Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 3 - Evidence
OTTAWA, Tuesday, March 31, 1998
The Standing Senate Committee on Aboriginal Peoples, to which was referred Bill C-8, respecting an accord between the Governments of Canada and the Yukon Territory relating to the administration and control of and legislative jurisdiction in respect of oil and gas, met this day at 10:12 a.m. to give consideration to the bill.
Senator Charlie Watt (Chairman) in the Chair.
[English]
The Chairman: Senators, we have before us Bill C-8, An Act respecting an accord between the Government of Canada and the Yukon Territory relating to the administration and control of and legislative jurisdiction in respect of oil and gas.
Ms Mimi Fortier, Acting Director, Northern Oil and Gas Directorate, Department of Indian Affairs and Northern Development: Mr. Chairman, honourable senators, we are pleased to have this opportunity to meet with you to discuss Bill C-8. The Canada-Yukon Oil and Gas Accord was signed on May 28, 1993. The federal government is committed to introduce legislation, consistent with the terms of the accord, to transfer to the Yukon the additional legislative powers necessary to undertake the management of oil and gas resources.
Following the direction given by the accord signed by the federal and territorial governments, these new legislative powers will not impair or diminish the capacity of the Government of Canada to fulfil federal responsibilities such as the resolution and implementation of aboriginal land claims, the creation of national parks and defence installations, and to fulfil its mandate with respect to international obligations, national security and the environment.
There are particular provisions in Bill C-8 aimed at responding to concerns of First Nations regarding the settlement and implementation of aboriginal land claims. Once the transfer of the administration and control of oil and gas is completed, the federal government will vacate the field in relation to the management and regulation of oil and gas resources in the Yukon, and so will complete another important transfer of a federal responsibility to territorial jurisdiction.
[Translation]
Mr. Normand Tremblay, Chief, Economic Policy, Northern Oil and Gas Directorate: The bill is divided into three main parts: the first part amends the Yukon Act to confer additional powers, the second part amends existing federal acts related to oil and gas jurisdiction to acknowledge the transfer, and the third part provides arrangements for the transition from federal to territorial control of oil and gas.
Amendments in the bill to the Yukon Act confer powers to the Yukon Commissioner in Council to make ordinances relating to oil and gas.
When the transfer is complete, the Yukon, through its own legislation, will manage and regulate oil and gas activities, including the exploration, development, production and conservation of these resources, environmental and safety regulation, and the determination and collection of resource revenues. These powers are analogous to the powers in respect of non-renewable resources of a province under section 92A of the Constitution Act, 1867.
The second part of the bill amends the legislation applicable to oil and gas resources in all frontier lands (the Canada Petroleum Resources Act and the Canada Oil and Gas Operations Act) so that these become non-applicable in the Yukon after the transfer.
Most of the provisions of the third part of the bill, the transitional arrangements, preserve rights under existing federal third party interests after the transfer. After transfer, Yukon oil and gas laws would apply to these interests but the provisions of this bill guarantee that Yukon laws will not diminish any rights attached these existing interests.
The bill was developed with the full participation of the Government of the Yukon. Consultations were held with numerous stakeholders, including the Canadian Association of Petroleum Producers, the Yukon Chamber of Mines and the Yukon Chamber Of Commerce.
A great deal of effort was expended to consult with First Nations, particularly the 14 Yukon First Nations. While in the past the discussions focused on the timing of devolution versus the settlement of all aboriginal land claims, the First Nations now seem to be satisfied with the protection measures put in place to allow for the resolution of claims. Indeed, they have written to the Minister of Indian Affairs and Northern Development to indicate their support.
Also leading to the Yukon First Nation support for the oil and gas transfer, seems to be the signing in January of 1997 of a set of agreements between the Government of the Yukon, the Council for Yukon First Nations, the Kwanlin Dun First Nation, the Liard First Nation and the Kaska Tribal Council. These included agreements on the oil and gas transfer which provided for operational participation in the development of territorial legislation for the administration and regulation of oil and gas.
Mr. Chairman, this concludes our presentation on Bill C-8. If you have comments or questions, we will be pleased to address them.
Senator Beaudoin: Is the primary objective of Bill C-8 to put the Yukon on the same footing as other Canadian provinces pursuant to section 92A which, as you know, was enacted in 1982? Will the Yukon be treated as a province for the purposes of natural resources exploration and development? Will it have the same powers as other provinces under section 92A?
Mr. Tremblay: The same powers.
Senator Beaudoin: The same ones?
Mr. Tremblay: Yes, but only insofar as oil and gas resources are concerned, not all mineral resources.
Senator Beaudoin: Only oil and gas resources, but not other natural resources. Is that what you are saying?
Mr. Tremblay: Not for now.
Senator Beaudoin: What type of mineral resources?
Mr. Tremblay: Iron or other types of minerals.
Senator Beaudoin: What about mines?
Mr. Tremblay: Mines as well.
Senator Beaudoin: What about water resources?
Mr. Tremblay: The transfer is not taking place right now.
