Bill C-74

Waste

149. (1) A person must not commit waste.

(2) In this Part, “waste”, in addition to its ordinary meaning, means waste as understood in the petroleum industry and in particular includes

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

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

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

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

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

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

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

150. (1) If the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, other than waste as defined in paragraph 149(2)(f) or (g), is being committed, that Officer may, subject to subsection (2), order that all operations giving rise to the waste cease until that Officer is satisfied that the waste has stopped.

(2) Subsections 147(4) to (6) and section 148 apply, with any modifications that the circumstances require, to the order as if it were an order under subsection 147(1).

151. (1) For the purpose of giving effect to an order made under section 150, the Chief Conservation Officer may authorize any person, as necessary, to enter the place where the operations giving rise to the waste are being carried out and take over the management and control of those operations and any connected works.

(2) The authorized person must manage and control the operations and do all things necessary to stop the waste.

(3) The cost of stopping the waste is to be borne by the person who holds the exploration licence or the production licence and constitutes a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

152. (1) When the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste as defined in paragraph 149(2)(f) or (g) is occurring in the recovery of petroleum from a pool, that Officer may apply to the Boards for an order requiring the operators within the pool to show cause at a hearing to be held before the Boards on a date specified in the order why the Boards should not make a direction in respect of the waste that is occurring.

(2) On the date specified in the order, the Boards must hold a hearing at which the Chief Conservation Officer, the operators and other interested persons are to be given an opportunity to be heard.

(3) If, after the hearing, the Boards are of the opinion that waste as defined in paragraph 149(2)(f) or (g) is occurring in the recovery of petroleum from a pool, the Boards may, by order, direct one or both of the following:

(a) the introduction of a scheme for the collection, processing, disposition or re-injection of any gas produced from the pool;

(b) the repressurizing, recycling or pressure maintenance for the pool or any part of it and, for or incidental to that purpose, direct the introduction or injection of gas, water or any other substance into that pool or any part of it.

(4) The Boards may, by order, direct that the operation of the pool or any part of it that is specified in the order made under subsection (3) be shut down if the requirements of that order are not met or unless a scheme is approved by the Boards and in operation on the day fixed in the order.

(5) Despite subsections (3) and (4), the Boards may, by order, permit the continued operation of a pool or any part of a pool after the day fixed by an order under this section if, in the opinion of the Boards, any scheme or other action described in paragraphs (3)(a) and (b) is in the course of preparation; however, the continued operation is subject to any conditions imposed by the Boards.

Spills and Debris

153. (1) The following definitions apply in sections 154 to 164.

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

“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 106(1)(b) and that has been abandoned without an authorization that may be required by or under this Part, or any material that has broken away or been jettisoned or displaced in the course of that work or activity.

“spill” means a discharge, emission or escape of petroleum other than one that is authorized under subsection 159(1), the regulations or any other federal law, but does not include a discharge from a vessel to which Part 8 or 9 of the Canada Shipping Act, 2001 applies or a ship to which Part 6 of the Marine Liability Act applies.

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

154. (1) A person must not cause or permit a spill in or from any portion of the joint management area.

(2) If a spill occurs in any portion of the joint management area, any person who at the time of the spill is carrying on any work or activity related to the exploration for or development or production of petroleum in the area of the spill must, in the prescribed manner, report the spill to the Chief Conservation Officer.

(3) Every person who is required to report a spill must, as soon as feasible, take all reasonable measures consistent with safety and the protection of health and the environment to prevent any further spill, to repair or remedy any situation resulting from the spill and to reduce or mitigate any damage or danger that results or may reasonably be expected to result from the spill.

(4) The Chief Conservation Officer may take any action or direct that it be taken by any person that may be necessary if that Officer is satisfied on reasonable grounds that

(a) a spill has occurred in any portion of the joint management area and immediate action is necessary in order to effect any reasonable measures referred to in subsection (3); and

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

(5) For the purposes of subsection (4), the Chief Conservation Officer may authorize and direct any person, as necessary, to enter the place where the spill has occurred and take over the management and control of any work or activity being carried on in the area of the spill.

(6) The person so authorized and directed must manage and control that work or activity and take all reasonable measures that are referred to in subsection (3) in relation to the spill.

(7) Any costs incurred under subsection (6) must be borne by the person who obtained the authorization under paragraph 106(1)(b) in respect of the work or activity from which the spill emanated and, until paid, constitute a debt recoverable by action in any court of competent jurisdiction as a debt due to the Her Majesty in right of Canada.

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

(9) A person who is aggrieved by any action or measure taken or authorized or directed to be taken under subsections (4) to (6) may apply to the Boards for a review of the action or measure.

(10) After hearing an application, the Boards may

(a) set aside, confirm or vary the action or measure that is the subject of the application;

(b) order that any of the measures under subsection (3) be taken; or

(c) make any other order that the Boards consider appropriate.

(11) No person who is required, directed or authorized to act under this section is personally liable either civilly or criminally in respect of any act or omission in the course of complying with this section unless it is shown that the act or omission was due to that person’s gross negligence or wilful misconduct, or gross or intentional fault.

