Power Broker

October 1, 2009

For David Emerson, the past year has been a wild ride. At the Beijing Olympics in 2008, he was Canada’s top representative. Back in Ottawa, he was the country’s minister of foreign affairs (and B.C.’s top Tory). Then, in September of last year, Prime Minister Stephen Harper called a snap election and the one man who could claim to be a close confidant of both Harper and B.C. premier Gordon Campbell was out of a job. But instead of a hard landing, Emerson got a phone call from Campbell. And with that call came a new job, a handsome salary, a superbly scenic office, and a position as a key architect of British Columbia’s economic future.

“I thought I’d take a break from everything,” Emerson said earlier this year about his decision not to fight for the Vancouver-Kingsway seat he won for the Liberals in 2006 and then handed to the Tories the next day. “But after two weeks, my wife got tired of me around the house,” he said with a grin. “Gordon Campbell, who I’ve known for a long time, paid me a few visits on the weekends and we started to talk about a couple of things that he really wanted.” The first thing Campbell wanted was a volunteer chairman for his Premier’s Economic Council. He also needed someone to head up the British Columbia Transmission Corporation, the Crown-owned company that builds and operates electrical transmission lines in the province. “All the stars aligned,” Emerson explained. “There’s probably no more critical piece to a North American environment and energy strategy than the transmission system.”

The only hitch, from Emerson’s perspective, was the job itself. It’s important, it’s powerful, it’s prestigious, but it’s a long way from spearheading big-ticket international diplomatic strategies like Canada’s Asia Pacific Gateway Project, which he did in Ottawa. “I have to confess that I have always hated transmission lines,” Emerson said, silhouetted against the scenic backdrop of an office window through which, on a clear day, you can discern a wisplike trace of BCTC transmission lines snaking in from the Interior to feed Vancouver. However necessary, Emerson said bluntly, transmission lines are a “blight on the landscape.”

To make matters worse, in mid February, just months after he took the job, BCTC was publicly horsewhipped in B.C.’s top court for trampling First Nations rights while charging ahead on a huge project to rescue Vancouver from an energy crunch planners have been warning about for years. So, instead of settling into a plush sinecure, Emerson found himself at the centre of a high-voltage fight in which the stakes may be nothing less than the survival of the B.C. economy as we know it. “I consider myself philosophically Buddhist,” Emerson mentioned. Having now been reincarnated at BCTC, he’ll need all the good karma he can muster.

The troubles that awaited Emerson at BCTC began long before he took the job. They can be traced back half a dozen years to a flurry of reports warning that by 2015, assuming Vancouver kept growing, a lot more juice would be required to keep baseboard heaters glowing in winter, air conditioners whirring in summer, and banks of servers humming year-around. Vancouver, said B.C. Hydro analysts, was running out of the stuff that makes its skyline twinkle. And the only way to fix that problem, they reasoned, was to bring in more power from hydro dams in the Interior. To do that, the power corridor connecting the city to dams in places like Revelstoke and the Peace River Country was going to require a $700-million expansion. And it would have to be done in a hurry.

Vancouver gets about half its power from a 348-kilometre high-voltage corridor that runs down from the mountains, into the Okanagan, along the Fraser Valley, and into the Lower Mainland. That corridor, known as the Interior to Lower Mainland line, was built in the 1960s during Vancouver’s first big postwar electricity infrastructure boom. All that was needed to avoid the looming power crunch, the BCTC officials responded, was a major upgrade and expansion to the line. The beauty of the plan lay in its simplicity, they believed. Although some 61 First Nations bands living along the line would have to be consulted, only a few new rights of way would be required. None of which would be a problem, they reasoned, since that problem had been resolved years ago.

Armed with these assurances, BCTC officials arrived last year at the offices of the B.C. Utilities Commission—a government-appointed tribunal with offices in downtown Vancouver—seeking approval to get cracking. If they didn’t start soon, they explained, the city could well face an electricity crisis of the sort that’s bedevilled places like Toronto in recent years. So when a handful of First Nations bands along the corridor requested that the commission more closely consult with them on various issues—including whether BCTC had actually lawfully acquired right of way before its big line was built in the 1960s—BCTC suggested this issue be dealt with later, as part of an environmental review process. Not many months later, BCTC got the tribunal’s blessing. Although a handful of First Nations groups had mounted a legal challenge, nobody at BCTC seemed to think these amounted to much. Almost seven months after the utilities commission kick-started the project, BCTC spokesman Mike Whitterly said: “The details are sorted out.” Just days after uttering those words, Whitterly had to eat them.

Tim Manuel’s roots on Douglas Lake, not far from Merritt, reach deep into British Columbia history. He serves as elected leader of the Upper Nicola Band, one of the First Nations that challenged BCTC’s plans to expand the power corridor. Not far from his office squats a massive, ever-humming B.C. Hydro facility known as the Merritt Substation. Enclosed by a barbed-wire fence and fed by high-voltage transmission lines from all directions, the facility is, as David Emerson might say, a blight on the landscape. “They came in 35 years ago and they never consulted us,” Manuel said on a walk though the sage grass that patterns the hills behind his windswept reserve. “They make substantial money and we never saw a red cent.”

