Canada–Newfoundland and Labrador Offshore Petroleum Cost Recovery Regulations (SOR/2016-21)

Definitions

Marginal note:Definitions

1 The following definitions apply in these Regulations.

Act

Act means the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act. (Loi)

actual full cost

actual full cost means the full cost confirmed by the Board’s audited financial statements. (coût entier réel)

direct regulatory activities

direct regulatory activities means the activities that are required for the Board to fulfill its regulatory responsibilities such as assessing applications, issuing licences, granting approvals and authorizations, verifying and enforcing compliance with the Act and providing information, products and services. (activités de réglementation directes)

indirect regulatory costs

indirect regulatory costs means the costs that support the Board’s direct regulatory activities 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 any advice relating to legislation or regulations) to the Federal Minister or the Provincial Minister at that Minister’s request. (coûts de réglementation indirects)

project

project means the work or the activity referred to in paragraph 138(1)(b) of the Act. (projet)

Part 1Regulatory Activity Plan Charges

Estimated annual charge

Marginal note: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;

• (b) calculate the estimated annual charge payable by the applicant or the operator for the project by determining the estimated full cost, including indirect regulatory costs, associated with the implementation of the regulatory activity plan based on

  • (i) the cost of the estimated total number of units of time necessary to be spent in that fiscal year on direct regulatory activities for the project, and

  • (ii) any other costs, excluding costs calculated under other cost recovery methods; and

• (c) notify the applicant or the operator, in writing, of the regulatory activity plan and the estimated annual charge payable.

Marginal note:Existing project

3 For each existing project that was previously under a regulatory activity plan, after approval of the Board’s budget in any given fiscal year following its submission in accordance with subsection 27(2) of the Act, the Board must

• (a) prepare a new regulatory activity plan;

• (b) calculate the estimated annual charge payable by the applicant or the operator for the project by determining the estimated full cost, including indirect regulatory costs, associated with the implementation of thenew regulatory activity plan based on

  • (i) the cost of the estimated total number of units of time necessary to be spent in that fiscal year on direct regulatory activities for the project, and

  • (ii) any other costs, excluding costs calculated under other cost recovery methods; and

• (c) notify the applicant or the operator, in writing, of the new regulatory activity plan and the estimated annual charge payable.

Marginal note: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

Marginal note: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).

• Marginal note: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

Marginal note: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 associated with the implementation of 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.

• Marginal note: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 to the Board within 30 days after the date of the invoice.

Part 2Formula Fees

Interpretation

Marginal note:Interpretation

7 In this Part,

• (a) base units of time are the number of units of time published by the Board in accordance with section 8 based on the Board’s estimate of the time required for it to undertake direct regulatory activities in relation to each activity set out in the tables to section 9;

• (b) variable units of time are the number of units of time published by the Board in accordance with section 8 based on the Board’s estimate of the time required for it to undertake direct regulatory activities in relation to the variables set out in column 3 of the table to subsection 9(3);

• (c) the effective rate is the rate published by the Board in accordance with section 8 based on the estimated sum of the costs incurred by the Board’s undertaking of all direct regulatory activities and of 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 at the request of the Federal Minister and the Provincial Minister and divided by the total number of units of time spent by the Board for those direct regulatory activities; and

• (d) the heavy burden coefficient is a multiplier that the Board may apply to a fee for an activity if the Board is of the opinion that the fee must be increased to reflect 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.

Publication

Marginal note:Publication by Board

8 Each year the Board must publish, by electronic or other means that is likely to reach applicants and operators,

• (a) the base units of time for each activity set out in the tables to section 9;

• (b) the variable units of time for each activity set out in the table to subsection 9(3); and

• (c) the effective rate.

Formulas

Marginal note:Basic formula

• 9 (1) The fee for each activity set out in the table to this subsection is determined by the formula

  A × C

  where

  A

  is the base units of time related to each activity; and

  C

  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

• Marginal note:Formula without variable units of time

  (2) The fee for each activity set out in column 2 of the table to this subsection is determined by the formula

  A × C × D

  where

  A

  is the base units of time related to each activity;

  C

  is the effective rate; and

  D

  if applicable, is the heavy burden coefficient.

  	Column 1	Column 2
  Item	Category of Activity	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

• Marginal note:Formula with variable units of time

  (3) The fee for each activity set out in column 2 of the table to this subsection is determined by the formula

  (A + B) × (C × D)

  where

  A

  is the base units of time related to each activity;

  B

  is the variable units of time multiplied by the number of primary vessels or aircraft to be used in each activity;

  C

  is the effective rate; and

  D

  if applicable, is the heavy burden coefficient.

  	Column 1	Column 2	Column 3
  Item	Category of Activity	Activity	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