Canada Gazette, Part I, Volume 152, Number 48: Black Lake First Nation Water Power Regulations

December 1, 2018

Statutory authorities
First Nations Commercial and Industrial Development Act
Dominion Water Power Act

Sponsoring departments
Department of Indigenous Services Canada
Department of Indian Affairs and Northern Development

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In June 2015, the Black Lake First Nation submitted a proposal to the Department of Indian Affairs and Northern Development requesting the development of regulations under the First Nations Commercial and Industrial Development Act to enable the development and operation of a diversion-type hydroelectric facility on the Black Lake First Nation reserve lands. Without the proposed Black Lake First Nation Water Power Regulations (the proposed Regulations), the construction of such a project could not proceed.

The proposed Regulations, made pursuant to the First Nations Commercial and Industrial Development Act, are necessary for two reasons. First, most provincial regulations do not apply on First Nation lands, as they fall under the jurisdiction of the federal government in accordance with subsection 91(24) of the Constitution Act, 1867. This leads to a regulatory gap between the regulations of similar projects on- and off-reserve where there are no existing federal regulations that would apply on-reserve. Second, water power is regulated both provincially by The Water Power Act and its associated Regulations, and federally by the Dominion Water Power Act and its regulations. Because the Fond du Lac River flows through Black Lake First Nation reserve land, it is unclear whether the water power generated by a project would be regulated provincially or federally.

A lack of adequate regulations and/or uncertainty around which regulations apply for industrial and commercial development on federally regulated reserve land can discourage investment in large projects and hinder economic development.

Background

Increasingly, First Nations across Canada are developing plans for complex commercial and industrial development projects on-reserve. These projects have economic benefits such as employment and business opportunities for First Nation members, and create significant ongoing revenue for First Nation governments. Large-scale industrial projects contribute to the economy of the surrounding region, providing employment opportunities and generating tax revenues that benefit all Canadians.

In 2006, the First Nations Commercial and Industrial Development Act came into force to facilitate economic development on-reserve. It enables the Government of Canada to create a regulatory regime for a specific project, on a specific piece of reserve land, by replicating or incorporating by reference relevant provincial laws and regulations. In practice, this means that projects under the First Nations Commercial and Industrial Development Act are required to meet standards that are substantially similar to those that apply in the rest of the province where the reserve is located. The use of the First Nations Commercial and Industrial Development Act removes legal uncertainty and risk, enhancing confidence for First Nation people, investors, developers and the public by ensuring that they are dealing with regulations and regulators that they know and understand.

The First Nations Commercial and Industrial Development Act requires that a tripartite agreement be entered into prior to the making of regulations. This tripartite agreement ensures that provincial officials can perform administrative, monitoring, compliance and enforcement activities with respect to a hydroelectric facility on specified reserve lands. Provincial departments and agencies would perform these activities as they do for similar projects located off-reserve.

A tripartite agreement between Canada, Saskatchewan, and the First Nation, as required under the First Nations Commercial and Industrial Development Act, was developed and sets out the agreement between the parties for the administration and enforcement of the proposed Regulations by provincial officials and bodies.

The Saskatchewan Water Security Agency, as the organization representing the Government of Saskatchewan, has participated in the negotiations of the tripartite agreement between Canada, Saskatchewan, and the First Nation. The proposed Regulations, together with the tripartite agreement, would create a comprehensive regulatory regime for a hydroelectric project on Black Lake First Nation reserve land. Enacting the proposed Regulations would provide stability to private sector investors looking to build and operate a hydroelectric facility.

Objectives

The objectives of the proposed Regulations are to

Description

The proposed Regulations would create site-specific regulations for the construction and administration of a hydroelectric project on the Chicken Indian Reserve No. 224 in Saskatchewan. It would also ensure that environmental, health and safety, and other related impacts common to hydroelectric production projects of this nature are effectively managed throughout the life of an on-reserve project. The proposed Regulations would provide a comprehensive regulatory regime through the incorporation by reference, with some minor adaptations, of the regulatory regime of the Province of Saskatchewan applicable to hydroelectric facilities located on provincial land. Minor adaptations are typically required in order to clarify that a project is taking place on reserve land, under the jurisdiction of the federal Crown, rather than under the jurisdiction of the provincial Crown.

