Canada Gazette, Part I, Volume 149, Number 28: Canada–Nova Scotia Offshore Petroleum Cost Recovery Regulations
July 11, 2015
Statutory authority
Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act
Sponsoring department
Department of Natural Resources
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Canada–Newfoundland and Labrador Offshore Petroleum Cost Recovery Regulations.
PROPOSED REGULATORY TEXT
Notice is given that the Governor in Council, pursuant to section 30.1 (see footnote a) of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act (see footnote b), proposes to make the annexed Canada–Nova Scotia Offshore Petroleum Cost Recovery Regulations.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Daniel Morin, Policy Analyst, Offshore Petroleum Management Division, Natural Resources Canada, 580 Booth St., Ottawa, Ontario K1A 0E4 (tel.: 613-992-4217; fax: 613-943-2274; email: daniel.morin@nrcan-rncan.gc.ca).
Ottawa, June 18, 2015
JURICA ČAPKUN
Assistant Clerk of the Privy Council
CANADA–NOVA SCOTIA OFFSHORE PETROLEUM COST RECOVERY REGULATIONS
INTERPRETATION
Definitions
1. The following definitions apply in these Regulations.
“Act”
« Loi »
“Act” means the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act.
“actual full cost”
« coût entier réel »
“actual full cost” means the full cost confirmed by the Board's audited financial statements.
“direct regulatory activities”
« activités de réglementation directes »
“direct regulatory activities” means the activities, such as assessing applications, issuing licences, granting approvals and authorizations, verifying and enforcing compliance with the Act and providing information, products and services, that are required for the Board to fulfil its regulatory responsibilities.
“indirect regulatory costs”
« coûts de réglementation indirects »
“indirect regulatory costs” means the costs of activities that support direct regulatory activities of the Board such as office accommodation, supplies and equipment, professional services, communications, travel, management, training, administration, human resources services, finance, information technology services, hardware and software, the preparation of documents (including policies, standards, guidelines, procedures and notices) and the provision of technical expertise (including the updating of regulations) to the Federal Minister or the Provincial Minister at that Minister's request.
“project”
« projet »
“project” means the work or the activity referred to in paragraph 142(1)(b) of the Act.
PART 1
REGULATORY ACTIVITY PLAN CHARGES
ESTIMATED ANNUAL CHARGE
Regulatory activity plan
2. For each new project relating to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs in respect of petroleum operations, on receipt of a project description or letter of intent, the Board must
- (a) prepare a regulatory activity plan and estimate the total number of units of time necessary to be spent in the fiscal year on direct regulatory activities for the project;
- (b) calculate the estimated annual charge payable by an applicant or operator for that fiscal year by determining the estimated full cost, excluding costs considered under other cost recovery methods, of implementing the regulatory activity plan that is prepared for the project; and
- (c) notify each applicant or operator, in writing, of the regulatory activity plan and the estimated annual charge payable.
Existing project
3. For each existing project that was previously under a regulatory activity plan, after confirmation of the Board's budget in any given fiscal year, the Board must
- (a) prepare a new regulatory activity plan and estimate the total number of units of time necessary to be spent in the fiscal year on direct regulatory activities for the project;
- (b) calculate the estimated annual charge payable by an applicant or operator for that fiscal year by determining the estimated full cost, excluding costs considered under other cost recovery methods, of implementing the new regulatory activity plan that is prepared for the project; and
- (c) notify each applicant or operator, in writing, of the regulatory activity plan and the estimated annual charge payable.
Recalculation
4. If an applicant or operator proposes changes to its project that are not reflected in the regulatory activity plan, the Board may recalculate the estimated annual charge for that project and adjust the payable amount accordingly.
QUARTERLY INVOICING
Invoice
5. (1) The Board must, on a quarterly basis, prepare and send an invoice for an amount equal to 25% of the estimated annual charge payable to each applicant or operator who has been notified under paragraph 2(c) or 3(c).
Payment within 30 days
(2) Within 30 days after the date of the invoice, the applicant or the operator must pay the amount invoiced.
