Mr. Speaker, the Government of the Northwest Territories recognizes that our future prosperity is heavily dependent on the responsible development of our abundant natural resources. On April 1, 2014, our government will be assuming new responsibilities for the administration of public lands, resources and rights in respect of waters. This means changes for the Department of Industry, Tourism and Investment, which will now administer mineral exploration and development activities and regulate onshore petroleum activities in the Northwest Territories, except in the Inuvialuit Settlement Region.
Having the authority to make decisions related to mineral and petroleum resource exploration and development on public lands will ensure the Government of the Northwest Territories can manage these non-renewable resources effectively and efficiently to the benefit of all residents of our territory. These new responsibilities will allow us to decide just how our future will play out, on our terms.
Our government is committed to the responsible management and development of Northwest Territories mineral and petroleum resources to create sustainable benefits for our people and fuel economic diversification and foster more robust growth over the long term. Our decisions will be guided by a legislative and policy framework that includes the federal legislation and regulations we have agreed to mirror in the Devolution Agreement
and existing Government of the Northwest Territories policies and strategies.
Responsibilities for mineral development will include planning and policy development as well as issuing the licences and permits required for prospecting and mining and recording mineral claims. The administrative authority that will allow us to further develop our onshore oil and gas resources also includes the regulatory responsibilities of ensuring public health and safety, conserving petroleum resources and protecting the environment.
As Premier McLeod announced earlier this week, the Minister of Industry, Tourism and Investment has been designated by Executive Council as the regulator of oil and gas activities for Northwest Territories onshore areas, outside of the Inuvialuit Settlement Region, effective on the devolution implementation date of April 1, 2014. I will be guided in this role by an integrated resource management approach to ensure fair and equitable decision-making. It should be noted that many decisions of the regulator will not be taken directly by the Minister. Where it makes sense, responsibility for decision-making will be delegated to independent, expert staff in the Department of ITI. This is consistent with the conventions supporting ministerial governance applicable in the Northwest Territories, in Canada generally, and in the family of nations descended from the British parliamentary tradition.
Oil and gas regulation in the Northwest Territories was previously carried out by the National Energy Board, an independent federal agency. The National Energy Board will remain the regulator in the NWT’s offshore areas, which remains Canada’s jurisdiction, and in the Inuvialuit Settlement Region, but under territorial legislation. This will ensure the consistent regulation of resources that straddle the onshore/offshore.
In all other regions of the Mackenzie Valley, the Minister of Industry, Tourism and Investment will serve as the regulator. Initially the regulator will apply the policies and practices inherited from the National Energy Board, but it will be open to the Northwest Territories to make prudent adjustments to those policies and practices as we move forward, consistent with the “devolve and then evolve strategy” we have adopted.
Oil and gas regulation are serious responsibilities. Cabinet carefully reviewed and considered a number of possible options. This approach to regulation is similar to that of Saskatchewan and Manitoba, which have successfully regulated oil and gas activity for years, and in Yukon, which received its own devolution of oil and gas regulatory authority in 1998.
Our government considers this model to be the most economical, efficient and accountable way to ensure that regulatory practices reflect NWT priorities, ensure public health and safety, protect the environment and also meet the needs of industry. Our government is committed to ensuring the northern environment will sustain present and future generations, and to diversifying our economy to increase employment opportunities where they are most needed.
To provide support, a new office of the regulator of oil and gas operations is being integrated into the Department of Industry, Tourism and Investment. This office will include the roles of chief conservation officer and chief safety officer, as established under the proposed mirror Oil and Gas Operation Act, which applies to the exploration and drilling for, and the production, conservation, processing and transportation of oil and gas within the NWT. Funding for this office will be drawn from the reserve fund established for unanticipated devolution-related costs. The decision to establish this office was not made in time to include it in the 2014-15 Main Estimates, but any future year funding will be requested through the regular business planning process.
The chief conservation officer will be responsible for environmental and conservation monitoring compliance and the chief safety officer is empowered to order a stop of operations for safety reasons.
Post-devolution organizational design was guided by the idea that regulatory functions should reside with the department with the legislative responsibility. This is the model currently employed in other departments. For example, the Department of Environment and Natural Resources is responsible for both the approval of licences and permits and inspecting for compliance with the conditions applicable to those same licences or permits.
Decisions related to oil and gas regulation, such as approvals to drill a well or operations’ authorizations, require in-depth technical analysis. To assist during the transition period, and to ensure that decisions related to health, safety and conservation requirements are informed ones, our government is establishing two-year service agreements with experienced regulators for other jurisdictions – the National Energy Board and the
Alberta Energy Regulator – to provide advisory and technical services.
The agreement with the National Energy Board establishes a framework for collaboration as neighbouring regulators that will ensure business continuity following the transfer. The Alberta Energy Regulator, which will provide technical advisory services, is a 75-year-old organization with extensive experience in onshore drilling.
These technical services will assist with the decision-making process, but ultimately, the decision will be made by the NWT regulator, consistent with NWT legislation and regulations and guided by an Integrated Resource Management Framework built on existing policies, strategies and frameworks such as the Land Use and Sustainability Framework, Water Stewardship Strategy and Sustainable Development Policy.
As is currently the NEB’s practice, many regulatory functions will be delegated to the chief conservation officer and chief safety officer, who will be responsible for ensuring that regulatory activities and decisions reflect and advance NWT priorities.
These agreements with established regulators will also help us achieve our long-term goal, which is to recruit and develop expertise in the territory. Collaboration with established regulators will help the Government of the Northwest Territories to build capacity in this area as we begin to exercise our new authorities following transfer.
Mr. Speaker, we are committed to the sustainable development of the territory’s resources. Responsible development will provide important job and business opportunities and generate significant revenues that can improve quality of life for our residents. We are equally committed to upholding the highest standards of public health and safety and will uphold our commitment to protect the environment. Thank you, Mr. Speaker.