Thank you very much.
Perhaps I will start by introducing the officials with me today. Sara Filbee is the assistant deputy minister of lands and economic development at Indian and Northern Affairs Canada. Strater Crowfoot is the chief executive officer and executive director of Indian Oil and Gas Canada. Karl Jacques is senior counsel with the Department of Justice.
They'll be here to answer all the difficult questions. I've promised them that I'm prepared to hand off anything that gets too technical to them, so they're ready for that, and they're ready, of course, to answer any questions you may have.
Thank you, Mr. Chairman and committee, for inviting me here today to outline both the necessity and the many benefits of Bill C-5, legislation that is needed so that first nations oil and gas resources will be managed using the most modern and effective tools available. This will ensure that first nations have the efficient regulations necessary to fully capitalize on the economic development opportunities created by oil and gas industries on their territory.
As committee members know, Bill C-5 has been a long time coming. As the 130 first nations with petroleum production or the potential for production on their lands will tell you, it's long overdue. The Indian Oil and Gas Act came into force back in 1974, so it's been around a long time. To say that things have changed since then is an understatement. The world has changed since then and the oil and gas industry has changed. There's a new generation of workers. There are new ways of working and better ways to protect the environment while increasing profitability. A lot of things have changed since that act was first written back in the 1970s.
Provincial laws and regulations governing the sector have kept pace with these changes in the intervening years, but federal legislation remains seriously out of date, and that's a real problem for first nations. Even though provincial governments have no jurisdiction over first nations for either oil or gas development or leasing of oil and gas rights on reserve lands, they do have authority over oil and gas companies operating on these lands. Federal laws governing oil and gas projects on reserve lands need to be better harmonized with provincial oil and gas regulatory regimes.
Cooperation with provincial authorities is essential. So, too, is the need to bring this outdated Indian Oil and Gas Act into the 21st century.
Bill C-5 responds to the needs of first nations and the oil and gas industry alike. It will do the following.
It will modernize and clarify the oil and gas regulatory process. For example, it will clarify ministerial and judicial review powers.
It will increase certainty and strengthen the accountability of Indian Oil and Gas Canada, which acts on behalf of first nations, such as providing Indian Oil and Gas Canada with new powers to audit operators.
It will also enhance protection for first nations environmental, cultural, and natural resources. For instance, as minister, I will have the authority to suspend operations that damage or threaten the environment or first nations sites of cultural, ceremonial, or spiritual significance.
I am confident that this is the right legislation, right for the times, because it is the result of extensive consultations and cooperation with the key players with a stake in this issue. And because it responds to what First Nations have been telling us needs to be done.
Over the past decade, Indian Oil and Gas Canada, working in partnership with the Indian Resource Council, a first nations organization advocating on behalf of some 130 oil and gas producing first nations, or potentially producing first nations, has held sessions with most of those oil and gas producing first nations and numerous tribal councils. And thanks to the longstanding and mutual relationship between Indian Oil and Gas Canada and the Indian Resource Council, first nations played an active role in the development of Bill C-5. Many of their suggestions for improvements have been incorporated in the bill before us.
We also worked with the Indian Resource Council and the Federation of Saskatchewan Indian Nations on the National Energy Business Centre of Excellence. This centre provides first nations with oil and gas expertise, things like legal advice, oil and gas business advice, and operations advice. It also helps them in identifying and coordinating programs, such as training and information sharing for first nations oil and gas managers. This will assist first nations in moving from being passive recipients of royalties to being actively involved in the business side of oil and gas, something I know there's increasing interest in. This will generate opportunities for wealth creation, and it could increase the number of oil and gas permits and leases held by first-nations-owned oil and gas companies, which currently are at approximately 40%.
I want to reiterate that first nations have told us time and time again that capacity development is very important to them. Many first nations are not ready to take advantage of the First Nations Oil and Gas and Moneys Management Act, the legislation that came into force in 2006, which enables development-ready first nations to assume full control of their oil and gas resources and moneys.
My department recognizes that the First Nations Oil and Gas and Monies Management Act may not be the right fit for every First Nation—First Nations may not yet have the necessary experience and capacity to take that major step. But this is an option for those who wish to take advantage of it.
Bill C-5 will ensure that Indian Oil and Gas Canada becomes, and continues to be, a modern regulator for those first nations whose oil and gas resources will continue to be managed under the Indian Oil and Gas Act. I also want to point out that this bill is not the end but merely a continuation of an ongoing consultation process with first nations. We will continue to work in partnership with the Indian Resource Council on the development of the regulations, and to develop mechanisms to deal with issues of concern to first nations.
Now, Mr. Chairman, there are a few other critical features of this legislation that I would like to briefly note before I take members' questions. During second reading debate, we heard the recurring themes of first nations consultation, economic development, and the environment. I have already touched upon the first two a little bit, but just to continue, one important issue addressed by Bill C-5 is providing assurance that the environment on first nations land will be protected, not only for today's generations but also for the generations that will follow. Bill C-5 provides for the authority to replicate appropriate provincial legislation and regulations. Harmonizing the environmental regime governing oil and gas activities on reserve with that of the same activities off reserve within a particular province is a good example of replicating a provincial regime into federal law to protect the environment.
Through this act, it will become possible to continually update environmental protection regulation without further regulation. In cases where there is a violation, as minister, I will have the authority to suspend a company's operations if those are damaging to the environment, or if areas of cultural, ceremonial, or spiritual importance are at risk. As well, the bill will give me the authority to impose hefty penalties for trespassing on first nations land, or the failure to submit forms, reports, or other required information. For more serious offences, the bill establishes a process to directly access the courts, and further establishes significant fines, which can be levied per day.
First nations are also protected in cases of non-compliance. For example, the bill provides for compensation to be paid to a first nation for loss of oil and gas, or reduction in the value of their lands resulting from trespassing.
Bill C-5 will give the Indian Oil and Gas Act real teeth, unlike the outdated version in place today.
I think it is very important that Bill C-5 will allow federal regulations to incorporate provincial laws as they relate to environmental protection, exploration, and equitable production or conservation. I want to clarify, however, that Bill C-5 does not give over any jurisdictional authority whatsoever to the provinces, nor will Bill C-5 have any impact whatsoever on the crown's fiduciary responsibilities, or on aboriginal or treaty rights. In fact, the proposed changes will strengthen Indian Oil and Gas Canada's legislative and regulatory capacity. This will actually increase its ability to fulfill the crown's fiduciary and statutory obligations related to the management of oil and gas resources on first nations lands.
Mr. Chairman, the fact that First Nations have been asking for these changes reinforces just how necessary they are. This is maybe the strongest argument for speedy passage of this legislation.
Mr. Chairman, the fact that first nations have been asking for these changes reinforces just how necessary they are. This is maybe the strongest argument for speedy passage of this legislation. The more than 130 oil and gas producing, or potentially producing, first nations across the country have waited long enough. It's time to act. I know I can count on this committee's support to move this legislation forward as quickly as possible.
I'd be pleased to respond to questions from committee members, and I look forward to hearing the results of your deliberations over the days to come.