Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 4 - Evidence - January 28, 2014
OTTAWA, Tuesday, January 28, 2014
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day, at 5:02 p.m., to examine 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 Richard Neufeld (Chair) in the chair.
[English]
The Chair: My name is Richard Neufeld. I represent the province of British Columbia in the Senate, and I am chair of this committee.
I would like to welcome honourable senators, as well as any members of the public with us in the room and those listening through the webcast.
I want to now ask the senators around the table to introduce themselves, and I'll first start by introducing my deputy chair, Senator Grant Mitchell from Alberta.
Senator MacDonald: Michael MacDonald from Nova Scotia.
Senator Wallace: John Wallace from New Brunswick.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Black: Doug Black from Alberta.
Senator Frum: Linda Frum, Ontario.
Senator Massicotte: Paul Massicotte from Montreal.
Senator Patterson: Dennis Patterson from Nunavut.
[Translation]
Senator Ringuette: Pierrette Ringuette from New Brunswick.
[English]
The Chair: In addition, I would like to introduce the staff we have supporting us from the Library of Parliament — Sam Banks is with us tonight — and our clerk, Lynn Gordon.
Today is the third meeting of our pre-study hearings on Bill C-15, whose short title is the ``Northwest Territories Devolution Act.'' This bill was introduced in the House of Commons on December 3, 2013.
It gives me great pleasure today to welcome Mr. Willard Hagen, who was in November 2013 reappointed by the Minister of Aboriginal Affairs and Northern Development for a third consecutive term as Chair and CEO of the Mackenzie Valley Land and Water Board. Accompanying him today in the video conference from Yellowknife are Zabey Nevitt, Executive Director; and John Donihee, Legal Counsel.
Gentlemen, thank you very much for being here today with us. Mr. Hagen, I believe that you have some opening statements and that all senators already have a copy of the remarks. I'm sure they've all read it. We look forward to your presentation. There will be some questions afterwards. The floor is yours, sir.
Willard Hagen, Chair and Chief Executive Officer, Mackenzie Valley Land and Water Board: Good afternoon to all. Thank you, Mr. Chair. I'm pleased to appear before the committee today as Chair of the Mackenzie Valley Land and Water Board. To my left is Mr. John Donihee, the board's legal counsel. Both John and I have been involved in the northern regulatory system for many years.
Following many years with the Government of the Northwest Territories, John has been board counsel since 2000, when Part 4 of the Mackenzie Valley Resource Management Act, MVRMA, came into force. I was a businessman before being elected President of the Gwich'in Tribal Council. My years with the board started in 1998, when I was appointed to the Gwich'in Land and Water Board. Subsequently, I was appointed Chair of the Mackenzie Valley Land and Water Board in 2005.
To my right is Zabey Nevitt, the board's executive director. He has been working with the land and water board's regional panels and now as the senior staff person with the Mackenzie Valley Land and Water Board since 2005.
I'd like to congratulate governments — federal, territorial and Aboriginal — on reaching the agreement necessary to make devolution a reality. The devolution provisions set out in Bill C-15 represent a milestone in the constitutional evolution of the Northwest Territories. I have long been a supporter of greater territorial control and decision making over our resources. My colleagues and I on the MVLWB look forward to working with the GNWT in making decisions about northern lands and waters in the North.
We are aware that during the consultation around the provisions contained in the bill, there has been significant discussion and many strong opinions have been expressed in the matter of land and water board amalgamation. This is one subject upon which the MVLWB has consistently provided no comment. It is our opinion that it would not be appropriate for us to comment on proposals affecting the structure of the very board to which we are currently appointed.
The land and water board structure is nevertheless an important matter, and the MVLWB is of the view that it is best discussed among governments — federal, territorial and Aboriginal.
To put our advice to the committee in context, I want to briefly review some recent board initiatives. The board is committed to providing certainty, predictability and consistency for all parties involved in applications for water licences and land use permits under the MVRMA. The MVLWB has been doing its share to contribute to the improvements in the regulatory framework for development in the Mackenzie Valley. These board initiatives are currently possible under sections 65 and 106 of the MVRMA, and we have relied on these authorities to complete the work.
In my time as chair of the board, we have worked hard to contribute to a regulatory system that is clear, accessible and efficient. Since 2006, the land and water boards of the Mackenzie Valley have implemented the Standard Procedures and Consistency Program to develop new policies and procedures applicable to land use permitting and water licensing throughout the Mackenzie Valley.
To give some examples, the board has developed a consultation and engagement policy and guidelines; waste management guidelines; a water quality policy; closure and reclamation guidelines, developed in conjunction with Aboriginal Affairs and Northern Development Canada, AANDC; a Mackenzie Valley-wide guide to land use permitting; and standards for GIS submissions. That's to name just a few.
As part of this program, we have also developed standardized language for the terms and conditions in land use permits, and we have a similar effort under way to standardize water licence provisions. The results of this work contribute to consistencies in process and predictability in decisions for all parties involved in the development process. They will also assist with enforcement, when that is necessary, and to ensure clarity in environmental standards for all who are interested in the board's work.
