An Act to amend the Indian Oil and Gas Act

This bill was last introduced in the 40th Parliament, 2nd Session, which ended in December 2009.

This bill was previously introduced in the 40th Parliament, 1st Session.

Sponsor

Chuck Strahl  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Indian Oil and Gas Act to clarify and expand the existing regulation-making powers and to add new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands and the determination and payment of oil and gas royalties. It also puts in place sanctions for contraventions of the Act as well as provisions for its enforcement.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Business of the House
Oral Questions

April 2nd, 2009 / 3 p.m.
See context

Prince George—Peace River
B.C.

Conservative

Jay Hill Leader of the Government in the House of Commons

Mr. Speaker, today, Bill S-3, the energy efficiency bill, was read a second time and referred to the Standing Committee on Natural Resources.

Just before question period, we were debating Bill C-13, the Canada Grain Act, but it appears the coalition of the Liberals, the NDP and the Bloc has been revived and it is supporting a motion that, if adopted, will defeat that bill. It is proposing to kill the bill before it even gets to committee. It is unfortunate that the coalition's first act is to abdicate its role as legislators by denying close scrutiny and study of a bill at a committee.

After my statement, the government will be calling Bill C-5, Indian oil and gas, followed by Bill C-18, the bill respecting RCMP pensions, which is at second reading.

Tomorrow, we will continue with the business that I just laid out for the remainder of today.

When the House returns on April 20, after two weeks of constituency work, we will continue with any unfinished business from this week, with the addition of Bill C-25, the truth in sentencing bill, Bill C-24, the Canada-Peru free trade agreement, Bill C-11, human pathogens and toxins and Bill C-6, consumer products safety. We can see we have a lot of work to do yet. All of these bills are at second reading, with the exception of Bill C-11, which will be at report stage.

During the first week the House returns from the constituency weeks, we expect that Bill C-3, the Arctic waters bill will be reported back from committee. We also anticipate that the Senate will send a message respecting Bill S-2, the customs act. If and when that happens, I will be adding those two bills to the list of business for that week.

Thursday, April 23, shall be an allotted day.

Speaker's Ruling
Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 3:45 p.m.
See context

Vancouver Island North
B.C.

Conservative

John Duncan Parliamentary Secretary to the Minister of Indian Affairs and Northern Development

Mr. Speaker, it is indeed very gratifying to see Bill C-5 advanced to third reading. After nearly a decade of discussions and consultations, we are finally bringing this legislation into the 21st century. In the process, we will be helping to bring much needed prosperity to oil and gas producing first nations.

This long overdue bill is an important step forward in levelling the playing field for resource-rich first nations that face obstacles to achieving their full economic potential. I remind my hon. colleagues that the Indian Oil and Gas Act has remained unchanged for the past 34 years. To say that Bill C-5 is long overdue, is an understatement. That is why I am so proud to be taking part in corrective action with this legislation to set first nations on a better course for the future.

As I pointed out, the last time I spoke on Bill C-5, this is a concrete example of the Conservative government's commitment to ensure that aboriginal Canadians fully share in economic opportunities. It is an important building block that will enable first nations with oil and gas reserves to build stronger, more reliant communities that can better manage their own affairs. The oil and gas sector represents a source of promising economic development opportunities for first nations. The Government of Canada, through its special operating agency Indian Oil and Gas Canada, currently manages over 1,000 oil and gas producing wells and about 150 new wells are drilled on reserves each year.

In 2005-06 over $270 million in oil and gas revenues were collected by the Government of Canada on behalf of first nations. More than $1 billion in revenues from on reserve oil and gas activity has been collected by Indian Oil and Gas Canada on behalf of about 60 first nations over the past five years. That revenue is then passed on, in its entirety, to those first nations communities. This much needed source revenue is being used by these first nations for training, new housing, water and sewer projects, initiatives that are building stronger communities and a brighter future for their children.

Notwithstanding the current economic downturn, industry remains committed to developing partnerships with first nations. The oil and gas sector is continuing to invest hundreds of millions of dollars in exploration and exploitation activities on first nations reserve lands, more than $300 million worth over the last five years alone. While there is great promise, the potential for first nations economic opportunities in the oil and gas sector is dependent upon industry investment.

Private sector interests lament that up until now federal laws governing development activity on reserves have not kept up with industry needs. They also complain that the regulations are unclear in many cases, which can cause delays, additional costs and lost investment opportunities. Industry stakeholders clearly prefer to invest in lands where the regulatory regimes are certain and where communities offer opportunities, not challenges. That is precisely what this bill would provide.

Let me review the many progressive features in Bill C-5 that would ensure first nations lands are every bit as attractive to investors as off reserve lands.

First, the act increases clarity. The amendments clarify both ministerial and judicial oversight powers in high-risk areas such as levying of fines and searches and seizures. Another way that Bill C-5 would clarify would be by harmonizing federal legislation with provincial regimes. This is important because provincial oil and gas laws related to conservation and environmental protection are amended from time to time. If the federal regime does not stay abreast of these changes, it puts first nations seeking investment at a clear disadvantage.

The incorporation by reference of these amendments would ensure the federal regime would keep pace. More to the point, it would eliminate disparities between on and off-reserve lands. Again, this would provide greater certainty for potential investors and facilitate economic development. All of this would be done while, in all circumstances, fully maintaining the federal government's fiduciary responsibilities to first nations.

The second major advantage of Bill C-5 is that it would improve Canada's ability to regulate oil and gas activities on reserve land. Bill C-5 would give the minister, through Indian Oil and Gas Canada, greater authority to audit operators and collect royalties owed to first nations. Once developed, new regulations will establish a clear set of rules to prevent companies from using certain transactions with subsidiaries or related parties to unduly reduce royalties payable to first nations.

Furthermore, the minister would have a 10-year limitation period to commence legal actions to collect unpaid royalties and other amounts owing. This is especially important. There would be no limitation period in cases of fraud or misrepresentation. Without this provision, provincial standards would apply and in some cases the limitation period would be as low as two years. This added protection would ensure that first nations were paid what they were rightfully due.

The final major area of improvement made possible by Bill C-5 concerns environmental protection and ensuring that first nation sites of cultural, spiritual or historical significance will be protected from potentially adverse effects of oil and gas activities. Because the federal regime would be harmonized with provincial environmental protection laws, new enforcement actions to protect the environment from oil and gas activities would be identical to the ones currently available to the province off reserve.

The minister would also be provided new powers to suspend operations if first nation sites of cultural, spiritual or historical significance were discovered or threatened by the oil and gas activities. Oil and gas activities would only be permitted to resume when the minister would be confident that the risk of harm would no longer exist. In addition, the regulations could require first nation concurrence before these operations are resumed.

Another important change in this legislation responds directly to the priorities of first nations. The concern was raised repeatedly that the on-reserve regime did not keep pace with the off-reserve regime. To address this need, the amendments would expand the authority of the governor in council to make regulations and to facilitate regular improvements to them. In fact, the approach taken by Bill C-5 would guarantee continuous changes and improvements to ensure that the federal oil and gas regime would remain current.

Under the act, regulations would be monitored, examined and, when required, amended on a never-ending basis. This means that first nations would never again have to wait for 30 or 35 years before amendments to modernize the act could be implemented.

This is another aspect following on the act in which first nations will play a crucial role. We will continue to work together with oil and gas first nations and their advocate, the Indian Resource Council, during the development of the regulations, just as we did during the development of this act.

I remind the House that before developing the bill, extensive consultations were carried out with first nations with oil and gas interests. Since 2003, Indian Oil and Gas Canada has held one-on-one sessions with over 85% of the oil and gas-producing first nations.

My hon. colleagues can rest assured that passage of this legislation is not the end, but merely a continuation of an ongoing consultation process with first nations. That is not rhetoric. That is a promise.

