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Part II .

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Canada-Nova Scotia Offshore Petroleum Cost Recovery Regulations

made under

Section 30A of the

Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act

S.N.S. 1987, c. 3

O.I.C. 2016-49 (February 26, 2016), N.S. Reg. 36/2016

Citation

1 These regulations may be cited as the Canada-Nova Scotia Offshore Petroleum Cost

Recovery Regulations .

Definitions

2 In these regulations,

“Act” means the Canada-Nova Scotia Offshore Petroleum Resources Accord

Implementation (Nova Scotia) Act ;

“actual full cost” means the full cost confirmed by the Board’s audited financial

statements;

“direct regulatory activities” means the activities that are required for the Board to

fulfill its regulatory responsibilities, such as

(

i) assessing applications,

(ii) issuing licences,

(iii) granting approvals and authorizations,

(iv) verifying and enforcing compliance with the Act, and

(

v) providing information, products and services;

“indirect regulatory costs” means the costs incurred to support the Board’s direct

regulatory activities, such as costs for

(

i) office accommodation, supplies and equipment,

(ii) professional services,

(iii) communications,

(iv) travel,

(

v) management,

(vi) training,

(vii) administration,

(viii) human resources services,

(ix) finance,

(

x) information technology services,

(xi) hardware and software,

(xii) the preparation of documents, including policies, standards, guidelines,

procedures and notices, and

(xiii) the provision of technical expertise, including any advice relating to

legislation or regulations, to the federal Minister or the Minister at that

Minister’s request;

“project” means the work or the activity referred to in clause 135(1)(

b) of the Act.

Part 1: Regulatory Activity Plan Charges

Estimated Annual Charge

Regulatory activity plan

3 For each new project relating to development, production, abandonment, exploratory

drilling or multi-year or complex seismic programs in respect of petroleum operations, on

receipt of a project description or letter of intent, the Board must

(

a) prepare a regulatory activity plan;

(

b) calculate the estimated annual charge payable by the applicant or the operator

for the project by determining the estimated full cost, including indirect

regulatory costs, associated with the implementation of the regulatory activity

plan prepared under clause (

a) based on

(

i) the cost of the estimated total number of units of time necessary to be

spent in that fiscal year on direct regulatory activities for the project, and

(ii) any other costs, excluding costs calculated under other cost recovery

methods; and

(

c) notify the applicant or the operator, in writing, of the regulatory activity plan

prepared under clause (

a) and the estimated annual charge payable.

Existing project

4 For each existing project that was previously under a regulatory activity plan, after

approval of the Board’s budget in any given fiscal year following its submission in

accordance with subsection 28(2) of the Act, the Board must

(

a) prepare a new regulatory activity plan;

(

b) calculate the estimated annual charge payable by the applicant or the operator

for the project by determining the estimated full cost, including indirect

regulatory costs, associated with the implementation of the new regulatory

activity plan prepared under clause (

a) based on

(

i) the cost of the estimated total number of units of time necessary to be

spent in that fiscal year on direct regulatory activities for the project, and

(ii) any other costs, excluding costs calculated under other cost recovery

methods; and

(

c) notify the applicant or the operator, in writing, of the new regulatory

activity plan prepared under clause (

a) and the estimated annual charge

payable.

Recalculation

5 If an applicant or operator proposes changes to its project that are not reflected in the

regulatory activity plan for the project prepared by the Board under clause 3(

a) or 4(a), the

Board may recalculate the estimated annual charge for that project calculated by the Board

under clause 3(

b) or 4(

b) and adjust the payable amount accordingly.

Quarterly Invoicing

Invoice

(1) The Board must, on a quarterly basis, prepare and send an invoice for an amount

equal to 25% of the estimated annual charge calculated by the Board under clause

3(

b) or 4(

b) to each applicant or operator who has been notified under clause 3(

c) or

4(c).

(2) Within 30 days after the date of an invoice sent under subsection (1), the applicant or

the operator must pay the amount invoiced.

