Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 3 - Evidence - December 5, 2013
OTTAWA, Thursday, December 5, 2013
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:04 a.m. to study the subject-matter of Bill C-15, An Act to replace the Northwest Territories Act to implement certain provisions of the Northwest Territories Lands and Resources Devolution Agreement and to repeal or make amendments to the Territorial Lands Act, the Northwest Territories Waters Act, the Mackenzie Valley Resource Management Act, other Acts and certain orders and regulations.
Senator Grant Mitchell (Deputy Chair) in the chair.
[Translation]
The Deputy Chair: Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Grant Mitchell. I represent the province of Alberta in the Senate and I am the deputy chair of the committee. Senator Neufeld, the chair of this committee, is unfortunately unable to be at our meeting today.
[English]
I would like to welcome the senators, any members of the public who happen to be watching at this early hour or when it's rebroadcast — because it's excellent television, as we all know — and I would certainly like to welcome witnesses, staff members and members of the public who are actually here with us today.
I will begin by introducing the staff who are with us, who do excellent work in supporting the work of this committee. They are, on my immediate right, Sam Banks and Marc LeBlanc from the Library of Parliament, and on my left is Lynn Gordon, the clerk.
Starting on my right with Senator Frum, I would ask the senators to introduce themselves so people understand who we are and where we come from.
Senator Frum: Linda Frum, Ontario.
Senator Sibbeston: Nick Sibbeston from the Northwest Territories.
[Translation]
Senator Massicotte: Paul Massicotte from the province of Quebec.
Senator Ringuette: Pierrette Ringuette from New Brunswick.
[English]
Senator Wallace: John Wallace, New Brunswick.
Senator Patterson: Dennis Patterson, Nunavut.
Senator Black: Doug Black, Alberta.
Senator Seidman: Judith Seidman from Montreal, Quebec.
[Translation]
Senator Boisvenu: Pierre-Hugues Boisvenu, province of Quebec.
[English]
The Deputy Chair: Today we begin our pre-study hearings on Bill C-15, An Act to replace the Northwest Territories Act to implement certain provisions of the Northwest Territories Lands and Resources Devolution Agreement and to repeal or make amendments to the Territorial Lands Act, the Northwest Territories Waters Act, the Mackenzie Valley Resource Management Act, other Acts and certain orders and regulations. It was introduced in the House of Commons on December 3, 2013.
Honourable senators and members of the public, this bill, whose short title is the ``Northwest Territories Devolution Act,'' contains four parts in 240 pages and enacts and amends various acts, among other things. The clerk has electronically distributed a copy of the bill and a clause-by-clause briefing binder from Aboriginal Affairs and Northern Development Canada. If you do not have these documents with you today or require anything, please signal the clerk.
It gives me great pleasure to welcome in the first segment of our meeting the Honourable Bernard Valcourt, P.C., M.P., Minister of Aboriginal Affairs and Northern Development since 2013 and Member of Parliament for Madawaska—Restigouche, New Brunswick.
Minister Valcourt, thank you so much for being with us today. We all appreciate how busy you are, the kind of agenda you face every day and the challenges that have been involved in the negotiations of this devolution. So it's an important day for you to be here — it is for us — and it's also greatly appreciated that you've taken the time to be with us.
I would also like to mention the people who are with you and congratulate them on an excellent technical briefing that was provided by them, as a group, to a number of members of Parliament and on the Senate side of the house on Monday evening. It was excellent. They are Paula Isaak, Director General, Natural Resources and Environment Branch; Tara Shannon, Director, Resource Policy and Programs Directorate; and Wayne Walsh, Director, Northwest Devolution Negotiations.
From the Department of Justice, we have Tom Isaac, Senior Counsel, Negotiations, Northern Affairs and Federal Interlocutor.
Mr. Minister, you are well aware of how this works. We look forward to your comments and then we will open it up to questions.
[Translation]
Hon. Bernard Valcourt, P.C., M.P., Minister of Aboriginal Affairs and Northern Development: Mr. Chair, thank you for your welcome and for the invitation to appear before the Standing Senate Committee on Energy, the Environment and Natural Resources on Bill C-15, An Act to replace the Northwest Territories Act to implement certain provisions of the Northwest Territories Lands and Resources Devolution Agreement and to repeal or make amendments to the Territorial Lands Act, the Northwest Territories Waters Act, the Mackenzie Valley Resource Management Act, other Acts and certain orders and regulations. Your committee is commencing its pre-study of this important bill.
As many of you know, the introduction of this bill has been a long time coming. This bill would bring into effect the Northwest Territories Land and Resources Agreement, which completes a process of federal transfers that began more than 40 years ago, when the Government of the Northwest Territories moved to Yellowknife in 1967.
[English]
No one knows this journey better than two members of this committee, and I'm talking about Senators Sibbeston and Patterson, both former Premiers of the Government of the Northwest Territories. I'm very pleased that Senator Patterson has agreed to shepherd this important bill through the Senate on behalf of the government. I thank him for it. His expertise and leadership will be invaluable to this committee, as we all work toward a common goal to have this legislation in place to meet the target devolution effective date of April 1, 2014.
As Senators Patterson and Sibbeston know very well, many successive governments have attempted to reach a devolution agreement on lands and resources but failed. It was only under the tireless leadership of this Prime Minister, Stephen Harper, and the Premier of the Northwest Territories, Bob McLeod, that we are here today.
I understand that the committee will be hearing next from the premier, who is here this morning. I had the opportunity to meet with Premier McLeod in Yellowknife and Inuvik earlier this year for the conclusion and signing of the devolution agreement, as well as earlier this week where he conveyed to me once again the importance of this bill to the people and the Legislative Assembly of the Northwest Territories. To use his words, ``Devolution is an historic step in the political and economic development of the Northwest Territories.''
I'm talking about when we were in Yellowknife, a few days after my being sworn in, where I was privileged, along with the Prime Minister, to accompany the premier and members of the Government of the Northwest Territories for the final conclusion of the agreement in principle. The premier said:
Devolution is an historic step in the political and economic development of the Northwest Territories. . . . It has been a long-term priority for the people and Legislative Assembly of the NWT and will help ensure NWT residents benefit from the responsible development of the North's great resource potential. Devolution will help transform the Northwest Territories economy and create jobs and opportunities for our residents and all Canadians, especially if it is supported by an efficient and effective regulatory system that promotes investment while ensuring resource development occurs sustainably.
Indeed, our government and this Prime Minister are determined to see the North and its communities benefit from the economic boom that is unfolding in the North.
[Translation]
There is no doubt that the Northwest Territories is blessed with a wealth of natural resources and that bringing these resources to market would generate significant revenue and jobs for northerners and Canadians in general.
As we complete devolution we must ensure that we are handing over an effective and efficient regulatory regime to take advantage of resource development opportunities while balancing potential environmental risks. Unfortunately, the regulatory regime currently in place to weigh the potential risks and benefits of resource development in the Northwest Territories is not adequate to meet the current and the future needs of the people of the Northwest Territories.
[English]
The Government of the Northwest Territories agrees that in order for northerners to benefit fully from the transfer of management over lands and resources post April 2014, a modern and effective regulatory regime must be in place. As the premier stated earlier this week, ``Our position has always been that we want an effective, efficient regulatory framework.'' That is why the Northwest Territories Devolution Act includes important changes to the Territorial Lands Act, the Mackenzie Valley Resource Management Act and the Northwest Territories Waters Act, which would bring about a more responsible, efficient and effective framework for resource management in the Northwest Territories.
One of the key changes is the establishment of firm time limits for reviews and assessments of proposed projects. Time limits on completing the regulatory reviews and assessments are essential because they provide clarity, predictability and transparency to the review and assessment processes and decisions.
