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First Nations and Yukon government butt heads over Oil and Gas Act

Three Yukon First Nations are unhappy with the government's proposed amendments to the Oil and Gas Act, saying they weren't properly consulted about changes that ended up in the draft legislation.

Three Yukon First Nations are unhappy with the government’s proposed amendments to the Oil and Gas Act, saying they weren’t properly consulted about changes that ended up in the draft legislation.

In the wake of this week’s court decision on the government’s changes to the land-use plan for the Peel watershed, it’s an issue that smacks a little of deja-vu. Earlier this week, the government received a letter from the chiefs of Tr’ondek Hwech’in, Vuntut Gwitchin First Nation and the First Nation of Nacho Nyak Dun - the same three First Nations that are plaintiffs in the Peel watershed case.

“We are writing to inform you that we object strongly to Yukon government’s approach,” the chiefs wrote. “The Yukon government is expediting amendments to (the Oil and Gas Act) at the expense of its relationship with Yukon First Nations.”

At the heart of the issue is an amendment that would allow the minister of energy, mines and resources to indefinitely extend an oil and gas permit.

Under the existing legislation, permits can last a maximum of 10 years. In a discussion document sent out to stakeholders this summer, the government proposed extending that maximum to 12 years. But in the bill tabled in the legislative assembly last week, that was changed to remove any limit on the length of a permit extension.

Chief Roberta Joseph of the Tr’ondek Hwech’in said allowing indefinite permit extensions ignores the possibility that environmental conditions can change over time. “For example, there might be changes in the climate, issues with fish and wildlife, those sorts of things,” she said.

Joseph said her First Nation received the discussion document and responded in writing to some of the proposed amendments. But she was disappointed that the government never sent out an actual draft legislation for review.

“Basically, we have not been meaningfully consulted,” she said. “We have not had an opportunity to sit down with the Yukon government to discuss in detail our issues in terms of the amendments.”

In their letter, Joseph and the other chiefs referred to a 1997 memorandum of agreement in which the Yukon government and First Nations agreed to work together on a government-to-government basis to develop oil and gas legislation.

“We expect the opportunity to consult on draft text, not vague concepts outlined in a discussion document,” they wrote. “In this instance, it appears the Yukon government has chosen to ignore its legal obligations.”

In the legislative assembly this week, NDP MLA Jim Tredger asked the government about the consultation process. “Yet again, it appears this government decided to derail dialogue rather than cooperate with First Nation governments,” he said.

Energy, Mines and Resources Minister Scott Kent defended the government’s process, saying it included government-to-government engagement and meetings of the oil and gas memorandum of understanding working group. But he said he had received the letter from the three First Nations and his deputy minister, Stephen Mills, will “reach out to senior officials in those First Nations and work on a path forward.”

Kent said the change to the oil and gas permits was based on feedback from industry during the 60-day consultation period. A “What We Heard” document available on the government’s website does include several suggestions to extend the maximum length of a permit beyond 12 years. But not all of those suggestions recommend indefinite extensions.

Instead, one of them suggests a maximum length of 20 years. Another recommends an indefinite extension, but with licence reviews after 12 months if there is no production.

David Thompson, CEO of Northern Cross, the only company currently exploring for oil and gas in northern Yukon, said it made sense not to set a maximum length.

“We think there shouldn’t be a hard cap on there,” he said, explaining that weather and logistics can cause unexpected delays, especially in remote, northern regions. “There are things that you can’t necessarily foresee. Sometimes the delays are things that we can’t control.”

The bill tabled last week does include one important concession to First Nations. The discussion document had suggested a change to benefit agreement negotiations with First Nations. The change would have allowed the government to initiate a dispute resolution process if a First Nation chose not to. That process would end with the government making a decision about whether and how a project on Yukon land will proceed.

Ray Sabo, lands and resources manager with the First Nation of Nacho Nyak Dun, said the amendment would have imposed unfair timelines on benefit agreement negotiations, and First Nations expressed concern about the change. For now, that amendment has been left out of the draft legislation, which Sabo said is a “source of relief.” In the legislative assembly, Kent said that amendment has been “deferred to enable further dialogue with First Nations.”

Most of the other amendments proposed in the discussion document have made their way into the draft legislation. One of those changes would give the government the power to cancel a well licence if an operator is out of compliance.

Another would ensure that licence owners are still liable for a well even after a licence is cancelled or the well is abandoned. That means that if environmental standards change over time and an abandoned well needs more work to be brought back into compliance, the licence owner will still be on the hook for that work.

Contact Maura Forrest at