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Bill C-22

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2nd Session, 41st Parliament,

62 Elizabeth II, 2013-2014

house of commons of canada

BILL C-22

An Act respecting Canada’s offshore oil and gas operations, enacting the Nuclear Liability and Compensation Act, repealing the Nuclear Liability Act and making consequential amendments to other Acts

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

1. This Act may be cited as the Energy Safety and Security Act.

PART 1

MODERNIZING CANADA’S OFFSHORE OIL AND GAS OPERATIONS REGIME

R.S., c. O-7; 1992, c. 35, s. 2

Canada Oil and Gas Operations Act

1992, c. 35, s. 3(3)(F)

2. (1) The definition “règlement” in section 2 of the French version of the Canada Oil and Gas Operations Act is replaced by the following:

« règlement »
French version only

« règlement » Sauf indication contraire du contexte, texte d’application pris par le gouverneur en conseil.

(2) Section 2 of the Act is amended by adding the following in alphabetical order:

“spill-treating agent”
« agent de traitement »

“spill-treating agent”, except in section 25.4, means a spill-treating agent that is on the list established under section 14.2;

3. Section 2.1 of the Act is amended by adding the following after paragraph (b):

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

1994, c. 10, s. 2; 2012, c. 19, s. 118

4. Subsection 4.1(1) of the Act is replaced by the following:

Delegation

4.1 (1) The National Energy Board 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.

5. The Act is amended by adding the following after section 4.1:

COST RECOVERY

Regulations respecting fees, etc.

4.2 (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 National Energy Board 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 National Energy Board’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.

Amounts not to exceed cost

(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.

Amounts not to exceed cost

(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.

1992, c. 35, s. 8; 1994, c. 10, s. 15

6. (1) Subsection 5(3) of the Act is replaced by the following:

Requirements for operating licence

(3) An operating licence is subject to any requirements that are determined by the National Energy Board or that are prescribed and to any deposits that are prescribed.

1992, c. 35, s. 8

(2) Paragraph 5(5)(a) of the Act is replaced by the following:

(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;

1992, c. 35, s. 8

(3) Paragraph 5(5)(c) of the Act is replaced by the following:

7. The Act is amended by adding the following after section 5:

Timing

5.001 (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 Indian Affairs and Northern Development has administrative responsibility for natural resources, the National Energy Board shall, within 18 months after the day on which the applicant has, in the Board’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.

Extensions

(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.

Environmental assessment

(3) If the application for an authorization is in respect of a designated project, as defined in subsection 2(1) of the Canadian Environmental Assessment Act, 2012, for which the National Energy Board is the responsible authority, as defined in that subsection, the Board shall issue the decision statement referred to in section 54 of that Act in respect of the designated project within the period referred to in subsection (1) or, if the period is extended under subsection (2), within that extended period.

Excluded period

(4) If the National Energy Board 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 Board’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.

Public notice of excluded period

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

Participant funding program

5.002 The National Energy Board may establish a participant funding program to facilitate the participation of the public in the environmental assessment, as defined in subsection 2(1) of the Canadian Environmental Assessment Act, 2012, of any designated project, as defined in that subsection, for which the Board is the responsible authority, as defined in that subsection, that meets the condition set out in paragraph 58(1)(a) of that Act and that is the subject of an application for an authorization under subsection 5(1).

8. (1) The Act is amended by adding the following after section 5.02:

Spill-treating Agent

Net environmental benefit

5.021 The National Energy Board shall not permit the use of a spill-treating agent in an authorization issued under paragraph 5(1)(b) unless the Board determines that the use of the spill-treating agent is likely to achieve a net environmental benefit.

(2) Section 5.021 of the Act is replaced by the following:

Net environmental benefit

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

1992, c. 35, s. 8; 1994, c. 10, s. 15

9. Section 5.03 of the Act and the heading before it are replaced by the following:

Financial Requirements

Compliance with certain provisions

5.03 The National Energy Board 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.

10. Section 5.1 of the Act is amended by adding the following in numerical order:

Transboundary pool or field

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

Approval subject to agreement and consent

(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 National Energy Board 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 Board and regulator have agreed are appropriate or that may be prescribed.

