This bill was last introduced in the 40th Parliament, 2nd Session, which ended in December 2009.
This bill was previously introduced in the 40th Parliament, 1st Session.
Chuck Strahl Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
The House proceeded to the consideration of Bill C-5, An Act to amend the Indian Oil and Gas Act, as reported with amendment from the committee.
The Speaker Peter Milliken
There is one motion in amendment standing on the notice paper for the report stage of Bill C-5.
Motion No. 1 will not be selected by the Chair, because it requires a royal recommendation.
There being no motions at report stage the House will now proceed without debate to the putting of the question on the motion to concur in the bill at report stage.
Gerry Ritz Conservative Battlefords—Lloydminster, SK
moved that the bill, as amended, be concurred in.
(Motion agreed to)
Some hon. members
Agreed.
Gerry Ritz Conservative Battlefords—Lloydminster, SK
moved that the bill be read a third time and passed.
Speaker's RulingIndian Oil and Gas ActGovernment Orders
Vancouver Island North B.C.
Conservative
John Duncan ConservativeParliamentary Secretary to the Minister of Indian Affairs and Northern Development
Mr. Speaker, it is indeed very gratifying to see Bill C-5 advanced to third reading. After nearly a decade of discussions and consultations, we are finally bringing this legislation into the 21st century. In the process, we will be helping to bring much needed prosperity to oil and gas producing first nations.
This long overdue bill is an important step forward in levelling the playing field for resource-rich first nations that face obstacles to achieving their full economic potential. I remind my hon. colleagues that the Indian Oil and Gas Act has remained unchanged for the past 34 years. To say that Bill C-5 is long overdue, is an understatement. That is why I am so proud to be taking part in corrective action with this legislation to set first nations on a better course for the future.
As I pointed out, the last time I spoke on Bill C-5, this is a concrete example of the Conservative government's commitment to ensure that aboriginal Canadians fully share in economic opportunities. It is an important building block that will enable first nations with oil and gas reserves to build stronger, more reliant communities that can better manage their own affairs. The oil and gas sector represents a source of promising economic development opportunities for first nations. The Government of Canada, through its special operating agency Indian Oil and Gas Canada, currently manages over 1,000 oil and gas producing wells and about 150 new wells are drilled on reserves each year.
In 2005-06 over $270 million in oil and gas revenues were collected by the Government of Canada on behalf of first nations. More than $1 billion in revenues from on reserve oil and gas activity has been collected by Indian Oil and Gas Canada on behalf of about 60 first nations over the past five years. That revenue is then passed on, in its entirety, to those first nations communities. This much needed source revenue is being used by these first nations for training, new housing, water and sewer projects, initiatives that are building stronger communities and a brighter future for their children.
Notwithstanding the current economic downturn, industry remains committed to developing partnerships with first nations. The oil and gas sector is continuing to invest hundreds of millions of dollars in exploration and exploitation activities on first nations reserve lands, more than $300 million worth over the last five years alone. While there is great promise, the potential for first nations economic opportunities in the oil and gas sector is dependent upon industry investment.
Private sector interests lament that up until now federal laws governing development activity on reserves have not kept up with industry needs. They also complain that the regulations are unclear in many cases, which can cause delays, additional costs and lost investment opportunities. Industry stakeholders clearly prefer to invest in lands where the regulatory regimes are certain and where communities offer opportunities, not challenges. That is precisely what this bill would provide.
Let me review the many progressive features in Bill C-5 that would ensure first nations lands are every bit as attractive to investors as off reserve lands.
First, the act increases clarity. The amendments clarify both ministerial and judicial oversight powers in high-risk areas such as levying of fines and searches and seizures. Another way that Bill C-5 would clarify would be by harmonizing federal legislation with provincial regimes. This is important because provincial oil and gas laws related to conservation and environmental protection are amended from time to time. If the federal regime does not stay abreast of these changes, it puts first nations seeking investment at a clear disadvantage.
The incorporation by reference of these amendments would ensure the federal regime would keep pace. More to the point, it would eliminate disparities between on and off-reserve lands. Again, this would provide greater certainty for potential investors and facilitate economic development. All of this would be done while, in all circumstances, fully maintaining the federal government's fiduciary responsibilities to first nations.
The second major advantage of Bill C-5 is that it would improve Canada's ability to regulate oil and gas activities on reserve land. Bill C-5 would give the minister, through Indian Oil and Gas Canada, greater authority to audit operators and collect royalties owed to first nations. Once developed, new regulations will establish a clear set of rules to prevent companies from using certain transactions with subsidiaries or related parties to unduly reduce royalties payable to first nations.
Furthermore, the minister would have a 10-year limitation period to commence legal actions to collect unpaid royalties and other amounts owing. This is especially important. There would be no limitation period in cases of fraud or misrepresentation. Without this provision, provincial standards would apply and in some cases the limitation period would be as low as two years. This added protection would ensure that first nations were paid what they were rightfully due.
The final major area of improvement made possible by Bill C-5 concerns environmental protection and ensuring that first nation sites of cultural, spiritual or historical significance will be protected from potentially adverse effects of oil and gas activities. Because the federal regime would be harmonized with provincial environmental protection laws, new enforcement actions to protect the environment from oil and gas activities would be identical to the ones currently available to the province off reserve.
