Canada Gazette, Part I, Volume 158, Number 50: Export and Import Reporting Regulations

December 14, 2024

Statutory authority
Canadian Energy Regulator Act

Sponsoring agency
Canadian Energy Regulator

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Issues

When the Canadian Energy Regulator Act (CER Act) replaced the National Energy Board Act (NEB Act), a new export and import regulatory framework was created. As a result, four regulations made under the NEB Act — the National Energy Board Act Part VI (Oil and Gas) Regulations (NEB Part VI Regulations), the National Energy Board Electricity Regulations (NEB Electricity Regulations), the National Energy Board Export and Import Reporting Regulations (NEB Reporting Regulations), and the Toll Information Regulations — need to be repealed and replaced with new regulations reflecting the regulation-making authorities set out in the CER Act.

Regulatory amendments are also necessary to address circumstances where requirements to report information are no longer reflective of the CER Act. The CER Act narrowed the scope of matters the Canada Energy Regulator (CER or Regulator) considers in assessing oil, gas, and electricity export applications, which in turn affected the associated information that must be reported by export authorization holders.

Additionally, until the regulations are updated, there is an increased risk that the CER may not obtain pertinent data to effectively monitor energy markets, which could impact stakeholders who also rely on this data. Certain aspects of the regulations have become outdated, as the energy industry has evolved in the decades since the regulations first came into force. Changes would reflect the types of information the CER now requires for market monitoring, as well as remove outdated requirements and revise others to reflect current industry practice and technology.

Until the regulations are changed, importers and authorization holders will continue to be required to comply with regulatory requirements that are not reflective of the CER Act or current industry practice and technology. Reliance on current reporting requirements may result in regulatory uncertainty and unnecessary administrative burden for potential applicants, importers and authorization holders, and other interested parties. There is also a risk that the CER may not obtain pertinent or timely market monitoring data, which may affect the CER’s ability to adapt quickly to evolving energy markets.

Background

The export and import regulatory framework, established under the NEB Act, consists of four regulations, made by the Governor in Council or the Regulator with the approval of the Governor in Council:

These four regulations provide the CER with critical information to assess applications and enable the CER to understand the functioning of energy markets in Canada in order to fulfill its mandate as Canada’s energy expert. This data is also used to publish energy reports and statistics that are used by industry to inform business and investment decision-making.

In 2012, the NEB Act was amended;footnote 1 requirements for mandatory public hearings for gas and electricity export applications were removed, and the scope of matters that are considered for export applications was reduced. In 2014, after consultation with stakeholders, amendments to the National Energy Board (NEB) regulations were drafted to reflect the legislative changes. However, the proposed regulatory amendments were put on hold in 2015 due to the federal election and in anticipation of the changes that would result from the Government’s Environmental and Regulatory Reviews.

In 2019, following the above-mentioned reviews, the NEB Act was repealed and replaced with the CER Act. The changes brought about with the CER Act included removing the requirement for an authorization to import oil or gas and changing various names and terms throughout. The CER Act also restructured the regulation-making authorities by introducing a third regulation-making authority: made by the Regulator.

The CER will be bringing forward three proposals to repeal the four NEB Act regulations and replace them with five CER Act regulations, reflecting the new regulation-making authorities, as shown in the table below.

Table: Proposed CER Act regulations
Proposed regulations CER Act Regulation-making authority
Export and Import (Orders, Licences and Permits) Regulations Part 7, paragraphs 353(1)(a) to (d), and paragraphs 367(1)(a) and (d) Governor in Council
Part 9, paragraph 390(1)(b) table 1 note a
International Power Lines (Permits) Regulations Part 4, paragraphs 291(a), (b), and (d)
Export and Import Reporting Regulations Part 7, subsection 354(1), and Part 9, paragraph 389(1)(d) Regulator with Governor in Council approval
Toll Information Reporting Regulations Part 9, paragraph 389(1)(d)
Export Applications (Licences and Permits) Regulations Part 7, subsections 354(2) and 367(2) Regulator

Table 1 note(s)

Table 1 note a

Regulations may only be made after consultation with the Regulator.