155. (1) The provisions referred to in Schedule 3 do not apply to the deposit of a spill-treating agent and those referred to in Schedule 4 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 for a work or activity 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

(c) the agent is used for the purposes of subsection 154(3) or (4).

(2) The provisions referred to in Schedule 4 continue to apply to the holder of an authorization referred to in paragraph (1)(a) in respect of any harm that is caused by the spill or, despite subsection (1), by the interaction between the spill-treating agent and the spilled oil.

(3) Other than in the case of a small-scale test, the approval required under paragraph (1)(b) must be in writing and is not to be granted unless

(a) the Chief Conservation Officer has consulted with the Ministers with respect to the approval;

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

(c) the Chief Conservation Officer determines that the use of the agent is likely to achieve a net environmental benefit.

156. 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.

157. For the purpose of section 42 of the Fisheries Act, if subsection 36(3) of that Act would have been contravened but for subsection 155(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 155(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.

158. The Federal Minister must, as soon as possible after a list of spill-treating agents is established by regulation, notify the Provincial Minister and the Boards of the making of the list and any amendment to it.

159. (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 if the Federal Minister has obtained the Provincial Minister’s approval.

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

(3) If the conditions set out in the authorization are met, the provisions referred to in section 156 and Schedules 3 and 4 do not apply in respect of the spill-treating agent, oil and oil surrogate required for the research project.

160. (1) If any discharge, emission or escape of petroleum that is authorized by regulation, or any spill, occurs in any portion of the joint management area,

(a) all persons to whose fault or negligence the spill or the authorized discharge, emission or escape of petroleum 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 petroleum is attributable are jointly and severally, or solidarily, liable 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 petroleum, or as a result of any action or measure taken in relation to the spill or the authorized discharge, emission or escape of petroleum,

(ii) the costs and expenses reasonably incurred by either of the Boards, Her Majesty in right of Canada or of Quebec or any other person in taking any action or measure in relation to the spill or the authorized discharge, emission or escape of petroleum, and

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

(b) the person who is required to obtain an authorization under paragraph 106(1)(b) in respect of the work or activity from which the spill or the authorized discharge, emission or escape of petroleum emanated is liable, without proof of fault or negligence, up to the applicable limit of liability that is set out in subsection (5), for the actual loss or damage, the costs and expenses and the loss of non-use value described in subparagraphs (a)(i) to (iii).

(2) If, as a result of debris or as a result of any action or measure taken in relation to debris, there is a loss of non-use value relating to a public resource or if any person incurs actual loss or damage as a result of debris or if either of the Boards or Her Majesty in right of Canada or of Quebec 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, or solidarily, liable for that loss, actual loss or damage and those costs and expenses; and

(b) the person who is required to obtain an authorization under paragraph 106(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 (5), for that loss, actual loss or damage and those costs and expenses.

(3) The persons who are at fault or negligent, or who are by law responsible for persons who are at fault or negligent, are liable to make contributions to each other or to indemnify each other in the degree to which they are respectively at fault or negligent.

(4) A person who is required to obtain an authorization under paragraph 106(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, or solidarily, 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).

(5) For the purposes of paragraphs (1)(b) and (2)(b), the limit of liability is $1 billion.

(6) Subject to subsection 7(1), the Governor in Council may, by regulation, increase the amount referred to in subsection (5).

(7) 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 (5) 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 (5) do not apply.

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

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

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

(11) Subject to subsections (8) and (9), nothing in this section suspends or limits

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

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

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

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

161. (1) An applicant for an authorization under paragraph 106(1)(b) for the drilling for or development or production of petroleum must 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 160(5) that apply to it. If the Boards consider it necessary, they may determine a greater amount and require proof that the applicant has the financial resources to pay that greater amount.

(2) An applicant for an authorization under paragraph 106(1)(b) for any other work or activity must provide proof, in the prescribed form and manner, that it has the financial resources necessary to pay an amount that is determined by the Boards.

(3) When the Boards determine an amount under subsection (1) or (2), they are 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 petroleum or as a result of debris.

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

(5) The holder of an authorization for a work or activity must 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 Boards notify the holder that they have accepted a report submitted by the holder indicating that the last well in respect of which the authorization was issued is abandoned. The Boards 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 Boards.

162. (1) An applicant for an authorization for a work or activity must provide proof of financial responsibility in the form of a letter of credit, a guarantee or an indemnity bond or in any other form satisfactory to the Boards,

(a) in the case of the drilling for or development or production of petroleum in the joint management area, in the amount of $100 million or, if the Boards consider it necessary, in a greater amount that they determine; or

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

(2) The holder of an authorization for a work or activity must ensure that the proof referred to in subsection (1) remains in force for the duration of the work or activity in respect of which the authorization is issued.

(3) The holder of an authorization for a work or activity must also ensure that the proof referred to in paragraph (1)(a) remains in force for a period of one year beginning on the day on which the Boards notify the holder that they have accepted the report submitted by the holder indicating that the last well in respect of which the authorization was issued is abandoned. The Boards may reduce that period and may decide 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 Boards.

