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Output-Based Pricing System Regulations (SOR/2019-266)

Regulations are current to 2022-06-20 and last amended on 2022-05-20. Previous Versions

Compensation and Compliance Units (continued)

Compensation and Issuance of Surplus Credits

Marginal note:Excess emissions

 For the purposes of subsection 174(1) of the Act, if, during a compliance period, a covered facility emits GHGs in a quantity that exceeds the applicable emissions limit, the compensation to be provided by the person responsible for that facility is to be established based on the quantity of GHGs, expressed in CO2e tonnes, that was emitted in excess of the emissions limit as reported in the annual report submitted for the compliance period or the Minister’s determination under section 53, as the case may be.

Marginal note:Excess emissions charge payment

  •  (1) Any compensation that is provided by means of an excess emissions charge payment must be made electronically to the Receiver General for Canada.

  • Marginal note:Surplus credits

    (2) Any compensation that is provided by means of a remittance of surplus credits must be made in the manner set out in section 70.

  • Marginal note:Other compliance units

    (3) Any compensation that is provided by means of a remittance of compliance units other than surplus credits must be made in the manner set out in section 71.

Marginal note:Minimum percentage — charge

 A minimum of 25% of the compensation that is required under section 174 of the Act must be provided by means of an excess emissions charge payment for each compliance period beginning with the 2022 compliance period.

Marginal note:Regular-rate compensation deadline

  •  (1) For the purposes of subsection 174(3) of the Act, the regular-rate compensation deadline is December 15 of the calendar year in which the related annual report must be submitted.

  • Marginal note:Exception

    (1.1) Despite subsection (1), for the compliance period that ends on December 31, 2019, the regular-rate compensation deadline is April 15, 2021.

  • Marginal note:Increased-rate compensation deadline

    (2) For the purposes of subsection 174(4) of the Act, the increased-rate compensation deadline is February 15 of the calendar year following the deadline under subsection (1).

  • Marginal note:Exception

    (2.1) Despite subsection (2), for the compliance period that ends on December 31, 2019, the increased-rate compensation deadline is June 15, 2021.

  • Marginal note:Notice referred to in subsection 53(3)

    (3) However, if a notice of determination under subsection 53(3) is issued after October 31 of the year in which the related annual report is due

    • (a) the regular-rate compensation deadline is 45 days after the day on which the notice is issued; and

    • (b) the increased-rate compensation deadline is 60 days after the day on which the regular-rate compensation deadline under paragraph (a) expires.

Marginal note:Compensation information

 A person that is responsible for a covered facility must, at the time compensation is provided, submit to the Minister the following information:

  • (a) the covered facility certificate number;

  • (b) the provision of the Act under which the compensation is being provided;

  • (c) the compliance period for which compensation is being provided;

  • (d) the quantity of GHGs emitted in excess of the emissions limit in respect of which the compensation is provided, expressed in CO2e tonnes;

  • (e) the details of any excess emissions charge payment, including

    • (i) the amount in dollars paid to the Receiver General for Canada,

    • (ii) the applicable rate, and

    • (iii) the date of payment;

  • (f) the details of any surplus credits or offset credits remitted, including, for each type of credit,

    • (i) the number remitted,

    • (ii) the date of the remittance transaction,

    • (iii) the remittance transaction number,

    • (iv) the serial numbers, and

    • (v) the date or dates on which they were issued; and

  • (g) the details of any units or credits, recognized as compliance units, remitted, including

    • (i) the number remitted,

    • (ii) the province or territory or program authority referred to in subsection 78(1) that issued the units or credits,

    • (iii) the date of their retirement,

    • (iv) the serial numbers assigned to them by the province or territory or program authority referred to in subsection 78(1),

    • (v) the start date of the offset project for which the unit or credit was issued,

    • (vi) the year in which the GHG reduction or removal occurred for which the unit or credit was issued,

    • (vii) the offset protocol applicable to the project for which the unit or credit was issued, including the version number and publication date, and

    • (viii) the name of the accredited verification body that verified the units or credits.

