Indigenous and Northern Affairs Committee on March 12th, 2009

[The Chair, Conservative, Bruce Stanton]

That's it, Mr. Rae. Sorry, but we are out of time; pardon me.

We have to move on now to Mr. Duncan, for seven minutes.

[John Duncan, Conservative, Vancouver Island North, BC]

Thank you, Chair.

Thank you to the chiefs for attending this morning.

Chief Bearspaw, I have stayed at your resort, and it was very fine indeed. Thank you.

I want to go where Mr. Russell went, on this fiduciary duty, because I think it's key to what we're looking at here.

I received a letter, which was sent on February 19, talking about an amendment to Bill C-5 that would confer powers to first nations that are currently done on their behalf by IOGC. This would include applying to the cancellation of oil and gas leases due to non-payment of royalties or in cases of non-compliance with terms and conditions of a lease.

When IOGC officials appeared before the committee on March 3, the committee heard that first nations were consulted and involved in the decision-making process leading to the cancellation of a lease. As recently as November 28, they proceeded to cancel a lease. We had chiefs and councils involved in every step with IOGC before the final decision on cancellation, but the decision remained with IOGC acting as a manager or regulator--a trustee.

We heard last week from IOGC that they do not have a mandate from their membership of chiefs and councils to entertain any changes that would have the potential to alter the fiduciary relationship, duties, and responsibilities of the crown. Since that February 19 letter, we now seem to have an altered position from yours. You're now seeking an amendment that would empower the first nation to direct the minister to cancel the lease. It now appears you're suggesting the decision to cancel would belong to the first nation, yet the responsibility and consequences of that decision would remain with the minister.

I think we need some clarification. Are you suggesting that first nations be given the unilateral decision to cancel the lease with no responsibilities or consequences? That is my first question.

Second, if that is indeed what you were seeking, then why would you not pursue it under the umbrella of the First Nations Oil and Gas and Moneys Management Act rather than under this legislation?

[Douglas Rae]

Mr. Chairman, if I could answer the first part of the question, I'll leave the second part to the chiefs.

We don't think we are changing our position. We originally provided a proposal whereby the first nation itself could put a lease into default.

We're realists. We've read your committee deliberations in the minutes of the past few weeks. The second refinement of that proposal simply provided that if that's not acceptable then the first nation could direct the minister to put the lease into default.

In regard to the first nations getting involved in what is otherwise the minister's or Indian Oil and Gas business, I would reiterate that with most of this litigation we're referring to, the first nations are already involved. The Samson and Ermineskin first nations--a portion of their lawsuit was the subject matter of the Supreme Court decision--themselves are being sued by oil companies for alleged overpayments of royalties. That's under the current act. They're already part of the mix.

The issue of who is liable is already quite complex, and I don't think any of the amendments we're proposing would in any way muddy the waters in that regard. I think they would in fact clarify it.

[The Chair, Conservative, Bruce Stanton]

Mr. Snow.

[John Snow]

Thank you, Mr. Chairman.

Also, when we initially embarked on our TOPGAS litigation, we had gone to the department. We went to IOGC and asked them to pursue it. At that time, we heard back that the Stoneys themselves have to pursue it. There was an unclear process at that point. These are going to keep recurring. These are the reasons why we want to take a closer look at the impact of a lot of these changes.

Speaking to the second question, dealing with FNOGMMA and why first nations are not taking that, I don't know of any at this point who have accepted the process. They have to do it either through referendum or BCR, and at this point none of them have undertaken those pieces of legislation.

It has always been the position of the chiefs, if I recall from the AGMs; they have said that we need to reserve our right to decide, and whether we participate in optional legislation, the optional nature, our ability to participate through referendum, BCRs, is our decision. So they've always kind of maintained that. That's their jurisdiction.

Thank you for your questions.

[The Chair, Conservative, Bruce Stanton]

You have about thirty seconds, Mr. Duncan.

[John Duncan, Conservative, Vancouver Island North, BC]

I think every time we ask about the fiduciary relationship, we get an answer that relates to royalties. We're trying to separate those two issues, because the fiduciary relationship is key to this whole document. I believe that's what Mr. Russell was trying to get at. That's what I'm trying to get at.

I don't believe you've answered that question. You keep going back to the royalty question. I think you should be cognizant that we're seeking clarification on that. There will be further questions from people. Maybe they want to pursue it some more.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Duncan, and thank you, Mr. Snow and Mr. Rae.

We're going to proceed to Monsieur Bélanger. We're in the second round now, questions for five minutes.

Monsieur Bélanger.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chairman.

