Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 5 - Evidence - October 25, 2011
OTTAWA, Tuesday, October 25, 2011
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:03 p.m. to study the current state and future of Canada's energy sector (including alternative energy).
Senator W. David Angus (Chair) in the chair.
[English]
The Chair: Good evening everyone, colleagues, Mr. Minister, your officials who are with you and all of our viewers on the CPAC network on the World Wide Web and our special dedicated website for our study on energy.
We are privileged this evening to have with us the Honourable John Duncan, Canada's Minister of Aboriginal Affairs and Northern Development, member of Parliament for Vancouver North, B.C. The minister was first elected to the House of Commons in 1993 and re-elected in 1997, 2000, 2004, 2008 and 2011. I think there was a little missing period. From 2006 to 2007, Mr. Duncan was Pacific region adviser to the Minister of Fisheries and Oceans, and from 2008 to 2010 he was parliamentary secretary to the Minister of Indian Affairs and Northern Development. In August 2010, Mr. Duncan was appointed Minister of Indian and Northern Affairs, Federal Interlocutor for Metis and Non- Status Indians and Minister of the Canadian Northern Economic Development Agency.
I also know that he was a great advocate for the oppressed jewellery industry when there was an excise tax that endured for many years on an industry. Due to his efforts, and some efforts that I was involved in with the Banking Committee, he made quite a name for himself with these people, many of whom live in Montreal. On a personal note, minister, I hope you do not mind my saying that.
I wanted to reiterate what I say at most of these meetings. This is a continuing meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources, in a study we started in June of 2009 on Canada's energy sector and with a view to getting Canadians dialoguing and talking about energy, to understanding it, to knowing what happens when you flick the light switch and suddenly a light switch comes on and why. There are myths out there that need to be demystified. The study has been met with interest across the nation and we are aiming to wind down in probably June of 2012. Between now and then, we will be travelling to your province, sir, as well as to Alberta, Saskatchewan and Manitoba. Hopefully, in one or other of those provinces, we will have witnesses from northern territories and people under your own special jurisdiction whom we have not seen yet. We do have witnesses scheduled to come here, including Chief Atleo. We have had a number of visits from the chairman of the National Energy Board, who has explained to us how you have a bit of shared jurisdiction in terms of permits. We got involved with that after the terrible spill in the Gulf of Mexico. We did a side bar study on could this happen here and how is Canada prepared to deal with such a disaster.
I will not go into how many witnesses we have heard, but it is over 200 so far. We have had an extensive study. We are now trying to bring a narrow focus into it.
I want you to know who we are. I am Senator Angus from Quebec. I am the chair. To my right is the deputy chair, Senator Mitchell from Alberta. Our two helpful people from the parliamentary library are Sam Banks and Marc LeBlanc. From Saskatchewan, we have Senator Peterson; from Alberta, Senator Banks, who was my predecessor as chair of this committe; to his right, from Montreal, Senator Massicotte. Tonight, a former member of this committee is filling in for an absent colleague. Senator Merchant, we are delighted to see you here. As you know, and as I have told you, you are welcome any time at this committee. To my left is our able clerk, Lynn Gordon. To her left, from the great province of New Brunswick, Senator Wallace; to his left, from Montreal, Quebec, Senator Seidman; from Manitoba, Senator Johnson; from Yukon Territory, Senator Lang. To his left, the only elected senator, Senator Brown, whom I think you know, minister.
I think you are also aware that just recently, in the last month, we have had Minister Kent and Minister Oliver from Natural Resources Canada and from Environment Canada. It is a perfect trilogy, as I told the Senate today. You are here to complement the three departments that are so inextricably involved in what we are looking at.
I received, only today, your statement, but we have all kinds of other background data. The committee is fairly excited to hear what you have to say and then we will question you, if you will allow us. Over to you, sir.
Hon. John Duncan, P.C., M.P., Minister of Aboriginal Affairs and Northern Development Canada: Thank you very much, chair. I am the third minister part of the trilogy. You have saved the best for last, I gather. Today is actually the eighteenth anniversary of my election to the House of Commons for the first time.
Some Hon. Senators: Hear, hear.
Mr. Duncan: I had to run into one of my old colleagues today to remind me of that. This is a busy portfolio and I had forgotten.
You mentioned the excise tax on jewellery bill, on which you were of great assistance at that time. I remain the only commonwealth member of Parliament to ever have a tax cut private member's bill receive Royal Assent. That record is still intact, with your help. I should introduce Janet King, who is on our northern desk; I never know what the actual title is.
The Chair: It is Assistant Deputy Minister, Northern Affairs Organization.
Mr. Duncan: Also with me is Sara Filbee, on the lands and economic development files; and Strater Crowfoot with Indian Oil and Gas. They are all very knowledgeable, and I have significant history with all of them, and so I am happy to talk to you today.
Obviously, Canada's energy sector plays an increasingly important role in the country's prosperity. It also obviously faces a number of current and emerging challenges. How these challenges are addressed will have a big impact on our future. I am confident that the committee's study will contribute to the understanding required to support our social and economic prosperity.
You have heard a wide range of views related to energy production, transmission, consumption and conservation. As Minister of Aboriginal Affairs and Northern Development, there has been a change since my first swearing-in post- election. The department name was changed, so I no longer have the longest title in the government. You went through interlocutor, and you went through minister responsible for Canadian Northern Economic Development Agency, et cetera. It has been shortened, and I think it is a lot more inclusive.
I would like to talk about what we do in terms of the energy sector. The mandate of the department is exercised in a manner that addresses northern and national interests in the context of Aboriginal land claims, promotes investment in the sustainable development of northern resources and provides related information and advice. In fact, my department is committed to using resource development to enhance the skills of Aboriginal peoples and northerners and strengthen the economic base of northern communities.
Throughout Canada's history, resource development projects have led to increased economic opportunities, but, too often in the past, Aboriginal people did not fully participate, and northern communities were left with environmental messes when the projects were ended.
We have learned lessons from that history. Today, the resource sector presents a tremendous and unprecedented opportunity for jobs and economic prosperity for Aboriginal people and northerners. This prosperity can be achieved in the context of sound environmental management. Many of my department's programs, initiatives and partnerships involve the resource sectors, energy in particular.
I would like to discuss three key aspects of my department's work. They are regulatory reform, consultation and accommodation, and sustainable resource development. I will begin with regulatory reform.
In recent years, this government has taken steps to make it easier for First Nations to develop energy projects. Two years ago, for example, Parliament amended the Indian Oil and Gas Act. These amendments allow for an oil and natural gas management regime on-reserve. This is more transparent, efficient and attractive to outside investors. To develop these amendments, the government followed a process similar to the one taken by this committee, listening carefully to the views of those directly involved.