Some of the key areas that the regulatory proposal would address include

"One-for-One" Rule

The "One-for-One" Rule does not apply, as the proposed Regulations would not impose new administrative burden on business.

The proposed Regulations would be enabling in nature and allow business to carry out this activity by incorporating the existing provincial regulatory regime. The costs of complying with the proposed Regulations would be equal to costs to proponents if the project was located on lands subject to provincial jurisdiction.

Small business lens

The proposed Regulations would only apply to a hydroelectric project on the site-specific lands, which would initiate business development opportunities, rather than impose new burdens or costs on existing small businesses. Existing small businesses could benefit from increased commercial activity associated with the project. As a result, the small business lens does not apply to this proposal.

Consultation

Opposition to the proposed Regulations is not expected. The three parties to the tripartite agreement — Canada, Saskatchewan, and the Black Lake First Nation — have been involved throughout the planning, negotiation and drafting of the agreement and the proposed Regulations.

Black Lake First Nation community members provided their support by approving the project in a referendum held in November 2015. On May 4, 2017, in accordance with the First Nations Commercial and Industrial Development Act, the First Nation passed a Band Council Resolution requesting that the Minister of Indian Affairs and Northern Development recommend to the Governor in Council the making of the proposed Regulations.

Support from surrounding communities is expected to be high, given the auxiliary benefits a hydroelectric project would bring to the area. For example, the community of Stony Rapids, a hamlet of northern Saskatchewan, with a population of about 250 people, is located on the Fond du Lac River, 82 km south of the Northwest Territories border, and about 20 km north of the Black Lake First Nation. The construction and operation of a hydroelectric project would provide a bridge across the Fond du Lac River, and improved roads which would offer greater mobility in this area of the province moving north toward Uranium City. There may also be employment opportunities for residents of Stony Rapids during the construction phase of a Black Lake hydroelectric project.

Stony Rapids and other communities and local organizations were consulted as part of the federal environmental assessment for a project, over several stages between January 2013 and June 2015. The Canadian Environmental Assessment Agency conducted the assessment in accordance with the Canadian Environmental Assessment Act, 2012. The Agency assessed the potential for the proposed project to cause significant adverse effects on the following components:

As part of the assessment process, the Canadian Environmental Assessment Agency provided four separate opportunities for public comment, at different stages:

  1. Project description summary
  2. Draft environmental impact statement guidelines
  3. Environmental impact statement summary
  4. Draft environmental assessment report

In total, 11 comments were received by the Canadian Environmental Assessment Agency, from an individual, a fishing lodge (Camp Grayling), and three First Nations in the region, including the Black Lake Denesuline First Nation, the Hatchet Lake Denesuline First Nation, and the Fond du Lac Denesuline First Nation. The comments expressed concerns about fish and fish habitat, vegetation, wildlife, and the cumulative environmental impacts of the proposed project, among other areas. In response, over 40 mitigation and monitoring follow-up practices were proposed.

The Canadian Environmental Assessment Agency considered the input from the consultations, including the public comments and responses provided, and issued an environmental assessment report and a decision statement on July 31, 2015. The Agency supported the proposed project, concluding that it is not likely to cause significant adverse environmental effects if key mitigation measures are implemented. The Environmental Assessment Report is available online. No significant opposition to a hydroelectric project is expected on environmental or other grounds. A reconfirmation of the environmental assessment report may be required once a hydroelectric project is under way.

Rationale

The proposed Regulations would allow a hydroelectric project to proceed by creating certainty as to which regulations apply on the project lands. The proposed Regulations accomplish this goal by allowing Canada and Saskatchewan to set aside the outstanding jurisdictional question regarding ownership of the water and water power without having to undertake a potentially long and costly court process to resolve the issue. Despite ambiguity over who owns the water and water power, both the province and the federal government agree that the benefits of the proposed Regulations and the development of a hydroelectric project are significant. The solution agreed to by the parties in respect of this jurisdictional question is set out in the tripartite agreement.

