Bill C-74

2nd Session, 41st Parliament,

62-63-64 Elizabeth II, 2013-2014-2015

house of commons of canada

BILL C-74

An Act to implement the accord between the Government of Canada and the Government of Quebec for the joint management of petroleum resources in the Gulf of St. Lawrence and to make consequential amendments to other Acts

Recognizing that the Government of Canada and the Government of Quebec have entered into an agreement for the joint management of petroleum resources in the Gulf of St. Lawrence and have agreed to implement it by means of the passage of legislation in the Parliament of Canada and the National Assembly of Quebec;

Recognizing that the Government of Canada and the Government of Quebec have agreed to establish, as soon as feasible, a transitional scheme for the joint management of those resources by means of that legislation until an independent joint board is established;

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

SHORT TITLE

1. This Act may be cited as the Canada–Quebec Gulf of St. Lawrence Petroleum Resources Accord Implementation Act.

INTERPRETATION AND PURPOSE

2. The following definitions apply in this Act.

“Board” means the National Energy Board established by section 3 of the National Energy Board Act.

“Boards” means the National Energy Board and the Quebec Energy Board.

“Committee” means the Oil and Gas Committee established under section 26.

“Federal Minister” means the Minister of Natural Resources.

“field” means a general submarine surface area that is or appears to be underlain by one or more pools and includes the subsurface regions vertically beneath such an area.

“gas” means natural gas and includes all substances, other than oil, that are produced in association with natural gas.

“interest” means any exploration licence, significant discovery licence or production licence.

“joint management area” or “petroleum resources joint management area” means the submarine areas within the limits described in Schedule 1.

“Ministers” means the Federal Minister and the Provincial Minister.

“oil” means

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

(b) any other hydrocarbons, except coal and gas, and, without limiting the generality of the foregoing, hydrocarbons that may be extracted or recovered from deposits of oil sand, bitumen, bituminous sand, oil shale or from any other types of deposits on the seabed or its subsoil of the joint management area.

“petroleum” means oil or gas.

“pool” means a natural underground reservoir containing or appearing to contain an accumulation of petroleum that is or appears to be separated from any other such accumulation.

“prescribed” means prescribed by regulations made by the Governor in Council.

“Provincial Minister” means the minister of the Government of Quebec who is responsible for the management of natural resources.

“Quebec Energy Board” means the Régie de l’énergie established by section 4 of An Act respecting the Régie de l’énergie, CQLR, c. R-6.01.

“spill-treating agent” means, except in section 159, a spill-treating agent that appears both

(a) on the list established under section 143.1; and

(b) on a list established by order made under the Environment Quality Act, CQLR, c. Q-2.

3. For greater certainty, the provisions of this Act must not be interpreted as providing a basis for any claim by or on behalf of the government of a province in respect of any right in or legislative jurisdiction over the joint management area or any living or non-living resources of the joint management area.

4. (1) In case of any inconsistency or conflict between the provisions of this Act or any regulations made under it and the provisions of any other Act of Parliament that deals primarily with the management of petroleum resources in the joint management area, including the exploration for, development and transportation by pipeline, as defined in section 99, of those resources, or of any regulations made under such an Act, the provisions of this Act and the regulations made under it take precedence.

(2) For greater certainty, the provisions of this Act are not inconsistent or in conflict with the provisions of any other Act of Parliament that implements an agreement between the Government of Canada and the government of a province for the joint management of petroleum resources.

5. The purpose of this Act is to regulate the development of petroleum in the joint management area by promoting, among other things, transparency, the sustainable management of resources and best practices to ensure personal safety and environmental protection while maximizing social and economic benefits.

PRESCRIBING THE LIMITS OF THE JOINT MANAGEMENT AREA

6. (1) Subject to subsection 7(1), the Governor in Council may make regulations amending the description of the limits of the joint management area set out in Schedule 1.

(2) The Ministers may approve or issue charts setting out the limits or a portion of the limits of the joint management area.

(3) In any legal or other proceedings, a chart purporting to be approved or issued by or under the authority of the Ministers is conclusive proof of the limits or a portion of the limits of the joint management area set out in the chart without proof of the signature or official character of the person purporting to have approved or issued the chart.

PRIOR APPROVAL FOR REGULATIONS

7. (1) Subject to subsections 16(2) and 234(3), the Federal Minister must consult the Provincial Minister with respect to any regulation proposed to be made under this Act. No regulation is to be made without the Provincial Minister’s approval.

(2) The Federal Minister must, before a regulation is made under subsection 142(2) or 145(8), also consult the minister of the Government of Quebec who is responsible for occupational health and safety with respect to the proposed regulation and no regulation is to be so made without the approval of that minister.

COST RECOVERY

8. (1) Subject to subsection 7(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 Board or the Federal Minister of a service or a 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 Board’s or the Federal Minister’s activities under this Act or under the Canadian Environmental Assessment Act, 2012, to be paid by

(i) a person who makes an application for an authorization under paragraph 106(1)(b) or an application under subsection 113(2), or

(ii) the holder of an operating licence issued under paragraph 106(1)(a) or an authorization issued under paragraph 106(1)(b); and

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

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

(3) The amounts of the fees or charges referred to in paragraph (1)(b) must not exceed the cost of performing the activities under this Act or under the Canadian Environmental Assessment Act, 2012.

9. The User Fees Act does not apply in respect of any fees or charges payable in accordance with regulations made under section 8.

10. The amounts obtained in accordance with regulations made under section 8 must be paid to the credit of the Receiver General in the prescribed time and manner.

APPLICATION

11. (1) This Act applies within the joint management area. It also applies beyond the joint management area with respect to the transportation of petroleum by pipeline to the extent provided for in the definition of “pipeline” in section 99.

(2) For greater certainty, unless the context requires otherwise, any reference to the joint management area in a provision is to be read as a reference to any area beyond the joint management area to which this Act applies.

(3) Subject to section 117, the provisions of the Canada Petroleum Resources Act and the provisions of the Canada Oil and Gas Operations Act other than sections 5.4 and 5.5, do not apply within the joint management area.

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

AMENDMENT OF ACCORD

13. The Government of Canada may jointly with the Government of Quebec amend the accord between the Government of Canada and the Government of Quebec for the joint management of petroleum resources in the Gulf of St. Lawrence, signed on March 24, 2011.

DISPUTE RESOLUTION

14. (1) In this section “agreement” means an agreement between the Government of Canada and the government of a province respecting resource management and revenue sharing resulting from activities in relation to the exploration for or the production of offshore petroleum.

(2) If a dispute between Quebec and any other province that is a party to an agreement arises in relation to the limits of the joint management area, the parties to the dispute are to proceed as follows:

(a) they may try to negotiate a settlement;

(b) if negotiations are unsuccessful, they may agree to settle the dispute by means of mediation; and

(c) if negotiation or mediation is unsuccessful, they may agree to submit the dispute to arbitration according to the conditions to which they jointly agree, and the decision of the arbitrator is final and binding on all parties specified in the decision as of the date specified in it.

