Manitoba's appeal court has ruled the Progressive Conservative government acted honourably when it cancelled a $67-million agreement with the province's Metis federation that Premier Brian Pallister called "hush money."

The Manitoba Metis Federation had applied to overturn a March 2020 Court of Queen's Bench review that concluded the government had the authority to nix the deal, which had been struck between the Metis federation and Crown-owned Manitoba Hydro.

The 2017 agreement would have given the Metis group $67 million for supporting a variety of hydro projects such as a new transmission line to Minnesota, and the support also would have helped secure faster approvals at regulatory hearings.

But cabinet cancelled the deal in 2018, with Pallister saying it simply paid for a group not to oppose projects.

Chief Justice Richard J. Chartier wrote in the appeal court ruling that the judge who issued the review decision in 2020 erred in saying it wasn't relevant to the case whether the government acted honourably.

Despite that, Chartier said he is satisfied the government did fulfil its obligation to act with "integrity and in good faith" when dealing with Indigenous people, and he dismissed the appeal.

"In the end, I have not been persuaded that there is reason to intervene with the reviewing judge's decision on this ground," Chartier wrote in the appeal court's ruling, released Thursday.

Manitoba Metis Federation President David Chartrand responded  the federation will be seeking leave to appeal to the Supreme Court of Canada.

“We did not obtain justice yet, but the Métis people will persevere," he stated in a news release.

Although the agreement was unsigned and had been taken by Manitoba Hydro to the government for discussion, the federation argued it was legally binding and cabinet had no authority to issue a directive to stop it.

Chief Justice Glenn Joyal of Court of Queen's Bench said in the earlier decision that the Progressive Conservative cabinet had the authority to issue binding legal directives, and that the government's decision did not have an impact on Indigenous rights.

In upholding Joyal's decision, Chartier wrote that Indigenous peoples have a special relationship with the Crown, and that special relationship requires the Crown to deal honourably with Indigenous peoples. 

He said Joyal was incorrect in his evaluation that this requirement didn't apply to the deal with Manitoba Hydro.

Chartrand, meanwhile, warned other Indigenous groups that if this can happen to the Metis federation, the Pallister Government can now reach in and cancel other agreements at any time.

“If the honour of the Crown doesn’t even require governments to honour the processes it agreed to in negotiated agreements with Indigenous peoples, it’s just hollow words then," Chartrand said in the statement. 

This report by The Canadian Press was first published May 8, 2021.

The Canadian Press