Return to table 1 note a referrer

This proposal brings together sections of the NEB Reporting Regulations and the Toll Information Regulations into two proposed regulations to be made by the Regulator with Governor in Council approval:

A second proposal brings together sections of the NEB Part VI Regulations and the NEB Electricity Regulations under two other regulations: the Export and Import (Orders, Licences and Permits) Regulations and the International Power Lines (Permits) Regulations, to be made under the Governor in Council’s regulation-making authority, which are addressed through a separate Regulatory Impact Analysis Statement.

A third, separate but concurrent proposal captures sections of the NEB Part VI Regulations, the NEB Electricity Regulations, and the NEB Reporting Regulations that are not addressed by the other two proposals. These proposed regulations, the Export Applications (Licences and Permits) Regulations, would be made by the Regulator and are addressed through a separate Regulatory Impact Analysis Statement.

Objective

The desired outcome for this proposal is a clear and consistent regulatory framework in which exporters and importers of oil, gas or electricity, and other interested parties would have a clear understanding of the reporting obligations. There are two objectives for this proposal:

This proposal aims to reduce unnecessary administrative burden on businesses and provide the CER with the information it requires to support its role as an expert tribunal. A regulatory environment that is fair, predictable, and consistent is crucial for businesses to function and make investment decisions, and supports the CER’s mandate to regulate energy development in the Canadian public interest.

Description

Below is a description of the two proposed regulations.

Export and Import Reporting Regulations

The proposed Export and Import Reporting Regulations reproduces certain requirements currently found in the NEB Reporting Regulations (sections 2–8). Specifically, the proposed regulations would contain the information that gas importers and holders of export orders, licences and permits must keep records of and report to the CER.

In addition, the proposed regulations would incorporate the following changes:

Toll Information Reporting Regulations

The proposed Toll Information Reporting Regulations reproduces certain requirements currently found in the Toll Information Regulations (sections 3 and 5). Specifically, the proposed regulations would contain the information (capital, traffic, revenues, expenses, and respecting the rate of returns) that pipeline companies, which charge tolls, must report to the CER.

In addition, the proposed regulations would incorporate the following changes:

Regulatory development

Consultation

The proposed regulations consider the feedback received through the consultation process undertaken in 2013 to address changes to the NEB Act. While no further consultations have occurred since 2013, information about this proposal has remained publicly available on the CER website along with an open invitation for feedback on the CER’s regulatory framework. The introduction of the CER Act in 2019 did not result in substantive changes to the amendments proposed in 2013, with the exception of changes to the regulation-making authorities. As a result, the proposed changes and comments received in 2013 remain relevant.

The consultation involved posting the proposed amendments on the NEB website, and notifying industry associations, export authorization holders, provincial governments and other interested stakeholders of opportunities to provide comments to the NEB. A total of 11 letters were submitted during the comment period by petroleum, petrochemical, pipeline and electricity associations, as well as by provincial departments and Indigenous Peoples. The NEB also met with a number of these parties during and after the comment period to answer questions and provide additional detail regarding the proposed amendments.

Companies and industry associations were generally supportive of proposed changes intended to streamline and simplify regulatory requirements and to bring the regulations in line with the legislation. Several modifications were made to address comments and requests from stakeholders. For example, the proposed Export and Import Reporting Regulations were modified to reflect a request from the Canadian Association of Petroleum Producers to amend the definition of “refined petroleum products” to clarify that this term does not include bitumen, synthetic crude oil and dilbit as these products are understood to fall under the meaning of “crude oil”. The proposed regulations were also modified to extend the deadline for electricity exporters to report monthly data as requested by the Canadian Electricity Association. The proposed Toll Information Reporting Regulations reflects the Canadian Association of Petroleum Producers and the Gitxaala Nation’s request to retain quarterly reporting, rather than moving to annual reporting, as this information is useful to toll paying companies for forecasting and negotiation purposes.

Other comments and requests from stakeholders did not require modifications to the proposed regulations. Some comments were resolved directly with stakeholders, and others would be addressed through updated guidance in the filing manuals and Commodity Tracking System once the proposed regulations come into force.

Some requests were not incorporated, as they would have created a misalignment with the legislation. For example, the Chemistry Industry Association of Canada requested to create a new requirement for natural gas exporters to report on the volume of natural gas liquids (NGLs) entrained in gas that is exported. The CER considered this request and decided not to impose this requirement on natural gas exporters as the volume of NGLs entrained in gas is not directly relevant to determining whether the gas is surplus to Canadian requirements, which is the only criterion in the CER Act for assessing oil or gas export applications. In addition, it is possible to monitor NGL markets using currently available sources of data and without creating additional regulatory burden on industry.

