Canada Oil and Gas Operations Act

Contents

1Short title#

This Act may be cited as the Canada Oil and Gas Operations Act.^note

2Definitions#

In this Act,

abandoned pipeline means a pipeline the operation of which has been abandoned with the leave of the Commission of the Canadian Energy Regulator as required by paragraph 4.01(1)(d) and that remains in place; (pipeline abandonné)

Accord Acts means

(a)the Canada–Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act, and

(b)the Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation and Offshore Renewable Energy Management Act; (lois de mise en oeuvre)

Agreement means the Agreement for Coordination and Cooperation in the Management and Administration of Petroleum Resources in the Inuvialuit Settlement Region that was made on June 25, 2013, as amended from time to time; (accord)

Chief Conservation Officer means the person designated as the Chief Conservation Officer under section 3.1; (délégué à l’exploitation)

Chief Safety Officer means the person designated as the Chief Safety Officer under section 3.1; (délégué à la sécurité)

Committee means the Oil and Gas Committee established by section 6; (Comité)

federal Ministers means the Minister of Natural Resources and the Minister of Northern Affairs; (ministres fédéraux)

field

(a)means a general surface area underlain or appearing to be underlain by one or more pools, and

(b)includes the subsurface regions vertically beneath the general surface area referred to in paragraph (a); (champ)

former regulations means the Canada Oil and Gas Land Regulations made pursuant to the Public Lands Grants Act and the Territorial Lands Act and includes orders made pursuant to those Regulations; (anciens règlements)

gas means natural gas and includes all substances, other than oil, that are produced in association with natural gas; (gaz)

Inuvialuit Settlement Region has the same meaning as in section 2 of the Agreement — as defined in section 2 of the Western Arctic (Inuvialuit) Claims Settlement Act — excluding any area in Yukon or in the adjoining area as defined in section 2 of the Yukon Act; (région désignée des Inuvialuits)

lease means an oil and gas lease issued pursuant to regulations made in accordance with the Territorial Lands Act and the Public Lands Grants Act and includes a production licence issued under the Canada Petroleum Resources Act; (concession)

Minister means

(a)in relation to any area in respect of which the Minister of Northern Affairs has administrative responsibility for the natural resources therein, the Minister of Northern Affairs, and

(b)in relation to any area in respect of which the Minister of Natural Resources has administrative responsibility for the natural resources therein, the Minister of Natural Resources; (ministre)

navigable water has the same meaning as in section 2 of the Canadian Navigable Waters Act; (eaux navigables)

oil means

(a)crude petroleum regardless of gravity produced at a well-head in liquid form, and

(b)any other hydrocarbons, except coal and gas, including hydrocarbons that may be extracted or recovered from surface or subsurface deposits, including deposits of oil sand, bitumen, bituminous sand, oil shale and other types of deposits; (pétrole)

onshore has the same meaning as in section 2 of the Northwest Territories Act; (région intracôtière)

permit means an exploratory oil and gas permit issued pursuant to regulations made in accordance with the Territorial Lands Act and the Public Lands Grants Act and includes an exploration agreement entered into under the Canada Oil and Gas Land Regulations and any exploration agreement or licence that is subject to the Canada Petroleum Resources Act; (permis)

pipeline means any pipe or any system or arrangement of pipes by which oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas is conveyed from any well-head or other place at which it is produced to any other place, or from any place where it is stored, processed or treated to any other place, and includes all property of any kind used for the purpose of, or in connection with or incidental to, the operation of a pipeline in the gathering, transporting, handling and delivery of the oil, gas or substance and, without restricting the generality of the foregoing, includes offshore installations or vessels, tanks, surface reservoirs, pumps, racks, storage and loading facilities, compressors, compressor stations, pressure measuring and controlling equipment and fixtures, flow controlling and measuring equipment and fixtures, metering equipment and fixtures, and heating, cooling and dehydrating equipment and fixtures, but does not include any pipe or any system or arrangement of pipes that constitutes a distribution system for the distribution of gas to ultimate consumers; (pipeline)

pool means a natural underground reservoir containing or appearing to contain an accumulation of oil or gas or both oil and gas and being separated or appearing to be separated from any other such accumulation; (gisement)

prescribed means prescribed by regulations made by the Governor in Council; (Version anglaise seulement)

Provincial Minister means the Provincial Minister within the meaning of either of the Accord Acts; (ministre provincial)

spill-treating agent, except in section 25.4, means a spill-treating agent that is on the list established under section 14.2; (agent de traitement)

straddling resource means a pool or field that the Commission of the Canadian Energy Regulator determines under section 48.02

(a)is wholly or partly in the Inuvialuit Settlement Region, other than in Inuvialuit lands as defined in Article 2.1 of the Agreement, and

(b)straddles the offshore, as defined in section 48.01, and the onshore; (ressource chevauchante)

well means any opening in the ground, not being a seismic shot hole, that is made, to be made or is in the process of being made, by drilling, boring or other method,

(a)for the production of oil or gas,

(b)for the purpose of searching for or obtaining oil or gas,

(c)for the purpose of obtaining water to inject into an underground formation,

(d)for the purpose of injecting gas, air, water or other substance into an underground formation, or

(e)for any purpose, if made through sedimentary rocks to a depth of at least one hundred and fifty metres. (puits)

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Purpose

2.1Purpose#

The purpose of this Act is to promote, in respect of the exploration for and exploitation of oil and gas,

(a)safety, particularly by encouraging persons exploring for and exploiting oil or gas to maintain a prudent regime for achieving safety;

(b)the protection of the environment;

(b.01)accountability in accordance with the “polluter pays” principle;

(b.1)the safety of navigation in navigable waters;

(c)the conservation of oil and gas resources;

(d)joint production arrangements; and

(e)economically efficient infrastructures.

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Application

3Application#

This Act applies in respect of the exploration and drilling for and the production, conservation, processing and transportation of oil and gas in

(a)that part of the onshore that is under the administration of a federal minister,

(b)Nunavut,

(c)Sable Island,

(d)that part — of the internal waters of Canada or the territorial sea of Canada — that is not situated

(i)in a province other than the Northwest Territories, or

(ii)in that part of the onshore that is not under the administration of a federal minister, and

(e)the continental shelf of Canada and the waters superjacent to the seabed of that continental shelf,

other than of oil and gas in the adjoining area, as defined in section 2 of the Yukon Act.^note

Chief Safety Officer and Chief Conservation Officer

3.1Designation#

The Chief Executive Officer of the Canadian Energy Regulator may, for the purposes of this Act, designate an employee of the Canadian Energy Regulator to be the Chief Safety Officer and the same or another employee of that Regulator to be the Chief Conservation Officer.^note

Statutory Instruments Act

3.2Orders#

For greater certainty, an order made by a safety officer, the Chief Safety Officer, a conservation officer, the Chief Conservation Officer, the Committee or the Commission of the Canadian Energy Regulator is not a statutory instrument as defined in the Statutory Instruments Act.^note

Prohibition

4Prohibition#

No person shall carry on any work or activity related to the exploration or drilling for or the production, conservation, processing or transportation of oil or gas in any area to which this Act applies unless

(a)that person is the holder of an operating licence issued under paragraph 5(1)(a);

(b)that person is the holder of an authorization issued, before the commencement of operations, under paragraph 5(1)(b) for each such work or activity; and

(c)where it is required, that person is authorized or entitled to carry on business in the place where that person proposes to carry on the work or activity.

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4.01Limitations on pipelines#

(1)A holder of an authorization under paragraph 5(1)(b) to construct or operate a pipeline shall not, without the leave of the Commission of the Canadian Energy Regulator,

(a)sell, transfer or lease to any person its pipeline, in whole or in part;

(b)purchase or lease any pipeline from any person;

(c)enter into an agreement for amalgamation with any person; or

(d)abandon the operation of a pipeline.

(2)For the purposes of paragraph (1)(b), pipeline includes a pipeline as defined in section 2 or any other pipeline.

(2.1)The Commission of the Canadian Energy Regulator may, on granting leave to abandon the operation of a pipeline, impose any terms and conditions that it considers proper.

(2.2)The Commission of the Canadian Energy Regulator may order a holder of an authorization issued under paragraph 5(1)(b) or a holder of that authorization that has obtained the Commission’s leave to abandon the operation of its pipeline, or the holder’s successor or assign, to take any measure that the Commission considers necessary to ensure that the holder, or its successor or assign, has the ability to pay for the abandonment of its pipelines and any costs and expenses related to its abandoned pipelines.

(3)Despite paragraph (1)(a), leave shall only be required if the holder sells, transfers or leases any part of its pipeline that is capable of being operated for the transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas.

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Delegation

4.1Delegation#

(1)The Commission of the Canadian Energy Regulator may delegate any of its powers under section 5, 5.02, 5.03, 5.11, 5.12, 26.1 or 27 to any person, and the person shall exercise those powers in accordance with the terms of the delegation.

(2)The person to whom the power to issue an authorization under paragraph 5(1)(b) is delegated may exercise that power in relation to a section or part of a pipeline that passes in, on, over, under, through or across a navigable water only after having consulted the Commission of the Canadian Energy Regulator.

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Cost Recovery

4.2Regulations respecting fees, etc.#

(1)The Governor in Council may make regulations

(a)respecting the fees or charges, or the method of calculating the fees or charges, to be paid for the provision, by the Canadian Energy Regulator or the Minister, of a service or product under this Act;

(b)respecting the fees or charges, or the method of calculating the fees or charges, in respect of any of the Canadian Energy Regulator’s or the Minister’s activities under or related to this Act or under any other Act of Parliament, that are to be paid by

(i)a person who makes an application for an authorization under paragraph 5(1)(b) or an application under subsection 5.1(2), or

(ii)the holder of an operating licence or authorization issued under section 5; and

(c)respecting the refund of all or part of any fee or charge referred to in paragraph (a) or (b), or the method of calculating that refund.

(2)The amounts of the fees or charges referred to in paragraph (1)(a) shall not exceed the cost of providing the services or products.

(3)The amounts of the fees or charges referred to in paragraph (1)(b) shall not exceed the cost of performing the activities under or related to this Act or under any other Act of Parliament.

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Licences and Authorizations

Operating Licences and Authorization for Work

5Licences and authorizations#

(1)The Commission of the Canadian Energy Regulator may, on application made in the form and containing the information fixed by the Commission of the Canadian Energy Regulator, and made in the prescribed manner, issue

(a)an operating licence; and

(b)an authorization with respect to each work or activity proposed to be carried on.

(2)An operating licence expires on the thirty-first day of March immediately after the day on which it is issued and may be renewed for successive periods not exceeding one year each.

(3)An operating licence is subject to any requirements that are determined by the Commission of the Canadian Energy Regulator or that are prescribed and to any deposits that are prescribed.

(4)An authorization shall be subject to such approvals as the Commission of the Canadian Energy Regulator determines or as may be granted in accordance with the regulations and such requirements and deposits as the Commission of the Canadian Energy Regulator determines or as may be prescribed, including

(a)requirements relating to liability for loss, damage, costs or expenses;

(b)requirements for the carrying out of environmental programs or studies; and

(c)requirements for the payment of expenses incurred by the Canadian Energy Regulator in approving the design, construction and operation of production facilities and production platforms as those terms are defined in the regulations.

(5)The Commission of the Canadian Energy Regulator may suspend or revoke an operating licence or an authorization for failure to comply with, contravention of or default in respect of

(a)a requirement, approval or deposit subject to which the licence or authorization was issued;

(a.1)a fee or charge payable in accordance with regulations made under section 4.2;

(b)a requirement undertaken in a declaration referred to in subsection 5.11(1) or (2);

(c)subsection 5.11(3), 5.12(2), 26.1(4) or (5) or 27(1.1), (1.2) or (5); or

(d)any applicable regulation.

(6)The Commission of the Canadian Energy Regulator may vary the conditions of an operating licence or authorization under section 383 of the Canadian Energy Regulator Act.

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5.001Timing#

(1)If an application for an authorization under subsection 5(1) is made with respect to a work or activity proposed to be carried on in whole or in part in any area in respect of which the Minister of Northern Affairs has administrative responsibility for natural resources, the Commission of the Canadian Energy Regulator shall, within 18 months after the day on which the applicant has, in the Commission’s opinion, provided a complete application, either issue the authorization to the applicant under that subsection or notify the applicant in writing of its decision not to issue the authorization.

(2)The Minister may, by order, extend the period referred to in subsection (1) by a maximum of three months. The Governor in Council may, on the recommendation of the Minister, by order, further extend that period by any additional period or periods of time.

(3)If the application for an authorization is in respect of a designated project, as defined in section 2 of the Impact Assessment Act, for which an impact assessment is required under that Act, the Minister of the Environment must issue the decision statement referred to in section 65 of that Act in respect of the designated project.

(4)If the Commission of the Canadian Energy Regulator requires the applicant to provide information or undertake a study with respect to the work or activity, the period that is taken by the applicant, in the Commission’s opinion, to comply with the requirement is not included in the calculation of the period referred to in subsection (1) or, if the period is extended under subsection (2), within that extended period.

(5)The Commission of the Canadian Energy Regulator shall, without delay, make public the dates on which the period referred to in subsection (4) begins and ends.

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5.002Participant funding program#

The Canadian Energy Regulator may establish a participant funding program to facilitate the participation of the public in the impact assessment, as defined in section 2 of the Impact Assessment Act, of any designated project, as defined in that section, if

(a)the Canadian Energy Regulator has responsibilities for the project under that Act;

(b)the project includes physical activities that are designated by regulations made under paragraph 112(1)(e) of that Act or that are part of a class of activities designated by those regulations; and

(c)the project is the subject of an application for an authorization under subsection 5(1) of this Act.

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5.01Right of entry#

(1)Any person may, for the purpose of exploring for or exploiting oil or gas, maintaining safety or protecting the environment, enter on and use the surface of the land in any area in which this Act applies in order to carry on a work or activity authorized under paragraph 5(1)(b).

(1.1)Any person or their successor or assign may, for the purpose of maintaining safety or protecting the environment, enter on and use the surface of the land in any area in which this Act applies in order to carry on a work or activity in relation to an abandoned pipeline for which the person has received the leave required by paragraph 4.01(1)(d).

(2)Despite subsections (1) and (1.1), if a person occupies land in an area to which this Act applies and that person owns or has title to the land — or has lawful possession of it, other than by virtue of an authorization under paragraph 5(1)(b) or an interest as defined in section 2 of the Canada Petroleum Resources Act — it is prohibited for anyone to enter on or use the surface of that land without the consent of the occupier or, if consent has been refused, except in accordance with the terms and conditions of

(a)in the case of land within Nunavut, a decision of the Nunavut Surface Rights Tribunal made in accordance with the Nunavut Waters and Nunavut Surface Rights Tribunal Act;

(a.1)in the case of land in the Northwest Territories, an order made by a territorial tribunal that is competent to resolve matters in dispute relating to access to the surface of lands; and

(b)in any other case, a decision of an arbitrator made in accordance with the regulations.

(3)Subsections (1) to (2) do not apply in respect of Inuit-owned land as defined in subsection 2(1) of the Nunavut Waters and Nunavut Surface Rights Tribunal Act.

(4)[Repealed, 1998, c. 5, s. 12] (repealed)

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Navigable Waters

5.011Construction or operation#

No person shall construct or operate a pipeline that passes in, on, over, under, through or across a navigable water unless an authorization to construct or operate, as the case may be, the pipeline has been issued under paragraph 5(1)(b).^note

5.012Effects on navigation#

In addition to any other factor that it considers appropriate, the Commission of the Canadian Energy Regulator shall take into account the effects that its decision might have on navigation, including safety of navigation, when deciding whether to issue an authorization under paragraph 5(1)(b) in respect of a pipeline that passes in, on, over, under, through or across a navigable water.^note

5.013Pipeline not work#

Despite the definition work in section 2 of the Canadian Navigable Waters Act, a pipeline in respect of which an authorization has been or may be issued under paragraph 5(1)(b) is not a work to which that Act applies.^note

5.014Regulations#

(1)The Governor in Council may, for purposes related to navigation, on the joint recommendation of the Minister of Northern Affairs and the Minister of Transport, make regulations respecting sections or parts of pipelines that pass in, on, over, under, through or across any navigable water in any area in respect of which the Minister of Northern Affairs has administrative responsibility for natural resources, including regulations respecting the design, construction, operation and abandonment of those pipelines and the issuance of authorizations under paragraph 5(1)(b) in respect of their construction or operation.

(2)The Governor in Council may, for purposes related to navigation, on the joint recommendation of the Minister of Natural Resources and the Minister of Transport, make regulations respecting sections or parts of pipelines that pass in, on, over, under, through or across any navigable waters in any area in respect of which the Minister of Natural Resources has administrative responsibility for natural resources, including regulations respecting the design, construction, operation and abandonment of those pipelines and the issuance of authorizations under paragraph 5(1)(b) in respect of their construction or operation.

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5.015Existing terms and conditions#

Terms and conditions imposed at any time before the coming into force of this section in relation to an approval given under the Navigation Protection Act in respect of a pipeline, in respect of which an authorization has been issued under paragraph 5(1)(b), apply as if they were requirements determined by the National Energy Board to be requirements to which the authorization is subject.^note

Safety of Works and Activities

5.02Safety#

The Commission of the Canadian Energy Regulator shall, before issuing an authorization for a work or activity referred to in paragraph 5(1)(b), consider the safety of the work or activity by reviewing, in consultation with the Chief Safety Officer, the system as a whole and its components, including its installations, equipment, operating procedures and personnel.^note

Spill-treating Agent

5.021Net environmental benefit#

The Commission of the Canadian Energy Regulator must not permit the use of a spill-treating agent in an authorization issued under paragraph 5(1)(b) unless that Commission determines, taking into account any prescribed factors and any factors the Regulator considers appropriate, that the use of the spill-treating agent is likely to achieve a net environmental benefit.^note

Financial Requirements

5.03Compliance with certain provisions#

The Commission of the Canadian Energy Regulator shall, before issuing an authorization for a work or activity referred to in paragraph 5(1)(b), ensure that the applicant has complied with the requirements of subsections 26.1(1) or (2) and 27(1) or (1.01) in respect of that work or activity.^note

Development Plan Approval

5.1Approval of general approach of development#

(1)No approval that is

(a)applicable to an authorization under paragraph 5(1)(b) to carry on work or activity in relation to developing a pool or field, and

(b)prescribed for the purposes of this subsection

shall be granted unless the Commission of the Canadian Energy Regulator, on application submitted in accordance with subsection (2), has approved a development plan relating to the pool or field pursuant to subsection (4).