Disagreement

(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 National Energy Board’s behalf, or the regulator may refer the matter to an expert in accordance with section 48.27.

Submissions in relation to Part I

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

Expert’s decision

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

Application of certain provisions

(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.

11. Section 5.2 of the Act is amended by adding the following after subsection (3):

Transboundary pool or field

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

Approval subject to agreement

(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.

Disagreement — Minister and regulator

(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.

2007, c. 35, s. 148

12. Subsection 5.3(1) of the Act is replaced by the following:

Board guidelines and interpretation notes

5.3 (1) The National Energy Board may issue and publish, in any manner the Board 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.

2007, c. 35, s. 149

13. Sections 5.34 and 5.35 of the Act are replaced by the following:

Public hearings

5.331 The National Energy Board 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.

Confidentiality

5.34 At any public hearing conducted under section 5.331 or in any proceedings with respect to Part 0.1, the National Energy Board 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 Board 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 Board 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.

Confidentiality— security

5.35 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 National Energy Board 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 Board 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.

Exception

5.351 The National Energy Board 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.

1992, c. 35, s. 14

14. (1) The portion of subsection 14(1) of the Act before paragraph (a) is replaced by the following:

Governor in Council’s regulatory power

14. (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

(2) Subsection 14(1) of the Act is amended by adding the following after paragraph (b):

(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 meas-ures 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);

(3) Subsection 14(1) of the Act is amended by striking out “and” at the end of paragraph (h) and by adding the following after that paragraph:

(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 National Energy Board 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

(4) Section 14 of the Act is amended by adding the following after subsection (2):

Spill-treating agents

(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.

15. The Act is amended by adding the following after section 14:

Amendments to Schedule 1 or 2

14.1 (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.

Recommendation

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

List of spill-treating agents

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

1992, c. 35, s. 22(1); 2001, c. 26, s. 324(10)

16. Subsections 24(1) to (3) of the Act are replaced by the following:

Definition of “spill”

24. (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.

Definition of “actual loss or damage”

(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.

Definition of “debris”

(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.

17. (1) The Act is amended by adding the following after section 25:

Spill-treating agents

25.1 (1) In the case of a spill in the internal waters of Canada not within a province, the territorial sea of Canada 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) the Chief Conservation Officer approves the use of the agent in response to the spill and it is used in accordance with any requirements set out in the approval; and

Clarification

(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.

Net environmental benefit

(3) Other than in the case of a small-scale test, the approval required under paragraph (1)(b) shall be in writing and shall not be granted unless the Chief Conservation Officer

(a) has consulted with the Minister and the Minister of the Environment with respect to the approval; and

(b) determines that the use of the agent is likely to achieve a net environmental benefit.

(2) Paragraph 25.1(1)(b) of the Act is replaced by the following:

(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;

(3) Subsection 25.1(1) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

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

(4) Subsection 25.1(3) of the Act is replaced by the following:

Net environmental benefit

(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.

18. The Act is amended by adding the following after section 25.1:

Canadian Environmental Protection Act, 1999

25.2 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.

Fisheries Act — civil liability

25.3 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.

Scientific research

25.4 (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 internal waters of Canada not within a province, the territorial sea of Canada or the waters superjacent to the continental shelf of Canada.

Oil surrogate

(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.

Non-application

(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.

1992, c. 35, s. 24(1)

19. (1) Paragraphs 26(1)(a) and (b) of the Act are replaced by the following:

(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).

1992, c. 35, ss. 23(4), 24(2), (3)(E) and (4)

(2) Subsections 26(2) to (3) of the Act are replaced by the following:

Recovery of loss, etc., caused by debris

(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.

