Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 3 - Evidence - December 12, 2013
OTTAWA, Thursday, December 12, 2013
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:02 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 this committee.
Senator Richard Neufeld, the chair, regrets that he was unable to attend today's meeting.
I would like to welcome honourable senators, any members of the public with us in the room, and viewers all across the country who are watching on television.
[English]
I want to welcome everyone here, members of the public who are in the room and members of the public, in particular, who are watching on television. I also want to welcome our witnesses, whom I'm going to introduce in a minute.
Today is our second meeting on our pre-budget study hearings of Bill C-15, the Northwest Territories devolution act, which was introduced in the House of Commons on December 3, 2013.
On Thursday of last week, we heard from the Honourable Bernard Valcourt, Minister of Aboriginal Affairs and Northern Development, and his officials. I'm pleased to welcome back today a few of those officials, and thank them very much for their patience due to the cancellation of the Tuesday evening meeting — when they were originally scheduled — due to an extended workload in the Senate chamber. We sat late that evening.
Thank you very much for being with us today.
Before I introduce our witnesses, I would like to introduce the members of the committee and supporting officials around the table. As I said, I'm Grant Mitchell from Alberta. This is Sam Banks, with the Library of Parliament, and Lynn Gordon, our clerk. I will ask Senator Seidman to commence with the introduction of senators.
Senator Seidman: Thank you, chair. Judith Seidman from Montreal, Quebec.
Senator Patterson: Dennis Patterson, Nunavut. Good morning.
Senator Wallace: Good morning. John Wallace from New Brunswick.
Senator Black: Good morning. Doug Black from Alberta.
Senator Massicotte: Good morning. Paul Massicotte from Quebec.
[Translation]
Senator Ringuette: Good morning. I am Pierrette Ringuette from New Brunswick.
Senator Boisvenu: Good morning. Pierre-Hugues Boisvenu from Sherbrooke, Quebec.
[English]
Senator Frum: Linda Frum, Ontario.
Senator MacDonald: Michael MacDonald, Nova Scotia.
The Deputy Chair: Thank you very much. I will introduce our witnesses: Wayne Walsh, Director, Northwest Devolution Negotiations; and Tara Shannon, Director, Resource Policy and Programs Directorate. Both are from Aboriginal Affairs and Northern Development Canada, as is, for the first time on this subject, Alison Lobsinger, Manager, Legislation and Policy.
They're joined today, from the Department of Justice, by Tom Isaac, Senior Counsel, Negotiations, Northern Affairs and Federal Interlocutor.
Before we started officially, I was mentioning that these witnesses have practically become official members of the committee because we have been imposing upon their expertise, patience and good nature for a number of times. The reason we specifically called them back is that several weeks ago a very detailed briefing was provided for certain officials by most of these witnesses, which was excellent and very informative. We thought it would be very useful and helpful for the committee as a whole to hear, because this is a very technical piece of legislation, quite apart from its profound importance to the development and evolution of this country and, really, its evolution as a nation.
We are going to depart from our general, traditional approach, which is kind of a 10-minute presentation, to give these witnesses a little bit more time to present in more detail. We have a deck — I think each of you will have — that may help us follow along.
But I will pass it over to Mr. Walsh. Are you going to head this up? Thank you very much.
Wayne Walsh, Director, Northwest Devolution Negotiations, Aboriginal Affairs and Northern Development Canada: Thank you very much, Mr. Chair. It's a pleasure to be with you here today. As you can tell from the people in the gallery, we're supported by a fairly large contingent of officials from the Department of Aboriginal Affairs who have worked extremely hard in supporting this, putting together the legislative package that you see before you. I just want to acknowledge that contribution. You can tell by the turnout this morning that they're very proud of their work, as we all are.
A special note: Also with us to support us today is the Chief Federal Negotiator who helped us negotiate the agreement, Mr. Dominique; he's in the gallery today to support us. I just want to take some time to recognize that.
The Deputy Chair: Can he identify himself? Thank you very much.
Mr. Walsh: The legislative package before you is a combination of many years — in fact, some would say many decades — of work to lead towards the transfer of provincial-type responsibilities from the Government of Canada to the Government of the Northwest Territories.
Devolution is not new; it has taken place over a long period of time. We have entered into devolution-type arrangements with the Government of the Northwest Territories on other provincial-type matters before, such as education, health, social services, transportation and forestry. The transfer of lands, administration and control of lands and resources, and rights with respect to water are the last major provincial-type responsibilities that we are undertaking with the Government of the Northwest Territories.
As you note, the efforts of approximately 13 years of negotiations with this round of transfer culminated with the signing of a final agreement on June 25, 2013, in Inuvik with the Government of the Northwest Territories and our five Aboriginal partners to the devolution agreement: the Inuvialuit Regional Corporation, the Northwest Territory Métis Nation, the Sahtu Secretariat Incorporated, the Gwich'in Tribal Council and the Tlicho Government.
[Translation]
The Government of Canada's legislative proposal will bring the Northwest Territories Lands and Resources Devolution Agreement into effect.
[English]
Turning to the overall objective of the bill, Bill C-15 is broken down into four parts. The first part deals with amendments to the Northwest Territories Act. That part of the bill is, for the most part, the enabling legislation that allows us to implement the devolution agreement.
Parts 2, 3 and 4 deal largely with regulatory improvement initiatives, but it is important to note there are aspects within those parts that are also important for the implementation of devolution. We can get into those specifics in our discussions today.
The key element of the proposal, from a devolution perspective, is to expand law-making powers of the legislative assembly to now include their ability to pass laws with respect to onshore public lands, inland waters and non- renewable natural resources.
There are some exceptions, and we can speak to that around federal lands. We are retaining some responsibilities, but those are very specific cases. The bill also confirms the onshore public lands and inland waters that will be subject to the commissioner's administration and control.
The act also outlines a repeal or renders inapplicable a number of various federal laws. These laws will be mirrored by the Legislative Assembly of the Northwest Territories. That's a key element that was negotiated in the devolution agreement.
Another key aspect of it is an amendment to the federal petroleum resources legislation that will provide for the unitization of petroleum resources straddling the Inuvialuit Settlement Region inshore, offshore. This is a unique component of the NWT devolution agreement, given the unique circumstances in the Mackenzie Delta.
Finally, like we did in the Yukon devolution exercise, we have taken this opportunity to modernize aspects of the Northwest Territories Act to reflect current governance structures and practices and to replace outdated terms, clarifying powers of the commissioner and the legislative assembly.
Before I go on, I think this might be a good opportunity to speak a little bit about the consultation engagement that we have had in devolution with various Aboriginal governments and First Nation communities throughout this exercise.
We have been engaged in devolution on this transfer since approximately 2000. At that time, the Aboriginal groups in the Northwest Territories were represented by the Aboriginal Summit. They were active participants in the negotiations. It was more or less a tripartite approach to the negotiations.
The Aboriginal Summit disbanded in 2005, and subsequent to that, various Aboriginal groups participated either on their own or through formal consultations.
After signing the agreement in principle in January 2011, we developed and undertook a three-phase consultation approach. The first phase took place during the negotiations of the final agreement, where we engaged with 24 different Aboriginal organizations and First Nations communities to seek their views and any concerns that they may have with respect to devolution.
That phase was key because as you are well aware, consultation comes also with a responsibility to accommodate where First Nation concerns are raised, particularly with their rights. We wanted to be sure that we were in a position to modify our approach in the negotiations if those concerns were raised. The first phase took place during the spring of 2012.
The second phase occurred following the announcement by Minister Valcourt and the Prime Minister that the negotiators had reached consensus in March 2013. That's when we finally released the final draft agreement and went out and consulted with those same groups to ensure that nothing in the agreement prejudiced First Nations' rights or interests.
Finally, we did consult this fall, prior to the tabling of the legislation, to ensure that the legislation itself didn't adversely impact Aboriginal rights or title.
I would say overall that some significant measures are included in the agreement, and I would be happy to discuss those that come as a direct result of our consultations throughout the devolution agreement.
Before I turn it over to my colleague, I would just like to point out, and I mentioned earlier, that Parts 2 to 4 also have some significant considerations with respect to implementing the agreement.