(2)For the purposes of subsection (1), an application for the approval of a development plan shall be submitted to the Canadian Energy Regulator in the form and containing the information fixed by the Canadian Energy Regulator, at such time and in such manner as may be prescribed, together with the proposed development plan in the form and containing the information described in subsection (3).

(3)A development plan relating to the proposed development of a pool or field submitted pursuant to this section shall be set out in two parts, containing

(a)in Part I, a description of the general approach of developing the pool or field, and in particular, information, in such detail as may be prescribed, with respect to

(i)the scope, purpose, location, timing and nature of the proposed development,

(ii)the production rate, evaluations of the pool or field, estimated amounts of oil or gas proposed to be recovered, reserves, recovery methods, production monitoring procedures, costs and environmental factors in connection with the proposed development, and

(iii)the production system and any alternative production systems that could be used for the development of the pool or field; and

(b)in Part II, all technical or other information and proposals, as may be prescribed, necessary for a comprehensive review and evaluation of the proposed development.

(4)After reviewing an application and development plan submitted pursuant to this section, the Commission of the Canadian Energy Regulator may approve the development plan, subject to the consent of the Governor in Council in relation to Part I of the development plan and any requirements that the Commission considers appropriate or that may be prescribed.

(5)Where a development plan has been approved pursuant to subsection (4),

(a)no amendment of the development plan shall be made unless it is approved by the Commission of the Canadian Energy Regulator and, in the case of an amendment to Part I of the development plan, the Governor in Council consents to the approval; and

(b)any requirement that the approval is subject to may be amended by the Commission of the Canadian Energy Regulator but, if the requirement relates to Part I of the development plan, it may only be amended with the consent of the Governor in Council.

(6)Subsections (1) to (5) apply, with such modifications as the circumstances require, with respect to a proposed amendment to a development plan or to any requirement that the approval of the plan is subject to.

(6.1)Despite subsection (4), the Commission of the Canadian Energy Regulator may approve a development plan in relation to developing a straddling resource, subject to

(a)the consent of the Governor in Council and the Executive Council of the Northwest Territories in relation to Part I of the plan; and

(b)any requirements that the Commission considers appropriate or that may be prescribed.

(6.2)If the Governor in Council and the Executive Council of the Northwest Territories do not consent in relation to Part I of the plan, the Minister or the Government of the Northwest Territories may notify the other of their intention to refer the matter to an independent expert for a decision in accordance with section 48.095.

(6.3)The expert’s decision in relation to the development plan is deemed to be a development plan that is approved by the Commission of the Canadian Energy Regulator and in relation to Part I of the plan is deemed to be one that is consented to by the Governor in Council and the Executive Council of the Northwest Territories.

(6.4)If a development plan is approved under subsection (6.1) or deemed to be approved under subsection (6.3), no amendment is to be made to the plan unless it is approved by the Commission of the Canadian Energy Regulator and, in the case of an amendment to Part I of the plan, consented to by the Governor in Council and the Executive Council of the Northwest Territories.

(6.5)Subsections (6.1) to (6.4) apply, with any modifications that the circumstances require, in respect of a proposed amendment to a development plan.

(7)The definitions in sections 29 and 48.15 apply in subsections (8) to (12).

(8)Despite subsection (4), a development plan submitted for approval in respect of a work or activity in a transboundary pool or field that is the subject of a joint exploitation agreement is not to be approved by the Commission of the Canadian Energy Regulator unless the appropriate regulator has agreed to its content. That approval is subject to the consent of the Governor in Council in relation to Part I of the development plan and any requirements that the Commission and regulator have agreed are appropriate or that may be prescribed.

(9)In the case of a disagreement about the content of the plan submitted for approval, or any of the requirements for approval referred to in subsection (8), the Minister, on the Commission of the Canadian Energy Regulator’s behalf, or the regulator may refer the matter to an expert in accordance with section 48.27.

(10)Any submissions to the expert by the Minister on the Commission of the Canadian Energy Regulator’s behalf regarding Part I of the development plan are subject to the prior consent of the Governor in Council.

(11)The expert’s decision is deemed to be approval by the Commission of the Canadian Energy Regulator of the plan, and Part I of that plan is deemed to have been consented to by the Governor in Council under subsection (8).

(12)Subsections (7) to (11) apply, with any necessary modifications, with respect to a proposed amendment to a development plan to which a work or activity in a transboundary pool or field or to any requirement that the approval of the plan is subject.

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Declarations

5.11Declaration by applicant#

(1)Subject to subsection (2), no authorization under paragraph 5(1)(b) shall be issued unless the Commission of the Canadian Energy Regulator has received, from the applicant for the authorization, a declaration in the form fixed by the Commission of the Canadian Energy Regulator that states that

(a)the equipment and installations that are to be used in the work or activity to be authorized are fit for the purposes for which they are to be used, the operating procedures relating to them are appropriate for those uses, and the personnel who are to be employed in connection with them are qualified and competent for their employment; and

(b)the applicant shall ensure, so long as the work or activity that is authorized continues, that the equipment and installations continue to be fit for the purposes for which they are used, the operating procedures continue to be appropriate for those uses, and the personnel continue to be so qualified and competent.

(2)The Commission of the Canadian Energy Regulator may accept, in respect of equipment that is to be used in the work or activity to be authorized, a declaration from the owner of the equipment in lieu of a declaration from the applicant for the authorization, and such a declaration shall be in a form fixed by the Commission of the Canadian Energy Regulator and shall state that

(a)the equipment is fit for the purpose for which it is to be used, the operating procedures relating to it are appropriate for that use, and the personnel who are to be employed by the owner in connection with it are qualified and competent for their employment; and

(b)the owner shall ensure that, so long as the equipment is used in the work or activity that is authorized, that the equipment continues to be fit for the purpose for which it is used, the operating procedures continue to be appropriate for that use, and the personnel continue to be so qualified and competent.

(3)Where the equipment, an installation, the operating procedures or any of the personnel specified in the declaration changes and no longer conforms to the declaration, the holder of the authorization shall provide the Commission of the Canadian Energy Regulator with a new declaration as soon as possible after the change occurs.

(4)The Commission of the Canadian Energy Regulator or any delegate of the Commission of the Canadian Energy Regulator is not liable to any person by reason only of having issued an authorization in reliance on a declaration made under this section.

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Certificates

5.12Certificate#

(1)No authorization under paragraph 5(1)(b) shall be issued with respect to any prescribed equipment or installation, or any equipment or installation of a prescribed class, unless the Commission of the Canadian Energy Regulator has received, from the applicant for the authorization, a certificate issued by a certifying authority in the form fixed by the Commission of the Canadian Energy Regulator.

(2)The holder of an authorization shall ensure that the certificate referred to in subsection (1) remains in force for so long as the equipment or installation to which the certificate relates is used in the work or activity in respect of which the authorization is issued.

(3)A certificate referred to in subsection (1) shall state that the equipment or installation in question

(a)is fit for the purposes for which it is to be used and may be operated safely without posing a threat to persons or to the environment in the location and for the time set out in the certificate; and

(b)is in conformity with all of the requirements and conditions that are imposed for the purposes of this section by subsection 5(4), whether they are imposed by regulation or by the Commission of the Canadian Energy Regulator.

(4)A certificate referred to in subsection (1) is not valid if the certifying authority

(a)has not complied with any prescribed procedure or any procedure that the Commission of the Canadian Energy Regulator may establish; or

(b)is a person or an organization that has participated in the design, construction or installation of the equipment or installation in respect of which the certificate is issued, to any extent greater than that prescribed.

(5)An applicant shall permit the certifying authority to have access to the equipment and installation in respect of which the certificate is required and to any information that relates to them.

(6)For the purposes of this section, certifying authority has the meaning assigned by the regulations.

(7)The Commission of the Canadian Energy Regulator or any delegate of the Commission of the Canadian Energy Regulator is not liable to any person by reason only of having issued an authorization in reliance on a certificate issued under this section.

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Benefits Plan Approval

5.2Definition of benefits plan#

(1)In this section, benefits plan means a plan for the employment of Canadians and for providing Canadian manufacturers, consultants, contractors and service companies with a full and fair opportunity to participate on a competitive basis in the supply of goods and services used in any proposed work or activity referred to in the benefits plan.

(2)No approval of a development plan shall be granted under subsection 5.1(1) and no authorization of any work or activity shall be issued under paragraph 5(1)(b), until the Minister has approved, or waived the requirement of approval of, a benefits plan in respect of the work or activity.

(3)The Minister may require that any benefits plan submitted pursuant to subsection (2) include provisions to ensure that disadvantaged individuals or groups have access to training and employment opportunities and to enable such individuals or groups or corporations owned or cooperatives operated by them to participate in the supply of goods and services used in any proposed work or activity referred to in the benefits plan.

(4)The definitions in sections 29 and 48.15 apply in subsections (5) and (6).

(5)A benefits plan submitted for approval in respect of a work or activity in a transboundary pool or field that is the subject of a joint exploitation agreement is not to be approved under subsection (2) unless the Minister and the appropriate regulator have agreed to its content.

(6)The Minister or the regulator may, if they disagree about the content of the plan submitted for approval, refer the matter to an expert in accordance with section 48.27. The expert’s decision is deemed to be approval by the Minister of the plan.

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Guidelines and Interpretation Notes

5.3Board guidelines and interpretation notes#

(1)The Canadian Energy Regulator may issue and publish, in any manner the Regulator considers appropriate, guidelines and interpretation notes with respect to the application and administration of section 5, 5.1 and 13.02 and subsection 27(1.01) and any regulations made under section 4.2, 13.17 and 14.

(2)The Minister may issue and publish, in any manner the Minister considers appropriate, guidelines and interpretation notes with respect to the application and administration of section 5.2.

(3)For greater certainty, guidelines and interpretation notes issued pursuant to subsections (1) and (2) are not statutory instruments as defined in the Statutory Instruments Act.

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Jurisdiction and Powers of the Commission of the Canadian Energy Regulator

5.31Jurisdiction#

(1)The Commission of the Canadian Energy Regulator has full and exclusive jurisdiction to inquire into, hear and determine any matter

(a)if it appears to the Commission of the Canadian Energy Regulator that any person failed to do any act, matter or thing required to be done by this Act, any regulation, order or direction made under this Act, or an operating licence or authorization issued under section 5, or that any person has done or is doing any act, matter or thing contrary to or in contravention of this Act, any regulation, order or direction made under this Act, or an operating licence or authorization issued under section 5; or

(b)if it appears to the Commission of the Canadian Energy Regulator that the circumstances may require the Commission, in the public interest, to make any order or give any direction, leave, sanction or approval that by law it is authorized to make or give, or with respect to any act, matter or thing that is prohibited, sanctioned or required to be done by this Act, any regulation, order or direction made under this Act, or an operating licence or authorization issued under section 5.

(2)The Commission of the Canadian Energy Regulator may, of its own motion, inquire into, hear and determine any matter or thing that under this Act it may inquire into, hear and determine.

(3)For the purposes of this Act, the Commission of the Canadian Energy Regulator has full jurisdiction to hear and determine all matters, whether of law or of fact.

^note

5.32Mandatory orders#

The Commission of the Canadian Energy Regulator may

(a)order and require any person to do, without delay, or within or at any specified time and in any manner set by the Canadian Energy Regulator, any act, matter or thing that the person is or may be required to do under this Act, any regulation, order or direction made under this Act or an operating licence or authorization issued under section 5; and

(b)prohibit the doing or continuing of any act, matter or thing that is contrary to this Act, any regulation, order or direction made under this Act or an operating licence or authorization issued under section 5.

^note

5.33Committee’s decisions and orders#

Sections 5.31 and 5.32 do not apply to any act, matter or thing required by or contrary to any decision or order of the Committee.^note

5.331Public hearings#

The Commission of the Canadian Energy Regulator may conduct a public hearing in relation to the exercise of any of its powers or the performance of any of its duties and functions under this Act.^note

5.34Confidentiality#

At any public hearing conducted under section 5.331 or in any proceedings with respect to Part 0.1, the Commission of the Canadian Energy Regulator may take any measures and make any order that it considers necessary to ensure the confidentiality of any information likely to be disclosed at the hearing or in the proceedings if the Commission is satisfied that

(a)disclosure of the information could reasonably be expected to result in a material loss or gain to a person directly affected by the hearing or proceedings, or to prejudice the person’s competitive position, and the potential harm resulting from the disclosure outweighs the public interest in making the disclosure; or

(b)the information is financial, commercial, scientific or technical information that is confidential information supplied to the Canadian Energy Regulator and

(i)the information has been consistently treated as confidential information by a person directly affected by the hearing or proceedings, and

(ii)the person’s interest in confidentiality outweighs the public interest in its disclosure.

^note

5.35Confidentiality — security#

At any public hearing conducted under section 5.331 or in respect of any order, or in any proceedings, with respect to Part 0.1, the Commission of the Canadian Energy Regulator may take any measures and make any order that it considers necessary to ensure the confidentiality of information that is likely to be disclosed at the hearing or in the proceedings or is contained in the order if the Commission is satisfied that

(a)there is a real and substantial risk that disclosure of the information will impair the security of pipelines, buildings, installations, vessels, vehicles, aircraft or systems, including computer or communication systems, or methods employed to protect them; and

(b)the need to prevent disclosure of the information outweighs the public interest in its disclosure.

^note

5.351Exception#

The Commission of the Canadian Energy Regulator shall not take any measures or make any order under section 5.34 or 5.35 in respect of information or documentation referred to in paragraphs 101(7)(a) to (e) and (i) of the Canada Petroleum Resources Act.^note

5.36Conditional orders, etc.#

(1)Without limiting the generality of any provision of this Act that authorizes the Commission of the Canadian Energy Regulator to impose terms and conditions in respect of any operating licence or authorization issued under section 5 or any of its orders, the Commission may direct in any operating licence, authorization or order that it or any portion or provision of it shall come into force at a future time or on the happening of any contingency, event or condition specified in the operating licence, authorization or order or on the performance to the satisfaction of the Commission of any conditions or requirements that the Commission may impose in the operating licence, authorization or order, and the Commission may direct that the whole or any portion of the operating licence, authorization or order shall have force for a limited time or until the happening of a specified event.

(2)The Commission of the Canadian Energy Regulator may, instead of making an order final in the first instance, make an interim order, and may reserve its decision pending further proceedings in connection with any matter.

^note

Documents

5.37Documents#

(1)A holder of the leave required by paragraph 4.01(1)(d) and a holder of an authorization to construct or operate a pipeline issued under paragraph 5(1)(b), or the successor or assign of either holder, shall keep, in a form and manner determined by the Canadian Energy Regulator, any documents, including any records or books of account, that the Regulator requires and that contain information that is determined by the Regulator to be necessary for the administration of this Act and any regulations made under it.

(2)The holder of that leave and the holder of that authorization, or the successor or assign of either holder, shall produce those documents to the Canadian Energy Regulator, or make them available to the Regulator or its designated representative, for inspection or copying at a time and under conditions set by the Regulator.

^note

Oil and Gas Administration Advisory Council

5.4Council established#

(1)There is established a council, to be known as the Oil and Gas Administration Advisory Council, consisting of the following six members, namely, the Chairperson of the Canada–Nova Scotia Offshore Energy Regulator, the Chairperson of the Canada–Newfoundland and Labrador Offshore Energy Regulator, the Chairperson of the board of directors of the Canadian Energy Regulator, a person designated jointly by the federal Ministers, a person designated by one of the Provincial Ministers and a person designated by the other Provincial Minister.

(2)The Council shall promote consistency and improvement in the administration of the regulatory regime in force under this Act and Part III of the Accord Acts and provide advice respecting those matters to the federal Ministers, the Provincial Ministers, the Canadian Energy Regulator and the Regulators referred to in subsection (1).

^note

Offshore Oil and Gas Training Standards Advisory Board

5.5Board established#

(1)The federal Ministers, with the approval of the Provincial Ministers, may establish a board, to be known as the Offshore Oil and Gas Training Standards Advisory Board, consisting of not more than nine members, each of whom has special knowledge respecting offshore oil and gas operations or respecting training for such operations.

(2)The Board shall inquire as to existing training standards and, if necessary, develop or encourage the development of training standards and shall recommend the adoption of training standards to the federal and Provincial Ministers, to the Canadian Energy Regulator and to the Boards referred to in subsection 5.4(1).

^note

Extended Formation Flow Tests

5.6Title#

(1)Subject to subsection (2), title to oil and gas produced during an extended formation flow test vests in the person who conducts the test in accordance with an authorization under section 5, with every approval and requirement subject to which such an authorization is issued and with any applicable regulation, whether or not the person has a production licence issued under the Canada Petroleum Resources Act.

(2)Title to oil and gas referred to in subsection (1) is conditional on compliance with the terms of the authorization, approval or regulation, including the payment of royalties or other payment in lieu of royalties.

(3)This section applies only in respect of an extended formation flow test that provides significant information for determining the best recovery system for a reservoir or for determining the limits of a reservoir or the productivity of a well producing oil or gas from a reservoir and that does not adversely affect the ultimate recovery from a reservoir.

^note

Oil and Gas Committee

Constitution

6Oil and Gas Committee#

(1)The Governor in Council may establish a committee to be known as the Oil and Gas Committee, which shall consist of five members, not more than three of whom shall be employees in the federal public administration.

(2)The Committee shall be under the direction of

(a)the Minister of Northern Affairs in relation to any area in respect of which that Minister has administrative responsibility for the natural resources therein; and

(b)the Minister of Natural Resources in relation to any area in respect of which that Minister has administrative responsibility for the natural resources therein.