These proposed time limits are consistent with environmental assessment processes used in the rest of the country, such as the Canadian Environmental Assessment Act, 2012, and the Nunavut Planning and Project Assessment Act. This consistency will enhance investor confidence and attract future investment in the Northwest Territories.
We didn't arrive at these changes overnight. The legislation now before this committee is the product of a thorough process of study, consultations and engagement with northerners, Aboriginal groups and other stakeholders.
[Translation]
In 2005, you will recall, the Auditor General of Canada identified the fact that the investment climate in the Northwest Territories is uncertain, largely due to a complex regulatory regime. And in 2007, our government appointed Mr. Neil McCrank to review and make changes to the regulatory system in the Northwest Territories, and in particular to the Mackenzie Valley Resource Management Act.
Then, in 2010, my predecessor, Chuck Strahl, the former Minister of Aboriginal Affairs and Northern Development, announced the Action Plan to improve Northern Regulatory Regimes. This identified legislative changes to improve the northern regulatory regimes across the north, including the creation of the Northwest Territories Surface Rights Board, which this committee had the opportunity to review last year as part of its study on Bill C-47 the Northern Jobs and Growth Act.
With this bill before you today, we fulfill the last outstanding obligation of the government to ensure the complete transfer of responsibilities over lands and resources to the Northwest Territories. This legislation will be repealed as a result of this Act before you today and replacement legislation will be put in place in the Northwest Territories.
In addition, in 2010, our government also appointed Mr. John Pollard to conduct consultations focused on the proposed restructuring of land and water boards under the Mackenzie Valley Resource Management Act. Based on the Action Plan to improve Northern Regulatory Regimes, the discussions were broadened to include additional amendments to the Mackenzie Valley Resource Management Act as well as to the Northwest Territories Waters Act and the Territorial Lands Act.
These consultations with all of the boards affected by the proposed amendments, industry stakeholders, and representatives of the Government of the Northwest Territories, as well as Aboriginal organizations with and without settled land claims in the Northwest Territories, have helped to shape the version of the bill now before us.
[English]
In conclusion, Mr. Chair, we know that northerners are keen to assume the responsibilities and responsibly exercise the powers that come with devolution. They appreciate both the potential benefits and risks of resource development, and they understand that modern, effective regulatory regimes are essential tools for balancing environmental and economic concerns.
As committee members conduct their review of Bill C-15, I encourage them to recognize that the Northwest Territories is on the cusp of a new era, one that will see the territory assume its rightful place as a full partner in this country's prosperity.
At this time, Mr. Chair, I'll do my best to answer any questions you may have. As all ministers must do sometimes, if I cannot answer, I'm ably supported this morning.
The Deputy Chair: Thank you very much for your very informative presentation.
As you alluded, Mr. Minister, we're very fortunate to have two former heads of the Government of the Northwest Territories who have been integrally involved. I'll start with them and give precedence in that choice to Senator Patterson, who is the lead on our committee for this bill.
Senator Patterson: Thank you very much, Mr. Chair.
I'd like to thank the minister for his gracious comments about Senator Sibbeston and myself, and his understanding that today brings us to the end of a very long process.
Although I appreciate his kind words, the fact is that it was about 25 years ago when I was involved with the Northwest Territories administration that signed an enabling agreement to negotiate a northern accord in the Mulroney administration, which Minister Valcourt was part of, but it did not crystallize. I guess I was part of one of those efforts that did not result in the achievement of this long-standing goal of the people of the N.W.T.
Looking back, there has been devolution of authority in other areas, like health, in our past history, but this is certainly the single most significant transfer of province-like jurisdiction to the people of the Northwest Territories. So it's historic, and I'm feeling very privileged and humbled to have a role in this today.
I do want to commend Minister Valcourt and his staff for getting us to where we are today, because it was only a very short time ago that the AIP was signed and everyone agreed to a tight timetable. Your efforts, minister, amidst your other important responsibilities in Canada, are very much appreciated.
Minister Duncan and Minister Strahl should also be noted today. I have worked with them, and they also kept this item as a priority for the Government of Canada, with the support of our Prime Minister. Thank you for that acknowledgment.
Minister, what do you see as the specific and tangible benefits that the implementation of this devolution agreement will provide for northerners and all Canadians?
Mr. Valcourt: Our work toward devolution in the Northwest Territories recognizes that the political and economic evolution of the people and governance of the territory is at the heart of Canada because, as you may remember, when this government took office in 2006, one of the first things that the Prime Minister and the government did was to adopt the Northern Strategy. Yes, indeed, sovereignty and social and economic development, but governance and the devolution of province-like powers to the territory, were at the heart of this Northern Strategy. This was to allow and permit northerners to become the full architects of their own development.
Let's look at Yukon. This is the tenth anniversary of devolution in the Yukon. For 10 straight years, the GDP has gone up and they're not looking backward; they're looking forward.
This will give the Northwest Territories new impetus. What is important, and we must not miss this, is the regulatory regime, which has been faulted with the standstill position of the Northwest Territories in comparison to the other territories. Now, with the benefit of this legislation, it will have a competitive environmental regime. I think we can count on the strength and resilience of the people of the Northwest Territories to take this challenge full ahead but be in charge of their own development, which will benefit all of us as Canadians.
Senator Patterson: Thank you, minister. I have one very specific supplementary question.
Any change comes with some resistance. You're aware, minister, that concerns have been expressed in the N.W.T. about creating one board, as we have in Nunavut, to replace a number of boards on a regional basis. I'm sure the committee will hear concerns about that as we study the bill, particularly from Aboriginal governments in the Mackenzie Valley.
Could you comment on accommodations that have been made to ensure regional representation in decision making, especially when it comes to setting up panels provided for under the act? I believe you were involved with this. There were consultations, and I believe the government has made some accommodations.
Mr. Valcourt: Thank you, senator, for raising that because, indeed, you will hear from some representatives who will question this move to one board for the entire territory.
I want to be clear with you all that this is in full respect of the comprehensive land claim agreements that have been entered into with those groups. I have here the Tlicho agreement. Just to be clear, if you look at paragraph 22.4.1 of the Tlicho agreement, land and water boards for larger areas, this was contemplated when these negotiations and land claims agreements were concluded. Where legislation establishes any other land and water board with jurisdiction in an area larger than but including the larger board, it shall assume the powers, et cetera.
This was not a new thing. Currently there are four land and water boards for the Mackenzie Valley. Three of the existing land and water boards are the Gwich'in, Sahtu and Wek'èezhìi and they each function in their claim areas as regionals panels of the Mackenzie Valley lands and water boards, which are responsible for projects that cover more than one region and for the unsettled area.
The restructured board will continue to make objective decisions and seek input into its review of developers' applications for land use permits and water licences, recognizing regional interests are concerned regarding development and environmental protection.
In our consultation process, we heard those boards questioning whether they would still be protected. The restructured board will not have permanent panels. However, in order to accommodate that concern, the amendments allow for the chair to establish smaller committees to deal with applications before the Mackenzie Valley Land and Water Board. Furthermore, in response to comments received through the consultations, the proposed legislation requires the chair to appoint the regionally nominated representative to the smaller committees when they are considering an application wholly within that region. With respect to the fear that their concern could not be understood or articulated, although the member on the board is objective, he or she is not a representative of a particular party. He or she is there to discharge his or her responsibility and do an objective assessment or review. We made that accommodation to allay that concern.
Senator Sibbeston: I thank the minister for reminding us of our roles, and he has completely disarmed me in terms of any criticism.
Mr. Valcourt: Why do you think I did that?
Senator Sibbeston: The relationship between the federal government and the Government of the Northwest Territories has evolved over the years. When I came on the scene in 1970 as a young person elected to what was the then the Territorial Council, it consisted of ten elected people and four appointed members. The government — the executive — was the commissioner, the deputy commissioner and the assistant commissioner. So over the years a lot of progress has been made with respect to responsible government to the point now where there is now responsible government in the North. A lot of progress has been made by the people of the North.