The minister would also be provided new powers to suspend operations if first nation sites of cultural, spiritual or historical significance were discovered or threatened by the oil and gas activities. Oil and gas activities would only be permitted to resume when the minister would be confident that the risk of harm would no longer exist. In addition, the regulations could require first nation concurrence before these operations are resumed.
Another important change in this legislation responds directly to the priorities of first nations. The concern was raised repeatedly that the on-reserve regime did not keep pace with the off-reserve regime. To address this need, the amendments would expand the authority of the governor in council to make regulations and to facilitate regular improvements to them. In fact, the approach taken by Bill C-5 would guarantee continuous changes and improvements to ensure that the federal oil and gas regime would remain current.
Under the act, regulations would be monitored, examined and, when required, amended on a never-ending basis. This means that first nations would never again have to wait for 30 or 35 years before amendments to modernize the act could be implemented.
This is another aspect following on the act in which first nations will play a crucial role. We will continue to work together with oil and gas first nations and their advocate, the Indian Resource Council, during the development of the regulations, just as we did during the development of this act.
I remind the House that before developing the bill, extensive consultations were carried out with first nations with oil and gas interests. Since 2003, Indian Oil and Gas Canada has held one-on-one sessions with over 85% of the oil and gas-producing first nations.
My hon. colleagues can rest assured that passage of this legislation is not the end, but merely a continuation of an ongoing consultation process with first nations. That is not rhetoric. That is a promise.
During the minister's appearance before committee, he mentioned a letter of comfort which he sent to the Indian Resource Council last year. I should explain that the Indian Resource Council is a national aboriginal organization that advocates on behalf of some 130 first nations with oil and gas production or the potential for production.
In writing, the minister outlined Canada's commitment to modernize the on-reserve oil and gas regime. He also committed to continue our partnership with the Indian Resource Council during the development of the regulations. Of concern to many, the minister reassured oil and gas first nations that there was nothing in Bill C-5 that affected first nations' jurisdiction over their resources. Nor did the act extend the jurisdiction of the provinces to those lands or resources.
The minister reiterated that it was the Government of Canada and not provincial authorities that would be responsible for managing first nation lands and resources. The letter of comfort also addressed first nation concerns related to value-added opportunities. For example, the minister pledged to establish first nation energy business centres of excellence in Alberta and in Saskatchewan.
Furthermore, the minister committed to identifying opportunities for greater first nations input and involvement in the decision-making processes at Indian Oil and Gas Canada on issues that directly affected them. As well, he signalled his willingness to explore options for greater first nations control over the management of their oil and gas resources. Of great interest to us as legislators, the minister promised to establish a continuous change or improvement process.
These assurances reinforce our government's determination to ensure first nations share equally in our country's prosperity. Members of government believe profoundly that first nations citizens must participate fully in all that Canada has to offer and be given the tools to achieve greater economic self-reliance and an ever-increasing quality of life. Bill C-5 would help to advance these goals by providing modern legislation, competitive regulations and sound practices that would create the conditions for economic success and social progress.
These goals are shared by all members of the House. The key to unleashing this potential lies in passing this modernized legislative framework into law. By endorsing Bill C-5, we will be confirming, once again, that collaboration and partnership between the federal government, the private sector and aboriginal people can lead to a better future. Indeed, it will help build a better country for us all.
I call on all parties to lend their support and ensure the speedy passage of this necessary and overdue legislation.
The House resumed consideration of the motion that Bill C-5, An Act to amend the Indian Oil and Gas Act, be read the third time and passed.
Linda Duncan NDP Edmonton Strathcona, AB
Madam Speaker, I commend the government for bringing forward this act. It is long overdue. I come from a jurisdiction where oil and gas is a huge part of the income for the province. One of the big vacuums has been the proper regulation of oil and gas activity on first nation lands. I commend the government for finally coming forward with a more modernized system.
I raised this question in the briefing the government provided, which I appreciated. When will the regulations come forward? In addition to the consultation with the first nations, which is appropriate and constitutionally required, will the government also consult with additional concerned people, including people living adjacent to the first nation communities who could potentially be impacted by either air emissions or contamination of water from the oil and gas activity? Will they also be consulted in the development of the regulations?
John Duncan Conservative Vancouver Island North, BC
Madam Speaker, I know that the regulatory process is going to involve a lot of consultation between the government and the Indian Resource Council. Producing first nations are very much a part of this exercise and I would assume that they are good neighbours.
I would assume that the fact that we are incorporating so much provincial legislation by reference would mean that the standard that would be applied would be very similar to what is currently applied, and that the level of consultation and advice is what is acceptable in the neighbourhood.
Bruce Stanton Conservative Simcoe North, ON
Madam Speaker, I thank the parliamentary secretary for his comments here this afternoon.
One of the topics that he touched on, and that I would ask that he expand on a bit, is the whole notion that the modernization of the act, in respect to this bill, would in fact ensure that the fiduciary relationship that is enjoyed between the Government of Canada and first nations is upheld; and second, that this bill would not in any way inhibit or change the important treaty and aboriginal rights that exist currently. I wonder if he could comment further on those two points.
John Duncan Conservative Vancouver Island North, BC
Madam Speaker, I appreciate the question from the chair of the aboriginal affairs committee, which has been seized with getting this bill through the House.