The Indian Resource Council played a key role. I know; I was parliamentary secretary for a portion of that time, working with Strater Crowfoot and others. I am very aware of how long and how involved the process was, and I think it was a good one.
In addition to the Indian Oil and Gas Act, two important and complementary pieces of optional legislation are the First Nations Land Management Act and the First Nations Oil and Gas and Moneys Management Act. Under these acts, a First Nation can assume control of land, natural resources and environmental management, including petroleum resources, along with related resource revenues.
Just last Wednesday, I signed a memorandum of understanding on First Nations land management that will increase access, allow more First Nations to undertake greater responsibility for land management and respond more quickly to economic development opportunity. That will increase the number of member First Nations almost immediately from 36 to something over 50, and we believe that with the number of First Nations knocking at the door that we already have a very successful economic development regime and we will have an even more successful take-up.
Another legislative tool that First Nations can choose to use is the First Nations Commercial and Industrial Development Act. Mining regulations have been developed under this act that enable oil sands mining on Alberta reserves, which would otherwise not be possible. The act is also being used now to develop the regulations for the Haisla First Nation in British Columbia to operate a liquefied natural gas plant. All these legislative initiatives have been designed to provide flexibility to meet the unique needs of First Nations communities.
In addition, our government announced an action plan in 2010 to improve northern regulatory regimes with the objective of streamlining the regulatory regimes and removing barriers to investment, while maintaining strong environmental protection. This plan will provide more efficient and effective processes, enhance the environmental stewardship and reflect a strong Aboriginal voice in decisions.
I am pleased to say we are making rapid progress, and I hope to reintroduce the proposed Nunavut planning and project assessment act in the coming weeks. This bill was developed in close collaboration with the Inuit organization Nunavut Tunngavik Incorporated, the Government of Nunavut and other stakeholders. We are committed to regulatory reform in the Northwest Territories as well.
Robust prices for oil and natural gas liquids have been a positive force driving the renewed global private sector interest in Canada's rich northern oil and gas resources. Holding up to one third of Canada's potential for conventional oil and natural gas, oil and gas and exploration and development activity in the North is showing real signs of progress, a progress that promises to bring durable economic benefits to all northern residents. Sustained growth in the oil and gas sector is predicated on leasing exploration lands, the ability to explore those lands seen as holding potential and confidence in a regulatory system that will allow responsible development within a sound environmental management framework.
The next points I would like to address are consultation and accommodation. As members of this committee know, the Crown has a legal duty to consult and, where appropriate, accommodate, where decisions may adversely affect Aboriginal and treaty rights. This government has taken a number of steps to ensure it fulfills this duty. A consolidated federal approach to consultation and accommodation is in place, for example, and over 1,800 federal officials have been trained to follow this approach.
This government is also working with other groups on this issue. Last year, for example, I was pleased to sign an agreement with the Mi'kmaq of Nova Scotia and the province on consultation processes. We continue to seek opportunities to work bilaterally with provinces to align our accommodation and consultation processes.
The final point today involves sustainable resource development. The list of Aboriginal and northern groups operating innovative renewable energy projects continues to grow. There are a number of examples. I can give you a quote from a discussion paper from the assembly of First Nations from earlier this year:
Today, First Nations in all parts of the country are communicating a strong interest to partake in the energy economy and clean energy development. This is marked by more and more communities starting up or becoming part owners in clean energy projects.
I can verify that. The department helped First Nations put together an energy conference in Toronto and another one in Vancouver in the last number of months. Those were highly successful and they brought people together. There have been great synergies and, as a consequence, things are happening. This is important for so many First Nations communities that are reliant on diesel generation because of their remoteness.
The reality is that renewable energy projects have the potential to generate sustainable benefits for Aboriginal communities across Canada The same is true for other types of energy projects. Last year, Indian Oil and Gas Canada collected more than $250 million on behalf of 50 First Nations for oil and gas projects on their lands. This money can be reinvested in on-reserve housing, water and sewer projects and education. In short, it helps those First Nations to build strong communities.
That concludes my remarks, and I am fully anticipating questions.
The Chair: Minister, thank you very much indeed. I might just exercise my chair's prerogative and ask the first question. You did mention discussions with provinces. One of the things we are learning, as we go forward with this study, is that your jurisdiction is kind of unique because energy and the environment are provincial matters in the rest of Canada. We realize that unless the provinces can discuss cooperatively and work with the federal government in developing a strategy for clean energy to be a clean energy superpower, which we are told is government policy, it will be difficult. In your area, I take it you have had lots of cooperation with the provinces. Could you elaborate a bit on that?
Mr. Duncan: Yes. The provinces get it in a way that they did not get it five or 10 years ago. I think that, because of where we are with the duty to consult, the duty to accommodate and the fact that the environmental and regulatory environment in Canada is strong, in order to effectively create resource and energy developments, there is a great need for industry and Aboriginal communities to partner. The provinces have an obvious stake in that, perhaps a bigger stake than we do in some respects.
Yes, we have had great collaboration. I can think of examples across the country, but we are finding that this is a great economic driver. We are happy when a community goes from having very poor prospects for environment to full employment, and this is actually happening. I think there are many opportunities to accelerate that. Every time we get a community that moves from that one place to the other place, it is noticed by the other communities and puts that much more pressure on their leadership and the process to make sure that they are getting some things happening in their part of the world, too.
The Chair: That is good news.
Mr. Duncan: We are finding that the provinces wish to harmonize, so we are having great success in that area as well.
The Chair: To conclude my thought on it, being from Quebec, Premier Charest, when he is not dealing with his current wildcat strike in the construction industry and his inquiry, is talking about this Plan Nord project. Are you folks consulted and or involved cooperatively with that? It seems to me that much of the north of Quebec is Aboriginal territories.
Mr. Duncan: Exciting things are happening in Northern Quebec. I talked to Minister Lebel, the minister responsible, who told me, for example, that in the Val-d'Or area they are looking for 10,000 miners. They would like to have them but they do not and they cannot find them.
When I talked to the Prospectors and Developers Association of Canada, they look at Northern Quebec as a great place to invest. There are many potential things there. Our mandate, because of the James Bay agreement in northern Quebec, is less than it would be in some of our other jurisdictions, but we have a strong role to play. One of my next visits will be to go into the cultural heart of Cree country into the community of Oujé-Bougoumou. I am looking forward to that.
The Chair: That will be interesting. Thank you for that.
Senator Mitchell: Thank you for being here, minister. I know you are busy and we appreciate it.
I am from Alberta, and Alberta has a labour strategy issue. I talked to the Minister of Labour several months ago. I bumped into him and he told me, "We need a labour strategy for these megaprojects." Clearly, one of the greatest sources of labour in a place like Alberta is Aboriginal people, who, on average, are quite young and certainly have prospects to be employable.
