The devolution of land and resource management affords the Northwest Territories a significant opportunity to design and implement a responsible regulatory regime. Representatives of the Saskatchewan Ministry of the Economy recommended enacting legislative and regulatory instruments that establish and enforce meaningful consequences for industry. Saskatchewan has looked to Alberta for many of its regulations.

Some features of the Saskatchewan self-disclosure-based regulatory approach include:

comprehensive baseline water and geological

information;

disclosure of the chemical composition of

fracturing fluid and, more importantly, in their view, identifying and monitoring transformed chemicals in well flowback;

explicit guidelines for the management and

disposal of contaminated water; and

environmental protection, remediation and

enforcement provisions.

The province has scheduled Crown land sales six times a year, and makes land available through leases, exploration licences and special exploratory permits. A liability management program includes a requirement for operators to pay a monthly security deposit to fund environmental protection and remediation programs.

The committee heard that despite ever-increasing permit applications and oil and gas revenues reaching over 1.5 billion annually, Saskatchewan regulatory staff and program funding has remained stable. The division experiences greater position vacancies than before, and few positions are dedicated to fieldwork.

Both Saskatchewan and North Dakota had established regulatory regimes, royalty and taxation structures before intense development of the Bakken began. The establishment of an effective

royalty regime is a significant area of planning for the Northwest Territories to address.

The committee heard the view that a key to successful development is to implement taxation that balances economic viability for industry and a jurisdiction’s revenue needs. The Saskatchewan Ministry of the Economy felt it had reached a competitive level of taxation, while still being able to collect resources for government priorities. The committee members noted, however, that Saskatchewan royalty rates had decreased while the amount of drilling activity increased. Unlike either the Northwest Territories or North Dakota, the province has not established a heritage fund.

North Dakota collects a combined production and extraction tax, with revenues divided between the state and municipalities. Thirty percent of all royalty revenues are directed to the state’s Legacy Fund. The fund is established under legislation that does not allow any portion to be accessed until 2017, and then, only with the consent of two-thirds of the state legislature. In addition to the Legacy Fund, North Dakota allocates royalty revenues to six other trusts established to fund infrastructure projects and community needs related to intense development. Unlike the Northwest Territories, North Dakota also has the ability to tax its non-resident workforce based on earnings within their jurisdiction.

Large oil revenues have resulted in disparities between oil-producing and non-oil-producing counties. The state notes that it is a challenge to mitigate regional disparities since infrastructure and programming pressures are greater in areas with more industrial activity.