Evidence of meeting #29 for Natural Resources in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
A recording is available from Parliament.
Liberal
The Chair Liberal James Maloney
Good morning, everybody. Thank you for joining us this morning.
We have two substitutes this morning. They have kindly agreed to participate. I thank Mr. Hoback and Mr. Rusnak for their participation.
We have two groups of witnesses today, which we're very grateful for. One of them needs no introduction.
Then we have Mr. Rae, who is joining us as well.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. Rae, for being for here today.
Ms. Murphy and Mr. Van Dine, we appreciate your taking the time to join us.
I will stop there and turn it over to you to start. We'll give each of you up to 10 minutes to speak, then we'll turn it over to the committee members for questions.
Thank you again for joining us.
Bob Rae Partner, Olthuis Kleer Townsend
Thank you very much, Mr. Chairman.
To you and members of the committee, thank you very much for the invitation to attend. I had the opportunity yesterday to speak to some of my colleagues in Parliament, but I also had a chance to meet with a Chamber of Commerce round table that looked at the growingly important interface between the concerns of first nations and aboriginal people broadly and the resource industry across the country.
Many of you who know me will know that this is a surprising statement: I will try not to make this in any way, shape, or form a partisan or contentious presentation. I have had the opportunity in the last several years, since leaving Parliament in 2013, to work on behalf of first nations in a number of negotiations across the country, including in British Columbia, Manitoba, and Ontario. I have also been, for the last two years, a visiting professor at the University Toronto, where I teach indigenous law and public policy issues.
The thrust of my remarks is the following. The difficult reality is that ever since 1867, the resource issue has focused on the provincial governments. The Supreme Court has just reaffirmed this in a decision involving the Grassy Narrows reserve. The Supreme Court has made it clear that the provincial government is as much the crown as the federal government with respect to resource development.
At the same time, the federal government has key jurisdiction because it is directly involved, under section 92, to take responsibility for issues affecting aboriginal people. Those responsibilities were confirmed when Parliament repatriated the Constitution in 1980, in particular because of section 35, which is the section of the Constitution that affirms Parliament's recognition of aboriginal rights and title. That has led, as you know, to a whole range of Supreme Court decisions since 1980 that have made clear the responsibilities to accommodate and to consult with first nations before resource development takes place.
Finally, we have the existence of the UN Declaration on the Rights of Indigenous People, which Canada has signed. The other significant legal reality or policy reality is that in their report, the truth and reconciliation committee made it clear—it was one of their clear recommendations—that the UN declaration should become the basis of Canadian public policy as it relates to relations between first nations and the crown.
All of this is to say that we're living in a world in which the question of how to successfully engage first nations is the key to future resource development. Putting my policy wonk hat on, I'd say that when the great developments occurred, for example, in my own province of Ontario, in the north, the discovery of nickel in the Sudbury basin, which was an extraordinary bonanza in terms of its implications.... It's been in existence for over 100 years and it's still going strong. That development took place without any participation by indigenous people. It took place without any recognition of their rights or title. It very much excluded them in terms of the impact of the development. The resources and revenues from those developments were never shared with first nations.
We can't do business like that anymore. The challenge we face, and I can tell you that this was very much an item of discussion in the chamber meeting I attended, is that there is now an obligation on the part of the crowns, both federal and provincial, to continue to clarify what they mean by “engagement” and what they think the terms of engagement should be.
I would make the observation that from my experience, large companies have the capacity and the means to engage with first nations. Their record of doing so, it has to be said, is improving. In terms of the known structure of creating impact benefit agreements, going onto reserve, talking directly about the need for sharing of benefits, a respectful negotiation—that is all happening in some very important and significant cases. It's important for us to recognize that. But as the members of this committee will know, mining is a business in which prospecting and exploring are carried on by much smaller companies, and staking claims is usually carried out by smaller companies. They don't have the means and they don't necessarily have the capacity to conduct the kind of engagement with first nations that's required.
It has to be said that from my experience, across the country there is a considerable difference of opinion between first nations, smaller companies, and the provincial crown as to what is the appropriate method of consultation. I think that's an area in which the federal government has a clear role to play, not in the sense that the federal government's power or authority is total, but in the sense that the federal government can't now ignore its responsibilities because of its constitutional authority, and frankly because the federal government has said this is the direction in which we want to go in terms of the process of consultation. That carries with it a responsibility to really be engaging with the provinces and first nations about how that is going to be done. It's not going to be easy. It's not easy, because as I've said, it's a contested area. But it's quite essential.
