Indigenous and Northern Affairs Committee on March 3rd, 2009

[The Chair, Conservative, Bruce Stanton]

Thank you.

Have you finished?

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

Yes.

[The Chair, Conservative, Bruce Stanton]

Ms. Crowder, you have seven minutes.

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

Thank you, Mr. Chair.

Thank you for coming before the committee today.

I want to ask a question about the royalties. I'm sure you're aware of the story around the Supreme Court decision, which basically says that under the Indian Act, the government fulfilled its obligations, even though I think the Ermineskin and Samson First Nations who took this forward felt that if the government had acted in line with its fiduciary responsibility, they would have had a better deal on the investment of those funds.

When I looked through the legislation, of course, there's a substantial change in the way royalties are going to be overseen, indicating to me there will be new powers to make regulations providing a clear set of rules to prevent companies from using certain transactions with subsidiaries to unfairly reduce royalties owed to first nations. But this change does not supercede the Indian Act. So the government still has the authority, under the Indian Act, to invest the way it currently does?

[Roy Fox]

Mr. Chair, that is my understanding.

Yes, we feel it was unfortunate that two of our member tribes were not successful in their legal claims with respect to the investment of Indian moneys and how that was done.

Our understanding, though, is that this particular bill deals with royalties in a very limited way. The collection of royalties is the responsibility of Indian Oil and Gas Canada, and that is all they are responsible for. They then ensure that those moneys flow to Ottawa, to be held in the consolidated revenue fund, under the authority of the Indian Act and the Financial Administration Act.

So, yes, we feel it was very unfortunate for two of our member tribes to lose their court battle. Unfortunately, this bill really has a very limited amount of involvement in royalties. They merely collect the royalties.

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

I noticed in your presentation that you said there were things that both sides had to give up. Would the oversight of royalties in a more inclusive way have been one of the things you had to give up?

[Roy Fox]

Yes. However, we are discussing how we could have a more uniform royalty regime.

I'm not sure if you are aware that within the total scope of the development of oil and natural gas resources on Indian lands, we have about 90 different royalty regimes. That is one of the instances where the leadership of the first nation, the chief and council, and their technical people involved in oil and gas, really make that decision. What will the royalty rate be for our natural gas? What will the royalty rate be for our crude oil? What will the royalty rate be for our sweet gas? What will the royalty rate be for heavy oil?

So we do not have a consistent royalty regime at the moment.

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

Is that something you want to move toward, a more consistent royalty regime, or is that going to continue to be up to the nation to negotiate? I would think it would make some sense to leave it up to the nation.

[Roy Fox]

I think we all want to ensure the particular first nation that has that oil or natural gas resource has at least that kind of say in how it will receive royalties.

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

I would agree with that, but on the other hand, the government currently can invest the money at x percent, pay out the trust at a different percent, and use the difference in terms of their own use of money. Is that correct?

[Roy Fox]

That's my understanding, and a number of our member tribes have tried over the years to use those Indian moneys made from royalties and bonuses and surface leases for reinvestment in new opportunities within their lands and elsewhere. However, we have been prevented from using them.

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

Do we have time?

[The Chair, Conservative, Bruce Stanton]

Two minutes, Ms. Crowder.

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

I wanted to touch base quickly on the elements of consultation. I know that consultation process worked. Were there things around the consultation process you would have liked to have seen done differently?

[Roy Fox]

I suppose we would have liked to ensure we visited each one of the member tribes that have oil and natural gas resources. We would have liked to have more human resources to assist us in that process, and I think we could have had more general sessions during that process. However, we were limited by the amount of resources we had.

Of course, we have to realize we have been talking about change for a long period of time, so whenever change occurs, I guess all of us as human beings are hesitant, especially first nations. People feel that perhaps they could be jeopardizing their treaty rights or aboriginal rights and interfering with that historical relationship between the crown and first nations made by treaty.

It's a long process, and we knew it was going to take some time, but I think we've arrived at a point where we've decided this is the best we can do. Both sides were not able to get all we wanted, more wording in there with respect to business development, but that is something we have agreed to deal with. We will continue to talk about how we are going to ensure our member tribes and their business entities take full advantage of the opportunities on the business side.

[The Chair, Conservative, Bruce Stanton]

Thank you very much.

Sorry to be moving things along. We're starting to come in to the last few minutes, so we're going to go to Mr. Albrecht, and I understand you'll be splitting your time with Mr. Clarke.

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

Thank you, Mr. Chair. I'm going to try to split my time with Mr. Clarke.

First, Mr. Fox and the group with you, thank you for being here. It's obvious you have a great deal of expertise to offer us. I also appreciate the letter you submitted to each member of the standing committee outlining your perspective, your concern for retaining competitiveness...the national “Energy Business Centre of Excellence to provide support, advice and expertise in planning and execution of economic development”, and then allowing your member communities to have a greater and more timely benefit from oil and gas activities.

These certainly resonate totally with our government's approach, and it's very easy for me to say here's an Indian Resource Council supporting it. That's great.

I have one question with regard to the Indian Resource Council. Minister Strahl mentioned 130 first nations communities that have petroleum production or potential for this. Did I understand you to say that all of those are unanimous in their support for Bill C-5?

[Roy Fox]

Mr. Chair, I hope I didn't imply that.

It would be great to have everyone agree on important initiatives, but I suppose most Canadians are not able to do that at the best of times.

We've tried to ensure that all those first nations had the opportunity to hear about the changes, voice their concerns, and voice their input into the process. We did it not just by having big meetings, but also by using regional meetings in special treaty areas, special regions, throughout the course of the initiative, hoping we would be able to cover all the first nations that had the potential or that had oil and natural gas resources, to become fully involved.

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

Just to backtrack a wee bit then, all 130 first nations had input into the process, and as with any committee or large group, there had to be a melding of their concerns into the final document.

[Roy Fox]

Mr. Chair, in setting up the meetings—not just the symposia but the regional meetings and the specific meetings—we were able to cover off some of the expenses they had to bear in getting to those sessions. In some cases we went out to them to ensure that our process involved everyone concerned.

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

Thank you.

[Vice-Chief Delbert Wapass, Vice-Chief of the Federation of Saskatchewan Indian Nations, Indian Resource Council]

Mr. Chair, good morning to the standing committee.

To add to Mr. Fox's answer, in the Federation of Saskatchewan Indian Nations we represent 74 first nations. Of that number, there are probably 20 first nations or thereabouts that are producing, although we have 74 first nations within our legislative assemblies, which bring our chiefs together. We go through a thorough exercise with them, apprising them of activities, of legislation, and so on. We also deal specifically with the producing first nations with the assistance of the Indian Resource Council and IOGC, as well as the centre of excellence.

In Saskatchewan, I know that in concert with the other parties the chiefs are fully apprised of the day-to-day work.

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

Thank you.

Mr. Chair, how much time do I have left?

[The Chair, Conservative, Bruce Stanton]

You have three minutes.

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

Okay, I have just one quick question and then I want to pass it off to my colleague.

We talked a bit about the examples of non-harmonization currently. You mentioned the 10-year limitation that's in proposed paragraph 5.1(1) of Bill C-5 as being in contrast with two years to Alberta, I think you said.

Can you give me one other quick, short example of how there might be lack of harmonization between provincial and federal regulations related to oil and gas?

Could we have a fairly short answer? Then my colleague can get his question asked.