Just so that we perhaps are helped in our role here as legislators, I would like the government to provide me and members of the committee with the rationale as to why, in their view, these amendments should not be adopted. I'm hoping we can go beyond procedures. Let's have some substantives so that when we get to them....

I'm not quite giving notice here, Mr. Chairman, that I might move these, but I would hope that in the exercise we're going to be engaging in the week after next, once we get to the clause-by-clause, these amendments as they've been presented to us could be addressed on a substantive front. I'm quite prepared to be convinced that they shouldn't be, but on the other hand, I would need that convincing.

I just give notice, so to speak, that I may be moving these, so that we get that rationale. I understand that some of these may be on a procedural front beyond the scope, or maybe not; we'd have to argue that at the time. So that's just to entrer en matière.

There's one area I have brought up that Monsieur Labelle mentioned here, and I'd like to use whatever little time I've got to explore. My concern as a legislator is that this bill would encompass all the provincial laws and regulations. And the notion that the Government of Canada has a constitutional obligation—way and beyond the fiduciary ones—vis-à-vis first nations doesn't necessarily translate in provincial law. And provincial law may not have been prepared and written and conceived with the constitutional obligations of the Government of Canada via-à-vis aboriginal nations, when they were preparing laws about how to handle their oil and gas resources.

So how can we reconcile the two? Is the government asking us as legislators to put on a blindfold and say, yes, we'll trust that all provincial regulations, all provincial laws, will treat aboriginal rights appropriately?

Perhaps you would comment on that, please.

[John Snow]

Thank you, Mr. Chair.

I think it's difficult for the province to identify and know the interests of first nations. They have their own interests at heart. They're not able to understand this fiduciary relationship, and we're running into problems with that right now in the oil and gas sector. We've attended some hearings with the ERCB, the Energy Resources Conservation Board, which is a provincial regulator in Alberta. They are unable to appreciate some of our interests and some of our arguments.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

In the next few days, could you send us some documentation on that? I need some examples.

[John Snow]

I'll ask Mr. Rae to comment on that.

[Douglas Rae]

Yes, sir, at your request, we certainly can provide you some examples.

You raise a very good point. Conceptually incorporating provincial laws makes a lot of sense. The material provided with Bill C-5 is the template upon which the bill is being proposed. The problem is that the Province of Alberta in its statutes, and particularly the Alberta Energy Resources Conservation Board in its enabling statute, say absolutely nothing about first nations, let alone any obligations--trust, fiduciary, treaty, or otherwise, or any of those under section 35 of the Constitution Act. That board has absolutely no mandate to do anything in consideration of first nations rights.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

What would you recommend as a remedy, therefore, to this notion that we incorporate, by virtue of this bill, all provincial laws and regulations relating to oil and gas when dealing with aboriginal lands that have oil and gas? What would the remedy be--to not do it, or to do something else, or to add something to make sure that the constitutional rights are protected?

[Douglas Rae]

The Alberta Oil and Gas Conservation Act, as an example, contains probably 150 sections. It's a voluminous statute. To incorporate it holus-bolus, without further ado, I don't think would work. Provisions can be incorporated. Certainly many of them are, in one way or the other, already. But they must be incorporated with one eye on modifying them to address first nations issues.

You asked what our druthers would be. Canada itself is an accomplished regulator. The National Energy Board is one of the most respected regulators in the world. Our initial position was why does Canada look to provincial regulators when its own regulator is perfectly capable, in our view, of regulating on-reserve lines?

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Bélanger.

Now we go to Mr. Rickford, for five minutes.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for coming here today.

I have a couple of quick questions that I hope will get yes or no answers. Then I have ones that perhaps you can expound on.

I want to get a sense of the history here in terms of your involvement with this whole process leading up to this legislation. This would be everything up to February 19, when we received this letter from your legal counsel. My understanding is that your committee has participated in around 20 to 22 meetings with IOGC. Would that be accurate?

[John Snow]

We have many meetings with IOGC. It would depend. We have a Stoney oil and gas committee. There are many different groups that interact with different levels of government.

[Greg Rickford, Conservative, Kenora, ON]

I'm speaking about the Indian Oil and Gas Canada co-management board meetings.

[John Snow]

Chief Clifford is a board member there, so he would have a better idea on that. And maybe Doug is aware of some of the board meeting schedules.

[Greg Rickford, Conservative, Kenora, ON]

So you're not sure if it's maybe 20 or 22 meetings that you've chaired, or for some of them co-chaired?

[Chief Clifford Poucette]

No.

[Greg Rickford, Conservative, Kenora, ON]

Then would it be fair to say...?

I'm sorry, go ahead.

[John Snow]

Sorry to interrupt.

I don't think you're the chairman, either.

[Chief Clifford Poucette]

No, I'm not the chairman, either.