Surface Contract Rent Renegotiation
Table of contents
Overview
Unless a surface contract provides otherwise, the contract holder must renegotiate the annual rent amount with the First Nation's council, IOGC, and any First Nation member in lawful possession of the surface contract lands pursuant to Section 77(1) of the Indian Oil and Gas Regulations, 2019 (the "Regulations"). This renegotiation is required at the end of:
- every five-year period (Alberta, British Columbia), and
- every three-year period (Saskatchewan, Manitoba)
All Surface Leases and certain Rights-of-Way will contain an annual rent clause.
Process to Renegotiate Surface Rent
Prior to the end of each three or five-year period described in the Overview section (the "renegotiation period"), the contract holder will commence renegotiations with the First Nation's council and any First Nation member in lawful possession of the surface contract lands.
Upon reaching an agreement to the rent amount, the contract holder will submit to IOGC evidence of this agreement in the form of a Band Council Resolution ("BCR"). This is required even if the agreement is to leave the rent amount unchanged.
Renegotiation breakdown
If an agreement cannot be reached in the rent renegotiation, IOGC must determine the rent and amend the surface contract accordingly if a request is made to IOGC by the First Nation's council, the contract holder, or any First Nation member in lawful possession of the surface contract lands.
Online forms are currently unavailable; contact the Lease Administration Unit to obtain the required form.
Processing
IOGC undertakes a review of the agreed upon rent to confirm the amount is fair on the basis of the criteria referred to in Section 73(3)(c) of the Regulations. Upon completion of this review:
- the First Nation and contract holder are provided with a draft of the amended contract for review and ratification that includes the compensation payable; and
- the contract holder is asked to provide payment of additional moneys owing for the renegotiation period if the renegotiation period has passed.
Upon granting the amended surface contract, IOGC will provide the First Nation and contract holder with an original copy. The amended surface contract is not registered in the Indian Lands Registry System (ILRS).
Payments Due under Surface Contracts
Annual rents are payable to the Receiver General for Canada and are to be submitted to IOGC, which collects the funds on behalf of the First Nation.