Vol. 145, No. 8 — April 13, 2011

Registration

SOR/2011-86 March 25, 2011

FIRST NATIONS COMMERCIAL AND INDUSTRIAL DEVELOPMENT ACT

ARCHIVED — Fort William First Nation Sawmill Regulations

P.C. 2011-449 March 25, 2011

Whereas in accordance with paragraph 5(a) of the First Nations Commercial and Industrial Development Act (see footnote a) the Minister of Indian Affairs and Northern Development has received a resolution of the council of the Fort William First Nation requesting that the Minister recommend to the Governor in Council the making of the annexed Fort William First Nation Sawmill Regulations;

And whereas in accordance with paragraph 5(b) of that Act an agreement has been concluded between the Minister, the Province of Ontario and the council of the Fort William First Nation for the administration and enforcement of the Regulations by the provincial officials and bodies specified in the Regulations;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Indian Affairs and Northern Development, pursuant to section 3 of the First Nations Commercial and Industrial Development Act (see footnote b), hereby makes the annexed Fort William First Nation Sawmill Regulations.

FORT WILLIAM FIRST NATION SAWMILL REGULATIONS

INTERPRETATION

Definitions

1. (1) The following definitions apply in these Regulations.

“incorporated laws”
« textes incorporés »

“incorporated laws” means the laws of Ontario specified in Schedule 1, as amended from time to time.

“project lands”
« terres du projet »

“project lands” means all those parcels or tracts of land in the Province of Ontario being part of the Fort William Indian Reserve No. 52 and being part of the Lands Patented to the Grand Trunk Pacific Railway Co., City of Thunder Bay, District of Thunder Bay, designated as parts 7, 11, 19, 27, 28, 29, 30 and 32 on Reference Plan 55R-11689 (CLSR 86142).

Successors

(2) A reference to the Fort William First Nation, LP shall be read as including any of its successors, any other person or entity to whom the Fort William First Nation, LP assigns a lease of the project lands, or any other person or entity with which the Government of Canada enters into a lease of the project lands.

Provincial interpretation

(3) The incorporated laws, as adapted by Schedule 2, shall be interpreted in accordance with the Legislation Act, 2006 (S.O. 2006, c. 21, Schedule F), as amended from time to time.

APPLICATION

Incorporation by reference

2. The incorporated laws, with the adaptations set out in Schedule 2, apply with respect to the project lands.

Fees

3. Fees, costs or other charges payable under an incorporated law shall be paid to the person or body specified in that law.

Interpretation

4. For greater certainty,

1. (a) a person or body that has a power, duty or function under the incorporated laws has the same power, duty or function under these Regulations, subject to the adaptations specified in Schedule 2;
   
2. (b) an official who is appointed or designated, or a body, fund, program, registry or index record that is established, under the incorporated laws is deemed to have been appointed, designated or established for the purposes of these Regulations;
   
3. (c) in Schedule 1, a reference to regulations made under an Act includes all regulations made under that Act after the coming into force of these Regulations, unless excepted in Schedule 1 or 2;
   
4. (d) any regulation made under the authority of a provision or regulation that is excepted from incorporation by reference in Schedule 1 is also excepted from incorporation by reference in these Regulations;
   
5. (e) a reference in an incorporated law, or in any notice, form, instrument or other document issued under an incorporated law, to a law (including any provision of one) of Ontario incorporated in these Regulations shall be read as a reference to that law as adapted by these Regulations;
   
6. (f) a reference to an incorporated law or a provision of one shall be read as a reference to the law or provision as amended from time to time; and
   
7. (g) an incorporated law or a provision of one applies only if it is in force as a law of Ontario.

Offence proceedings

5. (1) The Provincial Offences Act (R.S.O. 1990, c. P.33), any regulations made under that Act, any Act of Ontario referred to in that Act or its regulations relating to proceedings in respect of offences under a law of Ontario, and the applicable rules of court under the Courts of Justice Act (R.S.O. 1990, c. C.43), all as amended from time to time, apply in respect of alleged offences under these Regulations.

References in documents

(2) A reference to these Regulations may be made in any notice, form or other document issued with respect to a proceeding concerning an alleged offence under these Regulations, but the absence of such a reference does not affect the validity of a proceeding concerning that offence.

References to laws

(3) In any notice, form or other document issued with respect to a proceeding concerning an alleged offence under these Regulations, a reference to a law of Ontario or a provision of one incorporated in these Regulations shall be read as a reference to that law or provision as adapted by these Regulations.

