Output-Based Pricing System Regulations (SOR/2019-266)

Marginal note:Content of verification report

52 A verification report is prepared by a verification body in relation to the annual report and corrected report, if applicable, and any related data and information, and includes the information contained in Schedule 5.

Compensation and Compliance Units

Minister’s Intervention

Marginal note:Determination

• 53 (1) The Minister may establish the emissions limit or determine the quantity of GHGs emitted from the covered facility for the compliance period if

  • (a) there is a material discrepancy with respect to the total quantity of GHGs from the covered facility or the production from one or more specified industrial activities used in the calculation of the emissions limit reported in the annual report or the corrected report for the compliance period;

  • (b) the verification opinion referred to in paragraph 3(n) of Schedule 5 that is included in the verification report that accompanies an annual report or corrected report for the compliance period indicates that it is impossible to determine that a material discrepancy does not exist or that the annual report or corrected report was prepared in accordance with these Regulations;

  • (c) the emissions limit for the covered facility that is indicated in the annual report or corrected report for the compliance period was not calculated in accordance with these Regulations and any resulting error was equal to or greater than 2%; or

  • (d) the annual report for the compliance period was not submitted to the Minister.

• Marginal note:Criteria

  (2) The Minister is to establish the emissions limit or determine the quantity of GHGs emitted from the covered facility for the compliance period, as the case may be, based on the following:

  • (a) the annual report and verification report for the compliance period and, if necessary, any previous reports;

  • (b) any report made in accordance with the Notice with respect to reporting of greenhouse gases (GHGs) published under the Canadian Environmental Protection Act, 1999;

  • (c) information in respect of industrial activities, in Canada or in other jurisdictions, similar to those of the covered facility, that allows for the determination of production amounts for the covered facility;

  • (d) accepted quantification methods used to calculate the GHGs from facilities engaged in the same industrial activity or in the same type of industrial activity as the covered facility; and

  • (e) any other information provided, on the Minister’s request, by the person responsible for the covered facility or the verifier.

• Marginal note:Notice

  (3) The Minister must notify the person responsible for the covered facility, in writing, of their determination with respect to the emissions limit or the quantity of GHGs emitted from the covered facility established for the compliance period.

Compensation and Issuance of Surplus Credits

Marginal note:Excess emissions

54 For the purposes of subsection 174(1) of the Act, if, during a compliance period, a covered facility emits GHGs in a quantity that exceeds the applicable emissions limit, the compensation to be provided by the person responsible for that facility is to be established based on the quantity of GHGs, expressed in CO₂e tonnes, that was emitted in excess of the emissions limit as reported in the annual report submitted for the compliance period or the Minister’s determination under section 53, as the case may be.

Marginal note:Excess emissions charge payment

• 55 (1) Any compensation that is provided by means of an excess emissions charge payment must be made electronically to the Receiver General for Canada.

• Marginal note:Surplus credits

  (2) Any compensation that is provided by means of a remittance of surplus credits must be made in the manner set out in section 70.

• Marginal note:Other compliance units

  (3) Any compensation that is provided by means of a remittance of compliance units other than surplus credits must be made in the manner set out in section 71.

Marginal note:Minimum percentage — charge

56 A minimum of 25% of the compensation that is required under section 174 of the Act must be provided by means of an excess emissions charge payment for each compliance period beginning with the 2022 compliance period.

Marginal note:Regular-rate compensation deadline

• 57 (1) For the purposes of subsection 174(3) of the Act, the regular-rate compensation deadline is December 15 of the calendar year in which the related annual report must be submitted.

• Marginal note:Exception

  (1.1) Despite subsection (1), for the compliance period that ends on December 31, 2019, the regular-rate compensation deadline is April 15, 2021.

• Marginal note:Increased-rate compensation deadline

  (2) For the purposes of subsection 174(4) of the Act, the increased-rate compensation deadline is February 15 of the calendar year following the deadline under subsection (1).

• Marginal note:Exception

  (2.1) Despite subsection (2), for the compliance period that ends on December 31, 2019, the increased-rate compensation deadline is June 15, 2021.

• Marginal note:Notice referred to in subsection 53(3)

  (3) However, if a notice of determination under subsection 53(3) is issued after October 31 of the year in which the related annual report is due

  • (a) the regular-rate compensation deadline is 45 days after the day on which the notice is issued; and

  • (b) the increased-rate compensation deadline is 60 days after the day on which the regular-rate compensation deadline under paragraph (a) expires.

Marginal note:Compensation information

58 A person that is responsible for a covered facility must, at the time compensation is provided, submit to the Minister the following information:

• (a) the covered facility certificate number;

• (b) the provision of the Act under which the compensation is being provided;

• (c) the compliance period for which compensation is being provided;

• (d) the quantity of GHGs emitted in excess of the emissions limit in respect of which the compensation is provided, expressed in CO₂e tonnes;

• (e) the details of any excess emissions charge payment, including

  • (i) the amount in dollars paid to the Receiver General for Canada,

  • (ii) the applicable rate, and

  • (iii) the date of payment;

• (f) the details of any surplus credits or offset credits remitted, including, for each type of credit,

  • (i) the number remitted,

  • (ii) the date of the remittance transaction,

  • (iii) the remittance transaction number,

  • (iv) the serial numbers, and

  • (v) the date or dates on which they were issued; and

• (g) the details of any units or credits, recognized as compliance units, remitted, including

  • (i) the number remitted,

  • (ii) the province or program authority referred to in subsection 78(1) that issued the units or credits,

  • (iii) the date of their retirement or the date they are designated for use exclusively as a compliance unit for the purposes of remittance to the Minister under section 174, paragraph 178(1)(a) or subsection 181(2) of the Act, as the case may be,

  • (iv) the serial numbers assigned to them by the province or program authority referred to in subsection 78(1),

  • (v) the start date of the offset project for which the unit or credit was issued,

  • (vi) the year in which the GHG reduction or removal occurred for which the unit or credit was issued,

  • (vii) the offset protocol applicable to the project for which the unit or credit was issued, including the version number and publication date, and

  • (viii) the name of the accredited verification body that verified the units or credits.

