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Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations (SOR/2016-23)

Regulations are current to 2024-10-30 and last amended on 2016-02-27. Previous Versions

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Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations

SOR/2016-23

CANADA–NEWFOUNDLAND AND LABRADOR ATLANTIC ACCORD IMPLEMENTATION ACT

Registration 2016-02-19

Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations

P.C. 2016-71 2016-02-19

Whereas, pursuant to subsection 150(1) of the Canada–Newfoundland and Labrador Atlantic Accord Implementation ActFootnote a, a copy of the proposed Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations, substantially in the annexed form, was published in the Canada Gazette, Part I, on July 11, 2015 and a reasonable opportunity was afforded to interested persons to make representations to the Minister of Natural Resources with respect to the proposed Regulations;

And whereas, pursuant to subsection 7(1)Footnote b of that Act, the Minister of Natural Resources has consulted the Provincial Minister with respect to the proposed Regulations and the Provincial Minister has approved the making of those Regulations;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to subsection 149(1)Footnote c of the Canada–Newfoundland and Labrador Atlantic Accord Implementation ActFootnote a, makes the annexed Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations.

Definition

Definition of Act

1 In these Regulations, Act means the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act.

Financial Resources

Marginal note:Proof of financial resources

  • 2 (1) For the purposes of subsection 162.1(1) of the Act, the proof that an applicant has the necessary financial resources is to be made by the applicant providing the Board with a statement of its net assets or of funding arrangements that it has made that demonstrates to the Board’s satisfaction that it is able to pay the applicable amount referred to in that subsection.

  • Marginal note:Substantiating documents

    (2) The statement must be accompanied by one or more of the following documents that substantiate it:

    • (a) the applicant’s most recent audited annual financial statement and, if the applicant has been given a credit rating by a credit rating agency that is current at the time the application is made, a document that indicates that credit rating;

    • (b) a promissory note;

    • (c) an insurance policy or a certificate of insurance;

    • (d) an escrow agreement;

    • (e) a letter of credit;

    • (f) a line of credit agreement under which funds identified in the statement are available;

    • (g) a guarantee agreement;

    • (h) a security bond or pledge agreement or an indemnity bond or suretyship agreement.

  • Marginal note:Audited statement and documents

    (3) For greater certainty, the Board may require that the statement and substantiating documents be audited by a qualified independent auditor and that the applicant provide it with a report of the audit that is signed by that auditor.

Financial Responsibility

Marginal note:Requirements of pooled fund

  • 3 (1) A pooled fund that is established for the purposes of subsection 163(1.01) of the Act must be located and administered in Canada.

  • Marginal note:Permitted uses

    (2) The fund is to be used only to make payments under subsection 163(2) of the Act. However, the fund may be used to make payments

    • (a) under subsection 158(2) of the Provincial Act, if it is also established for the purposes of subsection 158(1.1) of that Act;

    • (b) under subsection 168(2) of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, if it is also established for the purposes of subsection 168(1.01) of that Act;

    • (c) under subsection 160(2) of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act, SNS 1987, c. 3, if it is also established for the purposes of subsection 160(1A) of that Act; or

    • (d) under subsection 27(2) of the Canada Oil and Gas Operations Act, if it is also established for the purposes of subsection 27(1.01) of that Act.

  • Marginal note:Payment on demand

    (3) Moneys that are required to be paid out of the fund must be paid by the administrator of the fund on demand.

  • Marginal note:Obligations of administrator

    (4) The administrator of the fund must

    • (a) every year, provide the Board with an audited financial statement that demonstrates that the fund has been maintained at a minimum of $250 million or at the higher minimum amount set by regulation;

    • (b) notify the Board within 24 hours of the addition of a participant to, or withdrawal of a participant from, the fund or of any change in the amount of the fund, other than one that is solely attributable to an interest charge or a banking fee;

    • (c) notify the Board of a contravention by a participant in the fund of their obligation under subsection 163(1.1), (1.2) or (5) of the Act within 24 hours after they become aware of the contravention; and

    • (d) provide the Board with the phone number, email address and mailing address of their contact person.

Marginal note:Reimbursement into pooled fund

4 For the purposes of subsection 163(5) of the Act, the reimbursement into the pooled fund of an amount that is paid out of it must be made within seven days after the day on which the payment is made.

Board Recommendation Regarding Lesser Financial Requirements

Marginal note:Circumstances relating to recommendation

  • 5 (1) For the purposes of subsection 163.1(1) of the Act, the Board may make a recommendation to the Federal Minister in respect of an applicant if the Board is satisfied that the estimated total of the losses, damages, costs and expenses — other than losses of non-use value — for which the applicant may be liable under paragraphs 162(1)(b) and (2)(b) of the Act in connection with the proposed work or activity to which the application pertains is less than the amount referred to in paragraph 162(2.2)(a) or (b) of the Act.

  • Marginal note:Recommendation

    (2) The recommendation must identify the hazards that are relevant to the proposed work or activity and must include an assessment of the risks associated with each event that could occur in connection with each of those hazards and that could result in debris, in a spill or in an authorized discharge, emission or escape of petroleum.

  • Marginal note:Required information

    (3) The following information must accompany the recommendation:

    • (a) the estimated total of the losses, damages, costs and expenses referred to in subsection (1);

    • (b) the recommended amount that is less than the amount referred to in paragraph 162(2.2)(a) or (b) or 163(1)(a) of the Act, as the case may be;

    • (c) a summary of the reasons for the recommendation;

    • (d) a summary of any information provided by the applicant to the Board that the Board considers to be pertinent;

    • (e) any information concerning the recommendation that the Board provided to the Provincial Minister in connection with that Minister’s approval under subsection 163.1(1) of the Act; and

    • (f) any information requested by the Federal Minister.

  • Marginal note:Additional information

    (4) The Board may submit to the Federal Minister any other information that it considers to be pertinent.

Repeal

6 [Repeal]

Coming into Force

Marginal note:S.C. 2015, c. 4

Footnote *7 These Regulations come into force on the day on which section 61 of the Energy Safety and Security Act comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

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