Marginal note:Surplus credits

 For the purposes of section 175 of the Act, the number of surplus credits, equivalent to the difference between the emissions limit and the quantity of GHGs emitted from the covered facility, that the Minister issues is based on what is reported in the annual report submitted for the compliance period if the emissions limit that was set out in the report was calculated in accordance with these Regulations, unless

  • (a) a material discrepancy, within the meaning of subsection 49(2), exists with respect to the total quantity of GHGs or the production from one of the specified industrial activities that is used in the calculation of the emissions limit for the compliance period; or

  • (b) the emissions limit or the quantity of GHGs emitted from the covered facility is determined by the Minister for the compliance period under section 53.

Errors and Omissions

Marginal note:Identification by person responsible

 The notice submitted under subsection 176(1) of the Act by a person responsible for a covered facility who has become aware of an error or omission in an annual report must indicate whether

  • (a) the error or omission would have constituted a material discrepancy under subsection 49(2) if it had been identified during the verification of the annual report; and

  • (b) the aggregate of all errors and omissions would have constituted a material discrepancy under subsection 49(2) if it had been identified during the verification of the annual report.

Marginal note:Corrected report

  •  (1) The person responsible for the covered facility must submit to the Minister a corrected report within 60 days after the day on which the notice is submitted or, if the notice indicated that the error or omission, or the aggregate of all errors or omissions, would have constituted a material discrepancy under subsection 49(2), a corrected report, along with a verification report prepared in accordance with section 52, within 90 days after the day on which the notice is submitted.

  • Marginal note:Content

    (2) The corrected report must include the following information:

    • (a) a description of the corrections made to the annual report;

    • (b) the circumstances that led to the error or omission and the reasons why the error or omission was not previously detected;

    • (c) a description of the measures implemented, or to be implemented, to avoid future errors or omissions of the same type;

    • (d) the quantity of GHGs to which the detected error or omission corresponds, if corrected;

    • (e) the production to which the detected error or omission corresponds, if corrected;

    • (f) the result of the calculation under section 64;

    • (g) in the case of a covered facility other than one referred to in paragraph (h) or (i)

      • (i) the quantity of each GHG from the covered facility, expressed in CO2e tonnes, for each emission type determined in accordance with subsections 17(2) to (4), if corrected,

      • (ii) the total quantity of GHGs determined in accordance with section 17, if corrected,

      • (iii) the quantity of GHGs emitted and the quantity of CO2 that is captured and stored, determined in accordance with section 35, if corrected, and

      • (iv) the quantity of production quantified in accordance with section 31, if corrected;

    • (g.1) in the case of a covered facility to which section 36.2 applies, the information referred subsection 11(1.1), if corrected;

    • (h) in the case of an electricity generation facility

      • (i) the quantity of each GHG from the covered facility, expressed in CO2e tonnes, for each emission type, if corrected,

      • (ii) the total quantity of GHGs from each unit within the facility, determined in accordance with section 20, if corrected, and the sum of those GHGs from all units within the covered facility during the compliance period, if corrected,

      • (iii) the quantity of GHGs emitted and the quantity of CO2 that is captured and stored, determined in accordance with section 35, if corrected, and

      • (iv) the gross quantity of electricity generated by each unit within the facility, quantified in accordance with section 32, if corrected.

    • (i) in respect of a covered facility where both the specified industrial activity of producing coal by mining coal deposits and, if comprised of a unit or a group of units that are registered under the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations, the generation of electricity are engaged in,

      • (i) the quantity of each GHG from the covered facility, expressed in CO2e tonnes, from each specified emission type, if corrected,

      • (ii) the total quantity of GHGs from mining of coal deposits, determined in accordance with section 17, and the total quantities of GHGs from the generation of electricity, determined in accordance with section 20, if corrected,

      • (iii) the quantity of GHGs emitted and the quantity of CO2 that is captured and stored, determined in accordance with section 35, if applicable, if corrected, and

      • (iv) the production quantified for each specified industrial activity engaged at the facility, the corrected production by each unit within the covered facility for each of the industrial activities set out in paragraphs 38(a) to (c), column 1, of Schedule 1 during the compliance period and the corrected sum of the production from all of the units, if corrected;

    • (i.i) in the case of a covered facility to which section 41.2 applies, the information referred to in subsection 11(1.2), if corrected;

    • (j) any change to the result obtained under section 44; and

    • (k) any other correction made to the information in the annual report.