Another one of the big objectives, however, is to ensure that we are devolving a modern, efficient and effective regulatory system to the Government of the Northwest Territories, and so we are using this opportunity. Ms. Shannon will go into detail on some of the measures that are being proposed in this bill.
Perhaps, after Ms. Shannon completes her opening remarks, we have a bill at a glance and I would like to walk members through what the different parts are. We will make this document available to the members after.
[Translation]
Tara Shannon, Director, Resource Policy and Programs Directorate, Aboriginal Affairs and Northern Development Canada: Thank you. I am pleased to appear before you today. I will provide you with an overview of Parts 2 to 4 of the bill.
[English]
As my colleague just identified, regulatory improvement has long been identified as a precondition for long-term growth in the North and a more stable and attractive investment climate from which all northerners can benefit.
The regulatory improvement initiatives in this bill are grounded in a fairly robust history of recommendations and reports, starting with the Auditor General of Canada report recommendations in 2005 and moving into a tripartite working group between Canada, the Government of the Northwest Territories and First Nations in the Northwest Territories, called the joint evaluation project.
Neil McCrank's 2008 report, Road To Improvement, actually recommended restructuring of the land and water boards in the Mackenzie Valley, which you will see in the bill in front of you today.
This was followed by the announcement of the government's action plan in 2010 and the expansion of that plan again in 2012, to align with changes that were made south of 60 under the Canadian Environmental Assessment Act insofar as possible while respecting land claim obligations.
In 2010, the Government of Canada appointed the Chief Federal Negotiator, John Pollard, to work with First Nations in the Northwest Territories and transboundary groups in particular as well as industry and government on restructuring of the land and water boards in the Mackenzie Valley.
The action plan has four objectives: making reviews of developments more predictable and timely, reducing duplication in the review process, strengthening environmental protection and achieving meaningful Aboriginal consultation.
A key component of the action plan was actually approved by Parliament last June, Bill C-47, the Northern Jobs and Growth Act, which included the creation of the Nunavut Planning and Project Assessment Act, the Northwest Territories Surface Rights Board Act and some amendments to the Yukon Surface Rights Board Act.
This bill in front of us today, the regulatory improvement components, is the next phase of the action plan.
I will say that there are shared themes across Parts 2 to 4, and I can provide details of the specific elements once I get to the final part of the bill, which is proposed amendments to the Mackenzie Valley Resource Management Act.
I would like to highlight that the proposed amendments do not change the existing environmental assessment or water licensing process in the Northwest Territories.
Part 2 of the bill deals with the Territorial Lands Act. Upon devolution, the scope of this legislation will be limited to federal lands. The proposed amendments to this act focus on two components, one on enhancing environmental protection through increased and modernized fines and the introduction of an administrative monetary penalty regime. That is a civil regime.
This act would come into force upon Royal Assent. However, the administrative monetary penalty regime would be operational only once regulations are in place.
Part 3 of the bill deals with the Northwest Territories Waters Act. This act will be repealed by Canada and mirrored by the Government of the Northwest Territories upon devolution, and large components of the act will be imported in the Mackenzie Valley Resource Management Act to enable the continued issuance of water licences on federal lands post-devolution.
With the Northwest Territories Waters Act, our focus is on introducing beginning-to-end time limits on water licences; regulatory burden improvements, such as life-of-project water licences; regulation-making authority for cost recovery and enhanced environmental protections, such as the increase in modernized fines; and an administrative monetary penalty regime.
The existing Northwest Territories Water Board would be renamed following Royal Assent. It would be renamed ``the Inuvialuit Water Board,'' reflective of its geographic scope in the Mackenzie Valley. The number of members would be reduced from nine to five.
This brings me to the Mackenzie Valley Resource Management Act. The amendments to this act focus on a number of areas — and as I say, these are shared: the introduction, again, of beginning-to-end time limits for environmental assessments; the introduction of an administrative monetary penalty scheme, which would see fines being able to be applied to individuals of up to $25,000 and organizations up to $100,000; and the introduction of development certificates, which are documents that would outline the terms and conditions following an environmental assessment that a proponent must follow in order for a project to receive — these development certificates would be subject to administrative monetary penalties.
Increased modified fines: We would increase fines for infractions related to land from $15,000 for a first offence up to $100,000 for a second offence. Sorry — $100,000 for a first offence and up to $200,000 for a second offence. For water, the fine for a first offence would be up to $250,000 and for a second or subsequent offence up to $500,000.
With respect to reducing the regulatory burden, we are also introducing amendments to extend board member terms to address issues of quorum, and when the board is considering a project and a member's term is set to expire, that member's term could be extended to allow that member to consider the development.
The Mackenzie Valley Resource Management Act, as you are well aware, also includes a proposal to restructure the four existing boards in the Mackenzie Valley into one Mackenzie Valley Land and Water Board. This board would be an 11-member board. I would like to identify that the mandate of this board would not change following Royal Assent.
I will speak very briefly to consultation. We have consulted on the proposed regulatory improvement amendments since 2010. Mr. John Pollard, the Chief Federal Negotiator, held over 50 meetings with Aboriginal parties, governments and industry stakeholders on the proposal to restructure the Mackenzie Valley Land and Water Board.
We also held discussions on the policy intent with respect to other amendments, such as the proposal to expand the minister's policy direction to all boards under the Mackenzie Valley Resource Management Act, and time limits.
In May of this year, we shared an initial draft of proposed text with Aboriginal parties, industry and other stakeholders, dealing with the restructuring element of the proposal, time limits and policy direction. We followed up with a complete package to share with Aboriginal parties, industry and other stakeholders in August 2013, and we held a consultation session in Yellowknife at the end of September and beginning of October.
As a result of those consultation sessions, we made a number of improvements to the bill to respond to comments received from First Nations, and we can speak to those in our discussion this morning.
I would like to acknowledge that the bill in front of us is quite long, in particular Part 4 of the bill, particular to the Mackenzie Valley Resource Management Act. And there are reasons for that. Various components of that act would come into force at various stages to allow for an orderly transition, in the first instance, to the consolidated water and land board in the Mackenzie Valley, and then for the introduction, for example, of new concepts, such as development certificates and the administrative monetary penalty scheme. Alison Lobsinger could speak to more detail on coming into force, if the committee would like.
With that, I will close my remarks.
The Deputy Chair: Thank you. Mr. Walsh, do you have something else you would like to add?
Mr. Walsh: Not necessarily. I could walk through various parts of the bill, or we can just circulate the documents and we can take questions. We are at the discretion of the committee.
The Deputy Chair: Could I suggest we do both? Could you circulate the documents and then we will walk through? And maybe while we're doing that, I can ask Ms. Lobsinger to provide the information that was introduced on her behalf by Ms. Shannon.
Alison Lobsinger, Manager, Legislation and Policy, Aboriginal Affairs and Northern Development Canada: As my colleague mentioned, we have a phased coming-into-force approach for the amendments to the Mackenzie Valley Resource Management Act. Specifically, we have a five-phased approach to the coming into force of this component of the bill.
The reason we have taken this approach is, in particular, to bring into effect some of the devolution amendments. As Ms. Shannon mentioned, we're importing the Northwest Territories Waters Act into the MVRMA. That's one element of the coming-into-force approach.
We have also phased the approach to allow for some administrative work we would like to do, in particular related to the restructuring of the land and water boards from the Mackenzie Valley Land and Water Board and its three regional panels to the restructured Mackenzie Valley Land and Water Board, and also for the coming into force of development certificates, which is a new model for the Mackenzie Valley.
As I mentioned, we have five steps to the coming into force of the Mackenzie Valley Resource Management Act. At Royal Assent, a number of regulatory improvement amendments will come into force. In particular, we have the expansion of ministerial policy direction, time limits for environmental assessments, the increase and modification to fines, a public registry for the Mackenzie Valley Environmental Impact Review Board, and adding the Canadian Nuclear Safety Commission as a designated regulatory agency. That happens at Royal Assent.
For the effective date of devolution, we have coming into force the transition of the text of the Northwest Territories Waters Act into the Mackenzie Valley Resource Management Act. As Ms. Shannon mentioned, that's to allow for the issuance of water licences on federal lands.