Modern treaty obligations and Indigenous engagement and consultation

An assessment of implications on modern treaties was conducted which examined the scope and subject matter of the initiative in relation to modern treaties in effect. The assessment did not identify any potential impacts or obligations on federal modern treaties in relation to these proposed regulations.

Notwithstanding the above, to ensure Indigenous Peoples are consulted and treaty rights are considered in the export and import regulatory framework, the CER will notify Indigenous Peoples, who may have an interest in these proposed regulations, of the opportunity to comment during the Canada Gazette, Part I, 45-day consultation period. This consultation would be in addition to the extensive consultation with Indigenous Peoples and organizations undertaken during the development of the CER Act through Bill C-69 (An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts).

Instrument choice

As there is an existing regulatory framework that applies to exports, imports, international power lines, and reporting, changes to the regulation-making authorities, as well as necessary changes to reflect the CER Act and modernize the regulations could only be accomplished through the regulatory process. Therefore, no other instruments were considered.

Regulatory analysis

Benefits and costs

This proposal would result in a net decrease in administrative costs for businesses. A number of export companies and companies who charge tolls were consulted in determining the cost-benefit impact of these regulatory changes.

Changes to the proposed Export and Import Reporting Regulations would result in cost savings for business as the proposal would remove reporting requirements for oil, gas, and electricity exporters and gas importers. The proposal would also remove all in-transit reporting requirements as exporters would no longer be required to seek authorizations for this activity. Information on the stakeholders and reporting frequency is in the “One-for-one rule” section. The present value cost decrease for businesses reporting on gas imports and oil, gas, and electricity exports would be $22,696 over a 10-year forecast period starting in 2024, or an annualized average of $3,231.

The proposed Toll Information Reporting Regulations would require certain pipeline companies to report traffic on a monthly basis instead of quarterly as currently required which would result in a marginal increase in costs to business. Currently, 13 pipeline companies submit quarterly surveillance reports with information on capital, traffic, revenues and expenses pertaining to their pipeline systems. The change would require these companies to submit information on traffic (i.e. throughput volumes) on a monthly basis, in addition to continuing to submit quarterly surveillance reports. Pipeline companies monitor throughput volumes at a very granular level, therefore, data on monthly throughput is readily available and would not require any additional equipment, processes or staffing. For information on the stakeholders and reporting requirements, refer to the “One-for-one rule” section. The present value cost increase for businesses reporting toll information would be $29,019 over a 10-year forecast period starting in 2024, or an annualized average of $4,132.

The proposed Export and Import Reporting Regulations and Toll Information Reporting Regulations would improve the quality and relevance of data collected by the CER. This would also provide economic benefits for Canadians as this data is used by the CER to publish energy reports and statistics that are used by industry to inform business and investment decision-making. For example, during the 2013 consultations on the proposed amendments, the Canadian Association of Petroleum Producers advised that data collected and made available pursuant to the Toll Information Regulations were used by toll-paying companies (i.e. producers) for forecasting and negotiating purposes and should continue to be collected. CER publications, such as the Energy Futures report, are widely taken up and reported by media and industry, and provide Canadians with information regarding Canadian energy supply, demand and markets that can help inform consumer and employment decision-making.

The proposed Export and Import Reporting Regulations and Toll Information Reporting Regulations would also assist the CER in collecting relevant data from exporters, importers and pipeline companies that are needed to monitor energy markets and commodity flows. Staying informed about markets and commodities is crucial for the CER, as an expert tribunal, to make decisions on facility and non-facility applications that are in the public interest. Costs to government to implement this proposal would be negligible as the CER’s Commodity Tracking System is already in place. Changes to reporting requirements in the proposed regulations would be reflected in the Commodity Tracking System as the CER periodically updates this system. This proposal would result in cost savings for the CER by freeing up resources needed to process these reports.

Small business lens

Analysis under the small business lens concluded that the proposed regulations would not impact Canadian small businesses.

Currently, there are no small businesses who export or import oil, gas or electricity; it is predominantly large companies who do so. Deleting unnecessary reporting requirements under the proposed Export and Import Reporting Regulations would result in reduced administrative costs for small businesses exporting or importing oil, gas, or electricity should they enter the market in the future.

