Indigenous and Northern Affairs Committee on March 12th, 2009

[John Dempsey]

I think the environmental protection area is quite important to this bill. Right now the existing Indian Oil and Gas Act and regulations contain extremely limited requirements in the area of environmental protection, such as abandonment of wells, reclamation of wells, remediation of well sites.

We rely right now on a contractual arrangement between IOGC and oil and gas companies. The problem is that the contractual arrangement is hard to enforce, and in many cases we don't know which body is to be enforcing that, because we use a mix of provincial and federal laws in there. So what Bill C-5 does is it gives us the ability to make federal laws in the regulations that address those important areas of reclamation of well sites, remediation, the whole environmental protection side of things.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay.

What's happening around such things as well abandonments? I'm sure there must be some cases where we've already seen that happen on first nations land.

[John Dempsey]

Well abandonment is an issue right now for Indian Oil and Gas Canada. As I said, we don't have a good, strong set of laws in place under the existing regime. Under Bill C-5 we have the ability to make regulations that would give us a wide range of federal tools to ensure that companies abandon well sites properly, to ensure that they have liabilities that would go on forever just in case there are some problems with the abandonment process they've done.

[LaVar Payne, Conservative, Medicine Hat, AB]

That would appear to me to be a really important piece of Bill C-5, to ensure the safety and, obviously, appropriate environmental protection on first nations land.

[Strater Crowfoot]

Yes, and also, I think, with the provinces....

For example, in Alberta, they have an orphan well fund. If it cannot be identified who owns a well, they would come in on the reserve and use that fund to properly abandon the well. So this is a case where it's good we're working closely with provincial authorities.

We have an example in Ontario right now; there are a few wells that are seeping oil and some product to the surface. It's on first nations land, but right now the province is saying it's a federal responsibility. So we're trying to work out with the provinces the proper abandonment of these wells, working with the provincial jurisdictions.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you.

[The Chair, Conservative, Bruce Stanton]

You still have 30 seconds left, Mr. Payne, if you want them. No?

We'll carry on then to Monsieur Lemay.

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

Mr. Bélanger raised a subject that I would like to clarify. If I read the bill as it currently stands and I check the definitions in clause 2, which concerns first nation lands, we're going to clarify this immediately—we agree on the fact that this bill applies solely to lands located on reserves.

[Strater Crowfoot]

Yes.

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

It only applies if we find oil, if there is exploitation on lands located on reserves. I had a concern and I wanted to ask you the question.

What do we do in the case of lands claimed for the purpose of inclusion in reserve lands or lands that we call ancestral lands? That has to happen. Are there currently any such cases? Would the act apply in those cases?

[Strater Crowfoot]

I'll answer that.

Our current legislation applies to only reserve lands that have been surrendered or designated for oil and gas administration. There are a number of lands that are involved in land claims or TLE processes--that's treaty land entitlement processes--where the first nation can gain ownership of those lands, have them transferred and become Indian first nation lands or reserve lands, and at the same time be designated for our oil and gas administration. Then we would have jurisdiction. Other than that, we have no jurisdiction off-reserve, on ancestral lands, or on other lands that are claimed by first nations if they're not reserve lands.

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

You answered in part.

Nevertheless, from the moment the first nation obtains those lands, which are part of the reserve lands, which will become reserve lands, the act applies. Have I correctly understood?

[Strater Crowfoot]

Yes. For example, if the land is through a treaty land entitlement process, that land becomes part of reserve lands. In that process is a vote by the membership to accept the land as reserve lands, but also there's a designation for oil and gas administration in that vote. When that occurs, then that would give us the authority to administer those oil and gas resources on that particular piece of land.

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

Thank you.

[The Chair, Conservative, Bruce Stanton]

Now we'll go to Mr. Albrecht for five minutes.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you, Mr. Chair, and thank you to all of you for being here today.

Minister Strahl, and you as well, Mr. Crowfoot, have indicated a number of times that this has been an ongoing process for roughly 10 years, and in that process the first nations that have oil-producing and gas-producing potential have been included. What we have here today is a series of agreements among the various parties to come to a resolution as to a way forward.

I wonder if you could just give me some examples as to some of the proposals that the Stoney Nakoda First Nations have made in that process over the last number of years. Can you give us some examples of some of their ideas that are incorporated into Bill C-5? I think we all understand that we never all get exactly everything we request, so I think it would be helpful for us to hear examples of how they have been accommodated.