(3) If the provinces are unable within a reasonable time to settle the dispute in accord-ance with subsection (2), the dispute is to be submitted to a binding arbitration process in accordance with section 15 on the request of one of the provinces by serving notice on the other provinces that are parties to the dispute and on the Federal Minister.

15. (1) If the dispute is submitted to a binding arbitration process, an arbitration panel must be established. Members of the panel, including the Chairperson, must be neutral and independent of the parties to the dispute.

(2) Within 60 days after the day on which notice is served under subsection 14(3), each province that is a party to the dispute must appoint one member to the panel.

(3) Notice is served if it is sent by registered mail to the recipient and is considered to have been served on the day on which it was mailed.

(4) Subject to subsection (5), the Governor in Council must appoint a Chairperson to the panel from a list of candidates agreed on by the provinces that are parties to the dispute. If the provinces do not provide a list of candidates within 60 days after the day on which notice is served, the Governor in Council must appoint the Chairperson after consultation with the provinces that are parties to the dispute.

(5) The Chairperson is a member of the panel and must be proficient in matters relating to maritime boundary delimitation. The Chairperson must not be a resident of a province that is a party to the dispute.

(6) If a province that is a party to the dispute fails to appoint a member in accordance with subsection (2), the Chairperson must make the appointment.

(7) The panel must control the discharge of its responsibilities and the conduct of its affairs, including its arbitration procedures.

(8) The panel’s decisions must be made on the basis of a majority vote of its members. The Chairperson’s vote is the deciding vote in the case of a tie.

(9) The panel must apply the principles of international law governing maritime boundary delimitation, with any modifications that the circumstances require.

(10) A decision made by the panel is final and binding on all parties specified in the decision as of the date specified in it.

16. (1) If a dispute is settled by means of negotiation, mediation or arbitration under section 14 or 15, the Governor in Council must, by regulation, amend the description of the limits of the joint management area set out in Schedule 1 in accordance with the settlement.

(2) The regulation referred to in subsection (1) is not subject to the procedure set out in subsection 7(1).

(3) For greater certainty, any settlement pertains only to the limits of the joint management area and is without prejudice to the constitutional positions of the parties and the Government of Canada.

DECISION-MAKING PROCEDURES AND ADMINISTRATIVE COORDINATION

17. (1) The decisions that are to be made under this Act by the Ministers must be made jointly.

(2) Any document, including an interest or order, that is issued as a result of a decision made jointly by the Ministers is to be issued as a joint document.

(3) The Ministers may conclude with each other or with the appropriate departments and agencies of the Government of Canada and of the Government of Quebec agreements or memoranda of understanding about any matter that they consider appropriate, including joint decision-making.

(4) The Ministers may together or individually delegate any of their powers, duties or functions under this Act to any person, and those powers, duties and functions are to be exercised or performed in accordance with the terms of the delegation.

(5) The Ministers may establish one or more advisory councils, and fix their terms of reference, for the purpose of advising the Ministers about any matter relating to the application of this Act.

18. (1) The Boards must jointly exercise the powers and perform the duties and functions that are attributed to them under this Act.

(2) The Boards must take the necessary measures to coordinate the exercise of their powers and the performance of their duties and functions as well as any activities that flow from the application of this Act by encouraging consultation and collaboration with each other to avoid duplication of work and activities and to establish shared services.

(3) For the purposes of subsection (2), the Boards must conclude with each other an agreement or memorandum of understanding establishing their operational rules, including rules in respect of the procedural framework and the manner of collaboration. The agreement or memorandum of understanding must be made public.

(4) The Boards may, to ensure effective coordination and avoid duplication of work and activities, conclude with each other or with the appropriate departments and agencies of the Government of Canada and of the Government of Quebec — together or individually — agreements or memoranda of understanding about

(a) environmental assessment and regulation;

(b) emergency measures;

(c) marine regulation including the safety and security of navigation;

(d) aviation regulation;

(e) employment and industrial benefits and the review and evaluation procedures to be followed in relation to those benefits;

(f) occupational health and safety;

(g) public hearings; and

(h) any other matters that they consider appropriate.

(5) Any agreement or memorandum of understanding concluded between the Boards, or any amendment to it, must be approved by the Ministers. The Ministers must be parties to any agreement or memorandum of understanding concluded in relation to a matter referred to in paragraph (4)(e).

(6) Subject to subsections 54(13), 61(4), 106(8) and 113(7), the Boards may delegate any of their powers, duties and functions under this Act to each other or to any of their members, officers or employees, and those powers, duties and functions must be exercised or performed in accordance with the terms of the delegation. The delegation may be of general or specific application.

19. (1) If the Boards are authorized to make a decision under this Act, the decision must be made jointly and in accordance with the decision-making process set out in this section.

(2) For the purpose of making a joint decision and subject to section 107, the Boards must, within 12 months after the day on which an applicant has, in the Boards’ opinion, provided a complete application, render individ-ual decisions and communicate them to each other. The individual decisions are of no force or effect and must remain confidential.

(3) Once both of the individual decisions have been communicated, the Boards must, while respecting those decisions, make a joint decision.

(4) The Boards must ensure that their joint decision includes any terms that are, in their opinion, necessary to ensure respect for their individual decisions.

(5) Despite subsections (2) and (3), any decision made under a delegated power between the Boards is deemed to be a joint decision of the Boards.

(6) Any joint decision is to be issued by the Boards as a joint document to the person concerned within three months after the day on which the time period in subsection (2) expires. The decision is final.

(7) A joint decision is deemed, for the purposes of judicial review, to be a decision of the Quebec Energy Board.

(8) Neither the Board nor the Quebec Energy Board is a federal board, commission or other tribunal as defined in subsection 2(1) of the Federal Courts Act when they make a joint decision under this section.

20. (1) The Boards may, on their own initiative or on application, amend or rescind any joint decision of the Boards.

(2) Before amending or rescinding a joint decision, the Boards must allow the person concerned to make representations.

(3) The person responsible for making a decision under a delegated power between the Boards may, if new facts warrant it, amend that decision.

(4) This section does not apply to decisions made under sections 54, 61, 106 and 113.

21. (1) Any notice, licence, authorization, order, declaration or other document that is given, issued or made following a joint decision by the Boards, must be given, issued or made as a joint document.

(2) Any notice, licence, authorization, order, declaration or other document that must be sent to the Boards under this Act must be sent to the Quebec Energy Board’s head office or any other place specified by the Boards in a public notice.

PUBLIC HEARINGS

22. The Boards may conduct a public hearing in relation to the exercise of any of their powers or the performance of any of their duties and functions under this Act.

23. At any public hearing conducted under section 22 or in any proceedings with respect to Division 1 of Part 2, the Boards may take any measures and make any order that they consider necessary to ensure the confidentiality of any information that is likely to be disclosed at the hearing or in the proceedings if they are satisfied that

(a) the disclosure of the information could reasonably be expected to result in a material loss or gain to a person who is 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 Boards 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.