(3)The members of the Committee shall be appointed by the Governor in Council to hold office for a term of three years, and one member shall be designated as chairman for such term as may be fixed by the Governor in Council.

(4)A retiring chairman or retiring member may be re-appointed to the Committee in the same or another capacity.

^note

7Qualification of members#

(1)The Governor in Council shall appoint as members of the Committee at least two persons who appear to the Governor in Council to have specialized, expert or technical knowledge of oil and gas.

(2)Persons employed in any division, branch or bureau of the Department of Indigenous Services, or the Department of Natural Resources, that is designated by order of the Minister concerned as the division, branch or bureau charged with the day-to-day administration and management of oil and gas resources for the Department, are not eligible to be members of the Committee, but the Ministers concerned may each designate one officer from any such division, branch or bureau who shall act as secretaries to the Committee.

(3)The Minister of Northern Affairs and the Minister of Natural Resources shall provide the Committee with such officers, clerks and employees as may be necessary for the proper conduct of the affairs of the Committee, and may provide the Committee with such professional or technical assistance for temporary periods or for specific work as the Committee may request, but no such assistance shall be provided otherwise than from the federal public administration except with the approval of the Treasury Board.

(4)The members of the Committee who are not employees in the federal public administration shall be paid such remuneration as may be authorized by the Governor in Council.

(5)The members of the Committee are entitled to be paid reasonable travel and living expenses while absent from their ordinary place of residence in the course of their duties.

^note

8Interest in oil and gas properties#

No member of the Committee shall have a pecuniary interest of any description, directly or indirectly, in any property in oil or gas to which this Act applies or own shares in any company engaged in any phase of the oil or gas industry in Canada in an amount in excess of five per cent of the issued shares thereof, and no member who owns any shares of any company engaged in any phase of the oil or gas industry in Canada shall vote when a question affecting such a company is before the Committee.^note

9Quorum#

(1)A majority of the members, including one member who is not an employee in the federal public administration, constitutes a quorum of the Committee.

(2)The Committee may make general rules regulating its practice and procedure and the places and times of its sittings.

^note

Jurisdiction and Powers

10Jurisdiction#

(1)Where, under this Act, the Committee is charged with a duty to hold an inquiry or to hear an appeal, the Committee has full jurisdiction to inquire into, hear and determine the matter of the inquiry or appeal and to make any order or give any direction that pursuant to this Act the Committee is authorized to make or give or with respect to any matter, act or thing that by this Act may be prohibited or approved by the Committee or required by the Committee to be done.

(2)For the purpose of any inquiry, hearing or appeal or the making of any order pursuant to this Act, the Committee has, regarding the attendance, swearing and examination of witnesses, the production and inspection of documents, the entry on and inspection of property, the enforcement of its orders and regarding other matters necessary or proper for the due exercise of its jurisdiction pursuant to this Act, all such powers, rights and privileges as are vested in a superior court of record.

(3)The finding or determination of the Committee on any question of fact within its jurisdiction is binding and conclusive.

11Deputing member to hold inquiry#

(1)The Committee may authorize and depute any member thereof to inquire into such matter before the Committee as may be directed by the Committee and to report the evidence and findings, if any, thereon to the Committee, and when the report is made to the Committee, it may be adopted as a finding of the Committee or otherwise dealt with as the Committee considers advisable.

(2)Where an inquiry is held by a member under subsection (1), the member has all the powers of the Committee for the purpose of taking evidence or acquiring information for the purposes of the report to the Committee.

^note

12Advisory functions#

The Minister may at any time refer to the Committee for a report or recommendation any question, matter or thing arising under this Act or relating to the conservation, production, storage, processing or transportation of oil or gas.^note

Enforcement

13Enforcement of Committee orders#

(1)Any order made by the Committee may, for the purpose of enforcement thereof, be made an order of the Federal Court and shall be enforced in like manner as any order of that Court.

(2)To make an order of the Committee an order of the Federal Court, the usual practice and procedure of that Court in such matters may be followed or in lieu thereof the secretary or another officer of the Committee may file in the Registry of the Federal Court a certified copy of the order and thereupon the order becomes an order of the Federal Court.

(3)When an order of the Committee has been made an order of the Federal Court, any order of the Committee, or of the Governor in Council under section 51, rescinding or replacing the first mentioned order of the Committee, shall be deemed to cancel the order of the Court and may in like manner be made an order of the Court.

^note

Part 0.1 · Traffic, Tolls and Tariffs

Interpretation

13.01Definitions#

The following definitions apply in this Part.

holder means a holder of an authorization to construct or operate a pipeline issued under paragraph 5(1)(b). (titulaire)

tariff means a schedule of tolls, terms and conditions, classifications, practices or rules and regulations applicable to the provision of a service by a holder and includes rules respecting the calculation of tolls. (tarif)

toll includes any rate, charge or allowance charged or made

(a)for the shipment, transportation, transmission, care, handling or delivery of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas that is transmitted through a pipeline, or for storage or demurrage or the like;

(b)for the provision of a pipeline when the pipeline is available and ready to provide for the transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas; and

(c)in respect of the purchase and sale of gas that is the property of a holder and that is transmitted by the holder through its pipeline, from which is subtracted the cost to the holder of the gas at the point where it enters the pipeline. (droit)

^note

Powers of Commission

13.02Regulation of traffic, etc.#

The Commission of the Canadian Energy Regulator may make orders with respect to all matters relating to traffic, tolls or tariffs.^note

Filing of Tariff

13.03Tolls to be filed#

(1)A holder shall not charge any tolls except tolls that are

(a)specified in a tariff that has been filed with the Canadian Energy Regulator and is in effect; or

(b)approved by an order of the Regulator.

(2)If gas transmitted by a holder through its pipeline is the property of the holder, the holder shall file with the Canadian Energy Regulator true copies of all the contracts it makes for the sale of the gas, at the time they are made, and any amendments to those contracts made from time to time, and the true copies constitute, for the purposes of this Part, a tariff under subsection (1).

^note

13.04Commencement of tariff#

If a holder files a tariff with the Canadian Energy Regulator and the holder proposes to charge a toll referred to in paragraph (b) of the definition toll in section 13.01, the Regulator may establish the day on which the tariff is to come into effect and the holder shall not begin charging the toll before that day.^note

Just and Reasonable Tolls

13.05Tolls to be just and reasonable#

All tolls shall be just and reasonable and shall always, under substantially similar circumstances and conditions with respect to all traffic of the same description carried over the same route, be charged equally to all persons at the same rate.^note

13.06Commission of the Canadian Energy Regulator determinations#

The Commission of the Canadian Energy Regulator may determine, as questions of fact, whether or not traffic is or has been carried out under substantially similar circumstances and conditions referred to in section 13.05, whether in any case a holder has or has not complied with the provisions of that section, and whether there has, in any case, been unjust discrimination as set out in section 13.1.^note

13.07Interim tolls#

If the Commission of the Canadian Energy Regulator has made an interim order authorizing a holder to charge tolls until a specified time or the happening of a specified event, the Commission may, in any subsequent order, direct the holder

(a)to refund, in a manner satisfactory to the Commission, any part of the tolls charged by the holder under the interim order that is in excess of the tolls determined by the Commission to be just and reasonable, together with interest on the amount so refunded; or

(b)to recover in its tolls, in a manner satisfactory to the Commission, the amount by which the tolls determined by the Commission to be just and reasonable exceed the tolls charged by the holder under the interim order, together with interest on the amount so recovered.

^note

Disallowance of Tariff

13.08Disallowance of tariff#

The Commission of the Canadian Energy Regulator may disallow any tariff or any portion of any tariff that it considers to be contrary to any of the provisions of this Act or any order of the Commission and may require a holder, within a time fixed by the Commission, to substitute for it a tariff satisfactory to the Commission or may establish other tariffs in lieu of the tariff or the portion so disallowed.^note

13.09Suspension of tariff#

The Commission of the Canadian Energy Regulator may suspend any tariff or any portion of any tariff before or after the tariff goes into effect.^note

Discrimination

13.1No unjust discrimination#

A holder shall not make any unjust discrimination in tolls, service or facilities against any person or locality.^note

13.11Burden of proof#

If it is shown that a holder makes any discrimination in tolls, service or facilities against any person or locality, the burden of proving that the discrimination is not unjust lies on the holder.^note

13.12No rebates, etc.#

(1)No holder or shipper or an officer or employee, or an agent or mandatary, of a holder or shipper shall

(a)offer, grant, give, solicit, accept or receive a rebate, concession or discrimination whereby a person obtains transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas by a holder at a rate less than that named in the tariffs then in force; or

(b)knowingly be party or privy to a false billing, false classification, false report or other device resulting in a rate being charged that is less than that named in the tariffs then in force.

(2)No prosecution shall be instituted for an offence under this section without leave of the Commission of the Canadian Energy Regulator.

^note

Contracts Limiting Liabilities

13.13Contracts limiting liability#

(1)Except as provided in this section, no contract, condition or notice made or given by a holder limiting its liability in respect of the transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas relieves the holder from its liability, unless that class of contract, condition or notice is included as a term or condition of its tariffs as filed or has been first authorized or approved by order of the Commission of the Canadian Energy Regulator.

(2)The Commission of the Canadian Energy Regulator may determine the extent to which the liability of a holder may be impaired, restricted or limited as provided in this section.

(3)The Commission of the Canadian Energy Regulator may establish the terms and conditions under which oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas may be transmitted by a holder.

^note

Transmission of Oil or Gas

13.14Duty of holder of an operating licence or authorization under subsection 5(1)#

(1)Subject to any exemptions or conditions that the Commission of the Canadian Energy Regulator may establish, a holder operating a pipeline for the transmission of oil shall, according to its powers, without delay and with due care and diligence, receive, transport and deliver all oil and any other substance, including water, incidental to the drilling for or production of oil offered for transmission by means of its pipeline.

(2)The Commission of the Canadian Energy Regulator may, by order, on any terms and conditions that it may specify in the order, require a holder operating a pipeline for the transmission of gas to receive, transport and deliver, according to its powers, gas and any other substance, including water, incidental to the drilling for or production of gas offered for transmission by means of its pipeline.

(3)If the Commission of the Canadian Energy Regulator finds that no undue burden will be placed on the holder by requiring the holder to do so and if it considers it necessary or desirable to do so in the public interest, the Commission may require a holder operating a pipeline for the transmission of oil or gas to provide adequate and suitable facilities for

(a)the receipt, transmission and delivery of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas offered for transmission by means of its pipeline;

(b)the storage of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas; and

(c)the junction of its pipeline with other facilities for the transmission of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas.

^note

Transmission and Sale of Gas

13.15Extension of services of gas pipeline companies#

(1)If the Commission of the Canadian Energy Regulator considers it necessary or desirable to do so in the public interest, it may direct a holder operating a pipeline for the transmission of gas to extend or improve its transmission facilities to provide facilities for the junction of its pipeline with any facilities of, and sell gas to, any person or municipality engaged or legally authorized to engage in the local distribution of gas to the public, and for those purposes to construct branch lines to communities immediately adjacent to its pipeline, if the Commission finds that to do so will not place an undue burden on the holder.

(2)Subsection (1) does not empower the Commission of the Canadian Energy Regulator to compel a holder to sell gas to additional customers if to do so would impair its ability to render adequate service to its existing customers.

^note

13.16Holder’s powers#

A holder may, for the purposes of its undertaking and subject to the provisions of this Act, transmit oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas by pipeline and regulate the time and manner in which it shall be transmitted and the tolls to be charged for the transmission.^note

Regulations

13.17Regulations#

The Governor in Council may make regulations for the purposes of this Part, designating as oil or gas any substance resulting from the processing or refining of hydrocarbons or coal if that substance

(a)is asphalt or a lubricant; or

(b)is a suitable source of energy by itself or when it is combined or used in association with something else.

^note

Part I · Regulation of Operations

Regulations

14Governor in Council’s regulatory power#

(1)The Governor in Council may, for the purposes of safety, the protection of the environment, and accountability as well as for the production and conservation of oil and gas resources, make regulations

(a)defining oil and gas, for the purposes of Parts I and II, installation and equipment for the purposes of sections 5.11 and 5.12 and “serious” for the purposes of section 28;

(b)concerning the exploration and drilling for, and the production, processing and transportation of, oil or gas in any area to which this Act applies and works and activities related to such exploration, drilling, production, processing and transportation;

(b.1)concerning the measures to be taken in preparation for or in the case of a spill, as defined in subsection 24(1), including measures concerning the use of a spill-treating agent;

(b.2)concerning the process for the determination of net environmental benefit;

(b.3)concerning the variation or revocation of an approval referred to in paragraph 25.1(1)(b);

(c)authorizing the Commission of the Canadian Energy Regulator, or any person, to make such orders as may be specified in the regulations and to exercise such powers and perform such duties as may be necessary for

(i)the management and control of oil or gas production,

(ii)the removal of oil or gas from the areas to which this Act applies, and

(iii)the design, construction, operation or abandonment of pipeline within the areas to which this Act applies;

(d)concerning arbitrations for the purposes of subsection 5.01(2) including the costs of or incurred in relation to such arbitrations;

(e)concerning the approvals to be granted as conditions of authorizations issued under paragraph 5(1)(b);

(f)concerning certificates for the purposes of section 5.12;

(g)prohibiting the introduction into the environment of substances, classes of substances and forms of energy in prescribed circumstances;

(h)authorizing the discharge, emission or escape of oil or gas for the purposes of subsection 24(1), in such quantities, at such locations, under such conditions and by such persons as may be specified in the regulations;

(h.1)establishing the requirements for a pooled fund for the purposes of subsection 27(1.01);

(h.2)concerning the circumstances under which the Commission of the Canadian Energy Regulator may make a recommendation for the purposes of subsection 27.1(1) and the information to be submitted with respect to that recommendation;

(h.3)concerning the creation, conservation and production of records; and

(i)prescribing anything that is required to be prescribed for the purposes of this Act.

(2)Unless otherwise provided in this Act, regulations made under subsection (1) may incorporate by reference the standards or specifications of any government, person or organization, either as they read at a fixed time or as amended from time to time.

(3)Regulations made under subsection (1) respecting a spill-treating agent shall be made on the recommendation of the federal Ministers and the Minister of the Environment.

^note

14.1Amendments to Schedule 1 or 2#

(1)The Governor in Council may, by order, amend Schedule 1 or 2 to add, amend or remove a reference to a federal Act or regulation, or to a provision of a federal Act or regulation.

(2)The order shall be made on the recommendation of the Minister and every minister responsible for the administration of the provision.

^note

14.2List of spill-treating agents#

The Minister of the Environment may, by regulation, establish a list of spill-treating agents.^note

15Publication of proposed regulations#

(1)Subject to subsection (2), a copy of each regulation that the Governor in Council proposes to make under this Act shall be published in the Canada Gazette and a reasonable opportunity shall be afforded to interested persons to make representations to the Minister with respect thereto.

(2)No proposed regulation need be published more than once under subsection (1) whether or not it is altered or amended after that publication as a result of representations made by interested persons as provided in that subsection.

^note

15.1Orders and regulations — Commission of the Canadian Energy Regulator#

The Commission of the Canadian Energy Regulator may make orders or regulations prohibiting activities within an area specified in the order or regulation around a pipeline, an abandoned pipeline or other work, authorizing exceptions to those prohibitions and specifying measures to be taken in relation to those exceptions.^note

16Equivalent standards and exemptions#

(1)Subject to subsection (2), the Chief Safety Officer and Chief Conservation Officer may

(a)authorize the use of equipment, methods, measures or standards in lieu of any required by regulation, where those Officers are satisfied that the use of that other equipment and those other methods, measures or standards would provide a level of safety, protection of the environment and conservation equivalent to that provided by compliance with the regulations; or

(b)grant an exemption from any regulatory requirement in respect of equipment, methods, measures or standards, where those Officers are satisfied with the level of safety, protection of the environment and conservation that will be achieved without compliance with that requirement.

(2)The Chief Safety Officer alone may exercise the powers referred to in paragraph (1)(a) or (b) if the regulatory requirement referred to in that paragraph does not relate to protection of the environment or conservation, and the Chief Conservation Officer alone may exercise those powers if that regulatory requirement does not relate to safety.

(3)No person contravenes the regulations if that person acts in compliance with an authorization or exemption under subsection (1) or (2).

^note

16.1Emergency situations#

(1)In a prescribed emergency situation, where the Minister is of the opinion that there is a conflict between the provisions of this Act or the regulations and the provisions of another federal law, other than provisions implementing an international treaty or convention to which Canada is a party, and that compliance with that law and this Act or the regulations is likely to create a situation that would seriously endanger the safety of persons or equipment, the Minister may issue a written declaration to that effect.

(2)A declaration made under subsection (1) must

(a)describe the emergency situation;

(b)specify the provisions that conflict and describe the nature of the conflict;

(c)describe the consultation that has taken place pursuant to subsection (4);

(d)describe the geographical area, person, work or activity affected by the declaration; and

(e)specify the time the declaration comes into effect.

(3)From the time specified in a declaration made under subsection (1), the provisions of this Act or the regulations specified therein prevail, in respect of the geographical area, person, work or activity described therein, over the provisions of the other federal law specified therein until such time as the Minister or the Governor in Council revokes the declaration.

(4)Before the Minister makes or revokes a declaration under this section, the minister responsible for the federal law that, in the Minister’s opinion, is in conflict with this Act or the regulations shall be consulted.

(5)The minister responsible for a federal law that is specified in a declaration made under subsection (1) may submit the declaration to the Governor in Council for revocation.

(6)A declaration or a revocation made under this section is not a regulation within the meaning and for the purposes of the Statutory Instruments Act, but shall be published in the Canada Gazette within seven days after it is made.

^note

Production Orders

17Production orders#

(1)Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that, with respect to an interest in any area to which this Act applies, the capability exists to commence, continue or increase production of oil or gas and that a production order would stop waste, the Chief Conservation Officer may order the commencement, continuation or increase of production of oil or gas at such rates and in such quantities as are specified in the order.

(2)Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that an order under this section would stop waste, the Chief Conservation Officer may order a decrease or the cessation or suspension of production of oil or gas for any period specified in the order.