(4) The Boards may require that moneys in an amount not more than the amount prescribed for any case or class of cases, or determined by the Boards 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) in respect of any claim for which proceedings may be instituted under section 160, whether or not those proceedings have been instituted.

(5) If payment is required under subsection (4), it must be made in the manner, subject to any conditions and procedures and to or for the benefit of any persons or classes of persons, that may be prescribed for any case or class of cases or as may be required by the Boards in the absence of regulations.

(6) If a claim is sued for under section 160, there is to be deducted from any award made as a result of the action on that claim any amount received by the claimant under this section in respect of the loss, damage, costs or expenses claimed.

163. (1) The Ministers may, by order, on the recommendation of the Boards, approve an amount that is less than the amount referred to in subsection 160(5) or paragraph 162(1)(a) in respect of an applicant for, or a holder of, an authorization for a work or activity.

(2) If the Ministers approve an amount that is less than the amount referred to in subsection 160(5) in respect of an applicant for an authorization for a work or activity, that applicant, for the purposes of subsection 161(1), need only provide proof that it has the financial resources necessary to pay the adjusted amount approved by the Ministers.

(3) No applicant for an authorization for a work or activity contravenes paragraph 162(1)(a) if that applicant provides proof of financial responsibility in the amount that is approved by the Ministers under this section.

Inquiries

164. (1) If a spill or debris or an accident or incident related to any work or activity to which this Part applies occurs or is found in any portion of the joint management area and results in death or injury or danger to public safety or the environment, the Ministers may direct an inquiry to be made and may authorize any person they consider qualified to conduct the inquiry.

(2) The Ministers must, under prescribed circumstances, direct that an inquiry referred to in subsection (1) be made and must ensure that the person who conducts the inquiry — the investigator — is not employed in a part of the federal administration or the public service of Quebec for which either Minister is responsible.

(3) For the purposes of an inquiry under subsection (1), the investigator has and may exercise all the powers of a person appointed as a commissioner under Part I of the Inquiries Act, other than the power to make a finding of, and impose a punishment for, contempt of court. The investigator may, however, apply to a judge of the Superior Court of Quebec to make a finding of, and impose a punishment for, contempt of court.

(4) Every person who contravenes an order of the investigator, or who refuses to answer questions that the investigator has the legal authority to ask or to produce documents or other things that the investigator has the legal authority to request, or who undermines the conduct of the hearing is guilty of contempt of court.

(5) The investigator must ensure that, to the extent feasible, the procedures and practices for the inquiry are compatible with investigation procedures and practices followed by any appropriate authority and, for those purposes, may consult with any of those authorities.

(6) As soon as feasible after the conclusion of the inquiry, the investigator must submit a report to the Ministers, together with the evidence and other material that was before the inquiry.

(7) The report must be jointly published by the Ministers within 60 days after the later of the days on which it was received.

(8) The Ministers may supply copies of the published report in the manner and on any terms that they consider proper.

Division 3

Production Arrangements

Interpretation

165. The following definitions apply in this Division.

“pooled spacing unit” means the area that is subject to a pooling agreement or a pooling order.

“pooled tract” means the portion of a pooled spacing unit defined as a tract in a pooling agreement or a pooling order.

“pooling agreement” means an agreement to pool the interests of owners in a spacing unit and to provide for the operation or the drilling and operation of a well on that spacing unit.

“pooling order” means an order made under section 167 or as altered in accordance with section 169.

“royalty interest” means any interest or right in, or the right to receive a portion of, any petroleum produced and saved from a field or pool or part of a field or pool or the proceeds from its sale, but does not include a working interest or the interest of any person whose sole interest is as a purchaser of petroleum from the pool or part of the pool.

“royalty owner” means a person, including Her Majesty in right of Canada, who owns a royalty interest.

“spacing unit” means the area allocated to a well for the purpose of drilling for or producing petroleum.

“tract participation” means the share of production from a unitized zone that is allocated to a unit tract under a unit agreement or unitization order or the share of production from a pooled spacing unit that is allocated to a pooled tract under a pooling agreement or pooling order.

“unit agreement” means an agreement to unitize the interests of owners in a pool or part of the pool whose area is greater than the area of a spacing unit and includes a unit agreement as varied by a unitization order.

“unit area” means the area that is subject to a unit agreement.

“unit operating agreement” means an agreement, providing for the management and operation of a unit area and a unitized zone, that is entered into by working interest owners who are parties to a unit agreement with respect to that unit area and unitized zone and includes a unit operating agreement as varied by a unitization order.

“unit operation” means operations conducted under a unit agreement or a unitization order.

“unit operator” means a person designated as a unit operator under a unit operating agreement.

“unit tract” means the portion of a unit area that is defined as a tract in a unit agreement.

“unitization order” means an order made under section 175.

“unitized zone” means a geological formation that is within a unit area and subject to a unit agreement.

“working interest” means a right, in whole or in part, to produce and dispose of petroleum from a pool or part of a pool, whether the right is held as an incident of ownership in the petroleum or under a production licence, an agreement or another instrument, if the right is chargeable with and the holder of the right is obligated to pay or bear, either in cash or out of production, all or a portion of the costs in connection with the drilling for, recovery and disposal of petroleum from the pool or part of the pool.

