Dam blamed for First Nation's financial woes

A Manitoba First Nation that's supposed to be saving money to invest in the Wuskwatim hydroelectric dam is in financial trouble.

The Nisichawayisihk Cree Nation, formerly known as Nelson House, is struggling with a deficit of millionsand has had been ordered by Indian Affairs to get control of its finances.

Community members who fought the deal with Manitoba Hydro to build the $1-billion, 200-megawatt Wuskwatim generating station blame the dam for the band's financial problems, saying their worst fears are coming true.

The deal struck with Manitoba Hydro the first of its kind in Manitoba will see the band become part owners of the dam.NCN will invest $28 million, plus a $56-million loan from Manitoba Hydro, in return for a 33 per cent share in the dam, which will be built on the Burntwood River in the band's resource-management area.

"I'm starting to see everything unfold in front of my eyes here, and people in the community are seeing it as well," said Carol Koblinski, who has opposed the Wuskwatim deal from the start.

"We shouldn't have put any money from the community into this project because of the condition of our community right now.We're so far into debt right now, for them to keep on taking, taking, it really is affecting the community and its members."

Chief Jim Moore says he's taken drastic measures to try to improve the reserve's financial situation: laying off staff, cutting off welfare cheats and even personally taking a financial hit.

"All chief and council took a 25 per cent cut in their pay," he said.

The problem is overspending that began before he was elected in August, Moore said.

Moore wouldn't comment on Wuskwatim spending, saying he'll present financial statements to the band on Tuesday.

Former chief Jerry Primrose, who negotiated the Wuskwatim deal with Manitoba Hydro, said he doesn't know why the band is in the red, but he won't blame the project. His regime put only $1.2 million into Wuskwatim preparations, he said.

Given the band's financial situation, Koblinski can't see how the band will ever be in a position to save money for the project.

"If we don't come up with that money, then what? Then we lose out," she said.

Manitoba Hydro officials say the band doesn't have to come up with any more money until the project is complete in 2011.

Although no profits are guaranteed, band officials have estimated in the past thatthereserve could receive $1 million to $3 million in profits annually starting in 2010 while it pays off loans to finance its portion of the project.

Once those loans are paid by 2062, they estimated the band could take in $15 million to $20 million per year over the life of the generating station.