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.

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

Thank you, Chair.

Good morning, Minister, and Mr. Wernick, Mr. Yeates, and Mr. Quinn.

Minister, the committee is scheduled to deal with Bill C-5 legislation, the Indian Oil and Gas Act amendments, clause by clause. I wonder if you could remind us of the process used in developing this piece of legislation. And could you tell us the possible ramifications if the committee proceeds with amendments that will change the bill currently before us?

[Chuck Strahl, Conservative, Minister of Indian Affairs and Northern Development]

Thank you, Mr. Chairman.

Mr. Chair, I'd like to thank you and your colleagues for inviting me to appear again before this committee.

It's good to be back. I'm not sure, but if we keep up at this rate we're going to set a record for being collegial with one another, and this is good. It's good to be back.

A few days ago I was here and I did have the opportunity to discuss Bill C-5, an act to amend the Indian Oil and Gas Act. As I said at that meeting, Bill C-5 has been a long time coming. When the bill is adopted, and hopefully that will be soon, the 130 first nation communities in our country with petroleum production or the potential for petroleum production on their lands will finally be able to manage their oil and gas resources using the most modern regulatory audit and oversight tools available. And equipped with these valuable tools, first nation communities will be ideally positioned to fully realize their economic potential--the potential of their own resources, really--and in their own way and on their own terms.

So Bill C-5 is an important and long overdue piece of business, but it's not the only item, of course, on our collective agenda. As you and committee members well know, several weeks ago we discussed supplementary estimates B of the Department of Indian Affairs and Northern Development for the fiscal year that ends March 31, 2009. That's just three weeks away.

I will tell you that I did enjoy that meeting for three reasons. First, it enabled me to share with you my thoughts on our recent achievements, our priorities, and the concrete steps we've taken to achieve those goals up until now and what we hope to achieve in the months to come. Second, it was an excellent opportunity for me to outline some of the important investments we're making through the supplementary estimates process. And third, and perhaps most importantly, all of the questions you asked--the very informed questions, I thought--following my presentation gave us all a chance to delve into a number of matters, both when I was here before the committee and afterwards with officials, and even subsequent to that in written form where we tried to answer the questions given to me. And I hope that's been useful, as I think we all are trying to find the right answers and explanations for what's going on in first nation, Métis, and Inuit communities across the country.

These are all important issues. They include everything from new homes, modern infrastructure, better education and schools, state-of-the-art water and waste water systems, an accelerated specific claims process and the tribunal that guides that, and honourable and long-lasting land claim settlements.

Following on supplementary estimates B, supplementary estimates C contain several long-term investments that will help the government and our provincial, territorial, and aboriginal partners take greater action on many of these fronts. To be more precise, this version of the supplementary estimates includes initiatives that total just over $118 million.

Before I go any further, I should point out that this $118 million does not require Parliament to appropriate new money, other than an increase to a loan vote for the preparation and negotiation of specific claims. Spending in supplementary estimates C is largely covered by funds available within existing reference levels, primarily attributed to claims reprofiling. These funds are being used temporarily to reduce the amount of new appropriation required, and they will be made available for their intended purposes next fiscal year. As a result, this investment does not increase my department's budget beyond the current $7.2 billion total for the 2008-09 fiscal year.

That being said, Mr. Chair, other specific investments listed in the Supplementary Estimates deserve mention. They are actions already taken to deal with some pressing issues, and I know this committee would want to be fully aware of them.

I know the committee wants to be fully informed or aware of these. Let's just go through them quickly.

First, we provided some $54 million to help residents of remote and isolated communities who suffered undue hardship as a result of rising fuel costs last year. Just prior to Christmas last year, I had several people from the committee approach me, as did a couple of the leaders in the House, who were quite concerned about the rising fuel costs in some of these remote communities. It was in the news. This $54 million was meant to address that hardship.

Secondly, we allocated approximately $26 million to empower first nation communities to address urgent and critical needs brought on by fires, floods, and evacuations.

Third, we invested more than $15 million to speed up even further our efforts to resolve specific claims.

And fourth, we added $10 million to the food mail program. This program reduces the cost of shipping nutritious food and other essential items to northern communities that lack year-round surface access.

These were effective responses to immediate challenges.

I should also point out, Mr. Chairman, that supplementary estimates C include a $44.5 million transfer between votes. This transfer allows the department to address critical pressures in the areas of fuel price increases for diesel generating plants on reserves; additional provincial education buildings for students from first nation communities who attend provincial schools; and the operation and maintenance of personal care homes in first nation communities.

Taken together, the investments contained in these supplementary estimates illustrate this Conservative government's focused approach to addressing the immediate concerns of northerners and members of first nation communities. Combined with the spending commitments contained in Canada's economic action plan, these investments also demonstrate that we're serious about addressing the long-term needs of men, women, and children in first nation and northern communities. In fact the government's approach can be summed up in three straightforward sentences. We're making pragmatic investments. We're working with partners. And we're getting results.

Thank you, Mr. Chair.

I look forward to answering your questions in the three areas: the investments we're making, the partnerships we've developed, and the results we're getting from those.

Thank you very much.