Pooling

166. (1) The working interest owners who have separately owned working interests in a spacing unit and the royalty owners who own all the interests in the spacing unit may pool their working interests and royalty interests in the spacing unit for the purpose of drilling for or producing, or both drilling for and producing, petroleum.

(2) A copy of the pooling agreement and any amendment to it must be filed with the Chief Conservation Officer.

(3) The Ministers may, on behalf of their respective governments, enter into a pooling agreement on any terms that they consider advisable, and, despite anything in Part 1, this Part or the Federal Real Property and Federal Immovables Act or any regulations made under those Parts or that Act, the pooling agreement is binding on the parties.

167. (1) In the absence of a pooling agreement, the owner of a working interest in a spacing unit may apply for a pooling order directing the other working interest owners and the royalty owners within the spacing unit to pool their interests in the spacing unit.

(2) The application must be made to the Ministers who must refer the application to the Committee for the purpose of holding a hearing to determine whether a pooling order should be made. At the hearing, the Committee must afford all interested parties an opportunity to be heard.

(3) Before the hearing, the applicant must provide the Committee, and any other interested parties that the Committee may direct, with a proposed pooling agreement and the working interest owners who have interests in the spacing unit to which the proposed pooling agreement relates must provide the Committee with any information that the Committee considers necessary.

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

(5) Every pooling order must provide

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

(b) for the appointment of an operator, from among the owners of working interests in a spacing unit, to be responsible for the drilling, operation or abandoning of the well whether it was drilled before or after the making of the pooling order;

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

(d) if no production of petroleum is obtained, for the payment by the applicant of all costs incurred in the drilling and abandoning of the well;

(e) if production is obtained, for the payment of the actual costs of drilling the well, whether it was drilled before or after the making of the pooling order, and for the payment of the actual costs of the completing, operation and abandoning of the well; and

(f) for the sale, by the operator, of the petroleum that is allocated under paragraph (c) to a working interest owner if that working interest owner fails to take in kind and dispose of the production of that petroleum, and for the deduction from the proceeds of the sale, by the operator, of the expenses reasonably incurred in connection with the sale.

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

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

168. If a pooling order is made, all working interest owners and royalty owners who have interests in the pooled spacing unit are, on the making of the pooling order, deemed to have entered into a pooling agreement as set out in the pooling order and that order is deemed to be a valid contract between the parties who have interests in the pooled spacing unit and all its terms and provisions, as set out in the pooling order or as altered in accordance with section 169, are binding on and enforceable against the parties to the pooling order.

169. (1) The Committee must hear any application to vary, amend or terminate a pooling order if the application is made by the owners of more than 25 % of the working interests in the pooled spacing unit, calculated on a prorated area basis, and may, in its discretion, order a hearing on the application of any working interest owner or royalty owner who has an interest in the pooled spacing unit.

(2) After the hearing, the Committee may vary or amend the pooling order to supply any deficiency in the pooling order or to meet changing conditions and may vary or revoke any provision that it considers to be unfair or inequitable or it may terminate the pooling order.

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

170. (1) A person must not produce any petroleum within a spacing unit in which there are two or more production licences or two or more separately owned working interests unless a pooling agreement has been entered into in accordance with section 166 or is deemed to have been entered into in accordance with a pooling order made under section 167.

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

Unitization

171. (1) Any one or more owners of a working interest in a pool or part of the pool whose area is more than the area of a spacing unit may, together with the royalty owners, enter into a unit agreement and operate their interests in accordance with the terms of the unit agreement or any amendment to it.

(2) A copy of the unit agreement and any amendment to it must be filed with the Chief Conservation Officer.

(3) The Ministers may, on behalf of their respective governments, enter into a unit agreement on any terms that they consider advisable and, in case of any inconsistency or conflict between the terms of the unit agreement and any regulations made under this Act or the Federal Real Property and Federal Immovables Act, the terms of the unit agreement take precedence.

(4) If a unit agreement filed under this section provides that a unit operator must be the agent or mandatary of the parties to the agreement with respect to their powers, duties and functions under this Part, the unit operator’s exercise or performance of, or their failure to exercise or perform, those powers, duties and functions is attributed to the parties otherwise having those powers, duties and functions under this Part.

172. (1) Despite anything in this Part, if, in the opinion of the Chief Conservation Officer, the unit operation of a pool or part of the pool would prevent waste, the Chief Conservation Officer may apply to the Committee for an order requiring the working interest owners concerned to enter into a unit agreement and a unit operating agreement.

(2) If the application is made, the Committee must hold a hearing at which all interested persons are to be given an opportunity to be heard.

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

(4) If, within a period of not less than six months after the day on which the order is made, the working interest owners and royalty owners have not entered into a unit agreement and a unit operating agreement approved by the Committee, all drilling and production operations within the pool or part of the pool in respect of which the order was made must cease until a unit agreement and a unit operating agreement have been approved by the Committee and filed with the Chief Conservation Officer.

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

Compulsory Unitization

173. (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 unit area may apply for a unitization order with respect to the agreements.

