Moved second reading of Bill C-88, An Act to amend the Mackenzie Valley Resource Management Act and the Canada Petroleum Resources Act and to make consequential amendments to other Acts.

She said: Honourable senators, I rise in the Senate today as sponsor of Bill C-88, An Act to amend the Mackenzie Valley Resource Management Act, which directly affects the Northwest Territories, and the Canada Petroleum Resources Act, which affects the Arctic offshore.

I want to acknowledge that we meet here today on the unceded territory of the Algonquin Anishinabek.

Bill C-88 is the result of consultation and collaboration. It is a step towards re-establishing trust with Indigenous partners in the Mackenzie Valley. The proposed amendments respect their constitutionally protected land claim agreements and restore legal certainty for responsible resource development, while fostering reconciliation with Indigenous peoples.

This bill is made up of two parts. The first part of Bill C-88 will resolve litigation about restructuring of land and water boards within the Mackenzie Valley of the Northwest Territories. These changes were written into the Bill C-15, the Northwest Territories Devolution Act, which received Royal Assent in 2014.

In addition to repealing the land and water board restructuring provisions, Bill C-88 preserves key policy elements that were introduced in the Northwest Territories Devolution Act. These policy elements include: regional studies; board member term extensions; regulation-making authorities for cost recovery; regulation-making authorities for consultation; a 10-day pause period following a preliminary screening decision that determines an environmental assessment is not required; an administrative monetary penalty scheme; development certificates and an enforcement scheme; and modifications to government inspection notice requirements on Gwich’in and Sahtu lands.

The second part of Bill C-88 responds to the interests of oil and gas rights holders in the Arctic offshore, territorial governments and Indigenous organizations. The proposed amendments prevent existing licences from expiring while under a prohibition order from the Governor-in-Council.

The key elements of this bill are as follows: Freeze the terms of existing rights in the Arctic offshore for the duration of the prohibition; suspend the work and commercial requirements; and extend the term of oil and gas rights for the period of the prohibition.

Together, the proposed amendments to both the Mackenzie Valley Resource Management Act and the Canada Petroleum Resources Act are essential to ensuring a responsible, sustainable and fair development regime in the Northwest Territories and the Beaufort Sea. It is important to all stakeholders — Indigenous organizations, Indigenous and territorial governments, as well as industry — that this bill be passed before we rise for the summer.

To begin, I wish to highlight the scale and diversity of the region I am from. The Northwest Territories is home to over 44,000 residents who live in 33 communities across a territory that is more than 1.3 million square kilometres. More than half of our population is Indigenous. There are six settled Aboriginal rights agreements in the Northwest Territories: the Deline Self-Government Agreement; the Gwich’in Comprehensive Land Claim Agreement; the Inuvialuit Final Agreement; the Sahtu Dene and Metis Comprehensive Land Claim Agreement; the Salt River First Nation Treaty Settlement Agreement; and the Tlicho Land Claims and Self-government Agreement.

In addition to this, there are 12 ongoing negotiation tables in the territory: Four land, resource and self-government agreement negotiations, six self-government agreement negotiations and two transboundary negotiations.

To ensure that all relevant views on the issues raised by Bill C-88 can be heard in a fair and open manner, the Standing Committee of Indigenous and Northern Affairs in the other place invited several witnesses to participate in its review. A total of 16 witnesses testified in May of this year. The committee also received eight written submissions. This evidence is now part of the public record.

Honourable senators, the first part of this bill makes amendments to the Mackenzie Valley Resource Management Act, or the MVRMA. This part of the bill was developed in close consultation with Indigenous and northern communities, governments and organizations.

As a result, Bill C-88 strongly reflects the views of the Tlicho Government and Sahtu Secretariat Incorporated, the Gwich’in Tribal Council, the Government of the Northwest Territories, as well as industry. In other words, the views of those directly involved in and affected by development within the Mackenzie Valley.

The impetus for Bill C-88 is a court challenge by the Tlicho Government and Sahtu Secretariat Incorporated. The case was a response to the Bill C-15, the Northwest Territories Devolution Act passed by Parliament on March 25, 2014. At the time, the primary purpose of the bill was to implement provisions of the devolution agreement of the Northwest Territories. However, buried in this bill were amendments to the Mackenzie Valley Resource Management Act that are now at the heart of this court challenge.