24. At any public hearing conducted under section 22 or in respect of an order, or in any proceedings with respect to Division 1 of Part 2, the Boards may take any measures and make any order that they consider 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 they are satisfied that

(a) there is a real and substantial risk that disclosure of the information will impair the security of pipelines, as defined in section 99, installations, vessels, 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.

25. The Boards must not take any measures or make any order under section 23 or 24 in respect of information or documentation referred to in paragraphs 93(5)(a) to (e) and (i).

OIL AND GAS COMMITTEE

Constitution and Function

26. (1) The Ministers may establish a committee to be known as the Oil and Gas Committee.

(2) The Committee must submit to the Ministers its report or recommendation on any question, matter or thing arising under Part 2 or relating to the conservation, production, storage, processing or transportation of petroleum that the Ministers refer to the Committee.

(3) On the request of the Ministers, the Committee must hold hearings in respect of any request that may be made by a person directly affected by a proposed drilling order, development order or order for the cancellation of interests, and submit to the Ministers its recommendations concerning the proposed order. The Committee must also hold hearings and exercise its powers under Part 2 with respect to pooling agreements, unit agreements and unit operating agreements.

27. (1) The Committee must consist of not more than five members, not more than three of whom may be employees in the federal public administration or the public service of Quebec.

(2) The members of the Committee must be appointed by the Ministers to hold office for a term of three years, and one member is to be designated as Chairperson for the term that is fixed by the Ministers.

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

28. (1) The Ministers must appoint as members of the Committee at least two persons who have specialized or expert knowledge of petroleum.

(2) Persons employed or who hold office in any division, branch or bureau of the departments that are presided over by either of the Ministers and that is designated as the division, branch or bureau charged with the day-to-day administration and management of oil and gas resources for the department, are not eligible to be members of the Committee, but the Ministers may designate an employee or officer from any such division, branch or bureau to act as secretary to the Committee.

(3) A member of the Committee must not have a pecuniary interest of any description, directly or indirectly, in any property in petroleum to which this Act applies or own shares in any company engaged in any phase of the petroleum industry in Canada in an amount in excess of 5 % of the company’s issued shares and a member who owns any shares of such a company must not vote or participate in any work of the Committee when a question affecting that company is before the Committee.

(4) The Ministers must provide the Committee with any officers, clerks and employees that may be necessary for the proper conduct of its affairs, and may provide the Committee with any professional or technical assistance for temporary periods or for specific work that it may request, but no such assistance is to be provided otherwise than from the staff of the federal public administration or the public service of Quebec except with the approval of the Ministers.

(5) The members of the Committee who are not employees of the federal public administration or the public service of Quebec are to be paid any remuneration that is authorized by the Ministers.

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

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

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

Inquiries and Hearings

30. (1) The Committee may conduct any inquiry or hold any hearing necessary or proper for the due exercise of its powers under this Act and for that purpose it has all of the powers, rights and privileges that are vested in a superior court of record, other than the power to make a finding of, and impose a punishment for, contempt of court. The Committee 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.

(2) If the Committee is charged with a duty to conduct an inquiry or hold a hearing, it has full jurisdiction to inquire into, hear and decide the matter that is the subject of that inquiry or hearing and to make any order, or give any direction that under this Act it is authorized to make or give or with respect to any matter, act or thing that by this Act may be prohibited or approved by it or required by it to be done.

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

(4) For the purposes of subsection (1), every person who refuses or fails to comply with an order made under subsection (2), or who refuses to answer questions that the Committee has the legal authority to ask or to produce documents or other things that the Committee has the legal authority to request, or who undermines the conduct of any hearing is guilty of contempt of court.

(5) The Committee may direct any of its members to conduct an inquiry into or hold a hearing in respect of any matter before it and to report the evidence and their findings to it. The report may be adopted as a finding of the Committee or otherwise dealt with as the Committee considers advisable.

(6) If an inquiry is conducted by a member under subsection (5), the member has all the powers, rights and privileges of the Committee under subsection (1).

Enforcement

31. (1) The Committee or any interested person may file a true copy of any order made by the Committee in the Superior Court of Quebec, in accordance with the practice and procedure established by or under an Act of the Legislature of Quebec, in order to make it a judgment of that Court for the purpose of its enforcement.

(2) An order that is filed in accordance with subsection (1) has the same force and effect as a judgment that was made by the Superior Court of Quebec.

(3) Any order of the Committee, or of the Ministers under section 185, rescinding or replacing an order of the Committee that is filed in the Superior Court of Quebec under subsection (2), has the effect of cancelling the order so filed and may in like manner be made a judgment of that Court.

REGULATIONS

32. Subject to subsection 7(1), the Governor in Council may make regulations

(a) that may be considered necessary for carrying out the purposes of the provisions of this Act that precede Part 1; and

(b) prescribing anything that, for the purposes of the provisions of this Act that precede Part 1 or the purposes of Schedule 1, is to be prescribed.

PART 1

PETROLEUM RESOURCES

Interpretation

33. The following definitions apply in this Part.

“call for bids” means a call for bids made in accordance with section 41.

“commercial discovery” means a discovery of petroleum that has been demonstrated to contain petroleum reserves that justify the investment of capital and effort to bring the discovery to production.

“commercial discovery area” means, in relation to a declaration of commercial discovery made under subsection 61(1) or (2), those portions of the joint management area described in the declaration.

“Crown reserve area” means portions of the joint management area in respect of which no interest is in force.

“holder” means, in respect of an interest or a share in an interest, the person indicated in the register maintained under Division 7 as the holder of the interest or the share.

“owner” means, in respect of an interest, the holder who holds the interest or the group of holders who hold all the shares in the interest.

“share” means, in respect of an interest, an undivided share in the interest or a share in the interest held in accordance with section 49.

“significant discovery” means a discovery indicated by the first well on a geological feature that demonstrates by flow testing the existence of petroleum in that feature and, having regard to geological and engineering factors, suggests the existence of an accumulation of petroleum that has potential for sustained production.

“significant discovery area” means, in relation to a declaration of significant discovery made under subsection 54(1) or (2), those portions of the joint management area described in the declaration.

Division 1

General

Manner of Giving Notices

34. A notice that is required under this Part must be given in the prescribed manner, in the form and containing the information that is specified by the Ministers.

35. (1) The Ministers may establish the form of any document provided for under this Part and may include a declaration to be signed by the person completing it declaring that the information given by that person is, to the best of that person’s knowledge, true, accurate and complete.

(2) Every document purporting to be a document established by the Ministers is deemed to be established by them under this Part unless it is called into question by either of the Ministers or a person acting for either of them or for the Government of Canada or of Quebec.

(3) The information to be given in an application under subsections 54(1), 56(1), 61(1) and 64(1) is prescribed.

Appointments

36. (1) If an interest owner consists of a group of holders, those holders must, in the prescribed manner, appoint one of their number to act as a representative of the interest owner, but the holders may, with the approval of the Ministers, appoint different representatives for different purposes.

