Indigenous and Northern Affairs Committee on March 12th, 2009

[Strater Crowfoot]

To add to that comment, if there are changes proposed and it's going to go forward, then consultation will have to take place with the other 130 first nations who were involved in this process.

[The Chair, Conservative, Bruce Stanton]

Thank you very much.

We'll now go to Mr. Lemay.

You have five minutes.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Have I understood correctly? In fact, is my interpretation correct when I say that a large portion of the amendments are proposed by the communities because they would like to see elements in the act that would be found in the regulatory power?

In other words, you so much want to shut down all the possibilities, really all the possibilities, that you are putting these provisions directly in the act. So there's no more room for regulations, and that complicates or would complicate the process for amending or enforcing what the first nations would like to have in future.

[Karl Jacques]

Indeed, I understand from a number of their complaints that most of the provisions should appear in the act, should be clarified instead of being subject to regulations. As the regulations are not yet defined, we definitely don't know what will happen.

However, with a bill for which all the stages are well determined, the result would probably be what we want. I think that the model you are referring to is:

the Canada Petroleum Resources Act.

I don't have the title in French. In that case, for the same results, this mechanism is in the act.

Nevertheless, it's understood that, with the existing regulatory power, there are certain things they would perhaps like to transfer to the bill as such.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

From the government, we've received the department's answer to the seven questions asked. Have you looked at them?

[Karl Jacques]

Seven questions, yes.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

And there were the government's answers on this point. We received them on March 6. I don't know whether you've looked at them. This concerned the department's answers to the seven questions asked.

I'm trying to understand. If I understand the government's position—and you'll correct me if I'm mistaken—none of the proposed amendments should appear in the act because, otherwise, that would complicate it. That's what I understand. Do you understand the same thing as I do?

[Karl Jacques]

If I may be permitted, I believe there is more than that. It's not just the fact of complicating the act; it's more that it wasn't provided for at the outset.

The bill concerns the government's management resources. Some amendments, like the cancellation of contracts by the first nations, do not appear in this scheme, if you will. So there are some things that lie solely outside the regulatory power.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

I have a few problems as well. We've been given a series of amendments, and there are four main amendments on which we should decide. I admit I'm having a bit of difficulty.

I'm going to put my question to Mr. Crowfoot or to Mr. Dempsey, or even to you, Mr. Jacques.

How can we reassure the Stoney Nakoda First Nations? How can we ensure that the royalties will be paid to them, that those first nations will get what they're entitled to? How can we assure them without undermining the entire bill?

[Strater Crowfoot]

Let me answer that, maybe in two parts.

The process to modernize the Indian Oil and Gas Act started back in 1999. The drafting and the negotiations took place with the IRC, with the oil- and gas-producing first nations. Our process has been a joint drafting process all along. We feel there was a lot of compromise, a lot of discussion back and forth, in what we have before you today with the proposed Indian Oil and Gas Act.

In regard to royalties, we have a system in place. We require companies to pay a certain percentage, like 90%...accurate, on the 25th of every month. Then, as time goes on, we're able to verify the production data and the prices and so forth to come up with what's owed to the first nations.

We are quite certain that what is being paid today, in terms of what is due from the companies in terms of royalties, the bands are getting. In a lot of cases, the bands negotiate the royalties structure with the company. They are involved in that process.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Lemay.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Chair, Conservative, Bruce Stanton]

Now we'll go to Ms. Jean Crowder.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Thank you, Mr. Chair.

Thank you for coming back before the committee.

I think the crux of what we've been hearing is concern around royalties, so I want to follow up on what Monsieur Lemay was talking about.

The February 20 letter from Rae and Company that came to the committee talks about the full amount of the royalties owing to the Stoney Nakoda; the Canadian taxpayer ended up paying the royalties rather than the oil and gas company.

Can you comment on that? And is it a common practice that Canadian taxpayers actually end up paying royalties?

[Strater Crowfoot]

No, that's not a common practice, Madam Crowder.

What was referred to by the Stoneys was an issue of payments that were allowed back in the eighties that the Stoneys felt should be disallowed. It was an industry practice. At the time, the IOGC officials felt they shouldn't pursue having these deductions removed. The Stoneys went to court to argue that these deductions were inappropriate. The court affirmed that the portions that were disallowed should have been paid.

That's only with regard to this matter called TOPGAS and OMAC. TOPGAS is taker-pay, and OMAC refers to administration and marketing charges.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

So you're saying this is an isolated situation?

[Strater Crowfoot]

Yes, it is.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I heard you say that part of the concern with the amendments was not wanting to see responsibilities being off-loaded and whatnot. I don't have all of the detail on it, but I understand in the Hobbema case the federal government has done whatever it needs to do to say the first nations should be on the hook around the royalties.

Can you tell me a bit more about that? It sounds like the government is actually backing away and making sure that the responsibility is being off-loaded to first nations.

[Strater Crowfoot]

The Buffalo case, I guess, is...there are different facets of it. What was argued was the moneys portion, or how the money was managed.

In terms of the oil and gas, we're still responsible for all the collection of royalties on behalf of the four bands in Hobbema. We do the audits. We reconcile the payments and ensure that what is owed by the companies to the first nations is paid. Then they're deposited into the different trust accounts.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

So you're saying it's an issue over the trust accounts, not the collection of the royalties.

[Strater Crowfoot]

It's the issue of how the money is managed.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

How the money is managed by whom?

[Strater Crowfoot]

After it's collected and put into the trust accounts.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

You're talking about how the money is managed by the federal government.

[Strater Crowfoot]

Right. And our mandate is to do the collection and deposit it into the different trust accounts. Then our responsibility basically is completed.