Thank you, Mr. Speaker. Your Standing Committee on Economic Development and Environment is pleased to provide its Report on Bill 36, An Act to Amend the Petroleum Resources Act, and Bill 37, an Act to Amend the Oil and Gas Operations Act.

Introduction

Mr. Speaker, Bill 36, An Act to Amend the Petroleum Resources Act, and Bill 37, An Act to Amend the Oil and Gas Operations Act, provide the framework for the administration and management of the exploration and production of onshore petroleum resources in the Northwest Territories. The Petroleum Act governs how the Government of the Northwest Territories will act as the owner and manager of petroleum resources and sets the rules for companies to acquire the rights to explore for and produce oil and gas in public lands in the Northwest Territories. The Oil and Gas Operations Act regulates oil and gas activities and promotes safety, the protection of the environment, and the efficient extraction of oil and gas resources.

The amendment of oil and gas legislation is part of the mandate of the Government of the Northwest Territories 2016-2019. Under mandate point 1.3.2, the Department of Industry, Tourism and Investment committed to develop and propose amendments to both acts. The department expressed that the proposed bills are a first step towards a larger review aimed at modernizing legislation and improving transparency of petroleum production in the Northwest Territories.

The Standing Committee on Economic Development and Environment, "the committee," commends the Minister for the development of these bills. Bill 36 and Bill 37 make amendments to existing legislation and propose to increase transparency and public accountability in the Petroleum Resources Act and the Oil and Gas Operations Act.

Both bills received second reading and were referred to the committee on February 22, 2019. Public hearings were conducted during May and June 2019, and the clause-by-clause review was held on August 2, 2019. During the review, the committee passed seven amendments to address concerns identified by the stakeholders and committee.

Overall, stakeholders indicated support of the bills. Many stakeholders were concerned for each bill to achieve the most appropriate balance between information to be made public and confidentiality to be provided. Stakeholders also raised concerns about the term for Significant Discovery Licences (SDL) and suggested additions to the proposed reporting requirements on hydraulic fracturing fluid recovered from a well.

The work of the standing committee to amend Bill 36 and Bill 37 is set out in this report. The remainder of this report addresses concerns from stakeholders and committee, provides rationale for the motions brought forward by committee and recommends several courses of action. Motions are listed in order of their appearance in the bills in the chapter of clause-by-clause review of the bills, and are referred to in this report by the number assigned.

Requirement for Federal Consent

Bill 36 and Bill 37 are among the legislation for which federal consent in certain instances is required. For the purposes of the Oil and Gas Operations Act, the National Energy Board continues to be the regulator for onshore development in the Inuvialuit settlement region. The Office of the Regulator of Oil and Gas Operations generally performs this function in the onshore in other parts of the Northwest Territories.

According to section 22(2) of the Northwest Territories Act, the Northwest Territories Legislature is required to seek federal consent for amendments that would change the regulatory functions of the National Energy Board, if these functions apply to the onshore portion of the Inuvialuit settlement region. This requirement is in effect for 20 years from the day on which the act came into force in 2014.

Committee learned in a later stage of the legislative review process that federal consent had already been sought by the department and been granted for several amendments proposed in Bills 36 and 37. Committee would have preferred that committee's efforts to improve the bill through making amendments based on public consultation had been considered and committee's oversight and accountability role been taken into account. Committee therefore makes the following recommendation.

Recommendation 1

The Standing Committee on Economic Development and Environment recommends that, should any portion of a bill require federal concurrence, a statement to this effect be included in the legislative proposal and that the relevant clauses be identified at the time of introduction to the appropriate standing committee. Committee further recommends that a bill should not be submitted to the federal government for their concurrence until after it has been reported back to the House following committee's review.

Public Consultation

The committee held public meetings in Inuvik, Norman Wells, and Yellowknife. A scheduled hearing for Fort Simpson was cancelled on request of the community. Numerous representatives of Indigenous governments, non-governmental organizations, and individuals made public representations to the committee, either in person or via written submissions. Written submissions are attached as Appendix 1.

Comments were received from seven stakeholders, including:

• Alternatives North, Ecology North, CPAWS-NWT, and the Canadian Arctic Resources Committee (CARC) joint submission;
• The Information and Privacy Commissioner of the Northwest Territories;
• Non-Profit Governance Solutions (Dr. Cody Sharpe) on behalf of Ecology North;
• NWT Metis Nation;
• NWT Chamber of Commerce;
• Sahtu Secretariat Incorporated; and
• Todd Slack (as individual).

The standing committee heard general support for the bills from presenters and received recommendations for improvements. Committee thanks every individual and organization who attended these meetings to share their views on Bill 36 and Bill 37.

The committee appreciates the plain-language material supplied by the Minister's office for the public hearings.

After having sought clarification from the sponsoring department, the committee considered the comments received during public hearings and discussed these matters amongst its members. Committee submitted eight motions in total to amend Bill 36 and Bill 37.

Mr. Speaker, at this time, I will turn the reading over to my honourable colleague from Nunakput, MLA Nakimayak. Thank you, Mr. Speaker.