Marginal note:Identification by the Minister

  •  (1) Subsection 62(2) applies to a report that is required by the Minister under subsection 177(2) of the Act and the report must be submitted to the Minister within the following period:

    • (a) in the case of a corrected report, 60 days after the day on which the Minister required it; and

    • (b) in the case of a verified corrected report, 90 days after the day on which the Minister required it.

  • Marginal note:Verification report

    (2) The corrected report submitted under paragraph (1)(b) must be submitted with a verification report prepared in accordance with section 52.

Marginal note:Change in obligations

 For the purposes of section 178 of the Act, the revised compensation to be paid or remitted or number of surplus credits to be issued, as the case may be, is equal to the difference between the result obtained in accordance with the calculation under section 44, and reported in the annual report, and the result that is reported in the corrected report.

Marginal note:Revised compensation

  •  (1) For the purposes of paragraph 178(1)(a) of the Act, any revised compensation is to be provided by means of an excess emissions charge payment or a remittance of compliance units. Revised compensation is to be provided if the difference specified in section 64 is greater than, or equal to, 500 CO2e tonnes.

  • Marginal note:Issuance of surplus credits

    (2) For the purposes of paragraph 178(1)(b) of the Act, the Minister may issue to a person that is responsible for a covered facility a number of surplus credits that is equivalent to the difference between

    • (a) the number of surplus credits calculated based on the corrected report and the number of surplus credits issued under section 175 of Act based on the annual report; or

    • (b) the applicable emissions limit and the quantity of GHGs emitted from the facility that are reported in the corrected report.

Marginal note:Excess Surplus credits issued

  •  (1) If a corrected report shows that an excess number of surplus credits was issued to the person responsible for a covered facility and the credits in question remain in an account in the tracking system that is linked to the covered facility, the Minister must revoke the excess credits without notice. The revocation is effective as of the date on which the corrected report is submitted.

  • Marginal note:Insufficient surplus credits in account

    (2) If any of the excess surplus credits are no longer in an account in the tracking system that is linked to the covered facility, the person responsible for the facility must, within the compensation deadlines set out in subsections 69(1) and (2), make up the amount owed by

    • (a) remitting to the Minister other surplus credits in accordance with section 70;

    • (b) remitting to the Minister other compliance units in accordance with section 71; or

    • (c) making an excess emissions charge payment in accordance with section 55.

Marginal note:Charge

 An excess emissions charge payment made for the purposes of subsection 65(1) must be made in the manner set out in section 55.

Marginal note:Surplus credits

  •  (1) Any revised compensation that is provided by the remittance of surplus credits must be made in the manner set out in section 70.

  • Marginal note:Other compliance units

    (2) Any revised compensation that is provided by the remittance of compliance units other than surplus credits must be made in the manner set out in section 71.

Marginal note:Regular-rate compensation deadline

  •  (1) For the purposes of revised compensation, the regular rate referred to in subsection 174(3) of the Act applies for a period of 45 days after the day on which the corrected report is submitted.

  • Marginal note:Increased-rate compensation deadline

    (2) If compensation is not provided in full by the deadline set out in subsection (1), the increased rate referred to in subsection 174(4) of the Act applies for a period of 60 days after that deadline.

  • Marginal note:Other compensation deadlines

    (3) If a corrected report is submitted to the Minister in respect of a compliance period for which the regular-rate compensation deadline set out in subsection 57(1) or (1.1) has not expired, the compensation deadline in respect of that compliance period is the later of

    • (a) the compensation deadlines set out in subsection 57(1), (1.1), (2) or (2.1), as the case may be, and

    • (b) the compensation deadlines under subsection (1) or (2), as the case may be.

 
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