At a date following the effective date of devolution — around a year later — we foresee the restructuring of the land and water boards coming into force. At the same time that we have the restructuring of land and water boards coming into force, we would have regional studies, extension of board member terms and a couple of regulation-making authorities coming into force.
On a fourth coming-into-force date, we have development certificates coming into force, as well as the administrative monetary penalty scheme. In particular, this is because development certificates are a new model for the Mackenzie Valley, so we wanted to allow for time to work with the Government of the Northwest Territories with the Mackenzie Valley Environmental Impact Review Board and within the federal family to implement this model.
Finally, on a fifth coming-into-force date, we have a joint examination project amendment related to inspectors' notice for entry onto First Nations-owned lands. This is to allow for a land claim amendment to allow this amendment to be made to the Mackenzie Valley Resource Management Act.
Just to back up from the coming-into-force approach, as Ms. Shannon mentioned, one of the reasons Part 4 of the bill is as long as it is is because of this coming-into-force approach. With the importation of the Northwest Territories Waters Act text into the MVRMA, there's a lot of technology in the NWT Waters Act related to boards. We had to put that text into the legislation for multiple land and water boards, because devolution and the importation of the waters act would happen before we would see restructuring happening. So we have all of that language written for multiple land and water boards.
Then, when restructuring comes into force at a later date, all of that terminology related to the importation of the waters act then had to be rewritten to allow for one land and water board. So you would notice on your examination of the bill that there's some repetition throughout the text, and that is specifically related to the movement of this text around boards.
As well, all of the text that is currently in the MVRMA around land and water boards was written for multiple land and water boards, and we had to rewrite all of that for one land and water board. So, 50 per cent of Part 4 is around moving the Northwest Territories Waters Act in and rewriting all the language for one board as opposed to multiple boards.
The Deputy Chair: Mr. Isaac, not to put you on the spot, but you've sat through a couple or three of these meetings now, and I'm wondering whether there is anything you would like to add. Or are you here just in case?
Tom Isaac, Senior Counsel, Negotiations, Northern Affairs and Federal Interlocutor, Department of Justice Canada: I'm pretty much here just in case. One of the fundamental aspects of the land and water regulation regime in the Northwest Territories is that it's grounded in land claim agreements. The provisions in the bill of course respect the land claim agreements, and it put parameters on what could happen. The land claim regime is a co-management regime; that has been respected, and that was a fundamental aspect of our consultation with Aboriginal groups.
The Deputy Chair: We're waiting for copies of the documents, so perhaps while we're waiting for that we could start with questions, unless you have something else you would like to add.
Senator Black: Welcome again to you all. Let me start off right from the top by thanking all of you, all of the team that is here and obviously the legions of people behind you for this tremendous work. You must be very proud of what you've done because it's important work.
I have three questions, three areas I'm not that clear on.
Could we start with the straddled resources? Mr. Walsh, you talked briefly about that. Could you clarify for me how it works for straddled — presuming there is a resource in a straddled area — in the Beaufort Sea — and should there be a saddled resource between the Territories and Alberta? How would that work, regulatorily?
Mr. Walsh: The first part of your question was actually a subject of negotiation that took quite a bit of time. The agreement spells out that we are transferring administration and control of lands and resources of the onshore. We are retaining jurisdiction, responsibility for the offshore. However, there are unique circumstances in the delta. There should be circumstances where a straddling resource exists between the two jurisdictions.
What was important to the parties was to ensure that those resources were developed in a manner that was efficient and maximized the benefits for all Canadians as well as northerners. Attached to the devolution agreement you will find a memorandum of agreement that lays out exactly what happens in the circumstances where there's a straddling resource between the onshore and the offshore.
Essentially, the memorandum of agreement spells out that that resource will be developed and exploited as if it were one resource. So the two —
Senator Black: It would be unitized.
Mr. Walsh: Exactly; it would be unitized. The two jurisdictions will agree on —
Senator Black: Who will take the regulatory lead?
Mr. Walsh: In the agreement, and also in the legislation, we provide for the NEB to be the regulator, and that is locked in for 20 years.
Senator Black: Similarly, if there was a straddled resource between Alberta and the territories, how would that work?
Mr. Isaac: This initiative didn't really impact the regulatory regime that would apply to the straddling resource other than a straddling resource between the onshore and the offshore. The Government of the Northwest Territories will mirror what is currently the regulatory regime for oil and gas in the Northwest Territories. So they will have the same regime territorially that we have federally, and that's under the Canada Oil and Gas Operations Act.
Senator Black: In respect of the federal lands that are being retained, can you help me understand what the criteria were for retaining federal lands and give some indication of what percentage of the lands would be retained by the Government of Canada, please?
Mr. Walsh: For the most part, there are three broad categories. The first is federal protected areas. They fall under the category of national parks, national park reserves, federal protected areas under the Protected Area Strategy. The second category is sites that various government departments identified they needed to maintain in order to maintain their responsibilities post-devolution.
Senator Black: Give me an example.
Mr. Walsh: An RCMP station, for example, buoys for DFO, wharves, et cetera. They are very small sites.
The third category, probably the most significant one from our perspective, is contaminated sites. We agreed in the negotiations that for any contaminated sites that occurred prior to devolution, we would retain the responsibility to clean those sites out. And that's an important distinction because, as Ms. Shannon has outlined, parts of the legislative proposal makes federal laws inapplicable to territorial lands. But those laws will continue to apply on federal lands. That enables us to then go out and use the federal regulatory regime to clean up those lands. The provisions of the devolution agreement stipulate that once those lands are cleaned up, and after a period of monitoring, we then transfer those lands back to the Northwest Territories.
In terms of the overall percentage, it's a good question. Once you include federal parks and national historic sites and things like that, I think it's less than 10 per cent. If we're dealing specifically with way sites, there are approximately 92 sites on the list of exclusions and it's less than 1 per cent.
Senator Black: Thank you very much.
Senator Patterson: I, too, would like to acknowledge the officials, especially Mr. Wayne Walsh, a Yellowknife boy whom I met first when he was a student working in our legislature in the 1980s. I think it's great that one of the lead officials was born and bred in the N.W.T.
I would like to say generally that the strong endorsement of the duly elected N.W.T. government for this bill should be quite significant to members since this is about devolving powers to that government and it clearly has the strong endorsement of the premier. But I would like to focus my questions on timelines.
I know this bill was drivable in part by CEAA 2012. CEAA 2012 was controversial in some quarters because it set out timelines, and there was a maximum timeline in the CEAA amendments even for major projects of two years.
Now, on the face of it, this bill sets out maximum timelines that are greater than that. So I wonder first if you could outline the maximum amount of time used in each stage of the project's reviews. I think there are basically two stages, environmental assessment and the environmental impact review.
Ms. Shannon: Yes. The time limits proposed within the Mackenzie Valley Resource Management Act would see a maximum of 12 months for an environmental assessment without a hearing, a maximum of 21 months for an environmental assessment with a hearing and a maximum of 24 months for an environmental impact review or a joint panel.
For those timelines, the maximums all include the decision-making time for the minister as well. I think it's important to identify that these timelines apply to ministerial decision making, which I think has been a source of frustration for some in the past, and the time that we have sometimes taken internal to bureaucracy. So it's a large improvement.
We modelled these timelines very clearly on the CEAA 2012, and CEAA does not have an environmental assessment without a hearing. The environmental impact review, or joint panel under MVRMA — the maximum of 24 months — is what is closely akin to the CEAA 2012 time limits.
I think one key difference within the Mackenzie Valley, and this is as a result of land claim agreements, is that it is possible for a project to go to environmental assessment and then be referred to an environmental impact review. There's nothing analogous in the south. However, as I said, this is grounded in the land claim agreements — the possibility of a sequential environmental assessment and then an environmental impact review.
Senator Patterson: What's been the practice to date? The MVRMA has been in place now for some time. And in practice, what has been the experience in terms of having a full environmental assessment and a full environmental impact review?
Do I understand that such a situation has occurred rarely and is probably not likely to be the case going forward? Is that a fair —?