Indian Oil and Gas Canada is responsible for managing and administering exploration and development on first nations lands. They are carried out under the direction and with the approval of first nations band councils. They are mandated to fulfill the Crown's fiduciary and statutory obligations.
Regarding the issue of Canada's fiduciary obligations, the federal government has committed that the fiduciary relationship will not diminish and will continue unchanged. In fact, the proposed changes actually strengthen Canada's ability to express its fiduciary obligations because of the clarity in the bill in terms of specific legislative and regulatory capacity, so that will allow us to fulfill our role much more efficiently.
The aboriginal and treaty rights of first nations are clearly unaffected by the provisions of the bill. They remain the same.
Paul Szabo Liberal Mississauga South, ON
Madam Speaker, the bill provides that the minister may make regulations, and there are some 25 or 26 different areas under which regulations are referred to, so I am sure that they are going to be there.
There are some provisos whereby if there are any inconsistencies between federal and provincial regulations, the federal regulations will prevail as they relate to any other acts which are incorporated by reference in the regulations.
I wanted to ask the member if he could give the House an estimate of the time it is going to take before such regulations are going to be able to be put together because it appears from the breadth of what is happening right across the country, and with different regulations for different provinces, that this may be a very onerous task and may raise some interesting questions.
I would also ask whether or not there has been any thought given to having any of these regulations presented for comment to the appropriate standing committee?
John Duncan Conservative Vancouver Island North, BC
Madam Speaker, at this point the committee has not been seized by that question. That could be a question that the committee might want to deal with.
The area in which Bill C-5 provides incorporation by reference of provincial legislation is actually quite limited, but it is that limited ability which allows us to incorporate many very thick provincial pieces of legislation, very meaty stuff. Those areas are determining the quantity or quality of oil or gas recovered, combining oil or gas rates for joint exploitation, abandonment of wells, establishment of administrative fees for services provided, environmental protection from the effects of oil and gas exploration, oil and gas conservation, and equitable production.
Even though it looks like it is a huge task, I think most of this has already been pre-contemplated. There has been a technical committee working on this through Indian Oil and Gas Canada. I do not think this should be a long time coming.
Todd Russell Liberal Labrador, NL
Madam Speaker, it is a pleasure to be here today to debate Bill C-5 at third reading.
The Liberal Party has supported this particular bill and made efforts to improve it where it saw a need for improvement. Not all of them have been accepted either by the committee or the House, with the ruling by the Speaker that a particular motion relating to the fiduciary duty of the minister and the government was not accepted.
Bill C-5 has been a long time coming, as many in the House have already said. The bill was officially introduced in 1974 and has remained substantially unchanged and unamended since that particular time. Efforts have been made in the past. There have been many discussions and consultations, and certainly many hours, days and weeks of work have taken place to get us where we are today.
In fact, this is the third time the bill has been introduced in as many sessions of Parliament and only now have we reached the third reading stage. Of course, there was a prorogation of the House, which everybody is aware of, last fall.
We all have to ask ourselves a question when it comes to pieces of legislation. Has there been adequate consultation? That is not a question that I can answer. It is only a question that can be answered by the first nations people, who are directly affected. In many regards, they have satisfied the committee that in fact extensive consultations have taken place.
There are, obviously, some organizations and first nations communities which have expressed some difficulty at committee around the specifics of this particular bill. In particular, the Stoney Nakoda First Nations out of Alberta has expressed a number of concerns with the bill around the fiduciary duty of the federal government, as to whether it would be changed or altered. It has also expressed certain concerns about the lack of control and jurisdiction of first nations over their own lands and the management of them.
That being said, it is important we understand that those concerns were noted prior to the development of the bill. Some have questioned whether these types of issues should have been raised in committee because the Stoney Nakoda, for instance, was already part of the consultations that took place with the Indian Resource Council of Canada, but that is the way our legislative process works. First nations have the ability to take advantage of whatever stage of the legislation to make their views known and I acknowledge that.
The bill came to the House as a result of the consultations between the Indian Resource Council of Canada, which represents 130 oil and gas producing first nations or those who have the potential to produce oil and gas, and the Government of Canada, primarily through Indian Oil and Gas Canada.
There is a need, of course, for this particular bill. It fills a regulatory gap and modernizes the Indian Oil and Gas Act. The Parliamentary Secretary to the Minister of Indian Affairs and Northern Development has already outlined some of those substantive changes.
I would like to review in broad terms some of the aspects of the clauses of this bill that deal with royalties and regulation making. There is an increase in the powers of the minister, but there is also a specific duty on the minister to consult with first nations in carrying out his powers and responsibilities. There are improvements to the inspection, audit and examination powers of the minister and Indian Oil and Gas Canada representing the minister. There are changes regarding search and seizure, delegation authorities, offences and punishment, as well as administrative monetary penalties.
One of the major discussions that took place in committee concerned the incorporation of provincial regulations. Basically, they would become federal regulations for the purposes of managing first nations lands that have oil and gas or the potential of oil and gas.