Small and large businesses may charge tolls; however, it is only large companies who are required to report toll information. Increasing the frequency of reporting under the proposed Toll Information Reporting Regulations would result in administrative costs that would not be prohibitive for small businesses should they enter the market in the future.

One-for-one rule

The one-for-one rule applies as the proposal would result in an incremental change in administrative burden on business. The proposal repeals two existing regulations and replaces them with two new regulatory titles, which results in no net increase or decrease in regulatory titles. A number of export companies and companies who charge tolls were consulted in determining the administrative impact of these proposed changes.

Export and Import Reporting Regulations

Element A: The proposed Export and Import Reporting Regulations would remove reporting requirements, currently required under the NEB Reporting Regulations, which would decrease administrative costs for businesses exporting gas and transporting electricity. There are currently 93 electricity export permit holders, and it is estimated that no longer requiring monthly compiling and reporting of electricity exports as firm or interruptible would save permit holders one hour every month to no longer compile and report this data to the CER on a monthly basis. There are currently 27 natural gas in-transit order holders and no light crude oil or refined petroleum products in-transit order holders, and it is estimated that no longer requiring monthly reporting would save order holders two hours to no longer submit a report to the CER on a monthly basis.

The proposed Export and Import Reporting Regulations would reintroduce reporting requirements, which would increase administrative costs for businesses that are no longer subject to the natural gas import reporting requirements under the NEB Reporting Regulations. Prior to the expiration of the CER Act transitional provision 42, all natural gas importers were required to report monthly. These requirements have been simplified and streamlined and will be reintroduced in the proposed regulations to again require all natural gas importers to report on a monthly basis. There was an annual average of 142 natural gas importers and it is estimated that re-adding monthly import reporting requirements would take an accounting-level position approximately one hour to compile the required data and report it to the CER every month.

The estimated average hourly wage, including overhead, for the responsible employee is $42.02 (in 2012 dollars). The total annualized average decrease in administrative costs to businesses for the proposed Export and Import Reporting Regulations is estimated to be $1,155.

Element B: This proposal would repeal the NEB Reporting Regulations and replace it with the proposed Export and Import Reporting Regulations, resulting in no net increase or decrease in regulatory titles.

Toll Information Reporting Regulations

Element A: The proposed Toll Information Reporting Regulations are expected to increase administrative costs for business, specifically for large pipeline companies (companies with extensive, complex systems). Currently, all 13 of the large pipeline companies who have infrastructure regulated by the CER submit quarterly reports. The proposed regulations would require those large pipeline companies to report traffic on a monthly basis. It is estimated that it would take companies one hour to report traffic every month. The estimated average hourly wage, including overhead, for the responsible employee is $31.04 (in 2012 dollars). The total annualized average increase in administrative costs to businesses for the proposed Toll Information Reporting Regulations is estimated to be $1,477.

Element B: This proposal would repeal the Toll Information Regulations and replace it with the proposed Toll Information Reporting Regulations, resulting in no net increase or decrease in regulatory titles.

Regulatory cooperation and alignment

The proposed regulations are not related to a work plan or commitment under a formal regulatory cooperation forum.

Nevertheless, the proposed Export and Import Reporting Regulations would extend the deadline for electricity importers to report information to the CER from the 15th day of the month to the 25th day of the month. This change would align the reporting requirement with the Canada Border Services Agency’s (CBSA) existing deadline for electricity importers to report information to the CBSA. This is a direct result of consultations with the Canadian Electricity Association who advised that they would support the alignment of the CER and CBSA reporting deadlines.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA Directive), a preliminary scan concluded that a SEEA is not required. This proposal is not expected to have any environmental effects as it pertains to export, import, and toll reporting.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

Implementation

The proposed Export and Import Reporting Regulations and the proposed Toll Information Reporting Regulations would come into force on the day on which the separately proposed Export and Import (Orders, Licences and Permits) Regulations come into force, but if these proposed regulations are registered after that day, they come into force on the day on which they are registered.

For the purpose of implementing the regulatory requirements, the CER would undertake a number of compliance promotion activities. Reporting requirements set out in the proposed Export and Import Reporting Regulations and Toll Information Reporting Regulations would be reflected through updated guidance on the CER’s website and in the CER Filing Manuals, as well as updates to the CER’s Commodity Tracking System.