I've had the opportunity to work particularly in the last three years in northern Ontario. Without getting into the details—I don't want to take more than my allotted time—nine first nations in the Matawa tribal council have signed a regional framework agreement with the provincial government, and negotiations to make further progress are carrying on.
We have indicated to the federal government, and this is another opportunity for me to do so, that we would like to find a more effective way of engaging with the federal government in terms of the Ring of Fire. Both the predecessor government and this government, I would say, have taken an interest and have shown an interest, but we're now at a point where we need a further degree of engagement. That's something we've been making clear.
Furthermore, I thank the committee.
It has been a year since many of you have been elected. I congratulate you and wish you well. It's always a great honour for me to return to this place and to see the people who are working hard for the public. I really do continue to relish my days in the House of Commons, even though some of you may have more mixed memories than I do.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. Rae. You're right on time. It's almost like you've done this before.
I'll turn the microphone over to Mr. Van Dine, please.
Stephen Van Dine Assistant Deputy Minister, Northern Affairs Organization, Department of Indian Affairs and Northern Development
Thank you. Merci beaucoup. Good morning, everyone.
I'd like to thank the chair for the opportunity to appear today. I have with me my colleague Sheilagh Murphy, assistant deputy minister of lands and economic development at Indigenous and Northern Affairs Canada.
My responsibility, as the assistant deputy minister for northern affairs, principally involves the three territories and the structures therein. Today my remarks will focus on our role in mineral development in the north, principally the mandate for northern development and its regulatory responsibilities, which arguably are a bit different from other parts of Canada.
There's a gentleman I believe you may have heard about in academic circles, a gentleman by the name of Dr. Ken Coates. He is involved with the Macdonald-Laurier Institute. He has written quite a bit about the relationship between indigenous players and government. One of his many theses that he refers to is how the north can actually provide a lesson to the rest of Canada with respect to relationships with indigenous peoples and industry.
Mineral development in Canada's north is important to northerners and all Canadians. Mining and related activities are the largest private sector employer of Indigenous peoples and the largest private sector contributor to territorial GDP.
Mineral resource development has played an integral role in opening up the north. Mr. Rae remarked upon the Sudbury experience. Going back even further, it started with the Klondike gold rush in the Yukon in the late 1800s; to over the past 50 years, gold mining in Yellowknife and the development of its hydroelectricity capacity; to the building of the railroad in Hay River for the Pine Point lead-zinc mine in the Northwest Territories; to the present-day mining of diamonds in the Northwest Territories, making Canada the third-largest value producer of diamonds in the world.
Current gold mining activities in Nunavut also have the potential to be transformative, with the development of areas that have high potential to be mining camps' equivalent to the Abitibi belt in Ontario and Quebec, which has produced precious and base metals for over 100 years. With this type of sustained development can come important legacy infrastructure that Nunavut desperately needs, such as the Manitoba to Nunavut infrastructure corridor, development of green hydroelectric power to replace Nunavut's current dependence on diesel, or a Yellowknife to Arctic coast “road to riches” that can facilitate other discoveries, and enable sustainable mineral development for generations to come.
Through the Department of Indian Affairs and Northern Development Act, the minister is responsible for the economic and political development of the north. More specifically, the minister is directly responsible for resource management, including lands, waters, minerals, and oil and gas, in Nunavut, in the same manner as provincial governments in the south.
The minister exercises these responsibilities in the management in two ways: first, through the issuance of rights for land, minerals, gravel, and oil and gas; and second, through policy development and decision-making in the regulatory process.
Mining development on crown lands in Nunavut is managed pursuant to the Territorial Lands Act and its related regulations, including the Nunavut Mining Regulations. These regulations deal with mineral tenure and royalties on mining, and are administered by the department.
The northern regulatory regimes were created to ensure responsible resource development in a remote region while providing for environmental protection. Each northern territory has its own resource management regime depending on its particular political development.