I've said about responsible government that it's a struggling process. It doesn't happen by writing nice letters and being nice to federal officials. You have to be really mean and knock on the table and be really determined. That's been the process.
This devolution agreement is the last stage of giving full responsibility to the people of the North. It's the transfer of lands and resources. It's laudable for the government to do this, but I do notice that it's like a father to a son that's grown up, a father giving a car to a son and saying, ``Son, you're grown up and responsible, so here's a car for you.'' But then it is like you are withholding some elements of it. You're holding maybe the keys or adding restrictions and saying, ``Well, you can't drive at night,'' or, ``You can't have girls in your car.''
I consider that the Mackenzie Valley Resource Management Board Act is the super board in the North that will be controlling development. It will basically be making decisions with respect to any development project in the North. I notice that the federal government is holding and retaining control of this. They will be able to make appointments as to who sits on the board, and the minister can give policy direction.
It seems to me laudable in many ways in the sense that we are at the stage of the North attaining full control over its resources, but you, as a minister, want to retain some aspects of it. It's as if you don't trust the people of the North to make all of the decisions. Can you comment on that? Tell me it's not true.
Mr. Valcourt: Absolutely you are right; it's not true.
First of all, let me point out that when we negotiated the devolution agreement with the Northwest Territories, of course that was agreed to. If you look at chapter 3 of the devolution agreement, you will find at paragraph 3.17, I think, that Canada has understand taken to keep the Mackenzie Valley Resource Management Act as a federal act because this is the statute or the vehicle through which Canada will continue to manage the federal lands that we will retain, plus those contaminated sites that we have undertaken to remediate. But it has been agreed that some of the powers under the Mackenzie Valley Resource Management Act will be delegated. Paragraph 3.17, for example, says that we will delegate the ability to the Government of the Northwest Territories to approve the issuance of certain water licences, to hold money as security, to make sure that land and water users follow the rules, choose land and water inspectors, keep track of records of the effects of land and water use over time, and coordinate environmental assessment decisions under the act.
These powers were agreed to be given and delegated to the Northwest Territories, but Premier McLeod, never being satisfied with these powers — again, in our consultation process, I and the government agreed to further delegate under the devolution agreement. For example, I agreed to delegate administrative monetary penalties, including penalties for violations in relation to development certificates. I agreed to delegate ministerial decisions on the time-limit extensions but not time-limit extensions granted through the Governor-in-Council for developments only on commissioner's or private lands. I have agreed to delegations and designations related to inspectors and inspections of development certificates, the approval of water Type B licences, which you are familiar with, and regional studies. I have agreed to delegate even more responsibility with the undertaking in our agreement to review the whole thing in five years.
As the Government of Canada, I think we owe the taxpayers, the citizens of the whole of Canada, to act in the best interests of our country. As we go along, we will review the whole thing in five years to see how it is operating, but I trust, senator, that you will agree with me that with these further delegations, they will not feel it is a paternalistic relationship with Canada, quite to the contrary.
Senator Sibbeston: Thank you.
One of the unique aspects of this undertaking, the whole process of the federal government and the Government of the Northwest Territories, is the involvement and the role of Aboriginal governments that exist in the North. I think it is a significant factor. It would never happen in Alberta, New Brunswick and Nova Scotia that a federal undertaking would involve Aboriginal groups playing a significant role. Could you say something about that to tell Canadians how you feel about this and how significant it is in terms of roles that Aboriginal governments and people will be playing?
Mr. Valcourt: Central to this initiative is all the beneficiaries, of course, under the several comprehensive land claim agreements. As you know, senator, we continue negotiating over two other parts of the territory with four groups, as we speak, and we hope that this devolution will create a new impetus to reach agreement in the unsettled area.
What is at the heart of this bill is the full respect of this co-management principle that is transparent in all of the comprehensive land claims agreements with the Aboriginal groups in question. We were very careful to ensure that the spirit and the letter of those agreements were respected in the drafting of this. Even though we are going to have this board for the whole of the territory, they keep their proportional representation. They will continue to co-manage. The Tlicho, for example, in their agreement, they have the right to appoint a person. That is there; it is fully respected.
When you look at the reality on the ground, the amount of land and resources in the control of these Aboriginal parties to the agreement — they were all parties to the agreement on devolution — is essential. A particular player — you would not see this, as you point out, in other provinces, because there are no other groups in the provinces except the province that holds all of the land. But here they are privileged partners of the Northwest Territories government, and it keeps them whole as a people in the Northwest Territories.
Senator Sibbeston: I will comment, too, that a big aspect of this agreement is that the federal government and the territorial government will be sharing resource revenue, the royalties derived from the development of resources in the North. The federal government will keep 50 per cent and they are going to give 50 per cent of the resource revenues to the GNWT. Some of this revenue, in turn, will be shared with Aboriginal governments, which is significant.
Mr. Valcourt: Absolutely. I am glad you point that out.
I was before the House of Commons Standing Committee on Aboriginal Affairs with the supplementary estimates last week. In my Supplementary Estimates (B) for 2013-14, I had some $20 million for a one-time cost that will be paid over to the government, but also to Aboriginal parties; there was $4 million for them. Ongoing, $4.6 million per year will go to the Aboriginal partners we have in the Northwest Territories, so it is unique.
I think the senator is right that Canadians should realize that in the Northwest Territories — in the whole of the North, for that matter — we have a very particular situation. That is why, when I talk about the North being so representative of what Canada is and what we identify with, I talk about the way to govern themselves and the role that these Aboriginal parties play.
Senator Black: Minister, to you and your team, and certainly to my colleague senators, you are to be congratulated on a clear effort of nation-building. For my very small part in this, I am proud to be a participant in this, because this is important work.
I have four questions for you, if I may, subject to the good graces of the deputy chair.
The Deputy Chair: We have 20 minutes with the minister, but we're looking forward to your four questions.
Senator Black: Well, my questions will be short and I know your answers, minister, will be short also.
You referred to the federal lands that will be retained and that will exist in the Northwest Territories. Will this proposed regulatory system apply to projects that may be developed on federal lands?
Mr. Valcourt: Absolutely, yes.
Senator Black: Mr. Neil McCrank, who is a friend of yours and certainly a friend of mine — he's done great work here — recommended in his report the creation of the equivalent of a major projects management organization in Natural Resources Canada for the North. Does CanNor fill that role?
Mr. Valcourt: To an extent, you can say that, yes, it does. CanNor is, if I can use the expression, en perpétuel développement, en perpétuel devenir. It plays a role that attunes itself to needs as they arise. We can envisage that CanNor will continue to play that role, but it is important to stress the fact that that role will never be a substitute for the powers that are being devolved, and that is important for northerners to know.
Senator Black: Minister, as we move into this new world with this new board, of course we understand that additional resources will be required by the board for such things as ensuring that the regulatory process is timely and efficient and that translation services exist and whatnot. Can you assure us that the resources necessary to ensure the efficient operating of the board will be available?
Mr. Valcourt: Yes, I can. When we negotiated the devolution agreement, Canada undertook and covenanted with the Northwest Territories to pay for each board under the Mackenzie Valley Resource Management Act. The experience to date, I think, is a testament to the fact that, indeed, the necessary resources will be invested to make sure that we discharge our responsibility to pay for each board under the Mackenzie Valley Resource Management Act.
Senator Black: Finally, again I refer to Mr. McCrank's 2008 report, where he recommended — and I am paraphrasing — that the government clarify its role and the role of the other actors in responding to the requirement for Aboriginal consultation and accommodation.
