IOGC Update on the Modernization of the Act, Regulations, and Systems (MARS) – Volume IV, Issue 3

Reporting Period October 1, 2014 to December 31, 2014

During this reporting period, IOGC initiated the development of the 2nd Consultation Draft, Phase I Regulations. This is subsequent to the 1st Consultation Draft, Phase I Regulations that IOGC introduced and provided to oil and gas First Nations and the Joint Technical Committee (JTC) for their review and feedback in February 2014. Although individual First Nations did not provide feedback; the input received from the JTC resulted in a new set of regulatory drafting instructions that are now applied in guiding the development of the 2nd Consultation Draft, Phase I Regulations. The expected completion date for this 2nd draft is February 2015. Going forward from this timeframe to May 2015, the 2nd Consultation Draft will be used to consult with First Nations, industry and the oil and gas producing provinces. Three major oil and gas producing First Nations – Frog Lake First Nation, Loon River Cree Nation, and White Bear First Nation – will be conducting independent reviews of the 2nd Consultation Draft. These First Nations are expected to obtain independent legal and technical advice on the 2nd Consultation Draft, which will form an important part of Canada’s duty to consult. The results will be shared with all producing First Nations and those with oil or gas potential. All First Nations will be given an opportunity to become fully engaged on the new regulations prior to implementation.

The department approved a phased approach for regulations development that allows for minimal delay for the 2009 Act to become law. This approach ensures that First Nations will benefit sooner from the improvements embodied  within the IOGA, 2009 which provides new authority for IOGC in the following areas: 1) audit companies working on First Nation lands; 2) determine and advise industry of longer records retention time for auditing purposes; 3) deal more effectively with surface and sub-surface trespass; 4) protect First Nation sites of cultural importance; 5) order companies to take remedial action under certain circumstances; and, 6) issue fines and penalties for offences under the Act or regulations. The phased approach calls for updates to the Indian Oil and Gas Regulations, 1995 – to make them compatible with the IOGA, 2009 – including new regulations in the areas of: 1) Drainage and Compensatory Royalty; 2) Sub-surface Tenure; 3) First Nations’ Audit (a component of Royalty Management); and, 4) reporting requirements to facilitate royalty verification. The remaining regulatory modules would become law once they are completed and, at the end of the process, IOGC will have jurisdiction to oversee and enforce a complete set of new, modern regulations. In consideration of the time required to accommodate input from stakeholders and the government’s regulations review and approval process, it is projected that the 2009 Act and its regulations will come into force in April 2016.

An important element of the work is First Nations consultation and engagement. Throughout the regulations development process, meetings have taken place with individual First Nations and Tribal Councils, upon request. Please contact IOGC if you would like a one-on-one session or require further information.

IOGC‘s efforts to implement informatics enhancements continue. Informatics enhancements are required to optimize the implementation and administration of the new Act and regulations. The completion of the department’s approval processes are forecasted for April 2015. The multi-jurisdiction and complexity of this project requires Treasury Board approval, projected to be completed in September 2015. Since October 2013, IOGC has been a member of PETRINEX (PETRoleum INformation EXcellence), the recognized authoritative source for hydrocarbon volume and pricing data. A key benefit of the expected informatics enhancements is PETRINEX’s data exchange with IOGC that should increase and reinforce both the timeliness and accuracy for royalty management.

In the area of Organizational Change Management (OCM), the OCM Team is working closely with IOGC‘s business lines to develop an implementation plan that coincides with the coming into force of the Act and regulations. This will ensure that IOGC has in place the necessary policies, procedures, forms, and tool-sets for the administration of the new Act and regulations on the day they become law. A key planning assumption for this project is that the Act and regulations will become law in April 2016.

For further information, please contact IOGC at:

Indian Oil and Gas Canada
100 – 9911 Chiila Blvd.
Tsuu T’ina AB T2W 6H6
Phone: (403) 292-5625
Fax: (403) 292-5618

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