(2) If the holders fail to appoint a represent-ative, the Ministers may designate one of those holders as the representative.

(3) An interest owner is bound by an act or omission on the part of the representative within the scope of the representative’s authority.

(4) The representative must prudently and diligently perform the duties for which he or she has been appointed or designated.

(5) Any agreement or other arrangement in force concerning an interest owner’s relevant interest is varied or amended as required to give effect to subsections (3) and (4).

General Rules Respecting Interests

37. The Ministers may, by order, for any purposes and under any conditions that are set out in the order, prohibit the issuance of interests for any portion of the joint management area that is specified in the order.

38. (1) An interest owner may, in the prescribed manner and subject to any requirements that may be prescribed respecting the minimum geographical area to which an interest may relate, surrender an interest for all or any portion of the joint management area subject to the interest.

(2) Any liability of an interest owner or the holder of a share in an interest to Her Majesty in right of Canada that exists at the time of any surrender under subsection (1) is not affected by the surrender.

39. (1) The Ministers may, by order, prohibit any interest owner specified in the order from commencing or continuing any work or activity in the joint management area or any portion of it that is subject to the interest of that owner if there exists

(a) an environmental or social problem of a serious nature; or

(b) dangerous or extreme weather conditions affecting the health or safety of persons or the safety of equipment.

(2) Any requirement in relation to an interest that cannot be complied with while an order under subsection (1) is in force is suspended until the order is revoked by the Ministers.

(3) Despite anything in this Act, the term of an interest that is subject to an order under subsection (1) and the period provided for compliance with any requirement in relation to the interest are extended for a period equal to the period that the order is in force.

(4) Nothing in this section affects the authority of the Ministers to relieve a person from any requirement in relation to an interest or under this Part.

Division 2

General Rules Relating to the Issuance of Interests

General Authority

40. (1) The Ministers may issue interests for any portion of the joint management area in accordance with this Part and the regulations made under it.

(2) The application of an interest may be restricted to any geological formations and substances that are specified in the interest.

Interests in Relation to Crown Reserve Areas

41. (1) Subject to section 44, the Ministers must not issue an interest in relation to Crown reserve areas unless

(a) before issuing it, the Ministers have made a call for bids in relation to those Crown reserve areas by publishing a notice in accordance with this section and section 46; and

(b) the interest is issued to the person who submitted, in response to the call, the bid selected by the Ministers in accordance with subsection 42(1).

(2) Any request received by the Ministers to make a call for bids for particular portions of the joint management area must be considered by the Ministers in selecting the portions of the joint management area to be specified in the call for bids.

(3) A call for bids must specify

(a) the interest to be issued and the portions of the joint management area to which the interest is to apply;

(b) if applicable, the geological formations and substances to which the interest is to apply;

(c) the other terms subject to which the interest is to be issued;

(d) any terms that a bid must satisfy to be considered by the Ministers;

(e) the form and manner in which a bid is to be submitted;

(f) the closing date and time for the submission of bids; and

(g) the sole criterion that the Ministers will apply in assessing bids.

(4) Unless otherwise prescribed, a call for bids must be published at least 120 days before the last day on which bids may be submitted as specified in the call for bids.

42. (1) A bid submitted in response to a call for bids must not be selected unless

(a) the bid satisfies the terms and is submitted in the form and manner specified in the call for bids; and

(b) the selection is made on the basis of the criterion specified in the call for bids.

(2) The Ministers must publish a notice in accordance with section 46 setting out the terms of the bid selected.

(3) If an interest is to be issued as a result of a call for bids, the terms of the interest must be substantially consistent with any terms specified in the call for bids in respect of that interest.

(4) The Ministers must publish a notice in accordance with section 46 setting out the terms of any interest issued as a result of a call for bids as soon as feasible after issuing it.

43. (1) The Ministers are not required to issue an interest as a result of a call for bids.

(2) Subject to section 44, if the Ministers have not issued an interest for a particular portion of the joint management area specified in a call for bids within six months after the last day on which bids may be submitted, they must, before issuing an interest for that portion of the joint management area, make a new call for bids.

44. (1) The Ministers may issue an interest, for any Crown reserve area, without making a call for bids if

(a) the portion of the joint management area to which the interest is to apply has, through error or inadvertence, become a Crown reserve area and the interest owner who last held an interest for that portion has, within one year after the time it so became a Crown reserve area, requested the Ministers to issue an interest; or

(b) they are issuing the interest to an interest owner in exchange for the surrender by the interest owner, at the Ministers’ request, of any other interest or a share in any other interest, for all or any portion of the joint management area subject to that other interest.

(2) If the Ministers propose to issue an interest under subsection (1), they must, not later than 90 days before the day on which they issue the interest, publish a notice in accordance with section 46 setting out the terms of the proposed interest.

45. If an interest has been issued, it is not vitiated by reason only of a failure to comply with any of the requirements set out in sections 41 to 44 respecting the form and content of, and time and manner of publishing, any notice required by those sections in relation to that interest.

46. Any notice that is required to be published by the Ministers under subsection 41(1), 42(2) or (4), 44(2) or 51(2) must be published in the Canada Gazette and in any other publication they consider appropriate and, despite those subsections, may contain only a summary of the information required to be published and a statement that the full text is available for inspection by any person on request made to them.

47. The Governor in Council may, for the purpose of section 41 and subject to subsection 7(1), make regulations of general application in relation to all or any portion of the joint management area, or in respect of any particular call for bids, prescribing the terms and sole criterion to be specified in a call for bids, the manner in which bids are to be submitted and requiring that those terms and that criterion and manner be specified in the call.

Division 3

Exploration

Exploration Licences

48. An exploration licence confers, with respect to the portions of the joint management area to which the licence applies,

(a) the right to explore, and the exclusive right to drill and test, for petroleum;

(b) the exclusive right to develop those portions of the joint management area in order to produce petroleum; and

(c) the exclusive right, subject to compliance with the other provisions of this Act, to obtain a production licence.

49. A share in an exploration licence may, subject to any requirements that may be prescribed, be held with respect only to a portion of the joint management area that is subject to the licence.

50. An exploration licence must contain the terms that are prescribed and may contain any other terms, which are not inconsistent with this Part, that are agreed on by the Ministers and the owner of the licence.

51. (1) The Ministers may, in agreement with the owner of an exploration licence, amend any provision of the licence in any manner not inconsistent with the provisions of this Part or the regulations made under it and may also, subject to subsection (2), amend the licence to include any other portion of the joint management area.

(2) The Ministers must not amend an exploration licence to include any portion of the joint management area that was a Crown reserve area unless the Ministers would be able to issue an interest to that interest owner for that area under subsection 44(1) and a notice has been published in accordance with section 46 not later than 90 days before the day on which they make the amendment. The notice must set out the terms of the amendment.

(3) The Ministers may, on the application of the interest owners of two or more exploration licences, consolidate those licences into a single exploration licence, subject to any terms that may be agreed on by the Ministers and interest owners.

