Indigenous and Northern Affairs Committee on March 5th, 2009

[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.

[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]

We're out of time. Chief, perhaps you can quickly summarize, and then we'll go to our next presenter.

[Chief Carolyn Buffalo]

I have a lot more to say and it will be difficult to summarize all of it.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Thank you.

Mr. Rickford.

[Greg Rickford, Conservative, Kenora, ON]

I want to ask if Chief Buffalo can repeat the specific amendments in the language that was proposed.

[The Chair, Conservative, Bruce Stanton]

Can you put that in, and when we have time for members' questions we'll go to that?

[Chief Carolyn Buffalo]

I can do that.

[The Chair, Conservative, Bruce Stanton]

Monsieur Lemay.

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

Mr. Chairman, as the interpreters made us aware, I would like Chief Buffalo to send us the documents she is referring to because I think that I saw her reading from a text. We might have them translated. I would especially like the list of amendments.

I have the impression I was talking to the walls because none of the witnesses were using their earpieces. Let me start over.

[The Chair, Conservative, Bruce Stanton]

You're doing it again?

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

I will go slowly. I would like you to send us a copy of the documents from which you have read as well as your proposed amendments. Thank you.

[The Chair, Conservative, Bruce Stanton]

Do you understand? And can you include the text you had in your presentation, if possible?

[Chief Carolyn Buffalo]

I can do that.

[The Chair, Conservative, Bruce Stanton]

Thank you very much.

Mr. Seymour, you have the floor for 10 minutes.

[Eugene Seymour, Coordinator, Independent Lobby to amend the Indian Oil and Gas Act]

Thank you, Mr. Chairman.

Let me first explain to you how we got here to present a proposal, what we're proposing, how we see our proposal working, and where we're at in the process of having our proposal enacted.

We're certainly grateful to have the opportunity to present an amendment to the Indian Oil and Gas Act for a financial incentive program that will be a stimulus to promote vertical integration and value-added activities in the oil industry, both upstream and downstream, on first nations land.

To tell you how we got here, let me take a moment to reflect back on history.

The Iroquois people sided with the British and made an arrangement that was recognized in the Royal Proclamation of 1763, which is now enshrined in the Canadian Constitution Act of 1982, under section 25 of the Charter of Rights and Freedoms. As such, when the American revolution broke out, the Mohawks and other tribes fought to establish the country of Canada, and then again, in the American invasion of 1812, they successfully defended the country.

In 1867, when the founding fathers confederated the country, there was a recognition established in the Constitution under section 91(24) that Indians and lands reserved for Indians would be the exclusive jurisdiction of the Parliament of Canada. Thus, the fiduciary trust responsibility was established between the trustee and beneficiary.

As development moved westward in the late 1800s, oil was discovered on Manitoulin Island and the Indians were boiling it to make a kerosene out of it. In 1898 the first Indian oil and gas mineral surrender was established at the Wikwemikong unceded Indian reservation.

In 1900 a joint Senate and House of Commons study reviewed petroleum deposits in the country and identified Wikwemikong as being one such site. Exploration permits were granted, drilling commenced, and they discovered oil. They capped it in 1905, before there was an automobile and before the auto industry had a market demand for crude oil petroleum products.

When the Leduc oil field was discovered in 1947--and shortly thereafter the Bonnie Glen field on the Pigeon Lake reserve owned by the Hobbema band--mineral oil and gas surrenders were established. The leases were made in accordance with regulations under paragraph 57(c) of the 1951 Indian Act.

Then in the 1960s John Diefenbaker gave the Indians the right to vote in Canada and Pierre Elliott Trudeau became the Minister of Justice. The Department of Indian Affairs and Northern Development Act was established in 1967 and Jean Chrétien became the first Minister of Indian Affairs. He reached out and engaged first nations people in consultation and discussions, which were turbulent at first. As Mr. Chrétien said in his infamous speech of 1968 at Queens University, “The paths to hell have been paved with the good intentions of do-gooders from within the department.”

In the early 1970s, under contract, the Indian Association of Alberta initiated a review of the 1951 Indian Act in its totality. At that point, the oil industry, concerned about their lease holdings on Indian land, pressured the government to establish free-standing legislation. The oil-producing bands were only getting a 12.5% royalty under the regulations, and, combined with the other interests, brought about the establishment of the Indian Oil and Gas Act of 1974, which you are presently amending today. It wasn't until 1978 that amendments to the regulations provided increases in royalty rates to the bands.

Then in 1987 the Indian Resource Council was established and for the first time the oil-producing bands were able to collaborate and bring forth their concerns to the government so that in 1999 they initiated the revision to the Indian Oil and Gas Act.

In 2002 Roy Fox, of the Indian Resource Council, came and met with us at Akwesasne on Cornwall Island and reached out to the downstream operations and retail gas stations.

At that point we launched this amendment for a financial incentive program for vertical integration and value-added activities. We petitioned other groups and got their support and then presented it to the Department of Indian Affairs. Their immediate reaction was to do what we were proposing as a major policy change. Our rebuttal was swift: That's exactly what is required to make major changes in the quality of life in first nations communities today.

