Announcement of New Policies and Recent Decisions by the Mackenzie Valley Land and Water Board

The Mackenzie Valley Land and Water Board (the “Board”) recently announced the release of several new policy documents that provide new rules for small projects in the Northwest Territories.[1] These new rules are designed to ease the burden of the Board’s regulatory system on smaller operators and projects. These new sets of rules are:

• the Method for Determining Available Winter Water Use Capacity for Small-Scale Projects;
• the Standards for Reporting Water Quality Information in the NWT; and
• the new Closure and Reclamation Tool (and the supporting policy manual).

At the same time, the Board announced the release of a decision on a request by the Northwest Territories and Nunavut Chamber of Mines (“Chamber”) to extend all existing land use permits (“LUP”s) that the Chamber had previously issued for two years to help industry through the COVID-19 pandemic.

The Board is organized and operates under the federal Mackenzie Valley Resource Management Act (“MVRMA)”.[2] The MVRMA governs the use of land throughout most of the Northwest Territories.[3] In southern Canada, the Provinces have full regulatory authority over lands within their boundaries.[4] In 2014, the Government of the Northwest Territories (“GNWT”) was given or “devolved” significant authority over its own lands and other natural resources to make it more like a province,[5] but the MVRMA and the authority over land it represents remains in the hands of the federal government. As a result, regulatory authority for land use in the Territory remains split between the two governments. The MVRMA system was created in significant part not just to update the existing regulatory regimes in the Territory when it was implemented in 1998, but as part of the resolution of several major Indigenous land claims in the Territory. The MVRMA creates the Board and three “regional panels” within it, each of which represents a region in the Territory with a settled land claim and provides the local land claimant with an ability to appoint some of the local regional panel’s members.[6] The Board currently makes decisions on projects in parts of the Northwest Territories without settled land claims.[7]

The use of water is formally regulated by the GNWT under its Waters Act.[8] However, the GNWT has delegated the power to make water licenses to the MVRMA board system, so functionally this system of federal boards also regulates the use of water in most of the Territory.[9]

Method for Determining Available Winter Water Use Capacity for Small-Scale Projects (“Method”)[10]

Before releasing this Method, the Board used a method developed by the federal Department of Fisheries and Oceans (“DFO”) to determine how much water an operator could reasonably extract from a frozen body of water for all projects. The risk of using certain bodies of water, particularly in the North where long and hard winters can leave very little water unfrozen, is that taking too much water from one can kill the fish living in what remains of the liquid water during the winter.[11]

However, DFO’s standard requires technically complicated work that imposes a significant burden on operators. The Board has created the Method to provide smaller operators with a simple rule that provides wildlife with the protection it needs and DFO wants, but without imposing an excessive burden on smaller operators.

To determine how much water can reasonably be taken from a given frozen body of water, the operator only needs to multiply the surface area of the body of water (in square meters) by 0.1 meters. Operators can determine the surface area of the body of water using simple, easily available mapping tools, including Google Earth.[12]

There are limits to the application of this Method. It may only be used on bodies of water that can be shown to have a minimum under-ice depth of 1.5 meters and a minimum total depth of 3 meters. Any bodies of water smaller than this “should not” be proposed as water sources unless the proposed water withdrawal from it is less than 100 cubic meters per day or it can be demonstrated that the body of water does not have fish in it. However, as the document uses the word “should”, rather than “may” or “must”, it would seem that the Board is open to operators using such small bodies of water, presumably in circumstances where other options for the operator are limited or unavailable.[13]

Whether an operator qualifies to use the Method is assessed on a case-by-case basis by the Board, so there are no hard-and-fast rules for operators to assess whether they can rely on it. The Board did state in the method that it will be typically applied to operators needing a Type B water license (usually, a water license for a project that uses at least 100 cubic meters of water per day, but less than 300)[14] for early-stage exploration or small-scale projects.[15]

Standards for Reporting Water Quality Information in the NWT (“Standards”)[16]