I join with other commentators and reviewers of the regulatory system in the Mackenzie Valley to re-emphasize the importance of settling land claims and completing land use plans. Finishing this work would ensure long-term certainty for all parties involved in resource development, but there is still a lot of work to be done.
For the committee's information, we now have land use plans completed in all regions of the Mackenzie Valley that have settled land claims. It should also be noted that the number of environmental assessment referrals from such areas, once a land use plan is in place, is greatly reduced. Of a total of 61 environmental assessment referrals since the MVRMA came into force in 1998, 53 have come from regions of the Mackenzie Valley without settled land claim agreements and with no approved land use plans.
So while an effective legislative framework will be a key contributor to certainty, we suggest that coming to agreements with the First Nations whose claims to rights and lands are outstanding and then eventually completing land use planning for those areas are equally important steps towards providing certainty for development.
There are a number of provisions in this proposed legislation that will improve the consistency and predictability of the regulatory process. For example, the board supports timelines for licence proceedings and supports the development of enforceable project certificates. Regional studies may also be of assistance in areas where there are no land use plans.
The improved and updated enforcement provisions, including administrative monetary penalties, should ensure compliance with the law and provide an expedited process to address these few instances where enforcement is necessary.
The board's overall approach in reviewing the bill and commenting to government focused on identifying changes that we felt could improve the legislation by enhancing certainty, predictability and timeliness. The points made below satisfy these objectives and could improve the bill.
Part 3 of the bill amends the Northwest Territories Waters Act. Board members' liability is addressed in clause 84 of the bill, where proposed new section 11.3 sets out ``immunity from suits'' or lawsuits provision for members of the Inuvialuit water board.
Part 4 of the bill amends the MVRMA and clause 124 addresses board members' liability by replacing section 20 of the MVRMA. These provisions are both intended to protect board members when acting in good faith to conduct public business.
But the provision found in clause 124 is legally inferior protection. There is a real difference between saying ``no suit can be brought'' and saying ``a board member is not liable.'' In the case of our board members, that means we would have to defend such a lawsuit, so we're wondering why the same bill sets out two different standards of protection for board members doing the same job.
From beginning to end, major licencing proceedings can last quite a while. Even with the new timelines, these proceedings are likely to last well over a year. Quorum issues arise and appointments to our board are only three years in duration.
I'll give you a quick example. The National Energy Board, which has been around for approximately 53 years, has appointments somewhere between five and seven years, just to give you an idea of another regulatory process.
Clause 136 of the bill proposes the insertion of a new section 57 to the MVRMA. In a case where quorum may be lost because of the expiry of a member's term, the chair of the board must write to the federal minister two months in advance asking for the extension of the member's term. The minister is deemed to approve if he does not respond.
We suggest that this approach leaves the board and the licence applicant, who may have invested large amounts of money in the regulatory process, with a great deal of uncertainty. The consequence of a loss of quorum would likely be starting over. This particular provision is found in the proposed amendments to the N.W.T. Waters Act and Part 5 of the MVRMA as well.
It would be clearer, simpler and much more efficient to simply say that if a board member is necessary for quorum and his term is going to expire during proceedings, the term is automatically extended until a board decision is rendered. This is a common provision in many other statutes establishing administrative tribunals.
One of the improvements set out in the bill involves the issuance of certificates as required by clause 211, which adds new section 131.3 to the act. It is not clear to the MVLWB, then, why new section 62 of the act inserted by clause 137 of the bill makes no reference to certificates. The requirement that the provisions of Part 5 of the act be satisfied are there in section 62, but we suggest that the responsibilities of the land and water board to comply with certificates should be more clearly articulated in section 62.
It is also clear from the bill that when a condition in a water licence recommended by the review board — that is, the Mackenzie Valley Environmental Impact Review Board — and included in a certificate must be amended, the process is likely to add many months to the time it takes to amend the water licence.
Subclause 224(3) of the bill adds proposed section 142.21 to the act. It will take up to eight months to amend a certificate. This will be in addition to the time set out for the water licence amendment process, which is nine months of board time. If the amendment is required for operational purposes, this means that an application must be filed about a year and a half in advance. We suggest that consideration be given to a more expedited process for amendments that do not pose material environmental risks.
The bill should make provision for the land and water board to dismiss an application for either a permit or a licence when the applicant consistently and repeatedly fails to provide information necessary for the board to bring an application proceeding to a close. On rare occasions, the board has made such decisions on the understanding that as an administrative tribunal, it controls its own process, but such actions leave questions. There should be clear authority to terminate a proceeding that is going nowhere on criteria specified in the legislation.
In conclusion, I'd like to thank Mr. Chair and the committee for your time and for listening to my presentation. All three of us would be pleased to answer any questions that may arise from this presentation.