EXCLUDED REGULATIONS

Exclusion

6. The Indian Reserve Waste Disposal Regulations do not apply with respect to the project lands.

COMING INTO FORCE

Coming into force

7. These Regulations come into force on the setting apart by the Governor General in Council of the project lands as reserve lands, which takes effect on registration of the Transfer/Deed of Land by which the project lands are acquired by the Minister of Indian Affairs and Northern Development, on behalf of Her Majesty in right of Canada, from the Fort William First Nation Development Corp.

SCHEDULE 1
(Subsection 1(1) and paragraphs 4(c) and (d))

INCORPORATED LAWS

Statutes and Regulations

Clean Water Act, 2006 (S.O. 2006, c. 22) and the regulations made under it, except the following:

– section 26, subsections 34(2) and 36(8), sections 39 to 42, 47 and 48, subsections 49(2) and (3), section 50, subsection 55(4), section 69, subsection 99(3) and sections 104 and 112 to 117 of the Act

Conservation Authorities Act (R.S.O. 1990, c. C.27) and the regulations made under it, except the following:

– sections 2 to 27, clauses 28(1)(a) and (b), subsection 28(2) and sections 29, 30 and 31 to 39 of the Act

– any regulations that apply only to lands of which no part is within the project lands

Crown Forest Sustainability Act, 1994 (S.O. 1994, c. 25) and the regulations made under it, except the following:

– sections 1, 2, 4 to 51 and 55 to 57, clauses 58(1)(a) to (d) and (f) and sections 59, 65, 68 and 70 to 77 of the Act

– Independent Forest Audits (O. Reg. 160/04)

Environmental Assessment Act (R.S.O. 1990, c. E.18) and the regulations made under it, except the following:

– section 4 and subsection 32(2) of the Act

– any regulations that apply only to lands of which no part is within the project lands

Environmental Bill of Rights, 1993 (S.O. 1993, c. 28) and the regulations made under it, except the following:

– subsection 2(3), sections 3, 5, 7 to 11, 14 to 21, 36 and 49 to 60, subsection 119(2) and section 120 of the Act

Environmental Protection Act (R.S.O. 1990, c. E.19) and the regulations made under it, except the following:

– clauses 4(1)(b) to (l), subsection 4(2), section 20, subsection 27(2), sections 29, 36, 87, 114, 121, 154, 168.1 to 168.9, 168.12 to 168.16 and 169 to 171, clauses 176(10)(f), (g) and (m) and subsections 180(2), 181.1(1) and 197(4) and (8) of the Act

– Cessation of Coal Use — Atikokan, Lambton, Nanticoke and Thunder Bay Generating Stations (O. Reg. 496/07)

– Classes of Contaminants — Exemptions (R.R.O. 1990, Reg. 339)

– Containers (R.R.O. 1990, Reg. 340)

– Deep Well Disposal (R.R.O. 1990, Reg. 341)

– Designation of Waste (R.R.O. 1990, Reg. 342)

– Discharge of Sewage from Pleasure Boats (R.R.O. 1990, Reg. 343)

– Disposable Containers for Milk (R.R.O. 1990, Reg. 344)

– Disposable Paper Containers for Milk (R.R.O. 1990, Reg. 345)

– Dry Cleaners (O. Reg. 323/94)

– Effluent Monitoring and Effluent Limits — Metal Mining Sector (O. Reg. 560/94)

– Effluent Monitoring and Effluent Limits — Electric Power Generation Sector (O. Reg. 215/95)

– Effluent Monitoring and Effluent Limits — Industrial Minerals Sector (O. Reg. 561/94)

– Effluent Monitoring and Effluent Limits — Inorganic Chemical Sector (O. Reg. 64/95)

– Effluent Monitoring and Effluent Limits — Iron and Steel Manufacturing Sector (O. Reg. 214/95)

– Effluent Monitoring and Effluent Limits — Metal Casting Sector (O. Reg. 562/94)

– Effluent Monitoring and Effluent Limits — Organic Chemical Manufacturing Sector (O. Reg. 63/95)

– Effluent Monitoring and Effluent Limits — Petroleum Sector (O. Reg. 537/93)

– Effluent Monitoring and Effluent Limits — Pulp and Paper Sector (O. Reg. 760/93)

– Ethanol in Gasoline (O. Reg. 535/05)

– Exemption — Deloro Mine Site (O. Reg. 577/98)

– Exemption — General Electric Canada Inc. and Eli Eco Logic International Inc. (O. Reg. 43/97)