Ms. Shannon: Yes. Yes, it is. There have actually been two instances in the 15-year history of the act: one environmental impact review and one joint panel review.
Senator Patterson: If I may, does the new review board have the basis for implementing procedural efficiencies; for example, avoiding duplication of assessments that have been undertaken in previous reviews?
And while you're considering that question, are there alternative measures like regulations or policy that also might be used to ensure the goal of efficiency and timeliness, which have been set as objects from the McCrank review onward?
Ms. Shannon: There's a new clause in the MVRMA that would allow or require the review board to consider previous environmental assessments for a project. That's a new provision in the act.
With respect to policy direction, yes, the bill does expand the minister's ability to provide policy direction to the Mackenzie Valley Environmental Impact Review Board as well as the land-use planning boards. That policy direction, though, could not be with respect to a specific project, but it could provide broader policy advice to the board.
Subsequent to Royal Assent of the proposed amendments, we would also be undertaking additional regulatory work; we would be looking at things like the preliminary screening regulations and the threshold regulations.
Senator Patterson: Just very quickly on that, would it be the intention of the department and the minister to involve industry in consultation in the development of those regulations?
Ms. Shannon: Absolutely.
Senator Patterson: Thank you.
The Deputy Chair: We have a couple of more questions, but also, Mr. Walsh, we have distributed the summary, if you'd like to go through that, if there's something you'd like to comment on.
Mr. Walsh: I'd like to go through it quickly.
The document we've just circulated is called Northwest Territories at a Glance. It's actually a cheat sheet that parses out the various sections of the first part of Bill C-15. You'll note that Part 1 of Bill C-15 deals with the executive power of the legislative assembly. It talks about the appointments of the commissioner, establishes the executive council and repeals the federal power to instruct the commissioner after 10 years.
The second part, clauses 10 to 33 — I think this is the bulk of the law-making authorities that are being granted to the legislative assembly in order to implement the devolution agreement. And there are also some important modernization aspects within that section. One I'll point out, for example, is that the legislative assembly, moving forward, will have a five-year term limit as opposed to a four-year term, and that's to be consistent with other legislatures in Canada.
The rest of the clauses — 34 to 36 — deal with the Northwest Territories Consolidated Revenue Fund; clauses 37 to 43 deal with public accounts; clauses 44 to 50 deal with the administration of justice; clauses 51 to 60 deal with public lands and waters; clause 61 deals with the amendment provisions of the act; and then finally the transitional provisions — and those are, I guess, the legal techniques that spells out which acts are being repealed and which acts are being rendered inapplicable pursuant to the devolution agreement. That's just a quick summary of Part 1 of the bill for the committee members.
The Deputy Chair: Thank you. Back to the list of questioners.
Senator Wallace: There's obviously no shortage of detail in all of this, and all of you are very well versed in that. For us trying to get up to scratch on that, it's a challenge.
Standing back from those details, though, I'm wondering: In terms of the devolution process in the N.W.T. that's proposed, I'm wondering how that compares to what occurred in the Yukon. Not to get down to the minute details, obviously, but in terms of the substantive, larger issues, are there significant differences in the devolution process proposed here compared with what occurred in the Yukon?
Mr. Walsh: I would say the processes were similar; we followed the same stages of negotiations.
With respect to substance, I think there are some significant differences, largely to do with circumstances. Land claims agreements are structured differently in the Northwest Territories than they are in the Yukon, and that affects the regulatory system that exists. Therefore, it did have an impact on the outcome of some of the negotiations.
Previous devolution arrangements also influenced the outcome. An example of that is that, during the devolution discussions with the Yukon, forestry was a subject matter. It was not in our negotiation because forestry had already been devolved to the Government of the Northwest Territories. Oil and gas, conversely, was not devolved in the Northwest Territories but had in the Yukon, so that was not a subject.
I would say the two biggest differences are that our approach to waste sites was different in the N.W.T. devolution agreement than the approach in the Yukon, and the straddling resources. The memorandum for agreement is a unique feature. Again, it's largely to do with circumstances and geography.
But for the most part, I would say it's similar.
As Mr. Isaac just kindly pointed out, at the end of the day, the two governments, post-devolution, end up with the same powers and authorities.
Senator Wallace: Would there be substantial differences in the implications to the federal government as a result of the devolution process in the Yukon compared to the N.W.T.?
Mr. Walsh: Not any more. The reason I say that is because the financial arrangements that we concluded with the Government of the Northwest Territories were different than what we had agreed to with the Government of Yukon. However, upon signing the agreement in principle, the Prime Minister did agree to amend the Yukon formula to match that of the Northwest Territories. So now the two net fiscal formulas are the same.
Senator Wallace: You mentioned that the consultation process that you went through was a three-phased approach. It sounded as if it was fairly detailed. You had a lot of input from Aboriginal groups and other interest groups. I think you also suggested that changes were made in the proposed devolution process as a result of that input from the consultation.
Can you give us a sense of the nature of those changes? What impact did that consultation process have?
Mr. Walsh: It was fundamental for the Government of Canada to ensure that nothing in the devolution agreement affects Aboriginal rights or title, whether they were asserted or found in land claim agreements.
As a result of our engagement, throughout not only the three phases but also the devolution discussions, there are active measures in place in the agreements. The few I will point out to the committee this morning include section 2.5 of the devolution agreement. That's what we typically call the non-derogation clause.
Sections 2.6 to 2.8 also are important features. I will note specifically that 2.6 was changed as a result of our consultations during the second phase. It essentially outlines that there's nothing in the agreement that will impair or impede any negotiation processes that are currently under way in the Northwest Territories. The wording prior to our consultations dealt only with resident groups, but as a result of our consultations with transboundary groups, notably the Athabasca and the Manitoba Dene Suline, we modified that language to ensure that their negotiations in the Northwest Territories were not affected as a result of this agreement.
Section 2.9 deals with land protection measures. Nothing in the land agreement will affect interim measures. Some of you know that we had interim measures in place with the Dehcho First Nations, the Akaitcho First Nations, the Dene Suline and the Northwest Territory Métis Nation. Interim measures are in place to provide some level of certainty in regions that are unsettled while negotiations are taking place. Although they're not legally binding and they don't confer any rights, we felt it was important to ensure that nothing in this agreement affected those interim measures as well.
Later on in the agreement we also have provisions that allow the Government of Canada to take back lands. There are a couple of circumstances in which the Government of Canada can take back lands. One is to establish national parks. The second would be for National Defence. The third one is to settle any claims. If the Dehcho First Nations, Akaitcho First Nations or the Northwest Territory Métis were to settle land claim agreement, there are provisions within the agreement that allow the Government of Canada to take back lands upon consultation with the Government of the Northwest Territories so that it enables us to settle those lands.
Those are just a few of the measures we've included in the devolution agreement to ensure.
Mr. Isaac, I don't know if you've got anything you wanted to add on that.
Mr. Isaac: You're making my job really easy. I would add that five of the major Aboriginal groups in the Northwest Territories, and all of the groups that have signed land claim agreements, are parties to the devolution agreement. In addition to the consultation we've had with groups that aren't parties, those five regional groups were integral to shaping the provisions in the agreement to provide protection to the Aboriginal rights. That was a fundamental aspect of their participation, and that resulted in the agreement having such strong protections for existing and asserted Aboriginal rights.
Mr. Walsh: If I may, Mr. Chair, the other key consideration was the treatment of own-source revenue as a result of devolution, and that's a big consideration for the Aboriginal groups. So any funds that the Aboriginal parties receive as a result of devolution will not be treated as own-source revenue when it comes to their self-government negotiation.
[Translation]
Senator Massicotte: Before I get into my questions, I want to congratulate you on the work you have done; it was a long-term undertaking of tremendous importance.
As Senator Wallace pointed out, the bill has no shortage of details and complexities. As lawmakers, we always have to think about the potential implications of a bill and provide for solutions to fix any errors.
If we assume something in the bill was drafted or structured improperly, what would the repercussions be and how could they be addressed? In the event that the bill were to benefit one side over another, for example, did you provide for solutions to rectify that?
Mr. Walsh: That is a good question. If we are talking about a mistake in the agreement, there are provisions that allow us to make changes.