52. (1) An exploration licence takes effect on the date that is specified in the licence.

(2) Subject to section 53, the term of an exploration licence must not be greater than nine years from the day on which the licence takes effect and the term must not be renewed.

(3) On the expiry of an exploration licence, the portions of the joint management area to which the exploration licence related that are not subject to a production licence or a significant discovery licence become Crown reserve areas.

53. (1) An exploration licence that is set to expire during the drilling of a well continues to be in force while the drilling of that well is being pursued diligently and for so long after that as may be necessary to determine the existence of a significant discovery based on the results of that well.

(2) If the drilling of that well is suspended because of dangerous or extreme weather conditions or mechanical or other technical problems, the drilling is deemed to have been pursued diligently during the period of suspension.

(3) If the drilling of that well cannot be completed because of mechanical or other technical problems and if, within 90 days after the day on which drilling operations for that well cease, or any longer period that the Ministers decide, the drilling of another well is begun on any portion of the joint management area that was subject to the exploration licence, the drilling of that other well is deemed to have begun before the expiry of the exploration licence.

Significant Discoveries

54. (1) If a significant discovery has been made on any portion of the joint management area that is subject to an interest or a share in an interest held in accordance with section 49, the Boards must, on the holder’s application made in the prescribed manner, make a written declaration of significant discovery for those portions of the joint management area in respect of which there are reasonable grounds to believe that the significant discovery may extend.

(2) If a significant discovery has been made on any portion of the joint management area, the Boards may, on their own initiative, make a written declaration of significant discovery for those portions of the joint management area in respect of which there are reasonable grounds to believe the significant discovery may extend.

(3) A declaration made under subsection (1) or (2) must describe the portions of the joint management area to which the declaration applies.

(4) Subject to subsection (5), if a declaration is made under subsection (1) or (2) and, based on the results of further drilling, there are reasonable grounds to believe that a discovery is not a significant discovery or that the portions of the joint management area to which the significant discovery extends differ from the significant discovery area, the Boards may, as appropriate in the circumstances,

(a) amend the declaration by increasing or decreasing the significant discovery area; or

(b) revoke the declaration.

(5) A declaration of significant discovery must not be amended to decrease the significant discovery area or be revoked earlier than

(a) in the case of a significant discovery area that is subject to a significant discovery licence issued under subsection 56(1), the day on which the exploration licence referred to in that subsection expires; and

(b) in the case of a significant discovery area that is subject to a significant discovery licence issued under subsection 56(2), three years after the day on which the significant discovery licence takes effect.

(6) A copy of a declaration of significant discovery and of any amendment or revocation of the declaration made under this section for any portion of the joint management area subject to an interest must be sent by registered mail to the interest owner.

(7) At least 30 days before making a decision to which this section applies, the Boards must give written notice of their intention to make the decision to any person that the Boards consider to be directly affected by the decision.

(8) A person to whom notice is given may, in writing, request a hearing in respect of the decision, but the request must be received by the Boards within 30 days after day on which the notice is given.

(9) If no request is received under subsection (8), the Boards may make the decision.

(10) If a request is received under subsection (8), the Boards must fix a suitable time and place for the hearing and notify each person who requested the hearing.

(11) Each person who requests a hearing may make representations and introduce witnesses and documents at the hearing.

(12) At or after the conclusion of the hearing, the Boards must make the decision, give notice of it to each person who requested the hearing and, if the person requests reasons, publish or make available the reasons for the decision.

(13) The Boards may each delegate any of their powers, duties and functions under this section to any of their members, officers or employees, and those powers, duties and functions must be exercised or performed in accordance with the terms of the delegation.

Significant Discovery Licences

55. A significant discovery licence confers, with respect to the portions of the joint management area to which the licence applies,

(a) the right to explore, and the exclusive right to drill and test, for petroleum;

(b) the exclusive right to develop those portions of the joint management area in order to produce petroleum; and

(c) the exclusive right, subject to compliance with the other provisions of this Act, to obtain a production licence.

56. (1) If a declaration of significant discovery is in force and all or a portion of the significant discovery area is subject to an exploration licence or a share in it held in accordance with section 49, the Ministers must, on the holder’s application made in the prescribed manner, issue to the interest holder a significant discovery licence for all portions of the significant discovery area that are subject to the exploration licence or the share.

(2) If a declaration of significant discovery is in force and the significant discovery area extends to a Crown reserve area, the Ministers may, after making a call for bids for all or any portion of that Crown reserve area and selecting a bid that was submitted in response to the call for bids in accordance with subsection 42(1), issue a significant discovery licence to the person who submitted that bid.

(3) A significant discovery licence may contain any other terms, not inconsistent with the provisions of this Part or the regulations made under it, that may be agreed on by the Ministers and the interest owner.

57. (1) If a significant discovery area in relation to a declaration of significant discovery is decreased as the result of an amendment made under subsection 54(4), any significant discovery licence that was issued on the basis of that declaration must be amended to decrease the portions of the joint management area subject to the licence accordingly.

(2) If a significant discovery area in relation to a declaration of significant discovery is increased as a result of an amendment made under subsection 54(4), any significant discovery licence that was issued on the basis of that declaration must be amended to include all portions of that amended significant discovery area.

58. (1) On the day on which a significant discovery licence for a significant discovery area is issued under subsection 56(1), any exploration licence issued for that area ceases to have effect.

(2) A significant discovery licence takes effect on the day on which the application for the licence was submitted.

(3) Subject to subsection 68(1), a significant discovery licence continues to be in force for each portion of the joint management area to which the licence applies during the period that the relevant declaration of significant discovery remains in force.

(4) On the day on which a significant discovery licence expires, any portion of the joint management area to which the significant discovery licence relates and that is not subject to a production licence becomes a Crown reserve area.

Drilling Orders

59. (1) Subject to subsections (2) to (4) and if a declaration of significant discovery has been made, the Ministers may, by order subject to section 96, require the owner of an 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 are set out in the order, and to begin the drilling within one year after the day on which the order is made or within any longer period that the Ministers specify in the order.

(2) A drilling order must not be made under subsection (1) with respect to any interest owner who has completed a well on the relevant portion of the significant discovery area within six months after the completing of that well.

(3) A drilling order must not be made within three years after the termination date of the well indicating the relevant significant discovery.

(4) A drilling order must not require an interest owner to drill more than one well at a time on the relevant portion of the significant discovery area.

(5) For the purposes of subsection (3), “termination date” means the day on which a well has been abandoned, completed or suspended in accordance with any applicable drilling regulations made under Part 2.

60. (1) The Ministers may, despite section 93, provide information or documentation relating to a significant discovery to any interest owner who requires it to assist that owner in complying with a drilling order. The Ministers may ask or direct the Boards to provide that information or documentation to that owner.

(2) An interest owner must not disclose any information or documentation provided to them under subsection (1) except if necessary to comply with a drilling order.

