7. (27) With respect to sand and gravel on Inuvialuit lands, as a first priority the Inuvialuit shall reserve supplies of sand and gravel of appropriate quality and within reasonable transport distances on Inuvialuit lands in order to meet public community needs in the Western Arctic Region and in Inuvik, based on reasonable twenty (20) year forecasts of the volumes required from Inuvialuit lands. The forecasts shall be prepared jointly by the Inuvialuit and the appropriate levels of government on the basis of community estimates of requirements, and shall be revised from time to time as required but, in any event, not less frequently than once every five (5) years.

As amended by P.C. 1987-26, January 15, 1987

7. (28) As a second priority, the Inuvialuit shall reserve adequate supplies of sand and gravel of appropriate quality on Inuvialuit lands for the direct private and corporate needs of the Inuvialuit and not for sale, based on reasonable twenty (20) year forecasts of required volumes prepared by the Inuvialuit Land Administration.

As amended by P.C. 1987-26, January 15, 1987

7. (29) As a third priority, the Inuvialuit shall make available sand and gravel for any project approved by an appropriate governmental agency.

7. (30) The Inuvialuit and the appropriate level of government may jointly identify certain zones within the Western Arctic Region including, for greater certainty, Inuvialuit lands, where sand and gravel may not be removed, or may not be removed during certain periods of the year, for environmental reasons or because of other conflicting uses of such land.

7. (31) For greater certainty, the sand and gravel deposits within Inuvialuit lands, known collectively as the Ya Ya Lakes eskers, shall be dedicated to sand and gravel development, subject to normal pit development, restoration measures and laws of general application.

7. (32) The right to remove sand and gravel from Inuvialuit lands requires a licence or concession obtained from the Inuvialuit Land Administration. A licence or concession may stipulate the required payment of a royalty to the Inuvialuit Land Administration, not exceeding $0.75 per cubic yard multiplied by b/a, where "a" means the Gross National Product of Canada in current dollars for the year 1982 and "b" means the Gross National Product of Canada in current dollars for the year previous to the year in which the royalties arc being charged.

7. (33) For the purposes of subsection (32): 

(a) a licence is a non-exclusive right to remove a certain volume of sand and gravel for a specific purpose during a period not exceeding one (1) year from a specific sand and gravel pit; and 

As amended by P.C. 1987-26, January 15, 1987

(b) a concession is the exclusive right to explore, develop and produce sand and gravel from an area for a period specified in the concession.

7. (34) A licence or concession may stipulate payments to cover reasonable administrative costs and, where they are applicable and justified, reasonable land reclamation costs in relation to the sand and gravel deposit for which the licence or concession has been granted.

7. (35) In granting a licence, the Inuvialuit Land Administration shall, to the extent of its legal capability, ensure that sand and gravel is made available to interested parties at reasonable prices.

7. (36) Before issuing a licence, the Inuvialuit Land Administration shall require the applicant to establish that the proposed project has been approved by the appropriate level of government and that a contract has been awarded.

7. (37) Notwithstanding subsection (36), the Inuvialuit Land Administration shall, subject to reasonable rules of pit management, issue a licence to any person for personal use in amounts not exceeding 50 cubic yards annually.

7. (38) Any concession granted by the Inuvialuit Land Administration to the Inuvialuit Development Corporation shall contain the specific provision that the Inuvialuit Development Corporation shall make sand and gravel available at reasonable prices to interested parties bearing in mind the priorities set out in subsections (27) to (29). Reasonable prices shall not exceed levels that would result in a rate of return in excess of 20%, after tax, on the capital employed by the holder in his sand and gravel business.

As amended by P.C. 1987-26, January 15, 1987

7. (39) The rate of return referred to in subsection (38) shall be determined in accordance with generally acceptable accounting principles on the basis of actual data for past years and reasonable forecasts for future years with the aim of averaging the rate of return over the life of the concession. For the purpose of determining reasonable prices, the concession holder shall not take into account any general annual overhead and management costs in excess of 15% of total costs.

7. (40) Any concession referred to in subsection (38) shall establish that the Inuvialuit Development Corporation maintains for inspection by the Inuvialuit Land Administration and the appropriate government officials the necessary financial records related to the royalty payments, profits and rate of return of the operations.

As amended by P.C. 1987-26, January 15, 1987

7. (41) Where the Minister is of the opinion that the Inuvialuit Development Corporation, under a concession, is providing sand and gravel in an unreliable or inefficient manner or at excessive prices, he may notify the Inuvialuit Land Administration in writing whereupon it shall terminate the concession and offer it on a competitive bid basis. Neither Canada, the concession holder nor any third party shall have any right, claim or recourse against the Inuvialuit arising from alleged damage or loss resulting from such termination.

As amended by P.C. 1987-26, January 15, 1987

7. (42) The provisions of this Agreement respecting sand and gravel, except subsection (41), are subject to the arbitration process set out in section 18.