The Black Lake First Nation has about 1 500 members living on-reserve. According to the 2011 Census, the population has a 28.6% employment rate and a median age of 22.5 years. It was estimated that a hydroelectric project could create close to 250 jobs during the construction phase and 8 permanent positions to operate the facility. Jobs and training in engineering, heavy equipment operation, masonry, bridge building, and electricity provided to First Nation members by a hydroelectric project would provide much-needed opportunities in northern Saskatchewan, a geographic area where there are currently very few opportunities. Some trades training has already taken place through an agreement between the First Nation, SaskPower, and Northlands College, thus positioning members in the community to fill many jobs required during the construction phase.

The revenues that would flow to the First Nation from a hydroelectric project could also allow the community to pursue other projects of its own choosing, which would further allow First Nation members to make use of the training they would receive as part of a hydroelectric project. Jobs would also be open to residents of surrounding communities, thereby providing benefits not only to those individuals, but also to the provincial and federal governments through an increased tax base.

This hydroelectric facility would provide the Black Lake First Nation, and to a lesser extent the surrounding communities, with significant economic and social benefits in the form of employment, business development opportunities, and a reliable source of electricity, which helps to reduce the reliance on less environmentally friendly energy producers such as fossil fuels.

The proposed Regulations incorporate by reference essential elements of the provincial regime, creating regulatory compatibility between similar projects on- and off-reserve, thus ensuring that a project would be adequately regulated in areas such as environmental management and protection, the handling of hazardous substances, employment, and the application of uniform building and accessibility standards. The resulting seamless regulatory regime would benefit the Government of Saskatchewan by providing clean and reliable energy to remote northern communities, businesses, and households. It would also provide assurance to the general public that the hydroelectric development would be adequately regulated on the basis of industry-wide standards and long-held best practices, and that risk to citizens and to the environment, on- and off-reserve, would be minimized.

The proposed regulatory approach of incorporation by reference would be significantly more cost effective than developing a new federal regulatory regime that would also run the risk of introducing ineffective or unmanageable compliance and enforcement mechanisms. With the provincial government administering and monitoring hydroelectric operations, the proponent would be required to report to the provincial authority with a few exceptions, thereby alleviating the administrative reporting burden, which in turn would generate cost savings for the Government of Canada. Provincial officials would administer and monitor much of the activity of the hydroelectric operations using the standards and practices for hydroelectric facilities off reserve land. As a result, the proponent would not carry more administrative burden than what would be expected if the on-reserve project were located off-reserve. Employing the existing provincial resources would generate secondary cost savings for the Government of Canada because the existing provincial infrastructure would be used to administer and monitor the hydroelectric facility as is done on provincial lands.

Making the proposed Regulations does not necessitate that a project move forward; rather, it enables a project to proceed on the Black Lake First Nation lands. Therefore, there would only be secondary costs and economic benefits for the Province of Saskatchewan once a hydroelectric project comes to fruition. The proposal is site-based and would facilitate a particular type of project; therefore, there are no direct costs to the federal government, to Canadians or to industry at large. In addition, capital and operating costs of the actual hydroelectric operations have not been included, as they would not be costs resulting from the creation of the proposed Regulations.

Creating the proposed Regulations would contribute to the Government of Canada's strategic outcome of facilitating the sustainable use of First Nation lands and resources. The proposed Regulations would allow for the adoption of a modern, robust regulatory regime that would close the regulatory gap for this diversion type hydroelectric development as it exists between federal and provincial lands.

To date, the Black Lake First Nation, the Province of Saskatchewan and the Government of Canada have invested significant time and resources into the development of the proposed Regulations and the tripartite agreement. As with previous regulatory submissions under the First Nations Commercial and Industrial Development Act, a Band Council Resolution is required before the proposed Regulations are implemented. Each regulatory project under the First Nations Commercial and Industrial Development Act also requires a tripartite agreement between the First Nation, the province where the First Nation is located, and the federal government.

