Agreed.
Thank you, committee. This concludes our consideration of the committee report. We have agreed to next consider Bill 36. We are going to change some personnel out here, so just give us a minute, and we will get right into it.
Thank you, committee. We will get right into Bill 36. I will ask the Minister responsible for it to introduce it. Minister Schumann.
Thank you, Mr. Chair. I am pleased to introduce Bill 36, An Act to Amend the Petroleum Resources Act.
Bill 36 seeks to enhance transparency and public accountability, address administrative and technical issues, and manage significant discoveries of petroleum in the Northwest Territories in the best interests of all residents.
To enhance transparency and public accountability, this bill proposes:
requiring greater amounts of information to be disclosed about a number of different licences and activities related to the petroleum in the NWT;
increasing public representation on the Environmental Studies Management Board, while requiring more reporting on activities of the fund they manage;
adding consideration of Indigenous traditional knowledge and input from Indigenous organizations when appointing board members; and
clarifying the requirements related to conflicts of interest on public boards established under the act.
To better manage significant petroleum discoveries, this bill would amend the criteria for an interest holder to be eligible for a significant discovery licence. This bill will also restrict the term of a significant discovery licence to better reflect our territory's values and principles when it comes to land and natural resource management.
On the administrative and technical side, this bill would clarify authorities of the Minister to delegate their powers, duties, and functions to other qualified persons, and correct inconsistencies and errors identified throughout the current Petroleum Resources Act.
This bill is part of the government's work to improve the NWT land and resource management regime, to ensure northerners are able to make decisions that support sustainable, responsible development and protection of the environment while respecting Indigenous rights.
This kind of made-in-the-NWT legislation will help ensure NWT residents are making the decisions about how land and resources in the NWT are developed and used on behalf of current residents and future generations.
This bill resulted from an extensive policy development effort, including significant legislative research; two months of open and multi-platform engagement with the public, industry, Indigenous governments, NGOs, and other interested stakeholders; feedback from those on this committee; and close collaboration with Indigenous governments through the Intergovernmental Council. The Department of Industry, Tourism and Investment also prepared plain-language materials to support the public engagement process.
The Department of Industry, Tourism and Investment has worked with the Legislation Division of the Department of Justice on the Bill. The department does not anticipate that new regulations are necessary for this particular legislative initiative but does anticipate working with the Office of the Regulator of Oil and Gas Operations to ensure appropriate guidance is developed before bringing these changes into force should the bill pass.
I also wish to take this opportunity to commend the committee on their continued engagement with the public as this bill was moved through the legislative process. I welcome any questions the Members may have. Thank you, Mr. Chair.
Thank you, Minister. I will now turn to the chair of the Standing Committee on Economic Development, which considered the bill, for any opening comments that he may have. Mr. Vanthuyne, any opening comments?
Thank you, Mr. Chair. Nothing further to add, just similar, along the lines of the opening comments provided with regard to the report, so no further comments. Thank you.
Thank you. Minister, I understand you have witnesses you wish to bring into the Chamber, so, Sergeant-at-Arms, please escort the witnesses into Chamber. We will try to squeeze them all at that table. Minister, you may take your seat at the witness table. Minister, will you please introduce your witnesses for the record.
Thank you, Mr. Chair. On my left, I have Menzie McEachern, director of mineral and petroleum resources. On my immediate right, I have Joel Marion, senior legislation advisor. On my far right, I have Christina Brownlee, lead drafter. Thank you, Mr. Chair.
Thank you. Welcome to the witnesses. I will now open the floor to general comments. Mr. Testart.
Thank you, Mr. Chair. Just before we get into the actual business of reviewing the legislation clause by clause, I would like to ask some questions on significant discovery licences, and hopefully the witnesses can oblige. How many significant discovery licences, or SDLs, are currently in the Northwest Territories or have been issued to rights holders in the Northwest Territories? Thank you.
Thank you, Mr. Testart. Minister.