[Strater Crowfoot]

There've been a number of times we've had discussions in this process--various chiefs and councils, oil and gas technicians, legal counsels. In fact, through some of the work through the Stoneys and their legal counsel, there have been at least four amendments that have found their way into this amendment that have come from the Stoney First Nation and their legal counsel.

Clause 2, “Definitions”, found their way in: proposed sections 4.1, 4.2, and 5.1; and also the retention of subsection 6(1), where the minister shall consult with first nations. Those are examples of recommendations from the Stoney First Nation that have found their way into the bill.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

One of the other concerns that I think we see in the amendments that are proposed now, the additional amendments--we have also heard this a number of times--is that somehow possibly first nations groups may be excluded from the downstream economic opportunities that might be out there. To me, that seems like a legitimate concern that I would raise as well.

The suggestion has been made by a number of our committee members that possibly those concerns could be addressed in the development of the regulations. Obviously, then, the question becomes this: will first nations actually be involved in the drafting of the regulations, and if so, how?

[John Dempsey]

On the downstream aspect of oil and gas operations, the bill is quite specific that it relates to exploration and exploitation of oil and gas only. Those downstream operations, such as refining, as you heard earlier, are important to some first nations. And there are other areas that aren't really captured by the scope of this bill.

The First Nations Commercial and Industrial Development Act was developed, in part, to give first nations the ability to go into those types of ventures, be they mining of crude bitumen, the establishment of a refinery, and so on. But the Indian Oil and Gas Act was never meant to have that broad a scope.

On the development of the regulations, we do have a process in place right now that has started with first nations. It's a continuation of the joint process that you've been hearing about and that has been going on for 10 years. We have several committees set up with the Indian Resource Council. We have several symposia planned for the next 12 months.

I think all parties who have been involved in this agree that the real work comes now, that the real work comes on the regulations. The act was merely an umbrella piece of legislation to set out some high-level authorities, but the details or processes—the details of some of the royalty issues you've been hearing about—will be worked out in the regulations.

I'll give you an example. In the bill itself right now, we've built in many processes related to royalties that aren't currently in the Indian Oil and Gas Act, such as powers around reserving a royalty, the assessment process of a royalty, and the clarification of pricing schemes, of royalty deductions, of royalty in-kind proposals, of the circumstances to waive a royalty, and of interest on a royalty. Those types of things aren't currently in the existing regime that we operate under, but we've put them into Bill C-5 so that we can make clear regulations on these areas with first nations in the future.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Just to summarize this, it seems clear to me that with all of the negotiations that have occurred and all of the issues you have already addressed here in your recent statement, it really is important for this committee to get moving on this; and the first nations are asking for us to move on this. So in the interest of not only resolving some of the outstanding issues that have been going on for 10-plus years, but also in the interest of moving forward for economic opportunity for first nations communities, it's critical that we move with this as quickly as possible. And then, as you said, the hard work begins.

Thank you.

[The Chair, Conservative, Bruce Stanton]

We have time for a brief question from Madam Crowder. Then we'll have to wrap this up.

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

I asked the Stoney Nakoda the same question. The Government of Canada treats its own royalties differently from the way it's treating the royalties of first nations. So why wouldn't the CPRA legislation have been used as a benchmark for Bill C-5?

[John Dempsey]

The CPRA is a good piece of legislation. It was reviewed in our process to develop Bill C-5. The issues that were raised at this table were in relation to the assessment and reassessment process that's in the CPRA, which we have built into Bill C-5—but in the development of regulations as opposed to putting the process in the act itself.

The issue of cancelling a lease was also raised. In the CPRA they have a process in the legislation itself to cancel a lease. In Bill C-5, that'll be developed in the regulations. But it's all federal law; it will all be addressed in the development of regulations.

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

I'm sorry, but that doesn't tell me why the legislation isn't equivalent. Why is one in the legislation, and the other going to be built in regulations?

[John Dempsey]

When the Minister of Indian Affairs and Northern Development was here last week, he talked about a continuous change process. That process was developed jointly with first nations, so we could make regulations that would be looked at and amended on a continuous basis, rather than waiting 30 to 35 years to amend the regulations again.

So the approach that was agreed with first nations was that we would put a lot of these process-type issues into regulations, so that we would have an open forum with first nations for years to come where we could address and re-address these, as opposed to going back through the legislative process.