This is page numbers 5945 - 5992 of the Hansard for the 18th Assembly, 3rd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was public.

Topics

Access to Education in Communities
Members' Statements

Page 5952

Daniel McNeely

Daniel McNeely Sahtu

Mr. Speaker, just this past month, I came together with the Sahtu leadership in the beautiful community of Deline to discuss the delivery of education in our region and benefitted from the work of my esteemed colleague from the Deh Cho riding, Mr. Nadli, in this area. Through these discussions and many others, I have greater appreciation of the challenges we face and will have questions for the Minister responsible later. Thank you, Mr. Speaker.

Access to Education in Communities
Members' Statements

Page 5952

The Speaker

The Speaker Jackson Lafferty

Masi. Members' statements. Member for Yellowknife Centre.

Julie Green

Julie Green Yellowknife Centre

Mahsi, Mr. Speaker. Seniors are the heart of my constituency and, through the next decade, their population will grow by 134 households in Yellowknife each year. The fact that the seniors population is growing is not news. Our lack of preparedness to meet their needs is today's headline.

The NWT Housing Corporation has a suite of programs for seniors to repair their homes and complete retrofits so they can stay in their homes as they age. That is all good, obviously. The problem is that, while the seniors population has been increasing, program funding has not. The same amount of money is available this year as it was last year for programs such as CARE. The total budget for the NWT for aging in place retrofits is just half a million dollars. In our mandate, we said we would help seniors to age in place, but the truth is there are a lot of gaps.

Mr. Speaker, here in Yellowknife we have a crisis of available and affordable housing for seniors. Not one, and let me say that again, not one new unit has been added to the inventory during the term of this Assembly. There are 60 people on the waiting list for AVENS Court; 49 on the waiting list for public housing; and there is a backlog of seniors in emergency shelters, as well. We need at least 100 new units for independent living, and we need them now.

We also need new investments in homecare to help people age in place. I am looking forward to the paid family and community caregiver project, and I am pleased that Yellowknife is one of the pilot communities, given the size of our senior population, but this program does not include nursing and personal care. We need a plan that addresses the growing need for professional care by people who are trying to retain their independence by living at home.

Last but not least is the day program. Almost three years after it closed, the GNWT still has not found a replacement for the adult day program. I realize the Minister has looked at various options and there is now a survey out for seniors to complete, but the fact is there is nothing in place.

Mr. Speaker, as we age along with the rest of the population, we are going to need increasing support, whether that is help to say where we are, a smaller unit that is more affordable and accessible, services to help us with everyday tasks, specialized nursing, or social inclusion activities. On all of these fronts, the next Assembly must do better than we have. Mahsi, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Members' statements. Member for Tu Nedhe-Wiilideh.

Prevention of Alcohol Bootlegging
Members' Statements

Page 5952

Tom Beaulieu

Tom Beaulieu Tu Nedhe-Wiilideh

Marsi cho, Mr. Speaker. Alcohol is a big issue in our communities, including regional centres and Yellowknife. In the last government, I was the Minister of Health and Social Services for two years. I could not believe that we were spending well over a million dollars a day in that department.

As I travelled to the communities, I asked the nurses what they thought were the biggest cost drivers in their communities. In almost all cases, they said alcohol.

I believe the causes of alcohol abuse in small communities, some of the causes, can be attributed to bootlegging. Mr. Speaker, I think it is time for us as a government to look at ways of preventing bootlegging from running a thriving business at the expense of our citizens.

Recently the City of Yellowknife discussed liquor store hours. Maybe there is merit in looking at changing liquor store hours one way or the other. Maybe you have liquor store open hours longer that will have the customers go to the liquor store instead of a bootlegger, or maybe we shorten the hours, I have not thought about that fully, to get away from the bootleggers, or maybe we shorten the hours. I do not know what it should be, but it certainly should be reviewed, Mr. Speaker.