The Chair: Thank you very much, Mr. Hagen, for your presentation. I'm going to defer to the deputy chair of the committee, Senator Mitchell.
Senator Mitchell: Thank you very much. Excellent, very clear presentation, with very specific proposals.
I wonder if you could indicate what the response has been from the government to your list of changes as proposed in your presentation. They seem very reasonable. For example, there's the one that says there are two ways that they're dealing with providing some form of protection against liability. They seem, if not contradictory, certainly not consistent.
What response have you had to that kind of proposal and the others that you list?
Mr. Hagen: Thank you for the question. Mr. Nevitt, our executive director, has been working on the working group directly with the AANDC people, so perhaps I'll have him address the response.
Zabey Nevitt, Executive Director, Mackenzie Valley Land and Water Board: To date, the recommendations have gone to the government through written submissions from the board. Yesterday, Mr. Hagen and Mr. Donihee also presented to the parliamentary committee that was reviewing, and the same recommendations have gone in to date. I guess as the bill goes through the legislative process, we'll see if there is any reaction to the recommendations.
Senator Mitchell: Maybe I missed that, but was that the first time you presented those proposals to the house, the first time being the House of Commons committee? Or did you present those proposals and ideas throughout the working development process?
Mr. Nevitt: Yes. During the development of the bill, the board was given the opportunity to see a confidential draft of the bill. At that stage, we also made those recommendations, in a written submission, to the Department of Aboriginal Affairs.
Senator Mitchell: The second question that I had concerns capacity. This issue has been raised with the devolution — a lot more responsibility and work, perhaps. Environmental department and other federal public servants may be moving over basically en masse. Will some of those people be working under your board? And, whether or not that is the case, what about capacity? Do you feel you have enough to do what you need to do?
Mr. Nevitt: Thank you for the question. People who have any experience working within the North know that capacity, overall, is a general issue that we face on an ongoing basis. Mr. Hagen spoke earlier about some of the projects we've been doing internally to improve our capacity through the development of guidelines, policies and procedures. The bill, as it is proposed right now, in any kind of amalgamation of the boards, talks about all of the existing employees and contracts becoming part of the staff of whatever new board structure is created, so we'll continue to have that capacity.
We've been working hard within the boards to develop and increase our capacity. We have a lot of very professional people working within the boards now who are making decisions from a variety of backgrounds, including industry and other areas, so they're adding to the capacity the board has at this time.
Senator Massicotte: On that same point, I understand that those same comments were raised when you were preparing the draft of the document, but obviously they were not responded to adequately in your opinion. Now, you're submitting the same comments in writing? I'm trying to understand the process where you vented your issues and your recommendations.
Mr. Nevitt: I must admit that I'm fairly new to the process, so I'm not always exact. I'm not sure how all of these concerns would get taken into the drafting process for the new bill. I guess I can just repeat that we have provided the comments, originally through the written submissions to the department, and we'll make the same suggestions as we think they would add content to the bill. I don't think we have anything else at that time.
Senator Patterson: I'd like to welcome Mr. Hagen and his colleagues to this committee meeting. I know you've been busy with the hearing in Yellowknife that took place yesterday, so I'm really delighted that you can join us today here in Ottawa by video conference.
I know Mr. Hagen has had a lot of experience in the regulatory regime in the N.W.T., which has been reviewed significantly over the years. There was the study done by Mr. McCrank and the work done by Mr. Pollard as the special ministerial representative, which I think has probably helped to lead us to this new legislation.
I'd like to ask Mr. Hagen if he could tell us whether he has been involved with the consultations, particularly with Mr. McCrank and Mr. Pollard, on behalf of the board, or otherwise, in his career. Maybe I'll have a question once he answers that.
Mr. Hagen: Senator Patterson, thank you for the question. We have been involved with Mr. Neil McCrank. They've held workshops. We've had our input with him, and we have also been consulted by Mr. Pollard. We've had our input there. We've had numerous meetings with Aboriginal governments and us combined in the same room and with AANDC, of course. We've had involvement with their people. There have been fairly thorough consultations with us and with Aboriginal governments where we've been involved. So the information flow has been there. The actual confidential documents didn't get to us until the very end, so a lot of it was guessing what it was going to look like.
I don't think we have a lot of complaints about how the consultation process took place over the last three years.
Senator Patterson: Okay, I'll leave it at that for now. Thank you.
The Chair: Maybe I can just ask a quick question. Yesterday, when you presented probably much the same information to the House of Commons committee, what was their response? What was their reaction to it? Did you get any reaction from them to your suggestions?
Mr. Hagen: Yes, we did. We had numerous questions. The NDP member, Dennis Bevington, was fairly vocal in some of his responses. We had some questions on the process and also one that Mr. Donihee answered. Perhaps, John, you could just elaborate on the one question on process.