Senator Beaudoin: Perhaps not right now, but that does not mean that the transfer will not occur someday down the road. It is impossible to say.
Mr. Tremblay: Perhaps at some point in the future, but not now.
[English]
Mr. Harmit Bajaj, Director, Fiscal Relations Directorate, Department of Indian Affairs and Northern Development: Mr. Chairman, the water resources are still being managed by the federal government and will continue to be until we have completed the devolution of remaining lands and resource management programs to the Yukon government.
Senator Beaudoin: The transfer is not taking place right now. That is the objective of Bill C-8, but the legislated transfer will not take place immediately, will it?
Mr. Bajaj: The transfer will not take place with respect to other resources, sir. Oil and gas management is being handled through Bill C-8, but other resources such as minerals, forestry, land management and water resources are not covered in this bill. Discussions are currently under way with the Yukon government and the Yukon First Nations to complete those arrangements. Once they are completed, the federal government will be coming forward with a proposal to transfer responsibility for those programs.
Senator Beaudoin: Is the transfer taking place now for oil and gas?
Mr. Bajaj: Yes, it is.
Senator Beaudoin: The objective is to transfer other natural resources later?
Mr. Bajaj: That is right.
Senator Berntson: My question arises from remarks made during the second reading debate by Senator Spivak. She asked how this legislation will be treated under international treaty. Apparently there are bilateral arrangements with several countries, and the number is growing every day. In 1997, the Government of Canada filed its reservations to this proposed Multilateral Agreement on Investment (MAI) with 28 other countries of the OECD. This bill was included on the government list of reservations.
Canada proposed to exempt measures implementing the Canada-Yukon oil and gas accord. They proposed to exempt this bill from the national treatment provisions of the MAI and from the restrictions on performance requirements. As I understand it, "performance requirements" means things like maximizing local participation in jobs, investment and such things.
My colleague raised two points. She would like to know whether the government plans to re-open investment treaties which exempt this bill from the requirements. She would also like to know what would prevent companies such as British Gas, Shell or Exxon, which have affiliates in other countries where we have these bilateral agreements, from coming in under that umbrella to avoid requirements that they might otherwise be subject to.
Ms Fortier: Senator, to start with the latter part of your question, we have been told that the Canada-Argentina Foreign Investment Protection Agreement contains a national treatment clause which requires that national treatment be provided to the extent possible in accordance with laws and regulations. Consequently, Canada's national treatment obligations with respect to Argentina are limited by Canada's laws and regulations. The agreement contains no obligation with respect to performance requirements.
Canada's obligations in respect to Argentina in this regard are governed by the terms of the agreements on trade-related investment measures, one of the agreements negotiated within the framework of the World Trade Organization. I understand that this is similar to other international agreements prior to NAFTA. These international agreements are less binding than NAFTA, for instance. There is a premise of "best efforts" within domestic regulation.
Senator Berntson: I am not an expert on these matters. I accept what you say. It is on the record and I am sure that Senator Spivak will accept that the question has been answered.
Senator Forest: Should this bill be passed by the Senate, what would be the implementation framework for this agreement?
Ms Fortier: Once it has passed the Senate and is proclaimed, the federal government will work with the Yukon government to ensure that all the territorial ordinances are in place to both manage and regulate the oil and gas resources. That includes regulations to protect federal dispositions and to protect the environment. We will then bring an Order in Council forward to effect a transfer date. To the degree possible, we will coordinate that with the Yukon government so that they can proclaim their ordinances for oil and gas. We expect that to happen within a couple of months after the proclamation of Bill C-8.
Senator Forest: The initial presentation indicated that a number of First Nations were in agreement and approved of it. Has there been controversy over this such as there has been over the Mackenzie Valley Resource Management Act?
Ms Fortier: It does not compare to the concerns that have been raised in terms of that. The concerns which have been historically raised with any devolution in the Yukon by Yukon First Nations has been the timing of the settlement of their land claim agreements. However, in this case, they have signed memoranda of agreement with the Yukon government to work in concert to formulate the Yukon ordinances. So they are looking at a shared formulation of the management and regulatory regime that will apply to all of the Yukon. They are quite comfortable with this devolution and have lifted their concerns in that respect.
Senator Forest: Are you speaking of all the First Nations?
Ms Fortier: Yes, I am speaking of all the Yukon First Nations.
Senator Lucier: Do I understand you to say that this will all happen in the next few months?
Ms Fortier: It is dependent upon proclamation and upon receiving regulations from the Yukon government. They have their Oil and Gas Act in place. They have a few regulations yet to draft under their act. They have led us to expect that we will have them shortly, so it should be able to happen fairly quickly.
Senator Lucier: I want to ensure that it happens in 1998, which is the 100th anniversary of the gold rush. There was a great occurrence in the Yukon in 1898 and we will have another one in 1998.
The Chairman: I guess this is the first time the Government of Canada will go beyond simply delegating to the territorial government a power which is normally in the hands of the provincial government. There are some aboriginal organizations which are still required to put together an agreement between the Yukon government and the federal government. Can you enlighten me on how many tribal councils or nations still need to conclude those agreements?
