Bill C-5 (Historical)

An Act to amend the Indian Oil and Gas Act

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.

[Greg Rickford, Conservative, Kenora, ON]

Were there any concerns, to your knowledge, raised around the provisions of Bill C-5?

[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]

The comparison with the Canada Petroleum Resources Act is a valid one. In that statute, Canada is dealing with its own royalties. Listed in considerable detail--in the statute itself, by the way, not in the regulations--are the powers of the minister when royalties are underpaid or when another default takes place in the lease. Bill C-5, as it currently is worded, has nothing in that regard at all. It's entirely left up to the regulation-making power.

We're simply pointing out that what is good for Canada under the Canada Petroleum Resources Act should be good for Canada on behalf of the first nations in Bill C-5.

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

Thank you, Mr. Chair.

I want to thank the chiefs, Mr. Snow, and Mr. Rae for coming before the committee. I think it's important that you are here in person to talk about the issues that you think need to be raised in the context of this particular piece of legislation.

I want to touch on two things. If I have time, I'll come back to a third question.

In your proposed amendments, you talk about the differences between the Canada Petroleum Resources Act and what is included in the bill. I think it's an unfortunate statement that the Government of Canada looks at royalties for itself in one way, and then treats first nations completely differently.

This is one proposed amendment: “5.2 (1) The Minister may, at any time, assess the royalty, interest or penalties”, and so on. I wonder if you could just briefly touch on the difference between the CPRA and what is proposed in Bill C-5. I don't know, it may be technical; keep it simple for us non-lawyers.

[Chief David Bearspaw, Chief, Bearspaw First Nation]

Thank you, Chairman.

Good morning, ladies and gentlemen. It's an honour to be speaking in front of you today.

I'm going to start by saying a few words in my own language.

[Witness speaks in his native language]

I would like to address the impact of Bill C-5 in terms of economic development and employment for the members of my first nation.

We met with Minister Strahl last July, in Calgary. He told us at that time that his priority is economic development and education. That is the same priority my great-great-great-grandfather had when he signed Treaty No. 7 in 1877. However, Bill C-5 does not appear to do much to support the minister's priority.

Specifically, Bill C-5 contains a definition for “exploitation” of oil and gas. This definition reflects a crown policy that the downstream operations, such as refining and processing, are to be excluded from the Indian Oil and Gas Act. It is from these downstream operations where most of the value-added benefits to my people will come, yet these downstream possibilities have been excluded from Bill C-5.

Why is that? We would ask that you consider an amendment to the definition of “exploitation” of oil and gas. We have provided draft wording in this regard, on page 2 of our clause-by-clause review, which was previously distributed to you.

Again, we wish to thank you in our language, “ish nish”. And we would like to invite each of you to the Stoney Nakoda Resort, where you can provide an economic stimulus to our people by gambling away your hard-earned money.

[Chief Bruce Labelle, Chief, Chiniki First Nation]

[Witness speaks in his native language]

Thank you, Mr. Chairman, for inviting us to appear before your committee today. We apologize that we were not able to appear before you last week. The timing was just too tight.

We do acknowledge that the Stoney Nakoda Nations have been directly involved in the consultations that Indian Oil and Gas Canada has been carrying out over the past two years with the Indian Resource Council. Mr. Snow, who is with us here today, has been our representative, and Chief Poucette, my fellow chief, is on the board of the IRC.

Those discussions, however, dealt only with the general principles behind the bill, not the details. We did not see the actual text of Bill C-5 until it was tabled in the House of Commons in February. We then immediately instructed our legal counsel to review Bill C-5 and to advise us in regard to it.

Our legal counsel then wrote to the committee on February 19, 2009. We would ask that this letter, our response to the minister—a clause-by-clause overview of the bill—be accepted as the submission of the Stoney Nakoda Nations.

We suggest that the committee request from the minister the correspondence and materials from the Indian Resource Council, and its joint technical committee, with respect to the issues that were identified and the specific amendments that were requested by the IRC at that time. Once this is reviewed, it will be clear that the issues we are raising are unresolved issues from the IRC process, not new issues, as has been suggested.

We are not proposing amendments designed to derail or to force a restarting of the process. We believe our proposed amendments to Bill C-5 are the conclusion of the consultation process started by the IOGC and the Indian Resource Council, not the beginning of a new process.

