Canadian Energy Regulator Act (S.C. 2019, c. 28, s. 10)

Rules about Violations

Marginal note:Certain defences not available

• 121 (1) A person named in a notice of violation does not have a defence by reason that the person

  • (a) exercised due diligence to prevent the commission of the violation; or

  • (b) reasonably and honestly believed in the existence of facts that, if true, would exonerate the person.

• Marginal note:Common law principles

  (2) Every rule and principle of the common law that makes any circumstance a justification or excuse in relation to a charge for an offence under this Act applies in respect of a violation to the extent that it is not inconsistent with this Act.

Marginal note:Continuing violation

122 A violation that is committed or continued on more than one day constitutes a separate violation for each day on which it is committed or continued.

Marginal note:Violation or offence

• 123 (1) Proceeding with any act or omission as a violation under this Act precludes proceeding with it as an offence under this Act, and proceeding with it as an offence under this Act precludes proceeding with it as a violation under this Act.

• Marginal note:Violations not offences

  (2) For greater certainty, a violation is not an offence and, accordingly, section 126 of the Criminal Code does not apply in respect of a violation.

Marginal note:Limitation period or prescription

124 No notice of violation in respect of a violation may be issued more than two years from the day on which the subject matter of the violation arises.

Reviews

Marginal note:Right to request review

125 A person who is served with a notice of violation may, within 30 days after the day on which it is served, or within any longer period that the Commission allows, make a request to the Commission for a review of the amount of the penalty or the facts of the violation, or both.

Marginal note:Correction or cancellation of notice of violation

126 At any time before a request for a review in respect of a notice of violation is received by the Commission, a person designated under subsection 116(2) may cancel the notice of violation or correct an error in it.

Marginal note:Review

• 127 (1) On receipt of a request made under section 125, the Commission must conduct the review or cause the review to be conducted by a person designated under subsection 116(1.1).

• Marginal note:Restriction

  (2) The Commission must conduct the review if the notice of violation was issued by a person designated under subsection 116(1.1).

Marginal note:Object of review

• 128 (1) The Commission or the person conducting the review must determine, as the case may be, whether the amount of the penalty for the violation was determined in accordance with the regulations or whether the person committed the violation, or both.

• Marginal note:Determination

  (2) The Commission or the person conducting the review must make a determination in writing and cause the person who requested the review to be served with a copy of the determination and the reasons for it.

• Marginal note:Correction of penalty

  (3) If the Commission or the person conducting the review determines that the amount of the penalty for the violation was not determined in accordance with the regulations, the Commission or the person, as the case may be, must correct the amount of the penalty.

• Marginal note:Responsibility

  (4) If the Commission or the person conducting the review determines that the person who requested the review committed the violation, the person who requested the review is liable to the penalty as set out in the determination.

• Marginal note:Determination final

  (5) Despite subsection 69(1) and (2), a determination made under this section is final and binding and, except for judicial review under the Federal Courts Act, is not subject to appeal or to review by any court.

• Marginal note:Federal Court

  (6) Despite section 28 of the Federal Courts Act, the Federal Court has exclusive original jurisdiction to hear and determine an application for judicial review of a determination made under this section by the Commission.

Marginal note:Burden of proof

129 If the facts of a violation are reviewed, the person who issued the notice of violation must establish, on a balance of probabilities, that the person named in it committed the violation identified in it.

Responsibility

Marginal note:Payment

130 If a person pays the penalty set out in a notice of violation, the person is considered to have committed the violation and proceedings in respect of it are ended.

Marginal note:Failure to act

131 A person that neither pays the penalty imposed under this Act nor requests a review within the period referred to in section 125 is considered to have committed the violation and is liable to the penalty.

Recovery of Penalties

Marginal note:Debts to Her Majesty

• 132 (1) A penalty constitutes a debt due to Her Majesty in right of Canada and may be recovered as such in the Federal Court or any other court of competent jurisdiction.

• Marginal note:Limitation period or prescription

  (2) Proceedings to recover the debt may be instituted no later than the fifth anniversary of the day on which the debt becomes payable.

Marginal note:Certificate

• 133 (1) The Commission may issue a certificate of non-payment certifying the unpaid amount of any debt referred to in subsection 132(1).

• Marginal note:Registration in Federal Court

  (2) Registration in the Federal Court or in any other court of competent jurisdiction of a certificate of non-payment issued under subsection (1) has the same effect as a judgment of that court for a debt of the amount specified in the certificate and all related registration costs.

General

Marginal note:Admissibility of documents

134 In the absence of evidence to the contrary, a document that appears to be a notice issued under subsection 120(1) is presumed to be authentic and is proof of its contents in any proceeding in respect of a violation.

Marginal note:Publication

135 The Regulator may make public the nature of a violation, the name of the person who committed it and the amount of the penalty.

Polluter Pays Principle

Marginal note:Purpose

136 The purpose of sections 137 to 142 is to reinforce the “polluter pays” principle by, among other things, imposing financial requirements on any company that is authorized under this Act to construct or operate a pipeline.