(3)Subsections 19(2) to (4) and section 21 apply, with such modifications as the circumstances require, to an order under subsection (1) or (2) as if it were an order under subsection 19(1).

(4)A person subject to an order under subsection (1) or (2) shall, on request, afford the Chief Conservation Officer or a person designated by the Chief Conservation Officer access to his premises, files and records for all reasonable purposes related to the order.

^note

Waste

18Waste prohibited#

(1)Subject to section 63, any person who commits waste is guilty of an offence under this Act, but a prosecution may be instituted for such an offence only with the consent of the Commission of the Canadian Energy Regulator.

(2)In this Act, waste, in addition to its ordinary meaning, means waste as understood in the oil and gas industry and in particular, but without limiting the generality of the foregoing, includes

(a)the inefficient or excessive use or dissipation of reservoir energy;

(b)the locating, spacing or drilling of a well within a field or pool or within part of a field or pool or the operating of any well that, having regard to sound engineering and economic principles, results or tends to result in a reduction in the quantity of oil or gas ultimately recoverable from a pool;

(c)the drilling, equipping, completing, operating or producing of any well in a manner that causes or is likely to cause the unnecessary or excessive loss or destruction of oil or gas after removal from the reservoir;

(d)the inefficient storage of oil or gas above ground or underground;

(e)the production of oil or gas in excess of available storage, transportation or marketing facilities;

(f)the escape or flaring of gas that could be economically recovered and processed or economically injected into an underground reservoir; or

(g)the failure to use suitable artificial, secondary or supplementary recovery methods in a pool when it appears that those methods would result in increasing the quantity of oil or gas, or both, ultimately recoverable under sound engineering and economic principles.

^note

19Prevention of waste#

(1)Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, other than waste as defined in paragraph 18(2)(f) or (g), is being committed, the Chief Conservation Officer may, subject to subsection (2), order that all operations giving rise to the waste cease until he is satisfied that the waste has stopped.

(2)Before making any order under subsection (1), the Chief Conservation Officer shall hold an investigation at which interested persons shall be given an opportunity to be heard.

(3)Notwithstanding subsection (2), the Chief Conservation Officer may, without an investigation, make an order under this section requiring all operations to be shut down if in the opinion of the Chief Conservation Officer it is necessary to do so to prevent damage to persons or property or to protect the environment, but as soon as possible after making such an order and in any event within fifteen days thereafter, the Chief Conservation Officer shall hold an investigation at which interested persons shall be given an opportunity to be heard.

(4)At the conclusion of an investigation under subsection (3), the Chief Conservation Officer may set aside, vary or confirm the order made or make a new order.

^note

20Taking over management#

(1)For the purpose of giving effect to an order made under section 19, the Chief Conservation Officer may authorize and direct such persons as may be necessary to enter the place where the operations giving rise to the waste are being carried out and take over the management and control of those operations and any works connected therewith.

(2)A person authorized under subsection (1) to take over the management and control of operations shall manage and control the operations and do all things necessary to stop the waste, and the cost thereof shall be borne by the person who holds the permit or the lease and until paid constitutes a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

^note

21Appeal#

A person aggrieved by an order of the Chief Conservation Officer under section 17 or 19 after an investigation under subsection 19(2) or (3) may appeal to the Commission of the Canadian Energy Regulator to have the order reviewed under section 384 of the Canadian Energy Regulator Act.^note

22Waste occuring#

When the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, as defined in paragraph 18(2)(f) or (g), is occurring in the recovery of oil or gas from a pool, that Officer may apply to the Commission of the Canadian Energy Regulator for an order under section 385 of the Canadian Energy Regulator Act requiring the operators within the pool to show cause why the Commission should not make a direction in respect of the waste.^note

23 #

[Repealed, 1994, c. 10, s. 8] (repealed)

Spills and Debris

24Definition of spill#

(1)In sections 25 to 28, spill means a discharge, emission or escape of oil or gas, other than one that is authorized under subsection 25.4(1), the regulations or any other federal law. It does not include a discharge from a vessel to which Part 8 or 9 of the Canada Shipping Act, 2001 applies or from a ship to which Part 6 of the Marine Liability Act applies.

(2)In section 26, actual loss or damage includes loss of income, including future income, and, with respect to any Aboriginal peoples of Canada, loss of hunting, fishing and gathering opportunities. It does not include loss of income recoverable under subsection 42(3) of the Fisheries Act.

(3)In sections 26 to 27 and 28, debris means any installation or structure that was put in place in the course of any work or activity required to be authorized under paragraph 5(1)(b) and that has been abandoned without an authorization that may be required by or under this Act, or any material that has broken away or been jettisoned or displaced in the course of any of that work or activity.

(4)Her Majesty in right of Canada incurs no liability whatever to any person arising out of the authorization by regulations made by the Governor in Council of any discharge, emission or escape of oil or gas.

^note

25Spills prohibited#

(1)No person shall cause or permit a spill on or from any area to which this Act applies.

(2)Where a spill occurs in any area to which this Act applies, any person who at the time of the spill is carrying on any work or activity related to the exploration for or development or production of oil or gas in the area of the spill shall, in the manner prescribed by the regulations, report the spill to the Chief Conservation Officer.

(3)Every person required to report a spill under subsection (2) shall, as soon as possible, take all reasonable measures consistent with safety and the protection of the environment to prevent any further spill, to repair or remedy any condition resulting from the spill and to reduce or mitigate any danger to life, health, property or the environment that results or may reasonably be expected to result from the spill.

(4)Where the Chief Conservation Officer, on reasonable grounds, is satisfied that

(a)a spill has occurred in any area to which this Act applies and immediate action is necessary in order to effect any reasonable measures referred to in subsection (3), and

(b)such action is not being taken or will not be taken under subsection (3),

he may take such action or direct that it be taken by such persons as may be necessary.

(5)For the purposes of subsection (4), the Chief Conservation Officer may authorize and direct such persons as may be necessary to enter the place where the spill has occurred and take over the management and control of any work or activity thereat.

(6)A person authorized and directed to take over the management and control of any work or activity under subsection (5) shall manage and control that work or activity and take all reasonable measures in relation to the spill that are referred to in subsection (3).

(7)Any costs incurred under subsection (6) shall be borne by the person who obtained an authorization under paragraph 5(1)(b) in respect of the work or activity from which the spill emanated and until paid constitute a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

(7.1)Where a person, other than a person referred to in subsection (7), takes action pursuant to subsection (3) or (4), the person may recover from Her Majesty in right of Canada the costs and expenses reasonably incurred by that person in taking the action.

(8)A person aggrieved by any action or measure taken or authorized or directed to be taken under subsections (4) to (6) may appeal to the Commission of the Canadian Energy Regulator to have the order reviewed under section 384 of the Canadian Energy Regulator Act.

(9)No person required, directed or authorized to act under this section or section 384 of the Canadian Energy Regulator Act is personally liable, either civilly or criminally, in respect of any act or omission in the course of complying with this section unless it is shown that the person did not act reasonably in the circumstances.

^note

25.1Spill-treating agents#

(1)In the case of a spill in the zones referred to in paragraph 3(d) or the waters superjacent to the continental shelf of Canada, the provisions referred to in Schedule 1 do not apply to the deposit of a spill-treating agent and those referred to in Schedule 2 do not apply in respect of any harm that is caused by the spill-treating agent or by the interaction between the spill-treating agent and the spilled oil, if

(a)the authorization issued under paragraph 5(1)(b) permits the use of the spill-treating agent;

(b)other than in the case of a small-scale test that meets the prescribed requirements, the Chief Conservation Officer approves in writing the use of the agent in response to the spill and it is used in accordance with any requirements set out in the approval;

(c)the agent is used for the purposes of subsection 25(3) or (4); and

(d)the agent is used in accordance with the regulations.

(2)The provisions referred to in Schedule 2 continue to apply to the holder of an authorization referred to in paragraph (1)(a) in respect of any harm that is caused by the spill or, despite subsection (1), by the interaction between the spill-treating agent and the spilled oil.

(3)Other than in the case of a small-scale test, the Chief Conservation Officer shall not approve the use of a spill-treating agent unless the Officer determines, taking into account any prescribed factors and any factors the Officer considers appropriate, that the use of the spill-treating agent is likely to achieve a net environmental benefit.

^note

25.2Canadian Environmental Protection Act, 1999#

Section 123 and subsections 124(1) to (3) of the Canadian Environmental Protection Act, 1999 do not apply in respect of a spill-treating agent.^note

25.3Fisheries Act — civil liability#

For the purpose of section 42 of the Fisheries Act, if subsection 36(3) of that Act would have been contravened but for subsection 25.1(1),

(a)subsection 36(3) of that Act is deemed to apply in respect of the deposit of the spill-treating agent;

(b)the holder of the authorization referred to in paragraph 25.1(1)(a) is deemed to be the only person referred to in paragraph 42(1)(a) of that Act; and

(c)those persons who caused or contributed to the spill are deemed to be the only persons referred to in paragraph 42(1)(b) of that Act.

^note

25.4Scientific research#

(1)For the purpose of a particular research project pertaining to the use of a spill-treating agent in mitigating the environmental impacts of a spill, the Minister of the Environment may authorize, and establish conditions for, the deposit of a spill-treating agent, oil or oil surrogate in the zones referred to in paragraph 3(d) or the waters superjacent to the continental shelf of Canada.

(2)The Minister of the Environment shall not authorize the deposit of an oil surrogate unless that Minister determines that the oil surrogate poses fewer safety, health or environmental risks than oil.

(3)If the conditions set out in the authorization are met, the provisions referred to in section 25.2 and Schedules 1 and 2 do not apply in respect of the spill-treating agent, oil and oil surrogate required for the research project.

^note

26Recovery of loss, damage, costs or expenses#

(1)Where any discharge, emission or escape of oil or gas that is authorized by regulation, or any spill, occurs in any area to which this Act applies,

(a)all persons to whose fault or negligence the spill or the authorized discharge, emission or escape of oil or gas is attributable or who are by law responsible for others to whose fault or negligence the spill or the authorized discharge, emission or escape of oil or gas is attributable are jointly and severally liable, to the extent determined according to the degree of the fault or negligence proved against them, for

(i)all actual loss or damage incurred by any person as a result of the spill or the authorized discharge, emission or escape of oil or gas or as a result of any action or measure taken in relation to the spill or the authorized discharge, emission or escape of oil or gas,

(ii)the costs and expenses reasonably incurred by Her Majesty in right of Canada or a province or any other person in taking any action or measure in relation to the spill or the authorized discharge, emission or escape of oil or gas, and

(iii)all loss of non-use value relating to a public resource that is affected by a spill or the authorized discharge, emission or escape of oil or gas or as a result of any action or measure taken in relation to the spill or the authorized discharge, emission or escape of oil or gas; and

(b)the person who is required to obtain an authorization under paragraph 5(1)(b) in respect of the work or activity from which the spill or the authorized discharge, emission or escape of oil or gas emanated is liable, without proof of fault or negligence, up to the applicable limit of liability that is set out in subsection (2.2) for the actual loss or damage, the costs and expenses and the loss of non-use value described in subparagraphs (a)(i) to (iii).

(2)If, as a result of debris or as a result of any action or measure taken in relation to debris, there is a loss of non-use value relating to a public resource or any person incurs actual loss or damage or if Her Majesty in right of Canada or a province reasonably incurs any costs or expenses in taking any action or measure in relation to debris,

(a)all persons to whose fault or negligence the debris is attributable or who are by law responsible for others to whose fault or negligence the debris is attributable are jointly and severally liable, to the extent determined according to the degree of the fault or negligence proved against them, for that loss, actual loss or damage, and for those costs and expenses; and

(b)the person who is required to obtain an authorization under paragraph 5(1)(b) in respect of the work or activity from which the debris originated is liable, without proof of fault or negligence, up to the applicable limit of liability that is set out in subsection (2.2), for that loss, actual loss or damage, and for those costs and expenses.

(2.1)A person who is required to obtain an authorization under paragraph 5(1)(b) and who retains, to carry on a work or activity in respect of which the authorization is required, the services of a contractor to whom paragraph (1)(a) or (2)(a) applies is jointly and severally liable with that contractor for any actual loss or damage, costs and expenses and loss of non-use value described in subparagraphs (1)(a)(i) to (iii) and subsection (2).

(2.2)For the purposes of paragraphs (1)(b) and (2)(b), the limits of liability are

(a)in respect of any area of land or submarine area referred to in paragraph 6(1)(a) of the Arctic Waters Pollution Prevention Act, the amount by which $1 billion exceeds the amount prescribed under section 9 of that Act in respect of any activity or undertaking engaged in or carried on by any person described in paragraph 6(1)(a) of that Act;

(b)in respect of any area referred to in paragraphs 3(a) and (b) that is covered by or located at a distance of 200 metres or less from any river, stream, lake or other body of inland water and to which paragraph (a) of this subsection does not apply, the amount of $25 million;

(c)in respect of any area referred to in paragraphs 3(a) and (b) and to which neither paragraph (a) nor (b) of this subsection applies, the amount of $10 million; and

(d)in respect of any area to which this Act applies and for which no other limit is established, the amount of $1 billion.

(2.3)The Governor in Council may, by regulation, on the recommendation of the Minister, increase the amounts referred to in subsection (2.2).

(2.4)If a person is liable under paragraph (1)(b) or (2)(b) with respect to an occurrence and the person is also liable under any other Act, without proof of fault or negligence, for the same occurrence, the person is liable up to the greater of the applicable limit of liability that is set out in subsection (2.2) and the limit up to which the person is liable under the other Act. If the other Act does not set out a limit of liability, the limits set out in subsection (2.2) do not apply.

(2.5)The costs and expenses that are recoverable by Her Majesty in right of Canada or a province under this section are not recoverable under subsection 42(1) of the Fisheries Act.

(2.6)Only Her Majesty in right of Canada or a province may bring an action to recover a loss of non-use value described in subsections (1) and (2).

(3)All claims under this section may be sued for and recovered in any court of competent jurisdiction in Canada and shall rank, firstly, in favour of persons incurring actual loss or damage described in subsections (1) and (2), without preference, secondly, to meet any costs and expenses described in those subsections, and, lastly, to recover a loss of non-use value described in those subsections.

(4)Subject to subsections (2.5) and (2.6), nothing in this section suspends or limits

(a)any legal liability or remedy for an act or omission by reason only that the act or omission is an offence under this Act or gives rise to liability under this section;

(b)any recourse, indemnity or relief available at law to a person who is liable under this section against any other person; or

(c)the operation of any applicable law or rule of law that is not inconsistent with this section.

(5)Proceedings in respect of claims under this section may be instituted within three years from the day when the loss, damage, costs or expenses occurred but in no case after six years from the day the spill or the discharge, emission or escape of oil or gas occurred or, in the case of debris, from the day the installation or structure in question was abandoned or the material in question broke away or was jettisoned or displaced.

^note

26.1Financial resources — certain activities#

(1)An applicant for an authorization under paragraph 5(1)(b) for the drilling for or development or production of oil or gas shall provide proof, in the prescribed form and manner, that it has the financial resources necessary to pay the greatest of the amounts of the limits of liability referred to in subsection 26(2.2) that apply to it. If the Commission of the Canadian Energy Regulator considers it necessary, it may determine a greater amount and require proof that the applicant has the financial resources to pay that greater amount.

(2)An applicant for an authorization under paragraph 5(1)(b) for any other work or activity shall provide proof, in the prescribed form and manner, that it has the financial resources necessary to pay an amount that is determined by the Commission of the Canadian Energy Regulator.

(3)When the Commission of the Canadian Energy Regulator determines an amount under subsection (1) or (2), the Commission is not required to consider any potential loss of non-use value relating to a public resource that is affected by a spill or the authorized discharge, emission or escape of oil or gas or as a result of debris.

(4)The holder of an authorization under paragraph 5(1)(b) shall ensure that the proof referred to in subsections (1) and (2) remains in force for the duration of the work or activity in respect of which the authorization is issued.

(5)The holder of an authorization under paragraph 5(1)(b) shall also ensure that the proof referred to in subsection (1) remains in force for a period of one year beginning on the day on which the Commission of the Canadian Energy Regulator notifies the holder that it has accepted a report submitted by the holder indicating that the last well in respect of which the authorization is issued is abandoned. The Commission may reduce that period and may decide that the proof that is to remain in force during that period is proof that the holder has the financial resources necessary to pay an amount that is less than the amount referred to in subsection (1) and that is determined by the Commission.

^note

27Financial responsibility#

(1)An applicant for an authorization under paragraph 5(1)(b) shall provide proof of financial responsibility in the form of a letter of credit, guarantee or indemnity bond or in any other form satisfactory to the Commission of the Canadian Energy Regulator,

(a)in the case of the drilling for or development or production of oil or gas in any area referred to in paragraphs 3(d) and (e), in the amount of $100 million or, if the Commission considers it necessary, in a greater amount that it determines; or

(b)in any other case, in an amount that is satisfactory to, and determined by, the Commission.

(1.01)An applicant to which paragraph (1)(a) applies may, rather than provide proof of financial responsibility in the amount referred to in that paragraph, provide proof that it participates in a pooled fund that is established by the oil and gas industry, that is maintained at a minimum of $250 million and that meets any other requirements that are established by regulation.

(1.02)The Governor in Council may, by regulation, on the recommendation of the Minister, increase the amount referred to in subsection (1.01).

(1.1)The holder of an authorization under paragraph 5(1)(b) shall ensure that the proof of financial responsibility referred to in subsection (1) or (1.01) remains in force for the duration of the work or activity in respect of which the authorization is issued.

(1.2)The holder of an authorization under paragraph 5(1)(b) shall also ensure that the proof referred to in paragraph (1)(a) or subsection (1.01) remains in force for a period of one year beginning on the day on which the Commission of the Canadian Energy Regulator notifies the holder that it has accepted a report submitted by the holder indicating that the last well in respect of which the authorization is issued is abandoned. The Commission may reduce that period and may decide — other than in the case of a holder that participates in a pooled fund — that the proof that is to remain in force during that period is for an amount that is less than the amount referred to in paragraph (1)(a) and that is determined by the Commission.

