Archived - COVID-19 Update #6: Termination and extension of industry and IOGC operational deferrals during COVID-19 pandemic (updated September 8, 2020)

Dated September 8, 2020 and replaces Updates #5 and #3

During the first six months of the COVID-19 pandemic, the Government of Canada, through its regulatory agency Indian Oil and Gas Canada (IOGC) provided additional flexibility to oil and gas industry companies (industry) who hold contracts on First Nation lands. IOGC's initial deferrals were for three months (Update #3), and then they were extended for another three months (Update #5). IOGC's industry and IOGC operational deferrals related to selection of land for intermediate term of permit, continuation of subsurface contracts, and surface rights or interests are now being terminated and no further deferrals in these areas are being considered at this time.. The following deferrals will expire on September 16, 2020:

• 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.
• 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.
• 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.

With respect to inspections and environmental audits, see the following inspection update and continued compliance reporting requirements:

• 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 were initially deferred for until August 31, 2020, and are now deferred until further notice 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.

• Environmental Audits (no changes)
  
  1. Non-compliant sites identified in the 2019 Environmental Audits are required to be brought into compliance, with a deadline to report on compliance of December 31, 2020.
  2. Environmental audit reports due December 31, 2020, as required in surface contracts are deferred August 31, 2021.
  3. Surface contract holders may 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 challenges and rationale.

For additional information, see Information Letter Environmental Audit Deferrals.

These actions do not defer any other requirements. IOGC is open to discussing 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 and refer to the list of IOGC contacts below.