[John Dempsey]

On the Stoney Nakoda proposed amendments, I'd just like to make a couple of comments.

Since we first started this process back in 1998, Stoney Nakoda Nation has been a key part of our consultations. They've been a key part of all committees that we've put together. They are a significant oil and gas producer, so it was thought that they needed to be involved at every step of the way, which they have been. They've had members on all subcommittees. They've attended all meetings. They've received all the information about the proposed changes.

This change being talked about now isn't something that was formally raised through that process. There have been informal discussions about those types of things, but they were involved in the drafting of Bill C-5 as well. That proposal was never tabled within our committee structure.

[The Chair, Conservative, Bruce Stanton]

Members, we're going to proceed with consideration of Bill C-5. At this stage, as has been suggested by members, we're at a point where we need to consider, in light of the interventions that have been received thus far, how the committee would like to proceed in terms of our consideration of this bill. So I'm at the pleasure of the committee.

Mr. Duncan.

[Chief Carolyn Buffalo, Chief of the Montana Cree Nation, Assembly of First Nations]

Thank you, and good morning.

I want to thank the committee for giving me the opportunity to make a presentation today on behalf of the Assembly of First Nations and also on behalf of my own first nation, the Montana Cree Nation, located at Hobbema, Alberta.

I don't know if this is something that's required of me to do, but I just want to make a brief comment. I thought I would just point out very briefly to the committee that I was on the legal team on the Samson and Ermineskin cases, which were heard in the Supreme Court of Canada, and on which there was a ruling on February 13. I just wanted to point that out for your information, although my role in the trial did not extend to the oil and gas part of the case.

The first thing I would like to say on behalf of the Assembly of First Nations is that we believe this bill takes important steps with regard to the sharing of royalties and resource revenues for first nations and also perhaps provides for the employment of first nation workers on projects that are taking place within their traditional territories. The position of the AFN is that these are laudable goals and that this will set an approach for work on related matters in the future.

We also believe that the federal government has taken the right approach in developing this legislation with a thorough process, which was begun over 10 years ago and involved over 130 first nations in dialogue. The bill, as I understand it, was developed jointly with first nation leaders to ensure that the interests of those affected were addressed. The AFN has said repeatedly that this is how federal legislation must be developed. We further note the ongoing responsibility of the minister to consult with affected first nations, set out specifically in proposed section 6 of the bill.

However, having said all of that, the AFN does have a concern about Bill C-5, which we believe can and should be addressed by this committee.

One of the things I also wanted to say to the committee is that in my conversations with other first nations, before I travelled here to Ottawa, I heard that the position of some other first nations was that they would have liked to come here and make presentations to the committee, but that because of the whole process we weren't given a whole lot of time. They still would like to be heard by the committee with respect to their positions on this bill. I just wanted to raise that timing as an issue.

We are also wondering why this legislation is being hurried. At least, that's the way it appears to me and to some other first nations. We're wondering what the rush is. What we would have preferred is that this legislation would have been heard together with the regulations, because as I understand it, we still haven't seen what the regulations pursuant to this legislation will look like. We would have liked the opportunity to review the regulations pursuant to the bill.

I wanted to state that for the record: that there are other first nations that would have liked to come here and make a presentation before this committee.

First of all, with respect to the more technical aspects of the bill, the AFN's position is that where federal legislation purports to speak to the management of the environment or the economy--in this case, oil and gas development and the resulting revenues--it's important to be clear about the relationship between that legislation and any related provincial or territorial laws.

Moreover, as part of fulfilling its responsibility to support self-government by first nations, the federal government must plan for and support the efforts of first nation governments to make laws governing our own communities. This is a very important point for us. The federal role may be to facilitate harmony between first nation and provincial or territorial laws; it cannot be to prevent development by first nations by asserting either its own continuing jurisdiction or importing provincial or territorial jurisdiction into application in first nation communities.

I would direct the attention of the committee to proposed sections in the bill, specifically proposed new sections 4.2 and 4.3, which read in part as follows:

4.2 (1) Regulations made under subsection 4.1(1) — other than regulations made under paragraphs 4.1(1)(a) to (d), (f) to (r), (v) and (w) — may incorporate by reference laws of a province as amended from time to time, with any adaptations that the Governor in Council considers appropriate. (2) Regulations incorporating laws of a province may confer any power or impose any duty that the Governor in Council considers necessary on any provincial official or body, to be exercised or performed on behalf of the federal government in the same circumstances and subject to the same conditions as those governing the exercise of that power or the performance of that duty under the laws of the province. (3) The Minister may enter into an agreement with the government of a province, or with a public body established by the laws of a province, respecting the administration or enforcement on first nation lands of any laws of the province that are incorporated by the regulations, including the exchange of information related to administration and enforcement of those laws. ........... 4.3 Regulations made under this Act prevail over any by-laws or other laws made by a first nation under another Act of Parliament to the extent of any inconsistency between them, unless otherwise provided by regulations made under this Act.

This is a point I have particular issue with.

I would also like to point to clause 2 of the bill, amending former section 6 of the act, by adding the following language, as you know:

(1.1) 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

I'm reading this really carefully because I'm mindful of the time constraints. There is also a proposed new paragraph 6(1.1)(c), the notice provision.