Marginal note:Surplus credits

• 59 (1) For the purposes of section 175 of the Act and subject to subsection (2), the number of surplus credits, equivalent to the difference between the emissions limit and the quantity of GHGs emitted from the covered facility, that the Minister issues is based on what is reported in the annual report submitted for the compliance period if the emissions limit that was set out in the report was calculated in accordance with these Regulations, unless a material discrepancy within the meaning of subsection 49(2) exists with respect to the total quantity of GHGs or the production from one of the specified industrial activities that is used in the calculation of the emissions limit for the compliance period.

• Marginal note:Exception

  (2) The Minister will not issue surplus credits if the Minister has established the emissions limit or determined the quantity of GHGs emitted from the covered facility for the compliance period under section 53.

Errors and Omissions

Marginal note:Identification by person responsible

61 The notice submitted under subsection 176(1) of the Act by a person responsible for a covered facility who has become aware of an error or omission in an annual report must indicate whether

• (a) the error or omission would have constituted a material discrepancy under subsection 49(2) if it had been identified during the verification of the annual report; and

• (b) the aggregate of all errors and omissions would have constituted a material discrepancy under subsection 49(2) if it had been identified during the verification of the annual report.

Marginal note:Corrected report

• 62 (1) If the notice indicated that the error or omission, or the aggregate of all errors and omissions, would have constituted a material discrepancy under subsection 49(2), a corrected report, along with a verification report prepared in accordance with section 52, must be submitted to the Minister by the person responsible within 120 days after the day on which the notice is submitted.

• Marginal note:Content

  (2) The corrected report must include the information referred to in sections 11 and 12 and, under a heading, the following information:

  • (a) the information provided in the annual report that required correction and a description of the corrections made;

  • (b) a description of the circumstances that led to the errors or omissions and an indication of the reasons why the error or omission was not previously detected; and

  • (c) a description of the measures that have been and will be implemented to avoid future errors or omissions of the same type.

Marginal note:Identification by the Minister

• 63 (1) Subsection 62(2) applies to a report that is required by the Minister under subsection 177(2) of the Act and the report must be submitted to the Minister within the following period:

  • (a) in the case of a corrected report, 60 days after the day on which the Minister required it; and

  • (b) in the case of a verified corrected report, 120 days after the day on which the Minister required it.

• Marginal note:Verification report

  (2) The corrected report submitted under paragraph (1)(b) must be submitted with a verification report prepared in accordance with section 52.

Marginal note:Change in obligations

• 64 (1) For the purposes of section 178 of the Act, the revised compensation to be paid or remitted or the number of surplus credits to be issued, as the case may be, is equal to the difference between the result of the assessment made in accordance with section 44, and reported in the annual report, and the result that is reported in the corrected report.

• Marginal note:Revised compensation

  (2) For the purposes of paragraph 178(1)(a) of the Act, any revised compensation is to be provided by means of an excess emissions charge payment or a remittance of compliance units. Revised compensation is to be provided if the difference referred to in subsection (1) is greater than or equal to 500 CO₂e tonnes.

• Marginal note:Issuance of surplus credits

  (3) For the purposes of paragraph 178(1)(b) of the Act and subject to subsection (4), the Minister may issue a number of surplus credits that is equivalent to the difference between, as the case may be,

  • (a) the number of surplus credits that corresponds to the result obtained under section 44 based on the corrected report and the number of surplus credits issued under section 175 of the Act based on the annual report; or

  • (b) the applicable emissions limit and the quantity of GHGs emitted from the covered facility that are reported in the corrected report, if the emissions limit that was set out in the corrected report was calculated in accordance with these Regulations.

• Marginal note:Exception

  (4) The Minister will not issue surplus credits if

  • (a) a material discrepancy within the meaning of subsection 49(2) exists with respect to the total quantity of GHGs reported in the corrected report or the production from one of the specified industrial activities that is used in the calculation of the emissions limit reported in the corrected report for the compliance period; or

  • (b) the emissions limit or quantity of GHGs emitted from the covered facility is determined by the Minister for the compliance period under section 53.

65 [Repealed, SOR/2023-240, s. 36]

Marginal note:Excess Surplus credits issued

• 66 (1) If a corrected report shows that an excess number of surplus credits was issued to the person responsible for a covered facility and the credits in question remain in an account in the tracking system that is linked to the covered facility, the Minister must revoke the excess credits without notice. The revocation is effective as of the date on which the corrected report is submitted.

• Marginal note:Insufficient surplus credits in account

  (2) If any of the excess surplus credits are no longer in an account in the tracking system that is linked to the covered facility, the person responsible for the facility must, within the compensation deadlines set out in subsections 69(1) and (2), make up the amount owed by

  • (a) remitting to the Minister other surplus credits in accordance with section 70;

  • (b) remitting to the Minister other compliance units in accordance with section 71; or

  • (c) making an excess emissions charge payment in accordance with section 55.