Thank you. To the bill as a whole.
Agreed.
Does committee agree that Bill 10 is ready for third reading?
---Bill 10 as a whole approved for third reading
Thank you, Premier McLeod. Thank you, Ms. McLaughlin and Mr. Fulford. Sergeant-at-Arms, please escort the witnesses from the Chamber. Thank you very much.
I’d like to ask Premier McLeod if he’d like to proceed with his opening remarks on Bill 11, Petroleum Resources Act. Premier McLeod.
Thank you for the opportunity to speak to Bill 11, the Petroleum Resources Act. The passage of this legislation will be another step towards implementing the Northwest Territories Lands and Resources Devolution Agreement.
The Department of Industry, Tourism and Investment will administer the Government of the Northwest Territories’ new authorities under the Petroleum Resources Act.
Under the Devolution Agreement, the GNWT is obligated to substantially mirror Canada’s statues and regulations that are being repealed or made inapplicable to lands transferring to the GNWT through devolution.
The mirroring exercise means that the new GNWT laws will address the same matters, in substantially the same way, as federal laws do now. Mirroring principles limited changes to addressing issues such as outdated language and applying GNWT drafting standards.
Mirrored legislation is a practical first step to ensure a continued delivery of services on April 1, 2014. Mirrored legislation also ensures that there are no legislative gaps or overlaps between GNWT and federal legislation.
The parties to the Devolution Agreement entered into a Protocol for Review of Devolution Legislation. Under this protocol, all parties had the opportunity to review and comment on this legislation before it was introduced in the Legislative Assembly. We have considered these comments carefully in the preparation of the bill before you.
The Petroleum Resources Act will govern the leasing of GNWT-owned oil and gas rights to companies that wish to find and produce the oil and gas. This includes all GNWT-owned oil and gas rights in the onshore of the NWT, right up to the onshore/offshore boundary negotiated by Canada and the GNWT. It does not include lands that will be retained by the federal government such as waste sites and the Norman Wells Proven Area.
Rights leased to a company under the Petroleum Resources Act will give the company the right to explore and, if successful, to produce oil and gas owned by the GNWT on behalf of the residents of the NWT.
Under the Petroleum Resources Act, oil and gas rights in unexplored areas will be issued after a public call for bids. The Minister may attach conditions to the transfer of rights including conditions for protecting the environment.
The Petroleum Resources Act will also establish an Environmental Studies Research Fund to pay for environmental and social studies necessary to inform decisions on whether oil and gas exploration or development should be carried out in a particular area. Oil and gas companies exploring in the NWT must make payments into this fund.
The proposed Petroleum Resources Act and Oil and Gas Operations Act each state that no work or activity on petroleum lands shall be authorized until the Minister has approved or waived the requirement of approval of a benefits plan.
Finally, the Petroleum Resources Act will allow the GNWT to prescribe the royalties that companies must pay to the GNWT once commercial production is achieved.
I would be pleased to answer any questions Members may have. Thank you.
Thank you, Premier McLeod. I’d like to ask the Premier if he would like to bring witnesses into the Chamber. Premier McLeod.
Yes, I would, Madam Chair.
Thank you, Premier McLeod. Is the committee agreed?
Agreed.
Thank you. I’ll ask the Sergeant-at-Arms to please escort the witnesses in. Premier McLeod, could you once again introduce your witnesses for the record.
Thank you, Madam Chair. To my right is Mark Aitken, the ADM with the Department of Justice, and to my left is Jamie Fulford, legal counsel with the Department of Justice.
Thank you, Premier McLeod. Bill 11, Petroleum Resources Act. General comments. Mr. Dolynny.
Thank you, Madam Chair. Again, welcome back to the Premier and team here. Just some clarification questions within this act, and I know that this is mirror legislation, and I know that we don’t want to delay implementation, but I need to understand a couple of things within this act a little bit more clearly. Within the act it talks about these exploration licences and the fact that there’s a waiting period and everything else. Do we have people right now currently waiting for this act to pass that are kind of sitting in stasis for an exploration licence?
Thank you, Mr. Dolynny. Mr. Fulford.
Thank you, Madam Chair. In answer to the question, I am not aware of any specific instances, but I can say that if there are people in the chain of approvals that their applications get continued over under this legislation, so if they had an application that was made under the federal act it would be continued just as if it had been made under this act.
The purpose of my question is to make sure that we are providing due process for those applicants, that we’re not superficially making them wait to get our affairs in order. Again, I haven’t had any calls to action on that, but I think it’s important that we recognize that.
Embedded within this act it also talks about a regulator. Can we define who is this entity or individual or is it a company that they’re involved with, the regulations or the regulator of the significant passages of this act?