If you were to develop a labour strategy to support a Canadian energy strategy, what role would your department play in that? What role should we playing to nurture Aboriginal employment in that regard?
Mr. Duncan: You are quite right from that standpoint. We have 400,000 Aboriginal youth who will be eligible to enter the workplace between now and 2020. At a time when our industry will be looking at labour shortages — assuming the economy will not completely tank, and I do not think it will; even in the face of global recession we had new mines going into some of our northern jurisdictions, and that is happening in the provinces as well — we are working with other federal departments, with the provinces and with First Nations, on skills training and development.
There are examples around the country. In order for industry to do the appropriate training, they require a level of literacy and numeracy. Sometimes that is what needs to be addressed. We are focusing on getting people to grade 12, if at all possible. That is why I got into the joint action plan. There was a confluence of a whole group of individuals and institutions that realized that education is the key to everything. We have an action plan on education. We are working seriously with HRSDC, who are engaged in a lot of skills training programs. We want to make sure that is being done appropriately in our Aboriginal communities. We are working with the provinces. We have signed agreements with regional Aboriginal organizations, provinces, HRSDC and ourselves to make sure that we have appropriate training in place to make people job ready. We are having success. We can identify some of the numbers, but much more is to be done.
We have communities with 30 per cent to 80 per cent unemployment rates. We would never accept that in a non- native community. The health of the community would be measured by that rate, so we are focused on changing that. We have made that very much a priority and we are still developing programs. Every time I sit down with Industry Canada, they have more ideas for us. Perhaps either Janet King or Sara Filbee would give examples if they have any they would like to describe.
Sara Filbee, Assistant Deputy Minister, Lands and Economic Development, Aboriginal Affairs and Northern Development Canada: When I was in Yellowknife, I met with Diavik Diamond Mines. While I know it is not energy, it is similar in terms of the process required for communities to realize the potential of major energy projects and major projects in general.
Diavik Diamond Mines is part of the Rio Tinto family. I cannot give you the numbers and figures; I probably should be able to, but those things did not stick.
However, what did stick was the fact that they took a proactive community engagement model to working with the local communities, and the numbers are substantial in terms of the benefits. For example, they would go into a community and would see someone climbing off a snowmobile, and they said, "If you can drive that, we can teach you to drive a truck." They took that approach.
There is also the Mine Training Society, which is funded by HRSDC. They work to get people job-ready, folks who may not have had employment experience, and help them learn what it is like to be employed, also what it is like to be underground in a mine and help them become job-ready. That is probably one of the best, and there are all kinds of success stories but not enough. We need more, but that is one particularly good example.
Mr. Duncan: When we had the Arctic tour with the Prime Minister, in August, I believe, we went to the Meadowbank Mine near Baker Lake. Baker Lake was known as the welfare capital of Nunavut, and there is now full employment. That is all because of the Agnico-Eagle gold mine at Meadowbank, and we were shown their training facilities. They are right on site. They have simulators, so they can train people on the simulators, and then when they think they are trained on the simulator, they can walk out the door and hop on the real thing; that is very unlike going to a school somewhere where you are still far removed. While they are doing the simulator training, they are actually living in the camp and being with the people in the workplace. They are learning how the day goes, how people are fed, what the rooms are like. They are getting past all the culture shock of going into a workplace. It is amazing. What we are witnessing is game-changing, and it is happening across great parts of the North because not only are they fully employed now but they are also moving out of social housing because they want their own housing. There is a serious breadwinner in the house. Families are fully functional again, and so many great things are happening. The more it happens, the more the adjacent communities want it to happen.
This is why I think it is important that we manage our economic development and our environmental protections in a way that will allow people to manage their part of the world sustainably to provide jobs and be a part of the economy.
Senator Mitchell: This is very interesting.
Coming back to Alberta and the pipeline to Kitimat, controversial, and, certainly, residents of B.C. are not all that fussy about it, and I am sympathetic to them. They are our neighbours. There is the argument that the Aboriginal peoples or some of them do not want it to cross their land.
What is the actual legal and practical reality of that? Can an Aboriginal group, whether they have — there are not treaties in B.C. — but if they would have a land claims settled or they are in the process of settling a land claim, can they veto under any circumstances a project of that nature going across their land, or can, theoretically, the government expropriate it, and then the practical implication is would that work anyway?
Mr. Duncan: I will start by saying that I am not a lawyer, but the jurisprudence all points to the fact that government has to ensure that the duty to consult and accommodate has been taken care of. That is my department's responsibility. However, we take a whole-of-government approach to how that happens, and beyond that, we have an environmental process in place related to that pipeline, and we have to respect that process. It has not reported yet.
Senator Mitchell: Thank you. I have another one on the second round.
The Chair: During your opening comment, you said you concluded an agreement with the Aboriginal people in B.C. to build a liquefied natural gas plant, if I understood correctly. Is that in Kitimat?
Mr. Duncan: Yes, that is the plant in Kitimat. All we did was create the legislative authority for them to manage their own zone and make decisions on their own land base under the First Nations Commercial and Industrial Development Act; we call it the FNC. All of those things previously required me, as the minister, or my predecessors, to sign every land use transaction, and that does not happen in the speed with which business operates, so that has been an albatross for First Nations for decades. We now have multiple pieces of legislation that deal with land management and oil and gas resources, and I would be happy to have Mr. Crowfoot talk about that as well.
The Chair: It depends on your time. We have eight more names here, and I was going to go to our northern expert, Senator Lang from Whitehorse, as the next questioner, and, perhaps, Mr. Crowfoot if you would like to add your comments. What did you have in mind that he would talk about?
Mr. Duncan: Mr. Crowfoot is familiar with the Indian oil and gas industry, the act and the resource centre. I just thought he has gone to all the effort of being here, and he is a good resource.
The Chair: I understood that you might have to leave before we are finished, and we will then grill Mr. Crowfoot, Ms. King and Ms. Filbee. Therefore, while you are here, I want to turn the pit bull from Whitehorse loose on you.
Senator Lang: As a preamble, I would like to recognize the minister's work on a number of files up North that most Canadians are not aware of, in conjunction with the Prime Minister. I know you were very much involved in getting an agreement to extend the health accord to all three territories. It was a substantial financial commitment by the Government of Canada, as well as a resource revenue sharing amendment to the agreement in Yukon, which has set the path for us to become much more independent from the Government of Canada. I want to go on the record to recognize the work of the minister's office and what he has done to make that happen.