The one thing our government may want to look at is the restriction on the amount of liquor that a customer can buy. A person should not be allowed to buy cases and cases of hard liquor, take them home for after the liquor store hours are closed, and then they have it for resale. We put restrictions on the purchase of cannabis and the possession of cannabis. I think we can do the same with alcohol. We must find a way to prevent the bootleggers from going to the liquor store and buying all kinds of alcohol, and everybody knows it's for resale, without affecting the average citizen who wishes to go to the liquor store and buy some wine or some beer or even some hard liquor for themselves, for their own consumption in their homes, so we must find a happy medium. Allowing bootleggers to buy unlimited amount of alcohol from liquor stores is not correct, and that should be stopped. Thank you, Mr. Speaker.

Prevention of Alcohol Bootlegging
Members' Statements

Page 5953

The Speaker

The Speaker Jackson Lafferty

Masi. Members' statements. Member for Nahendeh.

Highway Infrastructure Projects
Members' Statements

Page 5953

Shane Thompson

Shane Thompson Nahendeh

Thank you, Mr. Speaker. I rise in the House to talk about a couple of infrastructure projects on Highway No. 1 and locations on Highways No. 3, 5, 6, and the Hay River Reserve access road this year. Unfortunately, the tenders were awarded to two southern companies. It was my understanding the bid difference was less than a million dollars, so we are seeing approximately $17.5 million leaving the Northwest Territories.

Mr. Speaker, I am not sure how many northern and local contractors are being used on this work, but I know I have witnessed a lot of BC and Alberta plates on equipment as I have driven by. It is my understanding that the old way we implemented the business incentive policy was to use the full amount of the contracts. However, the new way only allows contractors to use a few million dollars of the whole contract.

Mr. Speaker, it is frustrating for Northern contractors, because the GNWT are making contracts larger, and BIP does not help keep the work in the North.

Companies from BC and Alberta have no ties in the North, and with contracts being awarded, the majority of the money is going south, with no benefit to NWT besides the project itself. These are unfair practices and have a huge impact on northern contractors. I have heard some talk that it would be beneficial to leave the territories and become absentee contractors so they are not subject to the high cost of living in working in the North.

Without northern companies hiring northern people, the tax base of the Northwest Territories will continue to shrink. Without the tax base, many of the projects the NWT would like to complete would no longer be done without the assistance of the federal government. The BIP in its current format does not work for large contracts. An example method that does work is, when an out-of-province contractor bids on projects in BC, they are subject to extreme penalty costs from the BC government. This penalty protects BC contracts, and ensures the contract awarded stays in BC.

The government should either make the contracts smaller, so they are less attractive to out-of-province companies, or reinstate the BIP back to the original format and intent. The original intent was to ensure money spent in the North stays in the North. This is the only way to ensure that the NWT grows both in local services and population.

We know we are dependent on federal funding, and every person has a value. Every person we lose has an impact on us. I will have questions for the Minister of Infrastructure later on today. Thank you, Mr. Speaker.

Highway Infrastructure Projects
Members' Statements

Page 5953

The Speaker

The Speaker Jackson Lafferty

Masi. Members' statements. Member for Nunakput.

Salmon in the Arctic
Members' Statements

Page 5953

Herbert Nakimayak

Herbert Nakimayak Nunakput

Thank you, Mr. Speaker. Every day Nunakput constituents are posting on social media about the high amounts of salmon they are catching in their fish nets in the Beaufort Sea. The Arctic char at this time are usually feeding along the coast before they migrate up the lakes and rivers for the winter. I am worried that these invasive species will take over some of the lakes and rivers where we harvest Arctic char, whitefish, coney, herring, lake trout, and other fish species, ultimately affecting the ecosystem as a whole.

The ocean currents have been warming and allowing species that do not usually migrate to the Arctic to traverse the waters through the high seas, affecting the ecosystem on and offshore. We see the effects of climate change with the sporadic and unpredictable weather patterns all over the globe. The warm ocean currents are bringing species such as salmon to colder water, which means that they are changing the balance of the ecosystem in the Arctic.

Fish farming in Alaska is likely contributing to this increase, and we must work with our co-management groups across the Northwest Territories and abroad to ensure that we are doing our best to support the rivers, lakes, and communities along the rivers and coast to ensure that this does not become a food security issue.