Mr. James Bishop, Chief Federal Negotiator, Department of Indian Affairs and Northern Development: I am one of two federal negotiators in the Yukon dealing with Yukon land claims. There are 14 Yukon First Nations in the Yukon territory. We have six agreements concluded and in effect. A seventh agreement is currently under ratification which we hope will be signed in June or July. Two other agreements are substantially concluded. In both cases, the negotiators have signed off memoranda of agreement. There are some remaining contingent issues. In one case, there is an issue of First Nations resolving some overlap issues. Once that is done, the agreement can be concluded fairly quickly. Of those five, one is not currently at the table. That particular First Nation is dealing with a number of internal matters and has recently approached the department about reconvening negotiations. We hope to do that some time this summer.
The other four tables are under very active negotiations. From my involvement at three of those four tables, I can say that there has been no concern expressed by the First Nations with respect to the passage of Bill C-8.
The Chairman: You also mentioned a non-derogation clause, which is a constitutional protection, a shield if you will. It seems to satisfy the federal government, but those rights are not affected in any way by this legislation.
How can you say that it is not affecting future claims when the Constitution talks only about existing rights?
Ms Fortier: The bill does not affect aboriginal rights. It is my understanding that future settlements are protected. The transfer of legislative authority in the bill does not affect those rights. There are specific provisions in the bill to designate lands that are needed to settle land claims and there are specific provisions also to make that designation to implement land claims. Of course, we also have provision to take back the title to oil and gas so that we can transfer title to the First Nations once those land claims are settled.
The Chairman: I presume that you are fully aware that that provision in the Constitution is subject to the interpretation by the court, depending upon the test case which is brought forward. It may or may not be protected.
Senator Beaudoin: Mr. Chairman, are you referring to section 35 of the 1992 act?
The Chairman: That is correct.
Senator Beaudoin: That is obviously part of the Constitution. This is a statute and the other is part of the Constitution. Obviously, this act cannot in any way derogate or supersede section 35 because section 35 is right in the heart of the Constitution. This is a statute and, of course, a statute has not the same force as the Constitution.
You said that it does not derogate. In my opinion, it does not derogate from section 35 at all.
Ms Fortier: No, it does not. The Constitution takes precedence and the land claim settlements are entrenched in section 35 once they are signed. You are concerned about the future; the unsettled land claims.
Senator Beaudoin: To what do you refer when you say the "non-derogation clause"? What do you have in mind?
Ms Fortier: There is no non-derogation clause in this bill.
Senator Beaudoin: I see. I was a bit worried because I did not see one. It is not there.
Ms Fortier: No. We felt that the transfer did not derogate from aboriginal rights and that they are protected.
Senator Beaudoin: So the protection given by section 35 remains intact.
Ms Fortier: That is right.
The Chairman: It depends upon how you interpret it. I wanted to ensure that you took every precaution while you were drafting this legislation.
Ms Fortier: We definitely did. That was a major concern of Yukon First Nations. We made a lot of minor wording changes to ensure that their concerns were taken into account. Indeed, they agreed with them and lifted their concerns.
The Chairman: Why is it that oil and gas seems to be the most urgent concern of the Yukon government rather than considering other resources which need to be placed under territorial jurisdiction before they get their provincial status, if we ever get to that point? Why are the others not part of the transfer?
Mr. Tremblay: In 1988, the Yukon government and the Government of the Northwest Territories signed an agreement in principle to negotiate the transfer of oil and gas. That was the beginning of the discussion on oil and gas and that was the only natural resource to be transferred at that moment. We focused on oil and gas because that was the commitment made in 1988.
Senator Lucier: Mr. Chairman, you must remember that the Yukon has some 32,000 people in an area almost the size of Alberta. We are having growing pains. It is for the benefit of the Yukon that we do this in an orderly fashion. It is very difficult. Our legislature has 16 members and it takes a lot of courage to take on even one thing at a time. Taking over oil and gas is a big responsibility. We already administer education, health and many other things. We have had great cooperation between the aboriginal and the non-aboriginal communities. We have come a long way in the Yukon and we are just being careful.
The Yukon used to fight like crazy for provincial status. We now see that provincial status is coming and we want to do it right and not have to do it too many times. It is not a question of whether provincial status will come to the Yukon, but when it will come. This is one more solid step.
The Government of the Yukon Territory deserves a lot of credit, as do the Aboriginal people for taking this on right now. They are already looking at forestry, and that will probably be the next resource dealt with. This is a big step for the Yukon.
The Chairman: I wish to thank the witnesses.
Is it agreed that we dispense with a clause-by-clause study of this bill?
Hon. Senators: Agreed.
The Chairman: Is it agreed that we adopt the title of the bill?
Hon. Senators: Agreed.
The Chairman: Is it agreed that I report the bill back to the Senate?
Hon. Senators: Agreed.
The Chairman: We will now proceed in camera.
The committee continued in camera.