Division 4

Production

Commercial Discoveries

61. (1) If a commercial discovery has been made on any portion of the joint management area that is subject to an interest or a share in an interest held in accordance with section 49, the Boards must, on the holder’s application made in the prescribed manner, make a written declaration of commercial discovery for those portions of the joint management area in respect of which there are reasonable grounds to believe that the commercial discovery may extend.

(2) If a commercial discovery has been made on any portion of the joint management area, the Boards may, on their own initiative, make a written declaration of commercial discovery in relation to those portions of the joint management area in respect of which there are reasonable grounds to believe that the commercial discovery may extend.

(3) Subsections 54(3), (4) and (6) to (12) apply, with any modifications that the circumstances require, with respect to a declaration made under this section.

(4) The Boards may each delegate any of their powers under this section to any of their members, officers or employees and those powers must be exercised in accordance with the terms of the delegation.

Development Orders

62. (1) If a declaration of commercial discovery has been made, the Ministers may give notice to the owner of any interest in any portion of the commercial discovery area where commercial production of petroleum has not begun that, after any period of not less than six months that is specified in the notice, they intend to issue an order reducing the term of that interest.

(2) During the period specified in the notice under subsection (1), the Ministers must provide a reasonable opportunity for the interest owner to make submissions in relation to the order.

(3) Despite anything in this Act, if the Ministers are of the opinion that it is in the public interest, they may, at any time within six months after the day on which the period specified in the notice under subsection (1) ends, by order subject to section 96, reduce the term of the interest to a period of three years, or any longer period that may be specified in the order, beginning on the day on which the order is made.

(4) Despite anything in this Act, but subject to subsections (5) and (6), any interest that is the subject of an order made under subsection (3) ceases to have effect at the end of the period specified in the order.

(5) If commercial production of petroleum in any portion of the joint management area to which the interest that is the subject of an order under subsection (3) relates begins before the day on which the period specified in that order or the period extended under subsection (6) ends, the order ceases to have effect and is considered to have been vacated.

(6) The Ministers may extend the period specified in an order made under subsection (3) or may revoke the order.

Production Licences

63. (1) A production licence confers, with respect to the portions of the joint management area to which the licence applies,

(a) the right to explore and the exclusive right to drill and test for petroleum;

(b) the exclusive right to develop those portions of the joint management area in order to produce petroleum;

(c) the exclusive right to produce petroleum from those portions of the joint management area; and

(d) the title to the petroleum so produced.

(2) Despite subsection (1), the Ministers may, subject to any terms that they consider appropriate, authorize any holder of an interest or a share in an interest to produce petroleum on the portions of the joint management area that are subject to the interest or share for use in the exploration or drilling for or development of petroleum in any portion of the joint management area.

64. (1) The Ministers, on application made in the prescribed manner,

(a) must issue a production licence to one interest owner, in respect of any one commercial discovery area or portion of it that is subject to an exploration licence or a significant discovery licence held by that interest owner; and

(b) may, subject to any terms that may be agreed on by the Ministers and the relevant interest owners, issue a production licence to

(i) one interest owner, in respect of two or more commercial discovery areas or portions of them that are subject to an exploration licence or a significant discovery licence held by that interest owner, or

(ii) two or more interest owners, in respect of one or more commercial discovery areas or portions of them that are subject to an exploration licence or a significant discovery licence held by any of those interest owners.

(2) If a declaration of commercial discovery is in force and the commercial discovery area extends to a Crown reserve area, the Ministers may, after making a call for bids for all or any portion of that Crown reserve area and selecting a bid that was submitted in response to the call for bids in accordance with subsection 42(1), issue a production licence to the person who submitted that bid.

(3) A production licence may contain any terms, not inconsistent with the provisions of this Part or the regulations made under it, that may be agreed on by the Ministers and the interest owner.

65. The Ministers may, on the application of the interest owners of two or more production licences, consolidate any of those production licences into a single production licence, on any terms that may be agreed on by the Ministers and those interest owners.

66. (1) If a commercial discovery area in relation to a declaration of commercial discovery is decreased as the result of an amendment made under subsections 54(4) and 61(3), any production licence that was issued on the basis of that declaration must be amended to decrease the portions of the joint management area subject to the licence accordingly.

(2) If a commercial discovery area in relation to a declaration of commercial discovery is increased as the result of an amendment made under subsections 54(4) and 61(3), any production licence that was issued on the basis of that declaration must be amended to include all portions of that amended commercial discovery area subject to an exploration licence or a significant discovery licence held by the production licence owner.

67. (1) A production licence takes effect on the day on which it is issued and must be issued for a term of 25 years.

(2) If a declaration of commercial discovery on the basis of which a production licence was issued is, under subsections 54(4) and 61(3), revoked or amended to exclude all portions of the commercial discovery area for which the production licence was issued, the production licence ceases to be in force.

(3) If petroleum is being produced commercially on the day on which the production licence expires, the term is extended for any period during which the commercial production continues.

(4) The Ministers may, by order, on any terms that they may specify, extend the term of a production licence if

(a) commercial production of petroleum from the portions of the joint management area that are subject to the licence ceases before or on the day on which the production licence’s 25-year term expires and the Ministers have reasonable grounds to believe that commercial production from those portions of the joint management area will restart; or

(b) the Ministers have reasonable grounds to believe that commercial production of petroleum from those portions of the joint management area will, at any time before or after the day on which the licence expires, cease during any period and restart after the period.

68. (1) Any interest in portions of the joint management area that is held before a production licence is issued for those portions ceases to have effect in relation to those portions on the day on which the licence is issued but otherwise continues to have effect.

(2) On the expiry of a production licence, the portions of the joint management area for which the production licence was issued become Crown reserve areas.

Subsurface Storage Licences

69. (1) The Ministers may, subject to any terms that they consider appropriate, issue a licence authorizing the subsurface storage of petroleum or any other substance approved by them in portions of the joint management area at depths greater than 20 metres.

(2) The joint management area must not be used for a purpose referred to in subsection (1) without a licence referred to in that subsection.

Division 5

Royalties

Payment of Royalties

70. (1) Every holder of a share in a production licence, and every person who conducts an extended formation flow test under section 124, is liable for and must pay the royalties under this Division in respect of their share of the production of petroleum in the joint management area and the amount of royalties that the holder or person must pay is to be determined in accordance with the relevant provisions of the Mining Act or the replacement act. The holder and person must also pay the related interest and penalties in default of payment of those royalties as determined in accordance with either of those Acts, as the case may be.

(2) Subject to the provisions of this Act and any regulations made under it, the provisions of the Mining Act or the replacement act that relate to royalties in respect of petroleum, including the remittance, collection or enforcement of those royalties, are incorporated by reference for the purposes of this Division with any modifications that the circumstances require including, in the Mining Act, the following:

(a) a reference to the domain of the State is a reference to the joint management area;

(b) a reference to a lessee under a lease to produce petroleum and natural gas is a reference to a holder of a share in a production licence; and

(c) a reference to the Minister in a provision stating that an amount is to be paid to the Minister is a reference to the Receiver General and, in any other case, is a reference to the Ministers.