Could you make a couple of comments while we have you here in the public forum? I know you were either directly or indirectly responsible for a number of those projects. Perhaps you could update us as to where we are. One is the Alaska Highway pipeline. I do not know how well versed you are on that. It has been very quiet. That is the pipeline that would be coming from Alaska down through B.C. and Alberta. It would be a significant help to the Yukon, as far as we are concerned, to meet some of our energy requirements as well as a financial taxation boom for us. There is starting to be more talk on the Mackenzie pipeline. Perhaps you could update us on that.
One other area that I think is important to this committee is your relationship with the National Energy Board. Perhaps you could update us as to where we are with the present inquiry and where you see oil and gas exploration development up in the North.
The Chair: Which one of those 11 questions would you like to answer? Minister, you pick.
Mr. Duncan: The Alaska Highway, MVP. What was the third one?
Senator Lang: The Alaska Highway, the Mackenzie pipeline and then the NEB, National Energy Board.
Mr. Duncan: It is an interesting division of authority, but the Minister of Natural Resources is actually responsible for the Alaska Highway pipeline.
On the Mackenzie gas pipeline, I think we all know that industry is under some timeline at this point; they have been given a certificate to allow them to proceed. There are some negotiations going on. There were a lot of negotiations between 2005 and 2010 on a fiscal arrangement, that is, government involvement in the project. There have been discussions recently. I am not able to talk about that; it is obviously privileged information.
I think people are happy that industry is basically still at the table. We have gotten past elections in NWT, and there was a strong degree of interest in the Norman Wells area when we had the latest round of licence applications, the exploration act applications. There is still a lot of optimism. There are nay-sayers around that project as well but, if you dig down far, there is still quite a bit of optimism.
The Chair: What do you want to know about the division of authority?
Senator Lang: The National Energy Board and the oil sands up in the North.
Mr. Duncan: The National Energy Board is not mine; we obviously have to work with them. What is crucial, you announced, on my behalf, the Beaufort Regional Environmental Assessment, which was $20 million over four or five years. This is for the offshore in Inuvialuit, which is the northern part of the NWT region. From a practical side, it is to determine circulation of the ocean, ice thicknesses, bottom hazards, seabed hazards, that kind of thing. It is to establish a whole bunch of benchmarks in the period prior to any likely drilling or exploration. We have a period of time when we can do all that work, so let us do it. As a government department, we made that announcement last year and that is proceeding. That has legs now that the NEB hearings in Nunavik are over.
Senator Merchant: Thank you, minister, for being with us. I, too, have questions about the Mackenzie Valley pipeline. The project has been approved for construction pending receipt of all necessary permits. There is a deadline contained in the National Energy Board approval that construction must begin by December 31, 2015. The proponents say that in order to meet that deadline, they need some assurances that fiscal arrangements with the federal government are in place no later than this winter.
The Mackenzie Valley pipeline, of course, would be a major contributor to Canada's energy security and the greenhouse gas reduction targets. Given that, what is your position on the Mackenzie Valley pipeline and would you support a fiscal arrangement similar to the loan guarantees recently provided to hydro development in Labrador?
Mr. Duncan: The only thing I can really share with you is that I was certainly involved in the Lower Churchill project from the standpoint of the agreements we have reached so far with the Labrador Innu. In terms of the Mackenzie gas project, I have more comprehensive authority, but the fiscal negotiations are quite privileged. The corporate sector wants it that way, we want it that way, and it has to be that way. Therefore, I am not sure I can answer your question.
Senator Merchant: The North has potential development of small- and large-scale hydro developments, as well as the potential for the development of alternative energy such as geothermal and wind. All of these will reduce the dependence on costly and highly polluting diesel in northern communities and mines. Canada committed, at the 2010 Cancun climate change meetings, to focus on measures that reduce black carbon from diesel.
What is your department doing to support proposals to develop hydro and alternative energy in the North?
Mr. Duncan: First, remote communities with diesel generation consume in Canada about 100 million litres on an annual basis. It is not a very good thing and it is very expensive, not only financially but also environmentally as there is a cost associated with digging it out of the ground, transporting it, storing it and burning it. It is a very inefficient thing. Therefore, we would very much like to get people either on grid or off grid and onto another system. I totally concur. We have programs that will do that or facilitate that.
It is clear that government cannot do everything. What became very clear to me after the First Nations energy conference in Vancouver in February is that we have brought together some industries that suddenly realized that they could collaborate. This guy has a battery that will store, distribute and make the renewable energy, which is intermittent, actually work on a supply and demand basis, and they did not know that each other existed. We have now had meetings facilitated by the B.C. region. It looks like we may be able to take that technology and put in two pilot projects, one in the North and one on the B.C. coast, that will take remote communities off diesel and onto renewable, save the community immense amounts of money, and save the environment at the same time.
Industry is so interested in doing that, partially because the people involved in the exercise are about my age, and they were mentored by First Nations people when they were young, so they want to give back. They see this as something that could be potentially game-changing. I am looking forward to it. I think we will all sit here not many years from now, look at diesel generation and say, "Boy, that was sure a dinosaur way to run things," because I think most of them will be gone.
Senator Merchant: Thank you.
[Translation]
Senator Massicotte: My question is further to previous questions.
As a representative of aboriginal people, it is important for you to listen and to understand their concerns. You are proposing bills that grant a certain degree of authority and mechanisms for the proper management of resources.
We human beings are always looking out for our interests. From time to time, those interests do not coincide with the interests of society in general. However, we have to expect people to defend their interests.
When we talk about pipelines or other projects, I would like to know the rights of the federal government, whose purpose is to represent the interests of the entire community and of society in general. Can the government tell aboriginal people or a segment of that population that, although it understands their interests, and despite their disagreement, he is proceeding with a project in our country's interests? Does the federal government have final authority in that sense?
[English]
Mr. Duncan: Once again, jurisprudence means we have a duty to consult and a duty to accommodate where appropriate. We go through many exercises. This is a collective because the Department of Justice can work for any department, including the Canadian Environmental Assessment Agency on things like strength of claim because it is clear in some parts of the country that Aboriginal rights are very strong and in some other region maybe not so much.
An industry who makes project proposals now understands that this is something they have to build into their thinking and their process and, indeed, some industry is starting there. They are starting with the Aboriginal communities before they start with government because they can have a better dialogue that way. Communication is so vital to how this eventually turns out so often.
It does come down to eventually the government issuing permits. Governments issue permits, so either we make a decision to issue the permit or we make a decision not to issue the permit. Most often, that is based on environmental concerns, but it is quite conceivable it would rest on Aboriginal concerns.
Normally, what would happen is industry would enter into an impact and benefit agreement with the affected group, a willing set of negotiators. The difficult ones, of course, are where there is no prospect of that. Increasingly, what you will find is investors do not even want to start; they will go somewhere else with their money.