Mr. Speaker, I believe there is a need to take a look at this and get involved and partner with Indigenous governments, hunters and trappers in the Northwest Territories, and the federal government to ensure that we can take a picture of this invasion of salmon and do our best to understand the underlying causes that are affecting the harvesters' catch in Nunakput and across the Northwest Territories. Partnering on projects and collaboration and cooperation has never been as important as we learn why this is occurring. We need to understand this from a global prospective to ensure that we do our best to protect our way of life in the Arctic.

Mr. Speaker, local Indigenous knowledge is key to the planning, conservation, and protection of the species in the Northwest Territories and across Canada. Thank you, Mr. Speaker.

Salmon in the Arctic
Members' Statements

Page 5954

The Speaker

The Speaker Jackson Lafferty

Masi. Members' statements. Item 4, reports of standing and special committees. Member for Yellowknife North.

Cory Vanthuyne

Cory Vanthuyne Yellowknife North

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.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Nunakput.

Herbert Nakimayak

Herbert Nakimayak Nunakput

Thank you, Mr. Speaker.

What We Heard

This part of the report is organized around the key themes or subject areas raised during the committee's public hearings and in the written submissions received.

Confidentiality in Bill 36

Committee appreciates the steps taken by the Department of Industry, Tourism and Investment to improve and modernize Bill 36 and Bill 37 by amending the confidentiality provisions in both bills. Improving accountability and transparency is a fundamental component of the Government of the Northwest Territories' Mandate. Ensuring in legislation that all information is made available while determining certain criteria for confidentiality is contributing to achieving a better balance between increasing transparency and the need to protect confidential information.

Stakeholders commented on the importance of transparency in all aspects of regulating oil and gas-related activities in the Northwest Territories. One stakeholder remained unconvinced that the bills strike the appropriate balance between confidentiality of proprietary information and public transparency. Currently, all information provided for the purposes of the Petroleum Resources Act and the Oil and Gas Operations Act, and the regulations under those acts, is deemed privileged and kept confidential, with few exceptions.

Bills 36 and Bill 37 change this and reverse the process in that all information required to be provided will be made available to the public unless the recipient of the information, which would be either the Minister or the Regulator, determines the information meets the test for confidentiality. Committee recognizes and supports this important step in the modernization of the legislation.

Role of Minister and Regulator

The Regulator is designated by the Commissioner in Executive Council under the Oil and Gas Operations Act (OGOA). The Minister has designated the regulator, however, delegated those powers to the Executive Director of the Office of the Regulator of Oil and Gas Operations (OROGO). Generally speaking, the Minister of Industry, Tourism and Investment has stronger responsibilities under the Petroleum Resources Act, and the regulator has a more robust role under the Oil and Gas Operations Act.

Committee received several comments on the importance that the roles of Minister and regulator do not overlap or interfere with either mandate. For example, where the Minister has the authority to classify information as confidential, this discretion must not overlap or infringe on the authority of the regulator. It was pointed out clearly that the regulator must be an independent decision-maker, if its rulings are to be viewed by the public as being free from political interference. However, there also was a clear desire expressed for more clarity around what information the Minister and the regulator should make publicly available. Committee considered carefully these concerns when discussing publication and annual report requirements.

Publication Requirement in Bill 36

Committee heard a number of comments on what is required to be published in the Petroleum Resources Act. Currently, the Minister is required to post notices in the Government of the Northwest Territories Gazette and "in any other publication the Minister deems appropriate"; this was seen as too vague. Stakeholders asked to improve the transparency of government decisions by setting out where the notices should be published.

Committee heard that the Gazette is an antiquated system of public notification and that it cannot be considered widely used. It was suggested that information be made available on websites or electronically to broaden the reach and accessibility of the information. Committee agreed that specifying where information needs to be made available is consistent with the Government of the Northwest Territories' Open Government Policy and the commitment to make information accessible in a way that is responsive to the needs and expectations of Northwest Territories residents.

Committee also wanted to ensure that information is being made accessible consistently and is user-friendly. Committee therefore moved Motion 1, which requires the administering department to publish information in the Gazette, make information public more widely, and publish it in a timely manner on a website.

