Devolution of Resource Management in Northwest Territories on April 1, 2014

Authors: Sarah V. Powell and Alexandria J. Pike

Bill C-15, the Northwest Territories Devolution Act (the Act), received Royal Assent on March 25, and the transfer of responsibilities from the federal government to the government of the Northwest Territories is to take effect on April 1, 2014. Devolution to the N.W.T. government has occurred gradually since its establishment in 1967, and the Act significantly advances the process, resulting in the territorial legislature having powers roughly equivalent to those of a province. Most significantly, the N.W.T. government will assume management of most of the public lands, resources and waters in the N.W.T. that are currently under the oversight of Aboriginal Affairs and Northern Development Canada.

Following devolution under the Act, the N.W.T. government will administer new leases and mineral rights, but existing interests will not be impacted. In particular, the N.W.T. government will have jurisdiction to:

  • Lease public lands, and grant exploration and production rights for petroleum and mineral resources;
  • Decide on certain final water licence and environmental approvals (including Type A water licences required for mining activities);
  • Collect resource royalties and proceeds from sales of public lands and revenue-share with Aboriginal governments (with related changes to federal transfers, the N.W.T. government will retain 50% of resource revenue); and
  • Regulate oil and gas activities in the Mackenzie Valley (except for the Norman Wells Proven Area, which will remain federally administered but with royalties going to the N.W.T. government).

The federal government will retain management of contaminated sites and lands and infrastructure for which there is a national interest. The federal National Energy Board will continue to administer offshore oil and gas development, as well as to regulate oil and gas activities in the Inuvialuit Settlement Region. In the Mackenzie Valley, permits for land and water use, as well as environmental reviews, will continue to be governed under the existing federal statute, the Mackenzie Valley Resource Management Act. However, the Act amends the Mackenzie Valley land and water permitting regime, restructuring the governance model and imposing new timelines for water licensing and environmental reviews. Certain Aboriginal groups oppose the new governance structure, indicating that they may challenge the changes as inconsistent with their treaty rights.

Resource companies with interests in N.W.T. will want to closely monitor the devolution process with respect to impacts on permitting requirements and Aboriginal relations.

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