The Genesis of the Columbia Basin Trust

Kootenay residents reflect on the creation of multi-faced community fund.

Columbia Basin Trust directors are seen during their first meeting on the steps of the legislature in Victoria on July 7

Fifth in a series about the Columbia River Treaty

They wanted it to last forever.

According to former MLA Corky Evans, that’s what residents demanded when they lobbied for the creation of the Columbia Basin Trust Act in 1995. Yes, they wanted to be compensated for the traumatic losses caused by flood and dam construction, but they weren’t going to settle for shut up money.

“That was a philosophical position taken by the people involved. They said ‘no, we do not want you to use this money to give out grants and make us happy and buy our goodwill, we want to build something,” he told the Star.

“And whatever you do with the trust, we want you to maintain the value and only spend the accrued interest.”

Columbia Basin residents ultimately received $250 million to finance power projects, $45 million for community reinvestment and $2 million every year from 1995 to 2012.

And with that initial endowment fuelling the Trust, outside the realm of government oversight, they’ve been building their capital ever since.

‘I was doubtful it would ever happen’

Ed Conroy was serving as the MLA for Rossland-Trail when residents first started to “put their shoulder to the wheel” to advocate for the creation of the Trust. Many of them had lost their homes or livelihoods, and they were looking for compensation.

“There were lots of people out there who thought we should’ve just eaten it for the rest of the province. They thought we should’ve just taken some cash and lived with the loss of our communities and the flooding of the Columbia River which we did regardless.”

He was shocked by the catastrophic change the dams had brought to the landscape.

“We paid a heavy, heavy, heavy price. If you lived here at the time like I did, you saw full evidence of people who lost not just their homes, but their entire towns.”

All this being said, he wasn’t convinced residents would be successful in their campaign.

“I was doubtful whether it would happen at all. To see all of it come together, and to know what it took, how much work, was pretty cool. When we made the decision to invest in hydro projects, that was personally a real high point for me.”

He’s also intensely proud of the work the Trust is doing investing in early childhood education and seniors issues.

A rollercoaster legacy

According to the Columbia Basin Trust’s new CEO Johnny Strilaeff, who is the sixth person to hold the position since its inception, current residents are the ones who dictate where and how the cash flows.

But there was a steep learning curve over the course of the last 22 years for those involved in the organization, and at times they’ve had to course-correct.

“In those early years a lot of the work was creating the organization, bringing on staff and building capacity,” Strilaeff told the Star.

“Over time this role has been able to evolve so that we’re less involved on inward requirements, and more focused on delivering on our mandate.”

The darkest period took place between the years of 2002 and 2005, an era in which the CBT found itself at loggerheads with its subsidiary Columbia Power, earning them negative attention from the province.

According to Strilaeff, conflict in the board room consumed the organization the two management teams couldn’t agree on how to develop their hydro-electric assets —and important work was getting neglected.

“It was a natural result of two organizations trying to find the best way forward on complex projects. The most significant negative implication is we became distracted from working with the communities because so much energy was going towards trying to maintain and develop this relationship.”

Ultimately, the senior management teams of both organizations moved on, and new leadership was brought in.

Making sound investments

Conroy believes much of the success of the Trust has to do with their sound investment strategy, but there were a few close calls.

“There were was a time when the board wanted to sell all our hard assets and invest in the stock market. There were community meetings all over the basin opposed to it, and thank goodness the board listened to the people and didn’t do it.”

He said evidence of CBT’s influence surrounds Kootenay residents.

“If I was an economist, I’d be able to do a study and tell you how it’s all working, and how well, but there’s no doubt it’s definitely working. You just have to look at the large number of organizations that are benefiting from the investments and the money the Trust recycles through the region.”

But they can’t rest on their laurels.

“It’s a never-ending job, but right now the Trust is sitting in a pretty good place because they made good investments early, and they have the right people in the right places.”

A golden age

It was Strilaeff’s predecessor Neil Muth, who passed away in 2016, who barrelled in to make significant changes to the trust’s operations following the shake-up in 2005. Both Evans and Strilaeff said Muth’s appearance coincided with a new golden age for the CBT.

“I was really worried they were losing their vision and heading off in directions that were not part of their mandate, but then Neil came in and the institution became stable and productive again,” said Evans.

Strilaeff said Muth’s influence is still keenly felt in their organization.

He was able to heal the wounds with Columbia Power and forge a new working relationship based on “recognizing the expertise of our power partners and looking to them for guidance rather than trying to develop our own views or second-guess their expertise.”

He also started travelling to communities within the basin to meet with residents and hear their concerns. Evans believes that it’s due to Muth’s influence that “the Trust is as well-respected as it’s ever been.”

‘We lost significant dollars’

The CBT’s current stability is largely due to how Muth stewarded their investments, which were the cause of huge financial losses under previous management.

Strilaeff said Muth was able to divorce the social enterprising element of investing from the goal of generating a sustainable revenue.

“Originally there was an attempt to not only realize financial returns, but also to achieve broader social benefits, and in trying to do that we realized we’re not accomplishing much at all,” Strilaeff said.

“We tried to do a lot with our investments, and it was well-intentioned, but we ended up doing very little and we lost significant dollars. People were saying ‘whoa, whoa, whoa’ when an investment is unsuccessful, nobody wins.”

Their new way of doing things: “One department generates the return, and the other one uses the return for community initiatives. They work wonderfully together.”

Keeping an eye on the Columbia River Treaty

The Columbia River Treaty may be coming up for renegotiation in the coming years, something the CBT is prepared for, but the organization will be relegated to the role of spectator.

Regardless of how things turn out, though, they’re going to keep at their work.

“It’s difficult to speculate on future payments, but at this point I would suggest there would be no significant benefit or harm coming from these future negotiations. One thing we need to keep an eye on though, is it might mean a change to how water resources are managed and that could have an impact on our hydro-electric facilities,” said Strilaeff.

That being said, “we’ve done our research and we’re satisfied even in the worst-case scenarios we might generate less power or produce less revenue, but not so much it would undermine the mission of the Trust.”

No more dams on the horizon

Strilaeff said they know how their energies will be focused until at least 2020 they have a list of 13 strategic priorities and he doubts they’ll be involved with any more power projects before 2030.

“There is no demand. With the power market in B.C. as it is, and with B.C. Hydro moving forward with Site C, there’s no expectation for this to be needed within the next 15 years.”

And if the Trust were to go off the rails again, Strilaeff said there are checks in place to get it back on track including a lawfully required Columbia Basin Management Plan.

“These checkpoints are terrific and keep us grounded. That management plan, any changes to it can only come from engagement with residents,” he said.

Evans believes the Trust is an example for the rest of the world.

“I’ve always believed this principle should be in place for forestry, electricity, all sorts of industries,” he said.

“I would like people to look over the mountains and say, ‘what’s going on there is really healthy,’ ‘they’re spending their money in a hugely responsible way’ and ‘we should imitate it elsewhere.’ That’s the dream.”

 

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