Mr. Speaker, I now pass this on to the honourable Member for Hay River North. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Hay River North.

R.J. Simpson

R.J. Simpson Hay River North

Thank you, Mr. Speaker.

Content of Annual Report

A commitment to improving accountability and transparency is one of the key priorities of the 18th Legislative Assembly. Public information is expected to be clear, concise, and easily understood. Committee agreed with submitters of comments that making information available will increase public confidence in the regulatory process.

Having the information, year over year, compiled in one place proves of interest and value in the context of accountable and transparent governance. The value of an annual report is the ability to have flexibility around how information is presented so as to allow the reader to put it clearly in context. The regulator already voluntarily prepares and publishes annual reports on activities, which is not required by legislation. The Minister is required to prepare a report with respect to the administration of the Petroleum Resources Act. The committee is of the view that contents of the report should be set out in legislation.

To provide greater clarity for the annual report that is required under the existing legislation, the licences and information issued, for example, can be provided by the Minister. Committee developed two motions that would link several sections and result in collaboration between the regulator and the Minister and annual reporting. This is reflected in Motion 2. The committee also proposed amendments that would set forth a list of information that should be included in the annual report of the Minister, which is reflected in Motion 6 amending Bill 36.

Well Abandonment and Financial Responsibility in Bill 37

Committee heard concerns and sought clarification on the commencement of the one-year period during which an operator must maintain proof of financial responsibility. Committee also had questions on the environmental remediation triggers within the respective reporting year.

During committee's deliberations on how the timing of the one-year period is determined, it was confirmed that abandoning a well is included in the definition of well operation, and that all operations require approval from the regulator. The holder of an authorization must maintain proof of financial responsibility for one year after the Office of the Regulator of Oil and Gas Operations has given notice to the proponent that all authorized works in respect of the abandonment of a well are completed. The extent of reclamation to be carried out before the notice would be issued depends on the approved work plans rather than statutory definitions respecting reclamation.

While committee is confident that concerns regarding the one-year period are addressed in regulations, the general question of assessing financial liability in resource management was raised. Committee is of the view that there needs to be further consideration of how to best ensure that end-of-life obligations are addressed in order to protect the government and residents of the Northwest Territories from potential liabilities.

Due to recent court cases, such as the Redwater case, committee is of the view that decisions which relate to terms of financial responsibility need to be reviewed on their consistency with recent court decisions. Therefore, committee makes the following recommendation.

Recommendation 2

The Standing Committee on Economic Development and Environment recommends that, in the second phase of the review of oil and gas legislation, consideration should be given to recent court decisions and best practices to ensure that the Government of the Northwest Territories and the public are protected from potential liabilities arising from oil and gas operations.

Committee is of the view that the cap for financial liability, which is currently set out in regulations, needs to be reviewed and aligned with Canadian practices. The Oil and Gas Spills Debris Liability Regulations were inherited from the federal government with devolution and have not been updated. Since 2014, however, the federal legislation governing offshore oil and gas exploration was updated to increase the absolute liability cap to $1 billion following a review by the Auditor General of Canada. Committee therefore makes the following recommendation.

Recommendation 3

The Standing Committee on Economic Development and Environment recommends that the Government of the Northwest Territories undertake a comprehensive review of oil and gas-related regulation with the expressed purpose to increase the cap for absolute liability.

I will now pass the reading on to the Member for Frame Lake. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Frame Lake.

Kevin O'Reilly

Kevin O'Reilly Frame Lake

Merci, Monsieur le President.

Significant Discovery Licences in Bill 36

Bill 36 establishes a term of 15 years for significant discovery licences (SDL) where previously exclusive rights to petroleum lands were granted for an indefinite time. Committee received submissions that questioned the 15-year term and were seeking answers on why this number was chosen. Considering term limits in other jurisdictions while taking into account the unique conditions of the Northwest Territories, committee believes that 15 years is a time limit that would allow industry to do work and still insert a time-bound requirement.