Non-regulatory options were not considered, as they would not allow for the effective management of a project of this nature on-reserve.

Implementation, enforcement and service standards

One of the primary reasons for the development of the proposed Regulations is to establish a full range of regulatory compliance and enforcement mechanisms identical to those for hydroelectric power generation facilities off-reserve in the Province of Saskatchewan. The proposed Regulations would include the following mechanisms for encouraging compliance and for detecting and penalizing non-compliance:

Compliance and enforcement provisions would replicate provisions in the regulatory regime of the Province of Saskatchewan that apply to similar projects off-reserve.

To summarize, the proposed Regulations replicate, with minor adaptations, the provincial regime, and give provincial officials the authority to administer, monitor and enforce the regulatory regime.

Under the tripartite agreement associated with these proposed Regulations, a management committee composed of representatives of the Government of Canada, the Province of Saskatchewan and the Black Lake First Nation would be established to monitor performance, address potential issues, and propose changes as required.

Contact

Marc Boivin
Director
Policy, Research and Legislative Initiatives
Crown-Indigenous Relations and Northern Affairs Canada
10 Wellington Street, Floor 17
Gatineau, Quebec
K1A 0H4
Telephone: 819-994-6735
Fax: 819-994-4345
Email: marc.boivin@canada.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to section 3 footnote a of the First Nations Commercial and Industrial Development Act footnote b and paragraph 15(d) of the Dominion Water Power Act footnote c, proposes to make the annexed Black Lake First Nation Water Power Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Marc Boivin, Director, Policy, Research and Legislative Initiatives Directorate, Crown-Indigenous Relations and Northern Affairs Canada, 10 Wellington Street, 17th Floor, Gatineau, Quebec K1A 0H4 (tel.: 819-994-6735; fax: 819-994-4345; email: marc.boivin@canada.ca).

Ottawa, November 22, 2018

Jurica Čapkun
Assistant Clerk of the Privy Council

Black Lake First Nation Water Power Regulations

Interpretation

Definitions

1 The following definitions apply in these Regulations.

Provincial – The Interpretation Act, 1995

2 The incorporated laws are to be interpreted in accordance with the Saskatchewan statute The Interpretation Act, 1995, S.S. 1995, c. I-11.2, as amended from time to time, and, for that purpose, references to "enactment" in that Act are to be read to include the incorporated laws.

Other expressions

3 For greater certainty, the adaptations in sections 13 to 34 are to be interpreted to be part of the incorporated laws to which they apply.

Application of Laws

Incorporation by reference

4 Subject to section 5, the incorporated laws apply to the project.

Restriction – laws in force

5 (1) A provision of an incorporated law applies only if the provision of the law of Saskatchewan that it incorporates is in force.

Restriction – limits of authority

(2) For greater certainty, an incorporated law applies only to the extent that it is within the limits of federal constitutional authority.

Incorporation of procedural matters

6 (1) Unless otherwise provided and subject to any adaptations set out in sections 13 to 34, the following are to conform to the laws of Saskatchewan, whether or not those laws have been set out in Schedule 2:

Related powers

(2) For the purposes of subsection (1), a person or body that has a power, duty or function under a law of Saskatchewan has the same power, duty or function in respect of any actions taken under that subsection.

Offences and penalties

7 (1) If contravention of a law of Saskatchewan that is incorporated in these Regulations is an offence under the laws of Saskatchewan, contravention of the incorporated law is also an offence and is subject to the same penalties as under the laws of Saskatchewan.

Violations and administrative monetary penalties

(2) If contravention of a law of Saskatchewan that is incorporated in these Regulations is a violation under the laws of Saskatchewan, contravention of the incorporated law is also a violation and is subject to the same administrative monetary penalties as under the laws of Saskatchewan.