Some have argued that the government has to ensure that the rights and interests of first nations are not infringed upon by the incorporation of those provincial laws. People want to ensure that by incorporating these particular laws the fiduciary obligation is not diminished. Also raised was the issue that because this particular bill allows the government to incorporate provincial regulations and because it is a regulation-making bill, how do we really know what is going on. There was an amendment made to this bill at committee that would require the government to report to Parliament. Proposed section 28.1 reads:
At least every two years after the coming into force of the present section, the Minister shall prepare a report on the administration of this Act during the two preceding years and shall table a copy of the report in each House of Parliament within the first fifteen days that it is sitting after the completion of the report, which shall include a summary addressing the following matters:
(a) the progress of the consultations mentioned in paragraph 6(1.1)(a) and a list of concerns raised during such consultations;
(b) any proposed regulation to be made under subsection 6(1.1); and
(c) any regulations made under this Act and describe any variations in the regulations from province to province.
It is quite an in-depth report on responsibility that was not originally in Bill C-5 that is there now as it has been reprinted.
It is important from our perspective that this bill pass in Parliament. It would provide some balance, some consistency between what will happen off reserve and what will happen on reserve as first nations develop their own lands where there is oil and gas or the potential for oil and gas. Some will argue that there will not be consistency right across the country because it will vary province to province.
My party is in favour of this piece of legislation. We have done our best to see it through its various legislative stages in a timely fashion.
Our party has supported in the past, it supports today and it will support in the future the right of first nations, aboriginal peoples generally, to develop their own lands and their own resources. We will support the inherent right of first nations to make decisions for themselves and for their people.
While this bill does not go all the way, it certainly goes part of the way to fulfilling those goals and aspirations.
John Duncan ConservativeParliamentary Secretary to the Minister of Indian Affairs and Northern Development
Madam Speaker, I was asked a question about the regulations going forward from here. It has been pointed out to me that the regulations will come into effect in 2010, assuming that the bill is adopted.
There has been considerable consultation. Specifically referring to the speech by the member for Labrador, it is worthwhile to point out that since consultations started on the bill in 1999, 10 years ago, on Indian oil and gas, the committee has heard testimony during 40 technical committee meetings on various amendments proposed to the bill. There have been 22 Indian Oil and Gas Canada co-management board meetings at which there has been further discussion on the bill. There have been numerous other opportunities and engagements since then at the Indian Resource Council annual meetings, tribal council meetings and symposia where the bill was discussed.
We have a consensus document from 130 first nations. I think everyone should be quite cognizant of the fact that there can always be more discussion, but in order to reap the benefits of the legislation, it is time to move on.
I would ask my colleague from Labrador if he does not subscribe to that same point of view at this point. Ten years of consultations and the amount of dialogue that has gone on regarding the bill, really we are at the point where we need to move forward.
Todd Russell Liberal Labrador, NL
Madam Speaker, there is no doubt there have been extensive discussions. There have been tens, if not hundreds, of meetings relative to this particular bill or the Indian Oil and Gas Act generally.
The parliamentary secretary is probably right that we can sometimes disagree on the level of consultations or what constitutes consultations.
However, I believe that we would not be here today discussing Bill C-5 at third reading if generally all of the stakeholders did not agree that we had arrived at a point where adequate talks and consultations had taken place.
It is my sense that while there is give and take in any type of consultation and negotiation, we have arrived at a bill which parties can accept. We heard in committee, for instance, that Indian Oil and Gas Canada might have sought various changes or various things to be added in or taken out. The Indian Resource Council of Canada has also testified that it may have looked for stronger language in certain areas or for a clause to be put in or a clause to be taken out. However, both parties have indicated that there was compromise.
We, in the Liberal Party, are satisfied that it is a compromise bill. It is not perfect, but it will achieve certain objectives, such as facilitating the development of oil and gas on reserve, giving first nations a hand up, and providing more clarity regarding the regulatory regime.
We will be supporting the bill as we have throughout the legislative process thus far.
Linda Duncan NDP Edmonton Strathcona, AB
Madam Speaker, our party is supporting the bill. Obviously the bill has gone through a lot of consultation which is the most important thing. On the consultation and accommodation of the first nation input, it seems that there was a lot of effort in that regard.
Perhaps the member could clarify something for me. A bill was just tabled in the House supposedly updating the penalties for most of the federal environmental statutes. It imposes a maximum $6 million fine for corporate offenders, yet in this bill the maximum penalty is $100,000.
Could the member clarify why when it comes to Indian lands the penalties are much lower?
Todd Russell Liberal Labrador, NL
Madam Speaker, that is a very interesting question. It is one on which I cannot provide a direct answer. It is something I would not mind discussing with the member and also seek clarity from the Government of Canada on that particular point.
Bruce Stanton Conservative Simcoe North, ON
Madam Speaker, I thank the member opposite for his comments and his and his party's support for this important bill.
The member will know through the course of our discussions in committee that one of the features that was discussed about Bill C-5 was the notion that this bill in fact builds a foundation for a continuous improvement regarding the needs that first nations communities would have going forward, knowing that the landscape in the energy business is going to change in the future. This bill would, at the very least, enable a building of a foundation for that going forward.
I wonder if he could comment on the extent to which he believes this bill gives us that ability.
Todd Russell Liberal Labrador, NL
Madam Speaker, this bill does accommodate that particular scenario. I believe that witnesses at committee and those who were involved in the consultations on and the drafting of this piece of legislation understood that conditions could change and could change rapidly, as with the current economic conditions in which we find our country and the world.
The government has committed, and we can only hope that the government will honour its commitment, to a process of ongoing change so that we will not get caught in a legislative time warp where there is something that was established 20 or 30 years ago, but we are dealing with a much more current set of circumstances. This is a positive development. It speaks to the duty of the minister to consult with first nations and Indian bands as we go forward.