We continued discussions with them on this matter, and they had an organizational problem at that time dealing with our proposal, namely that Indian Oil and Gas Canada is set up just to deal with the fiduciary trust responsibility in issuing oil leases under the Indian Oil and Gas Act. What we were proposing was economic development promotion, and they were not in a position to deal with that. Another department, economic development, would be more likely best suited to deal with that. In September 2008 they resolved that internally. They amalgamated into one branch under economic development, Indian oil and gas, and Indian lands and reserves and trusts, all in one, because somebody in the department, in their wisdom, realized that economic development on Indian land involves land tenure to a large extent, whether it be mineral rights or whether it be surface leasing and construction in some form.

We come to you today at this point to present this amendment as such. In the amendment this is what we're talking about in terms of vertical integration. We would like to have the government provide an incentive to allow the retail outlets on first nations land to purchase oil directly from the oil-producing bands, and we would like the government to provide incentives for oil-producing bands to joint-venture and participate in oil refinery construction and operation. Downstream we would like to be looking at bulk storage capacities. First Nation Independent Fuel Handlers Co-Op Ltd. of Ontario did an extensive study a few years back, and the economic opportunity is there throughout Ontario for such a venture.

On value-added activities, we can show you from example that we're not talking about just a simple gas station. A gas station can turn into a gas station-restaurant-motel-banquet hall, or gas station-convenience store-coffee shop, or home heating fuel operations. That's what we're talking about in terms of vertical integration and value added.

How we perceive this amendment working is we start with a premise that you do not throw money at the problem. I've worked in the department for four years in a program where we had money, but we had a sunset clause on our money and we had to distribute the money. We funded certain projects and we had auctions to call to get the money out. But the way we've structured this proposal is that you give an authorization as a stimulus to promote within first nations communities and you wait until they make applications accordingly, and then you measure their capacity as part of a business incentive.

The department in its letter.... Here's where we're at with the department. I asked the clerk to distribute copies of the department's letter to you. They said they have business centres set up. They just initiated that, and that is very fine and works well with this initiative because those business centres should have the capacity to provide professional consultative services to first nations people to help them organize and make applications that would coincide with our proposal. That way you would get value for your dollar.

At that point, Mr. Chairman, thank you for your time.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Seymour.

Members, as Mr. Seymour referred to, a letter was circulated in both languages, and that is available to you now.

While we have a moment here, in reference to Chief Buffalo's text and her proposals for amendments, they are in English only, available electronically. If there is consent to circulate those we can do that. Otherwise, our rules require that documents be circulated only in both official languages, so I seek the direction of the committee to have those circulated if it is your choice to do so.

Mr. Lemay.

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

We shall follow our rules, Mr. Chairman. We will have those documents translated and they will be distributed next week. We must have those documents available to us when the time comes for the clause-by-clause study.

[The Chair, Conservative, Bruce Stanton]

Very good.

Okay, there is no consent, so we'll seek to get those documents properly translated and circulate them to members.

Mr. Seymour, I'm sorry, you had a question.

[Eugene Seymour]

Yes, I have a question for the clerk. I sent all this material in a couple of weeks ago, did I not? Was it not circulated in French?

[The Chair, Conservative, Bruce Stanton]

It's been distributed. The materials that you brought this morning are in the hands of members as we speak.

[Eugene Seymour]

Okay, sorry.

[The Chair, Conservative, Bruce Stanton]

Thank you very much for both your presentations.

Welcome to Ms. Back-Skidders, who is the secretary-treasurer of the Akwesasne Petroleum Co-op. It's great to have you with us here this morning also.

Now we'll go to questions from members, beginning with Mr. Russell, seven minutes.

[Todd Russell, Liberal, Labrador, NL]

Thank you, Mr. Chair.

Good morning, Chief Buffalo, Mr. Seymour, and Ms. Back-Skidders. It's good to have you here.

Chief Buffalo, you began your presentation by saying there is general agreement around this particular piece of legislation, but then when I listened to the rest of the presentation there seemed to arise some substantive concerns around this particular piece of legislation. You can correct me if I'm wrong, but I heard that there were concerns about the legislation being hurried, that there could have been more consultation, that from the AFN's perspective you want to see the regulations that pertain to this particular piece of legislation. I mean, the legislation enables the regulations to be made and incorporated. There were also concerns around the environmental protections, as I heard, and the incorporation of provincial laws being applied on reserve lands. The comment was made that it does not increase the first nations control or management substantively.

These would not seem to me to be unsubstantive or not important. They seem to be rather weighty types of concerns that have been expressed.

I'm just looking for some direction from you as to where we should go, because I'm sure you're aware that according to our schedule, we had intended to go to clause-by-clause today. I gather that's what was on our schedule. This certainly seems to be a little bit inconsistent with what the IRC has been making presentations about, certainly in my meeting with them. They seem to say that this legislation is not perfect, it is not everything that they wanted, but it's certainly something that they need and something they want to move forward on in a fairly expeditious manner. That is what they have said to me personally at meetings that I've had with them, and what they also said at committee. I would just like to see if there's some way we can reconcile these two different positions, if you can help me with that.

My second question is for Mr. Seymour. I have read what you presented to the committee, a financial incentive program. Is there anything in this legislation that would prevent the government or first nations that have an interest in oil and gas development from working together to implement this program, even though it's not incorporated in the legislation? Is there anything that would prevent this?

This seems to make common sense, to be able to allow first nations to gather the most out of their resources and to benefit in a broad way from oil and gas development on reserve, both, as you say, downstream and upstream. Is there anything that would prevent this program from going ahead if this weren't incorporated?

I'll just go to Chief Buffalo first, and then ask Mr. Seymour to answer secondly, if that's okay.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Chief Buffalo.