Liability

Marginal note:Recovery of loss, damage, costs, expenses

• 137 (1) If an unintended or uncontrolled release from a pipeline of oil, gas or any other commodity occurs, all persons to whose fault or negligence the release is attributable or who are by law responsible for others to whose fault or negligence the release is attributable are jointly and severally, or solidarily, liable for

  • (a) all actual loss or damage incurred by any person as a result of the release or as a result of any action or measure taken in relation to the release;

  • (b) the costs and expenses reasonably incurred by Her Majesty in right of Canada or a province, any Indigenous governing body or any other person in taking any action or measure in relation to the release; and

  • (c) all loss of non-use value relating to a public resource that is affected by the release or by any action or measure taken in relation to the release.

• Marginal note:Contribution based on degree of fault

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

• Marginal note:Vicarious liability

  (3) The company that is authorized under this Act to construct or operate the pipeline from which the release occurred is jointly and severally, or solidarily, liable with any contractor — to whose fault or negligence the release is attributable — that performs work for the company for the actual loss or damage, the costs and expenses and the loss of non-use value, described in paragraphs (1)(a) to (c).

• Marginal note:Absolute liability

  (4) If an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline occurs, the company that is authorized under this Act to construct or operate that pipeline is liable, without proof of fault or negligence, up to the applicable limit of liability that is set out in subsection (5) for the actual loss or damage, the costs and expenses and the loss of non-use value, described in paragraphs (1)(a) to (c).

• Marginal note:Limits of liability

  (5) For the purposes of subsection (4), the limits of liability are,

  • (a) in respect of a company that is authorized under this Act to construct or operate one or more pipelines that individually or in the aggregate have the capacity to transport at least 250,000 barrels of oil per day, $1 billion or, if a greater amount is prescribed by the regulations, that amount; and

  • (b) in respect of a company that is authorized under this Act to construct or operate any other pipeline, the amount prescribed by the regulations.

• Marginal note:Regulations — limits of liability

  (6) The Governor in Council may, by regulation, on the Minister’s recommendation,

  • (a) prescribe an amount greater than $1 billion for the purposes of paragraph (5)(a); and

  • (b) prescribe an amount for the purposes of paragraph (5)(b) in respect of a company or class of companies.

• Marginal note:Liability under another law — subsection (4)

  (7) If a company is liable under subsection (4) with respect to a release and it is also liable under any other Act, without proof of fault or negligence, for that release, the company is liable up to the greater of the limit of liability referred to in subsection (5) that applies to it and the limit up to which it is liable under the other Act. If the other Act does not set out a limit of liability, the limits referred to in subsection (5) do not apply.

• Marginal note:Costs and expenses not recoverable under Fisheries Act

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

• Marginal note:Proceedings — loss of non-use value

  (9) Only Her Majesty in right of Canada or a province may institute proceedings to recover a loss of non-use value described in paragraph (1)(c).

• Marginal note:Claims

  (10) All claims under this section may be sued for and recovered in any court of competent jurisdiction in Canada. Claims in favour of persons incurring actual loss or damage described in paragraph (1)(a) are to be distributed pro rata and rank in priority over claims for costs and expenses described in paragraph (1)(b), and the claims for costs and expenses rank in priority over claims to recover a loss of non-use value described in paragraph (1)(c).

• Marginal note:Saving

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

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

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

  • (c) the operation of any applicable law or rule of law that is consistent with this section.

• Marginal note:Limitation period or prescription

  (12) Proceedings in respect of claims under this section may be instituted no later than the third anniversary of the day on which the loss, damage or costs and expenses were incurred but in no case after the sixth anniversary of the day on which the release occurred.

Financial Requirements

Marginal note:Financial resources

• 138 (1) A company that is authorized under this Act to construct or operate a pipeline must maintain the amount of financial resources necessary to pay the amount of the limit of liability referred to in subsection 137(5) that applies to it or, if the Commission specifies a greater amount, that amount.

• Marginal note:Types of financial resources

  (2) Subject to the regulations made under subsection (7), the Commission may, by order, direct a company, either individually or as a member of a class of companies authorized under this Act to construct or operate a pipeline, to maintain the amount of financial resources that is referred to in subsection (1) of the types of financial resources that the Commission specifies, including types that must be readily accessible to the company and, if the Commission specifies types of financial resources, it may specify the amount that the company is required to maintain of each type.

• Marginal note:Duty to satisfy Commission

  (3) At the Commission’s request, the company must satisfy the Commission that it meets the requirement to maintain the amount of financial resources referred to in subsection (1) and that it complies with any order made under subsection (2). The Commission may consider, among other things, the company’s financial statements, letters of credit, guarantees, bonds or suretyships and insurance.

• Marginal note:Greater amount

  (4) The Commission may, by order, specify an amount for the purposes of subsection (1).

• Marginal note:Loss of non-use value

  (5) When the Commission specifies an amount for the purposes of subsection (1), it is not required to consider any potential loss of non-use value relating to a public resource that is affected by an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline or by any action or measure taken in relation to the release.

• Marginal note:Continuing obligation

  (6) A company that is authorized under this Act to construct or operate a pipeline must maintain the amount of financial resources referred to in subsection (1) and must comply with any order made under subsection (2) and any regulation made under subsection (7) only until it obtains leave from the Commission to abandon the operation of its pipeline.

• Marginal note:Regulations

  (7) The Governor in Council may, on the Minister’s recommendation, make regulations

  • (a) providing for the types of financial resources from which the Commission may choose if it specifies types of financial resources under subsection (2), including those from which the Commission may choose if it specifies types of financial resources that must be readily accessible to the company; and

  • (b) respecting the amount of financial resources that must be readily accessible to a company individually or as a member of a class of companies.