Forty years ago, the B.C. Hydro technocrats who ran a power corridor through Chief Manuel’s traditional territory—which has never been ceded or surrendered—wouldn’t have seen much need to consult with the people living nearby. As it happens, though, experience in consulting with the Crown runs in Manuel’s blood: around 1908, he explained, his great-great-grandfather travelled to London to meet with King Edward VII and then to Rome to meet with Pope Pius X to talk about the situation back home. These were chief-to-chief meetings, in Manuel’s view, meant to resolve the question of who owned the land. “Can you imagine?” he asked, “having to get on a train, go across the country, and then get on a boat, then go across the sea? They were gone for months.” It was a long journey, and one Chief Manuel believes is not over.

The decision by Manuel and other First Nations leaders to take on BCTC over the transmission line was not made lightly either. It’s his sacred duty, he said, to continue the work of his forefathers to protect aboriginal interests. Like many aboriginal leaders, he has developed considerable expertise in the finer points of Canada’s Charter of Rights and Freedoms, which defines and protects his aboriginal rights. According to Manuel, First Nations have won about three-quarters of all the B.C. court cases on these issues in the past 20 years. Most of these decisions have resulted in major—and often very expensive—changes to industrial projects that have an impact on aboriginal interests. The weight of those decisions is now stalling the proposed Mackenzie Gas Project, as well as the Enbridge Northern Gateway Project, which aims to connect the Alberta oil sands with Asia through Northern B.C.

When the B.C. Court of Appeal issued a decision in mid February backing Manuel’s argument that the utilities commission was denying First Nations rights in refusing to grant consultations with First Nations, Manuel was delighted but not surprised. “This ruling is one more victory,” he said matter-of-factly. “How many times does the Province need to be hit over the head with a two-by-four to realize that, yes, the duty to consult is first and foremost. And yet they continue to ignore it.”

Vancouver lawyer Greg McDade was one of the small team of lawyers who tackled BCTC over its failure to meaningfully consult with First Nations bands on its choice of transmission line routes. Speaking a few days after the B.C. Court of Appeals decision, McDade—dressed in a slightly tatty sweater and scuffed shoes—said he wasn’t surprised. Representing First Nations bands is unglamorous work for clients who often have few dollars to spare for litigation; the lawyers on the other side likely earn many times their fees from rich corporate and government clients. Still, McDade exuded a sense of the courtroom warrior, home from battle, tired but again victorious. The BCTC case, he said, was not nearly as groundbreaking as a Supreme Court of Canada case won by the Haida against the B.C. Government in 2004 that made it clear governments must consult with First Nations on the use of their unceded lands, not just for the sake of the First Nations people living on those lands but to uphold what lawyers now call “the honour of the Crown.”

McDade said that since the Haida won their landmark decision, most cases around consultation have been won by First Nations. He described it as “common sense”— something so well established in law that the BCTC lawyers who sought to deflect calls for consultation ought to have known better. McDade’s voice trilled with humour. “To be making decisions and starting construction while you’re pretending to start the consultation process is a denial that consultation means anything. If someone’s going to build a power line through your back yard, it’s not enough to come to your door six times and tell you that.”

On the same February day that the B.C. Court of Appeal ruled against BCTC, it also ruled against B.C. Hydro in a case involving a claim filed by the Carrier Sekani Tribal Council, an aboriginal government in Northern B.C., who insisted they were not consulted over the Kemano Power Project and its later expansion near Kitimat. In that case, the court found that “B.C. Hydro, as a Crown corporation, was taking commercial advantage of an assumed infringement on a massive scale, without consultation.” The Carrier Sekani tribal council is also deeply involved in the challenge to the Gateway project.

Just as often as McDade flashed with humour, he erupted with anger. “The provincial government tends to look at [First Nations] title as the right to hunt and fish,” he said. “It’s the court’s continual message to the provincial government that they have to change.” Madam Justice Carol Mahood Huddart, who wrote the decision against BCTC, seemed to agree. “In my view,” Huddart wrote in her decision, “the appellants were not only entitled to be consulted and accommodated, they were also entitled to have their challenge to the adequacy of that consultation and accommodation assessed by the Commission before it certified BCTC’s proposal.”

Vancouver lawyer Jim Quail works with the B.C. Public Interest Advocacy Centre, a group operating out of a suite on Pender Street on behalf of such groups as lower-income ratepayers, pensioners, and others living on fixed incomes. He attended the commission’s hearings on BCTC’s plan to fix the power crisis threatening Vancouver. When First Nations began asking for consultations during the hearings, Quail intervened to suggest the process be stayed while this consultation issue was addressed. He didn’t get much of a hearing, he recalled with a chuckle. “So, yeah, I was happy to see that the judge agreed with me on that one.”