Financial requirements under lease

8 If the incorporated laws require a cash deposit or other financial security to be given, those requirements do not displace, but instead apply in addition to, the requirements of any lease of the project lands in relation to cash deposits or other financial security.

Inapplicable Federal Regulations

Exclusion

9 The Dominion Water Power Regulations, the Indian Reserve Waste Disposal Regulations and the Indian Timber Regulations do not apply to the project.

Use and Occupation of Land

Lease, permit or easement

10 The Minister of Indian Affairs and Northern Development may issue leases or permits or grant easements for the purpose of carrying out the project.

Water Rental

Payment

11 (1) The water rentals required to be paid in respect of the project under The Water Power Rental Regulations, as incorporated and adapted by these Regulations, are to be paid in the following proportions:

Use and benefit

(2) The water rentals paid to Her Majesty in right of Canada are to be for the use and benefit of the Black Lake First Nation.

Transitional Provision

Survival of rights

12 Any licences, permits, authorizations, orders or exemptions — including any amendments to them — issued by a provincial official in relation to the project before the day on which these Regulations come into force are to be considered to have been issued under these Regulations and to be valid for the purposes of these Regulations.

Adaptations Applicable to Incorporated Laws

Statutes and regulations of Saskatchewan

13 Unless otherwise indicated, the statutes and regulations referred to in sections 18 to 34 are statutes and regulations of Saskatchewan.

Reference to Crown

14 For greater certainty, in the incorporated laws,

Interpretation of incorporated laws

15 (1) Incorporated laws are to be read without reference to any of the following:

Interpretation of incorporated laws

(2) Despite paragraph (1)(b),

Specified persons, officials and bodies

(3) For greater certainty, a person, provincial official or provincial body that has a power, duty or function under a law of Saskatchewan incorporated by reference in these Regulations has the same power, duty or function under these Regulations, subject to the adaptations set out in sections 18 to 34.

Interpretation of incorporated laws

(4) For greater certainty, if a law of Saskatchewan is adapted by these Regulations, a reference to that law in an incorporated law, or in any notice, form, instrument or other document issued under an incorporated law, is to be read as a reference to that law as adapted by these Regulations.

Limitation on searches and inspections

16 A power to conduct searches or inspections under an incorporated law, including the power to enter a place, does not include a power to enter or search, or to inspect anything in, a federal government office, without the consent of the person who is or appears to be in charge of that office.

Limitation on production of documents

17 A power to seize, remove or compel the production of documents under an incorporated law does not include a power to seize, remove or compel the production of a document in the possession of the federal government, without the consent of the person in possession of the document.

Adaptations to Incorporated Laws

The Environmental Management and Protection Act, 2010

Adaptation to subsection 13(2)

18 In subsection 13(2) of The Environmental Management and Protection Act, 2010, a reference to "owner" is to be read as a reference to Her Majesty in right of Canada and the Black Lake First Nation.

Adaptation to subsection 34(2)

19 (1) Subsection 34(2) of the Act is to be read as follows:

(2) If the minister is satisfied that any sewage works will adversely affect any land other than the project lands, the minister shall provide a written request to the permit holder requiring the permit holder to:

Adaptation to subsection 34(4)

(2) In subsection 34(4) of the Act, a reference to "subsection (2)" is to be read as a reference to "clause (2)(a)".

Adaptation to paragraph 50(1)(a)

20 Paragraph 50(1)(a) of the Act is to be read as follows:

The Environmental Management and Protection (Saskatchewan Environmental Code Adoption) Regulations

Adaptation to paragraph 1-7(1)(a)

21 (1) In paragraph 1-7(1)(a) of Chapter B.1.1 of the Appendix to The Environmental Management and Protection (Saskatchewan Environmental Code Adoption) Regulations, a reference to "owner " is to be read as a reference to Her Majesty in right of Canada and the Black Lake First Nation.

Adaptation to paragraph 1-7(2)(a)

(2) In paragraph 1-7(2)(a) of Chapter B.1.1 of the Appendix to the Regulations, a reference to "owner of adjacent land" is to be read as a reference to Her Majesty in right of Canada and the Black Lake First Nation.