John Donihee, Legal Counsel, Mackenzie Valley Land and Water Board: Yes, certainly. The question that became a little bit more technical was the one addressing the point we made about timelines for amending certificates. A certificate is a new concept that will be inserted into the legislation through this bill, and, when an environmental assessment process is finished and the minister has approved the measures that have been recommended by the impact review board, those measures will be captured in a certificate, which the land and water board is then required to implement. In that way, the work of the environmental assessment process and the land and water process are integrated.
The concern that we expressed was simply that the provisions in the bill indicate that it could take upwards of eight months to amend a certificate, and our practical experience has been that most of the large mines in the North have to have a type A water licence in order to operate. It will take up to nine months to amend one of those licences, and, when the combined periods for the amendment of the certificate and the amendment of the licence are added up, the total duration could pose some challenges for mine operators. Some of these measures are not necessarily entirely focused on the operation of the mine in relation to the environment, and so we suggested that, if possible, an attempt should be made to identify those measures that would not be material from an environmental standpoint and seek an expedited way to amend them.
Some immediate attention was paid to that question by officials and by counsel representing the department as well. We certainly are satisfied that they heard us and that they're giving it some thought.
Senator Black: Thank you all for being available today. The work that you're doing is extraordinarily important. I'm very thankful we have people of your calibre doing that work.
As a former energy lawyer, I very much applaud what's going on here, because it's going to drive economic success in the Northwest Territories, which, of course, is what everyone in Canada wants to see.
I have three questions for you, and they're relatively technical in nature, but I want to understand where there are some overlaps that I can't necessarily figure out from the legislation.
I'll give you a couple of hypotheticals, if I may. I read reports in the morning National Post. Let's presume that the stranded gas off of your territory, the territory of the Northwest Territories, is able to be accessed for the development of an LNG on the coast of British Columbia.
Can you help me understand what regulatory bodies would be involved in that process to do what, please?
Mr. Hagen: Thank you for that question. I believe Zabey and John together could probably put it together, although for an LNG transport, you're obviously talking about along the Arctic coastline. Are you talking about LNG transport by a pipeline or by proposed ship or tanker?
Senator Black: I am particularly interested in what role your board would have under this legislation. What do you believe?
Mr. Hagen: John will address that part of it.
Mr. Donihee: Thank you, senator. It is a complex question. As you know, the land and water board's responsibilities are to issue permits for the use of land, Crown lands, and permits for the use of water or the deposit of waste into water. Our jurisdiction is solely within the Mackenzie Valley itself, only the portion of the Mackenzie Valley that is not on the Arctic coast, not the Inuvialuit settlement area, which has a different regime. So it's mostly from about the southern north part of the Mackenzie Valley, if you will.
If transportation or construction activities were necessary in order to extract the oil and gas and ship it and those activities affected the land and the environment, or involved the use of water or the deposit of waste into water, then the board's jurisdiction would be triggered.
We would not be involved in approving or reviewing a pipeline because in the scenario you're giving us it would be transboundary and very likely would involve the National Energy Board under section 52 of the National Energy Board Act. Pretty much whatever is on the right-of-way, if you will, would be the NEB; and if it is off right-of-way and it affects land and water, it would be our jurisdiction but only for those portions in the Northwest Territories Mackenzie Valley.
Senator Black: Now, I notice that the legislation contemplates that the new board will have responsibility for non- renewable resources. For resources such as wind or run-of-the-water projects, anything that is renewable, who will own that? I'm a proponent now, and I want to develop a wind project in the Northwest Territories; to which boards would I make application?
Mr. Donihee: To the extent that you want to sell that electricity generated by the wind farm, there is a public utilities board in the Northwest Territories, somewhat akin to the utilities commission that used to be in Alberta before they rolled things up; so that's the electrical utilities side of it, and that board would determine rates for the power and so on.
To the extent that it's necessary for there to be construction that might affect land or water, then we would probably be involved. I got the wind farm part, but I think you also asked about water?
Senator Black: For a hydro project. If there were a hydro project, that would be yours.
Mr. Donihee: For that question, the electrical generation, that's territorial jurisdiction right now; it would be managed by the territories. But the dam construction and all of that would require the land use permit, and ultimately, because they're impounding water and using water for power, they would need a water licence as well.
Senator Black: That's very helpful to me.
So I take from all of this that, while we are simplifying, it is still very complicated.
Mr. Donihee: Yes, sir. That's a fair statement.
Senator Frum: In your presentation, one of your suggestions was that the bill should make provisions to dismiss applications when the applicant fails to provide information necessary to bring the application forward.
Since you make the suggestion, I'm just wondering, this is obviously something you've experienced, and it seems to reflect a frustration. How common is it that applicants don't give you information?
Mr. Hagen: Yes, a good question. We have some active files on this situation, so I will have the executive director answer that.
Mr. Nevitt: It has happened fairly consistently with some of our proponents that come to us. Some of it is through a lack of clarity overall in describing what we need in front of us to help us make decisions; some of it is proponents coming in without the necessary information at all. We have also had situations where proponents have developed — I would not like to call them frivolous, but close that — proposals in terms of applying for permits and licenses that ultimately they haven't acted on at all. That costs a fair amount of money to the taxpayer as we go through the processes.