– Exemption — Prospectors (O. Reg. 504/95)

– Gasoline Volatility (O. Reg. 271/91)

– Hot Mix Asphalt Facilities (R.R.O. 1990, Reg. 349)

– Lakeview Generating Station (O. Reg. 396/01)

– Lambton Industry Meteorological Alert (R.R.O. 1990, Reg. 350)

– Landfilling Sites (O. Reg. 232/98)

– Marinas (R.R.O. 1990, Reg. 351)

– Municipal Sewage and Water and Roads Class Environmental Assessment Project (R.R.O. 1990, Reg. 354)

– Ontario Power Generation Inc. (O. Reg. 153/99)

– Plasco Demonstration Project (O. Reg. 254/06)

– Records of Site Condition — Part XV.1 of the Act (O. Reg. 153/04)

– Recovery of Gasoline Vapour in Bulk Transfers (O. Reg. 455/94)

– Recycling and Composting of Municipal Waste (O. Reg. 101/94)

– Refillable Containers for Carbonated Soft Drink (R.R.O. 1990, Reg. 357)

– Sterilants (O. Reg. 718/94)

– Sulphur Content of Fuels (R.R.O. 1990, Reg. 361)

– Transfer of Containers to Brewers Retail Inc. and Others (O. Reg. 17/07)

– Transitional Provisions Relating to the Repeal of Part VIII of the Act (O. Reg. 156/98)

Fire Protection and Prevention Act, 1997 (S.O. 1997, c. 4) and the regulations made under it, except the following:

– subsections 1(3) to (5), sections 2 to 5, subsections 6(1) to (4), sections 7, 7.1, 38 to 57 and 59 to 73 and subsection 74(2) of the Act

– Appointment of Arbitrators and Conciliation Officers (O. Reg. 407/97)

Lakes and Rivers Improvement Act (R.S.O. 1990, c. L.3) and the regulations made under it, except the following:

– clauses 3(1)(a) and (c) to (e), subsection 3(2), sections 4 to 6, 9 and 13 to 19, subsection 20(3), sections 22 to 23.1, clauses 28(1)(a) to (b.2) and (2)(b) and (c) and sections 29 and 89 to 93 of the Act

– Construction (O. Reg. 454/96)

Ontario Water Resources Act (R.S.O. 1990, c. O.40) and the regulations made under it, except the following:

– sections 2, 3 and 7 to 9, subsection 10(1), sections 11, 12, 14, 26, 27, 54, 55, 58, 62 to 74, 88, 89.1 to 89.3 and 89.6 to 89.8 and subsections 93(2) and 103(4) and (8) of the Act

– Additonal Charges (O. Reg. 157/93)

– Exemption — City of Detroit (O. Reg. 128/09)

– Lake Simcoe Protection (O. Reg. 60/08)

– Municipal Sewage and Water and Roads Class Environmental Assessment Projects (R.R.O. 1990, Reg. 900)

– Sewage Works Subject to Approval Under the Environmental Assessment Act (O. Reg. 207/97)

– Transitional Provisions Relating to the Repeal of Part VIII of the Environmental Protection Act (O. Reg. 155/98)

Pesticides Act (R.S.O. 1990, c. P.11) and the regulations made under it, except the following:

– clauses 2(b) to (h), subsection 16(2) and sections 31.3, 32 and 53 of the Act

Toxics Reduction Act (S.O. 2009, c. 19) and the regulations made under it.

Other Instruments

Forest Resource Processing Facility Licence No. 2590–07, dated June 26, 2007, issued under section 54 of the Crown Forest Sustainability Act, 1994 (S.O. 1994, c. 25)

Certificate of Approval No. 0117-76ZMQZ, dated October 14, 2007, issued under section 9 of the Environmental Protection Act (R.S.O. 1990, c. E.19)

Certificate of Approval No. 5067-6R6N9N, dated February 3, 2008, issued under section 9 of the Environmental Protection Act (R.S.O. 1990, c. E.19)

Minister’s Requirement for Hazardous Waste Fees, dated December 18, 2001, made under section 179.1 of the Environmental Protection Act (R.S.O. 1990, c. E.19)

Amended Certificate of Approval No. 3377-5N5QPH, dated June 4, 2003, issued under section 53 of the Ontario Water Resources Act (R.S.O. 1990, c. O.40)