During the minister's appearance before committee, he mentioned a letter of comfort which he sent to the Indian Resource Council last year. I should explain that the Indian Resource Council is a national aboriginal organization that advocates on behalf of some 130 first nations with oil and gas production or the potential for production.

In writing, the minister outlined Canada's commitment to modernize the on-reserve oil and gas regime. He also committed to continue our partnership with the Indian Resource Council during the development of the regulations. Of concern to many, the minister reassured oil and gas first nations that there was nothing in Bill C-5 that affected first nations' jurisdiction over their resources. Nor did the act extend the jurisdiction of the provinces to those lands or resources.

The minister reiterated that it was the Government of Canada and not provincial authorities that would be responsible for managing first nation lands and resources. The letter of comfort also addressed first nation concerns related to value-added opportunities. For example, the minister pledged to establish first nation energy business centres of excellence in Alberta and in Saskatchewan.

Furthermore, the minister committed to identifying opportunities for greater first nations input and involvement in the decision-making processes at Indian Oil and Gas Canada on issues that directly affected them. As well, he signalled his willingness to explore options for greater first nations control over the management of their oil and gas resources. Of great interest to us as legislators, the minister promised to establish a continuous change or improvement process.

These assurances reinforce our government's determination to ensure first nations share equally in our country's prosperity. Members of government believe profoundly that first nations citizens must participate fully in all that Canada has to offer and be given the tools to achieve greater economic self-reliance and an ever-increasing quality of life. Bill C-5 would help to advance these goals by providing modern legislation, competitive regulations and sound practices that would create the conditions for economic success and social progress.

These goals are shared by all members of the House. The key to unleashing this potential lies in passing this modernized legislative framework into law. By endorsing Bill C-5, we will be confirming, once again, that collaboration and partnership between the federal government, the private sector and aboriginal people can lead to a better future. Indeed, it will help build a better country for us all.

I call on all parties to lend their support and ensure the speedy passage of this necessary and overdue legislation.

Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 4:05 p.m.
See context

Conservative

John Duncan Vancouver Island North, BC

Madam Speaker, at this point the committee has not been seized by that question. That could be a question that the committee might want to deal with.

The area in which Bill C-5 provides incorporation by reference of provincial legislation is actually quite limited, but it is that limited ability which allows us to incorporate many very thick provincial pieces of legislation, very meaty stuff. Those areas are determining the quantity or quality of oil or gas recovered, combining oil or gas rates for joint exploitation, abandonment of wells, establishment of administrative fees for services provided, environmental protection from the effects of oil and gas exploration, oil and gas conservation, and equitable production.

Even though it looks like it is a huge task, I think most of this has already been pre-contemplated. There has been a technical committee working on this through Indian Oil and Gas Canada. I do not think this should be a long time coming.

Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 4:05 p.m.
See context

Liberal

Todd Russell Labrador, NL

Madam Speaker, it is a pleasure to be here today to debate Bill C-5 at third reading.

The Liberal Party has supported this particular bill and made efforts to improve it where it saw a need for improvement. Not all of them have been accepted either by the committee or the House, with the ruling by the Speaker that a particular motion relating to the fiduciary duty of the minister and the government was not accepted.

Bill C-5 has been a long time coming, as many in the House have already said. The bill was officially introduced in 1974 and has remained substantially unchanged and unamended since that particular time. Efforts have been made in the past. There have been many discussions and consultations, and certainly many hours, days and weeks of work have taken place to get us where we are today.

In fact, this is the third time the bill has been introduced in as many sessions of Parliament and only now have we reached the third reading stage. Of course, there was a prorogation of the House, which everybody is aware of, last fall.

We all have to ask ourselves a question when it comes to pieces of legislation. Has there been adequate consultation? That is not a question that I can answer. It is only a question that can be answered by the first nations people, who are directly affected. In many regards, they have satisfied the committee that in fact extensive consultations have taken place.

There are, obviously, some organizations and first nations communities which have expressed some difficulty at committee around the specifics of this particular bill. In particular, the Stoney Nakoda First Nations out of Alberta has expressed a number of concerns with the bill around the fiduciary duty of the federal government, as to whether it would be changed or altered. It has also expressed certain concerns about the lack of control and jurisdiction of first nations over their own lands and the management of them.

That being said, it is important we understand that those concerns were noted prior to the development of the bill. Some have questioned whether these types of issues should have been raised in committee because the Stoney Nakoda, for instance, was already part of the consultations that took place with the Indian Resource Council of Canada, but that is the way our legislative process works. First nations have the ability to take advantage of whatever stage of the legislation to make their views known and I acknowledge that.

The bill came to the House as a result of the consultations between the Indian Resource Council of Canada, which represents 130 oil and gas producing first nations or those who have the potential to produce oil and gas, and the Government of Canada, primarily through Indian Oil and Gas Canada.

There is a need, of course, for this particular bill. It fills a regulatory gap and modernizes the Indian Oil and Gas Act. The Parliamentary Secretary to the Minister of Indian Affairs and Northern Development has already outlined some of those substantive changes.

I would like to review in broad terms some of the aspects of the clauses of this bill that deal with royalties and regulation making. There is an increase in the powers of the minister, but there is also a specific duty on the minister to consult with first nations in carrying out his powers and responsibilities. There are improvements to the inspection, audit and examination powers of the minister and Indian Oil and Gas Canada representing the minister. There are changes regarding search and seizure, delegation authorities, offences and punishment, as well as administrative monetary penalties.

One of the major discussions that took place in committee concerned the incorporation of provincial regulations. Basically, they would become federal regulations for the purposes of managing first nations lands that have oil and gas or the potential of oil and gas.

Some have argued that the government has to ensure that the rights and interests of first nations are not infringed upon by the incorporation of those provincial laws. People want to ensure that by incorporating these particular laws the fiduciary obligation is not diminished. Also raised was the issue that because this particular bill allows the government to incorporate provincial regulations and because it is a regulation-making bill, how do we really know what is going on. There was an amendment made to this bill at committee that would require the government to report to Parliament. Proposed section 28.1 reads:

At least every two years after the coming into force of the present section, the Minister shall prepare a report on the administration of this Act during the two preceding years and shall table a copy of the report in each House of Parliament within the first fifteen days that it is sitting after the completion of the report, which shall include a summary addressing the following matters:

(a) the progress of the consultations mentioned in paragraph 6(1.1)(a) and a list of concerns raised during such consultations;

(b) any proposed regulation to be made under subsection 6(1.1); and

(c) any regulations made under this Act and describe any variations in the regulations from province to province.

It is quite an in-depth report on responsibility that was not originally in Bill C-5 that is there now as it has been reprinted.

It is important from our perspective that this bill pass in Parliament. It would provide some balance, some consistency between what will happen off reserve and what will happen on reserve as first nations develop their own lands where there is oil and gas or the potential for oil and gas. Some will argue that there will not be consistency right across the country because it will vary province to province.

My party is in favour of this piece of legislation. We have done our best to see it through its various legislative stages in a timely fashion.

Our party has supported in the past, it supports today and it will support in the future the right of first nations, aboriginal peoples generally, to develop their own lands and their own resources. We will support the inherent right of first nations to make decisions for themselves and for their people.

While this bill does not go all the way, it certainly goes part of the way to fulfilling those goals and aspirations.

Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 4:15 p.m.
See context

Liberal

Todd Russell Labrador, NL

Madam Speaker, there is no doubt there have been extensive discussions. There have been tens, if not hundreds, of meetings relative to this particular bill or the Indian Oil and Gas Act generally.

The parliamentary secretary is probably right that we can sometimes disagree on the level of consultations or what constitutes consultations.