There was a letter of comfort provided. Some people think that letters of comfort are not as strong as something that can be written in legislation, but at least there is something on the record that talks about the minister's commitment to engage in an ongoing process of evolving regulations and, where possible, maybe even legislation to adapt to the changes to first nations and the oil and gas producing first nations.
Paul Szabo Liberal Mississauga South, ON
Madam Speaker, one of the regulations that the minister may make has to do with the hiring of residents on the first nations lands. There is a qualification in the direction that indicates “to the extent that it is practicable and reasonably efficient, safe and economical to do so” that they would be hired.
Can the member advise whether or not this is a significant issue with regard to employing first nations people on the reserve lands which are adjacent to the properties for development of oil and gas?
Todd Russell Liberal Labrador, NL
Madam Speaker, it is an important clause to have in the bill because it directs companies to hire first nations people who are qualified and best able to meet the standards of the industry. There is an understanding within first nations themselves that there are capacity issues and that there are issues around education.
I believe it is incumbent upon the government to make sure that first nations have the resources to ensure that the people are educated and trained. Obviously we deal with issues of poverty. This raises a very good point. It is simple to put something in the bill and say that is what we are going to do, but there are always extenuating circumstances and an environment which must also be improved in order for us to meet that particular goal.
The Acting Speaker Denise Savoie
Before the resumption of debate, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Madawaska—Restigouche, Agriculture and Agri-food; the hon. member for Brossard—La Prairie, Forestry Industry.
The hon. member for Gatineau has the floor to resume debate.
Richard Nadeau Bloc Gatineau, QC
Madam Speaker, I would like to say right away that the Bloc Québécois is in favour of Bill C-5, An Act to amend the Indian Oil and Gas Act.
Although imperfect, the bill will provide the tools needed to harmonize the laws and regulations on reserve lands with those that apply in the provinces in which the reserves are located. During study in committee, the Bloc Québécois asked for further clarification of the terms and conditions surrounding the authorization to issue replacement leases for lands added to reserves and subsequently of the permits granted by the federal government for oil and gas exploration or exploitation.
As a result of the work done in committee, the Bloc Québécois does not think that the bill needs any amendments. In addition, the bill is the result of a consultation procedure the government conducted through Indian Oil and Gas Canada and with the cooperation of the Indian Resource Council, which consulted most of the oil and gas producing first nations as well as 130 band councils in 2002 and 2003.
This bill is the product, therefore, of a consensus of the 130 members of the Indian Resource Council and any amendments to it would require another period of consultations.
That being said, the Government of Canada should not use Bill C-5 to avoid its fiduciary responsibility for first nations. It is incumbent upon the government to correct the inequalities between aboriginals and non-aboriginals.
To be sure we are talking about the right thing, I will provide a summary of the bill.
The bill amends the Indian Oil and Gas Act to clarify and expand the existing regulation-making powers and to add new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands and the determination and payment of oil and gas royalties. It also puts in place sanctions for contraventions of the act as well as provisions for its enforcement.
In order for us to fully grasp the scope of the bill and the need for it, I would like to provide a bit of the historical background that brought us to this point.
For more than 20 years, studies and discussions have been going on to establish a new financial relationship between the first nations and the Government of Canada.
Already in 1983, the report of the House of Commons’ Special Committee on Indian Self-Government, the Penner report, recommended that the fiscal relationship between the Government of Canada and the first nations should be redefined.
In 1996, the final report of the Royal Commission on Aboriginal Peoples, which was also known as the Erasmus-Dussault Commission, as you will recall, also recommended a full review of the fiscal relationship between the federal government and the first nations. The proposed initiative focused on redefining this relationship within a broader context based on first nations self-government. The Tlicho self-government act is an example of this.
The First Nations Oil and Gas and Moneys Management Act, which came into effect on April 1, 2006, just over three years ago now, was one of the first steps in this new fiscal relationship between the first nations and the federal government.
This optional law contains two new provisions: the first makes it possible for first nations to manage and regulate oil and gas activities on reserves; the second, to manage funds held in trust for them by Canada.
A first nation can choose either option. In other words, it need not own oil or gas to become responsible for managing these monies.
This legislation will change the way oil and gas are developed, and it will allow first nations able to do so to develop these resources on their own land. Previously, first nations had to comply with the Indian Oil and Gas Act and its regulations, which did not allow them to manage these resources directly.
The First Nations Oil and Gas and Moneys Management Act allows first nations that choose to do so to be excluded from the application of the Indian Oil and Gas Act and its regulations.
That act, the Indian Oil and Gas Act, is the legislation governing exploration and exploitation of oil and gas resources on reserve land. This legislation does not allow first nations to manage the oil and gas resources on their land directly, nor does it allow them to develop an appropriate regulatory framework.
As I said, the First Nations Oil and Gas and Moneys Management Act is a very important legislative measure. Since 2006, it has allowed first nations, if they so choose, to create regulations concerning oil and gas exploration and conservation, on the spending of moneys derived from the exploitation of these resources, and on the protection of the environment.
As for regulations to protect the environment, those established by first nations will have to at least meet the standards of Quebec or the province in which the aboriginal community is located.