One thing that has been added in the legislation that I think could greatly assist in this area is the cost recovery. This is a cost recovery part of the legislation that the government can apply, through regulation, to require the payment of fees relating to the application costs so that the expenses of the board and the government in certain ways are covered. Hopefully that would get rid of some of the more frivolous applications.
Again, I think part of the answer is the work we've been doing to provide clarity on what we expect of proponents, making sure there are clear guidelines on what we would expect in the area of consultation and engagement before an applicant comes to us. The same is true in the development of water and effluent quality criteria: What kind of information do we need from a proponent before that comes in?
So that part is what we're doing. Our hope is that we'll have those kind of policies and guidelines clearly in place, and then if a proponent doesn't come to us with that information, and we ask so many times, we can say, look, we've tried, but we can't go on through a process without the information we need.
I hope that answers your question.
Senator Frum: That's very clear. It's funny to me that anyone would take the time to make a frivolous application, because that takes time, but clearly you're saying it happens.
Mr. Hagen: It happens more than you would imagine, but the idea of cost recovery is not new. The National Energy Board has been around for 53 years, and it has cost recovery. I believe John said 85 per cent, and if you want to build a pipeline, you have to have companies sign on saying they're going to ship their product with you, to prove that it's viable.
So it's been there. I think the time has come in the North to stop the waste of taxpayers' dollars with some of these frivolous applications, for lack of another word.
Senator Wallace: Mr. Hagen, as you point out, your board has land use plans completed in all regions of the Mackenzie Valley where land claims have been settled, and in the other areas, as you point out, regional studies could be of assistance to the board going forward.
I'm just wondering if you could expand upon that a bit. How will the authority of your board work within those areas that would be covered by these regional studies, and exactly what does that mean?
Mr. Hagen: Just to clarify, the Inuvialuit Settlement Region is part of the Northwest Territories, but it's not included. The MVRMA does not have jurisdiction over there, and their region does not have a land use plan. We don't have any authority over a land use plan, nor are we the ones that carry them out. From there I will turn it over to Zabey again to give you how our relationship to a land use plan to a developer would sit.
Mr. Nevitt: The land use plans that are in existence in the valley already are within the settled claimed regions — the Gwich'in, Sahtu and Tlicho regions. Those land use plans give us the guidance to say where we can or can't issue permits or licences straight away; they're like a go or no-go, or ``these are the particular conditions we may want to add to those.'' They provide clarity.
The biggest thing we've found with proponents who come to us is that we want to know if we can or can't go somewhere to apply to carry out some development. The land use plans are what give that, so by the time they get to our process to get a land use permit or water licence, they already know how the access issues have been resolved.
In the unsettled regions of the valley at present there aren't any of these land use plans completed. Some processes have been going on in the Dehcho region to develop a plan, but it's not finalized or providing guidance at this point. Again, it's about providing clarity and certainty for the proponents so they know that yes, this is okay; this isn't okay.
We believe the regional studies could be a first step to get to that. There are a number of areas of the territories where we already know there are issues relating to traditional use and the conflict with potential developments that are being proposed in those same regions.
If the regional studies are being carried out and can provide a more micro level of planning for those regions, it would then provide the board with the direction that we have of whether we can issue permits or licenses, or what specific conditions we might want to attach to those. Again, that is with the overall goal of providing clarity and certainty to anyone, so when they start into a process, they'll already know whether, yes or no, this is going to be an okay place at least to try to develop.
Having a lack of certainty and getting halfway through a process and then being told, ``No; we just don't want any development in this region'' doesn't provide certainty for anyone as they go into the process.
Mr. Hagen: I was going to add that the McCrank report also mentions land use planning as being the vehicle or tool to take the place of the regional land and water boards if they're going to get rid of those. Land use plans are community-based; a lot of the information comes from their elders and from traditional knowledge areas such as where they have old burial grounds. There is a lot of community involvement in the land use plan — much more so than the regulatory process.
But a land use plan, when complete, becomes probably the greatest tool a regulator has at his disposal. It does give certainty, like Zabey says, to a developer that there are areas that are sacred to the communities of the Aboriginal people of the region where it is a no-go. And they understand that from the onset.
It's a living document; it can be changed as time goes on, with the approval of three parties, generally.
Senator Wallace: So I take it from your comments that land use plans would be far more detailed than regional studies, but I think you also said the regional studies get down to the micro issues of the regions.
I'm trying to get a sense of these regional studies. How detailed are they, and would it in all likelihood be an easy transition to a land use plan down the road, or is there quite a difference between the two?
Mr. Nevitt: We don't know fully what a regional study will consist of entirely. We know they've been created to provide a mechanism for us to ask some of those questions. With the lack of having land use planning completed in all areas, it's just another tool available to us. Regional studies will be government-driven, so at the end of the day AANDC, or whatever department will be running this, will be doing it.