ANNUAL CHARGE ADJUSTMENT
Annual adjustment
6. (1) Each year, following the end of the fiscal year, the Board must, for each project under a regulatory activity plan,
- (a) calculate the actual full cost of implementing the regulatory activity plan;
- (b) calculate the charge adjustment, if any, by subtracting the estimated annual charge, calculated in accordance with paragraph 2(b) or 3(b), from the actual full cost; and
- (c) notify the applicant or the operator in writing of the amount of the actual full cost and the amount of the charge adjustment.
Effect of adjustment
(2) If the actual full cost calculated under paragraph (1)(a) is
- (a) less than the estimated annual charge, the difference is credited to the applicant's or operator's account and must be refunded as a credit on the next invoice; or
- (b) greater than the estimated annual charge, the Board must invoice the applicant or the operator for an amount equal to the difference and the applicant or the operator must pay that amount within 30 days after the date of the invoice.
PART 2
FORMULA FEES
INTERPRETATION
Interpretation
7. In this Part,
- (a) base units of time are the number of units of time spent by the Board
- (i) for the assessment of applications,
- (ii) to verify an applicant's or operator's compliance with regulatory requirements, or
- (iii) to undertake any other work that is related to a specific activity and that is generally foreseeable;
- (b) variable units of time are the additional number of units of time spent by the Board to undertake direct regulatory activities required for a specific activity that can be attributed to particular characteristics of the activity;
- (c) the heavy burden coefficient is equal to the additional number of units of time spent by the Board to undertake direct regulatory activities as a result of non-compliance with the Act, negligence or lack of effort by an applicant or operator in responding to any of the Board's questions during an application process or activity; and
- (d) the effective rate is equal to the sum of the costs incurred by the Board's undertaking of all direct regulatory activities andof the Board's indirect regulatory costs minus the sum of the costs incurred by the Board's undertaking of regulatory activities that are not recovered by the Board and divided by the total number of units of time spent by the Board for those direct regulatory activities.
FORMULAS
Basic formula
8. (1) The fees for the activities set out in the table to this subsection are determined by the formula
A × D
where
A is the base units of time; and
D is the effective rate.
| Item | Activity |
|---|---|
| 1. | Application for a declaration of significant discovery |
| 2. | Application for a declaration of commercial discovery |
| 3. | Application for a significant discovery licence |
| 4. | Application for a licence for subsurface storage |
| 5. | Application for a production licence |
| 6. | Application for an amendment to a licence or a consolidation of licences |
| 7. | Registration of a transfer |
| 8. | Registration of a security notice |
| 9. | Registration of an interest |
| 10. | Recording of a notice |
| 11. | Registration of an instrument other than a transfer or security notice |
| 12. | Application for an extension, by order, of the term of a production licence |
| 13. | Application for allowable expenditures |
Formula without variable units of time
(2) The fees for the activities set out in column 2 of the table to this subsection are determined by the formula
A × C × D
where
A is the base units of time;
C is the heavy burden coefficient; and
D is the effective rate.
| Item | Column 1 Category of Activity |
Column 2 Activity |
|---|---|---|
| 1. | Geological operations authorization (with field work) | Geochemical study |
| 2. | Geophysical (without field work) | Geophysical study |
| 3. | Geological (without field work) | Purchase of geological studies |
| 4. | Geological (without field work) | Isotope age dating |
| 5. | Geological (without field work) | In-house geological studies |
| 6. | Geological (without field work) | Petrography |
| 7. | Geological (without field work) | Paleontological or palynological study |
| 8. | Geological (without field work) | Other geophysical activity |
| 9. | Annual compliance fee | All geophysical projects |
Formula with variable units of time
(3) The fees for the activities set out in column 2 of the table to this subsection are determined by the formula
(A + B) × (C × D)
where
A is the base units of time;
B is the variable units of time per primary vessel or aircraft multiplied by the number of primary vessels or aircraft used in a project;
C is the heavy burden coefficient; and
D is the effective rate.