However, I believe that we would not be here today discussing Bill C-5 at third reading if generally all of the stakeholders did not agree that we had arrived at a point where adequate talks and consultations had taken place.

It is my sense that while there is give and take in any type of consultation and negotiation, we have arrived at a bill which parties can accept. We heard in committee, for instance, that Indian Oil and Gas Canada might have sought various changes or various things to be added in or taken out. The Indian Resource Council of Canada has also testified that it may have looked for stronger language in certain areas or for a clause to be put in or a clause to be taken out. However, both parties have indicated that there was compromise.

We, in the Liberal Party, are satisfied that it is a compromise bill. It is not perfect, but it will achieve certain objectives, such as facilitating the development of oil and gas on reserve, giving first nations a hand up, and providing more clarity regarding the regulatory regime.

We will be supporting the bill as we have throughout the legislative process thus far.

Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 4:20 p.m.
See context

Conservative

Bruce Stanton Simcoe North, ON

Madam Speaker, I thank the member opposite for his comments and his and his party's support for this important bill.

The member will know through the course of our discussions in committee that one of the features that was discussed about Bill C-5 was the notion that this bill in fact builds a foundation for a continuous improvement regarding the needs that first nations communities would have going forward, knowing that the landscape in the energy business is going to change in the future. This bill would, at the very least, enable a building of a foundation for that going forward.

I wonder if he could comment on the extent to which he believes this bill gives us that ability.

Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 4:25 p.m.
See context

Bloc

Richard Nadeau Gatineau, QC

Madam Speaker, I would like to say right away that the Bloc Québécois is in favour of Bill C-5, An Act to amend the Indian Oil and Gas Act.

Although imperfect, the bill will provide the tools needed to harmonize the laws and regulations on reserve lands with those that apply in the provinces in which the reserves are located. During study in committee, the Bloc Québécois asked for further clarification of the terms and conditions surrounding the authorization to issue replacement leases for lands added to reserves and subsequently of the permits granted by the federal government for oil and gas exploration or exploitation.

As a result of the work done in committee, the Bloc Québécois does not think that the bill needs any amendments. In addition, the bill is the result of a consultation procedure the government conducted through Indian Oil and Gas Canada and with the cooperation of the Indian Resource Council, which consulted most of the oil and gas producing first nations as well as 130 band councils in 2002 and 2003.

This bill is the product, therefore, of a consensus of the 130 members of the Indian Resource Council and any amendments to it would require another period of consultations.

That being said, the Government of Canada should not use Bill C-5 to avoid its fiduciary responsibility for first nations. It is incumbent upon the government to correct the inequalities between aboriginals and non-aboriginals.

To be sure we are talking about the right thing, I will provide a summary of the bill.

The bill amends the Indian Oil and Gas Act to clarify and expand the existing regulation-making powers and to add new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands and the determination and payment of oil and gas royalties. It also puts in place sanctions for contraventions of the act as well as provisions for its enforcement.

In order for us to fully grasp the scope of the bill and the need for it, I would like to provide a bit of the historical background that brought us to this point.

For more than 20 years, studies and discussions have been going on to establish a new financial relationship between the first nations and the Government of Canada.

Already in 1983, the report of the House of Commons’ Special Committee on Indian Self-Government, the Penner report, recommended that the fiscal relationship between the Government of Canada and the first nations should be redefined.

In 1996, the final report of the Royal Commission on Aboriginal Peoples, which was also known as the Erasmus-Dussault Commission, as you will recall, also recommended a full review of the fiscal relationship between the federal government and the first nations. The proposed initiative focused on redefining this relationship within a broader context based on first nations self-government. The Tlicho self-government act is an example of this.

The First Nations Oil and Gas and Moneys Management Act, which came into effect on April 1, 2006, just over three years ago now, was one of the first steps in this new fiscal relationship between the first nations and the federal government.

This optional law contains two new provisions: the first makes it possible for first nations to manage and regulate oil and gas activities on reserves; the second, to manage funds held in trust for them by Canada.

A first nation can choose either option. In other words, it need not own oil or gas to become responsible for managing these monies.

This legislation will change the way oil and gas are developed, and it will allow first nations able to do so to develop these resources on their own land. Previously, first nations had to comply with the Indian Oil and Gas Act and its regulations, which did not allow them to manage these resources directly.

The First Nations Oil and Gas and Moneys Management Act allows first nations that choose to do so to be excluded from the application of the Indian Oil and Gas Act and its regulations.

That act, the Indian Oil and Gas Act, is the legislation governing exploration and exploitation of oil and gas resources on reserve land. This legislation does not allow first nations to manage the oil and gas resources on their land directly, nor does it allow them to develop an appropriate regulatory framework.

As I said, the First Nations Oil and Gas and Moneys Management Act is a very important legislative measure. Since 2006, it has allowed first nations, if they so choose, to create regulations concerning oil and gas exploration and conservation, on the spending of moneys derived from the exploitation of these resources, and on the protection of the environment.

As for regulations to protect the environment, those established by first nations will have to at least meet the standards of Quebec or the province in which the aboriginal community is located.

In terms of managing their finances, those first nations choosing to come under this new legislative framework will be subject to different regulations regarding “Indian moneys”. This is currently defined in the Indian Act as all moneys collected, received or held by Her Majesty for the use and benefit of Indians or bands.

For these first nations, the provisions of the Indian Act will no longer apply. They will therefore be able to manage the amounts collected directly, rather than letting them be managed by the federal government. As a result, they will be able to make their own choices for investment in their communities instead of letting the Department of Indian Affairs and Northern Development dictate priorities to them. Auditor General Sheila Fraser pointed out in her 2004 report that this department is not doing a good job of administering the billions of dollars intended for the aboriginal communities.

If a first nation does not feel it would be advantageous to come under the new legislative regime, the current standards will continue to apply to it, so it will continue to benefit from the provisions of the Indian Act, including those that apply to the administration of Indian moneys.

Bill C-5 , which is incidentally identical to Bill C-63 and Bill C-5 , which died on the order paper June 17, 2008, and December 3, 2008, respectively, amends the Indian Oil and Gas Act. It is important to point out that oil is defined in the act as “a mixture of hydrocarbons that can be recovered from a well in liquid form, with the exception of condensate”.

At present, the First Nations that have oil and gas resources but do not manage them under the 2006 act must leave the management of those resources to Indian Oil and Gas Canada (IOGC), a government agency which reports to the Department of Indian and Northern Affairs.

IOGC is mandated to manage and administer the exploration and exploitation of oil and natural gas resources on Indian reserve land. IOGC promotes their development and ensures that royalties are appropriately paid to the first nations. However the Indian Oil and Gas Act has not been amended since it was passed in 1974. It is true that the Indian Oil and Gas Regulations of 1995 have been passed, but those regulations are inadequate to deal with the evolution of the market since 1974.

Faced with an increasingly complex industry, the provinces have constantly modernized their oil and gas legislation. That is why the federal government is today deciding to modernize the act, so as to bring it more in line with reality and the various legislative enactments of the provinces.

This bill will apply to reserves that were not granted rights under the First Nations Oil and Gas and Moneys Management Act. Hence it will apply to the first nations that are subject to the Indian Oil and Gas Act. Some 200 first nations produce or could produce oil and gas. At this time over 80% of this type of activity takes place, as one might guess, in Alberta. In 2005-06, over $270 million in oil and gas revenue was collected by IOGC on behalf of about 60 first nations that are signatories of development agreements in effect.

The purpose of the bill is to level the playing field between these industries’ on-reserve and off-reserve activities with the support of provincial legislation, in order to: reduce barriers to the economic development of the first nations; guarantee environmental protection on the reserves, something that is extremely important; and allow the government to better fulfill its industry management obligations to first nations through regulatory compliance and through the collection of royalties and other forms of applicable compensation.