In some senses I'm not sure we can answer completely what the intent might be at the end of the day, but from the description of what they are being designed to do, all I can say is that they look like they could be a useful tool to help provide us and proponents with the guidance we need.
Senator Seidman: If I look at the website of the current board, it appears to me that you are missing six of your 20 members. In other words, there are six positions currently vacant. Is that correct?
Mr. Hagen: I can't answer whether that's exactly correct. They make the appointments suddenly, and we're not aware until the same day they're made, so it's possible some could have come through. But since the start of the Mackenzie Valley Land and Water Board, the timeliness of appointments has been a big problem.
In all fairness, it's not always the federal government's fault. You have nominating bodies; the Aboriginal governments up the valley and the territory nominate, along with the territorial and federal governments. And they don't always choose the best names. Sometimes you don't do a security check and they're bounced back because they have a criminal record, which is something they should have checked before they submitted the name. Sometimes they have a dispute, so they won't give a name to the territorial government and they won't give one to the federal government.
It goes on and on. There's a lot of blame to go around, but at the end of the day, the board suffers because sometimes we just barely have a quorum. We're struggling a lot of times just to deal with applications.
It's ongoing, and we're hoping with this new bill now that will create one board that perhaps more attention will be paid to this problem.
Senator Seidman: Would you have any recommendations on how we might ameliorate the situation if it's a source of frustration? You also mention the quorum issues. When you talk about the timelines and how your studies — major licensing proceedings last quite a while. You're worried that someone's term of three years might expire in the middle of a licensing proceeding, which would therefore potentially impact your quorum, which would result in the review starting all over again.
I worry that this issue, plus the issue of vacancies, could impact the effectiveness of the board. Do you have a recommendation to ameliorate the situation?
Mr. Hagen: There are actually two separate issues there, and I think we can all take a bit of a shot at that — Zabey from an operational point of view, where the problem is trying to get the information to the right people if you just barely have a quorum; and I think John Donihee could perhaps start us off.
John, you might explain how the change in the NEB Act allowed them to go forth such that he or she who hears the evidence doesn't necessarily have to be there for a quorum.
Mr. Donihee: The NEB Act changes allow the chair to insert a new board member partway through a proceeding if the member hasn't even heard or been present for the hearings.
The common-law rule, of course, is that if you hold oral hearings as part of a proceeding, generally the people who participated in the oral proceeding or oral hearing need to be part of the decision-making group, and you need to have a quorum of them. Our problem identified in the presentation Mr. Hagen gave is simply that we're now down to three people for quorum, and the makeup of quorum under the bill requires that there be one member appointed on the nomination of an Aboriginal group and one member appointed on the nomination of government. These are co- management panels.
The difficulty we pointed out was simply that if we were butting up against a member's term, Mr. Hagen would have to write to the minister. If the minister replies right away, there's no problem. But in the midst of a proceeding, there are always a lot of things to keep track of, and we don't see it as being particularly efficient to force the chair of the tribunal to write to the minister in the middle of a proceeding, just to make sure he can hold on to quorum.
There's a much simpler way to do that, and we have laid that out in the presentation that Mr. Hagen gave to you.
So that's the genesis of the concern about members expiring, and I'll leave it to my colleague to deal more with the appointment question.
Mr. Nevitt: One of the bigger issues we have at an operational level is managing board continuity in terms of the length of time members are on a board. I find that often as board members are getting fully trained, while they're all very skilled individuals, in getting to know some of the major projects that we're dealing with, once they get trained up and then there are changes to the board composition, if somebody else is appointed, we're starting from scratch straight away.
I have found that three years is a short period of time for current board members because it's not just about the existing proceeding; it's also about the ongoing management of the file, whether that be a diamond mine or a pipeline or oil and gas exploration. These projects are lasting 15 to 20 years. While some board members may like to be involved on the boards for that length of time, to have at least a longer period of time would be very advantageous in retaining some of that corporate knowledge within the members.
That was a recommendation we made very early on in the review of this piece of legislation, the consideration of longer terms for board members. Some of that has been addressed through the recommendations made to allow for the board members to be extended through an existing proceeding, but to have a longer appointment period would be useful.
Mr. Hagen: To add a little bit to that, if you understand, the North is a vast piece of countryside, and we have a population of fewer than 40,000 people, so it is difficult at any given time to find suitable board members, a man or a woman. When you do find one, it is advantageous to try to keep that person because it's very difficult to find somebody, number one, who doesn't have conflicts — because it's a small population and everyone is intertwined in some way — with business or politics. And also, they're part-time members. They're paid only when there is an application to sit on. Well, if they're part time, they all have lives and jobs, so perhaps getting them the day you want them is not always possible.
The NEB has full-time board members, and their length is five to seven years. Now, they're huge; they cover all of Canada. But if you look at them as the model, it works, and it's worked for 53 or 54 years.