Minister’s Requirement for Fees (Application Fees for Permits to Take Water under section 34 of the Ontario Water Resources Act, R.S.O. 1990, c. O.40), dated August 28, 2007, made under section 96 of the Ontario Water Resources Act (R.S.O. 1990, c. O.40)

Minister’s Requirement for Fees (Licensing of Sewage Works Operators, O. Reg. 129/04), dated March 31, 2009, made under section 96 of the Ontario Water Resources Act (R.S.O. 1990, c. O.40)

SCHEDULE 2
(Subsection 1(3), section 2 and paragraphs 4(a) and (c))

ADAPTATIONS

PART 1

ADAPTATIONS APPLICABLE TO ALL INCORPORATED LAWS

Owner

1. A reference to an owner, in relation to the project lands, shall be read as including the Fort William First Nation, LP.

Exclusion

2. A reference to an owner or to any other person or entity does not include Her Majesty in right of Canada or an official of the Government of Canada.

Limitation on inspections

3. (1) A power to make inspections, including the power to enter a place, does not include a power to enter, or inspect anything in, a federal government office, or to enter any place or inspect anything in the possession of the Fort William First Nation.

Exception

(2) Subsection (1) does not preclude the entry into any place occupied by, or the inspection of anything in the possession of, the Fort William First Nation, LP.

Fire chief

4. The fire chief appointed by the Council of the City of Thunder Bay under section 6 of the Fire Protection and Prevention Act, 1997 (S.O. 1997, c. 4), is deemed to have also been appointed as a fire chief for the purposes of the incorporated laws.

PART 2

ADAPTATIONS TO THE CLEAN WATER ACT, 2006

Unorganized territory

5. Part IV of the Act applies to the project lands as if they were an unorganized territory.

Acquisition of land

6. In section 92, a reference to “acquire by purchase, lease or otherwise, or, subject to the Expropriations Act” shall be read as a reference to “acquire by lease or, subject to the Expropriations Act and section 35 of the Indian Act (Canada)”.

References to “another Act”

7. In subsection 105(1), a reference to “a provision of another Act or a regulation or instrument made, issued or otherwise created under another Act” shall be read as a reference to “a provision — incorporated by reference in these Regulations — of another Act or of a regulation or instrument made, issued or otherwise created under another Act”.

PART 3

ADAPTATIONS TO THE ENVIRONMENTAL ASSESSMENT ACT

Limit of application

8. The Act and its regulations apply only in circumstances where the Canadian Environmental Assessment Act does not apply.

PART 4

ADAPTATIONS TO THE ENVIRONMENTAL PROTECTION ACT AND REGULATIONS

DIVISION 1

ADAPTATIONS TO THE ACT

Period of 25 years9. In section 46, the reference to “a period of twenty-five years” shall be read as a reference to “a period equal to the remainder of the term of any lease of the project lands to the Fort William First Nation, LP or twenty-five years, whichever is shorter”.

Land registry office

10. In subsections 197(2) and (5), a reference to “the proper land registry office” shall be read as a reference to “the Reserve Land Register or Surrendered and Designated Lands Register, maintained by the Department of Indian Affairs and Northern Development”.

DIVISION 2

ADAPTATIONS TO THE AIR POLLUTION — LOCAL AIR QUALITY REGULATIONS (O. REG. 419/05)

Municipality

11. In subclause 34(2)(b)(iv), a reference to “each municipality in which the source of contaminant is located” shall be read as a reference to “the Fort William First Nation”.

PART 5

ADAPTATIONS TO THE LAKES AND RIVERS IMPROVEMENT ACT

Limitation on production of documents

12. In clause 20(2)(b), the power to require the production of any document or thing does not include a power to require the production of any document or thing located in a federal government office.

PART 6

ADAPTATIONS TO THE ONTARIO WATER RESOURCES ACT

Ontario

13. In subsections 29(1) and (2), a reference to “Ontario” shall be read as a reference to “the project lands”.

Limitation on orders

14. Under section 61, no direction applies to Her Majesty the Queen in right of Canada or to an official of the Government of Canada.

Land registry office

15. In subsections 103(2) and (5), a reference to “the proper land registry office” shall be read as a reference to “the Reserve Land Register or Surrendered and Designated Lands Register, maintained by the Department of Indian Affairs and Northern Development”.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issue

The Fort William First Nation has requested the Abibow sawmill site for addition to reserve. [Note: In December 2010, AbitibiBowater Canada Inc. was reorganized as Abibow Canada Inc. upon emerging from creditor protection. Therefore, all references to Bowater have been updated to read Abibow.]