(2) The application must be made to the Ministers who must refer it to the Committee for the purpose of holding a hearing in accordance with section 175.

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

174. (1) An application for a unitization order must contain

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

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

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

(d) a statement showing

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

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

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

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

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

(c) a provision specifying that the share of the production from a unit area that has been allocated to a unit tract is considered to have been produced from that unit tract; and

(d) a provision specifying the manner in which and the circumstances under which the unit operation is to end.

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

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

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

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

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

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

175. (1) If an application made under section 173 is referred by the Ministers to the Committee, the Committee must hold a hearing at which all interested persons are to be given an opportunity to be heard.

(2) The Committee may 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 all those 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 all those owners, if the Committee 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 accomplish the more efficient or more economical production of petroleum from the unitized zone.

(3) Subject to section 176, the unit agreement and the unit operating agreement have the effect given to them by the unitization order.

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

176. (1) Subject to subsection (2), a unitization order becomes effective on the day that the Committee indicates in the order, but that day must be not less than 30 days after the day on which the order is made.

(2) If a unit agreement or unit operating agreement is varied by the Committee in a unitization order, the order becomes ineffective if, before the effective date, the applicant files with the Committee a notice withdrawing the application on behalf of the working interest owners or there are filed with the Committee statements in writing objecting to the order and signed

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

(i) one or more working interest owners who own in total more than 25 % of the total working interests in the unit area and were included within the group owning 65 % or more of the total working interests as described in subparagraph 175(2)(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 were included within the group owning 65 % or more of the total royalty interests as described in subparagraph 175(2)(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 were included within the group owning 65 % or more of the total working interests as described in subparagraph 175(2)(a)(i).

(3) If a unitization order becomes ineffective under subsection (2), the Committee must immediately revoke the order.

177. A unitization order is not invalid by reason only of the absence of notice or of any irregularities in giving notice to any working interest owner and any royalty owner in respect of the application for the order or any proceedings leading to the making of the order.

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

(2) If the Committee 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 in the unit area and one or more royalty owners who own in total 65 % or more of the total royalty interests in the unit area have consented to the proposed amendment, the Committee may amend the unitization order in accordance with the amendment proposed.

179. No amendment is to be made under section 178 that will alter the ratios between the tract participations of those tracts that were qualified for inclusion in the unit area before the beginning of the hearing and, for the purpose of this section, the tract participations are to be those indicated in the unit agreement when it became subject to a unitization order.

180. After the day on which a unitization order comes into effect and while the order remains in force, a person must not carry on any operations within the unit area for the purpose of drilling for or producing petroleum in the unitized zone, except in accordance with the provisions of the unit agreement and the unit operating agreement.

181. The percentages of interests referred to in subsections 173(1), 175(2), 176(2) and 178(2) must be determined

(a) in the case of royalty interests, on a prorated area basis; and

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

General

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

(2) If a pooled spacing unit is included in a unit area, the provisions of any unit agreement, unit operating agreement and unitization order prevail over the provisions of the pooling order in the event of a conflict.

(3) Despite subsection (2),

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

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

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

Division 4

Appeals and Administration

Appeals

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

(2) Any minutes or other record of the Committee or any other document issued by the Committee is, for the purpose of this section, considered to be a decision or an order of the Committee.

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

(2) The Court must hear and determine the case stated and remit the matter to the Committee with its opinion on it.

185. The Ministers may, at any time, in their discretion, of their own motion or at the request of any person concerned, vary or rescind any decision or order of the Committee, and any order that the Ministers make becomes a decision or order of the Committee and, subject to section 186, is binding on the Committee and on all parties.

186. (1) An appeal lies from a decision or order of the Committee to the Superior Court of Quebec on a question of law, on leave for the appeal being obtained from that Court, on application made within 30 days after the day on which the decision or order sought to be appealed from was made or within any further time that the Court may allow.

(2) If leave to appeal is granted, any order of the Committee in respect of which the appeal is made must be stayed until the matter of the appeal is determined.

(3) After the hearing of the appeal, the Court must give its opinion to the Committee and the Committee must make any order necessary to comply with that opinion.

(4) Any order made by the Committee under subsection (3) is subject to section 185 unless the order has already been varied or rescinded under that section by the Ministers.

Safety and Conservation Officers

187. (1) Subject to subsection (3), the Ministers must designate from among the Boards’ officers and employees an individual who has been recommended by the Boards as a safety officer or conservation officer for the purposes of the administration and enforcement of this Part. The Ministers must make the designation within 30 days after the day on which they receive the name of the individual from the Boards.

(2) The Ministers must, without delay after making a designation, notify the Boards, in writing, that the designation has been made.

(3) The Ministers must not designate an individual if they are not satisfied that the individual is qualified to exercise the powers and perform the duties and functions of a safety officer or a conservation officer under this Part. If an individual is not designated, the Ministers must so notify the Boards, in writing, without delay.

(4) The Boards must provide every safety officer and conservation officer and the Chief Safety Officer and the Chief Conservation Officer with a certificate of appointment or designation and, on entering any place under the authority of this Part, the officer must, if so required, produce the certificate to the person in charge of the place under section 188.