Thank you, Mr. Chair. We do not have that number in front of us, but we can probably get it before this session is over so that we can get the number back to the Member. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. I was under the assumption that that would be a relatively small amount, but I will look forward to that information. My second question is: how much land is currently covered by the existing SDLs? Thank you.
Thank you. The Member asked how much land is currently covered by the existing SDLs. Does the Minister have an answer? Minister.
Same thing. We will get that information while we are sitting, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. So what is the term of existing SDLs in the Northwest Territories? Thank you.
Thank you. Minister.
Thank you, Mr. Chair. Under the current regulations, it's indefinite. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. What tools are available to the government to change the terms of existing SDLs? Thank you.
Minister.
Thank you, Mr. Chair. It's either by consent or drilling order. Thank you, Mr. Chair.
I am sorry. Could you repeat your answer?
It's either by consent or drilling order. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you. This legislation proposes to change the terms of SDLs in particular and to provide for some certainty that work will be done before extensions of term are granted. Those are fine, and those are the kind of things that I think are a better approach to the old federal artefact, as I call it, but I would like to know if those new terms will apply to the existing SDLs that have an indeterminate term. Thank you.
Thank you. Minister.
Thank you, Mr. Chair. No, they will not.
Thank you. If the witnesses could just indicate when they are done speaking so that our team knows when to change the mics, that would be appreciated. Mr. Testart.
Thank you, Mr. Chair. What assurances can the Minister give to people who are concerned about the old SDLs, the SDLs that weren't really working as well as intended? That was the feedback that we received. What assurances can the Minister give that those existing SDLs will be either brought into the regime that we will be bringing forward with the new legislation or, at least, will become competitive and not just sit there for an indeterminate amount of time, which could be until the end of time? What assurances can the Minister give that there will be work done and that these SDLs will generate economic activity that will benefit Northerners? Thank you.
Thank you. Minister.
Thank you, Mr. Chair. It has been quite clear; we cannot change these existing SDLs that are already put into place. There would be significant litigation possibilities, as I have said to committee when we discussed this. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you. Mr. Chair, I think the question is not: "will the Minister change the existing SDLs?" It was: "what comfort can he give to people who are concerned around the existing SDL regime that there will, in fact, be economic opportunity produced by these licences?" It doesn't have to be heavy-handed; it doesn't have to be drilling orders, but there has to be something there. If the department has no answer today, is this something that they can look at cooperatively with industry so that we can see some work move forward? Thank you.
Thank you. Minister.
Thank you, Mr. Chair. One of the things with these SDLs that are already in place, as I said, there would be significant litigation possibilities with it.
Now, if we want to try to get these companies to create some type of economic opportunity from existing SDLs, I would say exactly that is what we are doing through our petroleum strategy. We are trying to attract investment in the Northwest Territories. We are trying to get the federal government to invest in infrastructure to help lay the way to make it more possible for industry to be attracted to this area, to bring their costs down.
These are the opportunities that we will need to continue to work on in the 19th Legislative Assembly to attract investment back to the Northwest Territories around oil and gas. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. To be frank, the federal government can't build a pipeline to save its life, so I find it highly doubtful that they will be able to bring forward significant infrastructure to address the concerns that SDLs were created to address.
What can this government do directly, through working with industry, because I will address the liability that the Minister has clearly laid out, to avoid any potential liability of changing the existing SDLs? What can this government do to incentivize or encourage work in the areas that are covered by these SDL licences? Thank you.
Thank you. Minister.
As I have said, Mr. Chair, these SDL-holders that hold a significant amount of opportunity in the Northwest Territories are put into a spot right for you, as the Member from the Sahtu earlier said in his comments today, to attract investment into the Northwest Territories versus some of these other opportunities that lie globally. We are at a significant disadvantage, the way things are playing out globally. There are a lot of challenges around that industry.