In the Yukon and the Northwest Territories, the administration and control of lands and resources was transferred to the respective governments through their respective devolution agreements. Territorial legislation was passed to regulate the transferred responsibilities.
Nunavut has a single land claim agreement, which the Inuit of Nunavut and Canada signed in 1993. This agreement establishes the regulatory regime for project development and the establishment of five boards to manage these projects. Those boards deal with the following five areas: land use planning, environmental assessment, water rights issuance, surface rights disputes, and wildlife management.
These co-management boards and institutions of public government are tremendous examples of how indigenous peoples and communities are meaningfully engaged through all the stages of mineral development. At their core are the principles of the land claim agreement that was signed.
Nunavut is unique in that Inuit are the largest freehold landowners in the world. Their Inuit-owned lands represent approximately 20% of the two million square kilometres that make up Nunavut, over which they have surface rights of 20% and subsurface rights of 2%. During the negotiation of the Nunavut Land Claims Agreement, the subsurface land parcels were selected for economic potential based on advice provided by geological consultants. As a result, approximately 70% of the active mining leases are located on 2% of the Inuit-owned lands with the subsurface rights. This offers tremendous opportunity for economic development but also presents a great challenge due to remoteness and lack of infrastructure.
As I have briefly outlined, the department has a role in northern mineral development, from political evolution through to devolution and land claims, and we retain responsibility for lands and waters, including improving the environmental assessment regimes.
Thank you for your time. I look forward to the discussion.
Sheilagh Murphy Assistant Deputy Minister, Lands and Economic Development, Department of Indian Affairs and Northern Development
Good morning, and thank you, Mr. Chairman, for the opportunity to speak today.
I would like to share some of the steps taken by Indigenous and Northern Affairs Canada to improve first nations participation and benefits gained from mining projects.
The federal crown has a fiduciary obligation towards Canada's indigenous peoples. An important component of this obligation is meaningful consultation and accommodations surrounding the management of first nations lands and resources. I would also add that resource extraction near first nation lands and traditional territories benefits from meaningful consultation.
Number 92 of the Truth and Reconciliation Commission's calls for action calls upon the corporate sector to adopt the United Nations Declaration on the Rights of Indigenous Peoples, and to apply its principles, norms, and standards to corporate policy and core operational activities involving indigenous peoples and their lands and resources.
As a country with a strong legacy of the rule of law, Canada is well-positioned to operationalize UNDRIP's call for free, prior, and informed consent in a manner that ensures long-term benefits for all parties involved.
In Canada the majority of reserves are located south of 60. The federal government regulates on-reserve mining primarily through the Indian Act and the Indian Mining Regulations. Mining represents an important area of economic development for first nations. Over 500 aboriginal communities are situated near Canada's biggest oil, gas, forestry and mining projects. The mining industry has signed over 350 negotiated agreements, and it is one of the largest private sector employers of aboriginal people.
However, these figures represent only a small portion of the potential benefits to First Nations.
Although approximately 50% of Indian reserves have mineral potential, first nations typically do not own the rights. The minerals are generally owned by provincial governments, who lease the development rights to mining companies. A typical mining development on reserve involves private companies, provincial governments, one or more indigenous groups, and the federal government.
In 2012 a first nation-INAC working group examined the issues surrounding on-reserve mineral exploration. The recommendations pointed to the benefits that could be realized if the process on reserve mirrored the provincial regime. The working group also underscored the importance of training, skills development, and access to capital.
Based on these recommendations, INAC published new permitting guidelines. This year, INAC will finalize a new directive that will clarify the issuance of mineral permits and designations for mineral exploration. While the Indian Mining Regulations will continue to be used for exploration, it was recommended that the First Nations Commercial and Industrial Development Act be used to regulate active mines
An example of a modern on-reserve mine is the Muskowekwan First Nation's potash project, which proposes to use the First Nations Commercial and Industrial Development Act to incorporate by reference provincial regulations. Members demonstrated their support with a positive vote under the Indian Act land designation process. During construction, it is anticipated that a thousand jobs will be created, and that throughout the 50-year span of the mine, the first nation will earn approximately $80 million per year.
This approach raises the benchmark on how mining projects should proceed on reserve lands.