Vicarious liability for contractors

(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).

Limits of liability

(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 within the Northwest Territories or Nunavut covered by or located a distance of 200 metres or less from any river, stream, lake or other body of inland water and to which paragraph (a) does not apply, the amount of $25 million;

(c) in respect of any area within the Northwest Territories or Nunavut to which neither paragraph (a) nor (b) 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.

Increase in limits of liability

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

Liability under another law — paragraph (1)(b) or (2)(b)

(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.

Costs and expenses not recoverable under Fisheries Act

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

Action — loss of non-use value

(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).

Claims

(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.

(3) The portion of subsection 26(4) of the Act before paragraph (a) is replaced by the following:

Saving

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

(4) Subsection 26(5) of the French version of the Act is replaced by the following:

Prescription

(5) Les poursuites en recouvrement de créances fondées sur le présent article se prescrivent par trois ans après la date des pertes, dommages ou frais et par six ans après la date des déversements, dégagements, écoulements ou rejets ou après la date où s’est manifestée la présence des débris.

20. The Act is amended by adding the following after section 26:

Financial resources — certain activities

26.1 (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 National Energy Board considers it necessary, it may determine a greater amount and require proof that the applicant has the financial resources to pay that greater amount.

Financial resources — other activities

(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 National Energy Board.

Loss of non-use value

(3) When the National Energy Board determines an amount under subsection (1) or (2), the Board 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.

Continuing obligation

(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.

Extended obligation

(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 National Energy Board 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 Board 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 Board.

1992, c. 35, s. 25; 1994, c. 10, s. 10

21. (1) Subsections 27(1) to (2) of the Act are replaced by the following:

Financial responsibility

27. (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 National Energy Board,

(a) in the case of the drilling for or development or production of oil or gas in any area referred to in paragraph 3(b), in the amount of $100 million or, if the Board 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 Board.

Pooled fund

(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.

Increase in amount 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).

Continuing obligation

(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.

Extended obligation

(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 National Energy Board 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 Board 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 Board.

Payment of claims

(2) The National Energy Board may require that moneys in an amount not exceeding the amount prescribed for any case or class of cases, or determined by the Board 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.

(2) Section 27 of the Act is amended by adding the following after subsection (4):

Reimbursement of pooled fund

(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.

22. The Act is amended by adding the following after section 27:

Lesser amount

27.1 (1) The Minister may, by order, on the recommendation of the National Energy Board, 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).

Financial resources — exception

(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.

No contravention

(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.

23. (1) The definition “unitization order” in section 29 of the Act is replaced by the following:

“unitization order”
« arrêté d’union »

“unitization order” means an order made under section 41 or 48.23;

(2) Section 29 of the Act is amended by adding the following in alphabetical order:

“expert”
« expert »

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

“perimeter”
« bande limitrophe »

“perimeter” means

(a) the area in the Northwest Territories or Nunavut that is within 20 km of the limit of that territory; and

(b) the portion of the submarine area referred to in paragraph 3(b) that is within 10 nautical miles of the seaward limit of that submarine area;

“regulator”
« organisme de réglementation »

“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;

“transboundary”
« transfron- talier »

“transboundary” means, in relation to a pool, extending beyond the National Energy Board’s jurisdiction under this Act or, in relation to a field, underlain only by one or more such pools;

24. The Act is amended by adding the following in numerical order:

Transboundary Pools or Fields

Delineation

Appropriate regulator

48.1 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.

Information

48.11 (1) If an exploratory well, as defined in subsection 101(1) of the Canada Petroleum Resources Act, is drilled in the perimeter, the National Energy Board 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.

Additional information

(2) The National Energy Board 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.

Notice — as soon as feasible

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

Notice — after three drillings

(2) If no notice is given under subsection (1), the National Energy Board 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.

Notice — transboundary pool

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

Reasons

(4) The National Energy Board shall provide each appropriate regulator and the Minister with the reasons for its determination and opinion.