I come from Alberta. I'm very engaged, and have been historically, with the energy industry. I continue to hear a great deal of concern on this issue of Aboriginal consultation. In the context of responding to Mr. McCrank's report, and perhaps more generally, can you tell me what the Government of Canada is doing to improve clarity and investment certainty on this issue?
Mr. Valcourt: I think that one of the benefits of the amendments that are being brought to the regulatory regime will not only ensure the execution of our undertaking in the comprehensive land claim agreement to do that consultation, but now there will be a process in place where, early on, the proponents understand more and more the importance of proper consultation with the Aboriginal groups in question. I think that to have a more efficient and effective regulatory regime in place will promote a much clearer and much more effective consultation process. That is our hope.
We are progressing and learning. Mr. Eyford will report today on the work the Prime Minister mandated to him regarding the energy file for the B.C. coast. But I think we will want to look at those recommendations because the consultation obligation is not particular to B.C.; it applies all across the country. If we can learn from those experiences and his recommendations — we will look at them with a view to make sure that we properly consult and accommodate where it can be done.
Senator Black: May I take from that that it would be your and your department's intention to review the experience to date, review what Mr. Eyford has to say in his report today, and possibly move to providing Canadian business with greater clarity around what Aboriginal consultation means?
Mr. Valcourt: I think that the powers being devolved to the Northwest Territories government will play a much bigger and a much more important role in the future. All of those projects that come under the jurisdiction of the Government of the Northwest Territories — they will have that obligation to consult. We know, I think, and can suspect that they will be very jealous of that obligation and the power which they will now be responsible for.
The premier and I have agreed that we will continue, notwithstanding devolution, to work together. We're going to meet quarterly to review our progress. Anything we can do to ensure this devolution works to the advantage of northerners in the Northwest Territories and Canadians, we will do.
Senator Black: Thank you, minister, and congratulations.
Senator Frum: Minister, welcome and thank you. Congratulations to you for all the hard work that went into being able to bring this bill forward.
You mentioned it is now the tenth anniversary of the Yukon devolution agreement. Does this devolution agreement differ in any significant ways from that one and, if so, does it make any difference? Can you comment on the differences?
Mr. Valcourt: That's a tough question. Generally, I would say that this is quite at par with the devolution agreement in the Yukon and if there are particularities, they would be tied to the form of the Government of the Northwest Territories. If there is anything else, I will ask Wayne to respond.
[English]
Wayne Walsh, Director, Northwest Devolution Negotiations, Aboriginal Affairs and Northern Development Canada: Yes, the minister is correct. The framework is largely the same. There are unique circumstances that differ between the two agreements because the two territories are different. Primarily, the biggest difference is that we didn't deal with forestry in the Northwest Territories because that had already been devolved, whereas in the Yukon it was not. We dealt with oil and gas in the Northwest Territories devolution and the Yukon agreement did not deal with that because in that circumstance it was already devolved.
The offshore straddling resources are a unique feature because of the nature of the geography, and the offshore and onshore in the Northwest Territories is a unique element to the devolution agreement.
Finally, the approaches to contaminated waste sites and how we are going to remediate and retain them is a different model from the Yukon. That was for two reasons. One is because of lessons learned from our experience and the second is the regulatory regime system because the land claims are different in the Northwest Territories. So in all, I would say those are the main elements but no impact; I think the practical outcome is the same.
Senator Frum: Is there a next step in the devolution process after the agreement comes into force, something else that will happen later?
Mr. Valcourt: The next step will be in five years' time to review the operation of the Mackenzie Valley Resource Management Act and how we've come along. I would say that's the next step.
The other next step, of course, is there will be implementation and the coming into force of different parts and sections of this bill because it is something that takes place in a cohesive way to ensure that one part will trigger the option of another. The implementation process is the really the next step, culminating with this five-year review.
Senator Seidman: Minister, thank you very much. I would like to say, as has already been said by the deputy chair of the committee, that we had an excellent briefing from the people in your department the other night, and Justice was there as well. It was truly a remarkably good briefing, so thank you to the people in your department for that.
We're also aware that this is truly a nation-changing event and it is a privilege to have this bill before our committee. I would like to join the voices of congratulations for all the efforts that went into making this devolution agreement a success this time.
I would like to pursue the question that Senator Frum finished with and that is these last stages. I'd like to know who is involved in these last stages of implementation and how the stages will be undertaken, what is really left in the process, what the process in devolution will be, what steps we can expect and whether you anticipate any challenges in its implementation before April 1, because that is the end date.
Mr. Valcourt: Well, you've referred to officials that briefed senators on the bill, but I want to take this opportunity to pay tribute to those officials because Premier McLeod and Prime Minister Harper played a trick on the department in the sense that this was supposed to happen in 2015. Ever since the premier and the Prime Minister agreed to accelerate the implementation, these officials have been working 24 hours a day, seven days a week. The amount of work they have done at both the territorial level and our level has got to be acknowledged, and we should all thank the officials for their excellent work.
That said, from here until the effective date of April 1, the Government of the Northwest Territories has a lot of work on its plate. They have to mirror certain legislation that is amended by the bill and go through all of that process. When it comes into force it will trigger another implementation period which is the actualization of the amendments, for example, at the board level. That means that our Aboriginal partners will also have to execute the amendments that result in those changes that will be taking place. It will be a whole-of-the-party undertaking because many people will have to play and execute what the law will hopefully, if it is passed, say must happen.
It's going to be an active period from now until April 1, 2014, and thereafter into the actual implementation of the changes.
Senator Seidman: Perhaps I will follow up with the premier on this question later.
[Translation]
Senator Massicotte: I share the same sentiments, that it is a privilege to be involved in the process that will lead to the passage of this bill. I must also mention that we are very privileged because our committee has among its members at least two senators who know this subject very well.
We are at the beginning of our study and our understanding will become deeper with time. Our starting principle is decentralization, giving responsibilities to people who are more familiar with the details of their territories. This is a worthy concept that often brings administrative benefits. However, as we have learned from other cases of decentralization, if the responsibilities are not well distributed, if things are not done well, the result is often detrimental and the desired objectives are not met.
Can you advise us about the two or three most important aspects that we must consider as this is implemented, so that, in 5 or 10 years, we can say that it was a good decision that benefited everyone?
Mr. Valcourt: I am certainly not the one to give advice. You mentioned implementation, though it is rather a transfer of responsibilities. So if I were in your place, I would make sure that I fully understood the transfer agreement. The objective of the bill is to establish the legislative framework for the transfer agreement that is now complete and that was signed by the premier and myself in June.
As Senators Sibbeston and Patterson said, this process has been going on for almost 40 years. The transfer agreement was completed after marathon negotiating sessions, and monstrous studies and analyses. The agreement is really at the heart of this bill. So we want to make sure that the provisions of the agreement are fully reflected in the bill.
The other important aspect is the transfer of responsibilities over natural resources and inland waters. We are focused on economic development. This region has a wealth of natural resources, including gas, oil and minerals. The question is whether the Northwest Territories will have a regulatory regime that is competitive yet in compliance with our obligations under the comprehensive agreements. Is the investor going to look at the Northwest Territories and say, ``No, I am better off investing in the Yukon, in Nunavut or in Alberta because their regimes are more efficient.'' Does the regime meet the expectations of investors who want one that respects the environment, but also leads to development? Those are the main issues.
Senator Massicotte: Your point is that the legislation has to incorporate the agreement as such. Speaking of the agreement, what were the two major points that were most difficult for the parties to negotiate?