188. (1) A safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may, for the purpose of verifying compliance with this Part, order any person who is in charge of a place that is used for any work or activity in respect of which this Part applies or a place in which that officer has reasonable grounds to believe that there is anything to which this Part applies

(a) to inspect anything in the place;

(b) to pose questions, or conduct tests or monitoring, in the place;

(c) to take photographs or measurements, or make recordings or drawings, in the place;

(d) to accompany or assist the officer while the officer is in the place;

(e) to produce a document or another thing that is in their possession or under their control, or to prepare and produce a document based on data or documents that are in their possession or under their control, in the form and manner that the officer may specify;

(f) to provide, to the best of their knowledge, information relating to any matter to which this Part applies, or to prepare and produce a document based on that information, in the form and manner that the officer may specify;

(g) to ensure that all or part of the place, or anything located in the place, that is under their control, not be disturbed for a reasonable period that is established by the officer pending the exercise of any powers under this section; and

(h) to remove anything from the place and to provide it to the officer, in the manner that he or she specifies, for examination, testing or copying.

(2) A safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may, for the purpose of verifying compliance with this Part, and subject to section 191, enter a place that is used for any work or activity in respect of which this Part applies, or a place in which that officer has reasonable grounds to believe that there is anything to which this Part applies, and may for that purpose

(a) inspect anything in the place;

(b) pose questions, or conduct tests or monitoring, in the place;

(c) take samples from the place, or cause them to be taken, for examination or testing, and dispose of those samples;

(d) remove anything from the place, or cause it to be removed, for examination, testing or copying;

(e) while in the place, take or cause to be taken photographs or measurements, make or cause to be made recordings or drawings and use systems in the place that capture images or cause them to be used;

(f) use any computer system in the place, or cause it to be used, to examine data contained in or available to it;

(g) prepare a document, or cause one to be prepared, based on the data;

(h) use or cause to be used any copying equipment in the place to make copies of the data;

(i) be accompanied while in the place by any person, or be assisted while in the place by any person, that the officer considers necessary; and

(j) meet in private with any person in the place, with the agreement of that person.

(3) For greater certainty, an officer who enters a place under subsection (2) may order any person in the place to do anything described in paragraphs (1)(a) to (h).

(4) Anything that is removed under paragraph (1)(h) or (2)(d) for examination, testing or copying must, if requested by the person from whom it was removed, be returned to that person after the examination, testing or copying is completed, unless it is required for the purpose of a prosecution under this Part.

189. (1) The owner and every person who is in charge of a place that is entered by a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer under subsection 188(2), and every person found in that place, must give all assistance that is reasonably required to enable the officer to verify compliance with this Part and provide any documents, data or information that is reasonably required for that purpose.

(2) If the place referred to in subsection 188(2) is a marine installation or structure, as defined in subsection 145(1), the person who is in charge of the marine installation or structure must provide to the officer, and to every person accompanying the officer, free of charge,

(a) suitable transportation between the usual point of embarkation on shore and the marine installation or structure, between the marine installation or structure and the usual point of disembarkation on shore, and between marine installations or structures, if the marine installation or structure or marine installations or structures are situated in the joint management area; and

(b) suitable accommodation and food at the marine installation or structure.

190. A safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer, as the case may be, must provide to the holder of an authorization for a work or activity written reports about anything inspected, tested or monitored by or on the order of the officer for the purpose of verifying compliance with this Part in any place that is used for a work or activity in respect of which the authorization is issued.

191. (1) If the place referred to in subsection 188(2) is living quarters

(a) neither a conservation officer nor the Chief Conservation Officer is authorized to enter those quarters for the purpose of verifying compliance with the provisions of this Part; and

(b) a safety officer or the Chief Safety Officer is not authorized to enter those quarters without the consent of the occupant except

(i) to execute a warrant issued under subsection (4), or

(ii) to verify that those quarters, if on a marine installation or structure, as defined in subsection 145(1), are in a structurally sound condition.

(2) The officer must provide reasonable notice to the occupant before entering living quarters under subparagraph (1)(b)(ii).

(3) Despite subparagraph (1)(b)(ii), any locker in the living quarters that is fitted with a locking device and that is assigned to the occupant must not be opened by the officer without the occupant’s consent except under the authority of a warrant issued under subsection (4).

(4) On ex parte application, a justice of the peace may issue a warrant authorizing a safety officer who is named in it or the Chief Safety Officer to enter living quarters subject to any conditions specified in the warrant if the justice is satisfied by information on oath that

(a) the living quarters is a place referred to in subsection 188(2);

(b) entry to the living quarters is necessary to verify compliance with this Part; and

(c) entry was refused by the occupant or there are reasonable grounds to believe that entry will be refused or that consent to entry cannot be obtained from the occupant.

(5) The warrant may also authorize a locker described in subsection (3) to be opened, subject to any conditions specified in the warrant, if the justice is satisfied by information on oath that

(a) it is necessary to open the locker to verify compliance with this Part; and

(b) the occupant to whom the locker is assigned refused to allow it to be opened or there are reasonable grounds to believe that the occupant to whom it is assigned will refuse to allow it to be opened or that consent to opening it cannot be obtained from that occupant.