Under the Indian Act, oil and gas revenues are collected by the federal government for subsequent full redistribution to the peoples concerned. These revenues are defined in the act as “Indian moneys”, and from them flows the federal government’s responsibility as trustee.

This bill does not have the effect of transferring the federal government’s power of management and administration of the exploration and production of oil and gas resources on first nations reserve land. Its purpose is to update the Indian Oil and Gas Act and to harmonize the federal act with legislation in the provinces where first nations communities are located.

This incorporation of provincial laws and regulations will in no way either detract from or add to provincial jurisdiction, as for example with the harmonization of reserve environmental plans with provincial requirements.

The bill replaces almost all of the provisions of the existing six-section Indian Oil and Gas Act and includes a number of matters that are currently provided for in the Indian Oil and Gas Regulations, 1995.

Bill C-5 expands the Governor in Council's existing regulation-making powers and adds new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands. The bill also makes changes in respect of the limitation period for actions to collect amounts owing and the determination of royalty payments.

It puts in place sanctions for contraventions of the act as well as provisions for its enforcement comprising fines and penalties, a remedy for trespass, environmental protection clauses and authority to issue replacement leases for lands added to reserves.

It would be interesting to have more information about lands added to reserves and to know what measures are being put forward in negotiations with the provinces. For example, what is meant by expanding the Governor in Council's regulation-making powers and how will the provinces be consulted before regulations are introduced? Even though the bill states that these lands have been absolutely surrendered under the Indian Act or the First Nations Land Management Act, it would be interesting to get some clarification about the negotiation process with the provinces and obtaining a permit on these added lands.

The bill also requires the minister to undertake ongoing consultations with the first nations involved with respect to negotiations with industry. The new section 6(1.1) states that: The Governor in Council may, by regulation:

(a) require that a power of the Minister under this Act in relation to first nation lands be exercised only if prior approval of the council of the first nation is obtained, if the council is first consulted or if prior notice is given to the council, as the case may be;

(b) require that any such power of the Minister be exercised only if prior consent is given by any first nation member who is in lawful possession of the first nation lands; and

(c) require that notice be given to the council of the first nation after the Minister exercises any such power.

As far as consultations prior to introduction of the bill are concerned, we need to know that through Indian Oil and Gas Canada, and in cooperation with the Indian Resource Council, the government consulted most oil-producing first nations and 130 band councils in 2002 and 2003.

The Indian Resource Council was founded in 1987 to represent first nations' collective oil and gas interests with both government and industry. More than 130 first nations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and the Northwest Territories are members. Six non-producing first nations in Quebec are also members: the Odanak Abenakis; the Natashquan Innus; the Kanesatake Mohawks; the Gesgapegiag Micmacs; the Kahnawake Mohawks; and the Wôlinak Abenakis.

Some Indian Resource Council members are dissatisfied with certain aspects of the bill, but on the whole, the council is happy with the bill and the consultations that took place.

Our position—

Indian Oil and Gas Act
Government Orders

April 2nd, 2009 / 4:45 p.m.
See context

NDP

Jean Crowder Nanaimo—Cowichan, BC

Madam Speaker, I am pleased to speak to this legislation before the House today.

I want to give some context around the bill. One of the reasons this bill has come before the House is the fact that the original act has had little change since 1974. We know that, in many cases, the provincial legislation has changed but the federal legislation has simply failed to keep pace.

As other members have pointed out, when changes to the Indian Oil and Gas Act were contemplated, consultations were held with the first nations players who were involved in the oil and gas sector. One of the things we the committee heard was that most of the first nations that were involved did support the process but that there were a couple of first nations that raised significant concerns. In my speech today, I will touch on some of those concerns.

What we learned about the consultation process was that although it was inclusive in terms of providing information, taking it out to tribal councils and getting feedback, one of the challenges with the consultation process was that the scope of the bill was limited to begin with, which prevented some of the changes that some of the first nations were proposing.

Despite those shortcomings, the NDP is supporting the bill because it is a good first step in amending the legislation. I am hopeful that some of the concerns that were raised by some of the first nations do get taken into consideration, both in the regulatory process and perhaps in some further amendments to the bill down the road.

I will now touch on some of the concerns. One of the concerns raised by the Stoney Nakoda Nation was around the regulations. What we see in this legislation is that most of what will be dealt will actually be dealt with in the regulatory process. Although there is a process around developing regulations, gazetting regulations and getting input, it does not require the oversight of this House or of a committee.

Some concerns have been raised about that. I want to quote from the Stoney Nakoda response around the regulation because these words say it far better than I could. The Stoney Nakoda state:

In a comparison of Bill C-5 to either of the federal government's Canada Petroleum Resources Act or Alberta's Mines and Minerals Act one will immediately notice that Bill C-5 has left for the discretion of the Governor in Council the ability to prescribe by Regulation many of the specific rights and powers that are specifically provided for with the aforementioned legislation. While a specific example is the right to cancel a lease, which is found at section 105 of the Canada Petroleum Resources Act or at section 45 of the Mines and Minerals Act, other examples include the right to take royalties in kind, the sale of the royalty interest, continuations of leases, etc. All of these are enumerated rights or powers within other legislative schemes while in Bill C-5 these are discretionary matters.

It goes on to state:

Additional powers that are typically within the body of the Act and not just matters to be dealt with by Regulations include the power of the Minister to assess, reassess and recalculate royalties that are due from the lessor; appeal provisions, etc. While Bill C-5 has numerous provisions respecting fines and penalties, these basic, yet critical powers have been left to be dealt with by the Regulations.

That is a fairly serious concern that has been raised because for non-first nations, we have a complex, detailed act that outlines many of the things that are being left to the regulatory process for first nations. I wonder why we would say that non-first nation Canadians will have legislation that is comprehensive and has the oversight of the House versus first nations that must deal with the regulatory process.

In light of the concerns raised by the Stoney Nakoda and others, the NDP proposed an amendment that was accepted by the committee and subsequently put into the bill. It called for more oversight. I will not read the whole amendment that was accepted but it states in part, “...prepare a report on the administration of this Act during the two preceding years and shall table a copy of the report in each House of Parliament within the first fifteen days...”. It goes on to outline a couple of other things.

We felt strongly about the fact that there was not an ability to include many of the proposals that the Stoney Nakoda and others were making in the legislation and, because of the very narrow scope of the bill, that it was important that the House have oversight. With that amendment, it will allow us to take a closer look at how the act is being implemented and how regulations are being developed.

The Stoney Nakoda Nation raised a number of issues but I will only speak to two of them. It raised the issue around the obligations of having a body that has two responsibilities. It states:

The regulator acts in a quasi-judicial role and adjudicates and regulates the relationship between the various stakeholders. Since Bill C-5 does not clearly distinguish between these two roles, Canada's obligation to First Nations are effectively reduced.

In Alberta, the Department of Energy administers and manages Alberta's oil and gas interests through the Mines and Minerals Act while the Energy Resources Conservation Board adjudicates and regulates the development of the resources through the provisions of the Oil and Gas Conservation Act. Similarly, Canada's own northern and offshore oil and gas resources are administered and managed under the Canada Petroleum Resources Act while the National Energy Board adjudicates and regulates the development of the resources through the Canada Oil and Gas Operations Act.

We can see in two separate levels of government that are separate bodies that have different goals and responsibilities. Bill C-5 does not address that for first nations. Again we wonder why non-first nations would have this function that is taken apart so that there is not any conflict of interest. This was simply outside the scope of the bill that was presented to us, so we were not able to amend it to include those aspects that the Stoney Nakoda raised.

Another very troubling issue was raised when the committee was hearing testimony but because it was outside of the scope of the bill we could not propose amendments.

