Wednesday, November 27, 2013

The Standing Senate Committee on Energy, the Environment and Natural Resources has the honour to table its


Your committee, which was authorized to examine the subject-matter of Divisions 7 and 14 of Part 3 of Bill C-4, A second Act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures, has, in obedience to the order of reference of Tuesday, November 5, 2013, examined the said subject-matter and now reports as follows:

On November 19 and 21, 2013, the committee held two meetings and heard from seven witnesses across a range of stakeholder interests, received a submission of written evidence, and received a communication from the Government of British Columbia.

Part 3 Division 7: The Dominion Coal Blocks

This part of Bill C-4 gives the federal government the power to divest its holding of the Dominion Coal Blocks (DCB), two parcels of land totalling 20,000 hectares in the Crow’s Nest Pass region between Alberta and British Columbia (B.C.), which the Government of Canada acquired from the Province of British Columbia in 1905.

In 2009, the Government of Canada signalled its intention to review federal real property holdings, including the DCB, to determine if continued public ownership of these assets remained relevant. The review concluded there is no policy reason for continued federal ownership of the DCB and that divesting it could stimulate additional economic activity for the region. This division of the bill is the further expression of this objective.

A specified part of Parcel 82 of the DCB that overlaps the Flathead River Watershed is excluded from potential disposition to protect it from development. In 2011, British Columbia enacted the Flathead Watershed Area Conservation Act to preserve environmental values in this area. The federal government is also committed to the conservation of this area and is in discussion with the Province of British Columbia to determine the best approach to ensure the ongoing protection of the entire Flathead River Watershed.

Since March 2013, the federal government has been in consultation with First Nations who may be affected by the disposition of the DCB, notably the Ktunaxa First Nation, within whose traditional territory the DCB are located. Ongoing discussions are taking place to identify potential impacts and to develop measures to minimize those impacts.

Officials from the Department of Finance and Natural Resources Canada appeared before the committee to discuss the bill, as did the conservation organization Wildsight. Additionally, a communication was received from the Government of British Columbia.

Representatives from the Department of Finance and Natural Resources Canada told the committee they received no objections concerning the proposed disposition. A communication from the Government of British Columbia indicated it had no objections to the proposed divestiture of the DCB. Wildsight was supportive as well, subject to assurances that species at risk and water quality in the area would be protected, particularly along a wildlife corridor that extends between the national parks in the Rocky Mountains to Waterton-Glacier International Peace Park, and that full public consultations should occur with the people in the region who would be most affected, particularly the Ktunaxa First Nation.

Part 3 Division 14: The Mackenzie Gas Project Impacts Fund Act

This division of the bill repeals the Mackenzie Gas Project Impacts Act and replaces it with the Mackenzie Gas Project Impacts Fund Act. The new legislation preserves the structure of the fund, which was designed to offset the socio-economic impacts of the Mackenzie Gas Project should that project proceed. It also preserves the commitment to allocate $500 million to the fund.

The Mackenzie Gas Project Impacts Fund Act will dissolve the inactive Crown corporation that had been notionally established in 2006 to administer the fund, and it transfers administration responsibilities to a ministerial portfolio that has not yet been designated. The funds will not be active until the Mackenzie Gas Project becomes operational.

The committee heard from officials from the Canadian Northern Economic Development Agency (CanNor) and the Government of the Northwest Territories. The Inuvialuit Regional Corporation provided a written submission concerning the bill.

CanNor, the Government of the Northwest Territories and the Inuvialuit Regional Corporation are supportive of this specific division of the legislation. CanNor officials told the committee that they have experience in administering similar funding frameworks. Accordingly, these officials told the committee that they are well-positioned to manage the fund should the Governor in Council choose CanNor as the fund’s administrator.

The Government of the Northwest Territories welcomed these measures, stating that it is encouraged to see that important steps are being put in place to support the potential development of the Mackenzie Gas Project. Further, it stated its belief that having the fund administered by a minister rather than a Crown corporation would simplify the process.

The Inuvialuit Regional Corporation informed the committee that it strongly supports the continuation of the fund to assist the Inuvialuit to effectively participate and benefit from resource development within the Inuvialuit Settlement Region.

The committee is not aware of any objections to the Mackenzie Gas Project Impacts Fund Act.

Respectfully submitted,