Mr. Valcourt: I was not at the negotiating table, but if I had to guess, I would probably say that it was the delegation of powers under the Mackenzie Valley Resource Management Act. I am also sure, without actually being told, that there was also the issue of transferring money and human resources. I want to reassure senators about that point. There are over 130 employees in the federal public service whose employer is going to change. So, from a human resources management perspective, it was important that those employees should agree to the change. They are becoming employees of the Northwest Territories. They have received offers and it was done successfully. As I understand it — the premier will be able to tell you in a moment — the vast majority have agreed to take the positions in the Government of the Northwest Territories. First of all, it ensures a corporate memory, which is important.
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Senator Massicotte: Mr. Walsh, do you agree with that? You wanted to add something, I think.
Mr. Walsh: I concur with the minister. The issue of human resources was very challenging because we have two different systems, and I think both governments wanted to ensure total respect of employees.
Senator Massicotte: That was the most difficult?
Mr. Walsh: It was difficult because we have two simple systems, and the different systems of compensation and benefits were difficult to compare. It was difficult from a technical standpoint, not necessarily from a ``head-butting negotiation'' standpoint.
The other point that I think was difficult was how we were going to deal with waste sites. The overall principle we agreed to very early on was that Canada would retain the responsibility for remediation of the waste sites that occurred under Canada's watch, but there are many different ways, models and techniques that we could have come up with. It was more of a technical issue.
For example, there's the simple definition of what constituted a waste site and to what level are we going to remediate the monitoring, and at what point do you transfer the waste sites once they are cleaned and remediated to the Government of the Northwest Territories; al very technical issues, and we had worked through different permutations when we finally landed.
I say it was challenging because it affected other aspects of the agreement, and it all came into place quickly, but I would say those were the two biggest nuts to crack.
The Deputy Chair: We are now imposing on the minister's evident good nature, so this is the last question. I would ask Senator Ringuette to be brief and to the point. Thank you.
[Translation]
Senator Ringuette: Thank you for being here, Mr. Minister. In your presentation you used the words ``completes the process of federal transfers.'' So we have a transfer of responsibilities that is limited to a co-management system for those responsibilities. It concerns me when you use the words ``completes the process.''
My second question is about the fact the federal government has announced the sale of Crown properties to private entities, not to governmental entities. Does the agreement before us include a protocol under which the Government of the Northwest Territories could be the first purchaser if the federal government decides to part with certain Crown properties?
Mr. Valcourt: On your first question, we must not get the wrong idea about co-management. Under the comprehensive agreements reached by the Government of Canada, the Government of the Northwest Territories and, say, the Tlicho, there is a co-management regime for the environment and for resource management. That is the co- management regime I am talking about. There will be no co-management of Northwest Territories' land and resources between the federal government and the Government of the Northwest Territories. Co-management will happen in places where there are regulations, as was intended. So there will be no federal co-management with the Northwest Territories.
The second question is really technical. Federal lands, for the most part, will stay as a federal government responsibility. Those are the national parks, but it is a technical point, I feel. Is there a right of first refusal? That is what we are asked when we want to divest ourselves of a federal asset in the territories.
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Mr. Walsh: The agreement speaks of the transfer of lands and resources to the administration and control to the Government of the Northwest Territories, but it also speaks to the transfer of everything required to manage that responsibility. We talked earlier about human resources. It also deals with the transfer of assets, so buildings, trucks, warehouses, whatever assets of those functions currently in our inventory required to undertake those functions. That includes IT, records — all those things. That forms a large part of our implementation efforts between now and April 1.
Post-devolution, or after April 1, the agreement is silent. So if in a year or five years from now the Government of Canada or the Department of Aboriginal Affairs determines it no longer needs a certain asset, then that would be disposed of, following current Treasury Board guidelines.
The Deputy Chair: Thank you very much.
We've gone over time. You've been very generous with your time. Mr. Minister, our thanks to you and your officials for an excellent briefing. We appreciate it greatly.
As I said earlier, we're running a bit behind time. I'm going to be a little less lenient this time with my colleagues, just to keep things moving. We don't want to impose too much on the premier's time.
With that said, welcome to the second half of our meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. We are continuing our examination of Bill C-15. We just had an excellent briefing from the minister and his officials. I'm pleased in particular now to welcome the Honourable Bob McLeod, Premier of the Northwest Territories.
Welcome, Mr. McLeod. It's a great pleasure to have you here on what must be a very auspicious and proud time for you, having been so involved in what our colleagues have pointed out as being — and what you understand implicitly as being — nation-building. It's quite historic and it's a great honour for us to be here with you to share this moment and this process with you and with your great territory.
In addition to you being with us, you have brought two officials: Michael Miltenberger, Minister of Environment and Natural Resources; and Shaleen Woodword, Assistant Deputy Minister of Devolution Implementation.
Thank you again for being with us. If you would like to make some opening comments, that would be more than welcome, and we'll then ask you questions.
Hon. Bob McLeod, Premier of the Northwest Territories, Government of the Northwest Territories: Thank you, Mr. Chair. I also want to recognize two senators who have helped blaze the trail for where we are today: Senator Patterson and Senator Sibbeston.
Honourable senators, thank you for the invitation to address the Senate Energy Committee. I'm pleased to be here to speak about Bill C-15, the Northwest Territories Devolution Act. Devolution of responsibility for public lands, resources and water has been a priority for the people and Legislative Assembly of the Northwest Territories for many years. The Government of the Northwest Territories has worked closely with Canada in the negotiation of devolution and the development of implementation plans to effect the smooth and seamless transfer of these important responsibilities on April 1, 2014.
Devolution promises to usher in a new era of prosperity and opportunity for the people of the Northwest Territories. Supported by an efficient, effective and integrated regulatory regime, devolution will give northerners the necessary tools and authorities to responsibly develop the territory's significant natural resource potential, promote investment and economic development, and manage the land and environment sustainably.
Devolution will mark the culmination of a political evolution that began with the original creation of the Government of the Northwest Territories in 1967. For the first time, the people of the Northwest Territories will enjoy a level of self-determination and control over territorial affairs on par with that enjoyed by their fellow Canadians in the provinces and Yukon. Devolution will make good on the promise from 46 years ago and which we have secured through the ongoing development of a fully elected and representative legislative assembly that has steadily assumed responsibilities from Canada.
As we approach our fiftieth year, our government looks forward to strengthening its role as a contributing and vital member of Confederation, representing the unique views and priorities of all our people, including the Aboriginal people who make up almost 50 per cent of our population and who are key participants in the political, social and economic life of the territory.
We have seven regional Aboriginal governments in the Northwest Territories and we are proud to maintain formal government-to-government relationships with them. We work hand-in-hand with our Aboriginal government partners across the vast range of government decision making. It is not just part of our consensus style of government but also part of our consensus culture.
When we signed the devolution agreement with Minister Valcourt last June, five of those Aboriginal governments joined us as co-signatories, and we continue to work with the remaining two. This is how we do things. It is through ongoing, strong and always respectful partnerships with Aboriginal governments that we create strong communities, mutual trust and respect, and the goodwill that forges a strong territorial society.
We will be strengthening these partnerships even further through devolution. We are establishing an intergovernmental council that will bring together the public government and Aboriginal governments to better work together and coordinate decisions on land use and development throughout the territory.
The Government of the Northwest Territories has also offered to share up to 25 per cent of the resource revenues we will collect under devolution with participating Aboriginal governments. This is unprecedented in all of Canada but reflects our commitment to ensuring that all people of the Northwest Territories can share in the benefits of development in the territory. We believe the Northwest Territories can be a model for Canada where Aboriginal people actively support resource development because they have a meaningful role in decision making and receive a fair share of the benefits.
In 1904, Prime Minister Wilfrid Laurier famously said that the 20th century belonged to Canada. Why did he say this? Because Canada had everything going for it that a young country would want: population growth, increased industrial development, and immigration to further open up the prairies to agriculture and to solidify Canadian sovereignty. Railroads were being built in one of the early unifying megaprojects of this great land. We appeared sheltered from the conflicts and tensions of Europe and the Far East. Canada as a country was on the rise.