We were also disappointed to see that in the backgrounder and the speaking notes that accompanied Bill C-5, there was no mention whatsoever of the many lawsuits that have been brought by the major oil- and gas-producing first nations. We also have difficulty, from time to time, in obtaining information from Indian Oil and Gas Canada. But they should have advised you of the eight, at least, such lawsuits brought against the Government of Canada . The Supreme Court of Canada, two weeks ago, ruled in regard to only one small part of two of these lawsuits. The oil and gas royalty issues are still being litigated by the Stoney Nations and other first nations.

The amendments we are proposing would have the effect of facilitating resolutions of these issues, one way or another. And our proposed amendments would also conceivably save the Canadian taxpayer from having to pay out more money for royalty moneys that the IOGC has failed to collect .

Thank you for your time. Chief Poucette would now like to say a few words.

Ish nish. Thank you.

[The Chair, Conservative, Bruce Stanton]

Good morning, ladies and gentlemen.

This is the 10^th meeting of the Standing Committee on Indian Affairs and Northern Development. This morning, we have on the agenda Bill C-5, an Act to amend the Indian Oil and Gas Act.

This morning we welcome our witnesses for consideration of Bill C-5, amendments to the Indian Oil and Gas Act.

We'll start with Chief Bruce Labelle from the Chiniki First Nation. Second will be Chief Clifford Poucette from the Wesley First Nation. Then we'll hear from Chief David Bearspaw from the Bearspaw First Nation.

Chiefs, we welcome you to our committee this morning. We're delighted that you could take the time to join us here on relatively short notice.

We normally provide 10 minutes for each presentation. With your agreement, and seeing that we only have one hour, I suggest you keep your opening remarks to about seven minutes each so we'll be through them in about 20 minutes. Then we will go to questions from members.

We'll start with Chief Labelle for seven minutes.

[The Chair, Conservative, Bruce Stanton]

That's what we're going to do. We're going to have that discussion. I think we'll have that discussion in terms of providing some scope for that work ahead of us on the Thursday following the break. We have at least three days in front of us now, with a full day on Thursday, as discussed. We have the clause-by-clause for Bill C-5 on March 24 and we will set aside March 26 for consideration of providing some clarity on our next steps in terms of study topics. There being no other speakers, I think we will proceed on that basis.

Mr. Bagnell.

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

Two things, Mr. Chairman. First, I was listening to a radio report yesterday that there was apparently in Toronto a significant conference yesterday on the economic development of first nations. I'm just wondering why the committee was not made aware of that or perhaps even afforded an opportunity to participate. It's just a question I was wondering about. Perhaps we could obtain a report from that conference and its conclusions, if there are any.

Secondly, I'm just reminded of what we're doing here today, Mr. Chairman. I remember studying or being advised of a couple of principles that were important in human endeavours: one was the Peter Principle, that you'd be promoted to your level of incompetence; and the other one, whose name I forget, was that work would expand to occupy the time available. I wonder if that's what we're proving here today, the existence of that other principle.

I'd be willing to punt this to Thursday, after we've finished with Bill C-5.

[The Chair, Conservative, Bruce Stanton]

We're actually starting to get into that discussion now.

I was really seeking from the committee whether you want to have that discussion now and set a study topic. We do have, by the way, and I think you've all had circulated to you, the preferences of members with respect to their priorities and ideas, including those just mentioned.

We will need to schedule some time to have that discussion. It would appear at this stage that we won't be able to do that before the break. That does leave us the option, if you wish, to continue with a briefing-type meeting. There were still a couple of briefing topics that we had not completely dispensed with prior to our taking up consideration of Bill C-5. We could go in that direction, if you wish.

Ms. Crowder.

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

Mr. Chair, I had asked that we start preparing for the appearance of representatives of the Assembly of First Nations to discuss education. Once we have completed our study of Bill C-5, and before undertaking our study of Bill C-8, I think it would be a good idea to do that. The Assembly of First Nations has written to us on several occasions. The First Nations Education Steering Committee would like to meet with us.

[The Chair, Conservative, Bruce Stanton]

There being no other speakers, it would appear there's consensus for that schedule, if I can call it that, just as you described, Mr. Russell.

That does take us to clause-by-clause consideration on the Tuesday following the break, which would be March 24. We will set aside that meeting in its entirety at this point in time for that consideration of Bill C-5.

I take it there are no other speakers on that. We will accept that as a consensus by the committee, to proceed in that fashion. We will call witnesses in addition to the first nation--departmental officials, including those from IOGC--in the second hour. It has not been suggested that the IRC, who has been before our committee and provided testimony already, would be here, but we will hear from the department on the very specific and, I would agree, very technical suggestions on the part of first nations.