(2)The Commission of the Canadian Energy Regulator may require that moneys in an amount not exceeding the amount prescribed for any case or class of cases, or determined by the Commission in the absence of regulations, be paid out of the funds available under the letter of credit, guarantee or indemnity bond or other form of financial responsibility provided under subsection (1), or be paid out of the pooled fund referred to in subsection (1.01), in respect of any claim for which proceedings may be instituted under section 26, whether or not those proceedings have been instituted.

(3)Where payment is required under subsection (2), it shall be made in such manner, subject to such conditions and procedures and to or for the benefit of such persons or classes of persons as may be prescribed for any case or class of cases, or as may be required by the Commission of the Canadian Energy Regulator in the absence of regulations.

(4)Where a claim is sued for under section 26, there shall be deducted from any award made pursuant to the action on that claim any amount received by the claimant under this section in respect of the loss, damage, costs or expenses claimed.

(5)The holder of an authorization under paragraph 5(1)(b) that is liable for a discharge, emission or escape of oil or gas that is authorized by regulation or for any spill or debris in respect of which a payment has been made under subsection (2) out of the pooled fund, shall reimburse the amount of the payment to the fund in the prescribed manner.

^note

27.1Lesser amount#

(1)The Minister may, by order, on the recommendation of the Commission of the Canadian Energy Regulator, approve an amount that is less than the amount referred to in paragraph 26(2.2)(a) or (d) or 27(1)(a) in respect of an applicant for, or a holder of, an authorization under paragraph 5(1)(b).

(2)If the Minister approves an amount that is less than the amount referred to in paragraph 26(2.2)(a) or (d) in respect of an applicant for an authorization under paragraph 5(1)(b), that applicant, for the purposes of subsection 26.1(1), shall only provide proof that it has the financial resources necessary to pay the adjusted amount approved by the Minister.

(3)No applicant for an authorization under paragraph 5(1)(b) contravenes paragraph 27(1)(a) if that applicant provides proof of financial responsibility in the amount that is approved by the Minister under this section.

^note

Inquiries

28Inquiries#

(1)Where a spill or debris or an accident or incident related to any activity to which this Act applies occurs or is found in any area to which this Act applies and results in death or injury or danger to public safety or the environment, the Minister may direct an inquiry to be made, subject to the Canadian Transportation Accident Investigation and Safety Board Act, and may authorize any person that the Minister deems qualified to conduct the inquiry.

(1.1)Where a spill or debris or an accident or incident related to any activity to which this Act applies occurs or is found in any area to which this Act applies and is serious, as defined by regulation, the Minister shall direct that an inquiry referred to in subsection (1) be made, subject to the Canadian Transportation Accident Investigation and Safety Board Act, and shall ensure that the person who conducts the inquiry is not employed in a part of the federal public administration for which the Minister is responsible.

(2)For the purposes of an inquiry under subsection (1), a person authorized by the Minister under that subsection has all the powers of a commissioner under Part I of the Inquiries Act.

(3)The person or persons authorized to conduct an inquiry under subsection (1) shall ensure that, as far as practicable, the procedures and practices for the inquiry are compatible with investigation procedures and practices followed by any appropriate provincial authorities, and for those purposes may consult with any of those authorities concerning compatible procedures and practices.

(4)As soon as possible after the conclusion of an inquiry under subsection (1), the person or persons authorized to conduct the inquiry shall submit a report to the Minister, together with the evidence and other material that was before the inquiry.

(5)A report made pursuant to subsection (4) shall be published by the Minister within thirty days after he has received it.

(6)The Minister may supply copies of a report published pursuant to subsection (5) in such manner and on such terms as he considers proper.

Part II · Production Arrangements

Interpretation

29Definitions#

In this Part,

expert means a person who is appointed under subsection 48.27(2) or an expert panel appointed under subsection 48.27(3); (expert)

perimeter means

(a)the area in the offshore, as defined in section 48.01, that is within 20 km of the onshore;

(b)the area in Nunavut that is within 20 km of the limit of that territory; and

(c)the portion of the submarine area — consisting of the areas referred to in paragraphs 3(d) and (e) — that is within 10 nautical miles of the seaward limit of that area; (bande limitrophe)

pooled spacing unit means the area that is subject to a pooling agreement or a pooling order; (unité d’espacement mise en commun)

pooled tract means the portion of a pooled spacing unit defined as a tract in a pooling agreement or a pooling order; (parcelle mise en commun)

pooling agreement means an agreement to pool the interests of owners in a spacing unit and to provide for the operation or the drilling and operation of a well thereon; (accord de mise en commun)

pooling order means an order made under section 31 or as altered pursuant to section 35; (arrêté de mise en commun)

regulator means a provincial government, a provincial regulatory agency or a federal-provincial regulatory agency that has administrative responsibility for the exploration for and exploitation of oil and gas in an area adjoining the perimeter; (organisme de réglementation)

royalty interest means any interest in, or the right to receive a portion of, any oil or gas produced and saved from a field or pool or part of a field or pool or the proceeds from the sale thereof, but does not include a working interest or the interest of any person whose sole interest is as a purchaser of oil or gas from the pool or part thereof; (droit à redevance)

royalty owner means a person, including Her Majesty in right of Canada, who owns a royalty interest; (titulaire de redevance)

spacing unit means the area allocated to a well for the purpose of drilling for or producing oil or gas; (unité d’espacement)

tract participation means the share of production from a unitized zone that is allocated to a unit tract under a unit agreement or unitization order or the share of production from a pooled spacing unit that is allocated to a pooled tract under a pooling agreement or pooling order; (fraction parcellaire)

transboundary means, in relation to a pool, extending beyond the Commission of the Canadian Energy Regulator’s jurisdiction under this Act or, in relation to a field, underlain only by one or more such pools; (transfrontalier)

unit agreement means an agreement to unitize the interests of owners in a pool or a part of a pool exceeding in area a spacing unit, or such an agreement as varied by a unitization order; (accord d’union)

unit area means the area that is subject to a unit agreement; (secteur unitaire)

unitization order means an order made under section 41, 48.092 or 48.23; (arrêté d’union)

unitized zone means a geological formation that is within a unit area and subject to a unit agreement; (terrain)

unit operating agreement means an agreement, providing for the management and operation of a unit area and a unitized zone, that is entered into by working interest owners who are parties to a unit agreement with respect to that unit area and unitized zone, and includes a unit operating agreement as varied by a unitization order; (accord d’exploitation unitaire)

unit operation means those operations conducted pursuant to a unit agreement or a unitization order; (exploitation unitaire)

unit operator means a person designated as a unit operator under a unit operating agreement; (exploitant unitaire)

unit tract means the portion of a unit area that is defined as a tract in a unit agreement; (parcelle unitaire)

working interest means a right, in whole or in part, to produce and dispose of oil or gas from a pool or part of a pool, whether that right is held as an incident of ownership of an estate in fee simple in the oil or gas or under a lease, agreement or other instrument, if the right is chargeable with and the holder thereof is obligated to pay or bear, either in cash or out of production, all or a portion of the costs in connection with the drilling for, recovery and disposal of oil or gas from the pool or part thereof; (intérêt économique direct)

working interest owner means a person who owns a working interest. (détenteur)

^note

Pooling

30Voluntary pooling#

(1)Where one or more working interest owners have leases or separately owned working interests within a spacing unit, the working interest owners and the royalty owners who own all of the interests in the spacing unit may pool their working interests and royalty interests in the spacing unit for the purpose of drilling for or producing, or both drilling for and producing, oil and gas if a copy of the pooling agreement and any amendment thereto has been filed with the Chief Conservation Officer.

(2)The Minister may, on behalf of Her Majesty, enter into a pooling agreement on any terms and conditions that the Minister deems advisable and, despite anything in this Act, the Territorial Lands Act, the Federal Real Property and Federal Immovables Act, the Canada Petroleum Resources Act or any regulations made under those Acts, the pooling agreement is binding on Her Majesty.

^note

31Application for pooling order#

(1)In the absence of a pooling agreement, a working interest owner in a spacing unit may apply for a pooling order directing the working interest owners and royalty owners within the spacing unit to pool their interests in the spacing unit for the purpose of drilling for and producing, or producing, oil or gas or both from the spacing unit.

(2)An application under subsection (1) shall be made to the Minister who shall refer the application to the Committee for the purpose of holding a hearing to determine whether a pooling order should be made and at that hearing the Committee shall afford all interested parties an opportunity to be heard.

(3)Prior to a hearing held pursuant to subsection (2), the working interest owner making application shall provide the Committee, and such other interested parties as the Committee may direct, with a proposed form of pooling agreement, and the working interest owners who have interests in the spacing unit to which the proposed pooling agreement relates shall provide the Committee with such information as the Committee deems necessary.

(4)After a hearing held pursuant to subsection (2), the Committee may order that all working interest owners and royalty owners who have an interest in the spacing unit shall be deemed to have entered into a pooling agreement as set out in the pooling order.

^note

32Contents of pooling order#

Every pooling order shall provide

(a)for the drilling and operation of a well on the spacing unit or, where a well that is capable of or that can be made capable of production has been drilled on the spacing unit before the making of the pooling order, for the future production and operation of that well;

(b)for the appointment of a working interest owner as operator to be responsible for the drilling, operation or abandoning of the well whether drilled before or after the making of the pooling order;

(c)for the allocation to each pooled tract of its share of the production of the oil or gas from the pooled spacing unit that is not required, consumed or lost in the operation of the well, which allocation shall be on a prorated area basis unless it can be shown to the satisfaction of the Committee that that basis is unfair, whereupon the Committee may make an allocation on another more equitable basis;

(d)in the event that no production of oil or gas is obtained, for the payment by the applicant therefor of all costs incurred in the drilling and abandoning of the well;

(e)where production has been obtained, for the payment of the actual costs of drilling the well, whether drilled before or after the making of the pooling order, and for the payment of the actual costs of the completion, operation and abandoning of the well; and

(f)for the sale by the operator of any oil or gas allocated pursuant to paragraph (c) to a working interest owner where the working interest owner thereof fails to take in kind and dispose of the production, and for the deduction out of the proceeds by the operator of his expenses reasonably incurred in connection with the sale.

^note

33Provision of penalty#

(1)A pooling order may provide for a penalty for a working interest owner who does not, within the time specified in the order, pay the portion of the costs attributable to him as his share of the cost of drilling and completion of the well, but the penalty shall not exceed an amount equal to one-half of that working interest owner’s share of those costs.

(2)If a working interest owner does not, within the time specified therefor in the pooling order, pay his share of the costs of the drilling, completing, operating and abandoning of the well, his portion of the costs and the penalty, if any, are recoverable only out of his share of production from the spacing unit and not in any other manner.

^note

34Effect of pooling order#

Where a pooling order is made, all working interest owners and royalty owners having interests in the pooled spacing unit shall, on the making of the order, be deemed to have entered into a pooling agreement as set out in the pooling order and the order shall be deemed to be a valid contract between the parties having interests in the pooled spacing unit, and all its terms and provisions, as set out therein or as altered pursuant to section 35, are binding on and enforceable against the parties thereto, including Her Majesty.^note

35Application to alter pooling order#

(1)The Committee shall hear any application to vary, amend or terminate a pooling order where the application is made by the owners of over twenty-five per cent of the working interests in the pooled spacing unit, calculated on a prorated area basis, and may, in its discretion, order a hearing on the application of any working interest owner or royalty owner.

(2)After a hearing held pursuant to subsection (1), the Committee may vary or amend the pooling order to supply any deficiency therein or to meet changing conditions and may vary or revoke any provision that the Committee deems to be unfair or inequitable or it may terminate the pooling order.

(3)Where a pooling order is varied or amended, no change shall be made that will alter the ratios of tract participations between the pooled tracts as originally set out in the pooling order.

^note

36Prohibition#

(1)No person shall produce any oil or gas within a spacing unit in which there are two or more leases or two or more separately owned working interests unless a pooling agreement has been entered into in accordance with section 30 or in accordance with a pooling order made under section 31.

(2)Subsection (1) does not prohibit the production of oil or gas for testing in any quantities approved by the Chief Conservation Officer.

^note

Unitization

37Unit operation#

(1)Any one or more working interest owners in a pool or part of a pool exceeding in area a spacing unit, together with the royalty owners, may enter into a unit agreement and operate their interests pursuant to the terms of the unit agreement or any amendment thereto if a copy of the agreement and any amendment has been filed with the Chief Conservation Officer.

(2)The Minister may enter into a unit agreement binding on Her Majesty, on any terms and conditions that the Minister may deem advisable, and any of the regulations under this Act, the Territorial Lands Act, the Federal Real Property and Federal Immovables Act or the Canada Petroleum Resources Act that may be in conflict with the terms and conditions of the unit agreement stand varied or suspended to the extent necessary to give full effect to the terms and conditions of the unit agreement.

(3)Where a unit agreement filed under this section provides that a unit operator shall be the agent of the parties thereto with respect to their powers and responsibilities under this Act, the performance or non-performance thereof by the unit operator shall be deemed to be the performance or non-performance by the parties otherwise having those powers and responsibilities under this Act.

^note

38Requiring unitization to prevent waste#

(1)Notwithstanding anything in this Act, where, in the opinion of the Chief Conservation Officer, the unit operation of a pool or part thereof would prevent waste, he may apply to the Committee for an order requiring the working interest owners in the pool or part thereof to enter into a unit agreement and a unit operating agreement in respect of the pool or part thereof, as the case may be.

(2)Where an application is made by the Chief Conservation Officer pursuant to subsection (1), the Committee shall hold a hearing at which all interested persons shall be afforded an opportunity to be heard.

(3)If, after the hearing mentioned in subsection (2), the Committee is of the opinion that the unit operation of a pool or part thereof would prevent waste, the Committee may by order require the working interest owners in the pool or part thereof to enter into a unit agreement and a unit operating agreement in respect of the pool or part thereof.

(4)If in the time specified in the order referred to in subsection (3), being not less than six months after the date of the making of the order, the working interest owners and royalty owners fail to enter into a unit agreement and a unit operating agreement approved by the Committee, all drilling and producing operations within the pool or part thereof in respect of which the order was made shall cease until such time as a unit agreement and a unit operating agreement have been approved by the Committee and filed with the Chief Conservation Officer.

(5)Notwithstanding subsection (4), the Committee may permit the continued operation of the pool or part thereof after the time specified in the order referred to in subsection (3) if it is of the opinion that a unit agreement and unit operating agreement are in the course of being entered into, but any such continuation of operations shall be subject to any conditions prescribed by the Committee.

^note

Compulsory Unitization

39Who may apply for unitization order#

(1)One or more working interest owners who are parties to a unit agreement and a unit operating agreement and own in the aggregate sixty-five per cent or more of the working interests in a unit area may apply for a unitization order with respect to the agreements.

(2)An application under subsection (1) shall be made to the Minister who shall refer the application to the Committee for the purpose of holding a hearing thereon in accordance with section 41.

(3)An application under subsection (1) may be made by the unit operator or proposed unit operator on behalf of the working interest owners referred to in that subsection.

^note

40Contents of unitization application#

(1)An application for a unitization order shall contain

(a)a plan showing the unit area that the applicant desires to be made subject to the order;

(b)one copy each of the unit agreement and the unit operating agreement;

(c)a statement of the nature of the operations to be carried out; and

(d)a statement showing

(i)with respect to each proposed unit tract, the names and addresses of the working interest owners and royalty owners in that tract, and

(ii)the tracts that are entitled to be qualified as unit tracts under the provisions of the unit agreement.

(2)The unit agreement referred to in subsection (1) shall include

(a)a description of the unit area and the unit tracts included in the agreement;

(b)an allocation to each unit tract of a share of the production from the unitized zone not required, consumed or lost in the unit operation;

(c)a provision specifying the manner in which and the circumstances under which the unit operation shall terminate; and

(d)a provision specifying that the share of the production from a unit area that has been allocated to a unit tract shall be deemed to have been produced from that unit tract.

(3)The unit operating agreement referred to in subsection (1) shall make provision

(a)for the contribution or transfer to the unit, and any adjustment among the working interest owners, of the investment in wells and equipment within the unit area;

(b)for the charging of the costs and expenses of the unit operation to the working interest owners;

(c)for the supervision of the unit operation by the working interest owners through an operating committee composed of their duly authorized representatives and for the appointment of a unit operator to be responsible, under the direction and supervision of the operating committee, for the carrying out of the unit operation;

(d)for the determination of the percentage value of the vote of each working interest owner; and

(e)for the determination of the method of voting on any motion before the operating committee and the percentage value of the vote required to carry the motion.

^note

41Hearing on application#

(1)Where an application made under section 39 is referred by the Minister to the Committee, the Committee shall hold a hearing thereon at which all interested persons shall be afforded an opportunity to be heard.

(2)If the Committee finds that

(a)at the date of the commencement of a hearing referred to in subsection (1)

(i)the unit agreement and the unit operating agreement have been executed by one or more working interest owners who own in the aggregate sixty-five per cent or more of the total working interests in the unit area, and

(ii)the unit agreement has been executed by one or more royalty owners who own in the aggregate sixty-five per cent or more of the total royalty interests in the unit area, and

(b)the unitization order applied for would accomplish the more efficient or more economical production of oil or gas or both from the unitized zone,

(c)that the unit agreement be a valid contract enuring to the benefit of all the royalty owners and working interest owners in the unit area and binding on and enforceable against all such owners, and

(d)that the unit operating agreement be a valid contract enuring to the benefit of all the working interest owners in the unit area and binding on and enforceable against all such owners,

the Committee may orderand, subject to section 42, the unit agreement and the unit operating agreement have the effect given them by the order of the Committee.

(3)In a unitization order, the Committee may vary the unit agreement or the unit operating agreement by adding provisions or by deleting or amending any provision thereof.

^note

42Effective date of unitization order#

(1)Subject to subsection (2), a unitization order becomes effective on the day that the Committee determines in the order, but that day shall be not less than thirty days after the day on which the order is made.