Bill C-15 would have restructured the regulatory boards that governed development within the Mackenzie Valley, eliminating the Gwich’in Land and Water Board, the Sahtu Land and Water Board and the Wek’èezhìi Land and Water Board. This would not only have created one large superboard, it would have resulted in the Gwich’in, Sahtu Dene and Tlicho no longer having guaranteed representation in the development decisions that affect their regions.

In May 2014, the Tlicho Government and Sahtu Secretariat Incorporated filed a lawsuit against the Government of Canada claiming that the restructuring failed to honour the terms of their comprehensive land claim agreements. They also alleged that they had not been properly consulted about the restructuring.

In early 2015, the Supreme Court of the Northwest Territories put an injunction in place which suspended the restructuring provisions, along with other positive regulatory amendments that were included in Bill C-15 from coming into force. In her reasons for judgment, Justice Karan Shaner found that the Tlicho lawsuit raised “a serious constitutional issue to be tried,” and that “whether Canada met its consultation obligations is in issue.”

Efforts to reach an out-of-court settlement were launched in September 2016. Officials with CIRNAC, or as it was known then INAC, hosted a teleconference in February 2017 with representatives of Indigenous governments and organizations, and the Government of the Northwest Territories. The initial calls focused both on the goal of the process — how to resolve the court case — as well as the structure of the process, such as how it should proceed and how long it should last.

From the outset, all parties agreed that a legislative solution was needed and that the best response to the Supreme Court’s ruling would be an act of Parliament. All parties also agreed that such legislation could only be developed through collaboration and meaningful consultation.

Throughout this process, the Government of Canada provided funding to Indigenous rights holders so that they could participate actively in the consultations.

In March 2017, a legislative proposal, along with supporting materials, was distributed to all of the affected Indigenous governments and organizations, and the Government of the Northwest Territories, along with other stakeholders, such as resource co-management boards and representatives of the mining and oil and gas industry. Participants were given eight weeks to review and respond to the proposal.

At the outset of the consultations with industry, departmental officials explained the content of the legislative proposal and the consultation process. None of the industry organizations asked for follow-up meetings, although a few provided written submissions.

Midway through the eight-week period, federal officials met again with representatives of Indigenous rights holders, and the Government of the Northwest Territories. During two in-person meetings in Yellowknife, officials explained the content of the proposal and described possible measures to accommodate the comments raised so far in the process. At the end of the eight-week period, federal officials met again with participants and made further changes to the original proposal.

Tlicho Grand Chief George Mackenzie described the consultation process as follows:

. . . the consultation around Bill C-88 was positive, respectful, collaborative, and was fully supported by Tlicho Government. There were multiple face-to-face meetings in Yellowknife with federal representatives, in which Tlicho Government officials and advisors participated. Opportunities were provided to review and comment on the draft legislation. Concerns and questions were listened to, were responded to, and were resolved. The process of developing Bill C-88 was a demonstration of how successful and how positive the working relationship between Indigenous Governments and the federal government can be when we truly try to work together, as partners, seeking a mutually agreeable and beneficial outcome. Real reconciliation starts with listening and with trying to craft shared solutions to shared problems. And the collaborative and consensual approach to developing Bill C-88, and protecting the regional land and water boards in the Mackenzie Valley, was a step on the road to reconciliation.

David Wright, legal counsel for the Gwich’in Tribal Council, stated before the Standing Committee on Indigenous and Northern Affairs in the other place:

. . . the consultation process on Bill C-88 has actually helped restore some of the trust between Canada and the GTC. That trust would be eroded by any further delay, or at worst, failure to pass this bill in a timely manner.

When speaking to the standing committee on behalf of the Tlicho government, Grand Chief George Mackenzie further emphasized his support for Bill C-88:

We want Bill C-88 to be supported today in our Tlicho world, as well as other indigenous worlds in NWT—wherever else. We need to support development. We need to support development for the sake of our younger generation to get out of poverty and have opportunities for their young families. That is so much needed.

The views of the Grand Chief align with those of another key witness. The Premier of the Northwest Territories described how the regulatory regime for the Mackenzie Valley has inspired collaboration among Indigenous and non-Indigenous governments. He supports Bill C-88 because it would foster further collaboration. To quote from his testimony:

The Government of the Northwest Territories and indigenous governments are working together to build our territorial economy. The passage of Bill C-88 and the preservation of the regional land and water boards, as committed to in land claim and self-government agreements, is an important part of this.