Quail’s presence at the hearings was no accident. In his efforts to stick up for the people in Vancouver who might worry most if their electricity bills spike upward, he routinely monitors megaproject plans proposed by BCTC. It’s a job that usually offers little more excitement than lengthy paper chases and long hours in stuffy committee rooms. But as the power corridor expansion wended its way through the hearings last year, he grew alarmed: “It seemed to me BCTC was taking a risky approach,” he later explained. “From the view of ratepayers, if BCTC barrels ahead without consulting, then gets sued for it later, they could be forced to pay major compensation. That could cost BCTC a huge bundle. All of which would be paid by ratepayers.”

The last thing Vancouverites want or deserve is an extra $10 or $20 a month on their electricity bill (which is what people in Ontario now pay for the financial sins of the fathers of the former Ontario Hydro. Quebeckers, too, were forced to pay huge sums for compensation claims in the 1970s.) In Quail’s view, the case that McDade and band leaders like Tim Manuel are making made sense not just for First Nations folk in the Interior but for the people of Vancouver. “The best thing to do from a business-risk perspective,” he said, “is to consult first, and build afterwards. Doing it the other way around is no longer acceptable.”

Law professor James Hopkins agrees. Hopkins, an Algonquin from Maniwaki, a region of Quebec where First Nations were bulldozed off their ancestral lands in the 1970s, was recently given the National Aboriginal Economic Development Chair at the University of Victoria. The court’s ruling on the Interior to Lower Mainland project, he says, is a “wakeup call” for B.C. business leaders. “They need to start seeing First Nations as business partners on a new business platform.” Hopkins pointed to the success of Hupacasath First Nation near Port Alberni, who worked with private power developers on a hydro project that “has its own internal consultation blueprint.

“The duty to consult does not get any easier if you ignore it,” he adds. This is especially true at a time when First Nations leaders are arguing with growing force that existing infrastructure was built without legal consultation, accommodation, and compensation. If BCTC continues to alienate First Nations leaders, it could find itself having to defend decisions made decades ago. “If you look at the history of how those rights of way were acquired,” Hopkins explains, “the question becomes, How far back does the duty to consult apply?”

Hopkins believes that in order for BCTC and B.C. Hydro to flourish, and for the province to flourish as a result of sensible and ethical infrastructure decisions, these government-owned behemoths must work with First Nations as equal partners. Given that the Campbell government has rolled out plans to encourage a huge new privately financed, publicly subsidized hydro-electric infrastructure boom across the province, the need for aboriginal consultation becomes all the more urgent. In the case of BCTC, Hopkins says, the company depends on power corridors built on lands where aboriginal ownership has been asserted and never ceded. “It’s hard to calculate the value of these corridors,” he says. “But they are hugely valuable.” Paying compensation could become very expensive, he notes. Perhaps, Hopkins says drily, refusing to consult with the landowners beneath these corridors was not such a clever idea.

Who created the platform that Hopkins is now using so effectively to promote a new view of the B.C. economy—one in which First Nations are viewed as powerful landowners instead of squatters? Credit for that, ironically, goes to the Honourable David Emerson, who, when he was a federal minister, helped set up the UVic chair that Hopkins now holds.

“I’m a greenhorn,” David Emerson said with a self-deprecating shrug. “If you really want in-depth expertise on BCTC, you’re looking at the wrong guy.” But Gordon Campbell wasn’t looking for a guy with experience on alternating current when he called on Emerson last fall. What the premier wanted was high-level strategic clarity and decisiveness—something Emerson has been refining since his student days in the early 1970s, when he did a PhD thesis that rightly divined that the Auto Pact, arguably the most important industrial treaty in Canadian history, would lay the groundwork for a huge boom in the Canadian car-parts industry.

Armed with an impressive academic record, Emerson was soon snapped up by the B.C. Ministry of Finance. Within a decade, as a senior mandarin serving the Social Credit regime of Bill Vander Zalm, he was laying the groundwork for massive reforms to the provincial economy based on sweeping privatization of government-owned businesses—notably, B.C. Hydro. After leaving the provincial government, Emerson led an extensive restructuring of Canfor, then Canada’s biggest forestry corporation. When he entered federal politics in 2004, he was charged with sorting out the complex and acrimonious softwood lumber dispute. The solution he found left many people in the B.C. lumber industry unhappy, but nobody can doubt that B.C.’s own “Mr. Fix-It” can deliver.

Emerson understands that the problem BCTC now finds itself in with First Nations cannot be fixed with a legal sledgehammer. “You can’t load all of the costs of accommodation and righting of historic wrongs of one transmission line and dump it on the ratepayer—that’s not going to work.” That doesn’t mean Emerson is oblivious to the huge advances aboriginal economic interests are winning in the courts. “For me, in terms of my own values and philosophy, First Nations have just got to be brought in, particularly to land-oriented wealth creation,” he said. “Government people are looking at the court ruling and trying to figure out what it all means. My own view is that we have got to deal with the First Nations communities or we are going to have a bit of an economic crisis.” In the end, he believes, it’s about enlightened self-interest. “I’m an optimist,” said Emerson. “I believe we can work it through.”

Get the Newsletter

Own your city with Vancouver’s thrice-weekly scoop on the latest restaurant news, must-shop hotspots and can’t miss events. Rest assured your email is safe with us.