Transitional Regulations for the Purpose of the National Energy Board Cost Recovery Regulations: SOR/2019-300
Canada Gazette, Part II, Volume 153, Number 17
Registration
SOR/2019-300 August 8, 2019
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
P.C. 2019-1180 August 7, 2019
Whereas the Governor in Council considers it necessary, as of the day on which the Canadian Energy Regulator Act footnote a comes into force, to provide for the calculation of cost recovery charges under the National Energy Board Cost Recovery Regulations footnote b by the Canadian Energy Regulator established by section 10 of that Act as if it were the National Energy Board established by section 3 footnote c of the National Energy Board Act footnote d.
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to section 43 of 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 footnote e, makes the annexed Transitional Regulations for the Purpose of the National Energy Board Cost Recovery Regulations.
Transitional Regulations for the Purpose of the National Energy Board Cost Recovery Regulations
Definitions
1 The following definitions apply in these Regulations.
- commencement day means the day on which the Canadian Energy Regulator Act comes into force. (date de référence)
- National Energy Board means the National Energy Board established by section 3 of the National Energy Board Act as it read immediately before commencement day. (Office)
- NEB Regulations means the National Energy Board Cost Recovery Regulations as they read immediately before commencement day. (Règlement de l’Office)
- Regulator means the Canadian Energy Regulator established by section 10 of the Canadian Energy Regulator Act. (Régie)
NEB Regulations — as of commencement day
2 (1) On and after commencement day, the Regulator is to apply the NEB Regulations as if it were the National Energy Board and, in particular, is to
- (a) continue and complete any calculation of cost recovery charges, including the determination of costs for the purpose of that calculation or the determination of any other related matter, that had been commenced by the National Energy Board; and
- (b) begin and complete any calculation of cost recovery charges, including the determination of costs for the purpose of that calculation or the determination of any other related matter, that is required to be done under those Regulations and that had not been commenced by the National Energy Board.
Interpretation of NEB Regulations
(2) For the purpose of subsection (1), the NEB Regulations are to be read with any modifications that the circumstances require, including that
- (a) a reference to the National Energy Board is to be read as a reference to the Regulator, if the context of the reference relates to a period on or after commencement day; and
- (b) a reference to a cost or a forecast for the purpose of the calculation of cost recovery charges, including the determination of costs for the purpose of that calculation or the determination of any other related matter, is to be read, if the context requires, to be
- (i) a cost or a forecast that the National Energy Board determined, for any relevant period that ends before commencement day, to be attributable to its responsibilities under the National Energy Board Act or any other Act of Parliament or that the Regulator determines, as if it were the National Energy Board, to be attributable to those responsibilities, and
- (ii) a cost or a forecast that the Regulator determines, for any relevant period that begins on or after commencement day, to be attributable to the carrying out of the Regulator’s mandate under the Canadian Energy Regulator Act, including costs related to applications that are denied or withdrawn, as if the cost or forecast were determined by the National Energy Board to be attributable to the Board’s responsibilities under the National Energy Board Act or any other Act of Parliament.
Coming into force
3 These Regulations come into force on the day on which section 10 of 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, Chapter 28 of the Statutes of Canada, 2019, comes into force, but if they are registered after that day, they come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
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, repeals the National Energy Board Act (NEB Act) and replaces it with the Canadian Energy Regulator Act (CER Act). At the same time, the National Energy Board (NEB) is replaced with the Canadian Energy Regulator (CER). The CER, as did the NEB, provides regulatory oversight over the full lifecycle of federal energy infrastructure including pipelines that cross interprovincial and international borders, international and designated interprovincial power lines, and implements a mandate for safety, security and protection of the environment.
Regulations made under the NEB Act remain in force with the repeal of the NEB Act due to paragraph 44(g) of the Interpretation Act, which provides that all regulations made under a repealed enactment are in force and deemed to have been made under a new enactment that replaces it (i.e. CER Act), insofar as they are not inconsistent with the new enactment. One of these regulations is the National Energy Board Cost Recovery Regulations (Regulations). The Regulations prescribe a multi-year cycle for the calculation and recovery of agency costs from regulated entities.