[Translation]
Senator Massicotte: If I understand correctly, upon consultation, after listening to the arguments and following the normal process in accordance with your responsibility, if there is no agreement, the federal government can, in any case, decide to issue a licence, despite the fact that the aboriginal communities do not agree. Have I correctly understood your comments?
[English]
Mr. Duncan: Yes, I think so. I think we have some examples. There are many shades of grey; that is the difficulty. People are always looking for clear-cut answers on these questions.
The Chair: Senator Massicotte, if I may help you in what you are trying to get to, yes, the minister agrees that occasionally the permit will be issued notwithstanding that the Aboriginal community is not in accord with the project, but actually how often does that happen. Is that where you are headed?
Senator Massicotte: Yes, but I also acknowledge that people's interests are people's interests, and sometimes your interest is defined by your negotiating capacity. If you think that at the end of the day someone else has a right to supersede in the greater interests of the good, then you become more reasonable a little faster. I was trying to find out what exactly one's legal rights are, and what the bargaining chips are. Do our country's interests go to the wayside because people cannot agree? I think we got the answer.
The Chair: Yes. You have to trust a strong majority Conservative government.
Mr. Duncan: The Lower Churchill has been discussed here today. On the Lower Churchill, we have agreements among the private sector, the transmission company and the hydro construction. Neither one of them would likely proceed with the investment unless they knew that the Labrador Innu had come to agreement. The investment just would not happen. It is not that we have not issued the permits; it is just that they would walk away.
Senator Massicotte: That is because they cannot bear the uncertainty and the time.
Mr. Duncan: That is right. They need certainty.
Senator Massicotte: Thank you.
Senator Banks: Thank you, minister, for being here. The advantage of the Senate is that we get to ask the naive questions because we are not politicians. At least most of us are not, in the normal sense of the word. Most Canadians, certainly including me, do not fully understand the nature of the proprietorship or beneficial interest that First Nations have in the resources that lie under what we normally call their lands, although they are not their lands. They are federal lands. You are probably more familiar than the rest of us, as your predecessors would be, with charges and suggestions that our attitude in this country, probably since 1867, toward the Aboriginal people and the First Nations as we now refer to them, has been, in many respects, paternalistic.
With respect to the proceeds from resources, whatever they might be, that lie underneath a First Nations reserve, First Nations land — and there may be distinctions as to what the nature is of the land claim that has been made or something of that land — you said in your remarks that you have collected, I think you said, $250 million in the last little while in respect of resources from First Nations resource extraction and that it may be used for things like education and development on the First Nations.
I guess my question is: Why is not all used for that? In the instance of two hypothetical First Nations 50 miles apart, and First Nations A is the source of resources which resulted in $100 million worth of revenue in year one and First Nation B found that its resources were worth $10 million, does First Nation A get $100 million and First Nation B get $10 million or is that revenue eaten into by some process before they get it? Do they get to decide what is done with that money?
I think you understand the nature of my question. Could you inform my ignorance about that, please?
Mr. Duncan: Is communication not a difficult thing sometimes? It is Indian Oil and Gas Canada that collects the $250 million on behalf of First Nations, not Canada. That is what we did with the legislative piece. This is in the nature of getting away from the paternalism that you talked about.
When I signed the agreement last Wednesday with the lands advisory board under the First Nations Land Management Act, one of the things I said is, "Every time that I sign something that says I am no longer the decision maker, you are now empowered to be the decision maker, you are out from under the Indian Act, makes me happy." I had a chance to do that twice last week because I was there for the initialling of the final agreement with the Tla'amin First Nation agreement in British Columbia as well.
First Nations that happen to have settlement reserve lands that are sitting on resources are the beneficiaries. Is that your question?
Senator Banks: The beneficiaries in proportion to — the money does not get all mixed up some place in oil and natural gas and doled out on the basis of someone deciding that it should go there and not there?
Mr. Duncan: No.
Senator Banks: That is the way it used to be in many respects, if I recall or have been informed correctly.
Mr. Crowfoot, are you perfectly happy with the way it is being done now?
Strater Crowfoot, Executive Director, Indian Oil and Gas Canada, Aboriginal Affairs and Northern Development Canada: Yes, we have designations from the reserves that allow authority on their lands. With the designations, we act with the chief and council as partners in the process. Once we come to agreement with the company on First Nations land, chief and council agree, then we sign and we collect the royalties from each reserve. All we collect, 100 per cent of it, goes into that First Nation's capital account, either the capital trust or revenue account here in Ottawa. Once the money is deposited into the accounts, our responsibility is done and it goes over to Indian affairs to Ms. Filbee here in her shop as the ADM on development.
Senator Banks: Some members here will recall the signing of the Nisga'a treaty, which devolved a certain amount of responsibility to that First Nation of a kind and extent that had not previously to that been granted to any First Nation in Canada. I do not know whether there are any other anticipated agreements of that kind in the offing minister. Do you know of any? Has it been a success? Are you looking at going in that direction in the case of other First Nations?
Mr. Duncan: The Nisga'a treaty was the first comprehensive treaty in British Columbia. It was done prior to the B.C. treaty process that was set up. I think it was outside of the B.C. treaty process.
Senator Banks: It was unique.
Mr. Duncan: It was unique. The B.C. treaty process was actually set up, legislated and given authority in 1992 and will have its twentieth anniversary next year.
Since the B.C. treaty process came in, we have finalized two agreements, Tsawwassen and Maa-nulth, and we are close on Yale. There is one piece missing, and that is the federal piece. It has been ratified by the community, by the B.C. legislature, and it is just waiting for this place. We have others. We have many tables at work. We are being criticized for the slowness of the process, with some justification, but all three parties are not blameless. We all share blame.
Senator Banks: The mills of the gods grind slowly, but, to confirm my understanding, there was a degree of independence of management and decision making, for example, even going to the extent of hypothecation, that it was contemplated in the Nisga'a treaty. There was a line drawn, if I can put it that way, of this responsibility that used to exist in respect of the —
Mr. Duncan: Including some law-making authority, yes.
Senator Banks: Exactly, and some money changed hands as a result of that. Are you contemplating any more of that kind of agreement with First Nations? They are all unique.
Mr. Duncan: Yes. Since Nisga'a, there have been a number in NWT. I think all the Yukon agreements actually came after Nisga'a, if I am not mistaken, and the B.C. treaty process are not dissimilar from Nisga'a.
The Chair: To take advantage of Mr. Crowfoot's presence to draw out for the record what is this corporation, Indian Oil and Gas Canada, is it a Crown in the Constitution? It was not stated in the minister's remarks.
Mr. Duncan: Before we start on that, where are we? Can I escape for my other appointments?