Today, I have no doubt whatsoever that the 21st century belongs to the North. We are increasingly the centre of resource development, the storehouse of what the world wants and needs. Yesterday's so-called ``hinterland'' is today's economic engine, the fuel of our country's prosperity. Royalties from mining and oil and gas extraction are paying for daycares, hospitals and schools in the South. They are maintaining employment and generating prosperity across Canada, as an increasingly mobile labour force finds opportunities and well-paying jobs in northern communities.
Never before do I recall such a time of potential and future prosperity facing the people of our territory. We are the stewards of a great expanse of Canada's land mass. We are on the front lines of climate change; we see it first before the scientists and satellites and statisticians. We are also the preserve of traditional knowledge, of the wisdom of centuries of people who know and who understand how to manage a society and an economy in a sustainable and mutually respectful way. We will undertake balanced resource development to create jobs and protect the environment.
With responsibility for lands and resources, devolution will mean that northerners will take on new abilities to direct the economy of the territory and ensure that its residents benefit from development. We will take on new authority for managing the land and environment according to northern needs and priorities.
Devolution will also mean access to new revenues and a new measure of fiscal independence that the Government of the Northwest Territories can use to invest in the people of this territory, the economy and the environment.
Make no mistake, for the Northwest Territories this is a game-changer. Devolution is the key to a new era of prosperity.
We look forward to a future where northern priorities are reflected in resource development and environmental management decisions. We know our land. We know what matters to us. We have a vested interest in ensuring the long-term sustainability of our land. Our integrated co-management system will protect the economic, social and cultural well-being of our people.
Bill C-15 is a major milestone for the Northwest Territories, but it is only the beginning of the end. The journey continues, and we look forward to the review that we have agreed will be done at the end of five years and the more complete transfer of powers to the Northwest Territories at that time.
We will also have to continue to work on regulatory improvement. Our government has always supported an efficient and effective regulatory regime that promotes investment, protects the environment, respects the land claims and provides for regional and community views to be heard.
We know there are concerns about this aspect of the bill. We are confident, though, that by working with our Aboriginal government partners through forums like the intergovernmental council we are establishing and continued partnership with Canada, we can address the concerns and implement a system that promotes prosperity and upholds the public interest.
Our time has come. It is time for northerners to make their own decisions about our economy, our environment and our society. Devolution is critical to the long-term well-being and prosperity of the people of the Northwest Territories and of Canada, and the Government of the Northwest Territories supports the timely passage of this bill.
Mr. Chair, we would be prepared to answer any questions the committee may have.
The Deputy Chair: Thank you, Mr. Premier, for what I can characterize as inspirational words commensurate with the importance of what we're discussing here today.
I should add to the introduction of Mr. Miltenberger that he is also the Minister of Finance for the Northwest Territories.
I'm going to be a little more rigorous in my demands of my colleagues in asking questions and limit each of you to two questions in the first round. If we have more time, I will be happy to put you on a second round.
We're very fortunate to have two former heads of government and, now we have three in our midst, but I'm going to go this time to Senator Sibbeston.
Senator Sibbeston: Thank you.
Mr. Premier, you said in your remarks that we know our land and basically we know the people and the situation. I've always felt that anything the federal government does in the North, we in the North can do better, and that has been the history. Whereas the government would build one house with a certain amount of money, we would take that money and build three houses, and that has been the history.
I feel this matter of devolution is a commonsensical, responsible move. Part of the reason is the federal government has always kind of treated the North like a colony. Much like Imperial British dealt with Canada before 1867 as a colony, the federal government seems to be in that psyche of treating the far-off reaches of the Northwest Territories like a colony. We've had this history of a paternalistic kind of federal government.
I'd like to ask the premier to talk about the state of society in the North. I remember when I came on the scene in 1970 that we had ten elected and four appointed members and the commissioner, who was the executive. We were always told the federal government is doing this because ``You people in the North don't know how. You're not sophisticated or educated. You can't really do it so we have to send appointed members from government to do things for you in the North.''
Well, things have really changed since 1970. We have responsible government and consensus government, which is a bit better than the political party system in other parts of the country. We are ahead in that regard.
Would you be able to say something about the state of northern society? Tell Canadians what the state of society in the North is that would make them realize that, yes, this is a good move and people in the North can have control over resources and can manage them in a very responsible way.
Mr. McLeod: Thank you, senator. Certainly I concur that we in the Northwest Territories have come a long way and that we have Aboriginal governments that are the largest landholders in the Northwest Territories. The culture and the people have evolved but continue to depend significantly on the land.
I remember in the 1970s talking to friends who have gone on to bigger and better things. When the Mackenzie Valley pipeline first came around, the Aboriginal governments and band councils didn't even have a place to keep their documents and records. Now every community and every Aboriginal government has evolved to where they can interact with multinational companies. Multinational companies come and operate diamond mines and every form of business. We have evolved to the point where the majority of businesses in the Northwest Territories are owned and operated by Aboriginal corporations, no matter what level — airlines, hotels, trucking companies and construction companies. We are not afraid of any situation. Our people can hold their own; and we can benefit. That's why we are not afraid to embrace development because we can benefit from it.
We recognize and continue to preach that education is very important. We've worked with all Aboriginal governments, and the people of the Northwest Territories recognize that. We continue to push for that. Compared to even 10 years ago when we might have had 100 Aboriginal people in post-secondary education, we now have 1,500 to over 2,000 Aboriginal students in post-secondary education. This is part of the evolution of the Northwest Territories. We feel that with these powers we will be able to control the pace of development so that we can maximize the benefits to all people.
It also translates into the continued practice of a way of life. For example, last year the trappers earned the most money ever in the history of the Northwest Territories from trapping. It's very important to maintain that aspect of the way of life in the Northwest Territories.
Senator Sibbeston: Mr. Chairman, I give credit to the premier for his role in this whole process. The Government of the Northwest Territories is not only negotiating with the federal government but also with the territorial governments. In the North, land claims have been made with various Aboriginal groups since the 1980s. Great advancements have been made where Aboriginal people have used the money, the land and the resources to get on their feet and become prominent in all aspects of northern society. The premier not only has the support of his colleagues but also the support of five Aboriginal governments so far; and there are two remaining. Would you say something about that? How do you think you will get the two remaining groups on side and eventually support this agreement?
Mr. McLeod: I have to give credit to our government. When we were elected as the seventeenth legislative assembly, before we even had a premier or cabinet the caucus wanted to meet with all of the Aboriginal governments, which we did. We realized it was very important for our government to establish improved relationships with Aboriginal governments. We established an Aboriginal engagement strategy based on respect, recognition and responsibility.
When we were elected, two Aboriginal governments supported devolution. My colleagues and I went out and held many meetings with Aboriginal governments. I alone had over 160 meetings with Aboriginal governments. Over a period of time, we increased the two governments to five. We continue to meet with the two remaining Aboriginal governments that have not signed on. The Dehcho First Nations were very close to signing onto the devolution. We have established a small working group of senior officials to discuss, on a without-prejudice basis, how to find a way to deal with some difficult land issues. We've made significant progress and are very close. The grand chief has said that they are within a month or so of signing onto devolution.
The Tlicho First Nation wants to establish a similar process. We will meet within the next month to discuss the possibility. They are very interested in signing onto devolution.
It is important for us to get all Aboriginal governments to sign onto devolution. Once we get that, we can accomplish a tremendous amount. When meeting with Aboriginal governments, I always say it would be nice if we could go together to Ottawa to resolve outstanding issues. With this, I'll have to change that and say that they can come together in Yellowknife to resolve outstanding issues.
Senator Patterson: I congratulate you, Premier McLeod. You have been the leader who pulled this together with strong support from your cabinet where others tried and failed. This is a very proud moment for us in the North.