(2)Where a unit agreement or unit operating agreement is varied by the Committee in a unitization order, the effective date prescribed in the order shall be a date not less than thirty days following the day the order is made, but the order becomes ineffective if, before the effective date, the applicant files with the Committee a notice withdrawing the application on behalf of the working interest owners or there are filed with the Committee statements in writing objecting to the order and signed

(a)in the case of the unit agreement, by

(i)one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 41(2)(a)(i), and

(ii)one or more royalty owners who own in the aggregate more than twenty-five per cent of the total royalty interests in the unit area and were included within the group owning sixty-five per cent or more of the total royalty interests as described in subparagraph 41(2)(a)(ii); or

(b)in the case of the unit operating agreement, by one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the unit area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 41(2)(a)(i).

(3)Where a unitization order becomes ineffective under subsection (2), the Committee shall forthwith revoke the order.

^note

43Technical defects in unitization order#

A unitization order is not invalid by reason only of the absence of notice or of any irregularities in giving notice to any owner in respect of the application for the order or any proceedings leading to the making of the order.^note

44Amending unitization order#

(1)A unitization order may be amended on the application of a working interest owner, but before amending a unitization order the Committee shall hold a hearing at which all interested parties shall have an opportunity to be heard.

(2)If the Committee finds that, at the date of the commencement of a hearing of an application for the amendment of a unitization order, one or more working interest owners who own, in the aggregate, sixty-five per cent or more of the total working interests and one or more royalty interest owners who own, in the aggregate, sixty-five per cent or more of the total royalty interests in the unit area have consented to the proposed amendment, the Committee may amend the unitization order in accordance with the amendment proposed.

^note

45Protection of tract participation ratios#

No amendment shall be made under section 44 that will alter the ratios between the tract participations of those tracts that were qualified for inclusion in the unit area before the commencement of the hearing, and, for the purposes of this section, the tract participations shall be those indicated in the unit agreement when it became subject to a unitization order.^note

46Production prohibited except in accord with unitization order#

After the date on which a unitization order comes into effect and while the order remains in force, no person shall carry on any operations within the unit area for the purpose of drilling for or producing oil or gas from the unitized zone, except in accordance with the provisions of the unit agreement and the unit operating agreement.^note

47How percentages of interests to be determined#

(1)The percentages of interests referred to in subsections 39(1), 41(2), 42(2) and 44(2) shall be determined

(a)with respect to royalty interests, on a prorated area basis; and

(b)with respect to working interests, on the basis of tract participations shown in the unit agreement.

(2)Where a working interest in a unit tract is held as an incident of the ownership of a fee simple estate in oil or gas, the owner who holds that working interest shall, for the purposes of subsection (1), be deemed to be a royalty owner in respect of the tract on a prorated area basis under paragraph (1)(a).

^note

General

48Pooled spacing unit included in unit area#

(1)A pooled spacing unit that has been pooled pursuant to a pooling order and on which a well has been drilled may be included in a unit area as a single unit tract and the Committee may make such amendments to the pooling order as it deems necessary to remove any conflict between the provisions of the pooling order and the provisions of the unit agreement, or the unit operating agreement or the unitization order, if any.

(2)Where a pooled spacing unit is included in a unit area pursuant to subsection (1), the provisions of the unit agreement, the unit operating agreement and the unitization order, if any, prevail over the provisions of the pooling order in the event of a conflict.

(3)Notwithstanding subsection (2),

(a)the share of the unit production that is allocated to the pooled spacing unit shall in turn be allocated to the separately owned tracts in the pooled spacing unit on the same basis and in the same proportion as production actually obtained from the pooled spacing unit would have been shared under the pooling order;

(b)the costs and expenses of the unit operation that are allocated to the pooled spacing unit shall be shared and borne by the owners of the working interests therein on the same basis and in the same proportion as would apply under the pooling order; and

(c)the credits allocated under a unit operating agreement to a pooled spacing unit for adjustment of investment for wells and equipment thereon shall be shared by the owners of the working interests therein in the same proportion as would apply to the sharing of production under the pooling order.

^note

Straddling Resources — Inuvialuit Settlement Region

Definitions

48.01Definitions#

The following definitions apply in this section and in sections 48.02 to 48.096.

notification area means the following:

(a)that part of the offshore that is situated within 20 kilometres of the onshore; and

(b)that part of the onshore that is situated within 20 kilometres of the offshore. (zone de notification)

offshore means that part of the Inuvialuit Settlement Region that is not situated in the onshore. (région extracôtière)

^note

Determination

48.02Commission of the Canadian Energy Regulator’s obligations#

If the data obtained from conducting a survey or drilling an exploratory well — as defined in subsection 101(1) of the Canada Petroleum Resources Act — in the notification area provide sufficient information for the Commission of the Canadian Energy Regulator to determine that a pool or field exists, the Commission shall

(a)determine whether the pool or field is a straddling resource;

(b)without delay notify the Minister and the Government of the Northwest Territories of its determination and the reasons for it; and

(c)on request, provide that Minister or that Government with the information that is in the Commission’s possession and pertinent to that determination.

^note

48.03Information sharing#

The Minister and the Government of the Northwest Territories shall, on request, provide the other with the information that is in their possession and is relevant to the proper and efficient exploration for and the management, administration and exploitation of the straddling resource.^note

Exploitation of Straddling Resources

48.04Single pool or field#

(1)A straddling resource may be exploited as a single pool or field, as the case may be.

(2)An exploration or drilling program related to a straddling resource is, to the extent practicable, to be managed as a single exploration or drilling program.

^note

48.05Notice — intention to start production#

(1)If an interest owner, as defined in section 2 of the Canada Petroleum Resources Act, advises the Minister or the Commission of the Canadian Energy Regulator — including by way of an application under section 38 of the Canada Petroleum Resources Act or paragraph 5(1)(b) of this Act, as the case may be — that it intends to start production of a straddling resource, the Minister shall, without delay, notify the Government of the Northwest Territories of the interest owner’s intention.

(2)If, after production commences, the Commission of the Canadian Energy Regulator determines that a pool or field is a straddling resource

(a)the Minister or the Government of the Northwest Territories — depending on the jurisdiction in which production commenced — shall, without delay, notify the other of that determination; and

(b)either of them may give notice under section 48.06.

^note

48.06Requirement — exploitation as single unit#

The Minister or the Government of the Northwest Territories may, by notice, require of the other that a pool or field that is a straddling resource be exploited as a single pool or field, as the case may be.^note

48.07Unit agreement#

(1)The royalty owners and the working interest owners in respect of a straddling resource may enter into a unit agreement and, if it is approved under subsection 48.09(1), they shall operate their interests in accordance with it or any amendment to it.

(2)The working interest owners in respect of a straddling resource may enter into a unit operating agreement and, if it is approved under subsection 48.09(1), they shall operate their interests in accordance with it or any amendment to it.

(3)Unless the Minister and the Government of the Northwest Territories agree to an earlier termination, a unit agreement or a unit operating agreement remains in force until the later of

(a)the day on which commercial production from the straddling resources to which the agreement applies ends, and

(b)the day on which there are no outstanding obligations in respect of the decommissioning or the abandonment of the production system for a straddling resource to which the agreement applies.

^note

48.08Order to enter into agreements#

If a straddling resource is required to be exploited as a single pool or field under section 48.06 and the working interest owners have not entered into a unit agreement and a unit operating agreement, the Minister shall order the working interest owners in the portion of the pool or field that is in the Minister’s jurisdiction to do so.^note

48.09Approval of agreements#

(1)A unit agreement and a unit operating agreement are subject to the approval of the Minister and the Government of the Northwest Territories. They are to be approved only if all royalty owners and working interest owners referred to in subsection 48.07(1) or all working interest owners referred to in subsection 48.07(2), as the case may be, are parties to the agreement.

(2)No authorization is to be issued under paragraph 5(1)(b) — and no development plan is to be approved under subsection 5.1(4) — in relation to the exploitation of a straddling resource if the unit agreement and the unit operating agreement are not approved under subsection (1).

^note

48.091Referral to independent expert#

If the royalty owners and the working interest owners in respect of a straddling resource do not enter into a unit agreement — and, in the case of the working interest owners, a unit operating agreement — within 90 days after the day on which the Minister orders the working interest owners to enter into those agreements under section 48.08, the Minister or the Government of the Northwest Territories may notify the other of their intention to refer the matter to an independent expert for a decision in accordance with section 48.095.^note

48.092Unitization order#

(1)The Minister shall issue a unitization order in accordance with the independent expert’s final decision.

(2)The unit agreement and the unit operating agreement have the effect given them by the Minister’s order.

(3)A unitization order becomes effective only if the Government of the Northwest Territories issues an equivalent order.

(4)The issuance of a unitization order by the Minister and of an equivalent order by the Government of the Northwest Territories is deemed to be their joint approval of the unit agreement and the unit operating agreement.

(5)Subject to subsection (3), a unitization order becomes effective on the day established in the order, but that day is not to be less than 30 days after the day on which the order is issued.

^note

48.093Redetermination#

The Minister, the Government of the Northwest Territories or a working interest owner may — in respect of future production — request a redetermination of

(a)the apportionment of the production from the straddling resource; or

(b)one or more of the elements set out in the unit agreement or the unit operating agreement.

^note

48.094No agreement — royalty owners and working interest owners#

If the royalty owners and the working interest owners in respect of a straddling resource do not enter into an agreement in respect of the redetermination under section 48.093 within 90 days after the day on which the request is made, the Minister or the Government of the Northwest Territories may notify the other of their intention to refer the matter to an independent expert for a decision in accordance with section 48.095.^note

48.095Independent expert#

(1)Within 90 days after the day on which the Minister or the Government of the Northwest Territories is notified under subsection 5.1(8) or section 48.091 or 48.094, the Minister and the Government shall appoint the independent expert.

(2)The independent expert must be impartial and independent and have knowledge or experience relevant to the matter.

(3)If the Minister and the Government of the Northwest Territories do not appoint the expert in accordance with subsection (1), each shall — within 30 days after the day on which the time to appoint an expert expires — submit to the other the names of up to two persons with the qualifications set out in subsection (2); they shall within 30 days after the day of submission select the independent expert from those persons by drawing lots and appoint that person as the independent expert.

(4)If the Minister or the Government of the Northwest Territories does not submit, select or appoint as required by subsection (3), they are deemed to make the same submission, selection or appointment — as the case may be — as the other and are bound by the decision of the independent expert.

(5)Within 90 days after the day on which they are seized of the matter or within any other period agreed to by the Minister and the Government of the Northwest Territories, the independent expert shall render a preliminary decision and the Minister and the Government are to be provided with it and the reasons for it, including any supporting documentation.

(6)The Minister or the Government of the Northwest Territories may — within 60 days after being provided with the preliminary decision — request the independent expert to clarify or reconsider that decision and make additional submissions to the independent expert.

(7)If the Minister or the Government of the Northwest Territories does so request and make such submissions, they shall provide the other with a copy of those submissions. The other may — within 15 days after the day on which they receive that copy — make further submissions and shall provide the other with a copy of them.

(8)Within 120 days after the day on which they render a preliminary decision, the independent expert shall render a final decision and the Minister and the Government of the Northwest Territories are to be provided with it and the reasons for it, including any supporting documentation.

(9)An independent expert’s final decision is final and binding on the Minister and the Government of the Northwest Territories and is not to be challenged on appeal or judicial review in any court except on the ground that the independent expert erred in law or exceeded the independent expert’s jurisdiction.

(10)If a person acts as an independent expert,

(a)the person is not to be called to give evidence, and is not compellable as a witness, in any legal proceedings related to the matter; and

(b)the person’s records related to the matter are not admissible as evidence in any legal proceedings related to the matter.

^note

48.096Regulations — Inuvialuit lands#

The Governor in Council may, if the Inuvialuit Regional Corporation agrees in writing under subsection 3.3(b) of the Agreement to be bound by a provision of Article 5 of the Agreement, make regulations adapting the definitions Agreement, Inuvialuit Settlement Region and straddling resource in section 2 and sections 48.01 to 48.095 accordingly.^note

Transboundary Pools or Fields

Delineation

48.1Appropriate regulator#

For the purposes of sections 48.11 to 48.14, the appropriate regulator is any regulator that has jurisdiction in an area

(a)adjoining the portion of the perimeter where the drilling took place or where an accumulation of oil or gas exists; or

(b)into which there is reason to believe that, based on the data obtained from any drilling, an accumulation of oil or gas extends.

^note

48.11Information#

(1)If an exploratory well, as defined in subsection 101(1) of the Canada Petroleum Resources Act, is drilled in the perimeter, the Commission of the Canadian Energy Regulator shall provide each appropriate regulator, within the prescribed time and in the prescribed manner, with any information in its possession, including any prescribed information, that is relevant to the determination of whether a pool is transboundary and its delineation.

(2)The Commission of the Canadian Energy Regulator shall, on request, provide the regulator with any additional information in its possession, that is relevant to the determination of whether a pool is transboundary and its delineation.

^note

48.12Notice — as soon as feasible#

(1)If the data obtained from any drilling in the perimeter provides sufficient information for the Commission of the Canadian Energy Regulator to determine whether a pool exists, the Commission shall notify each appropriate regulator as soon as feasible of its determination.

(2)If no notice is given under subsection (1), the Commission of the Canadian Energy Regulator shall, no later than one year after the day on which it receives data from the last of three drillings of the same geological feature in the perimeter, notify each appropriate regulator of its determination or that there is insufficient information to make a determination based on the data from those drillings.

(3)If the Commission of the Canadian Energy Regulator determines that a pool exists, the Commission shall also specify in the notice whether or not there is, in its opinion, reason to believe that the pool is transboundary.

(4)The Commission of the Canadian Energy Regulator shall provide each appropriate regulator and the Minister with the reasons for its determination and opinion.

^note

48.13Notice from Canadian Energy Regulator#

(1)If the Canadian Energy Regulator receives a notice from a regulator indicating the regulator’s determination as to whether a pool exists in an area adjoining the perimeter and, if applicable, whether there is reason to believe the pool extends into the perimeter, the Commission of the Canadian Energy Regulator shall, within 90 days after the day on which the notice is received, inform the regulator of its agreement or disagreement with the content of the notice.

(2)If the Commission of the Canadian Energy Regulator disagrees with the content of the notice, it shall provide the regulator with the reasons for its disagreement.

^note

48.14Delineation#

(1)If, after receiving a notice under section 48.12 or 48.13, the Commission of the Canadian Energy Regulator and the regulator in question agree that a pool exists, the Commission and that regulator shall jointly determine whether that pool is transboundary and, if so, they shall jointly delineate its boundaries.

(2)The Commission of the Canadian Energy Regulator or the regulator may, if they disagree about whether a pool exists, whether the pool is transboundary or its delineation, refer the matter to an expert, no later than 180 days after the day on which the Commission issues a notice under section 48.12, or the regulator issues an equivalent notice.

^note

Agreements Relating to Development

48.15Appropriate regulator#

For the purposes of sections 48.16 to 48.27, the appropriate regulator is the regulator that has jurisdiction in an area into which the transboundary pool or field in question extends.^note

48.16Joint exploitation agreement#

The Minister and the appropriate regulator may enter into a joint exploitation agreement providing for the development of a transboundary pool or field as a single field. The agreement shall include any matters provided for by regulation.^note

48.17Development as a single field#

(1)If a joint exploitation agreement has been entered into, the transboundary pool or field may only be developed as a single field. The development of that field is subject to the following agreements having been entered into and subsequently approved under subsection 48.2(2) or 48.23(4):

(a)a unit agreement that includes the details referred to in paragraphs 40(2)(a) to (d); and

(b)a unit operating agreement that includes the details referred to in paragraphs 40(3)(a) to (e).

(2)The joint exploitation agreement prevails over the unit agreement and the unit operating agreement to the extent of any inconsistency between them.

^note

48.18Intention to start production#

(1)If an interest owner — as defined in the Canada Petroleum Resources Act — advises the Minister or the Canadian Energy Regulator, including by way of an application under paragraph 5(1)(b) of this Act or under section 38 of the Canada Petroleum Resources Act, that it intends to start production from a transboundary pool or field, the Minister shall notify the appropriate regulator as soon as feasible of the interest owner’s intention.

(2)If the Minister and the regulator have attempted to enter into a joint exploitation agreement but have been unsuccessful, the Minister or the regulator may, 180 days after the day on which the Minister gives notice under subsection (1), refer the matter to an expert to determine the particulars of the agreement. They may, however, agree to refer the matter to an expert at any time before the end of those 180 days.

^note

48.19Unit agreement#

(1)The royalty owners and the working interest owners in a transboundary pool or field that is to be developed as a single field may enter into a unit agreement and, once approved, shall operate their interests in accordance with it, including any amendment to it.

(2)Subsections 37(2) and (3) apply to the unit agreement.

^note

48.2Condition precedent#

(1)A unit agreement and unit operating agreement are to be jointly approved by the Minister and the appropriate regulator before an authorization is issued under paragraph 5(1)(b) for a work or activity proposed to be carried on in relation to the development of a transboundary pool or field as a single field.

(2)The Minister and the appropriate regulator may approve the unit agreement if all the royalty owners and all the working interest owners in the pool or field are parties to it; the Minister and the appropriate regulator may approve the unit operating agreement if all the working interest owners in the pool or field are parties to it.

^note

48.21Application for unitization order#

(1)One or more working interest owners who are parties to a unit agreement and a unit operating agreement and own in total 65% or more of the working interests in a transboundary pool or field that is to be developed as a single field may apply for a unitization order with respect to the agreements.

(2)The application shall be submitted to both the Minister and the appropriate regulator. It shall include the documents and statements referred to in subsection 40(1) and may be made by the unit operator or proposed unit operator on behalf of the working interest owners.

(3)The Minister and the regulator shall, for the purposes of section 48.22, appoint an expert in accordance with subsections 48.27(2) to (4).

^note

48.22Hearing#

(1)Once seized of an application made under section 48.21, the expert shall hold a hearing at which all interested persons shall be given an opportunity to be heard.