I believe the Member is referring to the regulator as defined in the act, and it’s the same regulator that’s defined in the Oil and Gas Operations Act. The regulator is defined as the regulator essentially chosen by Cabinet. The reasoning behind the choice in the mirroring was twofold. I would say that first it was a matter of flexibility, and second, and probably more importantly, was just with the timing constraints that we had the regulator needed to be in place as of April 1st. One of the choices might have been to constitute a quasi-judicial tribunal but that would have required separate legislation and likely consultation with the other parties, so that was basically the reasoning behind the drafting choice of the definition of regulator.
I appreciate the explanation there. That does provide a bit more clarity, because I know that term has come up a couple times and I know Members have spoken on, so I want to make sure we’re talking about the same process between each act.
Lastly, under the part of royalties, it references the Commissioner and the Executive Council. Can we define what that position or who that person is, just for the record.
Thank you, Mr. Dolynny. Mr. Aitken.
Thank you very much, Madam Chair. The Commissioner and the Executive Council is defined in the Interpretation Act as being the Commissioner acting by and with the advice of the Cabinet.
Just for clarification, who would that person be specifically?
It’s actually two separate entities acting in concert. The Commissioner, of course, is the Commissioner of the Northwest Territories. The Executive Council is the Cabinet, and when it makes a decision, it makes a decision as a group, and so it makes a recommendation to the Commissioner who then signs the final approval.
When I read a passage where it says Section 47(3) it says the Commissioner in Executive Council, so that means that the Commissioner, our current Commissioner is working on behalf of the Cabinet or is it with the Cabinet? Is it independent of the Cabinet or is it Commissioner and Cabinet working collectively as one signatory? I need clarification on that.
The provision 47.(3) says the Commissioner and Executive Council may by order, so the procedure would be a proposed order brought before Cabinet. Cabinet would approve the order. A record of decision would be made. The record of decision would be provided by the Commissioner, who, acting upon the advice of Cabinet, would sign off the order, at which point it would be registered by the registrar of regulations, it would be a final instrument as of that time. Thank you.
That answers those questions. Thank you, Madam Chair.
Thank you. General comments. Next I have Mr. Nadli.
Thank you, Madam Chair. My question is in terms of fracking. I know that it’s a practice that is happening here in the NWT and now that we’ve taken responsibility from the National Energy Board, the functions of this act in terms of regulating control and activities related to oil and gas, I wanted to ask if there are any further advances that this government might undertake in terms of trying to add our further substance to the guidance document that this government has developed in overseeing fracking and practices and how it could be employed here in the North. Mahsi.
Thank you, Mr. Nadli. Mr. Fulford.
Thank you, Madam Chair. Hydraulic fracturing is an operation that would be regulated under the Oil and Gas Operations Act, which is also before the Committee of the Whole. That act provides the ability for guidelines to be made that could further give shape to how that operation is regulated, but that is not something that would be done under the Petroleum Resources Act. Thank you.
Thank you, Mr. Fulford. General comments. Next I have Ms. Bisaro.
Thank you, Madam Chair. I have a number of questions here. I’m trying to understand some of the implications, I think, of the wording in the act. I’d like to start with the change of language from the Canada Petroleum Resources Act to the NWT act and the change from the Canada act to the NWT act is that the National Energy Board is the regulator for the Canadian act, or the federal act, and then in the territorial legislation anywhere where NEB is referenced, it’s changed to the regulator and we know that that regulator is the Ministry of Industry, Tourism and Investment. Within the Inuvialuit Settlement Region the NEB will continue to act as regulator.
So I have two questions. Why did we not continue to use the NEB as a regulator within this territorial act, particularly when the NEB remains the regulatory for the Inuvialuit Settlement Region? So, what’s the rationale for going to a different regulator for most of the NWT, but keeping the NEB for the ISR? Thank you.
Thank you, Ms. Bisaro. Mr. Fulford.
Thank you, Madam Chair. Due to an agreement that was reached between the GNWT, Canada and the Inuvialuit Regional Corporation that was concurrent with devolution, there was a requirement for the GNWT to maintain the National Energy Board as the regulator in the ISR and that was mainly due to a desire to have consistency in the regulation of what are called straddling resources that straddle the onshore/offshore boundary. There’s no such need outside of the ISR and there’s no requirement in the Devolution Agreement for the GNWT to retain the federal regulator. So, I guess that’s the answer. There was no requirement in the Devolution Agreement to do that. Thank you.