That does leave members with the question of how we proceed at the Thursday meeting. We had originally set aside this Thursday for consideration of study topics. The idea there was that we could direct our analysts and clerk's office in respect to getting witnesses for our initial study, going into the period after the break next week.

Is it the desire of the committee to consider that issue now? We have 30-odd minutes left in today's meeting. We can discuss that.

I'll take your direction on that question.

Mr. Lemay.

[Todd Russell, Liberal, Labrador, NL]

I think all committee members are aware that we have had some correspondence from the Stoney Nakoda First Nation with respect to the bill before us. Things seem to be a bit late coming to us in terms of some of the concerns that were raised. Notwithstanding that, the Stoney Nakoda has done some very intensive work around Bill C-5. They present some critiques we haven't heard at the committee, and I believe we should afford them the opportunity to present that to committee on Thursday. Their representatives have indicated the chiefs of the Stoney Nakoda can appear on Thursday.

So I would recommend that we suspend clause-by-clause for now, hear from the Stoney Nakoda on Thursday during the first hour, and then move on with clause-by-clause after that. That will also give us the time to review the information they have brought forward.

Having said that, I'd also like to reiterate that, as a party, we are basically supportive of Bill C-5 and we want to move this through the process. For the record, I've also indicated we are not interested in rewriting this bill. But we are interested in hearing logical arguments and critiques that may have some influence on potential amendments we might want to bring forward.

I would recommend that we go forward in this particular fashion.

[The Chair, Conservative, Bruce Stanton]

Thank you, members.

As you know, our orders of the day were to continue at this point with clause-by-clause consideration of Bill C-5. I know there have been discussions among members, and I wonder at this point whether members would be prepared to speak to a potential change in that order of the day.

Mr. Russell.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Thank you.

Obviously, Bill C-5 was the purpose of my last visit here, and I mentioned it in my opening remarks. It's an important bill. It was a long time being developed. It's an important bill, because I think in economic times like these we have to give maximum opportunities to first nations to benefit from the oil and gas reserves and the potential on their land.

This is an important and timely bill, and again, that's why I mentioned it in my remarks. The whole consultation, of course, precedes our government by several years. The previous Liberal government set up a consultative process--it has been going on now for eight or nine years--to try to update a piece of 35-year-old legislation. So it's not a partisan bill. It's not something we initiated, even. It is something, though, that we see the value of, because it's going to give economic opportunities to first nations.

There have been really intensive consultations over the last 18 months or so with the Indian Resource Council and with the 130 first nations they represent. There has been a real effort, on all fronts, I think, to make sure that we find that path forward that modernizes the regulations but also gives voice to the concerns of the Resource Council and the first nations. I have met with the IRC. I also gave them a letter--I think you have a copy--with the promise to work with them closely on the development of regulations that flow from it.

This has been going on for years and years. There are 130 first nations. There are the interests of the federal government and others. What we have is a good package of amendments to the bill that will do everything, I think, the IRC is looking for. I think that was their testimony before you. And we have an agreement to work on some of the other things that will be necessary going forward, including development of the regulations. You know, a lot of times, the devil is in the details, and the details are regulatory, so we're going to work closely with them. Also, there are some other things on their list of issues to deal with. There's an ongoing process to deal with those, as well.

As to the bill itself, I would urge the committee to consider the testimony of the IRC. What they have done, and my hat's off to them, is find a path forward with this bill that is a good path forward for the 130 first nations. If it is changed significantly, if there are amendments that change it significantly, certainly I'll have to go back to cabinet. I don't know what the amendments might be, but I would have to go back to cabinet. And my guess is that the IRC would have to go back and start a consultative process. My worry is that it's not simply a matter of going to the IRC and saying “what do you say”, and somebody stamping it. We have to get consensus from 130 first nations. So away we go again.

My concern is that if it's away we go again, we'll be back here a year or two or eight from now saying that it was too bad we couldn't have fixed it back then. And that would be a shame. I think we have to grab this thing while the grabbing's good. It's not because we couldn't do more work on it; it's just that the process is not simple. The process will start another round of consultations that will be expensive, and worse yet, will mean that the current system is in place until such time as we get another consensus. So I would urge the committee to consider the testimony of the IRC, which I think has done yeoman's work in hammering out that consensus and getting a pretty good piece of legislation with an agreement by the government that they'll consider other options, moving forward, that address some of their other needs.