(3) All amounts payable under subsection (1) must be remitted to the Receiver General.

(4) The Government of Canada must, without delay, unconditionally remit the amounts referred to in subsection (3) to the Government of Quebec.

(5) There may be paid out of the Consolidated Revenue Fund to the Government of Quebec, on the requisition of the Federal Minister, any amount to be remitted during a fiscal year under subsection (4).

71. (1) Despite anything in this Act, if a person is in default in the payment of any amount payable under subsection 70(1), the Ministers may, for so long as the amount remains unpaid,

(a) refuse to issue to that person any interest for any portion of the joint management area;

(b) refuse to authorize, under Part 2, that person to carry on any work or activity related to the exploration for or the production of petroleum on any portion of the joint management area and suspend any authorization already given; and

(c) exercise the powers under section 92.

(2) A remedy must not be exercised under this section in respect of a default in the payment of an amount before any remedy, including assessment, reassessment, appeal or review, under the Mining Act or the replacement act is exhausted in respect of that default.

72. The Federal Minister may, with the approval of the Governor in Council, enter on behalf of the Government of Canada into an agreement with the Government of Quebec with respect to the collection and administration of the amounts referred to in subsection 70(1) on behalf of the Government of Canada.

73. In sections 70 and 71,

(a) “Mining Act” means the Mining Act, CQLR, c. M-13.1 and the regulations made under it, as amended from time to time; and

(b) “replacement act” means any act of the Legislature of Quebec that replaces the Mining Act, in whole or in part, in respect of the management of petroleum, and the regulations made under that act, as amended from time to time.

Liability and Collection of Royalties

74. All amounts payable under subsection 70(1) are debts due to the Government of Canada and are recoverable as such from the person required to pay them in accordance with this Part.

Revenue Account

75. (1) There is established in the accounts of Canada an account to be known as the “Quebec Revenue Account — Petroleum Resources Joint Management Area”.

(2) The Federal Minister must, in the prescribed time and manner,

(a) credit the Revenue Account with

(i) an amount equal to the total of any royalties, interest and penalties payable to the Government of Canada under section 70, that have been collected by the Government of Quebec during any fiscal year in accordance with any agreement entered into under section 72, and

(ii) an amount equal to the total of any amounts received during any fiscal year under this Part or Part 2 and not required to be returned, other than the amounts referred to in subparagraph (i) and other than any fees or charges collected under section 8; and

(b) pay to the Government of Quebec any amount credited to the Revenue Account under paragraph (a).

(3) If, by application of subsection (2), the Government of Quebec has received any amount in excess of the amount to which it is entitled, the Federal Minister may recover as a debt due to Her Majesty in right of Canada an amount equal to that excess from any moneys that are or may become payable to the Government of Quebec under subsection (2) or under a provision of any other Act of Parliament.

(4) The Federal Minister may, for each fiscal year, pay out of the Consolidated Revenue Fund, in the prescribed time and manner, an amount to the Government of Quebec under paragraph 75(2)(b).

76. Subject to subsection 70(4), the Governor in Council may, on the recommendation of the Minister of Finance, make regulations prescribing the time and manner in which the amounts referred to in subsections 75(2) and (4) are to be credited or paid, as the case may be.

Division 6

Courts

77. (1) Every court in Quebec has jurisdiction in respect of matters arising in the joint management area under Division 5 to the same extent as the court has jurisdiction in respect of matters arising within its ordinary territorial jurisdiction.

(2) For the purposes of subsection (1), the joint management area is deemed to be within the territorial limits of the judicial district of Montreal.

(3) Nothing in this section limits the jurisdiction that a court may exercise apart from this section.

(4) In this section, “court” includes a judge of the court and any provincial court judge or justice.

Division 7

Transfers, Assignments and Registration

Interpretation

78. (1) The following definitions apply in this Division.

“assignment of security interest” means a notice of the assignment of a security interest or any part of it for which a security notice has been registered under this Division.

“court” means the Superior Court of Quebec and includes a judge of that Court.

“discharge” means a notice of the discharge or release of a security notice or postponement and includes a notice of partial discharge or release.

“instrument” means a discharge, postponement, security notice, transfer of an interest or a share in an interest or an assignment of a security interest.

“operator’s lien” means any charge on or right in relation to an interest or a share in an interest

(a) that arises under a contract

(i) to which the interest owner or holder of the interest or share is a party,

(ii) that provides for the operator appointed under that contract to carry out any work or activity related to the exploration for or the development or production of petroleum in the portions of the joint management area to which the interest or share applies, and

(iii) that requires the interest owner or holder to make payments to the operator to cover all or part of the advances made by the operator in respect of the costs and expenses of any work or activity; and

(b) that secures the payments referred to in subparagraph (a)(iii).

“postponement” means a document evidencing the postponement of a security notice or operator’s lien.

“secured party” means the person claiming a security interest under a security notice.

“security interest” means any charge on or right in relation to an interest or a share in an interest, including a security given under section 426 of the Bank Act but not including an operator’s lien, that secures

(a) the payment of an indebtedness arising from an existing or future loan or advance of money;

(b) a bond, debenture or other security of a corporation; or

(c) the performance of the obligations of a guarantor under a guarantee given in respect of all or part of an indebtedness referred to in paragraph (a) or all or part of a bond, debenture or other security of a corporation referred to in paragraph (b).

“security notice” means a notice of a security interest.

(2) If an assignment of security interest is registered, a reference in this Division to a secured party is, in respect of the security notice to which the assignment of security interest relates, a reference to the assignee named in the assignment of security interest.

Transfer and Assignment

79. If a holder of an interest or any share in an interest enters into an agreement or arrangement that results in or may result in a transfer, assignment or other disposition of the interest or share, the holder must give notice of that agreement or arrangement to the Ministers, together with a summary of its terms or, on the request of the Ministers, a copy of the agreement or arrangement.

Registration

80. (1) A public register of all interests issued under this Act, and all instruments related to those interests, is to be established and maintained in accordance with this Division.

(2) The Ministers must designate a Registrar and Deputy Registrar to exercise the powers and perform any duties and functions in respect of the register that may be prescribed.

81. (1) A document other than an interest or instrument must not be registered.

(2) An instrument must not be registered unless it has been submitted for registration in the form and containing the information required under this Division and it meets any other requirement for its registration.

(3) An instrument must not be registered unless a notice of official address for service of that instrument is filed with the Registrar. The official address for service may be changed by filing with the Registrar another notice of official address for service.

(4) In the case of a security notice, it must also specify

(a) the nature of the security interest claimed;

(b) the person from whom the security interest was acquired;

(c) the documents giving rise to the security interest; and

(d) any other particulars in respect of the security interest that may be prescribed.

82. If a significant discovery licence or production licence is issued at any time in respect of any portion of the joint management area, the registration of a security notice in respect of the interest in force immediately preceding the issuance of that licence and relating to that portion of the joint management area applies in respect of the licence as though the security notice referred to that licence, and as though that licence had been issued before the registration of the security notice.

