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

1. Phase I Regulations – Project Update:

Work during the current reporting period involved on-going discussion with the Indian Resource Council (IRC) and the Joint Technical Committee One (JTC-1) to resolve the request for six specific areas of accommodations brought forward in the IRC January 31, 2017 AGM resolution. As reported in the first quarter, the IRC and JTC-1 had both reviewed regulatory drafting instructions and had conditionally supported the proposed regulations, subject to a review of the resulting regulations. Just prior to the beginning of the previous reporting period, a new draft of the proposed Phase I regulations (the 4^th Consultation Draft) was readied. Printed paper copies of this draft, along with an information letter, were sent by regular mail to all Chiefs and Councils of producing First Nations as well as to other IOGC stakeholders (industry and other provincial government agencies). An electronic version of the proposed regulations was posted on the First Nations Gazette website for public viewing and feedback. Feedback from First Nation stakeholders was as follows:

• November 2, 2017 – the Blood Tribe submitted a request for an additional two new accommodations while raising concerns that two of the six accommodations made required some amendments.
• December 11, 2017 – following a thorough legal and technical review of the 4th Consultation Draft, JTC-1 submitted a set of seven new recommendations for accommodation for the Phase I regulations.

Although IOGC is still in the process of reviewing the seven new recommendations from JTC-1, there appears opportunity for further discussion and IOGC is committed to working with JTC-1 during the pre-publication process for the regulations so any accommodations will appear in the final version. The sole exception which cannot be accommodated within Phase I regulations is "Minimum Monthly Reference Price." This proposal is supported by IOGC for inclusion in the Phase II regulations, in which regulations related to royalties will be developed.

Finally, towards the end of the current reporting period of this newsletter, IOGC updated the "Indian Oil and Gas Act and Regulations – Record of Consultations".

2. Implementation of 2009 Act and Phase I regulations – Readiness Update:

IOGC continues to work on internal processes through its MARS Project Steering Committee to ensure the organization is ready to begin to implement, administer, and enforce the Indian Oil and Gas Act, 2009 and its Phase I regulations beginning on the day they both become law.

Once a path forward for Treasury Board consideration, including approval for pre-publication in the Canada Gazette, Part I of the Phase I regulations, has been agreed-upon with First Nation stakeholders, the MARS Project Plan and Deliverables Timeline can be updated.

IOGC is in the process of developing a MARS Strategic Communications Framework. Two of the four following (1 & 2) projected major components have been completed to support the Resource Information Management System 2 (RIMS2) Project:

• Petrinex – IOGC Inclusion Project
• RIMS Royalty Management and Case Management
• 2009 Act and Regulations Implementation
• Bring 2009 Act and Phase I regulations into force

3. Organizational Change Management (OCM) Update:

To support the implementation of the 2009 Act and Phase I regulations, OCM is helping business units complete sponsor self-assessments and develop their OCM communications plans.

An OCM team has been assembled for the RIMS2 Project. The team is using the Prosci© Methodology and Tools to support the project.

A successful bidder has been identified via the procurement process to provide long-term OCM services and support to IOGC. The contract can be officially awarded once security clearance issues have been resolved.

IOGC is also exploring options to further increase its internal change management capacity by contracting for training related to: 1) creating an additional 10 to 12 Prosci©-certified Change Management Practitioners within IOGC's core staff; 2) one-day manager / supervisor training for new managers and those unable to attend the last time this was offered; and, 3) one-day employee training for all remaining IOGC staff.

4. RIMS2 Project Update:

Please note that RIMS2 systems development is independent of the "Implementation of the 2009 Act and Phase I regulations." The new RIMS2 system functionality will come on-line sometime after the 2009 Act and Phase I regulations have both become law.

An important project milestone was reached when Sierra Systems was identified as the successful bidder and the contract was awarded for Sierra to: 1) construct new royalty management functionality (leverages Petrinex data exchange with IOGC); and, 2) the introduction of shared case management functionality to IOGC. A team from Sierra is presently on-site at IOGC and is quickly getting up to speed on IOGC's business requirements.

An important scope change has been introduced in that IOGC will not be receiving the range of data originally contemplated; instead, the data extract from Petrinex will be smaller, focusing only on the essential data elements required for the calculation of royalties.

Finally, as noted earlier, two of the four projected major components of the MARS Strategic Communications Framework required to support the RIMS2 Project have been completed. The partially-completed framework is currently undergoing review and approvals processes by INAC-HQ Communications.

5. Phase II Regulations – Project Update:

Please note that the Phase II regulations are out of scope of the "Implementation of the 2009 Act and Phase I regulations." Once the 2009 Act and Phase I regulations come into force, Phase II regulations will be developed and brought into force, as they are readied, until the existing Indian Oil and Gas Regulations, 1995 have been entirely replaced by new, modern regulations.

IOGC received JTC-1's feedback on the proposed regulatory drafting instructions for the Moneys regulations module on June 28, 2017. The feedback is being reviewed and a response is being prepared.

On December 13, 2017, IOGC received JTC-1's feedback on the proposed regulatory drafting instructions for both the Surface regulations module and the Exploration regulations module. This feedback has been forwarded to the regulatory module leads for analysis and response.

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