Several submissions accepted the 15-year term of SDLs, however expressed a preference for a set time limit on the renewal term for SDLs. Bill 36 provides the Minister with the discretion to make a decision that would have an SDL being considered for an extension. This discretion was seen by several stakeholders to be concerning for two reasons: first, placing the authority with the Minister allows the possibility of political interference in what should be a regulatory function; and secondly, the ability to indefinitely renew an SDL would allow companies to potentially hold territorial lands indefinitely.

Committee shares these concerns and believes that a licence renewal should be time-bound. Consequently, committee proposed in Motion 3 to amend the current wording and require that an extension of the term of a SDL licence is for one or more terms of 15 years.

Committee had intensive discussions on the mechanism of SDLs and whether it is the best approach to ensure that the Northwest Territories will benefit from oil and gas exploration. Making SDLs time-bound by setting a time limit on the term of licence and licence renewal was considered a positive step toward a more transparent and accountable system. However, to maximize benefits to the Northwest Territories, committee is suggesting a more comprehensive review of the SDL system, including consideration of models for oil and gas exploration in other jurisdictions.

Therefore, committee is making the following recommendation.

Recommendation 4

The Standing Committee on Economic Development and Environment recommends that, in phase two of the review of Northwest Territories oil and gas legislation, a comprehensive evaluation of options related to Significant Discovery Licences (SDLs) be conducted, providing alternatives for consideration, and table its findings during the 19th Legislative Assembly. Committee further recommends that this report identify how the findings will inform any future changes to be made by the Government of the Northwest Territories with respect to its oil and gas resources.

Environmental Studies Management Board in Bill 36

Several submissions commented on the new provisions on the Environmental Studies Management Board (ESMB). Committee heard that the ESMB's public legitimacy would be improved by setting terms for the appointment of the members. Currently, members are appointed by the Minister and hold office during pleasure. Committee gave this suggestion consideration, however is not able to propose term requirements. The term of board members is determined under subsection 70(2) of the Petroleum Resources Act, and this subsection is not included for amendment. Therefore, a motion to set terms would be out of scope and not applicable.

Committee heard that, for the appointment of members to the ESMB, a clear definition of number of appointments by interest group should be provided in legislation. Stakeholders asked that public representation should be ensured. The definition of membership representation was seen as an improvement to the public legitimacy of the ESMB.

Committee agreed with the need for clarity on board membership and proposed an amendment that would ensure that at least one member from the public will be serving on the ESMB. To further ensure that the appointment of members from the public would allow for a balanced representation, committee moved Motion 4, which requires the Minister to appoint one member from the public for a board with the size of five or less members, and two members from the public for a board with six or more members.

Definition of Hydraulic Fracturing Fluid in Bill 36 and Bill 37

Committee received several submissions from Indigenous governments and organizations, as well as non-government organizations, asking for an addition to the definition of hydraulic fracturing fluid. Bills 36 and 37 propose a comprehensive definition for hydraulic fracturing, including the requirement that the cubic metre volume of water injected into a well be measured. In their submissions, some stakeholders proposed to include the requirement to collect data on volume of fluids recovered from wells.

Committee agreed that knowledge of the volume of fluids recovered is important to better understand how much fluid may be left underground. Committee therefore moved Motion 5 to Bill 36 and Motion 2 to Bill 37 to amend the definition of hydraulic fracturing fluid information to be collected and to include information on the fluid recovered from wells.

In the context of hydraulic fracturing in the Northwest Territories, committee members discussed initiatives of past Legislative Assemblies. It was noted that, during the 17th Assembly, the Government of the Northwest Territories proposed to improve the regulatory framework by drafting new regulations. In its current mandate, the Government of the Northwest Territories committed to "ensure that residents have meaningful opportunities to participate in the assessment of potential benefits and risks associated with resource development, including hydraulic fracturing."

Committee is making the observation that the Government of the Northwest Territories has chosen to address mandate commitment 1.1.10 through the amendment of its oil and gas legislation and presentation of Bill 36 and Bill 37.

Mr. Speaker, I would like to turn over the next part of the report to the honourable Member for Kam Lake. Mahsi.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Kam Lake.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Speaker. Thank you, colleagues.

