Royalty review excludes Aboriginal resource revenue sharing

February 1, 2016

The results of a royalty review released late last week by a government-appointed committee give no indication as to where Aboriginal communities stand with the province on resource revenue sharing.

“It’s disappointing,” said Assembly of First Nations Alberta Regional Chief Craig Mackinaw.

The only reference to resource revenue sharing with Indigenous peoples comes in a section entitled “Other matters raised with our panel,” and states, “Representatives of First Nations and Metis communities consistently represented the issue of sharing resource revenues with their communities. There are outstanding and serious concerns about the impact that energy development activities have on their communities. These concerns could be added to other discussions undertaken by the government.”

“Their comments I think were a little too vague. They could have been more specific on what they meant by that,” said Mackinaw, adding there is no timeframe offered as to when those discussions should take place and no reference made as to what resource revenue sharing could look like.

And, as far as the Regional Chief is concerned, the committee did a poor job in getting input from First Nations when carrying out the review.

“The only notice I got was having a town hall-type meeting and that’s not really discussing the issues to the specifics,” said Mackinaw.

According to the report, First Nations and Metis groups were included as part of three “expert” groups, which helped the panel understand the existing royalty framework as well as how to optimize the framework to meet the panel’s mandate, which was to ensure Alberta “optimizes the value of its resources.”

Mackinaw says the results of the review do not lend credibility to Premier Rachel Notley’s campaign promises of creating a better relationship between Indigenous peoples and the province.

Mackinaw says he will be pursuing further talks on the issue with the government.

“They need to start their discussions with the Chiefs,” he said. “They need to really get into the revenue sharing and once they start discussing that and moving forward on it, then I’ll know they’re serious about our concerns.”

Lending support to a push for resource revenue sharing is a statement issued Monday by the Mining Association of Canada.

“MAC believes that government resource revenue sharing can provide Aboriginal communities with greater opportunities to participate in the mineral exploration and mining industry, and could significantly contribute to the elimination of socio-economic disparities between Aboriginal and non-Aboriginal Canadians. Moreover, by enhancing and clarifying Aboriginal benefits, these arrangements can result in increased certainty for commercial access to land and resource development,” says MAC in a statement made by president and CEO Pierre Gratton.

Syncrude, Suncor and Shell are included in MAC’s membership.

Without having seen MAC’s statement, Mackinaw is cautiously optimistic about the support, noting that “having more partners on board working with you works better for us” in discussions with the province.

Mackinaw is hopeful that a further push for resource revenue sharing will come in a government report due at the end of the month as government departments are to outline how they will be responding to the United Nations Declaration on Rights of Indigenous Peoples. Notley mandated her ministers to complete an assessment of their departments to see what work is aligned with UNDRIP and what has to be changed. Aboriginal Relations Minister Kathleen Ganley was appointed to head the process.

“We need to start discussing revenue sharing sooner rather than later,” said Mackinaw.

The new royalty framework does not differ greatly from what is already in place. The existing royalty structure is to remain for 10 years on existing wells while royalty changes take effect in 2017 with new wells. Other recommendations made by the panel, all of which were accepted by the NDP government, include transparency by annually publishing a capital cost index for oil and gas wells, and a wide range of data for each oil sands project, including costs, royalties paid, and percentage of product upgraded.