Madam Speaker, I would like to say right away that the Bloc Québécois is in favour of Bill C-5, An Act to amend the Indian Oil and Gas Act.
Although imperfect, the bill will provide the tools needed to harmonize the laws and regulations on reserve lands with those that apply in the provinces in which the reserves are located. During study in committee, the Bloc Québécois asked for further clarification of the terms and conditions surrounding the authorization to issue replacement leases for lands added to reserves and subsequently of the permits granted by the federal government for oil and gas exploration or exploitation.
As a result of the work done in committee, the Bloc Québécois does not think that the bill needs any amendments. In addition, the bill is the result of a consultation procedure the government conducted through Indian Oil and Gas Canada and with the cooperation of the Indian Resource Council, which consulted most of the oil and gas producing first nations as well as 130 band councils in 2002 and 2003.
This bill is the product, therefore, of a consensus of the 130 members of the Indian Resource Council and any amendments to it would require another period of consultations.
That being said, the Government of Canada should not use Bill C-5 to avoid its fiduciary responsibility for first nations. It is incumbent upon the government to correct the inequalities between aboriginals and non-aboriginals.
To be sure we are talking about the right thing, I will provide a summary of the bill.
The bill amends the Indian Oil and Gas Act to clarify and expand the existing regulation-making powers and to add new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands and the determination and payment of oil and gas royalties. It also puts in place sanctions for contraventions of the act as well as provisions for its enforcement.
In order for us to fully grasp the scope of the bill and the need for it, I would like to provide a bit of the historical background that brought us to this point.
For more than 20 years, studies and discussions have been going on to establish a new financial relationship between the first nations and the Government of Canada.
Already in 1983, the report of the House of Commons’ Special Committee on Indian Self-Government, the Penner report, recommended that the fiscal relationship between the Government of Canada and the first nations should be redefined.
In 1996, the final report of the Royal Commission on Aboriginal Peoples, which was also known as the Erasmus-Dussault Commission, as you will recall, also recommended a full review of the fiscal relationship between the federal government and the first nations. The proposed initiative focused on redefining this relationship within a broader context based on first nations self-government. The Tlicho self-government act is an example of this.
The First Nations Oil and Gas and Moneys Management Act, which came into effect on April 1, 2006, just over three years ago now, was one of the first steps in this new fiscal relationship between the first nations and the federal government.
This optional law contains two new provisions: the first makes it possible for first nations to manage and regulate oil and gas activities on reserves; the second, to manage funds held in trust for them by Canada.
A first nation can choose either option. In other words, it need not own oil or gas to become responsible for managing these monies.
This legislation will change the way oil and gas are developed, and it will allow first nations able to do so to develop these resources on their own land. Previously, first nations had to comply with the Indian Oil and Gas Act and its regulations, which did not allow them to manage these resources directly.
The First Nations Oil and Gas and Moneys Management Act allows first nations that choose to do so to be excluded from the application of the Indian Oil and Gas Act and its regulations.
That act, the Indian Oil and Gas Act, is the legislation governing exploration and exploitation of oil and gas resources on reserve land. This legislation does not allow first nations to manage the oil and gas resources on their land directly, nor does it allow them to develop an appropriate regulatory framework.
As I said, the First Nations Oil and Gas and Moneys Management Act is a very important legislative measure. Since 2006, it has allowed first nations, if they so choose, to create regulations concerning oil and gas exploration and conservation, on the spending of moneys derived from the exploitation of these resources, and on the protection of the environment.
As for regulations to protect the environment, those established by first nations will have to at least meet the standards of Quebec or the province in which the aboriginal community is located.
In terms of managing their finances, those first nations choosing to come under this new legislative framework will be subject to different regulations regarding “Indian moneys”. This is currently defined in the Indian Act as all moneys collected, received or held by Her Majesty for the use and benefit of Indians or bands.
For these first nations, the provisions of the Indian Act will no longer apply. They will therefore be able to manage the amounts collected directly, rather than letting them be managed by the federal government. As a result, they will be able to make their own choices for investment in their communities instead of letting the Department of Indian Affairs and Northern Development dictate priorities to them. Auditor General Sheila Fraser pointed out in her 2004 report that this department is not doing a good job of administering the billions of dollars intended for the aboriginal communities.
If a first nation does not feel it would be advantageous to come under the new legislative regime, the current standards will continue to apply to it, so it will continue to benefit from the provisions of the Indian Act, including those that apply to the administration of Indian moneys.