The Chair: You have been generous, but I have five people who did not get a question yet: Senator Brown, Senator Wallace, Senator Johnson and Senator Seidman. I have been in this position too long to know that you cannot gamble and give each one a question and then add the question and answer together. Could you give us 10 minutes more, say?
Mr. Duncan: Ten minutes, yes.
The Chair: Then we will come back to Mr. Crowfoot. Start with Senator Brown and make all the questions and the answers crisp, if you could.
Senator Brown: I would like to know if you can to tell me about the Keystone pipeline. I have been told it has been approved in Alberta but I want to know if it went through. I believe that a gateway line is also proposed to the West Coast, but I do not believe it has been approved in any way.
Mr. Duncan: I have not had much to do with Keystone because the Minister of the Environment is the lead.
Senator Brown: Perhaps the person beside you wants to comment.
Mr. Crowfoot: Before coming to IOGC, I was on the panel as an NEB board member, and we heard a number of First Nations' concerns about the route that Keystone was taking. We listened to the concerns. It did not traverse or go through any First Nation lands, but it did, perhaps, impact some traditional lands. In our hearing process, we heard the concerns, and, through our decision, we could mitigate some of those concerns.
Mr. Duncan: On the gateway project, it affects many First Nations in B.C., a few in Alberta, and it is in a review process. I will respect the process. The process is under the purview of the Minister of the Environment, of course. I am sure he talked about it when he was here.
Senator Brown: Is it a year or two away at least?
Mr. Duncan: Yes, at least.
Senator Peterson: My question is related to oil and gas. I would like to know what the structure and mandate are. When you say you are collecting monies on behalf of First Nations, are you an equal partner with the operator, or are you just collecting royalties on their behalf?
The Chair: That one can wait. I just did not want you not to have a chance to ask the minister. We will come back.
Senator Peterson: Okay.
Senator Wallace: I will be very brief. I know you have a couple of minutes left.
When I listened to your presentation and realized that a major focus of your department is to promote investment in the northern resources, that is a change over the last five or six years and beyond that. Is there an overall strategy within your department by which the development will be promoted? I realize you are involved in licensing and permitting. A lot of authority has devolved to the First Nations people, which is wonderful, but as far as the actual promotion of investment encouraging that, are there significant ways in which your department during your regime or over the last five or six years has made changes that encouraged the promotion of that northern development resource?
Mr. Duncan: Well, yes, that is just a small question.
Senator Wallace: I thought I would eat up everybody else's time with that one.
Mr. Duncan: Senator Lang is from the Yukon and talked about it earlier. In 2003, Yukon achieved devolution, in other words, a high degree of independence from the federal government in 2003 as one of our three northern territories, and it created their own regulatory regime, known as the Yukon Environmental Assessment Board. There was also the comprehensive First Nations umbrella agreement, which includes comprehensive treaties with 11 of the 14 First Nations in Yukon. All of that has created an environment of certainty, stability and local governance. That has promoted economic activity to the point where they are going gangbusters. They did not have a recession. It is hard to imagine them having a recession. They have investors knocking on the door; they have new mines; they have incredible new projects.
We want to reflect that as much as we can in Northwest Territories. I signed a devolution agreement January 28 of last year. Those devolution negotiations have been ongoing since then, and it looks like we can get to the same point there as Yukon achieved in 2003; we can probably get there by 2013 or early 2014.
In collaboration with that, we want to move forward with regulatory reform. We have a plethora of boards and commissions in NWT that deal with permitting and environmental assessments. We will try to bring some order to that. I mentioned in my speech in Nunavut that we will be introducing the Nunavut planning and project assessment act, NUPPA, in a matter of weeks. All of those things will promote economic investment and development, and we have people knocking on the door. One of the things that we did as government, for example, is invested a lot of money in geo- mapping. For every dollar we put into geo-mapping, we get almost an immediate $10 return in investor interest and spending, so that geo-mapping has been used heavily by industry to find and prioritize their work, their exploration and their seeking of permits. Therefore, the North has been a large federal transfer historically, and I think what we are looking at in the future is it will be a net contributor to Canada, perhaps in a major way.
Senator Wallace: It is a good news story.
Senator Johnson: What does the Nunavut planning and project assessment act include? Is it reflected in the action plan?
Mr. Duncan: It is the environmental assessment master piece, "master" in the sense of the broad piece, and it includes some of the provisions that are similar in the sense to the successful Yukon legislation. We think that it will be quite helpful and will bring stability and certainty to the environmental assessment process in Nunavut.
Senator Johnson: I was particularly interested because I know people up there, and they are excited about the project. That is great.
Senator Seidman: I would like to move upstream from the development conversation that you had with Senator Wallace.
If I am listening carefully to what we are talking about, a lot of it is about innovation and is futuristic, which is exciting. In the mandate for Aboriginal Affairs and Northern Development Canada, it states you have the responsibility to foster through science knowledge of Canada's North and its development.
Aboriginal Affairs and Northern Development Canada is not typically thought of as a science-oriented department like Environment Canada or NRCan or even the Department of Fisheries and Oceans. I would be interested to hear about what aspects of science the department might foster.
Mr. Duncan: Well, we are not a science-based department, but we have a lot to do with science. I talked about the BREA, Beaufort Resource Environmental Assessment process. We are leading that one. Many of our partners are scientists from different disciplines. We were the architects of the stimulus spending to improve the research facilities in the Arctic. We spent $85 million in that two-year period to upgrade all the science-based northern institutions, which was very gratefully received.
We are the lead on the Canadian High Arctic Research Station. We were the proponent. We made the selection as to where it would go. It will go into Cambridge Bay in Nunavut.
We have passed several stages and we put out tenders for the design work last month and so we are looking at the construction phase not too far down the road. This will be a world-class facility.
We were the lead on the International Polar Year, which was the largest ever. They call it "polar year" but actually it was about a four-year engagement, and there were incredible things that came out of it, which probably Ms. Filbee would like to talk about after I have left.
We have done a lot and I am actually very proud of what we have done. I know, when other departments have northern responsibilities, they very often come to us because we do have a lot of expertise and a lot of institutional knowledge that really nobody else has and it is quite understandable why. It is a huge place and it is quite difficult to get around, very expensive to get around and so on, but thanks for the question.
Senator Seidman: Thank you for the answer because it is certainly interesting and we will try to find out a little more about all that.
The Chair: Minister, I really want to thank you for your time, your very thoughtful attention to our questions and I want to congratulate you. I am sure my colleagues would agree that you appear to have developed a really good mastery of your department, which is not easy in the short time you have been there, I know. Your former colleague, Minister Chuck Strahl, as he then was, laid some of the groundwork for you, but it is really impressive how you have a grasp of it and we are pleased that you are up there and doing such a great job. We will learn a bit more, if you do not mind your colleagues speaking about you behind your back.