Canada, as a whole, is having a problem attracting the oil and gas industry back to Canada as an investment opportunity, and we will continue to work with all of our partners across the country to be able to try to bring opportunities back to our region, and that is what we will do in the rest of the life of this Assembly. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. I appreciate the Minister's earnest attempts to drive investment in this region, but I don't think that these instruments are working. We have heard directly from stakeholders that they are not working as intended. Going forward, they will work better, but there are still a lot of issues with even the revised forms. At least there is an expiry to the terms, but I am afraid that I am still unconvinced that the current state of affairs surrounding SDLs is the best approach to managing opportunities in our economy.
I wouldn't be encouraging any effort that would drive liabilities up for government or expropriate private property or privately-obtained rights, but we have to do something, and if we can collaborate with these proponents who already have these licences and, again, who can hold them until the end of time, then that would be the best way forward. Even if that is a specific feature of the petroleum strategy or whatever efforts are going forward, we have to do something. People are relying on these opportunities, and to say that we will wait until commodity markets make it feasible or wait until a pipeline is built, we might be waiting a very long time. The economic opportunity is needed now and badly needed in some of our regions. If there is a way to make use of these licences now and to respect that they were granted, to respect that they are federal art facts, but to still make sure of the relationships that they have created, I think that that is the best way forward.
That is more of a comment, but this was a significant concern for me as I reviewed this bill, and it was a significant concern of committee as well. It is not to penalize industry or to drive away investment. Rather, it is the opposite; it is to make sure that we have responsible resource development and that the tools that we create are driving economic opportunity or, at the very least, are driving revenues or benefits for the public Government of the Northwest Territories to benefit the people of the Northwest Territories. We still haven't hit that balance with the existing regime, and that has to change. Thank you.
Thank you. Next, I believe Mr. O'Reilly was on the list. Mr. O'Reilly.
Thanks, Mr. Chair. I have a few brief comments, and I do have a couple of lines of questioning that I would like to pursue.
First off, I was quite surprised that committee received absolutely no submissions from industry. Not one. Nothing. There is no record of any submissions made to the department as part of their development of the bill, because all of the submissions are still available on their website. To me, that means that there doesn't seem to be a lot of interest on the part of industry in commenting on our regulatory regime that they are actually governed by. They don't seem to be all that interested in doing any work here. I just want to get that on the record.
Now, the scope of the changes that were made was very limited, and I do want to congratulate late the department and the Minister for reversing the onus on secrecy. Right now everything is secret. Now everything is going to be public, unless there is some reason to keep it secret. That is a good thing, so I want to thank the Minister and the department for doing that.
The scope of some of the changes in here, I don't think, are really where they can and should have been, and I will give a couple of examples. The Environment Studies Management Board can and should have been made a co-management approach. I had raised that while the bill was being developed on the floor of this House. That was not done in this bill. We have some tinkering in here to include some public representation on the Environmental Studies Management Board, but industry representatives still sit on this, and I think that that is an inherent conflict of interest.
The scope of the changes does not include royalties, one of the most fundamental things that we have inherited. Even on the Significant Discovery Licences, my colleague mentioned that this does not fix the problem of Significant Discovery Licences. Under this bill, the Minister will still retain incredible discretion over whether Significant Discovery Licences are issued and, more particularly, renewed, and I don't think that that creates certainty.
This bill does not deal with the issue of whether to frack or not. That was a commitment made by this government as part of the mandate, to ensure that our residents have an opportunity to make informed decisions about this matter. This bill does not address this in any significant way.
I want to move on to a couple of issues that I mentioned, Mr. Chair. I raised federal concurrence in my remarks on the report by committee. I would like to ask the Minister why he went out and sought federal concurrence on this legislation while it was before committee. Thanks, Mr. Chair.
Thank you. Minister.
Can you repeat the question?
Mr. O'Reilly.
Thanks, Mr. Chair. Why did the Minister and his department seek federal concurrence on these bills while they were before committee? Thank you.
Thank you. Minister.
