Thank you, Madam Chair. I want to follow up on some of these similar questions for Bill 11, Petroleum Resources Act. I know a number of the public are alarmed at the regulations being proposed and put in force by this act, particularly because it is a fundamental change in public policy that demands public discussion certainly, and one would think in a consensus government that it would at least have demanded committee discussion. The questions were asked at the beginning of this six-week sitting. Commitments were made about briefing committee and that still has not been done. Again, so-called consensus government here seems to be failing us in a critical area such as this. I think it’s been pointed out the conflict of interest between the regulator who is also the promoter and subsidizer in this industry. So there are some fundamental concerns there.
Similar to that is concern with the lack of capacity and experience. I know the department’s going out, the regulator is going out for some contract help on that, but in the matter of transparency and to bring some certainty to this very uncertain equation, would the Minister be prepared to provide us with a copy of the contract that goes out for the closed contract services so that the public can be aware exactly what we are having contracted out and who is doing it? I’m not worried about the price on those things. Thank you, Madam Chair.
Thank you, Mr. Bromley. Premier McLeod.
Thank you, Madam Chair. Normally in these kinds of contractual situations we would have to check with the contractor. I don’t expect there would be any problem in doing so, but we’ll just have to check to see if there are any privacy requirements or contractual arrangements that we have to check on. We’re prepared to make it available subject to checking on a number of things. Thank you, Madam Chair.
Thanks to the Premier for that. I think the fundamental change, as I said, was from a publicly accountable institution to behind closed doors. We are looking for transparency whenever we can find it here and particularly given that committee’s being kept absolutely in the dark. So I would appreciate that information.
I guess related to that is a concern that decisions being made will be made by politicians instead of by objective, independent board members who are identified for that purpose. Again, it goes against certainly what the Premier’s been saying, that we are bringing decisions closer to the people and transparency and so on. This is in secret and behind closed doors, so that’s certainly a concern.
The question of royalty and fees for oil and gas are set in regulation and should be reviewed, obviously, to ensure an adequate return to the public once again. I am also concerned about the ability of the Minister to exempt a party from payment of royalties. I think government has a bad record on these sorts of things, especially when, again, decisions are made behind closed doors and in secret. I will look forward to the fleshing out of that and exactly where the authorities are, the limits on that, the role for the public in oversight of that.
The review, I would say, of royalties should include consideration of the bid system where the current approach is based on work. Bid criteria rather than cash bid or other criteria would better serve our communities and the environment. I know the Premier’s made a commitment for review soon, so that can be addressed at that time.
Mention has been made of the Environmental Studies Management Board. Again, the concern in this case is the only eligible people who sit on the board are government employees and individuals, non-native, by the oil and gas interests owners. This hardly seems fair or objective and it’s hard to understand how such a restriction serves the public interest. This part of the bill deserves a serious review to ensure, again, greater accountability and representativeness. I appreciate the information on Section 72 where rates will be set, I believe, in relation to this as well by…(inaudible)… That’s for the royalty fees rates, so I will be following up with that one.
Finally, again, as has been stated for several bills, we need a clear requirement for mandatory financial security to cover all aspects of oil and gas operations in the NWT. This is especially true in terms of accidents, malfunctions, spills and so on. I don’t believe this bill provides that, but I guess I would ask that question at this time. Is there provision for clear requirement of mandatory financial security to cover those things? Thank you.
Thank you, Mr. Bromley. Mr. Fulford.
Thank you, Madam Chair. There is, in fact, a requirement for a financial security but it’s in the Oil and Gas Operations Act. The Petroleum Resources Act speaks only to lands under the administration and control of the Government of the Northwest Territories. The Oil and Gas Operations Act speaks to oil and gas operations irrespective of what lands they occur on. For example, if they are on Aboriginal lands, operations on those lands will be governed by the Oil and Gas Operations Act. It’s actually called financial responsibility, but it’s the same idea, as the security needs to be posted in a manner and in a form satisfactory to the regulator. Thank you.
Thank you, Mr. Fulford. Mr. Bromley.
Thank you, Madam Chair, and thanks to Mr. Fulford. That’s good information to have and I appreciate that. I’ll maybe just postpone any further discussion on that aspect. I believe that’s all I had. Yes, that’s it. Thank you very much.
Thank you, Mr. Bromley. Other general comments on Bill 11, Petroleum Resources Act? Ms. Bisaro.
Thanks, Madam Chair. I just wanted to ask one other question. There are a number of regulations, I gather, under the Canada Petroleum Resources Act. Is my understanding correct that these regulations, Environmental Studies Research Fund regulations, Frontier Lands Petroleum Royalty Regulations, Frontier Lands Registration Regulations, will those be mirrored as the act has been mirrored?
Thank you, Ms. Bisaro. Mr. Aitken.
Thanks, Madam Chair. The answer is yes, and in fact, those mirror regulations are being finalized now and they will be made before March 31st, so they take effect on April 1st.
