Archived - Update on the Modernization of the Act, Regulations, and Systems (MARS) - Volume V, Issue 1

Reporting Period April 1, 2015 to June 30, 2015

During this reporting period, IOGC distributed the 2nd Consultation Draft, Phase I Regulations for review and feedback to:

1. All oil and gas First Nations
2. Industry
3. Oil and gas producing provinces
4. Three First Nations’ independent legal and technical reviews
5. May 2015, published the information in the First Nations Gazette for public review and feedback.

The feedback thus far is generally positive and indicates the regulations are proceeding in the right direction.

You may recall that the department has adopted an approach to bring the new Act into force with a core set of regulations. The remaining regulations would become law when they have been completed. The new Act is expected to benefit First Nations because it 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.

In consideration of the time required to accommodate input from stakeholders and the government’s regulations review and approval process, it is now projected that the 2009 Act and its regulations will come into force in fall 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 multi-jurisdiction and complexity of this project requires Treasury Board approval, projected to be completed in fall 2015. During this quarter, IOGC began Gate 4 activities including contracting for project management professional services who will assist IOGC in developing a submission to Treasury Board. 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 complete the 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 fall 2016.