I want to ask you to deal with concerns that I know the committee will hear. One of them, and I may be exaggerating here, is that all power and influence will go to Yellowknife, leaving the regions and the small communities behind. We may hear concerns of that kind.
Would you describe what you've done in this agreement in respect of those concerns and what your government is doing to make sure that this agreement will have a positive impact in the regions and small communities as opposed to headquarters?
Mr. McLeod: I guess going into the process of devolution and working with Aboriginal governments very early on allowed us to recognize that to get support we had to show that resources and positions would also go to the regions and the communities. We undertook what we call a three-phased approach to decentralization. The first phase was to identify existing programs and services that we devolved out of Yellowknife to the regions and communities.
The second phase was part of the devolution process, where we recognize that there would be at least 300 jobs that would be transferred from the Government of Canada to the Government of the Northwest Territories. Certainly the Aboriginal governments had an expectation that a large part of those jobs would go to communities outside of Yellowknife. As part of that, we were able to identify 90 jobs that would be located outside of Yellowknife.
Once we have implementation on April 1 — or the transfer date of April 1 — we will be entering the third phase of decentralization whereby we will be identifying positions, and there will be programs and services moved out of Yellowknife.
In the past, whenever we talked about decentralization, we would say, ``Well, we can't do it because the communities don't have the houses; they don't have the office space.'' Working with the Minister of Finance, we have identified funding so that we can build up to 100 houses in the next three years in a variety of communities. We will be identifying programs and services that will be decentralized, and we will also be providing for office space in those communities. So we will have a plan to move positions out.
Also, as part of the devolution agreement, for federal employees who were already in the North, we have committed that we wouldn't move any of those positions for at least two years.
So we have a decentralization plan. The Minister of Finance is the lead on decentralization, and through that we've been able to maintain — although some of our Aboriginal governments felt we should have moved more positions to the regions, but we have to recognize that we have to devolve and then evolve.
Senator Patterson: I have a very short question in that vein, Mr. Chair.
Of course, the system that's in place must continue without hiccups, and I think human resources are quite critical. I believe you made job offers to current federal employees. Could you share with the committee how that went? I think the deadline was recent, which is why this bill needs to move forward toward April 1. How did that go? What has the take-up been with current federal employees? Can you share that?
Mr. McLeod: Thank you for the question. We made a commitment to the Government of Canada when we asked them to move up devolution from 2015 to 2014. We made the commitment that we would provide for a seamless transfer of powers.
In order to do that, we spent a lot of time learning about the experience in the Yukon and what they did, what they felt they did right and what they felt they did wrong. One of the things they said was that it was very important to communicate with the federal employees who would be transferred. Obviously, we wanted as many or all of the federal employees affected to transfer, because we need their experience and expertise in order to deliver those programs. We also recognized that not all of them would come, so we had to be able to go to competition if they didn't come over.
We made job offers to all of the affected federal employees. The deadline was December 2 for them to respond as to whether they would accept a job with our government. I'm very pleased to say that almost 100 per cent of the job offers were accepted by the federal employees who would be transferred. I think only two offers were made to relocated spouses who were in Ontario who didn't accept the job offer.
We didn't expect we'd have that kind of take-up, so we're very pleased that almost 100 per cent of the federal employees have accepted job offers with the Government of Northwest Territories.
Senator Frum: Premier, congratulations to you, as well, for your leadership.
You mentioned in your presentation that at the end of five-year review period you would like to see a more complete transfer of powers. Could you briefly explain which powers you are referring to?
Mr. McLeod: Mainly the Mackenzie Valley Resource Management Act powers. The federal government will continue to fund the Mackenzie Valley Resource Management Act. They will be making some of the decisions. They will be delegating authority to us. We want all of those responsibilities transferred to the Government of the Northwest Territories — the responsibility for making board appointments, the responsibility for giving the direction and setting policy, and so on.
Obviously there are still other things that would have to be reviewed, such as the waste management sites. The federal government, I expect, even five years from now, would still retain responsibility for the cleanup of waste sites that occurred under their watch.
Those are the kinds of things that we would expect would be transferred after the review in five years. We feel that's still unfinished business for us.
Senator Frum: It's clear that land and water boards are a very integral part of your governance structure and now they are being amalgamated. Can you explain to me, being a senator from the centre of Toronto, what those boards do exactly?
Mr. McLeod: We have two boards under the MVRMA. One is the Mackenzie Valley Review Board and they deal primarily with environmental assessments and so on. The land and water boards deal with permits — land use, land permits and water licences, those kinds of things.
Once a project applies for development approval, it goes through an environmental assessment process. Once the project is approved, they have all of these other licences and permits to obtain in order for the construction and the project to go ahead.
Senator Black: Premier, I asked the federal minister earlier this morning about the issue around duty to consult. My information from colleagues in the industry is that they were hoping there would be a little more clarity in this legislation around what will be required of industry in respect of its obligations to consult with First Nations communities. Can you comment on that?
Mr. McLeod: That's a very important part for our government and also for Aboriginal governments. We are also guided by legal case law, which, if governments don't follow, then the courts will intercede. We have a substantial amount of case law that helps guide us in the consultations that we do.
We work very closely with industry to help navigate through the different processes. Plus, we also are working on a consultation framework that we will share with industry, one that we have developed in conjunction with Aboriginal governments.
Our expectation is that the requirements will be very clear, not only to industry, but also to governments and anybody who wants to operate in the Northwest Territories.
Senator Massicotte: Premier, I think you are on the way to achieving something historic for your people and for all of Canada, and I'm sure it was not always easy. Congratulations to you and your team.
Senator Sibbeston raised the situation that you have two outstanding communities who have not got on board and you are hopeful they will. As the minister noted this morning, one of the key objectives of this whole devolution, decentralization, is to create economic activity. When I see your structure, you're basically going to have seven communities working government by government, in your words, with yourselves as a ``devoluted'' power, and obviously you have the federal government with the 50 per cent interest in all resources.
Will that cause such a difficult process burden that you will not be able to be competitive with countries that can get approvals faster? I know legislation is proposing some boxing in of timing there. How do you feel about that, and how do we ensure things get done as opposed to a lot of talk, which we see a lot of in Ottawa?
Mr. McLeod: With devolution we see it as less Ottawa, more North. The people in the North will be making the decisions. It has been our experience that Aboriginal governments that have settled land claims are more open to development because they have resources and control over decision making. With this, we will work together, and the regulatory improvements, the time lines and so on will certainly expedite decision making.
The involvement of Aboriginal governments will also speed up the process. For example, the Mackenzie Valley pipeline, although it look a long time, provided for one third ownership by Aboriginal governments.
I think that you will see that the regulatory framework will become more effective and efficient.
Senator Massicotte: From your presentation, I think you said the Aboriginal communities will get 25 per cent. Is it 25 per cent of your 50 per cent or 25 percent of the 100 per cent of all the royalties?
Mr. McLeod: No, it's 25 per cent of what we collect and keep. So that would be 25 per cent of 50 per cent.
Senator Massicotte: So it's 12.5 per cent.
When you say ``royalties,'' are there any deductions? Is it net revenues from the project? When you say they get one a third interest in Mackenzie, I presume it's net of all costs, net of all debt. Is that the case?
Mr. McLeod: Yes, it's all in.
Senator Massicotte: But royalties are based on revenues. There's no deduction of expenses there.
Mr. McLeod: Yes, that's correct.
Senator Massicotte: They are two different things. One is one third as a project owner, and the other one is based at 12.5 per cent of — based on the revenue flow from that exploration.
Mr. McLeod: That's right.
Senator Massicotte: When you look at the issues, what should we be concerned about? What is the critical issue to make sure that when we see this thing 10 years from now, we say, ``What a great success''? What's the critical issue that we should be concerned with when we review this legislation?