Notice from regulator

48.13 (1) If the National Energy Board 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 Board 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.

Reasons

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

Delineation

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

Disagreement

(2) The National Energy Board 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 Board issues a notice under section 48.12, or the regulator issues an equivalent notice.

Agreements Relating to Development

Appropriate regulator

48.15 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.

Joint exploitation agreement

48.16 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.

Development as a single field

48.17 (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).

Joint exploitation agreement prevails

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

Intention to start production

48.18 (1) If an interest owner — as defined in the Canada Petroleum Resources Act — advises the Minister or the National Energy Board, 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.

Referral to expert

(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.

Unit agreement

48.19 (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 accord-ance with it, including any amendment to it.

Applicable provisions

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

Condition precedent

48.2 (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.

Approval

(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.

Application for unitization order

48.21 (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.

Contents

(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.

Appointment of expert

(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).

Hearing

48.22 (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.

Conclusion of hearing

(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.

Exception

(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.

Unitization order

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

Effect of unitization order

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

Equivalent order

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

Joint approval

(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.

Effective date of unitization order

(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.

Order revoked

(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).

Application of sections 43 and 46

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

Amending unitization order

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

Appointment of expert

(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.

Hearing

(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.

Conclusion of hearing

(4) On the conclusion of the hearing, the expert may request that the Minister order the amendment of the unitization order in accord-ance 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.

Exception

(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 accord-ance 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.

Application of section 48.23

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

Protection of tract participation ratios

48.25 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.

Determination — percentages of interests

48.26 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.

Referral to Expert

Notice

48.27 (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.

Appointment — single expert

(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.

Appointment — expert panel

(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.

Qualifications — expert

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

Decisions

(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.

Time limit

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

Decision is final and binding

(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.

Records to be kept

(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.

25. Section 60 of the Act is amended by adding the following after subsection (2):

Sentencing principles

(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 sentenc-ing 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.

Aggravating factors

(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.

Absence of aggravating factor

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

Meaning of “damage”

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

Reasons

(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.

26. Section 65 of the Act is replaced by the following:

Order of court

65. (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 National Energy Board 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 National Energy Board;

(e) directing the offender to have an environmental audit conducted by a person of a class and at the times specified by the National Energy Board 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.

Coming into force and duration of order

(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.

Publication

(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 National Energy Board may, in the manner that the court directed the offender, publish those facts and details and recover the costs of publication from the offender.

Debt due to Her Majesty

(4) If the National Energy Board 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.

Variation of sanctions

65.1 (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 National Energy Board, require the offender to appear before it and, after hearing the offender and the Board, 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.

Notice

(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.

Subsequent applications with leave

65.2 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.

Recovery of fines and amounts

65.3 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.

27. The Act is amended by adding the following after section 71:

Administrative Monetary Penalties

Powers

Regulations

71.01 (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.

Maximum penalty

(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.

Powers

71.02 The National Energy Board may

(a) establish the form of notices of violation;

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

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

Violations

Commission of violation

71.03 (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.

Purpose of penalty

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

Liability of directors, officers, etc.

71.04 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.

Proof of violation

71.05 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.

Issuance and service of notice of violation

71.06 (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.

Contents

(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;

(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.

Rules About Violations

Certain defences not available

71.07 (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.

Common law principles

(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.

Continuing violation

71.08 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.

Violation or offence

71.09 (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.

Violations not offences

(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.

Limitation or prescription period

71.1 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.

Reviews

Right to request review

71.2 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 National Energy Board allows, make a request to that Board for a review of the amount of the penalty or the facts of the violation, or both.

Correction or cancellation of notice of violation

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

Review

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

Restriction

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

Object of review

71.5 (1) The National Energy Board 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.

Determination

(2) The National Energy Board 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.

Correction of penalty

(3) If the National Energy Board 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 Board or the person, as the case may be, shall correct the amount of the penalty.

Responsibility

(4) If the National Energy Board 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).