(2)On the conclusion of the hearing, the expert shall request that the Minister and the appropriate regulator

(a)order that the unit agreement is a valid contract enuring to the benefit of all the royalty owners and working interest owners who have an interest in the unit area and binding on and enforceable against all such owners, and that the unit operating agreement is a valid contract enuring to the benefit of all the working interest owners who have an interest in the unit area and binding on and enforceable against all such owners; and

(b)include in the order any variations to the unit agreement or unit operating agreement that the expert determines are necessary to allow for the more efficient or more economical production of oil or gas from the unitized zone.

(3)Despite subsection (2), the expert shall end the hearing and request that the Minister and the appropriate regulator take the measure outlined in paragraph (2)(a) if the expert finds that,

(a)on the day on which the hearing begins,

(i)the unit agreement and the unit operating agreement have been executed by one or more working interest owners who own in total 65% or more of the total working interests in the unit area, and

(ii)the unit agreement has been executed by one or more royalty owners who own in total 65% or more of the total royalty interests in the unit area; and

(b)the unitization order applied for would allow for the more efficient or more economical production of oil or gas from the unitized zone.

^note

48.23Unitization order#

(1)The Minister shall issue an order in accordance with the expert’s request under subsection 48.22(2) or (3).

(2)The unit agreement and the unit operating agreement have the effect given to them by the Minister’s order.

(3)A unitization order becomes effective only if the appropriate regulator has issued an equivalent order.

(4)The issuance of a unitization order by the Minister and of an equivalent order by the regulator is deemed to be their joint approval of the unit agreement and the unit operating agreement.

(5)Subject to subsections (3) and (6), a unitization order becomes effective on the date set out in the order, but that date shall not be less than 30 days after the day on which the order is made.

(6)The Minister shall immediately revoke a unitization order that varies a unit agreement or a unit operating agreement if, before the effective date of that order, the applicant files with the Minister a notice withdrawing the application on behalf of the working interest owners or there are filed with the Minister statements objecting to the order and signed

(a)in the case of the unit agreement, by

(i)one or more working interest owners who own in total more than 25% of the total working interests in the unit area and are part of the group that owns 65% or more of the total working interests as described in subparagraph 48.22(3)(a)(i), and

(ii)one or more royalty owners who own in total more than 25% of the total royalty interests in the unit area and are part of the group that owns 65% or more of the total royalty interests as described in subparagraph 48.22(3)(a)(ii); or

(b)in the case of the unit operating agreement, by one or more working interest owners who own in total more than 25% of the total working interests in the unit area and are part of the group that owns 65% or more of the total working interests as described in subparagraph 48.22(3)(a)(i).

(7)Sections 43 and 46 apply to the unitization order.

^note

48.24Amending unitization order#

(1)A unitization order may be amended on the application of a working interest owner submitted to both the Minister and the appropriate regulator.

(2)The Minister and the regulator shall appoint an expert in accordance with subsections 48.27(2) to (4) for the purposes of this section.

(3)Once seized of the application, the expert shall hold a hearing at which all interested persons shall be given an opportunity to be heard.

(4)On the conclusion of the hearing, the expert may request that the Minister order the amendment of the unitization order in accordance with the amendment proposed and to include in the order any variations to it that the expert determines are necessary to allow for the more efficient or more economical production of oil or gas from the unitized zone. If the expert makes such a request, the expert shall also request that the appropriate regulator order the amendment of its equivalent order in the same way.

(5)If the expert finds that, on the day on which the hearing begins, one or more working interest owners who own in total 65% or more of the total working interests and one or more royalty interest owners who own in total 65% or more of the total royalty interests in the unit area have consented to the proposed amendment, the expert may end the hearing and request that the Minister amend the unitization order in accordance with the amendment proposed. If the expert makes such a request, the expert shall also request that the appropriate regulator amend its equivalent order in the same way.

(6)Section 48.23 applies, with any modifications that the circumstances require, to an amended unitization order.

^note

48.25Protection of tract participation ratios#

No amendment shall be made under section 48.24 that will alter the ratios between the tract participations of those tracts that were qualified for inclusion in the unit area before the commencement of the hearing, and, for the purposes of this section, the tract participations shall be those indicated in the unit agreement when it became subject to a unitization order.^note

48.26Determination — percentages of interests#

The percentages of interests referred to in subsections 48.21(1), 48.22(3), 48.23(6) and 48.24(5) shall be determined in accordance with section 47.^note

Referral to Expert

48.27Notice#

(1)The party that intends to refer a matter to an expert under subsection 5.1(9), 5.2(6), 48.14(2) or 48.18(2) shall notify the other party of their intention.

(2)Within 30 days after the day on which a notice is given under subsection (1) or an application is made under subsection 48.21(1) or 48.24(1), the parties shall agree on the appointment of an expert who shall be seized of the matter.

(3)If the parties do not agree on the appointment of a single expert, they shall, within 30 days after the day on which the period to jointly appoint an expert under subsection (2) ends, each appoint one expert to a panel and those experts shall, in turn, jointly appoint an additional expert as chairperson. If there is no agreement on the appointment of a chairperson within 30 days after the day of the last appointment, the chairperson shall be appointed by the Chief Justice of the Federal Court within 30 days after the period for appointing a chairperson ends. Once the chairperson is appointed, the expert panel shall be seized of the matter.

(4)An expert shall be impartial and independent, and have knowledge or experience relative to the subject of disagreement between the parties.

(5)Decisions of an expert panel shall be made on the basis of a majority vote of the members. The chairperson’s vote is the deciding vote in the case of a tie.

(6)The expert’s decision shall be made no later than 270 days after the day on which they were seized of the matter.

(7)Subject to judicial review, a decision made by an expert is final and binding on all parties specified in the decision from the date specified in it.

(8)An expert shall cause records to be kept of their hearings and proceedings and shall deposit their records with the Minister when their activities to which the records relate have ceased.

^note

Part III · Appeals and Enforcement

Appeals

49Orders and decisions final#

(1)Except as provided in this Act, every decision or order of the Committee is final and conclusive.

(2)Any minute or other record of the Committee or any document issued by the Committee, in the form of a decision or order, shall for the purposes of this section be deemed to be a decision or order of the Committee.

^note

50Stated case for Federal Court#

(1)The Committee may of its own motion, or at the request of the Minister, state a case, in writing, for the opinion of the Federal Court on any question that in the opinion of the Committee is a question of law or of the jurisdiction of the Committee.

(2)The Federal Court shall hear and determine the case stated and remit the matter to the Committee with the opinion of the Court thereon.

^note

51Governor in Council may review orders of Committee#

The Governor in Council may at any time, in his discretion, either on petition of any interested person or of his own motion, vary or rescind any decision or order of the Committee made under this Act, whether the order is made between parties or otherwise and any order that the Governor in Council makes with respect thereto becomes a decision or order of the Committee and, subject to section 52, is binding on the Committee and on all parties.^note

52Appeal to Federal Court#

(1)An appeal lies from a decision or order of the Committee to the Federal Court on a question of law, on leave therefor being obtained from the Federal Court, in accordance with the practice of that Court, on application made within one month after the making of the decision or order sought to be appealed from or within such further time as that Court may allow.

(2)[Repealed, R.S., 1985, c. 36 (2nd Supp.), s. 1] (repealed)

(3)Where leave to appeal is granted pursuant to subsection (1), any order of the Committee in respect of which the appeal is made shall be stayed until the matter of the appeal is determined.

(4)After the hearing of the appeal pursuant to this section, the Supreme Court of Canada shall certify its opinion to the Committee and the Committee shall make any order necessary to comply with the opinion.

(5)Any order made by the Committee pursuant to subsection (4), unless the order has already been dealt with by the Governor in Council pursuant to section 51, shall be subject to that section.

^note

Safety and Conservation Officers

53Officers#

The Chief Executive Officer of the Canadian Energy Regulator designates the safety officers and conservation officers necessary for the administration and enforcement of this Act and the regulations from among the employees of the Canadian Energy Regulator.^note

54Powers of officers#

(1)For the purpose of ensuring compliance with this Act and the regulations, a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may at any reasonable time

(a)enter any place, including lands, buildings, installations, vessels, vehicles and aircraft, used for any work or activity in respect of which this Act applies, for the purpose of carrying out inspections, examinations, tests or inquiries or of directing that the person in charge of the place carry them out, and the officer may be accompanied by any other person that the officer believes is necessary to help carry out the inspection, examination, test or inquiry;

(b)take photographs or make drawings of any place or thing referred to in this section;

(c)order that any place or thing referred to in this section not be interfered with for a specified period;

(d)require the production, for inspection or copying, of any books, records, documents, licences or permits required by this Act or the regulations;

(e)take samples or particulars and carry out, or have carried out, any reasonable tests or examinations; and

(f)require the person in charge of the place, or any other person in the place who has knowledge relevant to an inspection, examination, test or inquiry, to furnish information, either orally or in writing, in the form requested.

(2)For greater certainty, the powers set out in subsection (1) include the power to conduct a compliance audit.

^note

55Certificate#

The Chief Executive Officer of the Canadian Energy Regulator must provide every safety officer and conservation officer and the Chief Safety Officer and the Chief Conservation Officer with a certificate of appointment or designation and, on entering any place under this Act, the officer must, upon request, produce the certificate to the person in charge of the place.^note

56Assistance to officers#

The owner, the person in charge of any place referred to in subsection 54(1) and every person found in the place shall give a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer, as the case may be, all reasonable assistance to enable the officer to carry out duties and functions under this Act or the regulations.^note

57Obstruction of officers and making of false statements#

No person shall obstruct or hinder or make a false or misleading statement, either orally or in writing, to a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer who is engaged in carrying out duties and functions under this Act or the regulations.^note

58Power of officers#

(1)A safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may order that an operation or activity in any area to which this Act applies cease or be continued only in accordance with the terms of the order if the officer, on reasonable grounds, is of the opinion that its continuation could result in harm to a person, damage to the environment or property or a breach of security, or is not in compliance with this Act or the regulations, and

(a)the operation is in relation to the exploration or drilling for or the production, conservation, processing or transportation of oil or gas; or

(b)the activity is prohibited by an order or regulation made under section 15.1.

(2)The officer who makes an order under subsection (1) shall affix at or near the scene of the operation a notice of the order in a form approved by the Canadian Energy Regulator.

(3)An order made by a safety officer or a conservation officer under subsection (1) expires 72 hours after it is made unless it is confirmed before that time by order of the Chief Safety Officer or the Chief Conservation Officer, as the case may be.

(4)A safety officer or a conservation officer who makes an order under subsection (1) shall immediately so advise the Chief Safety Officer or the Chief Conservation Officer, as the case may be, and that Chief Officer may modify or revoke the order.

(5)A person carrying out an operation to which an order made under subsection (1) refers, or any person having a pecuniary interest in that operation, may, by notice in writing, request the Chief Safety Officer or the Chief Conservation Officer, as the case may be, to refer the order to the Commission of the Canadian Energy Regulator for a review of the need for the order under section 386 of the Canadian Energy Regulator Act and, on receiving the notice, that Chief Officer must refer the order accordingly.

(6)A person is prohibited from continuing an operation in respect of which an order has been made under this section, except in accordance with the terms of the order or until the order has been set aside by the Commission of the Canadian Energy Regulator under section 386 of the Canadian Energy Regulator Act.

(7) to (9)[Repealed, 1994, c. 10, s. 12] (repealed)

^note

58.1Priority#

An order made by a safety officer or the Chief Safety Officer prevails over an order made by a conservation officer or the Chief Conservation Officer to the extent of any inconsistency between the orders.^note

Installation Manager

58.2Installation manager#

(1)Every holder of an authorization under paragraph 5(1)(b) in respect of a work or activity for which a prescribed installation is to be used shall put in command of the installation a manager who meets any prescribed qualifications, and the installation manager is responsible for the safety of the installation and the persons at it.

(2)Subject to this Act and any other Act of Parliament, an installation manager has the power to do such things as are required to ensure the safety of the installation and the persons at it and, more particularly, may

(a)give orders to any person who is at the installation;

(b)order that any person who is at the installation be restrained or removed; and

(c)obtain information or documents.

(3)In a prescribed emergency situation, an installation manager’s powers are extended so that they also apply to each operator of a vessel, vehicle or aircraft that is at the installation or that is leaving or approaching it.

^note

Offences and Punishment

59Offences with respect to documents and records#

A person is guilty of an offence who

(a)knowingly makes any false entry or statement in any report, record or document required by this Act or the regulations or by any order made pursuant to this Act or the regulations; or

(b)knowingly destroys, mutilates or falsifies any report or other document required by this Act or the regulations or by any order made pursuant to this Act or the regulations.

^note

60Offences#

(1)Every person is guilty of an offence who

(a)contravenes this Act or the regulations;

(b)produces any oil or gas from a pool or field under the terms of a unit agreement within the meaning of Part II, or any amended unit agreement, before the unit agreement or amended unit agreement is filed with the Chief Conservation Officer;

(c)undertakes or carries on a work or activity without an authorization under paragraph 5(1)(b) or without complying with the approvals or requirements of such an authorization; or

(d)fails to comply with a direction, requirement or order of a safety officer, the Chief Safety Officer, a conservation officer, the Chief Conservation Officer or an installation manager or with an order of the Committee or the Commission of the Canadian Energy Regulator made under this Act.

(2)Every person who is guilty of an offence under subsection (1) is liable

(a)on summary conviction, to a fine not exceeding one hundred thousand dollars or to imprisonment for a term not exceeding one year, or to both; or

(b)on conviction on indictment, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding five years, or to both.

(3)In addition to the principles and factors that the court is otherwise required to consider, including those set out in sections 718.1 to 718.21 of the Criminal Code, the court shall consider the following principles when sentencing a person who is found guilty of an offence under this Act:

(a)the amount of the fine should be increased to account for every aggravating factor associated with the offence, including the aggravating factors set out in subsection (4); and

(b)the amount of the fine should reflect the gravity of each aggravating factor associated with the offence.

(4)The aggravating factors are the following:

(a)the offence caused harm or risk of harm to human health or safety;

(b)the offence caused damage or risk of damage to the environment or to environmental quality;

(c)the offence caused damage or risk of damage to any unique, rare, particularly important or vulnerable component of the environment;

(d)the damage or harm caused by the offence is extensive, persistent or irreparable;

(e)the offender committed the offence intentionally or recklessly;

(f)the offender failed to take reasonable steps to prevent the commission of the offence;

(g)by committing the offence or failing to take action to prevent its commission, the offender increased their revenue or decreased their costs or intended to increase their revenue or decrease their costs;

(h)the offender has a history of non-compliance with federal or provincial legislation that relates to safety or environmental conservation or protection; and

(i)after the commission of the offence, the offender

(i)attempted to conceal its commission,

(ii)failed to take prompt action to prevent, mitigate or remediate its effects, or

(iii)failed to take prompt action to reduce the risk of committing similar offences in the future.

(5)The absence of an aggravating factor set out in subsection (4) is not a mitigating factor.

(6)For the purposes of paragraphs (4)(b) to (d), damage includes loss of use value and non-use value.

(7)If the court is satisfied of the existence of one or more of the aggravating factors set out in subsection (4) but decides not to increase the amount of the fine because of that factor, the court shall give reasons for that decision.

61 and 62 #

[Repealed, 1992, c. 35, s. 30] (repealed)

63Presumption against waste#

A person does not commit an offence under subsection 18(1) by reason of committing waste as defined in paragraph 18(2)(f) or (g) unless the person has been ordered by the Commission of the Canadian Energy Regulator under section 385 of the Canadian Energy Regulator Act to take measures to prevent the waste and has failed to comply.^note

64 #

[Repealed, 1992, c. 35, s. 31] (repealed)

65Order of court#

(1)If a person is found guilty of an offence under this Act, the court may, having regard to the nature of the offence and the circumstances surrounding its commission, in addition to any other punishment that may be imposed under this Act, make an order that has any or all of the following effects:

(a)prohibiting the offender from committing an act or engaging in an activity that may, in the opinion of the court, result in the continuation or repetition of the offence;

(b)directing the offender to take any action that the court considers appropriate to remedy or avoid any harm to the environment that results or may result from the act or omission that constituted the offence;

(c)directing the offender to carry out environmental effects monitoring in the manner established by the Commission of the Canadian Energy Regulator or directing the offender to pay, in the manner specified by the court, an amount of money for the purposes of environmental effects monitoring;

(d)directing the offender to make changes to their environmental management system that are satisfactory to the Commission of the Canadian Energy Regulator;

(e)directing the offender to have an environmental audit conducted by a person of a class and at the times specified by the Commission of the Canadian Energy Regulator and directing the offender to remedy any deficiencies revealed during the audit;

(f)directing the offender to pay to Her Majesty in right of Canada, for the purpose of promoting the conservation, protection or restoration of the environment, or to pay into the Environmental Damages Fund — an account in the accounts of Canada — an amount of money that the court considers appropriate;

(g)directing the offender to publish, in the manner specified by the court, the facts relating to the commission of the offence and the details of the punishment imposed, including any orders made under this subsection;

(h)directing the offender to notify, at the offender’s own cost and in the manner specified by the court, any person aggrieved or affected by the offender’s conduct of the facts relating to the commission of the offence and of the details of the punishment imposed, including any orders made under this subsection;

(i)directing the offender to post a bond or pay an amount of money into court that the court considers appropriate to ensure that the offender complies with any prohibition, direction, requirement or condition that is specified in the order;

(j)directing the offender to perform community service, subject to any reasonable conditions that may be imposed by the court;

(k)directing the offender to pay, in the manner specified by the court, an amount of money to environmental, health or other groups to assist in their work in the community where the offence was committed;

(l)directing the offender to pay, in the manner specified by the court, an amount of money to an educational institution including for scholarships for students enrolled in studies related to the environment;

(m)requiring the offender to comply with any conditions that the court considers appropriate in the circumstances for securing the offender’s good conduct and for preventing the offender from repeating the same offence or committing another offence under this Act;

(n)prohibiting the offender from taking measures to acquire an interest under the Canada Petroleum Resources Act or from applying for any new licence or other authorization under this Act during any period that the court considers appropriate.