When the land becomes reserve, it will become federal lands and therefore provincial laws currently regulating the sawmill will no longer apply. Federal environmental regulation must therefore replace provincial law to ensure that the sawmill does not operate unregulated. Without such federal regulation, the First Nation would be at risk (e.g. ground source drinking water could be contaminated) and would have minimal recourse to legal remedies.

Objectives

These Regulations mirror the provincial environmental laws and regulations currently governing the operations of the Abibow sawmill, thereby promoting compliance with acceptable environmental standards that protect air, soil and water quality for this site. Abibow is a large scale operation currently subject to a significant number of different provincial regulations and laws that govern its environmental operation. By incorporating these provincial laws and regulations into the federal First Nations Commercial and Industrial Development Act regulations that apply on reserve land, Abibow’s large-scale operation will continue to be appropriately regulated while also resulting in a seamless regime on this site and off reserve.

Description

Land expropriated by Canadian National Railways (CNR) in 1905 was reacquired by the Fort William First Nation Development Corporation in 1999 and was proposed for an addition to reserve in March 2001. The Abibow sawmill is situated on a portion of these lands. The First Nation was advised that the addition to reserve would be subject to the addition to reserve Policy and the establishment of a federal regulatory regime would involve the Government of Ontario, which would provide monitoring and enforcement services for sawmill operations once the addition to reserve process concludes.

At that time, the federal government did not have a regulatory regime specifically designed to address large-scale sawmill operations. The Province of Ontario has an extensive, comprehensive regulatory regime for large scale industrial projects such as sawmills, but much of this regime does not apply on reserve lands. Federal regulations are needed in order to create regulatory certainty and to effectively manage environmental, health and safety, and other related impacts of the sawmill operation, since it will be located on reserve after the addition to reserve.

The Fort William First Nation requested that the Governor-in-Council make regulations for this project under the First Nations Commercial and Industrial Development Act. These Regulations apply only to a specified portion of the Fort William Indian Reserve No. 52. These Regulations will not apply to other First Nations, other reserve lands or other federal lands.

The Fort William First Nation Sawmill Regulations replicate, with some minor editorial adaptations, a large portion of the Ontario government’s regulatory regime for sawmill projects. This creates a seamless regulatory regime on and off reserve, and contributes to the willingness of the Government of Ontario to take on responsibilities for administering and enforcing these Regulations on behalf of the Government of Canada. The Regulations, in conjunction with a Canada-Ontario-Fort William First Nation Tripartite Agreement for administration and enforcement and a Canada-Ontario funding agreement, creates a comprehensive regulatory regime for the Abibow sawmill on the Fort William Indian Reserve No. 52.

Regulatory and non-regulatory options considered

Alternatives

Regulatory standards in leases

In some cases, governments impose regulatory standards as terms and conditions of leases they grant rather than putting these standards in statutes and regulations. This option was considered for the Fort William Abibow sawmill project, but rejected. The limited remedies available under contract law are not sufficient to adequately protect the interests of the First Nation, its members, the environment and Her Majesty for a project of this scale and complexity.

Unique federal regulations

Rather than replicating the Province of Ontario’s regulatory regime for sawmills, the federal government could have created its own unique regulations for sawmill operations. This option was rejected for many reasons, including the following:

• the costs for both developing and implementing the regulations would have been higher than in the chosen approach;
• the time needed to develop the regulations would have been longer, risking the ability to meet financial constraint time lines associated with this project;
• the Government of Ontario might not have been willing to take on administration and enforcement responsibilities under unique federal regulations, requiring the creation of significant federal administrative infrastructure;
• it was not the preferred approach of the First Nation or AbitibiBowater Canada Inc. (now known as Abibow Canada Inc.); and
• unique federal regulations would have undermined the policy objective of creating a seamless regulatory regime on and off reserve.

No regulatory regime

If no regulatory regime is established, the addition to reserve for Fort William could not proceed. This option was rejected because it would have deprived the First Nation of significant economic benefits from this large project.

