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Version of document from 2016-02-19 to 2016-02-26:

Canada–Newfoundland and Labrador Offshore Petroleum Cost Recovery Regulations

SOR/2016-21

CANADA–NEWFOUNDLAND AND LABRADOR ATLANTIC ACCORD IMPLEMENTATION ACT

Registration 2016-02-19

Canada–Newfoundland and Labrador Offshore Petroleum Cost Recovery Regulations

P.C. 2016-69 2016-02-19

Whereas, pursuant to subsection 150(1) of the Canada–Newfoundland and Labrador Atlantic Accord Implementation ActFootnote a, a copy of the proposed Canada–Newfoundland and Labrador Offshore Petroleum Cost Recovery Regulations, substantially in the annexed form, was published in the Canada Gazette, Part I, on July 11, 2015 and a reasonable opportunity was afforded to interested persons to make representations to the Minister of Natural Resources with respect to the proposed Regulations;

And whereas, pursuant to subsection 7(1)Footnote b of that Act, the Minister of Natural Resources has consulted the Provincial Minister with respect to the proposed Regulations and the Provincial Minister has approved the making of those Regulations;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to section 29.1Footnote c of the Canada–Newfoundland and Labrador Atlantic Accord Implementation ActFootnote a, makes the annexed Canada–Newfoundland and Labrador Offshore Petroleum Cost Recovery Regulations.

Definitions

The following provision is not in force.

Marginal note:Definitions

 The following definitions apply in these Regulations.

Act

Act means the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act. (Loi)

actual full cost

actual full cost means the full cost confirmed by the Board’s audited financial statements. (coût entier réel)

direct regulatory activities

direct regulatory activities means the activities that are required for the Board to fulfill its regulatory responsibilities such as assessing applications, issuing licences, granting approvals and authorizations, verifying and enforcing compliance with the Act and providing information, products and services. (activités de réglementation directes)

indirect regulatory costs

indirect regulatory costs means the costs that support the Board’s direct regulatory activities such as office accommodation, supplies and equipment, professional services, communications, travel, management, training, administration, human resources services, finance, information technology services, hardware and software, the preparation of documents (including policies, standards, guidelines, procedures and notices) and the provision of technical expertise (including any advice relating to legislation or regulations) to the Federal Minister or the Provincial Minister at that Minister’s request. (coûts de réglementation indirects)

project

project means the work or the activity referred to in paragraph 138(1)(b) of the Act. (projet)

Part 1Regulatory Activity Plan Charges

Estimated annual charge

The following provision is not in force.

Marginal note:Regulatory activity plan

 For each new project relating to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs in respect of petroleum operations, on receipt of a project description or letter of intent, the Board must

  • (a) prepare a regulatory activity plan;

  • (b) calculate the estimated annual charge payable by the applicant or the operator for the project by determining the estimated full cost, including indirect regulatory costs, associated with the implementation of the regulatory activity plan based on

    • (i) the cost of the estimated total number of units of time necessary to be spent in that fiscal year on direct regulatory activities for the project, and

    • (ii) any other costs, excluding costs calculated under other cost recovery methods; and

  • (c) notify the applicant or the operator, in writing, of the regulatory activity plan and the estimated annual charge payable.

The following provision is not in force.

Marginal note:Existing project

 For each existing project that was previously under a regulatory activity plan, after approval of the Board’s budget in any given fiscal year following its submission in accordance with subsection 27(2) of the Act, the Board must

  • (a) prepare a new regulatory activity plan;

  • (b) calculate the estimated annual charge payable by the applicant or the operator for the project by determining the estimated full cost, including indirect regulatory costs, associated with the implementation of thenew regulatory activity plan based on

    • (i) the cost of the estimated total number of units of time necessary to be spent in that fiscal year on direct regulatory activities for the project, and

    • (ii) any other costs, excluding costs calculated under other cost recovery methods; and

  • (c) notify the applicant or the operator, in writing, of the new regulatory activity plan and the estimated annual charge payable.

The following provision is not in force.

Marginal note:Recalculation

 If an applicant or operator proposes changes to its project that are not reflected in the regulatory activity plan, the Board may recalculate the estimated annual charge for that project and adjust the payable amount accordingly.

Quarterly Invoicing

The following provision is not in force.

Marginal note:Invoice

  •  (1) The Board must, on a quarterly basis, prepare and send an invoice for an amount equal to 25% of the estimated annual charge payable to each applicant or operator who has been notified under paragraph 2(c) or 3(c).