It is a big problem finding suitable board members. There is absolutely no doubt about that. AANDC for the minister's office will be the first people to tell you it's a very difficult job. For me, it's not something that works. It would be nice to keep them on for a couple of terms.
Senator Seidman: You've answered my question because I was going to ask what would be the ideal if three years is too short. So you're saying five to seven years?
Mr. Hagen: That's correct. A term is three years. If the person is very educated and smart on the land and otherwise, it still takes a while to figure out the regulatory process. Even some of the questions you're asking here now, I've been in the system as chair for a lot of years; I actually need to refer to legal counsel because that's the business we're in. It's very complicated at times, and it takes even a smart, educated member three years to really get up to speed, and then a lot of times you lose them. That's a stock portfolio there; you've invested a lot of money in that person, so it would be nice to keep them.
Senator Black: Mr. Hagen, you made a very interesting point — at least my notes reflect that. I just want to test it, if I can, please.
You indicated that an outstanding uncertainty for development that concerns you is the lack of settlements with three of the First Nations groups. Have I heard you correctly on that?
I'd like to understand from you, please, how large of an obstacle that is to your work.
Mr. Hagen: For starters, it's huge. It can be, and it gets more complicated as time goes on. The Dehcho, for example, are probably halfway or a little more through negotiations of a land claims agreement, so there's a lot of posturing going on. And as I mentioned in my opening remarks, out of 83 environmental assessments, the majority come out of the unsettled regions.
Some of them are for good reasons. Some of them are because it's a negotiation stand that they're taking. There are referral bodies that can refer an environmental assessment. They refer because they can and also because it's part of how they're negotiating. So they're using the regulatory system absolutely the wrong way that it's set out to do. That's not the norm, but it does happen, and those statistics are a result of that.
That being said, they've been at it for 25 years in some cases trying to get land claim agreements, so there's a lot of blame to go around again. It's not the federal government; probably the last three or four elected governments have tried to get settlements in these regions, and it hasn't happened.
But your industry developers are never going to get certainty. Some of the bases of argument they've used for the one board structure is to give certainty. They will never get certainty as long as land claim agreements are outstanding. That's just the bottom line.
Senator Black: Absolutely. And then you take that to the next point, that so long as there's uncertainty, it enhances the economic risk.
Mr. Hagen: Absolutely. Beyond a doubt.
Senator Mitchell: I would like to follow up on Senator Black's comment. I think it was what Senator Wallace was getting at, too. It has obviously captured our interest.
Apart from the uncertainty that is created during the land claims negotiation process due to the utilization of the environmental review process just because they can and perhaps it's a negotiating lever, what other features of a land claim create certainty? Do you get a land use management plan as a matter of course in a land claim? Do you get structure or commitments to your board, for example? How does the land claim change things so dramatically?
Mr. Hagen: Well, number one, I guess the main part of the land claim agreement is the ownership of land. They go in there saying, ``We own 100 per cent of the Gwich'in Settlement Region,'' for example. I was actually the president and negotiator when we signed off on the claim with the Mulroney government in power at that time. When we ratified, it was a 94 per cent ``yes'' vote, which hasn't been topped in Canada yet today, so I guess we did our homework.
We got close to 10,000 square miles of surface and subsurface rights, the surface and fee simple title. Now you have a landowner and there is no third-party interest on there, so it's very cut and dry for developers. You have to go and talk to the landowner in order to get concessions to go on the land and drill for oil, and you form partnerships.
So it's very cut and dry. You really do not have the problems you have when you're going into an unsettled region that's really Crown land under law. You have your interests, many other interests, but of course it's the Aboriginal peoples' lands that they're trying to negotiate. It becomes a big problem in the unsettled regions.
Back to the settled regions, before they can come to an agreement let's say in the Tlicho region to develop a diamond mine, you have two huge ones there within the Tlicho. They have a requirement for IBAs, impact benefit agreements, which are negotiated to give them the majority of the benefits from development on their lands.
Zabey, you've been involved in the Tlicho region. Perhaps you could elaborate somehow on some of those IBAs. The IBAs that happened in the Tlicho region were the first in the Northwest Territories, by the way.
Mr. Nevitt: I don't have much to add to what you've said, but it essentially provides that certainty of the agreements between the First Nations and the proponent on what the requirements are. So you go into land, and you know who the landowner is. There is a certainty straightaway there. In a settlement region, there's always a mix of federal and First Nation lands, but, in those regions, that's been defined.
The second point is what regulatory process are you going to go through? It's an accepted, understood process. The land use planning, as we've said before, is another process laid over top of that. Another chapter of pretty much every agreement will be saying, ``You'll complete a land use plan, often in a co-management way,'' which means that the federal government, the GNWT and others will be involved in developing that. It's not normally just one party that's doing that; it's combined. There's a process in place. It's accepted, and it's understood.