| Item | Column 1 Category of Activity |
Column 2 Activity |
Column 3 Variable |
|---|---|---|---|
| 1. | Geophysical operations authorization (with field work) | 2-D seismic reflection survey (primary activity) | Primary vessel |
| 2. | Geophysical operations authorization (with field work) | 3-D seismic reflection survey (primary activity) | Primary vessel |
| 3. | Geophysical operations authorization (with field work) | 4-D seismic reflection survey (primary activity) | Primary vessel |
| 4. | Geophysical operations authorization (with field work) | Seafloor gravity survey (primary activity) | Primary vessel |
| 5. | Geophysical operations authorization (with field work) | Seismic refraction survey (primary activity) | Primary vessel |
| 6. | Geophysical operations authorization (with field work) | Controlled source electromagnetic survey | Primary vessel |
| 7. | Geophysical operations authorization (with field work) | Other geophysical program | Primary vessel |
| 8. | Geophysical operations authorization (with field work) | Aeromagnetic survey (primary activity) | Aircraft |
| 9. | Geotechnical authorization (seabed survey) | Piston core | Primary vessel |
| 10. | Geotechnical authorization (seabed survey) | Shallow seismic, seabed survey | Primary vessel |
PUBLICATION
Publication by Board
9. Before the beginning of each fiscal year, the Board must publish, by electronic or other means that is likely to reach applicants and operators, the base units of time, the variable units of time and the effective rate for each activity set out in the tables to section 8.
PAYMENT OF FEES
Fees calculated under section 8
10. (1) On the submission of an application in respect of an activity set out in either table to section 8, the applicant must pay to the Board the fee determined in accordance with that section.
Heavy burden coefficient
(2) If the Board uses a heavy burden coefficient to calculate an additional charge in respect of an activity, the Board must invoice the applicant or the operator and the applicant or operator must pay that amount to the Board within 30 days after the date of the invoice.
PART 3
GEODATA CENTRE
Definition of “daily access rate”
11. In this Part, the daily access rate is the rate established and published by the Board by electronic or other means that is likely to reach applicants and operators.
Sample access fee
12. Any person, except a person requesting access for an academic purpose, the Federal Minister and the Provincial Minister, who accesses a physical sample at the geodata centre must pay the daily access rate for each day the sample is accessed.
PART 4
OTHER CHARGES
Reimbursement of Board costs
13. The Board may require reimbursement for 100% of its costs for activities that are not set out in Parts 1 to 3 and that are related to the following:
- (a) any verification of compliance under the Act involving travel to another location by the Board's staff;
- (b) the Oil and Gas Committee;
- (c) any technical analysis or process review that is related to a specific project and that is requested by an applicant or operator;
- (d) any public review, hearing or inquiry that is related to a specific project and that is required or initiated by the Board;
- (e) a participant funding program that is part of an environmental assessment conducted under the Canadian Environmental Assessment Act, 2012; and
- (f) information, products or services that are requested by a person.
PART 5
GENERAL
INTEREST
Compound interest rate of 1.5%
14. Interest on an amount owing to the Board must be calculated and compounded monthly at the rate of 1.5% and is payable and accrues during the period beginning on the due date and ending on the day before the day on which the payment is received by the Board.
REMITTANCE OF FEES AND CHARGES
Remittance
15. For the purposes of section 30.3 of the Act, the fees and charges obtained in accordance with these Regulations must be remitted on a quarterly basis subject to the Board's operational requirements.
PART 6
TRANSITIONAL AND COMING INTO FORCE
TRANSITIONAL PROVISION
Non-application of section 3
16. (1) Section 3 does not apply to a project that relates to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs if the applicant or operator has paid 100% of the Board's estimated costs for the project for the fiscal year in which these Regulations come into force.
Presumption
(2) All existing projects relating to development, production, abandonment, exploratory drilling or multiyear or complex seismic programs that are under the Board's regulatory authority before these Regulations come into force and that do not have a regulatory activity plan are considered to have been previously under a regulatory activity plan for the purposes of section 3.
COMING INTO FORCE
S.C. 2015, c. 4
17. These Regulations come into force on the day on which section 74 of the Energy Safety and Security Act comes into force but if they are registered after that day, they come into force on the day on which they are registered.
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