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Canada Petroleum Resources Act (R.S.C., 1985, c. 36 (2nd Supp.))

Act current to 2019-11-19 and last amended on 2019-08-28. Previous Versions

PART IVProduction (continued)

Issuance of Production Licences (continued)

Marginal note:Consolidation of production licences

 The Minister may, on the application of the interest owners of two or more production licences, consolidate those production licences into a single production licence, on such terms and conditions as may be agreed on by the Minister and those interest owners.

Marginal note:Reduction of lands subject to production licence

  •  (1) Where a commercial discovery area in relation to a declaration of commercial discovery is decreased pursuant to an amendment made under subsections 28(4) and 35(3), any production licence that was issued on the basis of that declaration shall be amended by decreasing accordingly the frontier lands subject to that licence.

  • Marginal note:Increase in lands subject to production licence

    (2) Where a commercial discovery area in relation to a declaration of commercial discovery is increased pursuant to an amendment made under subsections 28(4) and 35(3), any production licence that was issued on the basis of that declaration shall be amended to include all portions of the amended commercial discovery area that are subject to an exploration licence or a significant discovery licence held by the interest owner of that production licence at the time the commercial discovery area is so increased.

Marginal note:Term of production licence

  •  (1) Subject to subsections (2) to (4), a production licence is effective from the date it is issued and shall be issued for a term of twenty-five years.

  • Marginal note:Idem

    (2) Where a declaration of commercial discovery on the basis of which a production licence was issued is, pursuant to subsections 28(4) and 35(3), revoked or amended to exclude all portions of the commercial discovery area in relation to which the production licence was issued, the production licence ceases to be in force.

  • Marginal note:Automatic extension of term

    (3) Where, on the expiration of the term of a production licence, petroleum is being produced commercially, the term is extended for such period thereafter during which commercial production of petroleum continues.

  • Marginal note:Discretionary extension of term

    (4) The Minister may, by order, on such terms and conditions as may be specified in the order, extend the term of a production licence where

    • (a) commercial production of petroleum from the frontier lands subject to the licence ceases before or on the expiration of the twenty-five year term of the production licence and the Minister has reasonable grounds to believe that commercial production from those lands will recommence; or

    • (b) the Minister has reasonable grounds to believe that commercial production of petroleum from those lands will, at any time before or after the expiration of the term of the licence, cease during any period and thereafter recommence.

Marginal note:Lapsing of other interests

  •  (1) On the issuance of a production licence, any interest in relation to the frontier lands in respect of which the production licence is issued held immediately prior to the issuance of the production licence ceases to have effect in relation to those frontier lands, but otherwise continues to have effect according to its terms and the provisions of this Act.

  • Marginal note:Lands become Crown reserve lands on expiration of term

    (2) On the expiration of a production licence, the frontier lands in relation to which the production licence was issued become Crown reserve lands.

Subsurface Storage Licences

Marginal note:Licence for subsurface storage

  •  (1) The Minister may, subject to any terms and conditions the Minister considers appropriate, issue a licence for the purpose of subsurface storage of petroleum or any other substance approved by the Minister in frontier lands at depths greater than twenty metres.

  • Marginal note:Prohibition

    (2) No frontier lands shall be used for a purpose referred to in subsection (1) without a licence referred to therein.

Qualification for Production Licence

Marginal note:Qualification for production licence

 No production licence or share in a production licence may be held by any person other than a corporation incorporated in Canada.

  • R.S., 1985, c. 36 (2nd Supp.), s. 44
  • 1993, c. 47, s. 2

PART V[Repealed, 1993, c. 47, s. 3]

PART VIRoyalties

Interpretation

Marginal note:Definition of assessment

 In this Part, assessment includes reassessment.

Payment of Royalties

Marginal note:Royalties

  •  (1) There are hereby reserved to Her Majesty in right of Canada, and each holder of a share in a production licence is liable for and shall pay, in accordance with the regulations, such royalties as may be prescribed, at the rates prescribed, in respect of petroleum produced from frontier lands and in respect of the periods prescribed.

  • Marginal note:Payable in money or in kind

    (2) The Minister may require all or part of any royalty payable under this Part to be paid in money or in kind in accordance with the regulations.

  • Marginal note:Reduction of royalties or exemptions

    (3) The Governor in Council may, by order, authorize the reduction of, or the exemption from the payment of, any royalty payable under this Part for such periods, in such amounts and subject to such conditions as may be specified in the order.

Marginal note:Interest and penalties

 Each holder of a share in a production licence liable for and required to pay royalty under this Part who is in default in accordance with the regulations in the payment of any amount payable under this Part on account of that royalty shall pay interest and penalties on such amounts in accordance with the regulations.

Marginal note:Time and manner of payment

 Each holder of a share in a production licence liable for and required to pay royalties, penalties or interest under this Part shall make payments of or on account of those royalties, penalties or interest at the time and in the manner prescribed.

Returns and Retention of Records

Marginal note:Reports and returns

  •  (1) Each holder of a share in a production licence shall file, at the time and in the manner prescribed, reports and returns in such form and containing such information as may be prescribed and shall submit such documentation in connection therewith as may be prescribed.

  • Marginal note:Collection and remission of royalty by representative of two or more holders

    (2) Where the interest owner of a production licence consists of two or more interest holders, the representative of the interest owner shall, where required by the regulations,

    • (a) collect and remit on behalf of those interest holders any royalty due under this Part; and

    • (b) file on behalf of those holders, at the time and in the manner prescribed, consolidated reports and returns in the form and containing the information prescribed and submit such documentation in connection therewith as may be prescribed.

  • Marginal note:Idem

    (3) Interest holders of a production licence shall provide their representative with the information necessary to file any reports and returns pursuant to paragraph (2)(b).

Marginal note:Books and records

  •  (1) Each holder of a share in a production licence shall, subject to such terms and conditions as may be prescribed, keep books, records, accounts, documents and other information necessary for or incidental to the calculation and verification of the amounts of royalties payable by the holder under this Part, including such books, records, accounts, documents and other information as may be prescribed.

  • Marginal note:Idem

    (2) Books, records, accounts, documents and other information required to be kept pursuant to subsection (1) shall be kept at the place and in the manner and during the periods prescribed.

Assessments, Objections and Appeals

Marginal note:Audits and examinations

 Persons required by this Part to file reports and returns are subject to such audit and examination as may be prescribed to be conducted at the times, in the circumstances and in the manner prescribed.

Marginal note:Assessment and notice

  •  (1) The Minister shall, with all due dispatch, examine a report or return filed pursuant to subsection 58(1), assess the royalty payable for the period in respect of which the report or return was filed and the interest and penalties, if any, payable and send a notice of assessment to the person by whom the report or return was filed.

  • Marginal note:Notice of assessment at later date

    (2) The Minister may, at any time, assess the royalty, interest or penalties payable under this Part in respect of any period and give a notice of the assessment to the interest holder required to pay the royalty.

  • Marginal note:Liability unaffected

    (3) Liability for the royalty payable under this Part and the interest and penalties, if any, payable thereunder is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made.

  • Marginal note:Reports and returns not binding

    (4) In making an assessment pursuant to subsection (1), the Minister is not bound by any report or return filed by or on behalf of an interest holder and in making an assessment the Minister may, notwithstanding a report or return so filed or that no such report or return has been filed, assess the royalty, interest and penalties payable under this Part.

  • Marginal note:Effect of assessment

    (5) An assessment, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, is valid and binding notwithstanding any error, defect or omission in the assessment or in any proceeding under this Part relating thereto.

 
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