Public Hearings by the Regulator in Bill 37

Bill 37 proposes that the regulator be authorized to hold public hearings, however, leaves it to the discretion of the regulator to determine when a public hearing would be in the public interest. Committee members discussed regulatory practices in the Northwest Territories, where public hearings are obligatory. In resource development, thresholds are set, for example, for various types of water use and waste disposal, which determine when public hearings must be advertised and conducted.

Committee is of the view that the regulator should establish a threshold to identify when public hearings should be conducted. This would create consistency and certainty for applicants and other stakeholders as to when public hearings must take place. It would also allow consistency with other regulators and their approach.

Committee prepared a motion proposing that a subclause be added to require that the regulator issue and publish guidelines setting out the circumstances in which a public hearing must be held. The Minister did not concur on this motion.

Clause-by-Clause Review of Bills 36 and 37

The clause-by-clause review of the bill was held on August 2, 2019. The committee thanks the honourable Minister of Industry, Tourism and Investment, and members of his staff, for their appearance before the committee.

At this meeting, the committee moved six separate motions to amend Bill 36, which were all concurred with by the Minister. Committee moved two separate motions to amend Bill 37, and one found concurrence by the Minister.

Committee moved the following motions to amend Bill 36:

Motion 1:

That clause 4 of Bill 36 be amended:

(a) in proposed clause 18 by striking out

"must be published in the Northwest Territories Gazette and in any other publication the Minister considers appropriate" and substituting "must be published in a timely manner in the Northwest Territories Gazette and on a website maintained by the department responsible for the administration of this act"; and

(b) in that portion of proposed clause 18.1 preceding paragraph (a), by striking out

"shall make publicly available" and substituting "shall publish, in a timely manner, on a website maintained by the department responsible for the administration of this act."

The motion was carried, and the Minister concurred. The bill will be amended accordingly.

Motion 2:

That clause 4 of Bill 36 be amended by adding the following after proposed clause 18.1:

8.2. A report prepared by the Minister under section 98 shall include a list of

(a) the notices published under section 18; and

(b) the information made available to the public under section 18.1.

The motion was carried and the Minister concurred. The bill will be amended accordingly.

Motion 3:

That clause 9 of Bill 36 be amended in that portion of proposed subclause 32(4) preceding paragraph (a), by striking out "extend the term of a significant discovery licence if" and substituting "extend the term of a significant discovery licence, for one or more terms of 15 years, if."

The motion was carried, and the Minister concurred. The bill will be amended accordingly.

Motion 4:

That clause 14 of Bill 36 be amended by striking out subclause (5) and substituting the following:

(5) Notwithstanding subsections (2) to (4), if the number of members of the board is fixed

(a) at five or less, the Minister shall appoint one member of the public to the board; or

(b) at six or more, the Minister shall appoint two members of the public to the board.

The motion was carried, and the Minister concurred. The bill will be amended accordingly.

Motion 5:

That clause 16 of Bill 36 be amended in proposed subclause 91(1) in the proposed definition "hydraulic fracturing fluid information" by adding the following after paragraph (k):

(k.1) the total volume of fluid, in cubic metres, recovered from the well,

The motion was carried, and the Minister concurred. The bill will be amended accordingly.

Motion 6:

That clause 16 of Bill 36 be amended by adding the following after proposed subclause 91(9):

(9.1) A report prepared by the Minister under section 98 shall include a list of the information made available to the public by the Minister under this section.

The motion was carried, and the Minister concurred. The bill will be amended accordingly.

Committee moved the following motions to amend Bill 37:

Motion 1:

That clause 5 of Bill 37 be amended by renumbering proposed clause 19.1 as subclause 19.1(1) and adding the following after that renumbered subclause:

(2) The regulator shall issue and publish guidelines setting out the circumstances in which a public hearing must be held.

The motion was carried by committee. The Minister did not concur. Not carried.

Motion 2:

That clause 7 of Bill 37 be amended in proposed subclause 22(1) in the proposed definition "hydraulic fracturing fluid information" by adding the following after paragraph (k):

(k.1) the total volume of fluid, in cubic metres, recovered from the well,

The motion was carried, and the Minister concurred. The bill will be amended accordingly.