Benefits and costs

Benefits to Fort William First Nation

The Fort William First Nation and its members will benefit from the environmental and health and safety protections under the Regulations as workers in the sawmill industry, residents of the area, and caretakers and beneficiaries of the project lands. The Regulations have contributed, and are expected to continue to contribute, to ongoing positive relations among the First Nation, the Government of Ontario, the Government of Canada and the industry. The Abibow sawmill has been in operation since 2002. When the lands where the sawmill is located gain reserve status through the addition to reserve process, a process that was dependent on the development of these Regulations, Fort William First Nation will continue to benefit from monthly rent (see chart below for payment schedule) per year over the 40-year business deal with Abibow except this revenue will no longer be taxable since the sawmill will now be located on reserve. Assuming a corporate tax rate of 40%, this amount represents value savings of $4.9M to the Fort William First Nation. The equivalent amount is shown as a loss to the Government of Ontario’s corporate tax revenues. The addition of the land to reserve and the enactment of these Regulations will also eliminate the need for the First Nation Development Corporation to pay property taxes to the City of Thunder Bay, estimated at a present value of $11.5M as long as the lands were not reserve lands. Therefore, the total annualized benefit is $1.43 million in tax savings from both business taxes and property taxes.

Rental payment schedule:

rental	Monthly Rental Income ($)	Number of Months
A	96,961	19
B	104,836	15
C	86,625	353
Totals	288,422	387

Planning assumptions:

1. Project begins January 2011

2. Business tax at 40%

3. Property tax is constant at $1,000,000 per year

4. Discount rate is 8%

Benefits to industry

For Abibow Canada Inc., the Regulations provide assurance of regulatory certainty and a regulatory regime that they are familiar with and understand well. The establishment of these Regulations sets a precedent for other industries to locate large scale commercial and industrial projects on reserve lands as it demonstrates that levels of government and First Nations can successfully cooperate to create a level regulatory playing field both on and off reserve.

Benefits to the Government of Canada

The Regulations contribute to meeting one of the key strategic outcomes of the Government: facilitating sustainable use of lands and resources by First Nations. The Regulations address health and safety and environmental protection/management, as well as bringing regulatory standards on these reserve lands to a level comparable to the standards applicable to non-reserve lands in Ontario. This will benefit the general public of Canada in addition to the Fort William First Nation.

Another key strategic outcome of Government will be advanced — closing the economic gap for First Nations. The direct and indirect economic benefits to Fort William First Nation are summarized above.

The Regulations are significantly more cost-effective for Canada, as the alternatives of developing unique federal regulations (rather then adopting provincial laws and regulations), or developing regulations under an enhanced lease, would have been costly to develop, difficult to monitor and enforce, and would have limited potential remedies.

As a function of the addition to reserve process for this site, an acceptable regulatory regime is required before the land can be considered for addition to reserve. The newly developed Regulations meet that need.

The Regulations, and the addition of the project lands to reserve status, avoid the potential for litigation that might otherwise be pursued against Canada.

Benefits to the Government of Ontario

Provincial officials invested significant time and resources into the development of the Fort William First Nation Sawmill Regulations and intergovernmental agreements for the administration and enforcement of the Regulations. The Regulations benefit the Government of Ontario by ensuring that the Fort William Abibow sawmill project is subject to a regulatory regime that is seamless with the regime that applies in the surrounding area. In particular, ensuring adequate environmental protection and management measures is an important benefit for the Government of Ontario. In addition, the Government and residents of Ontario have a significant stake in facilitating the Fort William Abibow sawmill project, as it creates employment and contributes to the economy of the region. This project also sets a precedent for encouraging other industries to locate within First Nation communities by demonstrating effective intergovernmental regulatory cooperation, thus potentially improving economically disadvantaged regions of Ontario.

Benefits to the general public

The Regulations provide the general public with assurance that the Fort William Abibow sawmill project is adequately regulated on the basis of industry-wide standards and that risks to citizens and to the environment, both on and off reserve, are minimized. The continued operation of the sawmill, which is partially dependent on these Regulations, will generate significant direct and indirect economic benefits to the general public. These benefits include increased economic activity, employment opportunities and tax revenues for the provincial and federal government.

Costs

If there is any increase in compliance costs for industry under the Regulations (as compared to their costs for complying with the off-reserve regulatory regime applicable to similar sawmill projects) the increase will be incremental and minimal. The regulatory regime created by the Regulations, and the corresponding compliance responsibilities for industry, will be similar to the current regime and compliance responsibilities under which they have been operating. Administrative fees, penalties, and similar matters that exist in Ontario’s regulatory regime for sawmill industries have been replicated in the Regulations, and therefore will arise in the same circumstances and be for the same amounts as under the Ontario regime. Because of this, it is expected that there will be no impact on international competitiveness or on international trade.