83. (1) Every document submitted for registration must be examined by the Registrar and if the document meets all the requirements for its registration under this Division and the regulations, the Registrar must register it.

(2) If the Registrar refuses to register any document, the Registrar must return the document to the person who submitted it for registration and provide that person with the reasons for the refusal.

(3) An instrument is registered when the Registrar endorses it with a registration number and the time and date of registration.

(4) Instruments that are accepted for registration must be registered in the chronological order in which they are received by the Registrar.

84. The registration of an instrument constitutes actual notice of the instrument to all persons as of the instrument’s time of registration and actual notice of the contents of the documents specified in a security notice to all persons who may serve a demand for information under subsection 86(1).

85. (1) Subject to subsections (2) and (5), any particular right in an interest or a share in an interest, in respect of which an instrument has been registered at any time, has priority over and is valid against any other right, in relation to that interest or share,

(a) in respect of which an instrument may be registered, whether that other right was acquired before or after that particular right,

(i) if the instrument was not so registered, or

(ii) if the instrument was so registered after that time; or

(b) in respect of which an instrument must not be registered, if that other right was acquired after that time.

(2) If any right in respect of which an instrument may be registered was acquired before the day on which this Division comes into force and an instrument in respect of that right is registered not later than 180 days after the day on which this Division comes into force, the priority and validity of that right must be determined as though the instrument was registered at the time the right was acquired and as though this Division was in force at that time.

(3) Despite subsection (2), no right in respect of which that subsection applies is to have priority over and be valid against any other right in respect of which that subsection applies but in respect of which an instrument is not registered within the period referred to in that subsection, if the person who claims the right in respect of which the instrument is registered within that period acquired that right with actual knowledge of the other right.

(4) An instrument in respect of any right to which subsection (2) applies must not be registered unless it is accompanied by the statutory declaration, in the form and containing the information specified by the Ministers, of the person claiming that right, attesting to the day on which that right was acquired.

(5) An operator’s lien, in relation to an interest or a share in an interest, must, without the need for registration of any document evidencing the operator’s lien, have priority over and be valid against any other right, in relation to that interest or share, in respect of which an instrument may be registered, whether an instrument in respect of that other right was registered before or after the acquisition of the operator’s lien or the operator’s lien was acquired before or after that other right, unless the operator’s lien is postponed with respect to any other rights by the registration of a postponement in respect of the operator’s lien and a discharge in respect of that postponement has not been registered.

86. (1) A person may, in accordance with this section, serve a demand for information in respect of a security notice that has been registered in relation to an interest or a share in an interest if that person

(a) is the holder of that interest or share;

(b) is specified in the security notice as the person from whom the security interest was acquired;

(c) is the secured party under another security notice registered in respect of that interest or share;

(d) is a member of a class of prescribed persons; or

(e) obtains leave to do so from the court.

(2) A demand for information may be served by delivering to the secured party under the security notice a demand notice requiring the secured party

(a) to inform the person serving the demand notice, within 15 days after the day on which the notice is served, of the place where the documents specified in the security notice or copies of those documents are located and available for examination and of the normal business hours during which the examination may be made; and

(b) to make those documents or copies available for examination at that place during normal business hours, by or on behalf of the person serving the notice, within a reasonable period after the demand notice is served.

(3) A demand for information is served if it is sent by registered mail or delivered to the official address for service of the security notice according to the records of the Registrar.

(4) A demand for information may be complied with by mailing or delivering to the person serving the demand notice a true copy of the documents referred to in the demand notice.

(5) If a secured party fails without reasonable excuse to comply with a demand for information, the court may, on application by the person who served the demand notice, make an order requiring the secured party to comply with the demand within the time and in the manner specified in the order.

(6) If a secured party fails to comply with a court order made under subsection (5), the court may, on the application of the person who applied for the order,

(a) make any other order the court considers necessary to ensure compliance with the order made under subsection (5); or

(b) make an order directing the Registrar to cancel the registration of the security notice.

(7) In this section, “document” includes any amendment to the document.

87. (1) A person who may serve a demand for information in respect of a security notice under subsection 86(1) may

(a) serve on the secured party under the security notice a notice to take proceedings directing that secured party to apply to the court, within 60 days after the day on which the notice to take proceedings is served, or any shorter period ordered under subsection (2), for an order substantiating the security interest claimed in the security notice; or

(b) begin proceedings in the court, requiring the secured party to show cause why the registration of the security notice should not be cancelled.

(2) The court may, by order, on the ex parte application of a person who proposes to serve a notice to take proceedings under paragraph (1)(a), shorten the 60-day period referred to in that paragraph and, if the order is made, a certified copy of it must be served with that notice to take proceedings.

(3) The court may, on the application of a secured party served with a notice to take proceedings, extend the period referred to in paragraph (1)(a), whether or not that period has been shortened under subsection (2).

(4) A notice to take proceedings is served if it is sent by registered mail or delivered to the secured party at the official address for service of the security notice according to the records of the Registrar.

(5) The registration of a security notice is to be cancelled on submission to the Registrar of a statutory declaration showing that

(a) a notice to take proceedings was served in accordance with this section; and

(b) no application was made in relation to the notice to take proceedings or an application so made was dismissed by the court or discontinued.

(6) If the registration of a security notice in respect of a security interest is cancelled, the secured party under the security notice is not to submit for registration under this Part another security notice in respect of that security interest without leave of the court.

(7) The registration of a security notice is to be cancelled on submission to the Registrar of a certified copy of a court order or judgment directing the Registrar to do so, whether as a result of proceedings taken under this Division or otherwise.

88. A transfer of an interest or a share in an interest is not effective against the Crown before the registration of the transfer.

89. For greater certainty, the registration of an instrument

(a) does not restrict or in any manner affect any right or power of the Ministers under this Act or under the terms of any interest; and

(b) does not derogate from any interest or right over property or natural resources that Her Majesty in right of Canada has in respect of any portion of the joint management area.

90. No action or other proceedings for damages is to be commenced against the Registrar or Deputy Registrar or anyone acting under their authority for an act done or omitted to be done in good faith in the exercise of a power or the performance of a duty or function.

91. Subject to subsection 7(1), the Governor in Council may make regulations for carrying out the purposes and provisions of this Division, including regulations

(a) prescribing the powers, duties and functions of the Registrar and Deputy Registrar for the purposes of this Division and the time when, and manner and circumstances in which, they are to be exercised or performed, and providing for the designation by the Ministers of any person or class of persons to exercise any powers and perform any duties and functions that may be specified in the regulations;

(b) governing the books, abstracts and indexes to be maintained as the register for the purposes of this Division and the particulars of interests, instruments and portions of the joint management area and the orders and declarations made in relation to interests to be recorded in them;

(c) governing the filing of copies of documents relating to interests, registered instruments and other documents in the register established under this Division; and

(d) governing access to and searches of the register.

Division 8