Adaptation to paragraph 1-8(2)(a)

22 In paragraph 1-8(2)(a) of Part 1 of Chapter B.1.2 of the Appendix to the Regulations, a reference to "owner" is to be read to include Her Majesty in right of Canada and the Black Lake First Nation.

Adaptation to paragraphs 3-2(a) and 3-3(b)

23 In paragraphs 3-2(a) and 3-3(b) of Part 3 of Chapter C.3.1 of the Appendix to the Regulations, a reference to "landowner" is to be read to include Her Majesty in right of Canada and the Black Lake First Nation.

The Ground Water Regulations

Adaptation to subsection 26(1)

24 In subsection 26(1) of The Ground Water Regulations, a reference to "landowner" is to be read to include Her Majesty in right of Canada.

The Hazardous Substances and Waste Dangerous Goods Regulations

Adaptation to subparagraph 15(1)(b)(i)

25 In subparagraph 15(1)(b)(i) of The Hazardous Substances and Waste Dangerous Goods Regulations, the reference to the ""National Fire Code of Canada, 1990", as revised, amended or substituted at the date of the coming into force of this subclause" is to be read as a reference to the ""National Fire Code of Canada, 2010", as amended from time to time".

The Saskatchewan Employment Act

Adaptation to paragraph 3-1(1)(t)

26 The definition owner in paragraph 3-1(1)(t) of The Saskatchewan Employment Act is to be read as follows:

"owner" means:

The Uniform Building and Accessibility Standards Act

Adaptation to paragraph 2(1)(j.1)

27 (1) The definition land surveyor in paragraph 2(1)(j.1) of The Uniform Building and Accessibility Standards Act is to be read as follows:

Adaptation to paragraph 2(1)(k)

(2) The definition local authority in paragraph 2(1)(k) of the Act is to be read without reference to "or" at the end of subparagraph (ii), with reference to "or" at the end of subparagraph (iii) and with reference to the following after subparagraph (iii):

Adaptation to subsection 21(3)

28 Subsection 21(3) of the Act is to be read without reference to "and may be added to the tax payable on the property and collected in the same manner as taxes on the property".

The Uniform Building and Accessibility Standards Regulations

Adaptation to subsection 11(1)

29 Subsection 11(1) of The Uniform Building and Accessibility Standards Regulations is to be read without paragraph (c).

The Water Power Regulations

Adaptation to section 11

30 (1) Section 11 of The Water Power Regulations is to be read with the following after subsection (1):

Adaptation to subsection 11(3)

(2) Subsection 11(3) of the Regulations is to be read as follows:

Adaptation to section 11

(3) Section 11 of the Regulations is to be read with the following after subsection (5):

The Water Power Rental Regulations

Adaptation to subsection 3(1)

31 (1) Subsection 3(1) of The Water Power Rental Regulations is to be read as follows:

Adaptation to subsection 3(4)

(2) Subsection 3(4) of the Regulations is to be read as follows:

Adaptation to subsection 3(8)

(3) The portion of subsection 3(8) of the Regulations before paragraph (a) is to be read as follows:

Adaptation to subsection 3(9)

(4) Subsection 3(9) of the Regulations is to be read as follows:

Adaptation to section 3

(5) Section 3 of the Regulations is to be read with the following after subsection (12):

The Waterworks and Sewage Works Regulations

Adaptation to section 72

32 In section 72 of The Waterworks and Sewage Works Regulations, a reference to "clause 34(2)(a)" is to be read as a reference to "subclause 34(2)(a)(i)".

Coming into Force

Registration

33 These Regulations come into force on the day on which they are registered.

SCHEDULE 1

(Section 1)

Project Lands

All surface lands within Chicken Indian Reserve No. 224, Province of Saskatchewan, depicted as Surface Zone A on Administrative Area Plan 104899 filed in the Canada Lands Surveys Records.

SCHEDULE 2

(Section 1, subsection 6(1) and paragraph 15(1)(e))

Incorporated Laws