Senator Massicotte: Unilaterally? The federal government?
Mr. Walsh: No, jointly with the other parties, especially the Government of the Northwest Territories.
Senator Massicotte: That is my question. Take, for example, the Constitution of 1867. Not even a week after it was introduced, they were looking to amend it. So the problem is not a new one. In this case, what happens if the parties do not share a mutual interest, if there is disagreement?
[English]
Mr. Walsh: It is a good question. There are some dispute resolution mechanisms within the agreement if we come to a situation where we don't agree.
With respect to the legislation —
Mr. Isaac: The prerogative of Parliament with respect to amending legislation, of course, isn't derogated from in the agreement and going forward. Resource management legislation is constantly being reviewed and assessed, and parties bring forward concerns they have with respect to how the legislation applies to them. The department will look at those and try to accommodate issues that have been brought to its attention. I think that's an ongoing process.
The devolution agreement calls for review of the provision that deals with the Mackenzie Valley Resource Management Act to be commenced not earlier than five years. They wanted a period of time where a fundamental review wasn't undertaken, but review of the legislation is an ongoing process.
[Translation]
Senator Massicotte: I am not sure I am clear on that. The scenario I was wondering about is this. If, when the bill was being drafted, an error that happened to benefit or disadvantage the Northwest Territories, say, made its way into the bill, could the federal government amend the bill unilaterally?
[English]
Mr. Isaac: I think we're allowed to unilaterally impose legislative provisions that would derogate from the contract. I mean, that would be a political issue, of course. But —
Senator Massicotte: What contract? You said that deviates from the contract. The existing contract?
Mr. Isaac: The devolution agreement itself, because as I said, it doesn't derogate from Parliament's prerogative.
[Translation]
Senator Massicotte: If there were a political issue, in terms of managing the agreement or what have you, could the federal government assert its authority and make changes just like that? Is that possible?
[English]
Mr. Isaac: Fundamentally, yes. That's the case with respect to any sort of contract as opposed to legislation.
[Translation]
Senator Massicotte: Two Aboriginal communities out of seven agree, so that leaves five. Do you think they will soon sign? What do you see happening in that regard, and why have they not yet signed?
Senator Ringuette: Actually, I believe it is five communities that have signed and two that have not.
Mr. Isaac: Exactly.
Senator Massicotte: That is correct.
[English]
Mr. Walsh: I'll start with the second question first. The reason they have expressed, at least to us in our consultations of why they don't support the devolution agreement, is that they feel that their land claims should be settled prior to devolution taking place. They don't want that transfer to occur until that time. It is a bit of a fundamental shift because when we're talking from the land claim perspective, we are now the landowners. The GNWT will be the landowner, and so in terms of process there could be a difference in approaches, and that's what they have expressed concern over.
To quote Chief Sangris from Dettah, he told me that it's been characterized a bit as the chicken and the egg scenario, whether you sign your land claim first or the devolution agreement first. His response to the chicken and egg is that he's not sure if it's a chicken and egg, but it's his view that if he eats the chicken tonight he won't have eggs tomorrow morning. I thought that was quite clever.
Senator Massicotte: And if it is a rooster, he'll never get eggs.
Mr. Walsh: In terms of the likelihood that they will sign, I will say that the Government of the Northwest Territories has been very proactive in its engagement, and the premier, specifically, has been personally proactive.
You will remember that when we signed in principle in 2011, only two groups, the Inuvialuit and the Metis, supported it. None of the Dene groups in the Mackenzie Valley had signed on to the agreement. As a result of his personal engagement and the engagement of the Government of the Northwest Territories, the Gwich'in, Sahtu and Tlicho eventually signed on.
Discussions are ongoing with the Dehcho and Akaitcho, both at the federal level and with the premier. I think the premier indicated to this committee that he was optimistic that they would sign on soon. It's certainly our hope — the more, the merrier. But in terms of predicting when or if, I couldn't do that. There are a lot of variables in play.
The one thing I will note as well, and it goes back to an earlier question from Senator Black about the contents of the uniqueness of the agreement — and again, the GNWT deserves a lot of credita — and that's the resource royalty sharing aspect of it. The agreement talks about the Government of Canada transferring a share of resources to the Government of the Northwest Territories. The Government of the Northwest Territories then has agreed to share a portion of that with the Aboriginal groups or parties. I think that's a key consideration.
When you hear First Nation groups south of 60, and when we're talking about things like consultation, accommodation, ring of fire, et cetera, they talk about a share of resource royalties. The GNWT is ahead of the curve, nationally, on that and should be commended. So we will see.
[Translation]
Senator Boisvenu: Thank you, Mr. Chair. I will not repeat my colleague's words of praise for a job well done, a lengthy and complex job that will have far-reaching social and economic spinoff. Congratulations!
I want to focus on the daily lives of the population. Will the agreement affect people in the Northwest Territories on a day-to-day basis, and what impact will it have on their lives?
[English]
Mr. Walsh: Thank you for that. I think it will have an impact on northerners in a couple of different ways. First, decisions that are made at the local level — close to the local level — tend to be better. That's the experience of the natural evolution of the Canadian federation. If we go back to the colonies and responsible government and the transfer of responsibilities from England to Canada in the federation, I think it's there. Certainly in our experience with the Yukon, the economy in the Yukon has boomed as a result of devolution.
All the signs are there. I think northerners will have a better sense of identifying what their priorities are directly to their elected members, as opposed to trying to influence those priorities in a broader national context.
I think the biggest benefit that will come is that the priorities of the government will reflect the priorities of northerners as they expressed them.
[Translation]
Senator Boisvenu: Involved in the negotiations were mainly senior federal government officials and the political leadership of the Northwest Territories. Will you, at some point, hold consultations or engage in a process to gather the support of community members, through either a referendum or some other mechanism? What opportunity will the people have to give the agreement their support, aside from the high-level discussions that took place?
[English]
Mr. Walsh: To answer that question, the final agreement was unanimously supported — well, I shouldn't say ``unanimous.'' One member of the legislative assembly from the Dehcho voted against it, but the rest of the legislative assembly voted in favour of it.
There was not a broad referendum, per se, of the population in the Northwest Territories. But the way that the negotiation processes were structured was to ensure that there are periodic check-ins. The negotiations were not held in secret in some boardroom in downtown Toronto, for example.
Much like we structure our land claim negotiations, we structured it so we hit different milestones. The first milestone was the signing of what we normally call the framework agreement. That signifies to the population the intent of the parties — what's the subject matter under consideration. From there, we then negotiated the agreement in principle. The agreement in principle was signed in 2011, and again that document was made public.
We then negotiated the final agreement. In March, the Prime Minister signified the consensus agreement. And, again, that document was made public, and there were public consultations around that prior to the assembly then passing the final agreement and then the signature.
So while there was not a specific referendum or vote of the population at large, I think that the process itself was structured in a way that allowed for communication to the public and an engagement of public reaction at the various stages of negotiations.
I think it would be up to the Government of the Northwest Territories to then determine — and I think it found in its assessment — that there's enough public support to proceed.
[Translation]
Senator Boisvenu: As of right now, two communities have not signed the agreement, and if I am not mistaken, you said the federal government would continue negotiating with those two communities.
Let us discuss the government structure in place and look at the five signatory communities. The role in that respect should be to bring the two reluctant communities on board, should it not?
[English]
Mr. Walsh: That's a good question. First of all, we're in land claim negotiations with both the Dehcho and the Akaitcho. Those are the two groups that have not signed the devolution agreement. The Government of Canada's engagement on that front will continue.
With respect to devolution, the provision of the devolution agreement is clear that any time the Dehcho First Nations or the Akaitcho chiefs choose to sign on, they can. For the first year of post-transfer, it does not require anyone's consent. So if they were to pass and make their own determination that they want to sign on, they would just have to give us notice and they could become a party to the negotiations.
After one year, they could still become a party to the devolution agreement, with the concurrence of the Government of Canada and the Government of the Northwest Territories. The other Aboriginal parties would not necessarily have a say as to whether those groups can or cannot. They would not be in a position to deny those parties' or those groups' becoming a member of the devolution agreement.