Thanks to Mr. Fulford. So, I understand that there’s no requirement, but that doesn’t tell me the rationale for why we did not continue to keep the NEB as a regulator. One of the concerns that we had from somebody who provided input to us, as committee, was that their concern is that the Minister of ITI should not be the regulator for petroleum resources and felt that if that was the direction that we were going to go that there ought to be some public discussion prior to us making that decision. So that decision has already been made, but again, I guess I would like to ask what the rationale was for this change from the NEB to the Minister of ITI as the regulator. Thank you.
I think the rationale is as simple as this is territorial legislation so the default would be to a territorial regulator and while there’s a specific requirement with regard to the ISR, that requirement doesn’t exist outside of the ISR. Further, I guess I’d just note that under both the Canada Oil and Gas Operations Act and the CPRA that until the 1990s the federal Minister was the regulator and the NEB was only brought in as a regulator at a later date and that the model of having a ministerial regulator is fairly common in other jurisdictions across Canada. So our choice in defining the regulator and giving that flexibility was just reflective of all of these different types or models of regulation. Thank you.
Thanks to Mr. Fulford. So, I guess it just points out one of the reasons why we need to have public consultation on these acts once they have been approved, and after April 1st. It’s another reason why the government and committee, hopefully, will get together and will provide some opportunity for fairly comprehensive consultation on these acts.
I wanted to ask about royalties. The payment of royalties comes under Section 47, I think, and beyond that as well. Am I correct in understanding that royalties can be exempted basically by the Minister without consultation with other Members and/or the general public? Is that correct? Thank you.
I believe that is correct. I can’t find that correct section reference, but there is ability of the Minister to exempt the payment of royalties.
Thanks. I don’t need the exact section, so Mr. Fulford can stop searching. I guess my concern is that we could have decisions being made by an individual, I would hope not, but we could have decisions being made by an individual to exempt or waive or change royalties. So, my question further to this is whether or not there will be anything in regulation which will determine under what circumstances the Minister can exempt or change royalty payments. Thank you.
If there is not right now, and I can’t claim an encyclopedic knowledge of all the mirror legislation, but if there is not now, then that is something that could be done after the transfer date. Thank you.
Thanks. Something else to add to the list for us to consider after April 1st when we consult. I wanted to also ask, it struck me and this came from the information that we got from our staff, but it talks about disclosure of information, and I’m sorry I don’t have the reference in the bill, but as I understand it if, there was a conflict in terms of disclosure of information between the section in the act, between the Petroleum Resources Act and the Access to Information and Protection of Privacy Act, that the Petroleum Resources Act will take precedence. That struck me as being a little strange. I would have thought that the ATIPP Act would take precedence over pretty much anything else that we do. So, could I get an explanation of why the Petroleum Resources Act relative to disclosure of information would take precedence over ATIPP? Thank you.
Thank you, Ms. Bisaro. Mr. Aitken.
Thank you, Madam Chair. The section is Section 91 and the part is administration enforcement. You’ll see the Section 91 on disclosure of information is a very extensive section. It has 11 subsections, runs over three pages. It deals very specifically with the use of information and deals very specifically with the types of information that may be sought under this particular part. So, the exemption is only in respect of this part of the Petroleum Resources Act and it is similar to provisions we have in other territorial legislation we have now where if there is a detailed scheme setting out the rights and protections in respect of access to information, those provisions can govern over the Access to Information and Protection of Privacy Act, which is a general statute relating to access to information. Thank you.
Thank you, Mr. Aitken. Ms. Bisaro.
Thanks, Madam Chair. Okay, understood. I wanted to ask a question with regards to the Environmental Studies Research Fund and the Minister mentioned that in his opening remarks as well. I understand the purpose; I understand who is going to be appointed to this group, but I don’t understand where the money is coming from. Could I find out how this is going to be funded with dollars? Thank you.
Thank you, Ms. Bisaro. Premier McLeod.
Thank you, Madam Chair. It would come from the industry itself. Those are companies that are operating in the Northwest Territories. Thank you, Madam Chair.
Thanks to the Premier. That’s good to hear. Where is that going to be laid out? Is it laid out already in regulations, or is it again something that has yet to be determined? Thank you.
Thank you, Ms. Bisaro. Mr. Aitken.
Thank you, Madam Chair. Section 72 of the act relates to the fixing of rates. Rates are to be paid by the industry into different sub-accounts depending on where the activity is taking place. The sub-accounts are set up in regulations and the rates are set and they can be generally across the board to all sub-accounts or they can also be made particularly to individual sub-accounts. Those rates will be set or they can be varied at different stages in time.
I understand that the first rate setting by this government will take place for effective January 2015. That’s the plan going forward. At this point we have the existing rates previously set by the federal government. Thank you.
Thank you, Mr. Aitken. Ms. Bisaro, your 10 minutes for general comments have passed. Is there anybody else with general comments? Mr. Bromley.