In an article back in February, entitled “Trust policy hurts reserves”, it directly goes to the heart of the ability of a first nation to manage its own funds, to invest in economic development and to address some of the poverty issues that face many first nations communities. This court ruling that came out highlighted some of the challenges facing first nations when it comes to the management of their own funds. This article states:

Twenty years ago, the Ermineskin and Samson First Nations in Alberta began the most costly legal battle in Canadian history and now it has come to a crashing end.

They went all the way to the Supreme Court and in the end, the court sided with the government. The case, which cost the bands legal fees in excess of $100 million, was launched more than 20 years ago over the federal government's mishandling of their trust funds. The two bands alleged they had lost close to $2 billion in investment revenue because the Department of Indian Affairs had held the money in trust without any investment.

Later on in the article it states:

The money placed in trust earned Bank of Canada savings interest rate, which averaged around three to six per cent. The Government of Canada then used the money as a part of its consolidated revenue fund. Indian monies became a cheap source of revenue for Canadian governments.

But in the end, the Supreme Court sided with the government. They stated the Department of Indian Affairs had followed the Indian Act. Unfortunately the court made the decision because the Indian Act is the only piece of legislation the department has to follow when handling First Nations funds.

This issue did come before the committee. It was raised by the Stoney Nakoda and by the Montana First Nations. It is a very serious issue but, again, it was outside the scope of the bill to actually deal with that. The problem we are facing is that the federal government has a fiduciary responsibility. What happened in this case is that the government managed these royalties on behalf of first nations communities.

In the case that we are talking about, although the investments are significantly different now, we knew at the time that the federal government was investing the money at significantly higher rates of return. It paid the first nations the minimum amount it was required to and then invested the rest of the money and made far more money. The federal government benefited from the first nations royalty money, which simply unacceptable.

Although some of the responses were that first nations had an opportunity under other legislation to take over management of it, the fact was that the government had a responsibility to those communities to share that money in a much more reasonable way. Although the Supreme Court had to side with the government simply because of the Indian Act, it does not make it morally right, fair or just.

I am hopeful, because the light has now been shone on this kind of practice, we will see some changes that ensure first nations directly benefit from the resources on their own lands.

The NDP will be supporting the legislation and monitoring very closely, through the amendment proposed by the NDP, which was accepted.

Indian Oil and Gas Act
Government Orders

February 13th, 2009 / 12:25 p.m.
See context

Vancouver Island North
B.C.

Conservative

John Duncan Parliamentary Secretary to the Minister of Indian Affairs and Northern Development

Mr. Speaker, I am proud to have the pleasure of introducing Bill C-5, An Act to amend the Indian Oil and Gas Act.

In the recent Speech from the Throne, the government committed to take steps to ensure that aboriginal Canadians fully share in economic development opportunities and this legislation is a concrete example of that commitment.

The oil and gas sector provides a real source of promising economic development opportunities for first nations. Few other countries in the world can lay claim to the secure, abundant and diverse energy resources we enjoy in Canada. This energy wealth has fueled tremendous economic growth in many regions of the country.

The world's need for Canada's oil and gas holds significant promise for development for many years to come.

Since the government was formed, we have made clear our determination to ensure first nations share equally in our country's prosperity and that they are able to build stronger and self-reliant communities that can manage their own affairs.

Bill C-5 would help to advance these goals by enhancing Canada's capacity to assist first nations in managing their own affairs. The management and administration of oil and gas resources is governed on reserve lands by the Indian Oil and Gas Act and it is administered by Indian Oil and Gas Canada, a special operating agency within Indian and Northern Affairs Canada.

The mandate of Indian Oil and Gas Canada is to assist in fulfilling the Crown's fiduciary and statutory obligations related to the management of oil and gas resources on reserve lands and to ensure first nations initiatives for greater control over the management of their resources. In practical terms, this means that the agency issues and administers agreements on first nations lands, monitors oil and gas production and collects royalties for the benefit of first nations.

I will now speak to why the existing act needs to be amended.

The legislation under which Indian Oil and Gas Canada operates has not kept up with the times. The act first came into force back in 1974 when the industry was in the midst of a global energy crisis. Since then, most provinces have overhauled their laws and updated their regulations numerous times. For example, Alberta's legislation, the Alberta mines and minerals act, which governs resource development, has been amended more than 15 times since the 1970s. In contrast, the Indian Oil and Gas Act has remained unchanged for the past 34 years. We need to change that.

Furthermore, oil and gas exploration and exploitation on reserve lands and the revenue that these activities generate are significant. Over $1 billion in revenues from on reserve oil and gas activity have been collected on behalf of about 60 first nations over the past five years alone. This revenue is credited to those communities in its entirety. The industry is continuing to invest millions of dollars in exploration and exploitation activities on first nations reserve lands, more than $300 million in the past five years for drilling alone.

I realize that these amendments are very technical in nature but they are important. The broad changes brought forth can be grouped under three themes: first, amendments that would bring clarity to the oil and gas regulatory process; second, amendments that would ensure and strengthen accountability of Indian Oil and Gas Canada; and finally, amendments that would enhance the protection of first nations environmental, cultural and natural resources.

In terms of bringing clarity, once adopted, the amendments would ensure that the role and powers of the minister and reference to the courts are clear and provide for broader regulation-making authority. They will, equally important, allow federal regulations governing oil and gas projects to be harmonized with provincial oil and gas regulatory regimes. Co-operation with provincial authorities is key.

I want to make it clear that Bill C-5 would not increase the jurisdiction of provinces. It would allow for federal regulations to be made that are consistent with provincial laws, which is important to create clarity and certainty for both first nations and industry.

Enforcement powers would be clarified, as well as modernized. The current act limits fines to $5,000. This would be increased to $100,000 per day and sometimes more could be imposed by the courts.

In areas of high risk, such as the seizure of records and equipment, this would all be governed by relevant Criminal Code provisions and overseen by provincial courts. These amendments would ensure that the government, through Indian Oil and Gas Canada, can provide certainty and consistency for first nations, for industry and for provincial stakeholders.

The amendments that strengthen accountability to act on behalf of first nations by Indian Oil and Gas Canada are examples such as clear audit powers for Indian Oil and Gas Canada and accurate reporting and paying of royalties due to first nations when companies operate on reserve lands.

As another example, rules would be put in place to address complex relationships, not only between unrelated corporations but also between an existing corporation and its subsidiaries.

Bill C-5 would authorize new regulations to prevent companies from using non-arm's length transactions to unjustifiably reduce the royalty which would otherwise be payable to first nations. A company would not be able to sell oil or gas at a reduced price to a company it already owns in order to pay less royalty.

Furthermore, the limitation period to commence legal proceedings would be extended to 10 years and there is no limitation period in cases of fraud or misrepresentation.

The final set of amendments deal with enhancing protection for first nations' environment, cultural and natural resources. These amendments would balance the development of oil and gas resources with environmental protection. This is of interest to all Canadians. The current act has limited remedies in the case of non-compliance. Under the amendments, provincial environmental laws can be incorporated by reference into the federal regulations that apply to first nations reserve lands.

It is very important, of course, that anyone doing work on a reserve respect first nations' cultural and spiritual values and their special relationship to the land. Bill C-5 would authorize the minister to suspend operations of a company if areas involving these special values are at risk.

There are some further concerns from first nations. They wish to have a remedy when companies trespass on their property. With this legislation, there would be specific offences so that Indian Oil and Gas Canada would have more options to deal with these breaches.

A key policy objective for the government is ensuring our legislative framework supports first nations. The current Indian Oil and Gas Act falls short in this area. Many first nations are concerned that they will not be fully benefiting from the increase of exploration and development taking place around them. The Indian oil and gas industry is equally frustrated.