  • Marginal note:Payment within 30 days

    (2) Within 30 days after the date of the invoice, the applicant or the operator must pay the amount invoiced.

Annual Charge Adjustment

The following provision is not in force.

Marginal note:Annual adjustment

  •  (1) Each year, following the end of the fiscal year, the Board must, for each project under a regulatory activity plan,

    • (a) calculate the actual full cost associated with the implementation of the regulatory activity plan;

    • (b) calculate the charge adjustment, if any, by subtracting the estimated annual charge, calculated in accordance with paragraph 2(b) or 3(b), from the actual full cost; and

    • (c) notify the applicant or the operator in writing of the amount of the actual full cost and the amount of the charge adjustment.

  • Marginal note:Effect of adjustment

    (2) If the actual full cost calculated under paragraph (1)(a) is

    • (a) less than the estimated annual charge, the difference is credited to the applicant’s or operator’s account and must be refunded as a credit on the next invoice; or

    • (b) greater than the estimated annual charge, the Board must invoice the applicant or the operator for an amount equal to the difference and the applicant or the operator must pay that amount to the Board within 30 days after the date of the invoice.

Part 2Formula Fees

Interpretation

The following provision is not in force.

Marginal note:Interpretation

 In this Part,

  • (a) base units of time are the number of units of time published by the Board in accordance with section 8 based on the Board’s estimate of the time required for it to undertake direct regulatory activities in relation to each activity set out in the tables to section 9;

  • (b) variable units of time are the number of units of time published by the Board in accordance with section 8 based on the Board’s estimate of the time required for it to undertake direct regulatory activities in relation to the variables set out in column 3 of the table to subsection 9(3);

  • (c) the effective rate is the rate published by the Board in accordance with section 8 based on the estimated sum of the costs incurred by the Board’s undertaking of all direct regulatory activities and of the Board’s indirect regulatory costs minus the sum of the costs incurred by the Board’s undertaking of regulatory activities that are not recovered by the Board at the request of the Federal Minister and the Provincial Minister and divided by the total number of units of time spent by the Board for those direct regulatory activities; and

  • (d) the heavy burden coefficient is a multiplier that the Board may apply to a fee for an activity if the Board is of the opinion that the fee must be increased to reflect the additional number of units of time spent by the Board to undertake direct regulatory activities as a result of non-compliance with the Act, negligence or lack of effort by an applicant or operator in responding to any of the Board’s questions during an application process or activity.

Publication

The following provision is not in force.

Marginal note:Publication by Board

 Each year the Board must publish, by electronic or other means that is likely to reach applicants and operators,

  • (a) the base units of time for each activity set out in the tables to section 9;

  • (b) the variable units of time for each activity set out in the table to subsection 9(3); and

  • (c) the effective rate.

Formulas

The following provision is not in force.

Marginal note:Basic formula

  •  (1) The fee for each activity set out in the table to this subsection is determined by the formula

    A × C

    where

    A
    is the base units of time related to each activity; and
    C
    is the effective rate.

    TABLE

    ItemActivity
    1Application for a declaration of significant discovery
    2Application for a declaration of commercial discovery
    3Application for a significant discovery licence
    4Application for a licence for subsurface storage
    5Application for a production licence
    6Application for an amendment to a licence or a consolidation of licences
    7Registration of a transfer
    8Registration of a security notice
    9Registration of an interest
    10Recording of a notice
    11Registration of an instrument other than a transfer or security notice
    12Application for an extension, by order, of the term of a production licence
    13Application for allowable expenditures
  • Marginal note:Formula without variable units of time

    (2) The fee for each activity set out in column 2 of the table to this subsection is determined by the formula

    A × C × D

    where

    A
    is the base units of time related to each activity;
    C
    is the effective rate; and
    D
    if applicable, is the heavy burden coefficient.

    TABLE

    Column 1Column 2
    ItemCategory of ActivityActivity
    1Geological operations authorization (with field work)Geochemical study
    2Geophysical (without field work)Geophysical study
    3Geological (without field work)Purchase of geological studies
    4Geological (without field work)Isotope age dating
    5Geological (without field work)In-house geological studies
    6Geological (without field work)Petrography
    7Geological (without field work)Paleontological or palynological study
    8Geological (without field work)Other geophysical activity
    9Annual compliance feeAll geophysical projects
  • Marginal note:Formula with variable units of time

    (3) The fee for each activity set out in column 2 of the table to this subsection is determined by the formula

    (A + B) × (C × D)

    where

    A
    is the base units of time related to each activity;
    B
    is the variable units of time multiplied by the number of primary vessels or aircraft to be used in each activity;
    C
    is the effective rate; and
    D
    if applicable, is the heavy burden coefficient.