Compliance and enforcement

Compliance and enforcement of the proposed regulations would be in accordance with a risk-based approach, aligned with CER policies. They would follow established CER approaches and procedures, including education, applying conditions on authorizations, inspections at sites and facilities, audits of programs, procedures, manuals, records, and activities. Non-compliant activities would be subject to the enforcement actions available to the CER under the CER Act and could include notices, stop work orders, suspending or revoking authorizations, or prosecution.

Contact

Jenni Low
Regulatory Policy
Canada Energy Regulator
517 10th Avenue Southwest, Suite 210
Calgary, Alberta
T2R 0A8
Fax: 403‑299‑3664
Email: EIRF@cer-rec.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Canadian Energy Regulator, subject to the approval of the Governor in Council, proposes to make the annexed Export and Import Reporting Regulations under subsection 354(1) and paragraph 389(1)(d) of the Canadian Energy Regulator Act footnote a.

Interested persons may make representations concerning the proposed Regulations within 45 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Jenni Low, Market Analyst, Regulatory Policy, Canadian Energy Regulator, 517 Tenth Avenue Southwest, Suite 210, Calgary, Alberta T2R 0A8 (fax: 403‑299‑3664; email: EIRF@cer-rec.gc.ca)

Ottawa, November 28, 2024

Wendy Nixon
Assistant Clerk of the Privy Council

Export and Import Reporting Regulations

Definitions

Definitions

1 The following definitions apply in these Regulations.

Act
means the Canadian Energy Regulator Act. (Loi)
butane
means normal butane and isobutane. (butane)
energy
means the total quantity of energy in the form of electricity transmitted over a period of time, expressed in watt-hours or multiples or submultiples of watt-hours. (énergie)
licence
means a licence for the export of oil or gas that is issued under Division 1 of Part 7 of the Act. (licence)
order
means an order for the export of oil or gas that is made under the Export and Import (Orders, Licences and Permits) Regulations. (ordonnance)
permit
means a permit for the export of electricity that is issued under Division 2 of Part 7 of the Act. (permis)
power
means the rate at which energy is transferred in an electric circuit, expressed in watts or multiples or submultiples of watts. (puissance)
power system
means a network of electrical components, including the generating stations, transformers, switching stations, transmission lines, substations, distribution lines and circuits necessary for the generation, transmission and distribution of electricity. (réseau d’électricité)

Requirements

Keeping reports

2 Every person who submits a report to the Regulator that is required under these Regulations must keep a copy of the report for a period of three years beginning on the last day of the month to which the report relates.

Exemption

3 Every person who undertakes any of the following activities is exempt from submitting reports to the Regulator under these Regulations:

Gas

4 Every person who exports or imports gas — other than propane, butane or ethane — must submit to the Regulator, on or before the last day of each month, a report for the previous month that contains the following information, set out by point of export or import:

Propane and butane

5 Every holder of a licence or order authorizing the export of propane or butane must submit to the Regulator, on or before the last day of each month, a report for the previous month that contains, for each licence and order, the following information:

Ethane

6 Every holder of a licence or order authorizing the export of ethane must submit to the Regulator, on or before the last day of each month, a report for the previous month that contains, for each licence and order, the following information:

Oil

7 Every holder of a licence or order authorizing the export of oil must submit to the Regulator, on or before the last day of each month, a report for the previous month that contains, for each licence and order, the following information:

Electricity

8 (1) Every holder of a licence or permit authorizing the export of electricity must submit to the Regulator, on or before the 25th day of each month, a report for the previous month that contains, for each licence or permit, the following information:

Exception

(2) However, if a permit is issued authorizing, as a border accommodation transfer, the export of 1 000 kW or less of power to each customer served under the permit, the report must be submitted to the Regulator every six months.

Definition of border accommodation transfer

(3) In subsection (2), border accommodation transfer means a transfer of power and energy for the purpose of providing electricity to

Units of measurement

9 For the purposes of these Regulations, gas, oil and electricity must be measured in units of measurement that meet the requirements of sections 10 to 12 of the Export Applications (Licences and Permits) Regulations.

Repeal

10 The National Energy Board Export and Import Reporting Regulations footnote 3 are repealed.

Coming into Force

Registration

11 These Regulations come into force on the day on which the Export and Import (Orders, Licences and Permits) Regulations are registered, but if these Regulations are registered after that day, they come into force on the day on which they are registered.

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