Of course, the settlement of land claims is complementary to the success of the mining industry. Through negotiations, progress is being made through Canada's specific and comprehensive claims policies. Mining projects on or near first nations lands would be subject to environmental assessment pursuant to the Canadian Environmental Assessment Act, 2012. Mines are specifically identified under the regulations designating physical activities. They would therefore require a comprehensive environmental assessment overseen by the Canadian Environmental Assessment Agency.
In addition, Canada has statutory, contractual, and common law obligations to consult with aboriginal groups. Our department has developed guidelines that provide practical advice and guidance to federal departments in determining when the duty to consult may arise and how it may be fulfilled. The department facilitates mining activities near first nations lands through supportive programming. One example is the strategic partnerships initiative. Launched in 2010, this initiative has supported over 400 aboriginal communities and organizations in pursuing natural resource and economic development opportunities. It has developed over 100 new partnerships and leveraged nearly $100 million in additional funding from other sources. It has been a key funding vehicle for aboriginal communities in both the Ring of Fire and the Labrador Trough.
Industry is responding. According to the Mining Association of Canada, a number of project proponents are working collaboratively with indigenous communities by establishing impact benefit agreements. This is a step in the right direction.
To finish, I would like to note that the overall conduct of how mining projects proceed, on or near first nations lands, is related to their success. Government and industry must ensure meaningful engagement, up to and including shared benefits with the community.
Thank you again for the opportunity to speak today.
I will be happy to answer any questions you may have.
Liberal
Liberal
Don Rusnak Liberal Thunder Bay—Rainy River, ON
Thank you to all of you for your presentations today.
I'll start off with you, Mr. Rae. I'm familiar with mining in northwestern Ontario. That's the area of the country I come from. My mom is Ojibwa and my father is Ukrainian. I've been involved with first nation organizations in that area of the country for quite a while. First nations dealing with mining companies in the far north hasn't been a positive experience to date.
How would you suggest the federal government get involved and hopefully help smooth out some of those trouble areas? I'm not meaning to insult my friends from the department, but I've been hearing that a lot of first nations are very frustrated dealing with INAC. Would there be any other mechanism or department within the federal government to deal with these issues?
Partner, Olthuis Kleer Townsend
My view would be that the federal government engagement needs to be coordinated between departments much more effectively than it has been. First nations have to fill out forms every time they file for an application, whether it's for FedNor, INAC, the Department of Health, or whatever it is. It's becoming quite burdensome on communities, because they simply don't have the capacity to engage as much as they're being asked to engage. That is one of the practical challenges being faced.
I think the problem goes back to the fact that, under the crown's interpretation of the treaties, lands were surrendered to the crown, whether federal or provincial. In the case of Ontario, it's provincial. That's not the interpretation of any of the treaty chiefs now, as you will know if you talk to any of them in Ontario or right across the country, all the numbered treaties. So one of the ironies is that there's actually been better experience in engaging with the companies and with governments outside the treaty territories, which means we had more breakthroughs in Quebec and British Columbia, for example, and in the territories, as Stephen has pointed out, than we've had in any of the provinces that are covered by treaties. As you know, most of the landmass south of 60 is covered by the numbered treaties.
So I really think it's crucial for the federal government, without getting too complicated about it, to begin to address this problem with the provinces on a really practical basis, to say, look, we have this issue of engagement; we have the view of the first nations that their scope and jurisdiction extends well beyond what the crown has historically considered to be the case; so we have to create a new partnership.
I'll just give you an example. As Stephen described, they have co-management boards in Nunavut and in the Northwest Territories that are dealing with huge issues of land management. There's no such institution in Ontario. Now, there may be, as a result of the regional framework—we may be able to get there—but like all negotiations, they take a lot of time.
Therefore, I would suggest, respectfully, that the federal government could start to look at some particular developments in the old numbered treaties and ask how it can actually make some better progress and improve the relationships. Frankly, these are the poorest people in the country. If you look at who are the worst-off people, you'd have to say it's the people who are living in remote communities in the provinces where neither government has been particularly determined to exercise its responsibilities. We have to figure out a way to do it better. That means a much greater engagement by the federal government in working with the provinces.