Determination final

(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.

Federal 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 National Energy Board.

Burden of proof

71.6 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.

Responsibility

Payment

71.7 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.

Failure to act

71.8 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.

Recovery of Penalties

Debt to Her Majesty

71.9 (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.

Limitation period

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

Certificate

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

Registration in Federal Court

(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.

General

Admissibility of documents

72.01 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.

Publication

72.02 The National Energy Board may make public the nature of a violation, the name of the person who committed it and the amount of the penalty.

28. The Act is amended by adding, after section 74, the Schedules 1 and 2 set out in Schedule 1 to this Act.

R.S., c. 36 (2nd Supp.)

Canada Petroleum Resources Act

29. Paragraph 12(1)(b) of the French version of the Canada Petroleum Resources Act is replaced by the following:

b) problème environnemental ou social grave;

30. Subsection 28(5) of the French version of the Act is replaced by the following:

Limite

(5) La déclaration de découverte importante ne peut être modifiée en vue de réduire le périmètre ou annulée avant la date d’expiration du permis de prospection visé au paragraphe 30(1) ou moins de trois ans après la date de prise d’effet de l’attestation visée au paragraphe 30(2).

31. (1) Subsections 33(1) and (2) of the Act are replaced by the following:

Drilling orders

33. (1) Subject to subsections (2) to (4), the Minister may, at any time after the National Energy Board has made a declaration of significant discovery, by order subject to section 106, require the interest owner of any interest in relation to any portion of the significant discovery area to drill a well on any portion of the significant discovery area that is subject to that interest, in accordance with any directions that may be set out in the order, and to commence the drilling within one year after the making of the order or within any longer period that the Minister specifies in the order.

Exception

(2) No order may be made under subsection (1) with respect to any interest owner who has completed a well on the relevant frontier lands within six months after the completion of that well.

(2) Subsection 33(3) of the French version of the Act is replaced by the following:

Condition

(3) Il ne peut être pris d’arrêté de forage dans les trois ans qui suivent la date d’abandon du puits qui a mis en évidence l’existence d’une découverte importante.

(3) Subsection 33(5) of the French version of the Act is replaced by the following:

Définition de « date d’abandon du puits »

(5) Pour l’application du paragraphe (3), la date d’abandon du puits est celle à laquelle le puits a été abandonné ou complété ou son exploitation suspendue conformément aux règlements applicables en matière de forage.

32. Subsection 35(3) of the Act is replaced by the following:

Application of certain provisions

(3) Subsections 28(3) to (6) apply, with any modifications that the circumstances require, with respect to a declaration made under subsection (1) or (2).

33. Subsection 36(1) of the Act is replaced by the following:

Notice of order to reduce term of interest

36. (1) The Minister may, at any time after the National Energy Board has made a declaration of commercial discovery, give notice to the interest owner of any interest in relation to any portion of the commercial discovery area where commercial production of petroleum has not commenced before that time stating that, after any period of not less than six months that may be specified in the notice, an order may be made reducing the term of that interest.

1992, c. 35, s. 38(1)

34. (1) The definition “date d’abandon du forage” in subsection 101(1) of the French version of the Act is repealed.

1992, c. 35, s. 38(1)

(2) The definition “well termination date” in subsection 101(1) of the English version of the Act is replaced by the following:

“well termination date”
« date d’abandon du puits »

“well termination date” means the date on which a well has been abandoned, completed or suspended in accordance with any applicable regulations respecting the drilling for petroleum made under the Canada Oil and Gas Operations Act.

(3) Subsection 101(1) of the French version of the Act is amended by adding the following in alphabetical order:

« date d’abandon du puits »
“well termination date”

« date d’abandon du puits » Date à laquelle le puits a été abandonné ou complété ou son exploitation suspendue conformément aux règlements applicables en matière de forage pris sous le régime de la Loi sur les opérations pétrolières au Canada.