(6) The officer who executes a warrant issued under subsection (4) must not use force unless the use of force has been specifically authorized in the warrant.

(7) A warrant may be issued under this section by telephone or other means of telecommunication on information submitted by a safety officer or the Chief Safety Officer by one of those means and section 487.1 of the Criminal Code applies for that purpose with any modifications that the circumstances require.

(8) For the purposes of this section, “living quarters” means sleeping quarters provided on a marine installation or structure, as defined in subsection 145(1), and any room for the exclusive use of the occupants of those quarters that contains a toilet or a urinal.

192. A person must not obstruct or hinder, or make a false or misleading statement, either orally or in writing, to a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer while the officer is performing his or her duties or functions under this Part.

193. (1) On ex parte application, a justice of the peace may issue a warrant if the justice is satisfied by information on oath that there are reasonable grounds to believe that there is in any place anything that will provide evidence or information relating to the commission of an offence under this Part.

(2) The warrant may authorize a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer, and any other person named in the warrant, to at any time enter and search the place and to seize anything specified in the warrant or do any of the following as specified in the warrant, subject to any conditions that may be specified in the warrant:

(a) conduct examinations, tests or monitoring;

(b) take samples for examination or testing, and dispose of those samples; or

(c) take photographs or measurements, make recordings or drawings and use systems in the place that capture images.

(3) A safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may exercise the powers described in this section without a warrant if the conditions for obtaining the warrant exist but by reason of exigent circumstances it would not be feasible to obtain the warrant.

(4) Exigent circumstances include circumstances in which the delay necessary to obtain a warrant would result in danger to human life or the environment or the loss or destruction of evidence.

(5) A person authorized under this section to search a computer system in a place may

(a) use or cause to be used any computer system in the place to search any data contained in or available to the computer system;

(b) reproduce or cause to be reproduced any data in the form of a printout or other intelligible output;

(c) seize any printout or other output for examination or copying; and

(d) use or cause to be used any copying equipment in the place to make copies of the data.

(6) Every person who is in charge of a place in respect of which a search is carried out must, on presentation of the warrant, permit the individual carrying out the search to do anything described in subsection (5).

(7) If the place that is searched is a marine installation or structure, as defined in subsection 145(1), the person who is in charge of the marine installation or structure must provide to the individual who is executing the warrant, free of charge,

(a) suitable return transportation between the marine installation or structure and any location from which transportation services to that marine installation or structure are usually provided, and between marine installations or structures, if the marine installation or structure or marine installations or structures are situated in the joint management area; and

(b) suitable accommodation and food at the marine installation or structure.

(8) A warrant may be issued under this section by telephone or other means of telecommunication on information submitted by a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer by one of those means and section 487.1 of the Criminal Code applies for that purpose with any modifications that the circumstances require.

194. (1) A thing seized under this Part may be stored in the place where it was seized or may, at the discretion of a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer, be removed to any other place for storage. The owner of the thing or the person who is lawfully entitled to possess it must pay the costs of storage or removal.

(2) If the thing seized is perishable, a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may destroy the thing or otherwise dispose of it in any manner the officer considers appropriate. Any proceeds realized from its disposition must be paid to the Receiver General.

195. (1) If a safety officer or the Chief Safety Officer, on reasonable grounds, is of the opinion that continuation of any work or activity related to the exploration or drilling for or the production, conservation, processing or transportation of petroleum in any portion of the joint management area is likely to result in serious bodily injury, that safety officer or the Chief Safety Officer, as the case may be, may order that the operation cease or be continued only in accordance with the terms of the order.

(2) The officer who makes an order under subsection (1) must affix at or near the scene of the work or activity a notice of their order in the form approved by the Boards.

(3) The safety officer’s order expires 72 hours after it is made unless it is confirmed before that time by order of the Chief Safety Officer.

(4) A safety officer who makes an order under subsection (1) must immediately advise the Chief Safety Officer that the order has been made. The Chief Safety Officer may modify or revoke the order.

(5) The person carrying out the work or activity to which an order under subsection (1) makes reference or any person having a pecuniary interest in that work or activity may by notice in writing request the Chief Safety Officer to refer the order to the Boards for review and the Officer must do so.

(6) The Boards must inquire into the need for the order and may confirm it or set it aside. The Boards’ decision is final.

(7) If an order has been referred to the Boards under this section, the burden of establishing that the order is not needed is on the person who requested that the order be so referred.

(8) A person must not continue a work or activity in respect of which an order has been made under this section, except in accordance with the terms of the order or until the order has been set aside by the Boards under this section.

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

Installation Manager

197. (1) Every holder of an authorization issued under paragraph 106(1)(b) with respect to a work or activity for which a prescribed installation is to be used must put in command of the installation a manager who meets the prescribed qualifications. The installation manager is responsible for the safety of the installation and the persons at it.

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

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

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

(c) obtain any information or documents.