In terms of managing their finances, those first nations choosing to come under this new legislative framework will be subject to different regulations regarding “Indian moneys”. This is currently defined in the Indian Act as all moneys collected, received or held by Her Majesty for the use and benefit of Indians or bands.
For these first nations, the provisions of the Indian Act will no longer apply. They will therefore be able to manage the amounts collected directly, rather than letting them be managed by the federal government. As a result, they will be able to make their own choices for investment in their communities instead of letting the Department of Indian Affairs and Northern Development dictate priorities to them. Auditor General Sheila Fraser pointed out in her 2004 report that this department is not doing a good job of administering the billions of dollars intended for the aboriginal communities.
If a first nation does not feel it would be advantageous to come under the new legislative regime, the current standards will continue to apply to it, so it will continue to benefit from the provisions of the Indian Act, including those that apply to the administration of Indian moneys.
Bill C-5 , which is incidentally identical to Bill C-63 and Bill C-5 , which died on the order paper June 17, 2008, and December 3, 2008, respectively, amends the Indian Oil and Gas Act. It is important to point out that oil is defined in the act as “a mixture of hydrocarbons that can be recovered from a well in liquid form, with the exception of condensate”.
At present, the First Nations that have oil and gas resources but do not manage them under the 2006 act must leave the management of those resources to Indian Oil and Gas Canada (IOGC), a government agency which reports to the Department of Indian and Northern Affairs.
IOGC is mandated to manage and administer the exploration and exploitation of oil and natural gas resources on Indian reserve land. IOGC promotes their development and ensures that royalties are appropriately paid to the first nations. However the Indian Oil and Gas Act has not been amended since it was passed in 1974. It is true that the Indian Oil and Gas Regulations of 1995 have been passed, but those regulations are inadequate to deal with the evolution of the market since 1974.
Faced with an increasingly complex industry, the provinces have constantly modernized their oil and gas legislation. That is why the federal government is today deciding to modernize the act, so as to bring it more in line with reality and the various legislative enactments of the provinces.
This bill will apply to reserves that were not granted rights under the First Nations Oil and Gas and Moneys Management Act. Hence it will apply to the first nations that are subject to the Indian Oil and Gas Act. Some 200 first nations produce or could produce oil and gas. At this time over 80% of this type of activity takes place, as one might guess, in Alberta. In 2005-06, over $270 million in oil and gas revenue was collected by IOGC on behalf of about 60 first nations that are signatories of development agreements in effect.
The purpose of the bill is to level the playing field between these industries’ on-reserve and off-reserve activities with the support of provincial legislation, in order to: reduce barriers to the economic development of the first nations; guarantee environmental protection on the reserves, something that is extremely important; and allow the government to better fulfill its industry management obligations to first nations through regulatory compliance and through the collection of royalties and other forms of applicable compensation.
Under the Indian Act, oil and gas revenues are collected by the federal government for subsequent full redistribution to the peoples concerned. These revenues are defined in the act as “Indian moneys”, and from them flows the federal government’s responsibility as trustee.
This bill does not have the effect of transferring the federal government’s power of management and administration of the exploration and production of oil and gas resources on first nations reserve land. Its purpose is to update the Indian Oil and Gas Act and to harmonize the federal act with legislation in the provinces where first nations communities are located.
This incorporation of provincial laws and regulations will in no way either detract from or add to provincial jurisdiction, as for example with the harmonization of reserve environmental plans with provincial requirements.
The bill replaces almost all of the provisions of the existing six-section Indian Oil and Gas Act and includes a number of matters that are currently provided for in the Indian Oil and Gas Regulations, 1995.
Bill C-5 expands the Governor in Council's existing regulation-making powers and adds new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands. The bill also makes changes in respect of the limitation period for actions to collect amounts owing and the determination of royalty payments.
It puts in place sanctions for contraventions of the act as well as provisions for its enforcement comprising fines and penalties, a remedy for trespass, environmental protection clauses and authority to issue replacement leases for lands added to reserves.
It would be interesting to have more information about lands added to reserves and to know what measures are being put forward in negotiations with the provinces. For example, what is meant by expanding the Governor in Council's regulation-making powers and how will the provinces be consulted before regulations are introduced? Even though the bill states that these lands have been absolutely surrendered under the Indian Act or the First Nations Land Management Act, it would be interesting to get some clarification about the negotiation process with the provinces and obtaining a permit on these added lands.
The bill also requires the minister to undertake ongoing consultations with the first nations involved with respect to negotiations with industry. The new section 6(1.1) states that: The Governor in Council may, by regulation:
(a) require that a power of the Minister under this Act in relation to first nation lands be exercised only if prior approval of the council of the first nation is obtained, if the council is first consulted or if prior notice is given to the council, as the case may be;
(b) require that any such power of the Minister be exercised only if prior consent is given by any first nation member who is in lawful possession of the first nation lands; and
(c) require that notice be given to the council of the first nation after the Minister exercises any such power.
As far as consultations prior to introduction of the bill are concerned, we need to know that through Indian Oil and Gas Canada, and in cooperation with the Indian Resource Council, the government consulted most oil-producing first nations and 130 band councils in 2002 and 2003.