Thanks, Mr. Aitken. One last question. I guess it’s a comment, really. I notice that it was in Bill 10, as well, and I’m pretty sure that it’s in some of the other bills, also, but closure and reclamation of developments isn’t really covered, I don’t believe, in probably any of these acts, and it kind of goes to the same issue of financial security that Mr. Bromley was talking about. Do we have in these bills as we mirror them, do we have what the general public would consider as adequate financial security and adequate requirements for closure and remediation plans when a development is finished?
Thank you, Ms. Bisaro. Mr. Fulford.
Madam Chair, the way that I would respond to that is I can’t speak to what people would view as adequate but there are a number of the bills that address this in various manners. Our mirror Waters Act, for any development that requires a water licence, security will have to be posted with the Minister and the water licence speaks to terms of reclamation. Land use permitting in a similar manner. The standard terms of a lease under the Northwest Territories Lands Act will also speak to a requirement on the lessee to bring the lands back to…basically to reclaim the lands to the state that they were before the lease was issued. There are a number of pieces there that are in the mirror legislation, and of course, in the Mackenzie Valley the Mackenzie Valley Resource Management Act and Regulations continue to apply as well. There are various pieces out there that address the matter of security and reclamation.
Thanks to Mr. Fulford for that. I kind of thought that was the case. I think my concern is that the requirement may be there, but as I understand it, the amount of either the financial security or the need to have the closure and the reclamation plans is up to the regulator, and if the regulator makes a determination and determines an amount of money that is not what is required or accepts a remediation plan that’s in its infancy and isn’t updated over the years as the development occurs, we’re going to be left holding the bag when the development ends or it folds in the midst of production and everybody runs away and we’re left cleaning things up.
I think my question goes more to what there is either within the regulations or within the act that we can use, one, to make sure that the regulator sets appropriate amounts of financial security and demands appropriate closure and reclamation plans, and secondly, what do we have that’s going to enforce whatever it is that’s decided on for a development?
If we’re speaking specifically to the ability of the oil and gas regulator to establish security, that’s done under the Oil and Gas Operations Act, and there are sections of that act that govern that process. Keeping in mind that the oil and gas regulator is acting as a regulator and not as a Minister outside of the ISR, he will be bound by principles of administrative fairness, and in other cases specifically, the act itself sets out that the things that the Minister needs to do in terms of process and openness in making these decisions. Even absent those requirements, common law principles of natural justice will ensure that the regulator makes his or her decisions in a way that takes into account all of the affected parties.
Great explanation, but it doesn’t give me much comfort. I didn’t really hear that there are any enforcement capabilities, and it’s something that concerns me, particularly in a number of areas as devolution comes forward. We’ve got a lot of operating mines, for instance, which, as we’ve heard over the last couple of weeks, don’t have adequate security for their closure plans, and this sounds to me like it’s similar. We’re going to have a regulator who makes a decision, but will the regulator be using somebody to determine that the amount of money that’s declared is accurate and is appropriate, and if we don’t get the money from the company, who’s going to make sure that we get it?
Again, I’d just point out that this is a matter dealt with in the Oil and Gas Operations Act, and I draw the Member’s attention to Section 64 where it requires an applicant for an authorization to furnish security in a form satisfactory to the regulator and maintain that security for the term of the authorization. There is a legislated requirement to maintain that security if you want to have an authorization.
That’s good. Thanks.
You’re good? Okay. General comments.
Detail.
Detail. Bill 11, Petroleum Resources Act. We will go through the clauses in groups of 10 again. Is committee agreed?
Agreed.
Thank you. Mr. Miltenberger.
Thank you, Madam Chair. I would like to make a motion. I move that the definition “holder” or “interest holder” in the English version of clause 1 of Bill 11 be amended by striking out “under Part;” and substituting “under Part 8;”. Thank you.
Thank you, Mr. Miltenberger. The motion is in order. Mr. Miltenberger.
[Microphone turned off] …correct a typographical error in the definition “holder” or “interest holder” as the number of the part referred to had been omitted.
Thank you, Mr. Miltenberger. To the motion.
Question.
Question is being called. The motion is carried.
---Carried
Clause 1, as amended.
Agreed.
Clauses 2 to 10.
---Clauses 2 through 10 inclusive approved
Clauses 11 to 20.
---Clauses 11 through 20 inclusive approved
Clauses 21 to 30.
---Clauses 21 through 30 inclusive approved
Clauses 31 to 40.
---Clauses 31 through 40 inclusive approved
Clauses 41 to 50.
---Clauses 41 through 50 inclusive approved
Clauses 51 to 60.
---Clauses 51 through 60 inclusive approved
Clauses 61 to 70.
---Clauses 61 through 70 inclusive approved
Clauses 71 to 80.
---Clauses 71 through 80 inclusive approved
Clauses 81 to 90.
---Clauses 81 through 90 inclusive approved
Clauses 91 to 100.
---Clauses 91 through 100 inclusive approved
Clauses 101 to 104.
---Clauses 101 through 104 inclusive approved
Thank you. To the bill as a whole.
Agreed.
To the bill as a whole as amended.
Agreed.
Does the committee agree that Bill 11 is ready for third reading as amended?
---Bill 11 as a whole as amended approved for third reading
Thank you, committee. Moving on to Bill 13, Devolution Measures Act. Opening comments, Premier McLeod.
