Change in Undertaking
50 Where a licensee desires to develop, sell, use or dispose of any greater quantity of power than is authorized by his licence, whether such increased disposal of power does or does not necessitate any addition to or alteration in the works, or desires to use or dispose of any power in connection with his undertaking in a manner or for a purpose other than as provided in the licence, he shall first apply to the Minister for an interim licence authorizing the construction of the works or for a final licence authorizing the additional development, sale, use or disposal of power or authorizing the use or disposal of the power in such other manner or for such other purpose, as the case may be, and the granting of the licence and the use or disposal of the additional water-power shall in every case be subject to all the provisions of the regulations from time to time in force.
Sale of Power
51 In districts where there is no existing authority or competent jurisdiction to regulate and control transmission or distribution companies, no sale or delivery of power shall be made by any licensee to any such company except in case of emergency and then for not more than 60 days without the written consent of the Minister, unless the company has undertaken to the satisfaction of the Minister, to comply with the terms of these Regulations and of the licence to the same extent as the licensee would have been obliged to comply therewith, in so far as the use or disposal of such power is concerned.
52 Every licensee whose undertaking involves the sale, barter or exchange of the power authorized to be developed under his licence, when so requested by the Minister, shall sell power to the Crown at as low a price as is given to any other consumer for a like use at the same time and under similar conditions, if the request is within the capacity of the site and the rights of any other consumer then holding a binding contract for the delivery of power are not thereby prejudiced.
53 The Minister, with the approval of the Governor in Council, may authorize a licensee whose undertaking embraces the sale of energy or power to enter into contracts for the sale and delivery of that energy or power for periods extending beyond the term of the licence, but for not more than 10 years thereafter, and in such case, the licence will not be terminated at the end of the term unless a new licensee or some competent authority acting for or at the request of the Government of Canada has assumed to fulfil all the contracts so approved.
Stream Regulation and Control
54 Every licence is deemed to have been executed on the express condition that the licensee shall, in respect of the river or stream upon which his works are located,
(a) divert, use or store the water authorized to be diverted, used or stored by him in such a manner as not to interfere, in the opinion of the Minister, with the maximum advantageous development of the power and other resources of the river or stream;
(b) conform to and comply with any orders in respect of the control or regulation of the flow of the waters of the river or stream made from time to time by the Minister or by any person authorized by the Minister in that behalf; and
(c) at no time cause or permit the surface level of the waters of the river or stream or of any storage reservoir operated by him to be raised or lowered beyond the limits that are fixed from time to time by the Minister or by a person authorized by the Minister in that behalf.
Pro-rating of Capital Cost of Works
55 (1) In this section and in sections 57 and 58,
- annual outlay
annual outlay means all yearly maintenance, operation and depreciation costs, and necessary amortization costs other than instalments of the capital cost, incurred in respect of regulating or storage works together with interest on the capital cost; (frais annuels)
- capital cost
capital cost of any regulating or storage works undertaken under this section means actual cost. (frais de premier établissement)
(2) Where regulating or storage works are undertaken upon any stream by the Government of Canada or by any commission, board, company or person upon the authority of the Government for the control or augmentation of the flow of that stream for water-power or other purposes, the capital cost of the works or any part thereof may be assessed by the Minister upon the owners or licensees of all the water-power sites in the stream, whether those sites are fully developed, partially developed or entirely undeveloped.
(3) Where the capital cost of regulating or storage works upon a stream is assessed pursuant to subsection (2), the assessments shall be determined according to the relative benefits that, in the opinion of the Minister, are or will be derived by the respective owners or licensees of the works from the regulated or increased flow, and may also be charged against owners of water privileges under provincial jurisdiction in accordance with section 56.
(4) The capital cost, assessed pursuant to subsection (2), may be made payable in annual instalments, extending over such period of years, and in such respective amounts for any stated years, as the Minister may determine; and the Minister may provide, if any water-power sites mentioned in subsection (2) are undeveloped or have not commenced to be operated at the time when the regulating or storage works are undertaken, that the commencement of payment of the annual instalments may in such cases be deferred until development and operation take place, or until such time has elapsed thereafter as the Minister may deem suitable.
(5) The total annual outlay in respect of works undertaken under this section shall be a charge upon such of the water-power developments on the stream as are in a position to utilize the regulated or increased flow in whole or in part, and shall be apportioned among them in proportion to the respective benefits estimated as accruing from time to time to those developments from the regulated or increased flow.
(6) A due proportion of the annual outlay in respect of works undertaken under this section may also be charged against owners of water privileges under provincial jurisdiction in accordance with section 56.
