Cash-strapped First Nation spent at least $4.4M on consulting firm controlled by Winnipeg developer
CBC
Peguis First Nation and a real estate business it created paid a company controlled by a Winnipeg developer at least $4.4 million over two years for consulting services, CBC News has learned.
The leaders of the cash-strapped Cree and Ojibway nation, which struggles with perennial flooding and the financial aftermath of high-interest loans, are now questioning the payments, which were approved under a previous chief and council.
Between April 5, 2021, and March 10, 2023, Peguis First Nation paid $3.8 million to a numbered company controlled by developer Andrew Marquess, according to a list of payments provided to CBC News by the band's chief and council.
Between Aug. 17, 2021 and March 29, 2022, the Peguis First Nation Real Estate Trust, a limited partnership with the stated goal of creating housing and engaging in off-reserve development, recorded at least $600,000 worth of payments to the same Marquess-controlled company, according to financial records obtained by CBC News.
Marquess is best known as the developer of the Parker lands in Winnipeg.
The payments to his consulting firm constitute "a significant amount of money" for Peguis First Nation, Chief Stan Bird said in an interview early this year.
Bird, who ran for office in 2023 on a promise to make Peguis governance more transparent, said the First Nation's finances are constrained by a $172-million lawsuit over outstanding loans, as well as the need to conduct hundreds of millions of dollars worth of flood recovery and mitigation work.
"Every major decision we're making, we take it to the community, where we're going to be accountable for the decisions that we make," Bird said.
"From this point forward, we have to be vigilant. We have to move slowly, cautiously. We have to do things right."
Peguis is Manitoba's most populous First Nation, with a total of 11,834 members, 3,723 of whom live on reserve, according to federal population statistics.
Its reserve sits along the Fisher River in Manitoba's Interlake region, where the cumulative damage from floods in 2014, 2017 and 2022 has left Peguis with more than 500 homes in need of repair or replacement, Bird and his council said in April, when Peguis launched a $1-billion flood damages lawsuit against Canada, Manitoba and two rural municipalities.
As of that month, 785 Peguis members were unable to return to the community due to a housing shortage, Bird said.
The lawsuit against Peguis over loans was launched in December 2022 by PwC, a court-appointed receiver for defunct lender Bridging Finance.
Bridging provided $99.5 million worth of loans to Peguis at a rate of prime plus 11 per cent in 2017. The average lending rate for a five-year mortgage in Canada was 3.8 per cent that year, according to Statistics Canada.
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