Now I will turn the reading of this report over to the honourable Member for Yellowknife North. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Yellowknife North.

Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Speaker.

Conclusion

The committee commends the Minister for his willingness to work with committee to further amend Bill 36 and Bill 37 in response to public interest and to work collaboratively with committee on the amendments.

The committee thanks all those who took the time to appear before committee to share their thoughts on this legislation.

Following the clause-by-clause review, motions were carried to report Bill 36, An Act to Amend the Petroleum Resources Act, and Bill 37, An Act to Amend the Oil and Gas Operations Act, as amended and reprinted, as ready for consideration in Committee of the Whole.

Rule 100(5) of the Rules of the Legislative Assembly of the Northwest Territories requires Cabinet, in response to a motion by committee, to table a comprehensive response that addresses the committee report and any related motions adopted by the House. As required by this rule, committee usually includes a recommendation in each report, which is moved as a motion in the House, requesting a response from government within 120 days. Given that the 18th Legislative Assembly will dissolve prior to the conclusion of the 120-day time period allowed by the rules, committee has opted to forego this recommendation. Committee nonetheless requests, to the extent that it is possible before the dissolution of the 18th Assembly and for the public record, that government provide a response to this recommendation, even of a preliminary nature, that committee may publicly disclose.

This concludes the standing committee's review of Bills 36 and 37. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Reports of standing and special committees. Member for Yellowknife North.

Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Speaker. I seek unanimous consent to waive rule 100(4) and to have committee report 25-18(3), Standing Committee on Economic Development and Environment Report on the Review of Bill 36, An Act to Amend the Petroleum Resources Act, and Bill 37, An Act to Amend the Oil and Gas Operations Act, moved into Committee of the Whole for consideration later today. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. The Member is seeking unanimous consent to waive rule 100(4) to have Committee Report 25-18(3) moved into Committee of the Whole for consideration later today.

---Unanimous consent granted

Bill 36, An Act to Amend the Petroleum Resources Act, and Bill 37, An Act to Amend the Oil and Gas Operations Act is now moved into Committee of the Whole for consideration later today. Reports of standing and special committees. Member for Kam Lake.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Speaker. Your Standing Committee on Government Operations is pleased to present its Report on the Review of the Carbon Tax Bills, Bill 42, An Act to Amend the Petroleum Products Tax Act, and Bill 43, An Act to Amend the Income Tax Act, and commends it to the House.

INTRODUCTION

The Standing Committee on Government Operations ("the committee") is pleased to report on its review of Bill 42, An Act to Amend the Petroleum Products Tax Act, and Bill 43, An Act to Amend the Income Tax Act, collectively referred to as the carbon tax bills.

The carbon tax bills, sponsored by the Government of the Northwest Territories (GNWT) Department of Finance, were given second reading in the Legislative Assembly and referred to the Standing Committee on Government Operations for review on March 8, 2019. When passed, these bills will implement a carbon tax in the Northwest Territories.

Bill 42 proposes to amend the Petroleum Products Tax Act to:

  • Impose a carbon tax on petroleum products and natural gas;
  • Clarify that all existing provisions in the act related to the current fuel tax are noted as such;
  • Provide an exemption from the fuel tax for petroleum products delivered to or purchased by an Indian or Indian band on a reserve; or used by a designated municipal authority that is recognized by the Minister as representing a community;
  • Make the necessary amendments for collection and administration of this tax in the same manner as the current fuel tax, which requires purchasers to pay the tax, and vendors and collectors to remit the tax to the GNWT;
  • Allow the Minister to provide in regulations for rebates and grants;
  • Increase the maximum fines and penalties which may be imposed as administrative penalties or on summary conviction; and
  • Set out a process for the appeal of an assessment of tax, interest, or administrative penalties under the act.

Bill 43 proposes to amend the Income Tax Act to provide a cost-of-living offset as a mechanism for returning carbon tax revenues to Northwest Territories residents.

