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Litany of hardships
Dec 03, 2010
There’s a sadness to the story of Hecla Island as it has unfolded in recent decades. Dreams were hatched to great expectations, but fate seemed to always have a tendency to intervene, resulting in the best laid plans going ingloriously bust. 
Since the island became a provincial park in 1969, the news about Hecla has been fraught with impending disaster followed by announced failure. No enterprise on the island has been so exposed to the glint of doom than the resort hotel in Grindstone Provincial Park, which is now undergoing receivership proceedings in court that is being sought by the federal Business Development Bank of Canada which is owed $8.5 million and the province another $5.5 million.
The Paletta Group, a well-known Winnipeg family with a strong track record in the hotel business, took on the challenge of making a go of the resort in 2005 after everyone else previously involved had failed. After extensive renovations totaling $19 million, the hotel re-opened in 2008, but failed to attract customers during the critical winter season which would have established it as a year-round destination. As a result, the hotel claimed another victim, who subsequently padlocked the doors and walked away. 
Paletta Group is now suing the province for allegedly reneging on a promise to build 72 condos at the resort. Coupled with a luxury spa and wellness centre, Joe Paletta claimed the condo development would have made the resort a viable year-round enterprise.
On an island of ongoing heartbreak, it’s just the most recent setback in a long series dating back from the founding of the settlement by Icelanders in 1876. 
At its height, the island had a population of 500 people who were served by two schools and two stores. While a few eked out a living on farms plagued by poor soil conditions, most islanders were commercial fishermen and captains who took to the lake and earned an adequate livelihood. 
But the island’s fortunes began a downward spiral in the following decades, resulting in many fleeing to other communities, such as Gimli and Winnipeg, seeking better opportunities. In 1966, the last remaining school closed, giving islanders another reason to abandon their homes. 
The islanders could no longer support themselves as an isolated community, served by an ice road in the winter and a tiny ferry when there was open water  after the thaw. By the time  the causeway was completed in 1972, the island had already been denuded of its original inhabitants.
Former Premier Edward Schreyer told the WREN in 2003 that when his NDP government came to power in 1969, it inherited the Walter Weir Conservative government’s two-year-old plan to turn Hecla into a provincial park. “The facts and process were well underway when I became premier,” he said.
Schreyer appointed Jack Walter to head an inquiry into the creation of the provincial park. Walker reported that it might have been possible to expropriate all privately-held land, but it was not necessary, a point the former premier said he agreed with.
Schreyer said he looked at the plan devised by bureaucrats and didn’t like what he saw. While the bureaucrats opted for a pristine wilderness free of people, Schreyer envisioned a park which included at least some of the original inhabitants. He proposed only to expropriate land for needed infrastructure, and any private homes expropriated would be leased back to families.
“To have no one living there was a flight from common sense,” he added. “The more people we could get to stay there, the better.”
Unfortunately, few took advantage of the province’s lease-back proposal — the island was “economically depressed,” according to a federal-provincial rural development agreement.
The process was well advanced in 1969 with land assembled and agreements signed. “So we had to go ahead,” said Schreyer. “It is better to make these kinds of attempts than to curse the darkness.”
Of the 99 properties expropriated, 56 were voluntarily given up, 18 were eventually voluntarily ceded after negotiations, 17 cases were decided by the courts, three properties had expropriation abandoned and three properties were not considered for expropriation.
“The 50 or 60 families of retirement age didn’t have many options,” according to the former premier. “They were happy to get a lump sum.”
Schreyer said those who took the first prices offered became bitter, perceiving that some of the hold-outs may have gotten better terms from the province. If all the expropriation had been handled by the courts, Schreyer said those people might not have felt the process “was rigged or fixed.”
Whatever the process, a mythology emerged years afterward, with people claiming they were tricked out of their land. In 1997, the province tried to alleviate this perception by making a number of lots available to former residents and their descendants at $5,000 apiece. Unfortunately, the plan became embroiled in allegations of fraud, resulting in some deserving families not being able to purchase vacation property on the island. 
Wayne Helgason was fined $1,500 after being convicted in court of five counts of fraud, forgery and uttering a forged document in connection with the ownership of the ex-golf pro’s white house on Hecla Island. A judge ordered Helgason to forfeit the property. Marvin Benson was convicted of forging two documents regarding the acquisition of Lot 13 in Hecla Island Village, but was given an absolute discharge, meaning no criminal record would be attached to the conviction.
On June 7, 1971, just before his death in Winnipeg, Hecla-born Helgi Tomasson said that he “would not have exchanged my living on Hecla for any other way of life. At times there were great hardships but the rewards were also plentiful. Due to the independent style of living we had at Hecla I feel I have been able to succeed in doing the things I like to do and feel that my life on Hecla Island has been a happy one.”
While Hecla Island is a jewel in the provincial park system, recent events have revealed once more the litany of hardships associated with the island, and the difficulty it continues to experience  on the road to becoming an economically viable enterprise.