The reason behind these changes is to provide consistency and certainty to the oil and gas regime. That is one side of the equation. For the affected first nations, the revenue generated by this activity translates into increased economic development, new jobs and improved living standards.

The money being raised is used by first nations for training, housing, water and sewer projects, building stronger communities and a brighter future for their children. This modern suite of tools will better enable first nations to seize opportunities.

The amendments, as I mentioned, are very technical in nature. The first nations have been asking for these changes, and Canada started the process to modernize the act in 1999.

The Indian Resource Council is a national aboriginal organization advocating on behalf of 130 first nations with oil and gas production or the potential for production. We had extensive consultations with first nations and with oil and gas interests. First nations have validated the principles embodied in the legislation and have made suggestions for improvements.

Most noteworthy was the need to amend and modernize the legislation, and this need was endorsed by the Indian Resource Council at annual meetings in 2006 and 2007. Thanks to this close working relationship, oil- and gas-producing first nations have had the opportunity to influence the development of the amendments and will be called upon again to participate in the development of the regulations that will flow.

This support is reassuring, but the council went even further in order to make sure all communities with oil and gas interests had the opportunity to become fully aware. It held a symposium earlier this year in Alberta. Over 100 members representing more than 60 first nations attended. Their involvement and support were encouraging, and we are on the right track. We will continue to work in partnership, and this will lead to greater first nation control and management of petroleum resources on their lands.

The key to unleashing this potential lies in modernizing the legislative framework. Strong regulatory regimes are essential for both economic and social development. That is why we are bringing the Indian Oil and Gas Act up to 21st century standards.

Indian Oil and Gas Act
Government Orders

February 13th, 2009 / 12:40 p.m.
See context

Liberal

Todd Russell Labrador, NL

Mr. Speaker, I am pleased to speak today at second reading of Bill C-5, An Act to amend the Indian Oil and Gas Act. The Indian Oil and Gas Act was first introduced in 1974 and really has not had any major amendments. There were only some minor amendments in 1995.

This is the third time in as many sessions of Parliament that these more substantive and modernizing amendments have been brought forward. Unfortunately, between early elections and early prorogations, there has never been enough time in the parliamentary calendar for consideration of the substance of this bill. In fact, merely by getting to second reading, this version of the bill has outlasted its predecessors.

For the benefit of all who have a stake in this bill, there will hopefully be no more parliamentary hiccups keeping it from continuing through the proper legislative process here and in the other place.

Since the bill in its previous form was introduced in the last session, I have had the opportunity to read it and to study the background information explaining why these changes are needed at the present time.

In the past number of years, we have seen a massive increase in the natural resources sector in Canada, particularly in oil and gas exploration. My own riding, while not known for its onshore oil and gas, has significant offshore potential. We are also one of Canada's main mining regions, and in fact the Voisey's Bay nickel project in Labrador is an example of how resource industries and aboriginal peoples can work together.

The people of my riding are also well acquainted with the oil and gas industry in other parts of Canada, especially in Alberta and other western provinces, where many of the people I know have gone to work on petroleum industry projects. The recent economic downturn is affecting these industries, just as it is touching all industries and sectors of the economy.

We on this side of the aisle are very concerned about the economic direction of the country and the need for stimulus in the short term to get people working and get industry moving. However, in the long term we also have to look at making Canada a good place to do business and taking the steps to ensure that our resource and other industries will resume their growth and provide jobs for the future.

We also have to take steps to ensure that first nations people are brought in as true partners and participants in the development of natural resource industries.

During the latest boom, many mining and petroleum projects were crying out for employees, due to an acute labour shortage. Despite the current economic situation, the long-term trend is that Canada will require more skilled workers in all sectors of the economy, including the natural resources arena.

At the same time, there is a large and growing population of aboriginal Canadians, and far too many aboriginal communities are at an economic disadvantage. There is an incredible opportunity here to develop the industries with aboriginal people as owners, participants, partners and workers over the coming years and decades.

Modernizing the Indian Oil and Gas Act is one step that may help achieve these goals in respect of oil and gas exploration and development on first nation reserve lands. This bill contains a number of technical changes to the way oil and gas resources on reserves are administered and managed. I will describe the broad strokes of these changes.

The bill addresses the regulatory gap between on and off reserve oil and gas activities. Second, the bill would expand the powers of councils of first nations to delegate any of their powers under the act to any other person, effectively allowing first nations councils to hire experts to act on their behalf.

The law would also require a minister to exercise his or her power under the act only if the council of an affected first nation has given its permission. The bill includes a non-derogation clause, which states that nothing in this act shall be deemed to abrogate the rights of Indian people or preclude them from negotiating for oil and gas benefits in those areas in which land claims have not been settled.

A new section added to the bill governs the payment of royalties from oil and gas recovered on first nation lands, which are paid to the Crown in trust for the first nation in question. There are also greater audit capabilities.

There is a new section providing further powers to make regulation for the purposes of the act. One interesting provision, from my point of view, is the power to require petroleum operators to employ members of the first nation in question in the exploration or development of oil and gas from first nations lands.

Again, my own riding saw similar issues during the exploration, construction and development of the Voisey's Bay project.

I look forward to hearing more about how similar adjacency or hiring rules will apply under this bill to the oil and gas industry.

I will also be interested to learn from the experiences of first nations in other parts of Canada, who may have valuable lessons for people and communities in my riding.

My party's position is that we support the bill in its broad strokes and agree that a package of amendments must be brought forward for consideration. I have already had productive meetings with some of the stakeholders, like the Indian Resource Council and look forward to hearing other points of view, both one on one and in committee. It is in committee that I trust we can get down to some of the details.

The industry is generally positive towards the package of amendments contained in the bill, indicating that it will bring greater clarity, strengthen accountability and enhanced protection of first nations, environmental, cultural and island gas resource. If there are differing viewpoints, I look forward to hearing them once the bill has been referred to committee.

With the new spirit of openness and co-operation that is said to pervade in Parliament these days, I trust that all parties will be interested in hearing from a number of witnesses representing those with an interest, one way or another, in this legislation.

I also trust that the government will be willing, where appropriate and necessary, to be open to amendments if the committee's work leads us in that direction.

Indian Oil and Gas Act
Government Orders

February 13th, 2009 / 12:55 p.m.
See context

Bloc

Mario Laframboise Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am pleased to speak to Bill C-5 on behalf of the Bloc Québécois. This bill amends the Indian Oil and Gas Act.

Allow me to summarize. The summary of this 24-page bill is worth reading.

This enactment amends the Indian Oil and Gas Act to clarify and expand the existing regulation-making powers and to add new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands and the determination and payment of oil and gas royalties. It also puts in place sanctions for contraventions of the Act as well as provisions for its enforcement.

The Bloc Québécois has always respected the rights of aboriginal nations. That sense of respect will inform the Bloc Québécois' participation in committee through our critic, the excellent member for Abitibi—Témiscamingue, who will defend the interests of both first nations representatives and the Quebec nation.

Naturally, the Bloc Québécois supports the principles underlying this bill. Despite its imperfections, the bill will provide the necessary tools to harmonize existing laws and regulations governing reserves with the laws and regulations of the provinces in which they are located. When this bill goes to committee, our party, the Bloc Québécois, will ask for more details about, among other things, the terms and conditions relating to authority to issue replacement leases for lands added to reserve and, subsequently, oil and gas exploration and exploitation permits issued by the federal government.

The Government of Canada must not use Bill C-5 to abdicate its fiduciary responsibilities toward aboriginals. We must clearly identify the oil, gas and lands that may be affected, as well as the federal government's fiduciary obligations toward aboriginal peoples.