Bill 43 also proposes to amend the Income Tax Act to make changes in non-refundable tax credits claimed by multi-jurisdictional tax filers, including changes that restrict the Northwest Territories pension credit to NWT residents and changes that allow full pension and dividend credits to be claimed by NWT residents with business income earned outside the Northwest Territories.

This amendment, which is not related to the implementation of the carbon tax, arises out of discussions between the Department of Finance and the Canada Revenue Agency aimed at harmonizing the provincial-territorial tax treatment of pension and dividend tax credits for multi-jurisdictional tax filers. It will have the effect of denying NWT pension credits to non-residents with business income earned in the NWT and allowing full pension and dividend tax credits to NWT residents with business income earned outside the NWT.

BACKGROUND

As a signatory to the Pan-Canadian Framework on Clean Growth and Climate Change, the GNWT made a commitment to implement carbon pricing in the Northwest Territories. This tax on fuels that emit greenhouse gases (GHGs) is intended to encourage residents and businesses in the Northwest Territories to reduce fuel consumption. Along with the provinces and other territories, the GNWT was given the option by the federal government to implement its own approach to carbon pricing, provided that approach is consistent with the federal approach. For those jurisdictions choosing not to implement their own approach, Canada advised that it would impose its approach, often referred to as the "federal backstop." The GNWT opted to implement its own approach to carbon pricing, the details of which were publicly released in July 2018.

Lack of Meaningful Engagement with Committee

The GNWT communicated early and frequently with committee on this work as it progressed, including providing three presentations on the GNWT's proposed approach prior to its public release. The first of these took place in June 2017, prior to the public release of the GNWT's Discussion Paper on Implementing Pan-Canadian Carbon Pricing in the Northwest Territories. During this time period, committee wrote twice to the Finance Minister raising concerns that the GNWT's approach did not set out options for public debate; the proposed 75 percent direct rebate for large emitters was too high; there was no rebate or special measures for small businesses; and the policy objectives of the carbon tax were not clearly articulated.

According to the GNWT's plain-language summary of Bill 42, the "federal government reviewed and approved the planned approach in September 2018, and Bill 42 and Bill 43, which are needed to implement carbon pricing, were tabled in the NWT Legislative Assembly in March 2019." Committee was not advised that the federal government had "approved" the planned approach in September, which occurred while the committee was in the process of considering the legislative proposal for the carbon tax bills.

In November 2018, the committee again wrote to the government, advising that it does not support the proposal in its current form and reiterating its concerns that the 75-percent rebate for large emitters is too high and that there are no specific measures for small businesses. To this, committee added its concern that the rebates to individuals can only be claimed by filing taxes. Committee also expressed its concern that there was no indication from government as to whether or not the carbon tax legislation would mandate public reporting to enable transparency, increase public awareness of how the tax revenue is being used, and measure the impact of the carbon tax on emissions in the NWT.

While the GNWT was very forthcoming with respect to its discussions with the federal government on the GNWT's proposed approach, there was little actual engagement with committee to allow Regular Members to have input into the development of this approach. As noted, committee wrote several letters to the Minister raising committee's concerns with the proposed approach. In retrospect, committee does not feel that its input was given due consideration, nor was it made clear to committee that the information being shared was for information purposes only and that the input of Regular Members was not being sought.

Committee understands that the GNWT's proposed approach to carbon pricing in the Northwest Territories was negotiated with the federal government, leaving little room for input from Regular Members once that process had commenced. The lesson here, from the committee's perspective, is that earlier engagement of Regular Members, including engagement on the discussion of whether or not the GNWT should pursue its own approach, should have taken place.

This would have afforded Members the opportunity to debate issues such as the relative merits of differing policy approaches to reducing greenhouse gas emissions, such as a cap-and-trade system versus a carbon tax. It would have also allowed for dialogue about lessons learned from other jurisdictions such as British Columbia, which has had a carbon tax in place since 2008 and where the Minister is required to present annual plans to the provincial legislature setting out the amount of tax revenue anticipated.

Bills 42 and 43 were introduced in the Legislative Assembly, given first and second reading, and referred to committee for review on March 8, 2019.

Now, Mr. Speaker, I will turn the reading of this report over to the honourable Member for Sahtu.