Bill C-5 , which is incidentally identical to Bill C-63 and Bill C-5 , which died on the order paper June 17, 2008, and December 3, 2008, respectively, amends the Indian Oil and Gas Act. It is important to point out that oil is defined in the act as “a mixture of hydrocarbons that can be recovered from a well in liquid form, with the exception of condensate”.
At present, the First Nations that have oil and gas resources but do not manage them under the 2006 act must leave the management of those resources to Indian Oil and Gas Canada (IOGC), a government agency which reports to the Department of Indian and Northern Affairs.
IOGC is mandated to manage and administer the exploration and exploitation of oil and natural gas resources on Indian reserve land. IOGC promotes their development and ensures that royalties are appropriately paid to the first nations. However the Indian Oil and Gas Act has not been amended since it was passed in 1974. It is true that the Indian Oil and Gas Regulations of 1995 have been passed, but those regulations are inadequate to deal with the evolution of the market since 1974.
Faced with an increasingly complex industry, the provinces have constantly modernized their oil and gas legislation. That is why the federal government is today deciding to modernize the act, so as to bring it more in line with reality and the various legislative enactments of the provinces.
This bill will apply to reserves that were not granted rights under the First Nations Oil and Gas and Moneys Management Act. Hence it will apply to the first nations that are subject to the Indian Oil and Gas Act. Some 200 first nations produce or could produce oil and gas. At this time over 80% of this type of activity takes place, as one might guess, in Alberta. In 2005-06, over $270 million in oil and gas revenue was collected by IOGC on behalf of about 60 first nations that are signatories of development agreements in effect.
The purpose of the bill is to level the playing field between these industries’ on-reserve and off-reserve activities with the support of provincial legislation, in order to: reduce barriers to the economic development of the first nations; guarantee environmental protection on the reserves, something that is extremely important; and allow the government to better fulfill its industry management obligations to first nations through regulatory compliance and through the collection of royalties and other forms of applicable compensation.
Under the Indian Act, oil and gas revenues are collected by the federal government for subsequent full redistribution to the peoples concerned. These revenues are defined in the act as “Indian moneys”, and from them flows the federal government’s responsibility as trustee.
This bill does not have the effect of transferring the federal government’s power of management and administration of the exploration and production of oil and gas resources on first nations reserve land. Its purpose is to update the Indian Oil and Gas Act and to harmonize the federal act with legislation in the provinces where first nations communities are located.
This incorporation of provincial laws and regulations will in no way either detract from or add to provincial jurisdiction, as for example with the harmonization of reserve environmental plans with provincial requirements.
The bill replaces almost all of the provisions of the existing six-section Indian Oil and Gas Act and includes a number of matters that are currently provided for in the Indian Oil and Gas Regulations, 1995.
Bill C-5 expands the Governor in Council's existing regulation-making powers and adds new ones, particularly with respect to licences, permits and leases for the exploration and exploitation of oil and gas on reserve lands. The bill also makes changes in respect of the limitation period for actions to collect amounts owing and the determination of royalty payments.
It puts in place sanctions for contraventions of the act as well as provisions for its enforcement comprising fines and penalties, a remedy for trespass, environmental protection clauses and authority to issue replacement leases for lands added to reserves.
It would be interesting to have more information about lands added to reserves and to know what measures are being put forward in negotiations with the provinces. For example, what is meant by expanding the Governor in Council's regulation-making powers and how will the provinces be consulted before regulations are introduced? Even though the bill states that these lands have been absolutely surrendered under the Indian Act or the First Nations Land Management Act, it would be interesting to get some clarification about the negotiation process with the provinces and obtaining a permit on these added lands.
The bill also requires the minister to undertake ongoing consultations with the first nations involved with respect to negotiations with industry. The new section 6(1.1) states that: 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
(c) require that notice be given to the council of the first nation after the Minister exercises any such power.
As far as consultations prior to introduction of the bill are concerned, we need to know that through Indian Oil and Gas Canada, and in cooperation with the Indian Resource Council, the government consulted most oil-producing first nations and 130 band councils in 2002 and 2003.
The Indian Resource Council was founded in 1987 to represent first nations' collective oil and gas interests with both government and industry. More than 130 first nations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and the Northwest Territories are members. Six non-producing first nations in Quebec are also members: the Odanak Abenakis; the Natashquan Innus; the Kanesatake Mohawks; the Gesgapegiag Micmacs; the Kahnawake Mohawks; and the Wôlinak Abenakis.
Some Indian Resource Council members are dissatisfied with certain aspects of the bill, but on the whole, the council is happy with the bill and the consultations that took place.