Developed in association with the GNWT (as it regulates most water in the Territory), this document provides a set of requirements for reporting water quality data to the Board. The GNWT would like to collect and compile all of the data about water quality in the North that operators are creating through their work, to form a public record of this information. However, different operators have collected, catalogued, and analyzed their data in different manners, and this makes it difficult to compile, compare, and assess accurately. Operators will now need to follow these Standards whenever they are required to provide the Board (or one of its regional panels) with water quality data.[17]

This document provides two tables that each list different kinds of data an operator will need to report for each water sample they collect. The first table is for “metadata”, which here means basic information about the program within which the sample was collected (e.g., an operator’s on-site water monitoring program) and how the sample was collected.[18] The second table is for information about the sample itself, such as where it was collected, how it was analyzed, and what the results of the analysis were.[19]

Closure and Reclamation Tool[20]

Closure and reclamation requirements are one of the most financially onerous parts of executing a project in the North. They can be technically complicated and are used to calculate the security deposit an operator will need to pay under their LUP before starting their project.[21] The Board will soon replace its old, out-of-date tool for assessing these issues.

The new tool is a spreadsheet that runs an LUP applicant through a series of questions focused on how the site is accessed (e.g. by road, by a winter road, or by air), the amount of space the project will occupy, whether heavy machinery will be used to modify it, the amount of fuel that will be stored on site, buildings and construction that will occur on site, and whether post-closure monitoring of some kind will be needed. It also accounts for other securities held against the same project under other regulatory systems.

Decision on LUP Extensions[22]

LUPs issued under the MVRMA have an initial life of five years and can be “extended” once for an additional two years. The Board has maintained this position for over 20 years, but the regulation on which this position is based is ambiguous. It can also be read to allow for repeated two-year extensions, effectively allowing an LUP to be extended indefinitely.[23]

This is important for operators because the process of “renewing” an LUP after its lifespan has ended is effectively the same as applying for a new permit altogether. “Extensions” have shorter, more limited procedural requirements and shorter windows during which potentially affected Indigenous organizations and stakeholders can be engaged with or consulted. As a result, for an operator that holds an LUP, having access to the “extension” process can save time and money.[24]

Recently, the Board was called upon by the Chamber to offer automatic “extensions” of all LUPs that are currently in force to ease the burden of the COVID-19 pandemic. The Chamber asked the Board to reconsider its interpretation of the “extension” regulation to allow for a second extension of any LUPs that would require it to be granted the blanket extension of all LUPs the Chamber had asked for.[25]

The Board declined to change its position or to grant the blanket extensions of all LUPs in the Territory. The Board cited several reasons for maintaining its position despite the arguments of the Chamber. First, the Board held that because a reading of the language of the regulation in question in its “grammatical and ordinary sense” led to two possible interpretations, the provision needed to be read in its “statutory context”. The Board interpreted the overall “statutory context” in which the regulation exists as one in favor of greater, rather than lesser, regulatory oversight and intervention to protect the environment. The Board also held that related statutes that govern similar permits in the Northwest Territories have the same permit lives, including one that was recently revised to make it more consistent with the Board’s interpretation of the regulation in question.[26]

Interestingly, the Board also discussed its decision in light of the Supreme Court of Canada’s recent decision in the Vavilov[27] case. While courts are bound to follow the rules laid down in past decisions, administrative tribunals were not. Vavilov has significantly changed this – administrative tribunals are now obliged to follow their “longstanding practices or established internal authorit[ies]” unless they can justify their departure from these practices.[28] This offers both challenges and opportunities to operators who regularly require authorizations, like LUPs, from administrative tribunals like the Board. For existing practices that do not favor operators, it will be more difficult to persuade tribunals to depart from such practices in any one situation. However, for existing practices that favor operators, operators will have leverage to compel these tribunals to continue to follow them.

Conclusion

Natural resources regulation in the North remains in a state of continual adjustment as settled land claimants, the GNWT, and the federal government work together to iron out the creases in their shared system. Changes and policy updates such as these can be expected to continue for the foreseeable future, particularly as those regions in the Territory without settled land claims work towards resolving them.

For more information on these issues and how they may affect you or your business, please contact Jeremy Dixon in Yellowknife, Stuart Chambers in Edmonton or another member of our Energy, Environment and Regulatory Practice Group.