Update on the Modernization of the Act, Regulations and Systems (MARS)

IOGC Quarterly Newsletter Volume VI, Issue 4

Reporting Period January 1, 2017 to March 31, 2017

I. IOGC and MARS Project Update:

The draft Phase I regulations underwent the appropriate government review and approvals processes and were scheduled for a February 2017 date for consideration by Treasury Board and approval for pre-publication in the Canada Gazette, Part I. However, a resolution – moved by the Blood Tribe – was passed at the January 31, 2017 Indian Resource Council (IRC) Annual General Meeting and it called upon Canada to temporarily put this process into abeyance. The Minister agreed to this request and further approvals for the draft Phase I regulations were suspended.

The resolution put forth by the Blood Tribe contained six specific areas of concern. By the end of the reporting period for this newsletter, the Department had agreed to accommodations in three of the six areas. The Department is continuing to work closely with the IRC, as well as with the Joint Technical Committee One (JTC-1), to explore if additional accommodations could be made to the proposed, draft Phase I regulations to address the remaining concerns expressed by the Blood Tribe and other oil and gas First Nations.

Once the text is agreed-upon, new, official, Blue-Stamped regulations will be prepared by Justice Canada and the updated, Phase I regulations would again undergo the appropriate government review and approvals processes leading to Treasury Board consideration and approval for pre-publication in the Canada Gazette, Part I. Depending on the extent of the required changes, this may happen before Parliament adjourns for the summer recess or in the Fall of 2017. During pre-publication in the Canada Gazette, Part I, the draft regulations would be subjected to a 30-day public review and comment period. Simultaneously, IOGC will also be publishing the draft Phase I regulations in the First Nations Gazette.  All feedback received will be considered and accommodated, where appropriate. In the next step, the draft Phase I regulations will be updated to become the final Phase I regulations.  The final Phase I regulations would once again undergo government review and approvals processes. Once approved, the final Phase I regulations would be published in the Canada Gazette, Part II and shortly thereafter, the Indian Oil and Gas Act, 2009 and the Phase I regulations would both become law.

In the preceding issue of this newsletter, it was reported that there remain some issues of concern to First Nations outside the scope of the Act and its regulations. To address these issues, the Joint Technical Committee Two (JTC-2) process will be revived. The Government of Canada has committed to explore, in partnership with oil and gas First Nations, potential options for greater First Nation's jurisdiction and control over oil and gas management on reserve and is actively engaging First Nations to determine how this may be accommodated with a view to bringing recommendations forward for consideration by the Government.

IOGC's staff continues to prepare for the administration and enforcement of the Indian Oil and Gas Act, 2009 and the Phase I regulations. There are two parallel tracks governing this important process: 1) MARS Implementation, that will ensure processes, policies, procedures, and tools are prepared; and, 2) Organizational Change Management (OCM), that will ensure IOGC's staff are well-equipped. To assist staff through this period of considerable change; a contract is being prepared for an OCM service provider over the long-term. This will enable IOGC to be better-positioned to respond to both internally-driven change (i.e., changes resulting from the new Act and regulations) and externally-driven change (i.e., those changes that affect whole-of-government such as new e-mail and document management systems).  Due to competing priorities, the development of the long-term contract for OCM services has been delayed and will likely be postponed until Q1 FY2017-18.

Even as IOGC is shepherding the Phase I regulations through government approvals processes, its partnership with the IRC and JTC-1 has already begun work on some Phase II regulations.  However, while Phase II work is already in progress, it will be necessary to temporarily,  pause further work until Phase 1 is completed.  Regulatory drafting instructions were shared for:

  • Surface;
  • Exploration (Seismic);
  • Moneys; and,
  • Environment.

IOGC is looking forward to feedback once oil and gas First Nation advocates have completed their review.

II. Petrinex IOGC Inclusion Project Continues

In the last issue of this newsletter, IOGC announced that the Resource Information Management Systems 2 (RIMS2) would soon be kicked off. The RIMS2 Project includes:

  • The Petrinex IOGC Inclusion Project;
  • A new royalty management system for IOGC; and,
  • Introduction of elements of a case management system at IOGC.

The new on-reserve oil and gas legislative and regulatory regime will be implemented via modernized business practices supported by new information systems.  Once the RIMS2 project is completed, IOGC will be able to align business processes and systems with those already in use by the provinces and industry.  By tapping into Petrinex, First Nations and oil and gas companies will benefit via:

  • Reduced royalty under-payments and over-payments due to up-front validation and use of a factor concept to ensure 100% allocations;
  • Fewer amendments and reconciliations for royalty data submitted by industry; and,
  • More effective and reliable data.

Five project workshops have taken place over the last quarter on the Petrinex IOGC Inclusion Project and progress had been steady. The remaining two streams of the RIMS2 Project – a new royalty management system and the introduction of case management – are undergoing a procurement process managed by Public Services and Procurement Canada.

III. Inventory of First Nation Sites

During the consultation process for amendments to the Indian Oil and Gas Act, 2009, First Nations indicated the importance of protecting sites of cultural importance.  In response, section 5. (1)(a), (b) of the Indian Oil and Gas Act, 2009 was developed. It provides for the Minister to order the suspension of industry operations if it presents a risk of harm to a site of "...cultural, spiritual or ceremonial importance to the first nation".

While the process to enact the Indian Oil and Gas Act, 2009 is also in abeyance with the Phase I regulations, it was determined that funding directed to developing an inventory of culturally significant sites should be utilized.  After a competitive process, the First Nations Technical Services Advisory Group (TSAG) was selected to perform the work necessary to develop the inventory. TSAG is a non-profit organization mandated by the Chiefs of Alberta to provide technical services and training, including for mapping and geographic information systems (GIS). TSAG began working with First Nations on their inventories in mid-2016. TSAG has reached out to all First Nations with active oil and gas sites on their reserve lands and has initiated projects with over 10 First Nations.

It is important to note that First Nations maintain ownership over their data and maps and IOGC does not receive any of the data collected throughout the project. The inventory of cultural sites is beneficial for a First Nation regardless of the progress made on bringing the Indian Oil and Gas Act, 2009 and Phase I regulations into force and can inform planning and other land management decisions.

For more information about the "Inventory of First Nation Sites" project, please contact Amanda Doyle at TSAG (adoyle@tsag.net; 780-483-8601).

For further information on IOGC or the MARS Project, 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
Email: aadnc.contactiogc.aandc@canada.ca

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