There are four kinds of governmental costs to consider in relation to the Regulations:

1. (a) annual monitoring and enforcement costs — costs for conducting routine administration, compliance, and enforcement activities under the Regulations;
   
2. (b) costs for administering, monitoring and maintaining the Canada-Ontario-First Nation agreement regarding administration and enforcement, and changes to the Ontario regulatory regime;
   
3. (c) extraordinary costs — unknowable costs that may arise in relation to non-compliance; and
   
4. (d) costs incurred through the form of lost tax revenue in both corporate and property tax.

These three categories of costs incurred by the Province of Ontario will be reimbursed by Canada, as Ontario officials will be carrying out administration, compliance and enforcement activities under the Regulations on behalf of Canada in accordance with the Canada-Ontario-Fort William First Nation agreement. Costs in categories (a) and (b) are estimated to be $9,000 per year.

Costs in category (c) are difficult to address because there is no certainty about whether they will arise, and, if they do, what the size of the cost will be. An example is costs associated with lengthy, contested prosecutions. In order to better manage the risk of these costs, there is a provision in the inter-governmental agreement for the federal government to elect to conduct a prosecution instead of the prosecution being conducted by the Attorney-General of Ontario.

Costs in category (d) are incurred by the Government of Ontario through lost corporate tax revenue and by the City of Thunder Bay through lost property tax revenue. The total annualized amount of loss revenue to both governments would be $1.43 million. This cost would be transferred directly as a benefit to the Fort William First Nation as tax savings in the same amount, and so there is zero cost to Canada as a whole. Following is a table summarizing the above cost-benefit analysis and findings.

Table: Summary ofCost-Benefit Analysis

Cost-Benefit Statement	Base Year	Final Year	Total (PV)	Average Annual
A. Quantified Impacts $
Benefit: Fort William First Nation Corporate tax savings	465,000	104,000	4,923,000	428,000
Benefit: Fort William First Nation Property tax savings	1,000,000	225,000	11,453,000	995,000
Benefit: Government of Ontario Enforcement	10,000	2,000	115,000	10,000
Cost: Government of Ontario Lost corporate tax revenue	465,000	104,000	4,923,000	428,000
Cost: City of Thunder Bay Lost property tax revenue	1,000,000	225,000	11,453,000	995,000
Cost: Canada Enforcement	10,000	10,000	115,000	10,000
Net Benefits			0
B. Quantified Impacts in Non-$, e.g. Risk Assessment
Positive impacts Fort William First Nation: High Provides secure employment in a disadvantaged region. Creates a regulatory regime to ensure environmental practices that benefit the health and safety of residents. Government of Ontario: Medium The Abibow sawmill creates employment and other economic activity in the region.
Negative impacts The development of regulations poses little or no risk to any of the stakeholders. There are no negative non-monetized quantifiable impacts should the Regulations be developed.
C. Qualitative Impacts
Fort William First Nation Positive impacts Sets a precedent for encouraging other industries to locate within First Nation communities by demonstrating effective intergovernmental regulatory cooperation. Facilitates Aboriginal economic development and promotes partnerships with the private sector. Removes regulatory barriers and uncertainty to on-reserve business activity. Provides environmental, health and safety protections under the Regulations to workers in the sawmill industry, residents of the area, and caretakers and beneficiaries of the lands. Government of Ontario Positive impacts Creates a seamless regulatory regime between on- and off-reserve business activity. Creates certainty for developers, investors, and residents in the region. Provides protection for Ontario residents in the region by developing environmental, health and safety regulations similar to those enforced by provincial regulations.
Negative impacts There are no negative qualitative impacts should the Regulations be developed.

Rationale

These Regulations are supported by the key stakeholders, which include Fort William First Nation, Indian and Northern Affairs Canada, the Province of Ontario and AbitibiBowater Canada Inc. (Abibow Canada Inc.). The establishment of regulations under the First Nations Commercial and Industrial Development Act was subject to a referendum by the First Nation Community, which occurred in May 2007. The associated Tripartite Agreement was developed in conjunction with the Province of Ontario and subsequently signed by all parties in September 2007.

These Regulations are only the second set of regulations completed under the First Nations Commercial and Industrial Development Act and is the only one that deals with a parcel of land that is added to reserve. These Regulations remove any potential discrepancies in the provincial/federal views of which provincial laws may apply of their own force and effect. Therefore, this provides an equivalent regulatory regime both on and off reserve and removes regulatory uncertainty for businesses that may wish to locate on reserve.

These Regulations are consistent with actions taken or planned by other federal departments and levels of government. These regulations modernize and streamline the regulatory framework, remove barriers to increasing economic development, protect the environment and meet provincial standards.