Mr. McLeod: I think the test will be how well we work together, how we provide for balanced development.
You also have to recognize that the Government of Canada will continue to be a very important player because we are only 43,000 people in a land mass of 1.7 million square kilometres. There is still a role for the Government of Canada to play.
We have a very substantial infrastructure deficit. Our expectation is that we can't be expected to do a lot of things in the area of nation-building projects, so there's still the expectation, the understanding, that the Government of Canada has a role to play. For example, we want to build the Mackenzie Valley Highway. The federal government is still responsible for new highway construction, those kinds of things.
There is still the matter of the federal borrowing limit. The Government of Canada deals with the borrowing limit. We don't set it ourselves. For example, we have a vision for substantial hydro development and building transmission lines, but under the definition of ``debt'' for our government, even though it is self-liquidating debt, it falls under a borrowing limit.
Those are the kinds of things we still have to work out.
Senator Massicotte: You had quite a few public hearings. Who was the most serious critic? What were they concerned about? What were they saying is wrong with this legislation?
Mr. McLeod: The need for more resources.
Senator Massicotte: Do you mean more infrastructure or more limits?
Mr. McLeod: They want more money for us to invest in programs, more programs for —
Senator Massicotte: From the federal government.
Mr. McLeod: Yes, more money for capital, that sort of thing.
Senator Massicotte: Do you notice that everybody wants that?
Senator Wallace: Mr. Premier, you pointed out one of the main objectives of devolution is that the N.W.T. would enjoy a level of self-determination and control over territorial affairs that would be on par with the provinces. As you see this process of devolution continuing, is that likely to be the outcome, that at the end of day, the N.W.T. would be the mirror image of the powers and authorities that provinces have, or because of the unique circumstances of the N.W.T., are there still likely to be some significant differences?
Mr. McLeod: That's something we've looked at. A lot of people in the Northwest Territories asked the same question: ``Why don't we become a province?''
We've looked at it from a number of different angles. First and foremost, when you look at the difference between the funding for a province versus a territory, we have a Territorial Formula Financing arrangement with the Government of Canada. If we moved into the equalization program, the revenues we get from the Government of Canada would drop significantly, by at least two thirds.
Second, the Constitution of Canada which was developed requires that 50 per cent of the five most populated provinces have to agree before another province can be created. When Alberta was created in 1905, they had 100,000 people, and when it was first created, they weren't allowed to collect any royalties. I think it was two years after they were created that they were allowed to collect 100 per cent of the royalties. If we had that kind of arrangement, we would jump at the chance.
Senator Wallace: Mr. Premier, you refer to intergovernmental councils that have been established in the N.W.T. that bring together public government and Aboriginal governments. Could you say a bit more about that? How does that intergovernmental council work in terms of powers and authority? Is it another level of government, or is it really an advisory organization?
Mr. McLeod: A number of land claims have been negotiated, and when we were all finished with land claims negotiations, self-government negotiations, there was still some confusion with Aboriginal governments. Some of the Aboriginal governments felt once they had land claims, they would get so much land, and once they had self- government, they would get more land. We had to ensure everybody understood that once you settle a land claim, that's the land you're going to get. Self-government is not to provide more land but to take over programs and services. Certainly some of the Aboriginal governments feel that it's all their land and it's all their water.
So through the intergovernmental council, we're going to work with the Aboriginal governments so we can manage all the lands together. The Aboriginal governments will have their land, and as the Government of the Northwest Territories, we will have the land that we're managing. We're going to work together. We're going to have land use plans that will guide how we all use the land responsibly and sustainably. That's how we see it working.
We looked at a number of different versions. Would we have a European Union model, for example, or a Council of the Federation model? With the Aboriginal governments, we all agreed that we would have this intergovernmental council that would deal with land and management issues.
Senator Seidman: Congratulations, premier. As promised, I'd like to ask you the same question that I asked Minister Valcourt. We have maybe three months plus a couple weeks left before April 1, and I'd like to know what remains in the final stages of negotiations to complete the agreement process and the devolution. Who are the players in these last stages? Are there any outstanding issues that you're concerned about?
Mr. McLeod: Thank you. That's a very important question for us.
We've been planning for devolution for a long time, so we've been negotiating this agreement for over 12 years. Over the past two years, we've been getting ready for a transfer date of April 1, 2014. When I first met with the Prime Minister after I became premier, we said that we were here to talk about devolution. He said, oh yes, that it would happen by 2015. We said we couldn't wait until 2015. He asked us why. Because by 2015 we will get caught in the elections. The federal government is planning an election in October 2015. We're bound by current legislation to have an election in October 2015, so if we leave it to that date it's going to get caught up in elections. We, as a government, pushed really hard to have it occur on April 1, 2014.
When he agreed, we started getting ready for a seamless transition. We've done a lot of work already. We've designed our organization. Our organization is approved. We've negotiated with our unions to have a process for the transfer of 275 employees. We also had to get ready to mirror all of the federal legislation. There are 27 acts and regulations that we have to pass through our legislative assembly, and obviously it's very critical for Bill C-15 to pass through the federal system. We need to have our offices ready. We must have a place for all of the new staff to start on April 1. We still have to capture all the information. The IT we take over from the federal government has to be compatible with our systems.
We also have to give comfort to industry that we're going to be ready to go on April 1, so we've created a Mineral Development Strategy and an Economic Opportunities Strategy. We've also been reaching out to industry, meeting with them and working with the Aboriginal governments who have been our partners every step of the way. They've been involved with implementation.
We're already going out to competition for the staff positions that are vacant. We worked out it with the Government of Canada, who has to keep operating until April 1, that if they're going to hire any casual staff, then we hire them or we will hire them on that date. We're planning to be ready to go on April 1.
Senator Seidman: Thank you very much, and the very best of luck for April 1.
The Deputy Chair: It's just a little past 10:00 and you made the commitment to 10:00. If you have a moment, I'd like to ask a question, Mr. Premier.
I'm interested in the capacity of your government to undertake, for example, environmental reviews. That's a huge and new responsibility, as I understand. I wonder if you can give us some sense of the capacity you have to do that and your confidence that you can fulfill that obligation.
Mr. McLeod: We'll have the capacity to do it. I'll ask the minister responsible for the environment to respond to that.
Michael Miltenberger, Minister of Environment and Natural Resources, Government of the Northwest Territories: Thank you, Mr. Chair. We already have a system that's going to continue to operate. On oil and gas, we're going to become our own regulator. We're going to work out arrangements for technical support with the NEB. We're looking for possible assistance from Alberta. We're going to continue, as we transform the regulatory system, to work with the existing land and water boards. We don't intend to miss a step. We will be ready. We'll be more timely.
As the premier indicated, the whole key to this operation is that there's going to be less of a long distance relationship role from Ottawa many thousands of kilometres away to decision making in the North, in Yellowknife, in the regions and communities. We anticipate there's going to be a general improvement in the timeliness and the ability to respond and reassure industry.
The Deputy Chair: Thank you. I'm going to close the meeting by saying a couple of things and then making what will be perhaps an unorthodox but important request.
First of all, I'd like to commend both of you on the conciseness of your answers. You are model witnesses. We should send a tape to all witnesses because it was very good. I appreciate that greatly.
Mr. Premier, we thank you and both of your associates very much for being here. It has been very informative and exceptionally helpful.
The unorthodox request is that while this may not be a meeting of the Fathers of Confederation, it could be construed as a meeting of the extended family of devolution. I wonder if we might crowd around behind you and get a picture to commemorate you being here at this time. Would that be all right?
I'm going to adjourn the meeting before I do that. If you stay there, we'll get people to move around you and get a picture. Thank you very much.
(The committee adjourned.)