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

Offences and Penalties

198. (1) Every person is guilty of an offence who

(a) contravenes any provision of this Part or the regulations made under it;

(b) makes any false entry or statement in any report, record or other document that is required by this Part or the regulations made under it, or by any order made under this Part or those regulations;

(c) destroys, mutilates or falsifies any report, record or other document that is required by this Part or the regulations made under it or by any order made under this Part or those regulations;

(d) produces any petroleum from a pool or field under the terms of a unit agreement, as defined in Division 3, or any amended unit agreement, before a copy of the unit agreement or amended unit agreement is filed with the Chief Conservation Officer;

(e) undertakes or carries on a work or activity without an authorization under paragraph 106(1)(b) or without complying with the approvals or requirements, determined by the Boards in accordance with the provisions of this Part or granted or prescribed by regulations made under this Part, of such an authorization; or

(f) fails to comply with a direction, requirement or order of a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer or with an order of an installation manager or the Committee or with an order of the Boards made under this Part.

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

(a) on summary conviction to a fine of not more than $300,000 or to imprisonment for a term of not more than 18 months, or to both; or

(b) on conviction on indictment to a fine of not more than $6,000,000 or to imprisonment for a term of not more than four years, or to both.

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

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

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

(4) The aggravating factors are the following:

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

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

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

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

(e) except in the case of an offence referred to in paragraph (1)(a) that is in respect of the contravention of subsection 93(2) or of paragraph 136(1)(b) or the case of the offence of falsifying referred to in paragraph (1)(c), the offender committed the offence intentionally or recklessly;

(f) the offender knowingly failed to take reasonable steps to prevent the commission of the offence despite having the financial means to do so;

(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 noncompliance with federal or provincial legislation that relates to safety or environmental conservation or protection; and

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

(i) attempted to conceal its commission,

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

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

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

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

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

(8) In a prosecution of a person for an offence under this Part, other than an offence referred to in paragraph (1)(a) that is in respect of the contravention of subsection 93(2) or of paragraph 136(1)(b) and other than the offence of falsifying referred to in paragraph (1)(c), it is a defence for the person to prove that they exercised all due diligence to prevent the commission of the offence.

(9) A prosecution for the offence of waste may be instituted for that offence only with leave of the Boards. For the purpose of paragraph (1)(a), no person commits an offence by reason of committing waste as defined in paragraph 149(2)(f) or (g) unless that person has been ordered by the Boards to take measures to prevent the waste and has failed to comply.

199. (1) If a corporation commits an offence under this Part, any of the following individuals who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted:

(a) an officer, director or agent or mandatary of the corporation; and

(b) any other individual exercising managerial or supervisory functions in the corporation.

(2) In a prosecution for an offence under this Part, it is sufficient proof of the offence to establish that it was committed by an employee or an agent or mandatary of the accused, whether or not the employee or the agent or mandatary is identified or has been prosecuted for the offence.

200. If an individual is convicted of an offence under this Part on proceedings by way of summary conviction, no imprisonment may be imposed in default of payment of any fine imposed as punishment.

201. (1) If a person is found guilty of an offence under this Part, 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 Part, 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 Boards 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 Boards;

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

(f) directing the offender to pay to the Boards an amount of money that the court considers appropriate for the purpose of conducting research, education and training in matters related to the protection of the environment, conservation of petroleum resources or safety of petroleum operations;

(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;

(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 Part; and

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

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

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

(4) If the Boards incur publication costs under subsection (3), the costs constitute a debt due to the Boards and may be recovered in any court of competent jurisdiction.

202. (1) Subject to subsection (2), if a court has made, in relation to an offender, an order under subsection 201(1), the court may, on application by the offender or the Boards, require the offender to appear before it and, after hearing the offender and the Boards, vary the order in one or any combination 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 prohibition, direction, requirement or condition that is specified in the order, either absolutely or partially or for any period.

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

203. If an application made under subsection 202(1) in relation to an offender has been heard by a court, no other application may be made under section 202 in relation to the offender except with leave of the court.

204. If a person is convicted of an offence under this Part and a fine that is imposed is not paid when required or if a court orders an offender to pay an amount under subsection 201(1) or 202(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 the Superior Court of Quebec, 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.

205. If a person is guilty of an offence under this Part, a court may, in addition to any other penalty it may impose, order that person to comply with the provisions for the contravention of which that person has been convicted.

206. If an offence under this Part is committed on more than one day or is continued for more than one day, the person who committed it is liable to be convicted for a separate offence for each day on which it is committed or continued.

207. Proceedings by way of summary conviction in respect of an offence under this Part may be instituted at any time within five years after the day on which the subject matter of the proceedings arose.

208. In any prosecution for an offence under this Part, a copy of any order or other document purporting to have been made under this Part and purporting to have been signed by the person authorized under this Part to make that order or document is, in the absence of any evidence to the contrary, proof of the matters set out in the order or document.

209. No proceedings in relation to an offence under this Part are to be instituted except by or with the consent of the Attorney General of Canada or the Attorney General of Quebec.

210. (1) Even if a prosecution has been instituted in respect of an offence under this Part, the Ministers may commence and maintain an action to enjoin the committing of any such offence.

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

211. In any proceedings in respect of an offence under this Part, an information may include more than one offence committed by the same person and all those offences may be tried concurrently and one conviction for any or all those offences may be made.