Consultation

Regulations developed under the First Nations Commercial and Industrial Development Act were supported by all key stakeholders including Fort William First Nation, Indian and Northern Affairs Canada, the Province of Ontario and AbitibiBowater Canada Inc. (Abibow Canada Inc.). The regulatory approach was ratified by a community referendum vote held in May 2007. The associated Tripartite Agreement was negotiated and developed together with the Province of Ontario and subsequently signed by Canada, the province, and the First Nation in September 2007.

Though the City of Thunder Bay collected substantial property taxes on this property, the City did not oppose the addition to reserve. Fort William has entered into a Municipal Services Agreement with the City of Thunder Bay, dated November 6, 2006, as well as a Municipal Tax Satisfaction Agreement dated April 30, 2010. The latter agreement states that, subject to the payment of outstanding taxes, the full amount has subsequently been paid, and that “the City does hereby consent to the transfer of the Bowater sawmill lands to Her Majesty the Queen in right of Canada for the purposes of setting apart the Bowater sawmill lands for the use and benefit of Fort William First Nation.”

Indian and Northern Affairs Canada Reports on Plans and Priorities notified the public that the Department would have regulations under the First Nations Commercial and Industrial Development Act for the Fort William First Nation Bowater sawmill project.

These Regulations apply only to a specific project on Fort William Indian Reserve No. 52A and, in large part, replicate the provincial regime applicable to similar projects on provincial lands. The parties who are primarily affected by these Regulations are the Fort William First Nation, the Government of Ontario, and Abibow Canada Inc. Successive drafts of the Regulations were shared with these parties, starting in fall 2006 and carrying on through fall 2010, and all parties provided input. Because of the limited impacts of the Regulations themselves, broader consultation is not required.

In a referendum held May 23, 2007, the First Nation sought and received community approval for a regulation to be enacted pursuant to the First Nations Commercial and Industrial Development Act. Community meetings were held prior to the referendum.

The Government of Ontario has posted information on their Environmental Registry as part of the provincial process for being able to enter into the Tripartite Agreement.

Implementation, enforcement and service standards

One of the primary reasons these Regulations were developed is to establish a full range of regulatory compliance and enforcement mechanisms. The Regulations include the following mechanisms for encouraging compliance and for detecting and penalizing non-compliance:

• requirements for industry to obtain various licenses and approvals;
• authority for government officials to inspect, investigate, search and seize;
• authority for government officials and bodies to issue directives and orders;
• fines and other financial penalties for non-compliance and offences; and
• authority for government officials to make applications to Federal Court for various orders.

Compliance and enforcement provisions, to a large degree, replicate provisions in the regulatory regime of the Province of Ontario that apply to similar projects off-reserve. They form a compliance and enforcement ladder, so that minor infractions of regulations can be addressed with measured responses, and more serious infractions can be addressed with more powerful remedies.

Because the Fort William First Nation Sawmill Regulations replicate, with minor adaptations, the provincial regime, provincial officials have the expertise necessary to administer and enforce the Regulations. A Tripartite Agreement among the Government of Ontario, Fort William First Nation and Indian and Northern Affairs Canada was finalized under which provincial officials will perform administrative and enforcement activities under the Fort William First Nation Sawmill Regulations.

Performance measurement and evaluation

Under the Tripartite Agreement associated with these Regulations, a Management Committee was established to monitor performance, address potential issues, and propose changes as required.

The measurable outcome will be defined by the degree to which the air, soil and water quality has remained protected for the site. Performance will be measured through standard day to day environmental monitoring practices for the site and by the frequency of contraventions of the Regulations and the effectiveness of addressing those contraventions as monitored by the Management Committee.

Contacts

For enquiries in English:

Sean Thompson
Manager, Lands Initiatives
Indian and Northern Affairs Canada, Ontario Region
25 St. Clair Avenue East, 8th Floor
Toronto, Ontario
M4T 1M2
Telephone: 416-954-8235
Fax: 416-954-4328
Email: Sean.Thompson@ainc-inac.gc.ca

For enquiries in French:

Kris Johnson
Senior Director, Lands Modernization
Indian and Northern Affairs Canada
10 Wellington Street, Room 1230
Gatineau, Quebec
K1A 0H4
Telephone: 819-994-7311
Fax: 819-994-5697
Email: Kris.Johnson@ainc-inac.gc.ca

Footnote a
S.C. 2005, c. 53

Footnote b
S.C. 2005, c. 53