The land and water boards of the Mackenzie Valley are already working together to identify and implement ways to improve their operations. These efforts have strengthened the regulatory regime of the Mackenzie Valley, and we know that active collaboration produces mutually beneficial and informed results.

In March of last year, the Minister of Crown-Indigenous Relations also met with industry groups to hear their views on development and resource co-management in the North. Since then, departmental officials have continued these discussions. I will note that the cost-recovery provisions proposed in Bill C-88 are of particular concern to industry. These provisions only provide the authority to develop regulations should it be deemed advisable to do so. Such regulations would be developed in consultation with industry.

The second element of Bill C-88 involves amendments to the Canada Petroleum Resources Act, or CPRA. The amendments safeguard the Arctic offshore environment that is so critical to the peoples of the Arctic. They recognize Canada’s interests and protect the existing rights of exploration licence holders for the Beaufort Sea.

In 2016, the Government of Canada announced a moratorium that prohibits the issuance of new offshore oil and gas licences indefinitely, subject to a five-year, science-based review. From March to July 2017, the government consulted with the governments of Yukon, Northwest Territories, Nunavut, Inuvialuit and Inuit organizations, as well as existing oil and gas rights holders, about their interests in, and vision for, the Arctic offshore. The consultations allowed Canada to take stock of stakeholder interests, plans and visions for future oil and gas exploration and development in the Arctic offshore. Bill C-88 responds to the concerns raised during these consultations.

Participants in the consultations highlighted the importance of protecting the Arctic environment while pursuing safe and responsible offshore oil and gas activities that support the creation of jobs and other economic opportunities for northerners. All parties affirmed the strategic economic value of oil and gas development in the Arctic offshore for northern communities. They supported the measure in Bill C-88 to authorize the Governor in Council to issue a prohibition order to freeze the terms of the existing licences in the Beaufort Sea for the duration of the moratorium.

Canada’s decision to move forward with a moratorium on the new Arctic offshore oil and gas licences in federal waters was a risk-based decision in light of the potential devastating effects of a spill and limited science about drilling in the area. However, as my honourable colleagues well know, the announcement raised concerns among territorial and Indigenous leaders about the way decisions are made in the North. Northwest Territories Premier Bob McLeod criticized the government for the lack of consultation, issuing a red alert in response to southern policies being imposed on the N.W.T. The Chair and CEO of the Inuvialuit Regional Corporation, Duane Ningaqsiq Smith, said:

. . . the imposition of the Moratorium by the Prime Minister was done without consultation with any Inuvialuit in contravention of the IFA and with the framework established and the promises made under the Northwest Territories Lands and Resources Devolution Agreement.

It is important to remember that at that time of the announcement there was no active drilling in the Beaufort Sea and no realistic plans to initiate drilling in the short or medium term. The moratorium was announced in conjunction with a five-year, science-based review scheduled for 2021.

In October 2018, the Government of Canada announced a collaborative approach in the Arctic offshore. The federal government, territorial governments, Indigenous governments and organizations and northern communities are partners in the science-based review process. Others, including industry, continue to be actively consulted.

Currently, two separate Regional Strategic Environmental Assessments are under way in the Eastern and Western Arctic that take into account marine and climate change science, as well as Indigenous knowledge. In the east, the assessment is being undertaken by the Nunavut Impact Review Board. In the west, the assessment is co-led by the Inuvialuit Regional Corporation, as well as CIRNAC.

In 2021, the five-year science-based review will consolidate the findings of these ongoing Regional Strategic Environmental Assessments. The outcome of the review process will inform next steps in the Arctic offshore.

Honourable colleagues, Bill C-88 is the product of consultation and collaboration. The bill will resolve litigation about the restructuring of the land and water boards in the Mackenzie Valley. It will reintroduce policy elements prevented from coming into force because of the court injunction.

This bill also responds to the concerns that licence holders brought forward during the 2017 Arctic offshore consultation process. It freezes the terms of existing licences until the science-based review is complete. In so doing, the bill maintains a precautionary approach that supports safe and responsible resource management decisions about the natural environment that is of vital importance to us all, and to northerners in particular.

Both elements of this bill help to maintain an effective and robust approach to managing non-renewable resources across the Northwest Territories and in the offshore.

