Winnipeg Sun March 21, 2018, updated March 25, 3:30 PM CDT

The entire board of Manitoba Hydro, except for a political member, resigned today after being unable to get an audience with Manitoba's Premier, Brian Pallister.

The reason Manitoba Hydro’s proposed payout of $67.5 million to the Manitoba Metis Federation to buy “50 years of peace in the valley” was so controversial is because it was based on the false assumption that the Metis have land claims in Manitoba.

They do not.

Former Hydro board chairman Sandy Riley and most of the Hydro board resigned last week, citing irreconcilable differences with the Pallister government. Among their concerns was a clash over a proposed payout to the MMF in exchange for the groups’ commitment not to block or delay existing or future Hydro projects for the next 50 years.

It was an “unusual transaction,” Riley admitted, and very different than any other compensation deal Hydro had negotiated before with Indigenous groups. The reason it was so different is because it wasn’t based on any type of Indigenous land title. Unlike First Nations, the Metis don’t have title to a communal land base in Manitoba, nor do they have any legal claim to one.

The proposed payout was not designed to compensate the MMF for land use, displacement or damages to land as a result of a Hydro project because they have no communal land. The payout was simply to buy the MMF’s cooperation not to interfere with future and existing Hydro projects.

Hydro “bought” peace “at a very attractive price,” said Riley.

But it was a controversial proposal. And Riley said he knew the board couldn’t proceed with it unilaterally.

“People might not agree with us and that’s why we put it to the government,” Riley told the Winnipeg Sun in a lengthy telephone interview last week.

The problem with the proposal is that it’s not based on any legal principle. The MMF has the right to be consulted on developments like Hydro projects in some cases under Sec. 35 of the Constitution, as per a recent Supreme Court of Canada decision. But consultation doesn’t necessarily translate into a multi-million-dollar payout. The Crown can consult meaningfully and even address Metis concerns without giving them a bunch of money.

And that’s where Riley and his former board faltered.

The board bought into the idea that it had a responsibility to provide compensation to the MMF where there was no legal basis to do so. They proceeded at best under a very liberal and overly-generous interpretation of recent Supreme Court decisions and at worst a complete misread of them.

A 2013 Supreme Court decision, for example, rejected most of the MMF’s legal arguments regarding land transactions in the late 1800s, including a claim that the federal government had a “fiduciary” responsibility to the Metis. They don’t, the court ruled. What the top court did rule was that the federal government from 1870 to 1885 did not act “in accordance with the honour of the Crown” when distributing 1.4 million acres of land to Metis children under the Manitoba Act. Government did distribute the land, or scrip redeemable for land, eventually. But delays and administrative foul-ups meant they failed to meet the objectives of the land distribution, which was to give Metis children a head start before the influx of new settlers.

The case had nothing to do with a land claim, though, even though the MMF has tried to characterize it as such. In fact, the MMF wasn’t even seeking damages in the Supreme Court case, namely because they knew they wouldn’t get any.

“The Métis seek no personal relief and make no claim for damages or for land,” the top court ruled. “Nor do they seek restoration of the title their descendants might have inherited had the Crown acted honourably.”

What the MMF wanted is a declaration from the court that the government of Canada didn’t treat them properly over a century ago and they got that declaration. But that’s it. There’s no land claim and no legal requirement to make financial redress of any kind.

But for some reason, Riley and his board believed the Supreme Court put a new obligation on them to compensate the MMF for Hydro projects, even though the top court did not recommend a remedy of any kind, much less a requirement for a Crown corporation to negotiate a compensation deal with the MMF.

At the end of the day, there was no legal basis for Hydro to negotiate a settlement with the MMF. And the Pallister government did the right thing by withdrawing it.