Mr. Duncan: I will read the transcript.
The Chair: Thank you very much, Minister Duncan.
Mr. Duncan: Thank you very much and your questions were actually very thoughtful too, so thank you.
The Chair: Colleagues, we will continue on and I will ask Senator Peterson to pick up with his question to Mr. Crowfoot.
Senator Peterson: I will go through the question again but I believe you got most of it. I was interested in the structure and mandate of Indian Oil and Gas Canada and how you negotiate on behalf of First Nations; do you do joint ventures or is it a royalty structure?
Mr. Crowfoot: We are a federal government regulatory body. We are under Aboriginal Affairs and Northern Development Canada. Sara Filbee currently is the person I report to in Ottawa. We are a special operating agency that operates on the Tsuu T'ina First Nation. We have a staff of about 70 people and our mandate is to work with First Nations at lands that have been designated. These are Indian reserves that have been designated for our administration to take effect. We work with the chief and councils. Our mandate is to fulfil the Crown's fiduciary and statutory obligations as related to oil and gas management and development on Indian reservation lands.
Senator Peterson: Can First Nations unilaterally go ahead and do a deal with a joint venture partner?
Mr. Crowfoot: They can do deals separately perhaps in joint venture arrangements, but in terms of issuing a lease that we have jurisdiction over, we work directly with chief and councils, and chief and councils have to approve the deal that is being negotiated and then we have the final approval. Then we can issue the lease to a joint venture partner perhaps or to a non-native such as a regular oil company. That is how we operate, but we work closely with chief and council to key process. They turn their key first and then we look at it and then we can turn our key.
Another related question that might arise is that we talked before about First Nations Oil and Gas and Moneys Management Act. FNOGMMA is legislation whereby a First Nation can assume full control of their monies and the oil and gas. That is available for them. If our regime is not suitable for them and what they want to do for their future and how oil and gas is managed on their lands, then they can pursue and use FNOGMMA for their own purposes.
Senator Peterson: Roughly how long would that take to get approved?
Mr. Crowfoot: FNOGMMA is in place now and the process should not take more than several months to go through. We have to work with them and do an assessment. We make sure they are ready and they have to make sure the staff is trained. Once we transfer over our functions we make sure the staff that is taking over our responsibilities is trained and have some sort of capacity to manage the oil and gas side of the business.
Senator Peterson: My notes indicate that over the last five years you have collected in excess of $1 billion?
Mr. Crowfoot: Yes.
Senator Peterson: Has all that money been distributed?
Mr. Crowfoot: Yes, the money, as I said before, we collect it for each First Nation from their lands and we deposit that money into the trust accounts in Ottawa, in the revenue account or capital account. That money goes directly to that First Nation's account. It is there for their use and they can access it through the Indian Act.
Senator Peterson: You do not sign a cheque directly back to them, but it goes to another account?
Mr. Crowfoot: It goes to their trust account because we have a fiduciary responsibility to ensure money we deposit into their trust account is accurate and then it is there for their use, either for revenue or capital. However, it is their money sitting there that they can access, as I said, through the Indian Act.
Senator Peterson: Can they use that as collateral for other things they want to do?
Mr. Crowfoot: Perhaps, but I think that is where the ministerial discretion comes in, because we would like them to use this money for housing and development on reserve. Sometimes risky ventures such as oil and gas deals involve a lot of risk. It is up to them, but if they want to do that then we encourage them to take FNOGMMA as a vehicle and that way they take full control of their own monies as well and they can decide how they want to invest it and how they want to use it.
Senator Peterson: Does any of it carry an interest position where there is no risk?
Mr. Crowfoot: Some of them do. Some First Nations negotiate in their joint venture arrangements with the companies to have a carried working interest that reduces the risk.
Senator Peterson: Do you have to approve that too?
Mr. Crowfoot: No, that is something that is done between the First Nation and their partner, or the oil and gas company they are working with.
The Chair: I just missed the beginning. Is it a Crown corporation?
Mr. Crowfoot: We are a federal body, yes.
The Chair: An agency?
Mr. Crowfoot: We are a special operating agency of the federal government and we are part of Indian Affairs.
The Chair: Do you work in the department and report to Minister Duncan?
Mr. Crowfoot: I report through Sara Filbee, and she then reports up to the deputy and then to the minister.
Senator Dickson: For clarification, Mr. Crowfoot, just as the land position, is it a claim that the First Nations have, or do they have what I would say is the fee simple in the land, in other words the mineral rights as well as the surface rights? I am a bit confused.
Mr. Crowfoot: I will let Sara Filbee answer that one.
Ms. Filbee: They do not have fee simple because the reserve lands are federal lands and held by the Crown. They are the beneficial owners. The legal owner is the Crown.
With respect to mineral rights, it differs across Canada with a whole bunch of different factors. If you want the details, I may have to get my brain trust behind me for that. For example, in B.C., the province asserts the rights to the minerals.
A lot of it depends on how the reserve was created, when it was created and whether it did or did not include minerals at the time it was created. It is different across Canada as to whether the interest in the minerals is held for the benefit of the First Nation or the province asserts title to it.
Senator Dickson: I wanted to go back to what Senator Massicotte was discussing with you as to the interests of Canada. Who sets the royalty rate?
Mr. Crowfoot: The royalty rate is set through negotiations. We have a guide where we look at what is going on around the reserve. We look at the prevailing provincial royalty rate, and we try to get at least that or more than that. It is through negotiations with the First Nations, our department, our negotiators and the oil and gas company we are dealing with.
Senator Dickson: Does the federal government have a veto on the rate?
Mr. Crowfoot: We ensure the First Nation gets fair value for the sale of the resource. We have to ensure the rate is fair and it is a market rate, and then we can approve it. If the rate is too low, then we will say no.
Senator Dickson: Senator Lang is always convincing me about the enormous mineral opportunities in the territories, and I am really convinced now.
Has anyone done any macro planning and modeling as to what precisely the resource may be and what the revenue stream is? Is there any opportunity for Canada to at some point in time not have to budget for Aboriginal affairs and for all the services provided there, such as the clean water and this and that?
The Chair: That is the plan.
Senator Dickson: There is a paternalistic attitude. When does it come to an end if those resources are there? What thought has gone into this? All of a sudden, we will end up with all the companies there instead.
Janet King, Assistant Deputy Minister, Northern Affairs Organization, Aboriginal Affairs and Northern Development Canada: I can answer part of your question, and that is that oil and gas reserves are estimated across Canada by NRCan. For estimations, whether it be in the High Arctic, on land in the Arctic or south of 60 on any lands, that would be the scientific assessment of potential reserves in Canada based on current understanding.