Honourable colleagues, ongoing consultation is essential to ensuring the responsible, sustainable and fair development regime in the Northwest Territories and the Arctic. Justice Berger stated as much in his report, Northern Frontier, Northern Homeland, which was released in 1977 following a three-year inquiry into the impacts of a proposed gas pipeline that would run through the Yukon and the Mackenzie River Valley. Justice Berger said:

Regardless of the state of government policy, whether past, present or future, it is vital to understand that the continuing strength of the native people in the Mackenzie Valley and the Western Arctic has depended primarily upon their powerful sense of belonging to a group defined by distinct social, economic and cultural traditions. What will decide the future of the native people in the Mackenzie Valley and the Western Arctic is their own collective will to survive as a people. No federal ukase will settle the matter once and for all; no tidy, bureaucratic chart for the reorganization of northern government will be of any use, unless it takes into account their determination to remain Dene, Inuit and Metis.

The proposed amendments to both the MVRMA and the CPRA in Bill C-88 are a step in the right direction. This bill has the full support of the Minister of Crown-Indigenous Relations and Northern Affairs Canada and the Member of Parliament for the Northwest Territories. It has the full support of the Premier of the Northwest Territories. It has the full support of the Tlicho Government, the Sahtu Secretariat Incorporated and the Gwich’in Tribal Council. And the Inuvialuit Regional Corporation, which oversees the implementation of the Inuvialuit Final Agreement in the Mackenzie Delta, Beaufort Sea and Amundsen Gulf area, has recognized the necessity of this bill at this time. Bill C-88 deserves the full support of this chamber.

Quyanainni, mahsi’cho, thank you.

Senator Anderson, will you take a question?

Yes, I will.

I’m not fully clear on the process. I do know that licences last for nine years. I do know there are 11 exploratory licences and 69 scientific discovery licences.

With regard to your question, I can only speak from my experience. I was between 13 and 17 years old when oil and gas companies and businesses were actually operating in Tuktoyaktuk. They had the resources and the infrastructure to provide those services. My experience now is that the infrastructure is not present in the Arctic to provide that type of support.

I understand your question with regard to us allowing them to spend without reimbursing or obtaining a benefit from it. I think you could look at it that way, but I think you can also look at the fact that, right now, the cost of oil and gas in Canada also doesn’t support oil and gas development in the Arctic at this time. I think you could look at it that way, but I think you can also look at the fact that the cost of oil and gas in Canada also doesn’t support oil and gas development in the Arctic at this time.

Honourable senators, I rise today to speak as critic for the Official Opposition in the Senate at second reading of Bill C-88, An Act to amend the Mackenzie Valley Resource Management Act and the Canada Petroleum Resources Act and to make consequential amendments to other Acts.

This bill builds upon changes to the Mackenzie Valley Resource Management Act, fondly known as the MVRMA, introduced in the previous government. Bill C-15 was a major step in devolving the power of land and resource management to the territory, and I am pleased to have been the sponsor of that legislation.

Admittedly, we did at the time hear testimony that resisted the creation of what has been called a superboard, which was suggested by Canada’s Chief Federal Negotiator, John Pollard. Mr. Pollard’s recommendation was to amalgamate the smaller regional boards into one central board. This was in line with the federal government’s 2010 Action Plan to Improve Northern Regulatory Regimes in the Northwest Territories, which sought to streamline and bring increased certainty and transparency to the regulatory regime in the N.W.T.

As a compromise, the government of the day chose to enable the chair of the new board to create subcommittees or panels composed of a minimum of three members of the affected communities, the idea being that smaller regional panels would be better suited to make decisions over land and water management that would more accurately reflect community input and knowledge. That didn’t go very well.

This measure in Bill C-15 was not enacted due to an injunction launched by the Tlicho government, who argued that the board restructuring measures were not part of the devolution negotiations, were not necessary for devolution, and that there was insufficient consultation on the range of other options available for regulatory improvement.

Bill C-88 seeks to address these outstanding concerns. As the Honourable Bob McLeod, Premier of the Northwest Territories, explained it during his appearance at the Indigenous and Northern Affairs Committee in the other place:

We don’t see Bill C-88 as a partisan bill. It ensures that land claim agreements are fully implemented by maintaining the regional boards, and also has modern amendments with multi-party support.