AFN is of the position that this bill would be stronger and would set a better example for other legislation with two small amendments: in the first line of proposed new subsection 6(1.1) by deleting the word “may” and replacing it with the word “shall”; and under proposed new paragraph 6(1.1)(a) by deleting the word “or” and replacing it with the word “and” .

I don't know that it's necessary for me to read what the text would look like with these changes, but the small changes would greatly improve the otherwise fine work done by the first nations and the federal government in crafting this piece of legislation.

That's what the Assembly of First Nations has asked me to present to the committee.

Other first nations to whom I have spoken have said that they believe there could have been more and better consultation than occurred. Some of the first nations have said that the bill was presented to them as a sort of fait accompli before they even had a chance to speak to the issue or say anything about what amendments they would like to see in the legislation. It was instead given to them already drafted, and there was not a lot of opportunity for the first nations to exercise influence over the content of the bill. I know that some of my friends would disagree, but that is the position of some first nations, and I have been asked to relay it to the committee. Despite the fact that we know there was some consultation, and we are appreciative and mindful of that, the position of some first nations is that there could have been more and better consultation done.

Another issue that some have had is that in the existing legislation and regulations the IOGC already has a number of powers and abilities available to it. The question for some of us becomes this: since these powers already exist but aren't being enforced, we wonder how effective this new legislation is going to be, given that there were powers already available to but not exercised by the IOGC.

The other thing is that Bill C-5 doesn't increase first nation control or input into the decision-making process. That's a key element that we say is missing from this bill.

Since this legislation does not address these concerns from the perspective of some first nations, there's no rush to amend the existing act. Therefore we're asking that you take your time and perhaps do more consultation to make this legislation more effective.

[The Chair, Conservative, Bruce Stanton]

Good morning, ladies and gentlemen, members, witnesses and guests. This is the meeting number eight of the Standing Committee on Aboriginal Affairs and Northern Development. On the Orders of the day we have, pursuant to the Order of Reference dated Friday, February 13, 2007, Bill C-5, An Act to amend the Indian Oil and Gas Act.

This morning we have two presentations, members. As the first, we'll lead off with Chief Carolyn Buffalo, chief of the Montana Cree Nation, representing the Assembly of First Nations. Second we'll hear from Mr. Eugene Seymour, the coordinator for the independent lobby to amend the Indian Oil and Gas Act.

From our presenters this morning, we will have presentations of ten minutes. We will do each in succession and then we will go to questions from members.

Chief Buffalo, welcome. Please proceed. You have the floor for ten minutes.

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

I imagine you read the Ermineskin decision rendered by the Supreme Court on February 13. I know it's taken 20 years to settle that case. It concerns gas, oil and the Crown's trustship role that the minister must play.

I would like to know whether the Supreme Court decision of February 13 will have an impact on Bill C-5 or whether that's a thing of the past.

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

Minister, I've carefully studied this bill, which I find interesting.

I find it interesting that the Indian Resource Council, the IRC, still exists, but especially that it mostly consists of aboriginals who know the file.

Can we be sure that will be the case if Bill C-5 comes into force?

Indian Oil and Gas Act

[Joe Comartin, NDP, 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.

[Mario Laframboise, Bloc, 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.

[Todd Russell, Liberal, 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.

[John Duncan, Conservative, 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.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

moved that Bill C-5, An Act to amend the Indian Oil and Gas Act, be read the second time and referred to a committee.

Business of the House

[Jay Hill, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I welcome those questions from the opposition House leader.

In a few moments we will be voting on the second reading stage of Bill C-10, the budget implementation act. Also, the House will approve supplementary estimates (B).

I would like to take this time to thank all members for their cooperation in accelerating the consideration and approval of supplementary estimates (B) including and especially my cabinet colleagues who responded with little notice to invitations from the various committees to study these estimates.

After the votes, we will continue with the debate on Bill C-4, not-for-profit legislation; followed by Bill C-9, transportation of dangerous goods; Bill C-5, Indian oil and gas; Bill C-11, an act to promote safety and security with respect to human pathogens and toxins; and Bill C-3, Arctic waters. All these bills are at second reading.

Next week is a constituency week when the House will be adjourned.

As the House is also aware President Barack Obama will be visiting Canada next week. Since the House will not be sitting, I would like to take this opportunity, on behalf of all members of the House, to welcome the President to Canada. We hope he has a productive and enjoyable visit here in our nation's capital.

When the House returns from the break, we will continue with the list of business I mentioned earlier and in addition to these bills Tuesday, February 24 and Thursday, February 26 will be designated as opposition days.

[Todd Russell, Liberal, Labrador, NL]

Thank you, Mr. Chair.

What you've suggested in terms of moving the briefings up and hoping we'll get to Bill C-5 is fine with us. When you talk about a Statistics Canada presentation, that will have to be broad in terms of aboriginal peoples. I mean, there's an Aboriginal Peoples Survey out there as well, and it would be good to get some feedback on that.

Now, I'm open to it, but if we're talking first nations, we're talking Métis, and we're talking Inuit as well? So that's the gamut?