Mr. Crowfoot: It is reflective of over $1 billion in the last five years, but not all First Nations are blessed like others. The majority of money we collect is for a handful of First Nations. That is the bulk of what we collect. The rest do not have any oil and gas resources.
Ms. Filbee: There are major project opportunities, be it energy or other resources, not just in the North, although significantly in the North, but across Canada as well.
Mr. Crowfoot is right; not every Aboriginal community is so blessed. However, many may be. Ironically, many of them, especially in the remote areas, do have those opportunities. However, it is not as simple as saying they have those opportunities; therefore, they will be wealthy. One hopes that will happen, but there is a significant amount of work that needs to be done by all of the partners.
We talked about impact benefit agreements with, for example, First Nations or Inuit communities. Those are important, but then you have to get ready because it is not just a question of the benefits directly to the community; it is also the question of benefits and potential for entrepreneurs in the area. The expression that was once used is "rope, soap and dope," or bring all the suppliers to the major projects. In many cases, that is for people to be employee-ready and/or Aboriginal entrepreneur-ready. It takes development.
There is an excellent example that you would be familiar with, senator, in the tar ponds. In that case, industry was the government, but there was a massive cleanup. There was a special organization formed, the Unama'ki Economic Benefits Office, that worked closely through Public Works with the five First Nation communities in that area. They had very aggressive set-aside goals, and they reached them. In fact, they surpassed them, to make sure the First Nations in that area benefited. As a result of that, not only did they meet the objectives for that particular project, but they also strengthened Aboriginal entrepreneurs that have now been able to compete on other projects without the benefit of a set-aside, which I think is anyone's definition of success.
Senator Mitchell: I want to make sure I have this. When I asked about the power of an Aboriginal group to veto a project, the minister left me with the impression that they do not have that power no matter what the status of the land is, whether it is a claim in progress or something else. He said there is the duty to consult. He made another point later on.
Back to this idea with mineral rights, if the Aboriginal group has mineral rights, does that make any difference to their ability — the minister's other point was they would not risk it if the group did not agree anyway; investors would not do it.
However, if they have mineral rights, does that give them the power to veto or is it still just the duty to consult?
Ms. Filbee: If they have mineral rights and it is with respect to development on the reserve, I guess from their perspective, depending on — there are some areas, for example I believe in Ontario, where you can find people staking claims on your front lawn. That is the nature of the beast. I think they would have greater rights there for sure.
One of the things about the fiduciary obligation out of which the duty to consult arises is that is something that must be exercised by the federal government in light of all of the interests. While the Aboriginal interest is a very important one, it is not the only interest that needs to be balanced off.
Ms. King: If I may add a point, just building on Ms. Filbee's answer, she is speaking particularly to south of 60 First Nation land under the Indian Act. I think the committee is probably familiar with north of 60 where there are different governance regimes in place with numerous settled land claims. I will speak to one example that might further the information in response to your question.
In Nunavut, for example, the Nunavut Land Claims Agreement did set aside Indian-owned lands, so there is very clear title. That being said, the reviews for projects engage the Inuit, the government of Newfoundland and the federal government. They come together to review the projects. We mentioned NUPPA already. Everyone is engaged in assessing the project and moving it forward.
As the minister noted, it is also a significant private sector decision each step of the way as to whether to continue or not. In the end, the minister has the final signoff on that process, but there are many steps of engagement along the way.
Senator Mitchell: Thank you.
Senator Banks: I hate to be dense, but I will ask the question specifically with respect to First Nation lands south of 60. Ms. Filbee, Ms. King just said that in the case of development of resources on Indian lands or Aboriginal lands north of 60, the minister has the final say.
In respect of the development and realization of the profits from resource development on Indian lands south of 60, I am going back to Senator Massicotte's problem; where does the eminent domain concept kick in? Does it override First Nations interests, wishes, stated desires or leadership? If a First Nation says, "We want this resource developed according to the deal that we have worked out with the oil company or the coal company or the gas company," can the federal government say, "No, we do not like the deal"? Conversely, if the First Nation says, "We do not want this resource developed; we do not want this mine dug here," does the concept of eminent domain kick in to the extent that the federal government can say, "Sorry, in the larger interest, we are digging that mine"?
Mr. Crowfoot: To your first question, yes, we can say no to a deal if we feel the royalty structure is not fair and equitable. We can work with the First Nation and the oil company to work out a better deal. That is part of our mandate.
Senator Banks: Is the royalty amount the sole consideration?
Mr. Crowfoot: Royalty, bonus and perhaps employment and so forth are the considerations; but it is mainly the royalty and the bonus.
To your second question, yes, a First Nation can say, "We do not want this mine developed," and just leave it there. If it is reserve land, it is their right. Even though it is federal land, they are the beneficial owner, and they can decide what they want to do with that resource.
Senator Banks: Good. Thank you.
The Chair: I do not see any other hands up from the senators.
Mr. Crowfoot, Ms. Filbee and Ms. King, as you know we are doing this energy study so if you have any thoughts on others who might help us on the perspective of the issues discussed this evening, it would be appreciated. We are trying to ensure that the full story is out. For example, we have big gaps in the Quebec picture. The Minister of Energy will appear, and we have some special arrangements to get their story better, including the Plan Nord. Also, the Chief of the Assembly of First Nations will appear at the upcoming November 24 meeting. In our efforts to get the full story, anything you could do to help could be relayed through the clerk of the committee, unless you have something for us now.
Ms. Filbee: I want to suggest an organization that has been very successful in working with both the Southern Utes and the Northern Utes in the United States. They are Native American resource partners and are moving up to headquarter in Calgary. They provide access to equity. Some folks criticize them because they are costly, but equity is costly. Their record with respect to the work with the Utes shows that the southern Utes started out with a net worth of $7 million and, depending on market cap and commodity values, they are now worth between $7 billion and $15 billion. They have similar impediments to realization of their resources. They were able to use a couple of cute legal transactions, such as leasing leases so they could mortgage the leasehold interest versus the direct interest. They have done really interesting work. I think they would be an interesting resource for you folks to hear from; and I think they would be interested in sharing their experience. Capital becomes a huge issue in terms of major projects, especially if we would prefer to have Aboriginals involved as active partners and not just as passive holders of interests because passive interest does not get you far. Active participation, knowing there is risk involved, if appropriately done is where the true wealth lies. It is a story you should hear. I can put the clerk in touch with the contact there.
The Chair: That is lovely. Thank you.
Ms. King: I am thinking of a number of names that I could communicate to the clerk.
The Chair: That would be great. I thank all three of you very much and, for the record, Minister Duncan as well; it has been a terrific session. We are all going away with many other questions buzzing around our minds. Unless anyone has something they want to add, I declare the meeting adjourned. Thank you.
(The committee adjourned.)