(4) Section 101 of the Act is amended by adding the following after subsection (6):

Disclosure — governments and agencies

(6.1) The National Energy Board may disclose any information or documentation that it obtains under this Act or the Canada Oil and Gas Operations Act — to officials of the Government of Canada, the government of a province or a foreign government or to the representatives of any of their agencies — for the purposes of a federal, provincial or foreign law, as the case may be, that deals primarily with a petroleum-related work or activity, including the exploration for and the management, administration and exploitation of petroleum resources, if

(a) the government or agency undertakes to keep the information or documentation confidential and not to disclose it without the Board’s written consent;

(b) the information or documentation is disclosed in accordance with any conditions agreed to by the Board and the government or agency; and

Disclosure — Minister

(6.2) The National Energy Board may disclose to the Minister the information or documentation that it has disclosed or intends to disclose under subsection (6.1), but the Minister is not to further disclose that information or documentation unless the Board consents in writing to that disclosure or the Minister is required by an Act of Parliament to disclose that information or documentation.

Consent

(6.3) For the purposes of paragraph (6.1)(a) and subsection (6.2), the National Energy Board may consent to the further disclosure of information or documentation only if the Board itself is authorized under this section to disclose it.

(5) Paragraphs 101(7)(a) to (c) of the French version of the Act are replaced by the following:

a) un puits d’exploration, si les renseignements proviennent effectivement du forage du puits et si deux ans se sont écoulés depuis la date d’abandon du puits;

b) un puits de délimitation, s’ils proviennent effectivement du forage du puits et si deux ans se sont écoulés depuis la date d’abandon du puits d’exploration en cause ou si quatre-vingt-dix jours se sont écoulés depuis la date d’abandon du puits de délimitation, selon la dernière des éventualités à survenir;

c) un puits d’exploitation, s’ils proviennent effectivement du forage du puits et si deux ans se sont écoulés depuis la date d’abandon du puits d’exploration en cause ou si soixante jours se sont écoulés depuis la date d’abandon du puits d’exploitation, selon la dernière des éventualités à survenir;

(6) Subparagraph 101(7)(d)(ii) of the French version of the Act is replaced by the following:

(ii) par ailleurs, cinq ans après leur achèvement;

(7) Subparagraph 101(7)(e)(ii) of the French version of the Act is replaced by the following:

(ii) par ailleurs, au plus tôt soit cinq ans après leur achèvement, soit après que ces terres sont devenues réserves de l’État;

(8) Section 101 of the Act is amended by adding the following after subsection (7):

Applicant and proposed work or activity

(8) Subsection (2) does not apply in respect of information regarding the applicant for an operating licence or authorization under subsection 5(1) of the Canada Oil and Gas Operations Act, or the scope, purpose, location, timing and nature of the proposed work or activity for which the authorization is sought.

Public hearing

(9) Subsection (2) does not apply in respect of information or documentation provided for the purposes of a public hearing conducted under section 5.331 of the Canada Oil and Gas Operations Act.

Safety or environmental protection

(10) Subject to section 101.1, the National Energy Board may disclose all or part of any information or documentation related to safety or environmental protection that is provided in relation to an application for an operating licence or authorization under subsection 5(1) of the Canada Oil and Gas Operations Act or to an operating licence or authorization that is issued under that subsection or provided in accordance with any regulation made under that Act. The Board is not, however, permitted to disclose information or documentation if the Board is satisfied that

(a) disclosure of it could reasonably be expected to result in a material loss or gain to a person, or to prejudice their competitive position, and the potential harm resulting from the disclosure outweighs the public interest in making the disclosure;

(b) it is financial, commercial, scientific or technical information or documentation that is confidential and has been consistently treated as such by a person who would be directly affected by its disclosure, and for which the person’s interest in confidentiality outweighs the public interest in its disclosure; or

(c) there is a real and substantial risk that disclosure of it will impair the security of pipelines, as defined in section 2 of the Canada Oil and Gas Operations Act, buildings, installations, vessels, vehicles, aircraft or systems, including computer or communication systems, used for any work or activity in respect of which that Act applies — or methods employed to protect them — and the need to prevent its disclosure outweighs the public interest in its disclosure.

