A Bell Canada lawyer who sits on the board of Manitoba Hydro has recused herself repeatedly from portions of directors meetings this year due to potential conflicts of interest, raising suspicion her company may benefit from the Crown corporation’s as-yet-unstated plans to revamp or wind down a subsidiary.

Melanie McKague was one of five directors appointed to the Hydro board immediately after the previous board quit en masse in a dispute with the Pallister government in March 2018.

According to meeting minutes obtained by the Free Press, McKague recused herself twice during a board meeting in February: once when telecommunications issues were discussed and later when the meeting turned its attention to the corporation's "business model" as it affects subsidiary Manitoba Hydro International (MHI).

During meetings in July and August, McKague similarly recused herself when MHI came up.

New Democrats, who obtained the meeting minutes under freedom of information legislation, believe the recusals suggest that Bell MTS has a commercial interest in parts or all of MHI, which has been operating under a cloud for several months.

According to a leaked internal memo earlier this year, MHI staff was directed not to aggressively pursue new work or seek out new customers. That caused the 125 people who work for MHI, Hydro's international energy consulting arm, to fear for their jobs.

In January, the Pallister government discouraged Manitoba Hydro (through the MHI subsidiary Manitoba Hydro Telecom) from bidding on a lucrative data network contract that provides inter-office data connectivity to more than 600 provincial offices. The message was delivered by Treasury Board secretary Paul Beauregard, a former executive with both Manitoba Telecom Service Inc. and BCE/Bell Canada.

Instead of opening up the Manitoba Network contract to bidders when it became available in June, the government decided to extend its existing deal with Bell MTS for 2 1/2 years at a cost of $37.5 million.

NDP MLA Adrien Sala, the party's critic for Manitoba Hydro, said McKague's recusals are more evidence the government is preparing to sell off the profitable MHI -- something the Tory government has denied.

"Bell, as a telco, is a potential buyer of some parts of Manitoba Hydro International, specifically the Manitoba Hydro Telecom portion of their business," he said.

McKague could not be reached for comment on Friday.

In a statement to the Free Press, Crown Services Minister Jeff Wharton said Manitoba Hydro has conducted an extensive a review of MHI’s operations using an independent third party. That review is still being assessed, he said.

"Despite ongoing media speculation, no decision has been made regarding MHI," he said.

A Manitoba Hydro spokesman said the corporation continues to develop its long-term strategic plan.

"With regard to MHI, no decisions have been made or even recommended to the (Hydro board). Once any decision is made, it would be communicated to MHI employees first and a public announcement would follow," the spokesman said in an email.

David MacKay, executive director of the Coalition of Manitoba Internet Service Providers, said the government has put an entire sector on hold by freezing Manitoba Hydro Telecom's business activities. The group's members had hoped to receive spinoff business through the awarding of the Manitoba Network contract, but those hopes fizzled when Bell received its extension.

MacKay said he doesn't read too much into the fact that McKague has repeatedly recused herself when MHI comes up for discussion at Hydro board meetings.

"I commend her for recognizing what could be a conflict and recusing herself. I think she's acquitted herself appropriately," he said.

But MacKay said "it's a little disturbing" to see the Pallister government's "cosy relationship with Bell MTS."

Not only is Beauregard one of the premier's most trusted and powerful advisers, but the government's new deputy minister of the Families Department, Kathryn Gerrard, is a former longtime Bell MTS executive.

"What is it that's so special with Bell MTS that they have to be so close in an advisory role to government?" MacKay said.

Meanwhile, he said coalition members are concerned that MHI's future remains in limbo as the year draws to a close.

"We are still awaiting, of course, the awarding of the rural broadband expansion RFP (request for proposals from government). That is a huge concern because we think that's just going to be a hand-off to Bell," MacKay said.