Northern Gateway Pipelines Limited Partnership Remission Order: SI/2018-111
Canada Gazette, Part II, Volume 152, Number 26
Registration
SI/2018-111 December 26, 2018
FINANCIAL ADMINISTRATION ACT
Northern Gateway Pipelines Limited Partnership Remission Order
P.C. 2018-1567 December 14, 2018
Whereas Northern Gateway Pipelines Limited Partnership paid a levy of $14,710,000 under subsection 5.2(1) footnote a of the National Energy Board Cost Recovery Regulations footnote b after the Certificates of Public Convenience and Necessity OC-060 and OC-061 were issued by the National Energy Board;
Whereas, on June 23, 2016, the Federal Court of Appeal quashed the Certificates of Public Convenience and Necessity OC-060 and OC-061 in its decision Gitxaala Nation v. Canada (2016 FCA 187);
And whereas, the Governor in Council considers that the collection of the amount of $14,710,000 from Northern Gateway Pipelines Limited Partnership is unreasonable and unjust;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources and the Treasury Board, pursuant to subsection 23(2.1) footnote c of the Financial Administration Act footnote d, remits the amount of $14,710,000 to Northern Gateway Pipelines Limited Partnership.
EXPLANATORY NOTE
(This note is not part of the Order.)
Proposal
To seek the Governor in Council’s (GIC) approval to make a payment to Northern Gateway Pipelines Limited Partnership in the amount of $14,710,000, pursuant to subsection 23(2.1) of the Financial Administration Act for the Northern Gateway project.
Objective
The objective of this Order is to remit the levy charged to Northern Gateway Pipelines Limited Partnership (NGP) by the National Energy Board (NEB) for the two certificates issued for the project, which were subsequently quashed and declared to be a nullity by the Federal Court of Appeal.
Background
The proposed Northern Gateway Pipeline involved the proposed construction of a 1 170 km pipeline from Alberta to northern British Columbia. The completed pipeline would carry oil products from the oil sands to a marine terminal for export by way of tanker ships. Before it could be built, the proponent required a certificate under section 52 of the National Energy Board Act. Such a certificate may be issued by the NEB only after the GIC has directed the NEB to do so.
On December 19, 2013, a joint review panel (formed by the NEB and the Canadian Environmental Assessment Agency) recommended that the GIC direct the NEB to authorize the Northern Gateway Pipeline project.
On June 17, 2014, the GIC issued an Order directing the NEB to issue two certificates of public convenience and necessity (the certificates) for the project.
On June 18, 2014, the NEB issued the certificates to NGP pursuant to the National Energy Board Act.
On December 16, 2014, the NEB sent an invoice to NGP requesting the payment of a levy of $14.7 million for the issuance of the certificates pursuant to subsection 5.2(1) of the National Energy Board Act Cost Recovery Regulations. This subsection of the Regulations states that “any company that obtains […] a certificate authorizing the construction of a pipeline shall pay to the [NEB] a levy equal to 0.2% of the estimated cost of construction of the pipeline, as estimated by the Board in its decision issuing the certificate or making the order.”
On March 13, 2015, NGP paid the Receiver General of Canada the full amount of the levy.
In 2015, eight Indigenous groups and individuals, one union and four environmental organizations sought judicial review of, among other things, the federal environmental assessment, the Order and the NEB’s certificates. These applications were consolidated by the Federal Court of Appeal (FCA) on the basis they sought review of common matters.
On June 22, 2016, the FCA quashed the certificates and declared them a nullity on the basis of inadequate Indigenous consultation by the federal Crown. The FCA directed the matter be remitted back to the GIC for prompt redetermination.
On November 29, 2016, the GIC directed the NEB to dismiss NGP’s application for certificates in relation to the project.
As a result, on December 6, 2016, the NEB issued correspondence to NGP advising that it had rescinded the certificates for the project. As a consequence, there are no longer valid NEB Act certificates issued for the project.
On February 1, 2018, NGP wrote to the Receiver General of Canada requesting that the $14,710,000 levy be returned.
Implications
It is just and reasonable to remit the funds to NGP as the levy was intended to support the NEB’s activities during the construction and operation of the project. In this case, NGP did not begin construction and the project will never move into operation. In order to remain transparent and accountable for the collection and use of public funds, the levy will be remitted and returned to NGP. These funds will be remitted out of the Consolidated Revenue Fund of Canada by the Receiver General for Canada.
Contacts
Jim Fox
Vice-President
Integrated Energy Information and Analysis
National Energy Board
Telephone: 403-299-3628
Jean-Clément Chénier
Acting Director General
Communications and Portfolio Sector
Natural Resources Canada
Telephone: 343-292-6110