The requirements for IBAs are often there, so then there's another section of each land claim agreement that will talk specifically about what the requirements for impact and benefit agreements or for access requirements or for employment targets are. They're very specific. Again, it's all laid out, understood and clear for a party going in as a proponent to know what it is they're supposed to do. So that level of uncertainty has been reduced.
Mr. Hagen: And, of course, they're also constitutionally protected documents. They're in the Constitution of Canada, so it's pretty certain. These are the rules going in and coming off the lands. Industry knows and welcomes it.
Senator Mitchell: That's helpful. That really clarifies it for me. Thank you very much.
Senator Patterson: Getting back to the consultation that led up to this legislation, I think it's no secret that when Mr. McCrank reviewed the regulatory regime in the North, his goal was a more efficient and simpler regulatory system.
Now, the legislation proposes eliminating three regional panels and giving responsibility to the Mackenzie Valley Land and Water Board alone. You will be the inaugural chair.
I'm sure you would have heard from some regional Aboriginal governments that they will be losing something with the bill and with the dissolution of the regional panels. There has been talk — and maybe it's kind of loose talk — about a super board that might be more Yellowknife-based and maybe not as responsive to the regions as previously.
Mr. Hagen, could you respond to those concerns that you probably heard at the hearings yesterday? How will you make sure that regional views are represented and respected going forward?
Mr. Hagen: Thank you for the question, senator. Of course, some of the Aboriginal leaders, on their way to Ottawa now, are going to be presenting to you, I believe on Thursday. They were very passionate in their presentations that they do not want their regional boards dissolved. You will hear that.
Bill C-15 is a reality; it becomes law. We're working on that. I believe Mr. Nevitt is on a working group now. I'll get him to respond to what is starting to shape up. It's very early in the process. We have not had the AANDC put any ideas of budget forth. It's hard for us to try to get all of the regions involved. Of course, they will have one member per region who will come to the board, but, as they come to the board as members, then they are on a public board and now serve the people of the Northwest Territories and all of Canada. So they're not just representing their region anymore.
We have field offices, we like to call them, in the Gwich'in, the Sahtu and the Tlicho, and the main office in Yellowknife is what Mr. Nevitt and the AANDC people are working on as we speak. Mr. Nevitt, did you want to add some ideas to that? I know it's a fairly difficult question this early in the game.
Mr. Nevitt: The organizational response is that we're still early on in the game. We're waiting for the legislation to be passed so that we can see exactly when the implementation of such changes may occur. Ensuring input into processes requires good processes to be run, and that's what we've been trying to strive for across the boards right now, whether it be the Mackenzie Valley board or the regional panels. Hopefully, just running a good process will ensure that people have a voice in the decision making.
Mr. Hagen: Senator, of course we have had a great working relationship. We have a lot of loyalties to the regional panels and to the regions through 10 years-plus of being a regulator with them. We understand their concerns. They are also our concerns, so we understand the attachment and loyalty that each region has to their board, and that will be clearly expressed to your committee when the Aboriginal leaders come down here.
At the end of the day, there is a way that the regions will have full involvement in this process, and I think it will just take time. I think time will prove that they are 100 per cent part of the Mackenzie Valley Land and Water Board. Their input is there. Traditional knowledge is very important, as you know. You're the past Premier of the Northwest Territories, which included Nunavut at the time. That's very dear to the communities' hearts. They see perhaps being lost because they don't have a regional panel there, but that can be incorporated into the new system that is involved in this bill.
Senator Patterson: You have recommended some technical amendments that I'm not sure I fully understand, but I'm sure they're thoughtful. Putting aside those points that you've made today, I'd like to ask you: You've been involved as a board in the development of the legislation, in seeing drafts. You've had input into how it was finally shaped. Putting aside your technical concerns, are you confident that you can make this new regime work? You will be the inaugural chair. Will you make this work?
Mr. Hagen: Thank you, senator, for the question. To start off with, it's happening. It's a reality, as far as we can see from here, so we have no choice. We have to make it work, and we will make it work. In terms of how well it works, it's still federal legislation, and we're funded not through the territorial or devolution process but directly through AANDC. So how well it works, how well we can get it out of the starting gate and make it work and have it encompass the whole territory outside of the ISR depends on the tools we're given, which, of course, depends on what kind of a budget we have to operate with. We've been squeezed year after year after year, and we understand. There are fiscal restraints on all governments right across this land. We accept that, but it doesn't make the job any easier. We've lost some good people because of budget constraints. If we continue to have those and at the same time try to put together this one board that has a lot of components, a lot of complications and a lot of resistance, and if we don't have the fiscal support and the right tools, it will be a tough job.
Senator Patterson: I'm sure you're up for it.
The Chair: That's the end of the questions that we have tonight. Mr. Hagen, I'm sure that you will make it work and find out if there are some things that need to be changed later on.
Mr. Hagen, Mr. Nevitt and Mr. Donihee, we thank you very much for taking the time. We appreciate your input. We got very interesting comments. Thank you again.
(The committee adjourned.)