The Indian Resource Council was founded in 1987 to represent first nations' collective oil and gas interests with both government and industry. More than 130 first nations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and the Northwest Territories are members. Six non-producing first nations in Quebec are also members: the Odanak Abenakis; the Natashquan Innus; the Kanesatake Mohawks; the Gesgapegiag Micmacs; the Kahnawake Mohawks; and the Wôlinak Abenakis.
Some Indian Resource Council members are dissatisfied with certain aspects of the bill, but on the whole, the council is happy with the bill and the consultations that took place.
Our position—
The Acting Speaker Denise Savoie
I am sorry to have to interrupt the hon. member, but his time has expired.
Are there any questions or comments?
Resuming debate.
The hon. member for Nanaimo—Cowichan has the floor.
Jean Crowder NDP Nanaimo—Cowichan, BC
Madam Speaker, I am pleased to speak to this legislation before the House today.
I want to give some context around the bill. One of the reasons this bill has come before the House is the fact that the original act has had little change since 1974. We know that, in many cases, the provincial legislation has changed but the federal legislation has simply failed to keep pace.
As other members have pointed out, when changes to the Indian Oil and Gas Act were contemplated, consultations were held with the first nations players who were involved in the oil and gas sector. One of the things we the committee heard was that most of the first nations that were involved did support the process but that there were a couple of first nations that raised significant concerns. In my speech today, I will touch on some of those concerns.
What we learned about the consultation process was that although it was inclusive in terms of providing information, taking it out to tribal councils and getting feedback, one of the challenges with the consultation process was that the scope of the bill was limited to begin with, which prevented some of the changes that some of the first nations were proposing.
Despite those shortcomings, the NDP is supporting the bill because it is a good first step in amending the legislation. I am hopeful that some of the concerns that were raised by some of the first nations do get taken into consideration, both in the regulatory process and perhaps in some further amendments to the bill down the road.
I will now touch on some of the concerns. One of the concerns raised by the Stoney Nakoda Nation was around the regulations. What we see in this legislation is that most of what will be dealt will actually be dealt with in the regulatory process. Although there is a process around developing regulations, gazetting regulations and getting input, it does not require the oversight of this House or of a committee.
Some concerns have been raised about that. I want to quote from the Stoney Nakoda response around the regulation because these words say it far better than I could. The Stoney Nakoda state:
In a comparison of Bill C-5 to either of the federal government's Canada Petroleum Resources Act or Alberta's Mines and Minerals Act one will immediately notice that Bill C-5 has left for the discretion of the Governor in Council the ability to prescribe by Regulation many of the specific rights and powers that are specifically provided for with the aforementioned legislation. While a specific example is the right to cancel a lease, which is found at section 105 of the Canada Petroleum Resources Act or at section 45 of the Mines and Minerals Act, other examples include the right to take royalties in kind, the sale of the royalty interest, continuations of leases, etc. All of these are enumerated rights or powers within other legislative schemes while in Bill C-5 these are discretionary matters.
It goes on to state:
Additional powers that are typically within the body of the Act and not just matters to be dealt with by Regulations include the power of the Minister to assess, reassess and recalculate royalties that are due from the lessor; appeal provisions, etc. While Bill C-5 has numerous provisions respecting fines and penalties, these basic, yet critical powers have been left to be dealt with by the Regulations.
That is a fairly serious concern that has been raised because for non-first nations, we have a complex, detailed act that outlines many of the things that are being left to the regulatory process for first nations. I wonder why we would say that non-first nation Canadians will have legislation that is comprehensive and has the oversight of the House versus first nations that must deal with the regulatory process.
In light of the concerns raised by the Stoney Nakoda and others, the NDP proposed an amendment that was accepted by the committee and subsequently put into the bill. It called for more oversight. I will not read the whole amendment that was accepted but it states in part, “...prepare a report on the administration of this Act during the two preceding years and shall table a copy of the report in each House of Parliament within the first fifteen days...”. It goes on to outline a couple of other things.
We felt strongly about the fact that there was not an ability to include many of the proposals that the Stoney Nakoda and others were making in the legislation and, because of the very narrow scope of the bill, that it was important that the House have oversight. With that amendment, it will allow us to take a closer look at how the act is being implemented and how regulations are being developed.
The Stoney Nakoda Nation raised a number of issues but I will only speak to two of them. It raised the issue around the obligations of having a body that has two responsibilities. It states:
The regulator acts in a quasi-judicial role and adjudicates and regulates the relationship between the various stakeholders. Since Bill C-5 does not clearly distinguish between these two roles, Canada's obligation to First Nations are effectively reduced.
In Alberta, the Department of Energy administers and manages Alberta's oil and gas interests through the Mines and Minerals Act while the Energy Resources Conservation Board adjudicates and regulates the development of the resources through the provisions of the Oil and Gas Conservation Act. Similarly, Canada's own northern and offshore oil and gas resources are administered and managed under the Canada Petroleum Resources Act while the National Energy Board adjudicates and regulates the development of the resources through the Canada Oil and Gas Operations Act.
We can see in two separate levels of government that are separate bodies that have different goals and responsibilities. Bill C-5 does not address that for first nations. Again we wonder why non-first nations would have this function that is taken apart so that there is not any conflict of interest. This was simply outside the scope of the bill that was presented to us, so we were not able to amend it to include those aspects that the Stoney Nakoda raised.
Another very troubling issue was raised when the committee was hearing testimony but because it was outside of the scope of the bill we could not propose amendments.
