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

Marginal note:Interest and penalties

56 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

57 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

• 58 (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

• 59 (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

60 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

• 61 (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.

Marginal note:Objection to assessment

• 62 (1) An interest holder who objects to an assessment may, within ninety days after the date of mailing of the notice of assessment, give a notice of objection to the Minister by registered mail, in such form and manner as may be prescribed, setting out the reasons for the objection and all the relevant facts.

• Marginal note:Reconsideration and notice

  (2) On receipt of a notice of objection, the Minister shall, with all due dispatch, reconsider the assessment and confirm, vary or vacate the assessment and give notice thereof by registered mail to the interest holder who gave the notice of objection.

Marginal note:Appeal to Federal Court

• 63 (1) Where the Minister confirms or varies an assessment under subsection 62(2) or fails, within ninety days after the date of mailing by the interest holder of the notice of objection, to notify the interest holder that the Minister has confirmed, varied or vacated the assessment, the interest holder may appeal to the Federal Court in the manner set out in section 48 of the Federal Courts Act to have the assessment varied or vacated.

• Marginal note:Time limit for appeal

  (2) No appeal under subsection (1) may be instituted after the expiration of ninety days after the date of mailing of a notice confirming or varying an assessment or, where no such notice is given, after the expiration of one hundred and eighty days after the date of mailing of the notice of objection.

• Marginal note:Notice of appeal

  (3) Where an appeal is taken under subsection (1), the Federal Court shall forthwith give notice of the appeal to the Minister who, forthwith after receiving the notice, shall forward to the Court copies of all reports or returns, notices of assessment, notices of objection and other documents, if any, that are relevant to the appeal.

• Marginal note:Disposition of appeal

  (4) The Federal Court may dispose of an appeal under subsection (1) by dismissing it or by allowing it and vacating or varying the assessment and may make such orders as are necessary for giving effect to any such disposition.

• Marginal note:Hearing in private

  (5) Proceedings in an appeal to the Federal Court under subsection (1) may be held in private on request made to the Court by a party to the appeal.

Marginal note:Extension of time for objection

• 64 (1) Notwithstanding subsections 62(1) and 63(2), the Federal Court may, on application, make an order, subject to any terms it deems just, extending the time within which a notice of objection to an assessment may be given under subsection 62(1) or an appeal to the Federal Court may be instituted under subsection 63(2) where, in the opinion of the Court, the circumstances of the case are such that it would be just and equitable to do so.

• Marginal note:Suspension of payment of amounts in dispute

  (2) Where notice of objection to an assessment is given under subsection 62(1) or an appeal to the Federal Court is instituted under subsection 63(1), the Minister may suspend, pending disposition of the objection or appeal, the requirement to pay any amount on account of royalty, interest or penalty payable under this Part, the liability for which the interest holder disputes in the notice of objection or on appeal.

• Marginal note:Furnishing security

  (3) The Minister may, as a condition of suspending payment of any amount in dispute, require the relevant interest holder to furnish security for such payment in a form and amount acceptable to the Minister.

Marginal note:References to Federal Court

65 Where the Minister and the holder of a share in a production licence agree in writing that a question of law, fact or mixed law and fact arising under this Part should be determined by the Federal Court, that question shall be determined by the Court pursuant to subsection 17(3) or (4) of the Federal Courts Act.

Refunds

Marginal note:Refunds

66 The Minister shall, at the times and in the circumstances prescribed, refund any overpayment made on account of royalties, interest or penalties payable under this Act and interest at a prescribed rate per annum shall be paid thereon in accordance with the regulations.

Special Remedies

Marginal note:Set-offs

67 Where a person is indebted to Her Majesty under this Part, the Minister may require the retention by way of deduction or set-off of such amount as the Minister may specify out of any amount that is or may become payable to that person by Her Majesty in right of Canada.

Marginal note:Direction to pay forthwith where avoidance of payment

• 68 (1) Where, in the opinion of the Minister, the holder of a share in a production licence is attempting to avoid payment of royalties under this Part, the Minister may, in writing, direct that all royalties, interest and penalties payable by that holder be paid forthwith on assessment.

• Marginal note:Direction to pay forthwith on cancellation of production licence

  (2) Where the Minister orders the cancellation of a production licence pursuant to subsection 105(2), all royalties, interest and penalties payable under this Part in respect of that production licence shall be paid forthwith on assessment.

Marginal note:Acts deemed to be at arm’s length

69 Where, in the opinion of the Minister, the result of one or more acts, agreements, arrangements, transactions or operations is to artificially or unduly reduce the amount of any royalties payable under this Part, those royalties shall, for the purposes of any assessment by the Minister under this Part, be calculated as though the act, agreement, arrangement, transaction or operation had not taken place or had taken place at fair market value between parties dealing at arm’s length.

Marginal note:Successors jointly liable without certificate

• 70 (1) Where an interest holder, in this subsection referred to as the “successor”, acquires a production licence or a share in a production licence from another interest holder, in this subsection referred to as the “predecessor”, the successor is jointly and severally liable with the predecessor for all royalties, interest and penalties that have been assessed under this Part and that are payable by the predecessor at the time of the acquisition unless the successor has obtained prior to the acquisition a certificate from the Minister certifying that

  • (a) all the royalties, interest and penalties have been paid;

  • (b) security for the payment of the royalties, interest and penalties has been accepted by the Minister; or

  • (c) arrangements for the payment of the royalties, interest and penalties acceptable to the Minister have been made.

• Marginal note:Certificate of Minister required for assignees

  (2) Every assignee, liquidator, administrator, executor and other like person, other than a trustee in bankruptcy, shall, before distributing any property under his control belonging to the holder of a share in a production licence, obtain a certificate from the Minister certifying that all royalties, interest and penalties that have been assessed under this Part and are payable by the interest holder have been paid or that security for the payment thereof has been accepted by the Minister.

• Marginal note:Liability where no certificate

  (3) Distribution of property without a certificate required by subsection (2) renders the person required to obtain the certificate personally liable for the unpaid royalties, interest and penalties.

Marginal note:Remedies for unpaid royalties

71 Notwithstanding any other provision of this Act or the Canada Oil and Gas Operations Act, where a person is in default in accordance with the regulations in the payment of any amount payable under this Part in respect of any interest issued in relation to any frontier lands, the Minister may, for so long as the amount remains unpaid, refuse

• (a) to issue to that person any interest in relation to any frontier lands; and

• (b) to authorize, pursuant to the Canada Oil and Gas Operations Act, that person to carry on any work or activity related to the exploration for or the production of petroleum on any frontier lands and may suspend any such authorization already given.

Marginal note:Application of provisions of Income Tax Act

72 Sections 231 to 231.5 of the Income Tax Act apply, with such modifications as the circumstances require, in respect of the administration and enforcement of this Part and, without restricting the generality of the foregoing, as if

• (a) the references therein to “tax” were read as a reference to “royalty”;

• (b) the references therein to “Minister” were read as a reference to “Minister” as defined in section 2 of this Act;

• (c) the references therein to the “Canada Revenue Agency” were read as a reference to the “Department of Natural Resources” or the “Department of Indigenous Services”, whichever is applicable in the circumstances;

• (d) the references therein to the “Tax Court of Canada” were read as a reference to the “Federal Court”; and

• (e) the references therein to a “return of income or a supplementary return” were read as a reference to “a report or return” filed pursuant to this Part.