(7) A schedule of the proportion of the annual outlay referred to in subsection (6) to be debited against the respective water-power developments shall be prepared from time to time at the direction of the Minister, and shall remain in effect for a period of not less than three years.
(8) In fixing the respective proportions of annual outlay for any period of years, the use made by the licensee for the period immediately preceding may be taken into consideration.
(9) The schedule of proportions prepared pursuant to subsection (7) may be revised at any time with the consent of all the licensees affected.
(10) A water-power development that has come into operation or the utilization of the stream-flow of which has been substantially increased within the period during which a schedule of the proportion of annual outlay is effective may, at the discretion of the Minister, be debited with its proportionate share of the annual outlay from the time of the commencement of the operation, in which case the proportion charged upon each of the existing developments shall be correspondingly reduced.
(11) In addition to paying the assessments of capital cost and the annual charges as provided for in this section, every licensee may be required to pay for the additional flowage created by any works and used by the licensee such rental as the Minister may determine, subject to these Regulations that are applicable to rentals for the development and use of water power.
Cooperative Agreements with Province
56 (1) The Minister may enter into cooperative agreements with the authorities of any province for the purpose of providing that owners of water privileges under provincial jurisdiction shall bear a due share in the cost of any storage and regulating works undertaken under section 55, of any annual charges arising out of the construction of such works, and of rentals for the additional flowage created.
(2) Subject to approval by the Governor in Council and, where required, with the assent and cooperation of the proper provincial authorities, the Minister may specify the conditions under which owners of irrigation, logging, navigation or other interests upon the stream that are benefited by regulating or storage works shall be required to share with the water-power interests the cost and charges arising under this section.
57 (1) Where the Minister deems it advisable and at any time during the term of a licence, he may cause a reappraisal of the value of the lands, works and properties held by a licensee in respect of his undertaking.
(2) The basis for a reappraisal made pursuant to subsection (1) is the actual cost of the properties determined as set out in section 19, consideration being given to any extensions or permanent improvements made in the properties in the period that may have elapsed subsequent to the time of the original construction or subsequent to the last previous appraisal, as the case may be, and also to the loss in value, if any, in the properties due to physical or functional depreciation or otherwise, as well as to the variation in the purchasing power of the dollar.
(3) In the case of any undertaking established under regulations made under any Act of the Parliament of Canada, the Minister, after conferring with the owner of an undertaking and with the authority, if any, having jurisdiction over the regulation and control of public utilities in the district in which the undertaking is situated, may modify the basis on which the appraisal is to be made.
(4) In any valuation of the lands, works and properties held by a licensee in connection with his licence, no value shall be given or claimed for the rights and privileges granted by his licence over and above the sums, if any, actually paid to the government for such rights and privileges, but not including in any case guarantee deposits paid during the interim licence period nor any rentals or annual charges accruing during the final licence period.
58 (1) Unless exempted in writing by the Minister from compliance with this section, every licensee shall keep a true and detailed account of all expenditures made in respect of the works, lands and properties and shall file annually with the Director on or before March 1st a return for the immediately preceding year ending December 31st, based on the account and being an accurate summary thereof, the return to be attested by the oath of the licensee or in the case of a company by its president and secretary.
(2) In an annual return made by a licensee the following items shall be shown separately:
(a) respecting the works,
(i) the actual cost thereof, giving separately each class of expenditures as indicated in the definition actual cost in section 2,
(ii) amounts expended in that year for enlargements and permanent improvements authorized by the Minister, and
(iii) depreciation in value from any and all causes for that year;
(b) respecting lands, tenements and appurtenances not included in paragraph (a), a statement setting out, in each case, the actual cost thereof in accordance with section 19;
(c) respecting capital stock,
(i) the amount authorized and the number of shares into which it is divided,
(ii) the number of shares subscribed for and allotted, the number of shares forfeited to date, and the owners, for the time being, of all outstanding shares,
(iii) the amount of calls made on each share, and the total amount received from shareholders in cash on account of stock,
(iv) the number of shares, if any, issued as fully paid-up shares as consideration for any service rendered or otherwise, specifying in each case the consideration for which such shares were issued, and
(v) the amounts of dividends declared and paid;
(d) respecting bonds or debentures,
(i) the amount authorized, and the period of redemption,
(ii) the amount sold (face value) and the rate of interest,
(iii) the amount realized from sales, and
(iv) the annual amount set aside as a sinking fund to meet bonded indebtedness, and the date of commencement;
(e) the indebtedness other than stock and bonds, specifying the nature and amounts, and the rate of interest such indebtedness bears;
(f) a statement showing the total revenues of the undertaking, specifying the amount received from each and every source;
(g) maintenance and operation expenditures, separating those expenditures that are incurred at or near the works from head-office expenditures and expenditures relating to general administration;
(h) the names of officers and the classification of employees with salaries, expenses or other remuneration paid or allowed;
(i) the proposed extensions during ensuing years; and
(j) such other data as the Minister may require.