In an article back in February, entitled “Trust policy hurts reserves”, it directly goes to the heart of the ability of a first nation to manage its own funds, to invest in economic development and to address some of the poverty issues that face many first nations communities. This court ruling that came out highlighted some of the challenges facing first nations when it comes to the management of their own funds. This article states:
Twenty years ago, the Ermineskin and Samson First Nations in Alberta began the most costly legal battle in Canadian history and now it has come to a crashing end.
They went all the way to the Supreme Court and in the end, the court sided with the government. The case, which cost the bands legal fees in excess of $100 million, was launched more than 20 years ago over the federal government's mishandling of their trust funds. The two bands alleged they had lost close to $2 billion in investment revenue because the Department of Indian Affairs had held the money in trust without any investment.
Later on in the article it states:
The money placed in trust earned Bank of Canada savings interest rate, which averaged around three to six per cent. The Government of Canada then used the money as a part of its consolidated revenue fund. Indian monies became a cheap source of revenue for Canadian governments.
But in the end, the Supreme Court sided with the government. They stated the Department of Indian Affairs had followed the Indian Act. Unfortunately the court made the decision because the Indian Act is the only piece of legislation the department has to follow when handling First Nations funds.
This issue did come before the committee. It was raised by the Stoney Nakoda and by the Montana First Nations. It is a very serious issue but, again, it was outside the scope of the bill to actually deal with that. The problem we are facing is that the federal government has a fiduciary responsibility. What happened in this case is that the government managed these royalties on behalf of first nations communities.
In the case that we are talking about, although the investments are significantly different now, we knew at the time that the federal government was investing the money at significantly higher rates of return. It paid the first nations the minimum amount it was required to and then invested the rest of the money and made far more money. The federal government benefited from the first nations royalty money, which simply unacceptable.
Although some of the responses were that first nations had an opportunity under other legislation to take over management of it, the fact was that the government had a responsibility to those communities to share that money in a much more reasonable way. Although the Supreme Court had to side with the government simply because of the Indian Act, it does not make it morally right, fair or just.
I am hopeful, because the light has now been shone on this kind of practice, we will see some changes that ensure first nations directly benefit from the resources on their own lands.
The NDP will be supporting the legislation and monitoring very closely, through the amendment proposed by the NDP, which was accepted.
John Duncan ConservativeParliamentary Secretary to the Minister of Indian Affairs and Northern Development
Madam Speaker, I listened to the member's speech with great interest.
There was a fair amount of comment on the case that went to the Supreme Court. I point out that its final decision was important from the standpoint that not only did it not find fault with the government, but in a seven to zero decision, the court said that the government had no authority to invest the money in the way it was contemplated by the legal suit.
Indeed, we are trying to modernize this whole regime so first nations can have full benefit of their oil and gas resources. That is why the we wanted to get the legislation through. That is why we have the First Nations Oil and Gas and Moneys Management Act, which will allow first nations to manage their own moneys as well, if they so chose to do that. This has been rather well thought out and we see major progress.
I also add that we have this continuous change process to which this bill commits us.
Does the member agree that the accumulation of various measures represents major progress and addresses the concerns she has expressed in her comments?
Jean Crowder NDP Nanaimo—Cowichan, BC
Madam Speaker, the parliamentary secretary is absolutely right. It was a seven to zero Supreme Court decision. However, the issue is a deeply flawed Indian Act.
He is quite right. Even if the Supreme Court had wanted to rule in favour, it would have been bound by legislation, which I would argue is out of date, in fact, ancient.
If we were to contemplate amending or doing away with the Indian Act, I referred earlier to the consultation process. There were certainly some benefits in the current consultation process, but the trick always is the kind of a mandate the federal government provides to first nations to operate within that consultation process.
In this legislation we could not address the issues that were raised around the court case simply because the scope of the bill was far too limited. The Stoney Nakoda pointed out the fact that although the two nations lost their Supreme Court cases, there were a number of other court cases around the mishandling of royalties.
This is an opportunity for the government to examine that part of the Indian Act and make changes to it, which would benefit the first nations communities. The government benefits from those resources.
Jim Maloway NDP Elmwood—Transcona, MB
Madam Speaker, does the member have any thoughts or comments as to why it has taken so long for the bill to get to this point?
Jean Crowder NDP Nanaimo—Cowichan, BC
Madam Speaker, that is a very good point. When we deal with first nations, Métis and Inuit, we often see the wheels of government grind exceedingly slow. I just read a report by the Auditor General on treaty land entitlement. She talks about the fact that first nations in Saskatchewan and Manitoba often wait up to a decade to get access to land to which they are entitled.
Since 1974, this legislation has not had the kinds of changes that are required, given what has changed in provincial legislation. As well, the scope of the bill is very narrow. More changes are required, but we had to deal with the particular mandate with which we were faced.
Some hon. members
Question.
The Acting Speaker Denise Savoie
The question is on the motion. Is it the pleasure of the House to adopt the motion?
Some hon. members
Agreed.
Gordon O'Connor Conservative Carleton—Mississippi Mills, ON
Madam Speaker, I rise on a point of order. I ask that you see the clock at 5:30 p.m.
Some hon. members
Agreed.
The Acting Speaker Denise Savoie
It being 5:30 p.m., the House will now proceed to the consideration of private member's bill as listed on today's order paper.