The other important thing to note is that the way the financial arrangements are structured, regardless of whether or not those groups sign on, it doesn't affect the share of the other groups. So whatever the Gwich'in, the Tlicho or the Inuvialuit are receiving as a result of the devolution agreement before the Dehcho signed on won't change; their share remains the share as agreed to.
Senator Seidman: Thank you very much for coming this morning to give us your excellent briefing, and of course having a second time helps in understanding some of the details, because this is very complex. And you have been working on it for a long time, so you have a much better handle on it than we do.
I did want to ask you about the environmental review timeline changes, but you have already spoken to that, and you just spoke to the financial arrangements and the issues around that.
If I could ask you — you have a very firm timetable now for the devolution act to come into effect April 1, and given you are involved with all of these details, what, in your mind, are the potential sticking details that could cause challenges even yet, before the April 1 deadline?
Mr. Walsh: I guess the biggest sticking detail is that the legislation isn't passed. That would be a big one.
Senator Seidman: Do you see any challenges other than, of course, the legislation not being passed?
Mr. Walsh: There's a lot. The time compression is a fairly significant challenge. Beyond just having the legislation passed, there's coming into force, government and councils that need to be passed. The model we have developed is that all lands are being transferred to the Government of the Northwest Territories with the exception of those that are excluded.
We need to put those lands on a list of exclusions, and that's an order-in-council, so it's another procedural type of issue.
One of the challenges we have managed to overcome is the transfer of employees. We have hit those significant timelines and we're happy to report that almost 100 per cent of the federal employees have accepted job offers from the Government of the Northwest Territories.
In terms of other challenges, the transfer of records is a big one right now. It is again an ongoing consideration. A lot of work needs to take place in a very short amount of time. I think the compressed timeline is our biggest challenge.
Having said that, though, one of the lessons learned from the Yukon experience was that we created an implementation committee. During negotiations, the implementation committee, which was made up of all the parties to the negotiations, was tasked with developing an implementation plan. The plan formed part of the agreement. It is one of the schedules. The committee then went from a planning committee to an implementation committee. That is a joint committee, as I mentioned earlier. It is overseeing the implementation efforts.
Under that structure, we have a joint management framework with the Government of the Northwest Territories, where we're monitoring the progress that we have made on — I don't exaggerate when I say this — a daily basis.
We have established a number of working groups — records, legal, lands. Those working groups are comprised of officials from both the Government of Canada and the Government of the Northwest Territories. They developed critical paths, worksheets, work plans, and they report on their daily activity back to the joint structure, which then monitors the overall progress of the implementation efforts.
If any flags come up, we do a quick re-calibration and try to address those. I think we have a fairly good handle, structurally, of the task at hand. It's a big undertaking.
But what is certainly adding to the challenge is that people who are on these working groups, and are working very hard in order to ensure that all the pieces are in place for April 1, still have their regular day jobs to do. When companies come in and they need to submit their permits or stake their claims and go to the Mining Recorder's Office, those day-to-day transactions still take place. I would say that's it, in a nutshell. It is compressed timelines, for sure.
Senator Seidman: The people who are engaged now in this implementation group, which is completing the last hurdles in transfers, records, and a whole mammoth amount of things that need to be done —
Mr. Walsh: Yes.
Senator Seidman: How many people are in this implementation group?
Mr. Walsh: Hundreds.
Senator Seidman: Hundreds. Oh, yes.
Mr. Walsh: If you want to look from the top down, the implementation committee is made up of a representative from each party. That committee is approximately eight to 10 people. The joint management structure is at the assistant deputy minister level, so our assistant deputy minister — with her counterpart in the Government of the Northwest Territories — oversees that. But then we start populating the working groups. The majority of employees in the regional office, as well as the majority here at headquarters, are involved in one form or another in implementation.
Senator Seidman: That's helpful to hear. If I might just ask one more question, it has to do with the intergovernmental council; there's been a lot of discussion around that. When will the intergovernmental council actually be set up?
Mr. Walsh: The intergovernmental council is a bilateral arrangement between the Government of the Northwest Territories and the Aboriginal groups. My understanding is that the agreement has been reached; they're in the process of finalizing that. It is to be appended as a schedule to the agreement. This would be a question, I think, for the Government of the Northwest Territories, but my understanding is that council will be up and running come April 1.
Senator Seidman: Sorry?
Mr. Walsh: Come April 1.
Senator Ringuette: Clarify this for me: Last time that we talked, in regard to the sharing of royalties, if my memory is right, it was indicated to us that it was 50-50: 50 per cent goes to the federal government and 50 per cent to the Northwest Territories intergovernmental council.
But is that 50 per cent — the redistribution within the territory — based on land claims of where the royalties will be extracted from, or is it an equal distribution of royalties? Could you clarify that for me?
Mr. Walsh: Yes. After devolution, the Government of the Northwest Territories will collect all the royalties in the Northwest Territories. The Gwich'in land claim agreement, the Sahtu land claim agreement and the Tlicho land claim agreement, as well as the Dehcho Interim Measures Agreement, have provisions where they are paid a percentage of royalties that are collected per year. That obligation is constitutionally protected. The Government of the Northwest Territories will pay those obligations off the top.
Senator Ringuette: Of the 50 per cent?
Mr. Walsh: No, of the 100 per cent. If we were to say that the Government of the Northwest Territories will collect $110 million in a fiscal year, as a hypothetical, the land claim agreement stipulates through the various formulas that the [GNWT] pays out $10 million to the various groups; that's right off the top. What's left is $100 million.
The Government of the Northwest Territories would then write the Government of Canada a cheque for $50 million, and it would keep $50 million. Within that $50 million it keeps, it has made an arrangement to share up to 25 per cent of that with various groups to the devolution agreement.
Senator Ringuette: Okay.
Mr. Walsh: I don't know the details of the formula that the Government of the Northwest Territories has come up with for that share. They're still working that out.
Senator Ringuette: But that kind of brings back into question your prior answer that when the two nations that have not yet signed land claims are not going to participate for the time being in this process, when and if they do become part of the process, you still have the same pot of money from what you just said.
Mr. Walsh: That's correct.
Senator Ringuette: So, therefore, the redistribution will be less for the participating members.
Mr. Walsh: In fact, the way the Government of the Northwest Territories is structured — and it is similar to what we have structured or ongoing — they made a commitment to share up to 25 per cent. Their calculation of 25 per cent is if all groups are on. If all seven groups are signed then they will share the full 25 per cent.
If only five of the seven groups share, that share will be less than 25 per cent. So the commitment —
Senator Ringuette: That was not specified prior to this question that there is some kind of reserve —
Mr. Walsh: That's right.
Senator Ringuette: — that the N.W.T. government will retain until which time.
Which brings me to my other question: In regard to land claims, what is the benchmark in regard to royalty? I'm assuming that it is part of land claims supplement — royalties — so what is the benchmark, roughly?
Mr. Walsh: In the original Dene-Metis agreement, back in the 1970s and 1980s, the Government of Canada was involved in a negotiation process with one claim for all the groups, and it was called the Dene-Metis process. And we came close to reaching a final agreement.
Under that claim structure, a formula was broken out as to how much we would pay. If memory serves me right, that formula was 50 per cent of the first $2 million, and then there was a certain percentage after that.
Senator Ringuette: In regard to royalties collected for the resources within that land?
Mr. Walsh: In terms of the royalties that we would collect and then pay, pursuant to the agreement.
Senator Ringuette: Okay.
Mr. Walsh: What happened in 1990 with the failure to ratify the Dene-Metis agreement, the Government of Canada then took a policy decision to negotiate regional claims as opposed to one big claim. The condition under which we entered into those negotiations was that those negotiations, on a regional basis, would be based on the principles of the Dene-Metis claim that we negotiated.
On that basis, the Gwich'in, Sahtu and eventually the Tlicho agreed and settled regional land claims. What we did in those claims, then, was use the formula, and then appropriated it out based on population. So you will find in the Tlicho agreement, for example, that 25.1.1 is the provision that spells out what they are entitled to under the land claim, and it is 10.429 per cent of the first $2 million in mineral royalties received by the government, and then 2.086 per cent of any additional mineral royalties received by the government.