Exception

(11) Subsections (8) to (10) do not apply in respect of the classes of information or documentation described in paragraphs (7)(a) to (e) and (i).

35. The Act is amended by adding the following after section 101:

Notice — subsection 101(10)

101.1 (1) If the National Energy Board intends to disclose any information or documentation under subsection 101(10), the Board shall make every reasonable effort to give the person who provided it written notice of the Board’s intention to disclose it.

Waiver of notice

(2) Any person to whom a notice is required to be given under subsection (1) may waive the requirement, and if they have consented to the disclosure they are deemed to have waived the requirement.

Contents of notice

(3) A notice given under subsection (1) shall include

(a) a statement that the National Energy Board intends to disclose information or documentation under subsection 101(10);

(b) a description of the information or documentation that was provided by the person to whom the notice is given; and

(c) a statement that the person may, within 20 days after the day on which the notice is given, make written representations to the Board as to why the information or documentation, or a portion of it, should not be disclosed.

Representations

(4) If a notice is given to a person under subsection (1), the National Energy Board shall

(a) give the person the opportunity to make, within 20 days after the day on which the notice is given, written representations to the Board as to why the information or documentation, or a portion of it, should not be disclosed; and

(b) after the person has had the opportunity to make representations, but no later than 30 days after the day on which the notice is given, make a decision as to whether or not to disclose the information or documentation and give written notice of the decision to the person.

Contents of notice of decision to disclose

(5) A notice given under paragraph (4)(b) of a decision to disclose information or documentation shall include

(a) a statement that the person to whom the notice is given may request a review of the decision under subsection (7) within 20 days after the notice is given; and

(b) a statement that if no review is requested under subsection (7) within 20 days after the notice is given, the National Energy Board shall disclose the information or documentation.

Disclosure of information or documentation

(6) If, under paragraph (4)(b), the National Energy Board decides to disclose the information or documentation, the Board shall disclose it on the expiry of 20 days after a notice is given under that paragraph, unless a review of the decision is requested under subsection (7).

Review

(7) Any person to whom the National Energy Board is required under paragraph (4)(b) to give a notice of a decision to disclose information or documentation may, within 20 days after day on which the notice is given, apply to the Federal Court for a review of the decision.

Hearing in summary way

(8) An application made in accordance with subsection (7) shall be heard and determined in a summary way in accordance with any special rules made in respect of such applications under section 46 of the Federal Courts Act.

Court to take precautions against disclosing

(9) In any proceedings before the Federal Court arising from an application made in accordance with subsection (7), the Court shall take every reasonable precaution, includ-ing, when appropriate, conducting hearings in camera, to avoid the disclosure by the Court or any person of any information or documentation that, under this Act, is privileged or is not to be disclosed.

36. (1) Subsection 107(1) of the Act is amended by striking out “and” at the end of paragraph (c) and by adding the following after that paragraph:

(c.1) respecting the fees or charges, or the method of calculating the fees or charges, to be paid for the provision, by the National Energy Board or the Minister, of a service or a product under this Act;

(c.2) respecting the fees or charges, or the method of calculating the fees or charges, to be paid by a holder of an interest or a share in an interest in respect of any of the National Energy Board’s or the Minister’s activities under or related to this Act;

(c.3) respecting the refund of all or part of any fee or charge referred to in paragraph (c.1) or (c.2), or the method of calculating that refund; and

(2) Section 107 of the Act is amended by adding the following after subsection (1):

Amounts not to exceed cost

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

Amounts not to exceed cost

(1.2) The amounts of the fees or charges referred to in paragraph (1)(c.2) shall not exceed the cost of performing the activities under or related to this Act.