The provinces are critically important. They have the revenue from all the resource development. They have the historic jurisdiction in controlling and managing land, and hunting, resource issues, fishing, and all of that. There's MNR and MNDM. These are big ministries in Ontario. They have huge responsibilities. We really have to move to a new relationship in terms of how that works out. I think the federal government has to be at that table in helping us to do that.
Liberal
Don Rusnak Liberal Thunder Bay—Rainy River, ON
Not so long ago, the Minister of Innovation, the Minister of Status of Women, and I met with Matawa chiefs.
Liberal
Don Rusnak Liberal Thunder Bay—Rainy River, ON
They essentially said that nothing was going to go on in their territory until their issues were dealt with. One particular chief—
Liberal
Don Rusnak Liberal Thunder Bay—Rainy River, ON
It wasn't about a road to a mine, although the road was important. It was about infrastructure in their communities: building health centres and schools, dealing with the housing, dealing with their water.
How has the department been doing in terms of ramping up in terms of that area of the country?
Assistant Deputy Minister, Lands and Economic Development, Department of Indian Affairs and Northern Development
In terms of the Ring of Fire and the nine Matawa communities, through our strategic partnerships initiative we have been working collectively with Health Canada and the Province of Ontario to try to get the nine Matawa communities to sign on to a new whole-of-government approach to address their infrastructure and priority needs. We have three communities out of the nine that are working with us now to address priorities such as water, housing, and some of their health problems.
It's slow going. The capacity there needs to be built. We're working on how we can build that capacity, respecting their governance, and trying to do a whole-of-government approach.
Mr. Rae mentioned their having to make applications to several departments. We've pushed that away, and we're working with them through a single-window approach to try to lift up that capacity of those communities so that when development does occur, they're better prepared to take advantage of that development.
This is new for us. It's a pilot that we're trying in some very disadvantaged communities. If that pilot works, then I think it sets the stage for more horizontality across departments to deal with first nations communities in addressing their needs and equipping them to be better positioned to take advantage of development down the road.
There is a large investment out of budget 2016 associated with this for housing and infrastructure, such as water treatment plants, but it goes beyond that. We have to be more present, with the Province of Ontario, in helping those communities build the capacity that they currently don't have, and that's been the focus in the Ring of Fire most recently.
Conservative
Mark Strahl Conservative Chilliwack—Hope, BC
Thank you, Mr. Chair.
Thank you to all of you. It's good to see you again.
Mr. Rae, you said you didn't want to be political, but I'm sure the history books will show that your leadership paved the way for Justin Trudeau's large majority government. We thank you, obviously, for your service to the country in your previous elected capacity and now for continuing to try to facilitate some development for the people you're working for.
I want to focus on the United Nations declaration. I was the parliamentary secretary to the Minister of Aboriginal Affairs when the initial TRC report came out. We were fairly surprised that the Liberal Party at the time right away said that they were going to adopt every recommendation in the TRC report, including, most significantly, UNDRIP, and that one of the recommendations is not only that Canada sign on but that they enact it and basically make it effective in Canadian law.
As you know, the previous Conservative government initially didn't sign, and then did, with the caveat that it was aspirational and that they couldn't see it working with section 35 and our constitutional framework. We've since seen that Minister Wilson-Raybould has said that adopting the whole thing into Canadian law is now unworkable and simplistic.
I have a couple of questions. First, do you think we can adopt UNDRIP into Canadian law, given the current constitutional framework, as was proposed by the TRC and promised by the government in the election campaign?
The second question is perhaps a little more complex. The Supreme Court has ruled that there is a duty to consult and accommodate, where necessary. I think industry has come to grips with that. As you've said, certainly the bigger companies are trying to meet that standard when they can understand it. Free, prior, and informed consent in UNDRIP is a different standard, I would argue, and I know you have said that it's a key principle of the UN Declaration on the Rights of Indigenous Peoples.
The Boreal Leadership Council has said, for instance, “It must be noted that FPIC cannot exist where a people does not have the option to meaningfully withhold consent.” It sounds like a veto in common layman's terms. Minister Bennett has said that FPIC does not constitute a veto.
There is a lot there. In your opinion, does FPIC constitute a veto over projects that do not have the consent of first nations on their traditional territory, and do you think UNDRIP can be implemented completely, as has been suggested, within the Canadian context?