Annual Charge Adjustment

Annual adjustment

(1) Each year, following the end of the fiscal year, the Board must, for each project

under a regulatory activity plan,

(

a) calculate the actual full cost associated with the implementation of the

regulatory activity plan;

(

b) calculate the charge adjustment, if any, by subtracting the estimated annual

charge, calculated in accordance with clause 3(

b) or 4(b), from the actual full

cost; and

(

c) notify the applicant or the operator in writing of the amount of the actual full

cost and the amount of the charge adjustment.

(2) If the actual full cost calculated under clause (1)(

a) is

(

a) less than the estimated annual charge, the difference is credited to the

applicant’s or operator’s account and must be refunded as a credit on the next

invoice; or

(

b) greater than the estimated annual charge, the Board must invoice the applicant

or the operator for an amount equal to the difference and the applicant or the

operator must pay that amount to the Board within 30 days after the date of the

invoice.

Part 2: Formula Fees

Interpretation

8 In this part,

(

a) base units of time are the number of units of time published by the Board in

accordance with

Section 9 based on the Board’s estimate of the time required

for it to undertake direct regulatory activities in relation to each activity set out

in the tables to

Section 10;

(

b) variable units of time are the number of units of time published by the Board in

accordance with

Section 9 based on the Board’s estimate of the time required

for it to undertake direct regulatory activities in relation to the variables set out

in column 3 of the table to subsection 10(3);

(

c) the effective rate is the rate published by the Board in accordance with

Section

9 based on the estimated sum of the costs incurred by the Board’s undertaking

of all direct regulatory activities and of the Board’s indirect regulatory costs

minus the sum of the costs incurred by the Board’s undertaking of regulatory

activities that are not recovered by the Board at the request of the federal

Minister and the Minister and divided by the total number of units of time

spent by the Board for those direct regulatory activities; and

(

d) the heavy burden coefficient is a multiplier that the Board may apply to a fee

for an activity if the Board is of the opinion that the fee must be increased to

reflect the additional number of units of time spent by the Board to undertake

direct regulatory activities as a result of non-compliance with the Act,

negligence or lack of effort by an applicant or operator in responding to any of

the Board’s questions during an application process or activity.

Publication and Formulas

Publication by Board

9 Each year the Board must publish, by electronic or other means that are likely to reach

applicants and operators,

(

a) the base units of time for each activity set out in the tables to

Section 10;

(

b) the variable units of time for each activity set out in the table to subsection

10(3); and

(

c) the effective rate.

Formulas

(1) The fee for each activity set out in the table to this subsection is determined by the

formula A × C, in which

(

a) A is the base units of time related to each activity; and

(

b) C is the effective rate.

Table

Item

Activity

Application for a declaration of significant discovery

Application for a declaration of commercial discovery

Application for a significant discovery licence

Application for a licence for subsurface storage

Application for a production licence

Application for an amendment to a licence or a consolidation of licences

Registration of a transfer

Registration of a security notice

Registration of an interest

Recording of a notice

Registration of an instrument other than a transfer or security notice

Application for an extension, by order, of the term of a production licence

Application for allowable expenditures

(2) The fee for each activity set out in column 2 of the table to this subsection is

determined by the formula A × C × D, in which

(

a) A is the base units of time related to each activity;

(

b) C is the effective rate; and

(

c) D, if applicable, is the heavy burden coefficient.

Table

Column 1

Column 2

Item

Category of Activity

Activity

Geological operations

authorization (with field work)

Geochemical study

Geophysical (without field work)

Geophysical study

Geological (without field work)

Purchase of geological studies

Geological (without field work)

Isotope age dating

Geological (without field work)

In-house geological studies

Geological (without field work)

Petrography

Geological (without field work)

Paleontological or palynological study

Geological (without field work)

Other geophysical activity

Annual compliance fee

All geophysical projects

(3) The fee for each activity set out in column 2 of the table to this subsection is

determined by the formula (A + B) × (C × D), in which

(

a) A is the base units of time related to each activity;

(

b) B is the variable units of time multiplied by the number of primary vessels or

aircraft to be used in each activity;

(

c) C is the effective rate; and

(

d) D, if applicable, is the heavy burden coefficient.