(2)An order made under subsection (1) comes into force on the day on which the order is made or on any other day that the court may determine, but shall not continue in force for more than three years after that day.

(3)If an offender does not comply with an order requiring the publication of facts relating to the offence and the details of the punishment, the Canadian Energy Regulator may, in the manner that the court directed the offender, publish those facts and details and recover the costs of publication from the offender.

(4)If the Canadian Energy Regulator incurs publication costs under subsection (3), the costs constitute a debt due to Her Majesty in right of Canada and may be recovered in any court of competent jurisdiction.

^note

65.1Variation of sanctions#

(1)Subject to subsection (2), if a court has made, in relation to an offender, an order under section 65, the court may, on application by the offender or the Commission of the Canadian Energy Regulator, require the offender to appear before it and, after hearing the offender and the Commission, vary the order in one or more of the following ways that the court considers appropriate because of a change in the offender’s circumstances since the order was made:

(a)by making changes to any prohibition, direction, requirement or condition that is specified in the order for any period or by extending the period during which the order is to remain in force, not exceeding one year; or

(b)by decreasing the period during which the order is to remain in force or by relieving the offender of compliance with any condition that is specified in the order, either absolutely or partially or for any period.

(2)Before making an order under subsection (1), the court may direct that notice be given to any persons that the court considers to be interested, and may hear any of those persons.

^note

65.2Subsequent applications with leave#

If an application made under subsection 65.1(1) in relation to an offender has been heard by a court, no other application may be made under section 65.1 in relation to the offender except with leave of the court.^note

65.3Recovery of fines and amounts#

If a person is convicted of an offence under this Act and a fine that is imposed is not paid when required or if a court orders an offender to pay an amount under subsection 65(1) or 65.1(1), the prosecutor may, by filing the conviction or order, as the case may be, enter as a judgment the amount of the fine or the amount ordered to be paid, and costs, if any, in any court of competent jurisdiction in Canada, and the judgment is enforceable against the person in the same manner as if it were a judgment rendered against them in that court in civil proceedings.^note

66Continuing offences#

Where an offence under this Act is committed on more than one day or is continued for more than one day, it shall be deemed to be a separate offence for each day on which the offence is committed or continued.^note

67 #

[Repealed, 1992, c. 35, s. 32] (repealed)

68Limitation period#

A prosecution for an offence under this Act may be instituted at any time within but not later than two years after the time when the subject-matter of the complaint arose.^note

69Evidence#

In any prosecution for an offence under this Act, a copy of an order purporting to have been made pursuant to this Act or the regulations and purporting to have been signed by the person authorized by this Act or the regulations to make that order is evidence of the matters set out therein.^note

70Jurisdiction of judge or justice#

Any complaint or information in respect of an offence under this Act may be heard, tried or determined by a justice or judge if the accused is resident or carrying on business within the territorial jurisdiction of that justice or judge although the matter of the complaint or information did not arise in that territorial jurisdiction.^note

71Action to enjoin not prejudiced by prosecution#

(1)Notwithstanding that a prosecution has been instituted in respect of an offence under this Act, the regulations or any order made pursuant to this Act or the regulations, Her Majesty in right of Canada may commence and maintain an action to enjoin the committing of any contravention of this Act, the regulations or any order made pursuant to this Act or the regulations.

(2)No civil remedy for any act or omission is suspended or affected by reason that the act or omission is an offence under this Act.

^note

Administrative Monetary Penalties

Powers

71.01Regulations#

(1)The Governor in Council may make regulations

(a)designating as a violation that may be proceeded with in accordance with this Act

(i)the contravention of any specified provision of this Act or of any of its regulations,

(ii)the contravention of any direction, requirement, decision or order, or of any direction, requirement, decision or order of a specified class of directions, requirements, decisions or orders, made under this Act, or

(iii)the failure to comply with any term, condition or requirement of

(A)an operating licence or authorization or any specified class of operating licences or authorizations, or

(B)any approval, leave or exemption or any specified class of approvals, leave or exemptions granted under this Act;

(b)respecting the determination of, or the method of determining, the amount payable as the penalty, which may be different for individuals and other persons, for each violation; and

(c)respecting the service of documents required or authorized under section 71.06, 71.2 or 71.5, including the manner and proof of service and the circumstances under which documents are considered to be served.

(2)The amount that may be determined under any regulations made under paragraph (1)(b) as the penalty for a violation shall not be more than $25,000, in the case of an individual, and $100,000, in the case of any other person.

^note

71.02Powers#

The Commission of the Canadian Energy Regulator may

(a)establish the form of notices of violation;

(b)designate persons or classes of persons who are authorized to issue notices of violation;

(c)establish, in respect of each violation, a short-form description to be used in notices of violation; and

(d)designate persons or classes of persons to conduct reviews under section 71.4.

^note

Violations

71.03Commission of violation#

(1)Every person who contravenes or fails to comply with a provision, direction, requirement, decision or order, or term or condition the contravention of which, or the failure to comply with which, is designated to be a violation by a regulation made under paragraph 71.01(1)(a) commits a violation and is liable to a penalty of an amount to be determined in accordance with the regulations.

(2)The purpose of the penalty is to promote compliance with this Act and not to punish.

^note

71.04Liability of directors, officers, etc.#

If a corporation commits a violation, any director, officer, or agent or mandatary of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the violation is a party to the violation and is liable to a penalty of an amount to be determined in accordance with the regulations, whether or not the corporation has been proceeded against in accordance with this Act.^note

71.05Proof of violation#

In any proceedings under this Act against a person in relation to a violation, it is sufficient proof of the violation to establish that it was committed by an employee, or agent or mandatary, of the person, whether or not the employee, or agent or mandatary is identified or proceeded against in accordance with this Act.^note

71.06Issuance and service of notice of violation#

(1)If a person designated under paragraph 71.02(b) believes on reasonable grounds that a person has committed a violation, the designated person may issue a notice of violation and cause it to be served on the person.

(2)The notice of violation shall

(a)name the person that is believed to have committed the violation;

(b)set out the relevant facts surrounding the violation;

(c)set out the amount of the penalty for the violation;

(d)inform the person of their right, under section 71.2, to request a review with respect the amount of the penalty or the facts of the violation, and of the prescribed period within which that right is to be exercised;

(e)inform the person of the manner of paying the penalty set out in the notice; and

(f)inform the person that, if they do not exercise their right to request a review or if they do not pay the penalty, they will be considered to have committed the violation and that they are liable to the penalty set out in the notice.

^note

Rules About Violations

71.07Certain defences not available#

(1)A person named in a notice of violation does not have a defence by reason that the person

(a)exercised due diligence to prevent the commission of the violation; or

(b)reasonably and honestly believed in the existence of facts that, if true, would exonerate the person.

(2)Every rule and principle of the common law that renders any circumstance a justification or excuse in relation to a charge for an offence under this Act applies in respect of a violation to the extent that it is not inconsistent with this Act.

^note

71.08Continuing violation#

A violation that is committed or continued on more than one day constitutes a separate violation for each day on which it is committed or continued.^note

71.09Violation or offence#

(1)Proceeding with any act or omission as a violation under this Act precludes proceeding with it as an offence under this Act, and proceeding with it as an offence under this Act precludes proceeding with it as a violation under this Act.

(2)For greater certainty, a violation is not an offence and, accordingly, section 126 of the Criminal Code does not apply in respect of a violation.

^note

71.1Limitation or prescription period#

No notice of violation is to be issued more than two years after the day on which the matter giving rise to the violation occurred.^note

Reviews

71.2Right to request review#

A person who is served with a notice of violation may, within 30 days after the day on which it is served, or within any longer period that the Commission of the Canadian Energy Regulator allows, make a request to that Commission for a review of the amount of the penalty or the facts of the violation, or both.^note

71.3Correction or cancellation of notice of violation#

At any time before a request for a review in respect of a notice of violation is received by the Commission of the Canadian Energy Regulator, a person designated under paragraph 71.02(b) may cancel the notice of violation or correct an error in it.^note

71.4Review#

(1)On receipt of a request made under section 71.2, the Commission of the Canadian Energy Regulator shall conduct the review or cause the review to be conducted by a person designated under paragraph 71.02(d).

(2)The Commission of the Canadian Energy Regulator shall conduct the review if the notice of violation was issued by a person designated under paragraph 71.02(d).

^note

71.5Object of review#

(1)The Commission of the Canadian Energy Regulator or the person conducting the review shall determine, as the case may be, whether the amount of the penalty for the violation was determined in accordance with the regulations or whether the person committed the violation, or both.

(2)The Commission of the Canadian Energy Regulator or the person conducting the review shall render a determination and the reasons for it in writing and cause the person who requested the review to be served with a copy of them.

(3)If the Commission of the Canadian Energy Regulator or the person conducting the review determines that the amount of the penalty for the violation was not determined in accordance with the regulations, the Commission or the person, as the case may be, shall correct the amount of the penalty.

(4)If the Commission of the Canadian Energy Regulator or the person conducting the review determines that the person who requested the review committed the violation, the person who requested the review is liable to the penalty as set out in the notice issued under section 71.06 or as set out in the determination if the amount of the penalty was corrected under subsection (3).

(5)A determination made under this section is final and binding and, except for judicial review under the Federal Courts Act, is not subject to appeal or to review by any court.

(6)Despite section 28 of the Federal Courts Act, the Federal Court has exclusive original jurisdiction to hear and determine an application for judicial review of a determination made under this section by the Commission of the Canadian Energy Regulator.

^note

71.6Burden of proof#

If the facts of a violation are reviewed, the person who issued the notice of violation shall establish, on a balance of probabilities, that the person named in it committed the violation identified in it.^note

Responsibility

71.7Payment#

If a person pays the penalty set out in a notice of violation, the person is considered to have committed the violation and proceedings in respect of it are ended.^note

71.8Failure to act#

A person that neither pays the penalty imposed under this Act nor requests a review within the period referred to in section 71.2 is considered to have committed the violation and is liable to the penalty.^note

Recovery of Penalties

71.9Debt to Her Majesty#

(1)A penalty constitutes a debt due to Her Majesty in right of Canada and may be recovered in the Federal Court or any other court of competent jurisdiction.

(2)No proceedings to recover the debt are to be instituted more than five years after the day on which the debt becomes payable.

^note

72Certificate#

(1)The Commission of the Canadian Energy Regulator may issue a certificate of non-payment certifying the unpaid amount of any debt referred to in subsection 71.9(1).

(2)Registration in the Federal Court or in any other court of competent jurisdiction of a certificate of non-payment issued under subsection (1) has the same effect as a judgment of that court for a debt of the amount specified in the certificate and all related registration costs.

^note

General

72.01Admissibility of documents#

In the absence of evidence to the contrary, a document that appears to be a notice issued under subsection 71.06(1) is presumed to be authentic and is proof of its contents in any proceeding in respect of a violation.^note

72.02Publication#

The Commission of the Canadian Energy Regulator may make public the nature of a violation, the name of the person who committed it and the amount of the penalty.^note

Application

72.1Application#

This Act applies to every interest or right in oil or gas acquired or vested before the coming into force of this section.^note

Her Majesty

73Binding on Her Majesty#

This Act is binding on Her Majesty in right of Canada or a province.^note

Coming into Force

*74Commencement#

Sections 39 to 47 shall come into force on a day to be fixed by proclamation.^note

Schedule 1 · (Subsections 14.1(1), 25.1(1) and 25.4(3))

| Column 1 | Column 2Item | Act | Provision1 | Arctic Waters Pollution Prevention Act | 4(1)2 | Canada Shipping Act, 2001 | 1873 | Canadian Environmental Protection Act, 1999 | 125(1) to (5)4 | Fisheries Act | 36(3)5 | Migratory Birds Convention Act, 1994 | 5.1(1) and (2)

Schedule 2 · Provisions (Subsections 14.1(1), 25.1(1) and (2) and 25.4(3))

Related provisions

— 1998, c. 5, ss. 19 to 27*The definitions in this section apply in sections 20 to 28.existing federal interest meansan interest, within the meaning of section 2 of the Canada Petroleum Resources Act, in oil and gas in the Yukon Territory or the adjoining area in effect on the transfer date; ora production licence issued on or after the transfer date by virtue of section 23. (titres fédéraux existants)transfer date means the effective date of the first order of the Governor in Council made pursuant to section 47.1 of the Yukon Act, as amended by this Act, after this section comes into force that transfers the administration and control of oil and gas to the Commissioner of the Yukon Territory. (date de transfert)The expressions adjoining area, gas, oil, oil and gas interest, territorial oil and gas minister and Yukon oil and gas laws in sections 20 to 28 have the same meaning as in section 2 of the Yukon Act. — 1998, c. 5, ss. 19 to 27*Every existing federal interest remains in effect on and after the transfer date until it expires or is cancelled, until it is surrendered by the holder of the interest or until otherwise agreed to by the holder of the interest and the territorial oil and gas minister.On and after the transfer date and subject to subsection (3), Yukon oil and gas laws apply in respect of every existing federal interest, except thatrights under an existing federal interest, within the meaning of subsection (4), may not be diminished; andthe term of an existing federal interest may not be reduced.An existing federal interest may be cancelled or rights under it suspended, in accordance with Yukon oil and gas laws, if the interest could have been cancelled or the rights suspended in like circumstances before the transfer date.For the purposes of subsection (2), rights under an existing federal interest are the following:in the case of an exploration licence issued under the Canada Petroleum Resources Act,the rights described in paragraphs 22(a) and (b) of that Act, in respect of the lands described in the licence, andin lieu of the right described in paragraph 22(c) of that Act, the exclusive right to obtain, pursuant to Yukon oil and gas laws, production rights in respect of any part of the lands described in the licence in which oil or gas is determined, pursuant to those laws, to be commercially producible;in the case of a significant discovery licence issued under the Canada Petroleum Resources Act,the rights described in paragraphs 29(a) and (b) of that Act, in respect of the lands described in the licence other than any part of the lands for which a determination has been made under Yukon oil and gas laws to the effect that there is no potential for sustained production of oil or gas, andin lieu of the right described in paragraph 29(c) of that Act, the exclusive right to obtain, pursuant to Yukon oil and gas laws, production rights in respect of any part of those lands in which oil or gas is determined, pursuant to those laws, to be commercially producible;in the case of a production licence issued under the Canada Petroleum Resources Act,the rights described in subsection 37(1) of that Act, in respect of the lands described in the licence, anda right to the extension of the term of the licence, as provided by subsection 41(3) of that Act; andin the case of a lease issued under the Canada Oil and Gas Land Regulations, C.R.C., c. 1518,the rights described in section 58 of those Regulations, as that section read on the transfer date, in respect of the lands described in the lease, anda right to the reissuance of the lease, as provided by section 63 of those Regulations, as that section read on the transfer date.Yukon oil and gas laws must include provisions corresponding to the provisions of this section for as long as any existing federal interest remains in effect. — 1998, c. 5, ss. 19 to 27*Where Yukon oil and gas laws confer a right of access to lands for purposes of exploration for or production or transportation of oil or gas, and provide for the resolution of disputes between persons exercising that right and persons, other than the Governments of Canada and the Yukon Territory, having rights or interests in the surface of those lands, those laws shall provide for such resolution to be by means of access orders of the Yukon Surface Rights Board made in accordance with the Yukon Surface Rights Board Act. — 1998, c. 5, ss. 19 to 27*Where any lands have been withdrawn from disposition pursuant to the Territorial Lands Act before the transfer date for any purposes and under any conditions, no oil and gas interest may be granted pursuant to Yukon oil and gas laws in relation to those lands, for those purposes and under those conditions, for as long as those lands remain withdrawn from disposition. — 1998, c. 5, ss. 19 to 27*Where an application for a declaration of commercial discovery or a production licence under the Canada Petroleum Resources Act in relation to lands in the Yukon Territory or the adjoining area was made but not disposed of before the transfer date, the application shall be disposed of in accordance with that Act as if it continued to apply in respect of those lands after the transfer date.Where a declaration of commercial discovery is made before the transfer date under the Canada Petroleum Resources Act and is in effect on the transfer date, or is made on or after the transfer date by virtue of subsection (1), in relation to any lands that immediately before that date were subject to an existing federal interest,the owner of that interest may apply for a production licence in relation to those lands in accordance with that Act at any time within 30 days after the transfer date or after the making of the declaration, whichever is later, andan application so made shall be disposed of in accordance with that Act, as if that Act continued to apply in respect of those lands after the transfer date. — 1998, c. 5, ss. 19 to 27*Where an application was made but not disposed of before the transfer date under section 65 of the Yukon Surface Rights Board Act in respect of a mineral right with a right of access under subsection 5.01(1) of the Canada Oil and Gas Operations Act, the application shall be disposed of as if section 65 of the Yukon Surface Rights Board Act continued to apply in respect of the right of access after the transfer date. — 1998, c. 5, ss. 19 to 27*The Government of the Yukon Territory shall indemnify the Government of Canada against any claim, action or other proceeding for damages brought against the Government of Canada, or any of its employees or agents, arising out of any acts or omissions of the Government of the Yukon Territory in respect of the operation of Yukon oil and gas laws on and after the transfer date.The Government of Canada shall indemnify the Government of the Yukon Territory against any claim, action or other proceeding for damages brought against the Government of the Yukon Territory, or any of its employees or agents, after the transfer date in respect of the operation of the Canada Oil and Gas Operations Act, the Canada Petroleum Resources Act or Part II.1 of the National Energy Board Act before the transfer date.A Government is not entitled to be indemnified under this section by the other Government if it has settled the claim, action or proceeding without the approval of the other Government. — 1998, c. 5, ss. 19 to 27*The Minister of Indian Affairs and Northern Development shall cause notice of the transfer date to be published in the Canada Gazette. — 1998, c. 5, ss. 19 to 27*Yukon oil and gas laws may be made at any time after this Act has been assented to, notwithstanding the application of the Canada Petroleum Resources Act and the Canada Oil and Gas Operations Act in the Yukon Territory until the transfer date, but those laws have no effect before the transfer date.

Federal laws of Canada reproduced under the Reproduction of Federal Law Order (SI/97-5); not the official version. Source: Justice Laws Website.