The government is responsible for rectifying inequalities between aboriginals and non-aboriginals. We do not feel that this bill does that. This is part of a bigger picture; it addresses and resolves part of the problem, but it would be false to suggest that this bill can resolve or rectify inequalities between aboriginals and non-aboriginals.

I will reread the summary:

This enactment amends the Indian Oil and Gas Act to clarify and expand the existing regulation-making powers and to add new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas...It also puts in place sanctions for contraventions of the Act as well as provisions for its enforcement.

We can see here that Canada made a choice long ago to turn over oil and gas exploration and exploitation to the private sector.

Many countries in the world develop their own oil and gas resources. That is a choice. Canada, like the United States, simply decided to put this in the hands of private enterprise. When a country does that, it must pass legislation and provide for sanctions in the event that legislation is violated. Clearly, this is what part of this bill is intended to do.

I would remind hon. members that the development of a new fiscal relationship between the first nations and the Government of Canada has been the focus of discussions and analyses for more than 20 years. It has been talked about for over 20 years. As early as 1983, the Penner report, a report by the House of Commons Special Committee on Indian Self-Government, recommended that the fiscal relationship between the federal government and the first nations be redefined.

In 1996, the final report of the Royal Commission on Aboriginal Peoples—also known as the Erasmus-Dussault commission—also recommended a full review of the fiscal relationship between the federal government and the first nations. The proposed initiative focused on redefining this relationship within a broader context based on first nations self-government. The Tlicho self-government act that we passed in this House is an example of this.

The First Nations Oil and Gas and Moneys Management Act, which came into effect on April 1, 2006, was one of the first steps in this new fiscal relationship between the first nations and the federal government.

This optional law contains two new provisions: the first makes it possible for first nations to manage and regulate oil and gas activities on reserves; the second, to manage funds held in trust for them by Canada. A first nation can choose either option. In other words, they need not own oil or gas to become responsible for managing these monies.

This legislation will change the way oil and gas are developed and it will allow first nations which are self-reliant to develop these resources on their own land. Previously, first nations have had to comply with the Indian Oil and Gas Act and its regulations, which has not allowed them to manage these resources directly.

The First Nations Oil and Gas and Moneys Management Act allows first nations, that choose to do so, to be excluded from the application of the Indian Oil and Gas Act and its regulations.

That act, the Indian Oil and Gas Act, is the legislation governing exploration and exploitation of oil and gas resources on reserve land. This legislation does not allow first nations to manage the oil and gas resources on their land directly nor does it allow them to develop an appropriate regulatory framework.

Since 2006, the First Nations Oil and Gas and Moneys Management Act has allowed first nations, if they so choose, to create regulations concerning oil and gas exploration and conservation, on the spending of moneys derived from the exploitation of these resources, and on the protection of the environment.

As for regulations to protect the environment, those established by first nations will have to at least meet the standards of Quebec or the province in which the aboriginal community is located. This is important to us, the Bloc Québécois. Protecting the interests of Quebeckers is just as important as protecting the interests of first nations and aboriginal peoples. Obviously, the law that applies to first nations must be the same as the law that applies to Quebec.

In terms of managing their finances, those first nations choosing to come under this new legislative framework will be subject to different regulations regarding money. This money is currently defined in the Indian Act as all moneys collected, received or held by Her Majesty for the use and benefit of Indians or bands.

For these first nations, the provisions of the Indian Act will no longer apply. They will therefore be able to manage the amounts collected directly, rather than letting them be managed by the federal government. As a result, they will be able to make their own choices for investment in their communities instead of letting the Department of Indian Affairs and Northern Development dictate priorities to them. Auditor General Sheila Fraser pointed out in her 2004 report that this department is not doing a good job of administering the billions of dollars intended for the aboriginal communities. The best way for aboriginal communities to do this is to negotiate with the federal government as equals.

If a first nation does not feel it would be advantageous to come under the new legislative regime, the current standards will continue to apply to it, so it will continue to benefit from the provisions of the Indian Act, including those that apply to the administration of Indian moneys.

Bill C-5, which is identical to Bill C-63 and Bill C-5, which died on the order paper June 17 and December 3, 2008, respectively, amends the Indian Oil and Gas Act.

It is important for those watching us to understand why bills die on the order paper. As we all know, this is because an election is called or the House is prorogued. In that sense, since the Conservatives have been in power, they have had the pleasure either of calling an election, even though it went against their own legislation regarding fixed election dates, or deciding to simply prorogue the House in order to stay in power. The adverse effect of that, of course, is that all the bills needed for the well-being and progress of the people, such as aboriginal communities in this case, are lost simply because the Conservatives decided either to call an election or prorogue the House.

At present, under the 2006 legislation, first nations that have oil and gas resources but are not managing them must leave the management of their resources to Indian Oil and Gas Canada, a government agency that falls under the Department of Indian Affairs and Northern Development.

Indian Oil and Gas Canada, or IOGC, has a mandate to manage and administer the exploration for and production of oil and natural gas resources on first nation reserve lands. This organization encourages production and ensures proper collection of royalties on behalf of first nations.

But the Indian Oil and Gas Act has not been amended since it was passed in 1974. Of course, in 1995 a regulation was passed concerning Indian oil and gas, but that is not satisfactory given how the market has evolved since 1974. As the industry has become more and more complex, provinces have constantly modernized their oil and gas legislation. And that is why the federal government is now deciding to modernize its legislation—to bring it more into line with reality and various pieces of provincial legislation.

This bill would apply to reserves that have not chosen to exercise rights under the First Nations Oil and Gas and Moneys Management Act. This bill would apply to first nations that are subject to the Indian Oil and Gas Act. That represents approximately 200 First Nations that produce or could be producing oil and gas.

Currently, more than 80% of these activities take place in Alberta. In 2005 and 2006, more than $270 million in oil and gas revenue was collected by the federal agency that manages Indian oil and gas resources, IOGC. This organization has signed active production agreements on behalf of 60 first nations.

This bill would give the same weight to the industry's activities both on and off reserve—based on provincial legislation—in order to decrease the number of obstacles to first nations economic development, in order to ensure environmental protection on the reserves and in order to allow the government to better fulfill its obligations to first nations in terms of managing these industries by respecting regulations and collecting royalties and other applicable types of revenue.

Under the Indian Act, oil and gas revenues are collected by the federal government and are then to be completely redistributed to native peoples. This money is referred to as “Indian moneys” in the Act and the federal government has fiduciary responsibility for it.

This bill does not transfer to first nations the federal government's power to manage and administer oil and gas exploitation and production activities on reserve lands.

Its purpose is to update the Indian Oil and Gas Act and harmonize the federal legislation with the legislation in the provinces where first nations communities are located. Incorporating the provincial acts and regulations will neither remove any jurisdiction from the provinces nor confer any jurisdiction on them. For example, reserves' environmental regimes will continue to be harmonized with provincial requirements.

The bill replaces almost all of the provisions of the existing six-section Indian Oil and Gas Act and includes a number of matters that are currently provided for in the Indian Oil and Gas Regulations, 1995.

Bill C-5 expands the Governor in Council's existing regulation-making powers and adds new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands.

The bill also makes changes in respect of the limitation period for actions to collect amounts owing and the determination of royalty payments. It puts in place sanctions for contraventions of the act as well as provisions for its enforcement comprising fines and penalties, a remedy for trespass, environmental protection clauses and authority to issue replacement leases for lands added to reserves.

It would be interesting to have more information about lands added to reserves and to know what measures are being put forward in negotiations with the provinces. The Bloc Québécois plans to ask some pointed questions about this in committee. We could ask what is meant by expanding the Governor in Council's regulation-making powers and how the provinces will be consulted before regulations are introduced.

For example, even though the bill states that these lands have been absolutely surrendered under the Indian Act or the First Nations Land Management Act, it would be interesting to get some clarification about the negotiation process with the provinces and obtaining a permit on these added lands.

