process for all of 23 us. 24 Article 8.4.6 also contemplates 25 modifications, if necessary, to any compensation 1882 1 proposal agreed upon before the environmental 2 review. 3 Once the environmental review process 4 is complete, we have simply decided to follow the 5 combined effect of all these provisions, which I 6 indicate -- indicated the other day is in keeping 7 with Article 8 process. 8 Above all, our members still have the 9 rights granted to them by the Article 8.4.7 which 10 is that Hydro will not proceed with the 11 construction of the generating station before 12 compensation arrangements are in place. But, in 13 accordance with this provision, if licenses are 14 granted, it was always contemplated that 15 preliminary work on access roads, construction 16 camps, et cetera, could start before such 17 compensation was agreed to. 18 In our discussions with Hydro since 19 1999, we obtained their agreement not to start any 20 construction on roads or otherwise until our 21 people have approved the PDA, even though Article 22 8 would permit them to do so. To me, that is 23 fully protecting the rights of our people. 24 So, when we talk about the -- when I 25 stated "very preliminary discussions", that is 1883 1 what I was talking about and it should be taken 2 within the context that I was offering it in. 3 However, I do recognize that I needed 4 to provide further clarification because of what 5 was -- how it was taken that resulted in a motion 6 here before the commission, and also as it's been 7 portrayed in the media. So, I felt it necessary 8 for me to provide that clarification now. 9 MS. MATTHEWS LEMIEUX: Okay, thank 10 you. I have no other questions. 11 THE CHAIRMAN: Thank you. Mr. Grewar, 12 are there other processes, procedures or documents 13 to be filed? 14 MR. WOJCZYNSKI: A small comment, 15 Mr. Chair, that we do have another undertaking 16 that hasn't been discussed that we are still 17 working on. That was at the very end of the 18 session last week on the wind and IRR and work is 19 still proceeding on that and we hope to have that 20 later this week. 21 THE CHAIRMAN: We weren't going to let 22 you forget. Thank you. 23 This brings us to just about 5:00 24 o'clock and there will obviously not be any new 25 presentations today. So, we will carry on 1884 1 tomorrow morning. We are on a roll. We haven't 2 stopped. 3 4 (ADJOURNED AT 4:54 P.M.) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25