    TABLE

    Column 1Column 2Column 3
    ItemCategory of ActivityActivityVariable
    1Geophysical operations authorization (with field work)2-D seismic reflection survey (primary activity)Primary vessel
    2Geophysical operations authorization (with field work)3-D seismic reflection survey (primary activity)Primary vessel
    3Geophysical operations authorization (with field work)4-D seismic reflection survey (primary activity)Primary vessel
    4Geophysical operations authorization (with field work)Seafloor gravity survey (primary activity)Primary vessel
    5Geophysical operations authorization (with field work)Seismic refraction survey (primary activity)Primary vessel
    6Geophysical operations authorization (with field work)Controlled source electromagnetic surveyPrimary vessel
    7Geophysical operations authorization (with field work)Other geophysical programPrimary vessel
    8Geophysical operations authorization (with field work)Aeromagnetic survey (primary activity)Aircraft
    9Geotechnical authorization (seabed survey)Piston corePrimary vessel
    10Geotechnical authorization (seabed survey)Shallow seismic, seabed surveyPrimary vessel

Payment of Fees

The following provision is not in force.

Marginal note:Fees calculated under section 9

  •  (1) On the submission of an application in respect of an activity set out in any table to section 9, the applicant must pay to the Board the fee determined in accordance with that section.

  • Marginal note:Heavy burden coefficient

    (2) If the Board uses a heavy burden coefficient to calculate an additional charge in respect of an activity, the Board must invoice the applicant or the operator and the applicant or the operator must pay that amount to the Board within 30 days after the date of the invoice.

Part 3Geodata Centre

The following provision is not in force.

Definition of daily access rate

 In this Part, the daily access rate is the rate established and published by the Board by electronic or other means that is likely to reach applicants and operators.

The following provision is not in force.

Marginal note:Sample access fee

 Any person, except a person requesting access for an academic purpose, the Federal Minister and the Provincial Minister, who accesses a physical sample at the geodata centre must pay the daily access rate for each day the sample is accessed.

Part 4Other Charges

The following provision is not in force.

Marginal note:Reimbursement of Board costs

 The Board may require reimbursement for 100% of its costs for activities that are not set out in Parts 1 to 3 and that are related to the following:

  • (a) any verification of compliance under the Act involving travel to another location by the Board’s staff;

  • (b) the Oil and Gas Committee;

  • (c) any technical analysis or process review that is related to a specific project and that is requested by an applicant or operator;

  • (d) any public review, written or oral hearing or inquiry that is related to a specific project and that is required or initiated by the Board;

  • (e) a participant funding program that is part of an environmental assessment conducted under the Canadian Environmental Assessment Act, 2012; and

  • (f) information, products or services that are requested by a person.

Part 5General

Interest

The following provision is not in force.

Marginal note:Compound interest rate of 1.5%

 Interest on an amount owing to the Board must be calculated and compounded monthly at the rate of 1.5% and is payable and accrues during the period beginning on the due date and ending on the day before the day on which the payment is received by the Board.

Remittance of Fees and Charges

The following provision is not in force.

Marginal note:Remittance

 For the purposes of section 29.3 of the Act, the fees and charges obtained in accordance with these Regulations must be remitted on a quarterly basis subject to the Board’s operational requirements.

Part 6Consequential Amendments, Transitional Provisions and Coming into Force

Consequential Amendments to the Newfoundland Offshore Area Registration Regulations

The following provision is not in force.

 [Amendment]

The following provision is not in force.

 [Amendments]

The following provision is not in force.

 [Amendment]

The following provision is not in force.

 [Amendment]

Transitional Provisions

The following provision is not in force.

Marginal note:Non-application of section 3

  •  (1) Section 3 does not apply to a project that relates to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs if the applicant or the operator has paid 100% of the Board’s estimated costs for the project for the fiscal year in which these Regulations come into force.

  • Marginal note:Presumption

    (2) All existing projects relating to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs that are under the Board’s regulatory authority before these Regulations come into force and that do not have a regulatory activity plan are considered to have been previously under a regulatory activity plan for the purposes of section 3.

Coming into Force

Marginal note:S.C. 2015, c. 4

Footnote * These Regulations come into force on the day on which section 39 of the Energy Safety and Security Act comes into force but if they are registered after that day, they come into force on the day on which they are registered.


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