For clarity and certainty regarding the continuity of the Regulations over a multiple-year billing cycle, across the transition period from the NEB to the CER, the Transitional Regulations for the Purpose of the National Energy Board Cost Recovery Regulations (Transitional Regulations) are required.
Background
Under the Regulations, it typically takes three calendar years to fully recover the actual costs associated with operation of the agency during a given fiscal year. In each calendar year, annual levies for regulated entities are based on the aggregation of forecast expenditures for portions of the immediately prior and future fiscal years, adjusted for differences between estimated and actual cost recovery calculations in prior years.
The cost recovery methodology in the Regulations also includes calculations associated with direct and indirect staff time allocation as amongst commodity classes, as well as forecasted and actual facility throughput of regulated entities, with levies revised on a rolling basis through the prescribed annual adjustment process.
Objectives
The objectives of the Transitional Regulations are
- to provide clarity and certainty regarding the continued application of the Regulations as they are applied today during the transition period from the NEB to the CER; and
- to provide for continuous cost recovery for regulatory oversight provided by the federal regulator over the full lifecycle of federal energy infrastructure including pipelines that cross interprovincial and international borders, international and designated interprovincial power lines.
Description
The Transitional Regulations provide
- that the CER is to apply the Regulations when the CER Act comes into force;
- provide that the CER continues and completes the calculation of cost recovery charges that had been started by the NEB prior to the CER Act coming into force, as if it were the NEB;
- that the CER completes any calculation of cost recovery charges that is required under the Regulations;
- that any reference in the Regulations to the NEB is to be read as a reference to the CER;
- that a reference to a cost or forecast of cost recovery charges may be read to be a cost or forecast that the NEB determined through the Regulations, before the CER Act came into force; and
- that a reference to a cost or forecast of cost recovery charges determined by the CER, may be read as a cost or forecast that the NEB determined through the Regulations under the NEB Act.
Regulatory development
Consultation
The Transitional Regulations for the Purpose of the National Energy Board Cost Recovery Regulations were not prepublished as these are transitional regulations, to provide clarity and certainty regarding the continued application of the Regulations as they are applied today and maintain the current level of cost recovery for the federal energy regulator.
Modern treaty obligations and Indigenous engagement and consultation
The Transitional Regulations impact Indigenous peoples in the same way that they impact all Canadians subject to the Regulations.
Instrument choice
An option of not putting the Transitional Regulations in place was considered. However, given the potential lack of clarity and certainty about the continuity of the Regulations across the transition period from the NEB to the CER and the potential disruption of the cost recovery cycle, and in order to recover costs for the ongoing work of the agency, it was determined that these Transitional Regulations were the appropriate instrument.
Regulatory analysis
Costs and benefits
There are no costs associated with the Transitional Regulations. The benefits are
- clarity and certainty about the continuity and continued application of the Regulations, through the transition period from the NEB to the CER; and
- the ability of the CER to fully implement its mandate under the CER Act, including safety, security and protection of the environment.
Small business lens
The small business lens does not apply as there are no impacts on small businesses.
“One-for-One” Rule
The “One-for-One” Rule does not apply as there is no impact on administrative burden.
Regulatory cooperation and alignment
The Transitional Regulations do not involve or impact regulatory cooperation and alignment.
Strategic environmental assessment
In accordance with The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for this proposal.
Implementation, compliance and enforcement, and service standards
The Regulations will continue apply through the transition from the NEB to the CER. As the Transitional Regulations maintain the existing Regulations, the related process for recovering costs will continue to be implemented. The CER will maintain the same enforcement approach and service standards as are in place under the existing Regulations. Communication regarding the continuity of the application of the Regulations will be included in CER communications at the commencement of the CER Act.
Contact
Fern Hietkamp
Regulatory Policy Team
National Energy Board / Canadian Energy Regulator
517 Tenth Avenue SW, Suite 210
Calgary, Alberta
T2R 0A8
Telephone: 403‑292‑4800 (toll-free: 1‑800‑899‑1265)
Fax: 403‑292‑5503 (toll-free: 1‑877‑288‑8803)
TTY (teletype): 1‑800‑632‑1663
Email: fern.hietkamp@neb-one.gc.ca