Good morning, Mr. Chairperson and members of the committee.
My name is Bob Bleaney. I'm the vice-president of external relations for the Canadian Association of Petroleum Producers, or CAPP.
CAPP represents Canada’s upstream oil and gas sector. Our members find and develop about 90% of Canada’s oil and natural gas resources all across the country. Together, they invest over $60 billion annually and employ more than 550,000 people across Canada.
We appreciate the opportunity to contribute our perspectives regarding Bill C-15, the Northwest Territories devolution act. This is a historic bill, as the people of the Northwest Territories are set to take control of the future path of the development of the abundant natural resources in their region.
As you are aware, the bill was tabled in early December last year. Although we are still in the process of assessing all its implications, we can say that CAPP supports the intent and the spirit of Bill C-15 and views it as a positive step that will aid northern development.
To date, CAPP has primarily focused its review on part 4 of the bill, relating to the proposed amendments to the Mackenzie Valley Resource Management Act, or the MVRMA.
The federal government’s initiatives for regulatory reform have been a positive step forward towards improving regulatory efficiency and effectiveness while ensuring a continued high standard of environmental performance. Extending these reforms into the Northwest Territories will be important for attracting and enabling investment that creates jobs, economic growth, and prosperity for the Northwest Territories and all Canadians.
Regulatory process bottlenecks in the past have often led to project delays or outright cancellations, with the resulting adverse effects on economic and social benefits that could flow from these projects. Accordingly, CAPP is strongly supportive of the government’s objectives to improve the efficiency and the effectiveness of the northern regulatory regime.
The MVRMA is a core piece of regulatory legislation in the Northwest Territories, and the proposed changes to this are very important to our industry. For example, the ability for the minister to give binding policy direction to all MVRMA boards, including the land and water boards, the land use planning boards, and the environmental impact review boards should provide for a more cohesive, unified, and comprehensive review process, one that should be a benefit to all parties involved.
CAPP fully respects existing comprehensive land claim agreements and aboriginal treaty rights and supports the federal government’s protection of the these agreements and rights in the proposed amendments.
CAPP's view is that the regulatory bodies in the north should be efficient, timely, and ensure regional knowledge is appropriately considered in the review process. In this vein, we support the accommodation measure in the MVRMA that requires the chair of the Mackenzie Valley Land and Water Board to consider the inclusion of regional nominees when committees are dispatched to address proposed projects. This will be particularly important in respect of the proposed board amalgamation, in order to retain regional representation in their process.
The proposed clarification of timelines for the environmental impact assessment process is also a very positive step. The historical lack of predictability—and the resulting uncertainty—of review timelines for project proposals in the central Mackenzie Valley has been a significant concern for project proponents.
Investment and operational decisions benefit from a predictable review process, particularly as to review scope and timing. This is essential for being able to manage work activities to fit within the limited seasonal operational windows that exist in the north. Unexpected delays in the timing of authorizations can disrupt project plans, which can translate, as I mentioned, to serious delays and missed opportunities.
Critical path decisions and investment timelines have been a systemic challenge to the north and are especially pronounced when compared to timelines in competing oil and gas jurisdictions. Our industry is global in scale, and northern oil and gas exploration and development projects have to aggressively compete for limited investment dollars against opportunities elsewhere in Canada and around the world. Reducing the risks and uncertainties in project review timelines, as proposed in this legislation, will serve to improve northern competitiveness.
Devolution of federal responsibilities to the Northwest Territories, coupled with increased exploration interest, facilitates the opportunity to make the needed improvements to regulatory efficiency and effectiveness. The transition stage from April 1 forward will be a crucial time.
CAPP appreciates the mirroring of the federal legislation that’s been mandated by the devolution agreement, which will support stability, continuity, and predictability of the regulatory regime through this transition.
Such a regime is fundamental to creating a positive environment for investment, which creates jobs and economic growth, and tax and royalty revenues to government. Industry invested about $600 million in the north over the past three years, and is expected to spend an additional $650 million based on existing land commitments alone. An improved regulatory framework should help to stimulate further investment.
The north is a key area of interest to our industry, an area of vast oil and gas potential but not without its challenges, which makes regulatory effectiveness and efficiency that much more crucial to success. Being a frontier area, there is a lack of infrastructure, likely the most limiting factor for exploration and development work in this region, whether it be with regard to physical infrastructure, like roads or pipelines or facilities; community infrastructure with respect to housing and recreation; workforce availability; or service sector support.
Although there is large resource potential, most of these resources await confirmation as to whether they are economically viable, and timely assessment through exploration will be key to their realization.
I should also note that the north is not alone in its challenges. Whether in producing jurisdictions such as B.C., Alberta, Saskatchewan, and the Atlantic Canada offshore, or potential new development areas, such as Quebec, New Brunswick and the Atlantic onshore, there are common challenges facing Canadian oil and gas development. They include access to domestic, North American, and other international markets; competitiveness in the areas of fiscal and regulatory policies; workforce availability; access to precious investment capital; and having the social license to operate with respect to public confidence and trust.
With devolution set to go live April 1, 2014, and the related legislative changes through Bill C-15, there is a historic opportunity for the Northwest Territories to start to address these challenges and advance its vision for oil and gas development. There will be ongoing regulatory work needed to be done to achieve this vision, as it will remain important to ensure the timely implementation of related changes to regulations and policies to support this legislative intent.
In closing, CAPP supports the federal government in its efforts to improve the regulatory framework in the Northwest Territories. These amendments have been under development and consulted upon for a number of years as part of AANDC's action plan on northern regulatory improvement. These amendments are a positive step forward on the long road towards expanded oil and gas exploration and development in the Northwest Territories.
We look forward to continuing to consult with the Northwest Territories and federal governments to work together to help this vision become a reality. I’d like to thank you for this opportunity to present to you today. I look forward to your questions.