(3) If the licensee is a company, an annual return shall have attached thereto a copy of the by-laws of the company, showing all amendments thereto during the year covered by the return.
(4) In respect of the classification of items under paragraphs 2(a) to (j), the methods of allowing for depreciation, and the form in which the accounts shall be kept, the Minister’s decision is final.
59 (1) Before any assignment or transfer of any licence or of the rights and privileges granted thereby or the undertaking connected therewith or any part thereof becomes valid or effective, the Minister’s approval in writing shall be obtained, and the assignment or transfer is subject to such terms and conditions as the Minister may impose.
(2) When applying for approval of the assignment or transfer of a licence, the licensee shall file with the Minister a full and detailed statement of the proposed compensation to be paid to him for the rights, privileges and properties transferred in respect of the undertaking.
(3) The Minister shall not grant approval of the assignment or transfer of a licence unless
(a) it is shown to his satisfaction that the assignment or transfer is expedient in the public interest;
(b) no remuneration is to be allowed to the assignor or transferor for the rights and privileges conferred under the licence over and above the sums, if any, actually paid to the Crown for such rights and privileges, but not including guarantee deposits paid during the interim licence period or any rentals or annual charges accruing during the final licence period; and
(c) the assignee or transferee has undertaken in a manner satisfactory to the Minister to assume all the obligations of the assignor or transferor and the additional obligations prescribed by the Minister in the written approval.
60 (1) No lien may be created by mortgage or trust deed upon any power undertaking established in respect of any licence unless it is approved by the Minister and is for the bona fide purpose of financing the undertaking.
(2) Any successor or assign of the rights held in respect of a licence, whether by judicial sale, foreclosure sale or otherwise, is subject to all the conditions of the licence, and to all the provisions and conditions of these Regulations to the same extent as though the successor or assign were the original licensee.
61 Lands inside the severance line used or occupied for the purposes of the undertaking shall not be alienated, sold or disposed of by the licensee without the consent of the Minister, and the alienation, sale or disposal shall be subject to such terms as the Minister may prescribe for the protection of the undertaking.
62 Whenever notice of termination or cancellation has been given to a licensee in pursuance of these Regulations, no lands whatever, whether inside or outside the severance line, used or occupied for the purposes of the undertaking shall thereafter be alienated, sold or disposed of without the consent of the Minister and the alienation, sale or disposal shall be subject to such terms as the Minister may prescribe.
Acceptance of Terms of Licence
63 (1) Before issuing a licence, the Minister shall submit to the prospective licensee a draft of the proposed licence, and shall secure from such licensee an acceptance thereof and an undertaking to observe and fulfil all the terms and conditions that a licensee is required to observe or fulfil under the licence and these Regulations, with particular reference to the right of Her Majesty to take over the works, lands and properties held by the licensee in connection with his licence in certain contingencies as in these Regulations provided.
(2) The acceptance and undertaking referred to in subsection (1) shall bind the executors, administrators and assigns, or in the case of a company the successors and assigns of the prospective licensee.
64 (1) Any notice that is required to be given or served, or that the Minister may desire to give or serve upon any person in respect of these Regulations, shall be considered to have been validly given or served when sent by registered mail to that person addressed to his latest known address or when delivered by hand to that address.
(2) A notice sent by post shall be deemed to be given when in due course of postal operations it would be delivered at the address to which it was sent.
65 The licensee shall indemnify Her Majesty in right of Canada against all actions, claims or demands arising against Her by reason of anything done by him in the exercise or purported exercise of the rights and privileges granted under the licence.
66 (1) Where applications are made therefor, the Minister may grant conditional leases or licences for the temporary use and occupation for other purposes of lands that have been reserved by the Governor in Council for water-power development, where, in the Minister’s opinion, those lands will not be utilized for a number of years in connection with water-power development and the granting of temporary leases or licences of occupation does not interfere with the purposes of the reservation.
(2) Every conditional lease or licence is deemed to include provisions to the effect that, when the leased lands are required in connection with a water-power development and upon giving the conditional lessee or licensee not less than six months’ notice of cancellation in writing under his hand, the Minister may cancel the lease or licence, and terminate the rights thereby conferred, and repossess himself on behalf of Her Majesty of the leased lands and all improvements thereon without any compensation whatever being paid to the conditional licensee or lessee.
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