Representatives of the three affected Indigenous regions, as the sponsor of the bill just outlined — and I endorse what she said — have all spoken in support of the measures included in Bill C-88. Grand Chief George Mackenzie, who spoke on behalf of the Tlicho in the other place, said:

The co-management of natural resources in Wek’èezhii is an essential part of the Tlicho agreement. Co-management is essential to address the overlapping interests and jurisdiction of Tlicho Government, other indigenous government and public government.

Protecting the environment while promoting responsible development and use of resources is a concern to all the responsible governments in the North. Both sides of that equation are very important to us. Under the Tlicho agreement, the Tlicho Government is co-manager and joint decision maker with respect to lands, waters and renewable and non-renewable resources within Wek’èezhii.

Representatives of the Sahtu Secretariat and the Gwich’n Tribal Council echoed these sentiments.

As these are provisions that have the full endorsement of the territorial and Indigenous governments, I am fully supportive of these measures. I am, however, concerned about other measures included in the bill, including sections that would enable the federal government to collect monies from proponents via cost recovery mechanisms found throughout the bill.

Clause 30, for instance, amends the MVRMA to create an “obligation to pay” that would cause proponents who have projects assessed under the act:

. . . to [pay to] the federal minister the following amounts and costs relating to an environmental assessment, an environmental impact review or an examination — carried out by a review panel, or a joint panel, established jointly by the Review Board and any other person or body — that stands in lieu of an environmental impact review. . . .

I was quoting from the bill.

As Joe Campbell, Executive Board Member and Vice President of the N.W.T. and Nunavut Chamber of Mines, explained in his submission to the committee in the other place:

This industry is expected to shoulder these costs, but we are given no control over them. The federal government empowers the boards, and they control the activity and the clock. Then, after pulling all the levers, they turn around and put out their hands for the recovery of the costs of the process they are entirely responsible for.

There is no level playing field for the North. We are beset by higher costs and tougher regulations from all levels of government — local, indigenous, territorial and federal. Against these odds, the mineral industry persists and provides thousands of jobs, fuelling the northern economy with billions in business expenditures and taxes and helping to contribute to regional infrastructure. Mining remains the only viable private industry that staves off the total welfare state in the Northwest Territories.

The services that cost recovery will be applicable to are defined as “prescribed services,” indicating that this will be further defined in regulations at some point in the future. But that doesn’t bring comfort to the potential investors of today.

As Mr. Campbell goes on to say:

The industry cannot bear the burden of cost recovery, particularly when we have no ability to control the process or budget for it. Until the mine is built, we have no source of income. More correctly, our investment backers will not bear the cost. No investment equals no development, which equals no cost recovery at all.

Bearing this very legitimate concern in mind at a time of unstable and low commodity prices and, as we all know, the premium of up to three times the cost of building mines in the North compared to building them in southern Canada, I do want to put on the record in speaking to this bill at second reading that it is essential, in my view, that the development of regulations to enable cost recovery take place in full consultation with the N.W.T. and Nunavut Chamber of Mines.

The other area of concern to me with this bill is Part 2, which introduces amendments to the Canada Petroleum Resources Act. As some senators will remember, the Trudeau government unilaterally imposed a ban on Arctic oil and gas in December 2016. Territorial leaders were informed a half hour prior to the announcement by telephone, catching them all unaware. This was one of the many actions that caused Premier McLeod to issue a Red Alert on November 1, 2017, in which he stated:

The promise of the North is fading and the dreams of northerners are dying as we see a re-emergence of colonialism.

Bill C-88 seeks to give the government the legislative authority to do what it has already done by unilateral policy changes. I am concerned about the precedent that this change sets and about the overall policy approach this government may be taking with respect to the Arctic and its natural resources. I am hoping that witnesses and the minister will be able to bring clarity and comfort to me during their presentations.

It is, however, very apparent to me and to others who have met with Premier McLeod and Indigenous government representatives — and they have been here lobbying many of us in the preceding months. They have told us this bill is a major priority of all the elected representatives of these governments within the N.W.T. Simply put, colleagues, the clear message they all send is that they would like to see this long-standing issue resolved in the life of this Parliament. I feel it is imperative to have Bill C-88 passed prior to the end of this current session and the dissolution of Parliament in the lead-up to the coming election.

I would ask colleagues that you refer this bill to committee so we can quickly begin our important work of examining this legislation further. Thank you.

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill read second time.)