You can see that we have gone to three decimal points, and that represents their share of the overall Dene-Metis population. That's the benchmark we used; we have used the original agreement that was negotiated back in the 1980s. Then when we go into the regional models, we do a calculation of what their percentage is population-wise.
That's all separate from devolution. That's important to know.
Senator Ringuette: Clarify another issue for me in regard to all of this. The five native communities that have settled land claims under those benchmarks, and will participate in the process, will they have bigger financial resources from their — no, I shouldn't say. Will they have a bigger share of royalties as a result of participating, or is this participation in lieu of the settlement? Is it in addition or —
Mr. Walsh: It is in addition.
Senator Ringuette: Or is it an exchange?
Mr. Walsh: No, it is in addition. Regardless of devolution, the federal land claimants receive the royalties pursuant to their land claim agreement.
Senator Ringuette: Okay.
Mr. Walsh: That comes off the top. That's guaranteed. That's a constitutionally protected agreement. They will get those royalties regardless.
Senator Ringuette: Okay.
Mr. Walsh: Their participation in devolution, and as a result of their agreement with the Northwest Territories, they get additional resource royalties.
If the Dehcho and the Akaitcho were to sign on to devolution tomorrow, they would be eligible for the devolution money, but it would also not prejudice their ability to negotiate further royalties within their land claims.
Senator Ringuette: Thank you very much for clarifying that.
Senator Patterson: Those were good questions, Senator Ringuette. Just to go a little further on that line, the settled land claims groups also have the ability — setting aside royalties — under their land claim agreements to negotiate impact and benefit agreements; correct?
Mr. Isaac: The land claim agreements are not uniform. The Inuvialuit agreement in the Inuvialuit region does have a provision for what they call participation agreements. A developer in that region has an obligation to enter into a participation agreement with the Inuvialuit.
In the Mackenzie Valley with the Gwich'in, Sahtu and Tlicho, there are provisions in each of those agreements with respect to a benefit agreement for really major mining developments. The practice has been, however, that they do enter into impact benefit agreements, generally speaking, for almost every development.
Senator Patterson: I believe those would cover things like business opportunities and jobs, perhaps more than money?
Mr. Isaac: In the impact benefit agreements that I've been made aware of, business opportunities are a fundamental aspect. The land claims provide for public business opportunities, so that procurement preferences are given to them for public procurements. And the impact benefit agreements typically provide similar procurement preference in hiring and training preferences for private procurement and training.
Senator Patterson: If I may continue, I wanted to focus on the political and constitutional development aspects of the agreement and this bill. I believe it has enormous significance in giving the N.W.T. province-like powers over lands and resources, which has been a struggle for years in the Northwest Territories.
The bill before us repeals, after 10 years, the never-used-but-still-colonial power of the Governor-in-Council to provide written instructions to the commissioner, which I have always thought was kind of a last vestige of colonialism. So that provision is welcome.
But I have some questions about this area. The agreement and the bill do not include the offshore, and provinces have negotiated offshore co-management arrangements with Canada. Is there a possibility that the offshore issue could be discussed in the future by what is before us — or the agreement?
Mr. Walsh: Thank you for that. A section of the devolution agreement actually speaks to this issue, that the Government of the Northwest Territories, with the participation of the Inuvialuit Regional Corporation, will commence negotiations for the management of oil and gas resources in the Beaufort Sea — so the offshore — within — I believe it was — 60 days after signing the agreement.
We signed the agreement on June 25. Those discussions have already commenced.
Senator Patterson: That's good.
If I may, one section I'm a little curious about, if not concerned about, is subsection 11(1). It allows for the N.W.T. legislature to continue for up to five years, but I understand that under clause 65, the term of the present government will not go beyond four years.
Given the complex staged implementation schedule described by Ms. Lobsinger, was consideration given to giving the current legislative assembly the potential to continue for five years for the purpose of continuity in the implementation of the agreement and this bill? Was that discussed?
Mr. Walsh: Yes. That issue was discussed with the Government of the Northwest Territories.
One of the considerations that were brought forward was that there will be three elections in the Northwest Territories within a two-week period in October 2015. The current federal election I believe is legislated to occur in October 2015 along with the territorial and municipal elections. A request was made for consideration to have the seventeenth assembly be extended by a year.
While it was considered, I think it was finally determined that we would continue with the four years. There were a couple of reasons for that. One is that it was viewed that the extension of a sitting assembly or sitting legislature, without going back to the people, should only be done under very unique circumstances such as a national emergency or natural disaster.
There's also consideration given that with assembly acquiring vast new powers, it would make sense to go back to the electorate rather than extending it for the four years.
To address the potential election fatigue issue, one of the other modernization aspects included in the bill was that currently an election in the Northwest Territories can only occur upon a Governor-in-Council. That requirement is being removed so that the commissioner can now call an election upon the recommendation of the premier and the legislative assembly. We thought that that provision would allow the government and the legislature to dissolve earlier than October if they wanted to avoid the potential of having the three elections in four years.
That's how we addressed that potential issue. We've allowed the commissioner that authority to call an election rather than going to the Governor-in-Council.
I think it's also consistent with the other legislature. It's consistent with the Yukon. As part of the modernization elements of the Yukon when devolution came in, we also changed the term of the legislature from four to five years, and the same transition provisions were included, that it would only apply to the next legislature.
Senator Patterson: I have another question, but I will defer.
The Deputy Chair: You are the only other questioner, except for me, so if you want to continue.
Senator Patterson: The provisions in the bill allow for cost recovery by government for the regulatory process. I believe this is new in the North. I'm not sure if it's new in Canada, but it's new in the North. This area of Canada is geographically and climatically challenged. I don't need to explain. There are no roads in many N.W.T. communities, transportation, cost, and there's limited other infrastructure.
There is concern if not curiosity about how this is going to work. I think we'll hear from industry in later appearances before this committee that there does not seem to be much clarity in this legislation about how that's going to work. Perhaps that's not fair, but I'm wondering if you could describe this provision, how it will be clarified and whether those most affected, namely potential developers, will have a say in how this concept is going to be implemented.
Ms. Lobsinger: I can answer that question. We've written regulation-making authorities related to cost recovery into the Mackenzie Valley Resource Management Act and also into the Northwest Territories Waters Act. It is a new model for the Mackenzie Valley, but it is something that was put into the new Canadian Environmental Assessment Act, 2012. So it is a model seen south of 60, and we're now going to apply it in the Northwest Territories.
It is a regulation-making authority, so we have yet to develop the regulations. That's on our work plan following the completion of our legislative work.
Essentially, the regulation-making authority would let us develop regulations to recover costs from proponents related to certain board activities, services provided or acquired by the board as well as very limited ministerial functions. This would be for large water licenses, for environmental assessments, and for environmental impact reviews.
We will have to be very careful when we develop these regulations to make sure that we apply them judiciously and carefully. As you mentioned, it is a difficult working environment in the Northwest Territories, and we have committed that we will be consulting carefully in the development of these regulations. We will be working with First Nations, with the Government of the Northwest Territories, and as well with industry to make sure we develop them appropriately.
Senator Patterson: Yes. I think everyone has an interest, including the Aboriginal people and government, in not creating a climate that is going to completely scare away industry. That's good to know.
One other quick question, if I may, is on the duty to consult. This is a very controversial subject these days and the subject of court decisions. I believe it's fair to say it has given some concern to industry about what their obligations are and who is required to do what in the way of consultation.
What does the bill say about that? Will there be opportunities to clarify roles and responsibilities on the duty to consult at all stages of development going forward?
Ms. Lobsinger: I'll answer that one as well.
On the theme of regulation-making authorities, we've also included, in relation to the Mackenzie Valley Resource Management Act component of the bill, a regulation-making authority around Aboriginal consultation. It is a regulation-making authority, but it would allow us to set out procedural roles and responsibilities for parties within the consultation process, co-management boards, industry, First Nations. That is something we have included in the bill as well and that we would be developing going forward, as with the cost-recovery regulations following the completion of our legislative work. Again, we would have to make sure that we were very careful to consult on the development of these consultation regulations with all the parties, First Nations, the Government of the Northwest Territories, the boards and with industry as well.
