Archived - COVID-19 Update #5: Industry and IOGC Operational Deferrals During COVID-19 Pandemic (Updated June 12, 2020)

Dated June 12, 2020 and replaces Update #3

The operational deferrals in this update are now replaced by the operational deferral dates in COVID-19 Update #6.

As a result of the COVID-19 pandemic, the Government of Canada, through its regulatory agency Indian Oil and Gas Canada (IOGC) is providing additional flexibility to oil and gas industry companies (industry) who hold contracts on First Nation lands. IOGC’s initial deferrals were for three months and now IOGC is extending them for another three months. The measures described below are intended to support companies continuing their operations as well as ensure continued revenue flow to First Nations at this very critical time. Through delegated authorities under Sec. 5.(1)(d) of the Indian Oil and Gas Act R.S.C., 1985, c. I-7, IOGC is temporarily deferring certain industry requirements in the following four key areas:

• 1. Selection of Lands for Intermediate Term of Permit
  Section 54(2) of the Indian Oil and Gas Regulations, SOR/2019-196, establishes a late application process for a company in the instance where they have missed the deadline to apply to IOGC for the selection of lands for the initial term of their permit. IOGC will defer expiry dates from March 16, 2020 onwards related to this section for a 6 month period, until September 16, 2020. The late application fee would only apply to the end of the deferral period.
• 2. Continuation of Subsurface Contracts
  Section 64 of the Indian Oil and Gas Regulations, SOR/2019-196, provides a process and criteria for the continuation of a subsurface (mineral) contract. Contract expiry dates related to this section will be deferred for 6 months. This deferral applies to contracts due to expire between March 16, 2020, to September 16, 2020. This deferral also applies to contracts related to section 62 of the Indian Oil and Gas Regulations, SOR/2019-196. Note: All associated rentals require continued payment.
• 3. Surface Rights or Interests
  Section 77 of the Indian Oil and Gas Regulations, SOR/2019-196, directs a contract holder to renegotiate rent at specific time intervals. All time intervals prescribed in section 77 of the Indian Oil and Gas Regulations, SOR/2019-196, that results in a requirement to renegotiate between March 16, 2020 to September 16, 2020 are deferred for 6 months. Note: Original rental amounts require continued payment during the deferral period and any rental increase negotiated after the deferral period will be owed retroactively.
• 4. Inspections
  The Indian Oil and Gas Act R.S.C., 1985, c. I-7 provides authority for inspections related to verifying compliance with the Act or accompanying regulations. All routine industry-IOGC-First Nation or IOGC-First Nation-industry joint site inspections are deferred for until August 31, 2020 with some notable exceptions and stipulations. This deferral is intended to address: a) potential access restrictions on First Nation lands; and b) the safety of First Nation, industry, and IOGC representatives who would normally attend all joint inspections. At the time of this update, non-essential interprovincial travel is not recommended. IOGC will continue to consider local and provincial health authority guidance in relation to travel and adjust as required.
• Obligations of contract holders and operators to report environmental issues, emergencies, incidents, production compliance requirements, or any other related matters remain in place. If exceptional circumstances warrant, IOGC may conduct an inspection. First Nation Chief and Councils can send requests for inspection to Elaine.McIvor@canada.ca.
• 5. Environmental Audits
  1. Non-compliant sites identified in the 2019 Environmental Audits are now due December 31, 2020: IOGC’s environmental audit program requires regulated companies to bring their non-compliant sites into compliance. The deadline to report on compliance is deferred to December 31, 2020.
  2. Environmental Audit Reports due December 31, 2020 are now due August 31, 2021 Environmental audit reports due December 31, 2020, as required in surface contracts are now deferred August 31, 2021.
  3. Companies with other mandated environmental reporting requirement Surface contract holders may also request an extension of due dates for other environmental reporting requirements. In this case, please contact the Environmental Analyst responsible for the respective First Nation to discuss a new due date.

These actions do not defer any other requirements. The longer this uncertain time continues, IOGC may need to extend these deferral dates and consider other measures as more information becomes available. IOGC is open to discuss additional options on a case-by-case basis jointly with oil and gas producing First Nations and industry representatives. Please continue to check IOGC’s website for updates or changes. Please refer to the list of IOGC contacts below.