The bill also requires the minister to undertake ongoing consultations with the first nations involved with respect to negotiations with industry. The new section 6(1.1) states that:

The Governor in Council may, by regulation,

(a) require that a power of the Minister under this Act in relation to first nation lands be exercised only if prior approval of the council of the first nation is obtained, if the council is first consulted or if prior notice is given to the council, as the case may be;

(b) require that any such power of the Minister be exercised only if prior consent is given by any first nation member who is in lawful possession of the first nation lands; and

(c) require that notice be given to the council of the first nation after the Minister exercises any such power.

Through Indian Oil and Gas Canada, and in cooperation with the Indian Resource Council, the government consulted most oil-producing first nations and 130 band councils in 2002 and 2003.

The Indian Resource Council was founded in 1987 to represent first nations' collective oil and gas interests with both government and industry. Current membership exceeds 130 first nations from British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and the Northwest Territories. Six non-producing first nations in Quebec are also members: the Odanak Abenakis; the Natashquan Innus; the Kanesatake Mohawks; the Gesgapegiag Micmacs; the Kahnawake Mohawks; and the Wôlinak Abenakis.

Our aboriginal affairs critic met with Indian Resource Council delegates. Some council members are dissatisfied with certain aspects of the bill, but on the whole, the council is happy with the bill and the consultations that took place.

The Bloc Québécois will therefore support the bill in principle.

While far from perfect, this bill will provide the tools needed in order to standardize the legislation on reserves with that of the provinces where they are located. The Bloc Québécois will demand clarifications during the committee's study of this bill, for example, regarding the terms and conditions relating to authority to issue replacement leases for lands added to reserve, as well as oil and gas exploration and exploitation permits issued by the federal government.

The Bloc Québécois will ensure the Government of Canada does not use Bill C-5 as a means to slough off its financial obligations with respect to first nations. The Government of Canada has a fiduciary obligation to aboriginal peoples and it cannot shirk it.

Although passing this bill will engender improvements, the federal government must do a lot more for aboriginals. The housing conditions, education and health of aboriginals are inferior to those of the rest of population. On the reserves, most families—65%—live in substandard housing. The Bloc Québécois deplores the fact that the lack of affordable housing of adequate size and quality for aboriginals has consequences beyond simple housing standards. Various medical and social problems are linked to poor housing conditions and quality of life. The Government of Canada must make the effort needed to correct the situation without simply handing over the problems to the first nations.

Once again, although not perfect, this bill may help create an environment that we hope will be conducive to first nations obtaining resource royalties and reinvesting them in their own communities.

The Bloc Québécois is concerned about aboriginal claims for self-government. Autonomy cannot be attained unless a nation controls its economic levers.

I am the member for Argenteuil—Papineau—Mirabel and my riding is adjacent to the Kanesatake Mohawk nation. It is important to try to understand others. Last year, I had a rewarding experience with young artists. The Centre de l'image et de l'estampe de Mirabel decided to sponsor aboriginal artists who are now touring Canada. For the past two years, this centre has taken under its wing young Mohawk artists from Kanesatake, our neighbours, and it has been an enriching experience with the results now touring Canada. It is an honour for a population that is often forgotten by governments and left to its own devices. When we try to help these nations to help themselves good things can happen. I hope that this bill will attain its objective.

Indian Oil and Gas Act
Government Orders

February 13th, 2009 / 1:15 p.m.
See context

NDP

Joe Comartin Windsor—Tecumseh, ON

Mr. Speaker, I probably will not be taking my full 20 minutes allocated to this bill. As members have heard already from both the government and the opposition parties, there is general consensus that this legislation is badly needed. It is very timely in the sense that it has been a long time that amendments have been necessary to the Indian Oil and Gas Act.

It also would appear, and we share in this sentiment, that it has widespread support from the first nations. I would signal in particular that the Indian Resource Council, which was formed in 1987 I believe, has come out very strongly endorsing the legislation. I am sure we will hear from the council that it is not absolutely perfect and maybe at committee some additional and probably minor amendments will be necessary. However, the council is quite strong in supporting the legislation and encouraging all parties to support it.

I think that has to be the controlling factor. The council is clearly identified as the group in the country among the first nations. It does have representation from a large number of the first nations, but it is the group that has been identified as dealing with this particular issue, this sector of the economy for the first nations, and it is quite supportive of the legislation.

This legislation goes back to 1974 when it was first passed in the House. It has not been amended since that time. Regulations were changed to some reasonable degree around 1995 but other than that the act has remained as it was in 1974. It is obvious that over that 35 years things have changed.

The relationship between the first nations and the Government of Canada has changed dramatically. As we finally began to recognize, we are nowhere near finishing that agenda, but we began to recognize the significance of working with them on a nation to nation basis on all sorts of issues.

That recognition in particular has taken first nations coast to coast to coast to the Supreme Court on a number of occasions, particularly around, as the Supreme Court of Canada has found now repeatedly, the requirement on the part of the federal government of the day to consult in a meaningful way with the first nations. The Supreme Court and the lower courts have as well found breaches of that responsibility repeatedly. Projects that were to move ahead had to be stopped and meaningful consultation taken up with the first nations.

It appears quite clearly that on this particular piece of legislation consultation has taken place. It actually was completed before the calling of the last election. There was a prior bill introduced by the government, Bill C-63 in the last Parliament, which basically is the same bill as we are seeing now in Bill C-5. That of course died on the order paper when the Prime Minister opted to break his promise and call a snap election in September. Otherwise, this bill probably would have been through the House and been law by this time. This was further extended by the government's dodging of its democratic responsibilities with the prorogation of Parliament last December.

We now have the bill in front of us. The opposition parties are generally supportive. It will go to committee for final review, but I expect, in listening to our critic in this area, that the review will not take very long, so we should see the bill back before the House fairly quickly, and hopefully quick passage on to the Senate and royal assent.

The intent of the bill is to modernize it, to bring it into the 21st century, and in particular there have been conflicts between the federal legislation and the provincial legislation. This goes some distance to clear that up.

The first nations feel that the relationship between the federal government and the first nations that are affected by the legislation will be enhanced by the amendments that are going through. The bottom line is that this would bring clarity.

There are a number of provisions in the bill around the responsibility of the minister to deal with environmental issues. Most often what happens is that multinational corporations come in to do the exploration and withdrawal of oil and gas from the site, including, in some cases, coal deposits, to which it extends, but in the course of doing that it can cause environmental damage. The minister has very clear authority to deal with the remedial action that would be necessary to correct that environmental damage but the minister would be given additional powers to do so, which is an important factor in the bill.

I was caught also by the responsibility of the minister to ensure historical sites, which would, almost exclusively, be for the first nations, are protected, as well as archaeological sites. Over the years, many times first nations have been rightfully indignant, angry and bitter over the treatment of their archaeological sites with no particular sensitivity to their spiritual beliefs and their historical importance. The legislation would strengthen the responsibility of the minister to ensure that sensitivity is assured and guaranteed. That would be a major improvement to the relationship between the Government of Canada and the first nations.

There are a good number of important provisions within the legislation that provide for an enhancement of the role of first nations in the governance of the oil and gas reserves that they have on their lands. That only goes to further strengthen their desire to be independent of control by the federal government. It is clear what the responsibilities are of the federal government, which will continue, but it also significantly enhances the role of the first nations, and that can only be seen as a positive development.

We will be supporting the legislation. I suppose it is always possible that evidence and witnesses at the committee may produce some concerns, but the strongly felt sense we have at this point is that, because of the substantial support from the first nations and the support from all parties, those concerns would be of a very minor nature and again it would be back here for quick passage, hopefully as early as within the next month or so.