Senator Patterson: Okay. That's good to hear.
The Deputy Chair: I would like to wrap it up.
Senator Massicotte: On that note, nearly every day we can read in a newspaper about some disagreement either by the Aboriginal community or by the government of what that means, and as you know, that difference remains from a legal point of view. The Aboriginal community sees the words to be much more extensive than what I think many companies, and maybe the fellow government, sees. We all acknowledge that uncertainty is a major handicap for any project because it takes away certainty. You could be talking about a lot of money. You could be talking about a lot of time, and this difference lingers and lingers. What is the solution? Are we waiting for the Supreme Court to decide, or can we get some definition of what it means to consult and to what degree we must consult? How do we get there? It's a major problem.
Mr. Isaac: I agree it has been an issue across the country and particularly in respect of resource developments. As you indicated, the Supreme Court of Canada has set out broad parameters on what the duty to consult means and how that's to be undertaken. You really have to look at it on a case-by-case basis to assess the adequacy of consultation in any particular circumstance.
I think the provinces, the federal government and the territorial governments have all been in a learning curve over the last decade since the Haida and Taku came down with this fundamental duty to consult. They are developing better practices and consultation protocols. I think governments, industry and the Aboriginal groups are taking strides forward to put some more certainty on consultation. The regulation-making power is another step in that direction.
Land claim agreements, impact benefit agreements — all of these incentives to balance development, also, I think, are having a positive effect on the duty to consult. But, as you indicated, there are still differences of opinion, and I think there are often unavoidable, to some extent, because different parties want different things.
Senator Massicotte: The Supreme Court actually scolded the federal government; it indicated that it wasn't an extensive enough and or sincere enough consultation.
Now, you can look up in Webster's what that word means, but in my understanding, the word ``consult'' does not mean you must agree. But you realize that some of our Aboriginal communities think that's what it does say.
How do you get there?
Mr. Isaac: The Supreme Court of Canada has put an onus on the government to act honourably in all of its dealings with First Nations. I think undertaking that process in good faith and in an honourable fashion is the way you get to fulfilling your duty to consult.
As you've said, the duty to consult is not a duty to come to a consent arrangement with First Nations. All we can do is put forward our best foot in good faith and act honourably, and hope the other side is also reasonable.
The Deputy Chair: Thank you. You probably think after this very detailed briefing and detailed answers to equally detailed questions that there would be nothing left over for me, but I am undaunted. I have a few clarifications.
With your $110 million example, with $10 million going to the settled groups — I'm pretty sure it's the case that such would be allocated on the basis of population; wouldn't it? It's not allocated on the basis of how much of a given resource is under a given land claim — is in that region for each territory.
Mr. Walsh: Under my $110 million example, the $10 million is hypothetical, but that figure is a result of what's been agreed to in the land claim agreements.
The Deputy Chair: And is that based on population or —
Mr. Walsh: It is.
The Deputy Chair: One group wouldn't say, ``Well, why didn't we negotiate better or harder?'' or ``Why you did you give another group more?'' — somehow proportionally?
Mr. Walsh: Under the Dene-Metis agreement, we came up with an overall formula, and I believe the formula was 50 per cent of the first $2 million.
The Deputy Chair: Okay, yes.
Mr. Walsh: Had that agreement been settled, we would have had one land claim in the Mackenzie Valley where the first $2 million would be paid out to the land claimant group. When that broke apart, we decided to go regional on the principle that we would follow the framework that was agreed to in the Dene-Metis.
From our perspective, what does that mean when you're dealing with that formula? We then calculated that, well, the Gwich'in are X per cent of the overall Aboriginal population. It is a per-capita approach, I guess, that the Government of Canada took with respect to the formula.
The Deputy Chair: Okay.
Mr. Walsh: That's the long answer to your question.
The Deputy Chair: That just clarifies it.
In the case of the Norman Wells Proven Area, I understand that remains federal. Is that because it's seen to be a contaminated site and will be ultimately handed over? It would be controversial, it seems to me, because there are a lot of resources there, and yet maybe it isn't because the royalties on that resource will still be 50-50 — or is it 100 per cent because it remains Canadian land?
Mr. Walsh: The Norman Wells Proven Area is a unique circumstance. We have proprietary interests in that development, so Canada is actually the one-third owner of that field. The nature of the agreement with Imperial is such that it was very difficult, if not impossible, to untangle ourselves from that agreement. So we determined that it was easier to have the Norman Wells excluded from devolutions; we will maintain our proprietary ownership.
The one thing we did agree to was that any royalties that we do collect as a result of that will be transferred to the Government of the Northwest Territories.
The Deputy Chair: It will be part of the 100 per cent that will then be split?
Mr. Walsh: That's right.
The Deputy Chair: Wow. Okay.
Further clarification: The MVRMA is of course a federal act, but it is a powerful driving force, it seems to me, in the regulation that follows devolution. So in a sense it's — I don't mean this to be quite as aggressive as it sounds — but it sounds like a contradiction of devolution. So how do you answer that? And is the answer that the actual application of processes under that act will be conducted by Northwest Territories officials?
Mr. Walsh: The short answer is yes. The MVRMA finds its genesis in the land claim agreement. The whole principle of the integration and the co-management stems from that. Essentially, the MVRMA, for lack of a better word, is the enabling legislation to those commitments.
Through the devolution agreement, the parties agreed that, for now, the act would remain federal. However, we did agree that significant amounts of the administration of the act would be delegated to the Government of the Northwest Territories. And I'll let my colleague speak more to the delegation model.
But the three areas we decided not to delegate were around the funding of the boards.
So we agree; I don't think the GNWT argued very hard with us in that regard. We also agreed for now that we would maintain the employment role and the policy direction. Essentially everything else is delegated to the Government of the Northwest Territories to administer.
I'll let Ms. Shannon expand on the delegation model.
Ms. Shannon: I'll actually turn it over to Ms. Lobsinger, who has been deeply involved in this. I will say that when the minister was before this committee last week, I do believe he indicated that in addition to those delegations and the devolution agreement, he is delegating further powers, pursuant to section 4 of the existing Mackenzie Valley Resource Management Act. And these delegations would be as a complement to those in the devolution agreement and a recognition of the greater powers of the Northwest Territories following devolution.
Ms. Lobsinger: The minister will be delegating the majority of his roles under the Mackenzie Valley Resource Management Act to the Government of the Northwest Territories. In particular, the MVRMA sets out rules around land for the minister. Inspection and enforcement regarding land use permits and authorizations on land — the minister will be delegating that to the Government of the Northwest Territories for developments on territorial and private lands, as well as the ability to hold and require security.
The minister will be delegating certain functions related to environmental assessments, specifically the receipt of reports from the Mackenzie Valley Environmental Impact Reviewed Board; participation in the decision as a federal minister not as a responsible minister; as well as the distribution of the report. Finally, the minister will be delegating all of his responsibilities under Part 6 of the act, which relates to cumulative impact monitoring and environmental audit. In addition, the minister will be delegating to the Government of the Northwest Territories the approval of water licenses.
All of his major functions in the MVRMA will be delegated to the Government of the Northwest Territories for commissioners and private lands. The minister will continue to hold those roles for federal lands.
The Deputy Chair: Just one last thing. So that's where the bulk of the transfer of federal employees to the Northwest Territories will occur — in those responsibilities? You briefed us that a number of people are quite happily moving to the Northwest Territories regime.
Mr. Walsh: Yes, I would say so. I mean, there's that. The Water Act is being repealed, so we have employees who administer that. There are a number of other moving pieces, but certainly those functions —
The Deputy Chair: So capacity is going?
Mr. Walsh: That's right.
The Deputy Chair: I can't thank you enough, on behalf of the committee. I want to emphasize again that this has been an excellent briefing. Thanks to the committee members for excellent questions. To all of your many officials who have helped in this process, thank you.
I also want to emphasize that it wasn't just helpful to us; this is televised, and I think the many Canadian people who will get to watch this, over time — sometimes late at night, but not always — will have found it very informative, as well. So I express on behalf of all of those people and all of us, we appreciate it.
(The committee adjourned.)