Table

Column 1

Column 2

Column 3

Item

Category of Activity

Activity

Variable

Geophysical operations

authorization (with field work)

2-D seismic reflection

survey (primary activity)

Primary

vessel

Geophysical operations

authorization (with field work)

3-D seismic reflection

survey (primary activity)

Primary

vessel

Geophysical operations

authorization (with field work)

4-D seismic reflection

survey (primary activity)

Primary

vessel

Geophysical operations

authorization (with field work)

Seafloor gravity survey

(primary activity)

Primary

vessel

Geophysical operations

authorization (with field work)

Seismic refraction survey

(primary activity)

Primary

vessel

Geophysical operations

authorization (with field work)

Controlled source

electromagnetic survey

Primary

vessel

Geophysical operations

authorization (with field work)

Other geophysical

program

Primary

vessel

Geophysical operations

authorization (with field work)

Aeromagnetic survey

(primary activity)

Aircraft

Geotechnical authorization

(seabed survey)

Piston core

Primary

vessel

Geotechnical authorization

(seabed survey)

Shallow seismic, seabed

survey

Primary

vessel

Payment of fees

(1) On the submission of an application in respect of an activity set out in any table to

Section 10, the applicant must pay to the Board the fee determined in accordance

with that Section.

(2) If the Board uses a heavy burden coefficient to calculate an additional charge in

respect of an activity, the Board must invoice the applicant or the operator and the

applicant or the operator must pay that amount to the Board within 30 days after the

date of the invoice.

Part 3: Geodata Centre

Daily access rate

12 In this Part, the daily access rate is the rate established and published by the Board by

electronic or other means that are likely to reach applicants and operators.

Sample access fee

13 Any person, except a person requesting access for an academic purpose, the federal

Minister or the Minister, who accesses a physical sample at the geodata center must pay

the daily access rate for each day the sample is accessed.

Part 4: Other Charges

Reimbursement of Board costs

14 The Board may require reimbursement for 100% of its costs for activities that are not set

out in Parts 1 to 3 and that are related to the following:

(

a) any verification of compliance under the Act involving travel to another

location by the Board’s staff;

(

b) the Oil and Gas Committee;

(

c) any technical analysis or process review that is related to a specific project and

that is requested by an applicant or operator;

(

d) any public review, written or oral hearing or inquiry that is related to a specific

project and that is required or initiated by the Board;

(

e) a participant funding program that is part of an environmental assessment

conducted under the Canadian Environmental Assessment Act, 2012 (Canada);

and

(

f) information, products or services that are requested by a person.

Part 5: General

Interest

15 Interest on an amount owing to the Board must be calculated and compounded monthly at

the rate of 1.5% and is payable and accrues during the period beginning on the due date

and ending on the day before the day on which the payment is received by the Board.

Remittance of fees and charges

16 For the purposes of

Section 30B of the Act, the fees and charges obtained in accordance

with these regulations must be remitted on a quarterly basis subject to the Board’s

operational requirements.

Part 6: Transitional Provisions

Transitional provision

(1) Section 4 does not apply to a project that relates to development, production,

abandonment, exploratory drilling or multi-year or complex seismic programs if the

applicant or the operator has paid 100% of the Board’s estimated costs for the

project for the fiscal year in which these regulations come into force.

(2) All existing projects relating to development, production, abandonment, exploratory

drilling or multi-year or complex seismic programs that are under the Board’s

regulatory authority before these regulations come into force and that do not have a

regulatory activity plan are considered to have been previously under a regulatory

activity plan for the purposes of

Section 4.