Partner, Olthuis Kleer Townsend
I think we only have a restricted period of time. I'm not using that as a way of excusing not answering the question. I will try to answer it, but it is part of a longer discussion.
The first thing I would say is that within its own jurisdiction the federal government can of course implement UNDRIP. It's entirely within its jurisdiction to do so, but the reality is that the phrase “Canadian law” also includes the provinces as well as first nations, and so far no province has come forward to say that they are going to implement UNDRIP in whole.
My own personal view is that the UN declaration has to be seen as part of a whole range of approaches to first nations issues, in which, frankly, Canada has been very much a participant for the last 50 years. We've seen extraordinary developments in our own country with respect to first nations participation, involvement, consent, and so on. We obviously have to look at our own particular approaches that we've taken under Canadian law, and under the Supreme Court of Canada's quite complex journey that they have taken the country on with respect to the meaning of section 35, and how section 35 implies self-government and implies other inherent rights that are in place.
I don't believe you can have successful development in the traditional territories of the first nations without their consent. I don't believe it's practical to do it, I don't think many companies would want to do it, and I don't think any government would want to impose something on a people who simply don't want that development to take place. My experience has been that in most circumstances people want development to take place as long as it's development that's responsible and sustainable and they can be fully involved and engaged in it.
I think there has to be a real engagement by the federal government and the provinces with the first nations to take the country on a journey to greater clarity with respect to what is involved in this engagement and in the principle of free, prior, and informed consent. I think we will get there. I'm confident we'll get there, but it will take much greater engagement than we've seen so far.
The Federal Court decision in the Northern Gateway case, I think, is a clear indication from the courts that you have to get this engagement right. There are many instances—and that's probably the most high-profile one we can think of—where the courts have said “you just didn't meet the standard”, and that's the standard we have to meet.
I know the phrase “veto” gives everyone a lot of concern, but, practically speaking, even the smallest companies I've dealt with in the far north of Ontario say that if people don't want them there, they're not going there, because they can't physically function there if there's ongoing opposition from people. Look at the dispute around Muskrat Falls in the last two weeks. Given the level of confrontation and the difference of opinion, the fact of the matter was that there had to be a resolution. You need to find practical solutions to these things without seeing it as a decision that's always going to be decided by the courts.
I think we're moving to the point where it's governments that are going to have to take more of these decisions and be further engaged in that.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
Thanks to all of you for being here today.
I would like to start off with you, Mr. Rae, to continue that conversation. You mentioned the differences in approaches or opinions between the governments and the numbered treaties lands, and you talked about co-management boards in the north. In passing, you mentioned British Columbia. I'm from British Columbia, and I wondered what lessons.... You mentioned the Northern Gateway decision, but we've had others. There was the Tsilhqot'in decision, and maybe we could go back to Delgamuukw. Those decisions and how things are being done in British Columbia might—I don't know if “model” would be the right term—point the way for more action.
Partner, Olthuis Kleer Townsend
I think the Government of British Columbia and Premier Campbell led the way. I think he led the way because he realized that there was no alternative but a different relationship with first nations.
For three years I had the honour of serving as chair of the first nations limited partnership in B.C., which was a partnership of 16 first nations involved in the proposed Pacific Trail Pipeline. Those first nations negotiated a breakthrough agreement with the oil companies and with the Government of British Columbia that guarantees environmental monitoring and control of the project with respect to how that project will proceed, ongoing consultation, and substantial economic benefits to the communities, some of which have already flowed. It's a remarkably progressive document that also looks at advantages in terms of contracting, jobs, and all those opportunities.
Those kinds of development negotiations are happening across the country. To me it's one of the ironies, when you think about it, that's it because B.C. was uncomfortable with treaties, going back to the 19th century, where there is a part of British Columbia...it's covered by Treaty No. 8, which is now in court over the Site C development. B.C. and Quebec have made more progress with respect to building stronger partnerships and engagement than has taken place in the treaty provinces, because the treaties have been used as an excuse for the province and the federal government to say, well, you have your treaty; there's your deal.
When you compare that deal to the other deals that are now being signed in the non-treaty provinces, there's no comparison. That's what is creating the resentment in the treaty groups. That's what is creating this sense of total frustration that they are not getting the kind of partnerships and the kind of benefits they see other provinces getting.