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Canada-Nova Scotia Offshore Petroleum Financial Requirements Regulations

made under

Section 146 of the

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

S.N.S. 1987, c. 3

O.I.C. 2016-48 (February 26, 2016), N.S. Reg. 35/2016

Citation

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

Requirements Regulations .

Definitions

2 In these regulations, “Act” means the Canada-Nova Scotia Offshore Petroleum Resources

Accord Implementation (Nova Scotia) Act .

Financial resources

(1) For the purposes of subsection 159A(1) of the Act, the proof that an applicant has

the necessary financial resources is to be made by the applicant providing the Board

with a statement of its net assets or of funding arrangements that it has made that

demonstrates to the Board’s satisfaction that it is able to pay the applicable amount

referred to in that subsection.

(2) The statement must be accompanied by 1 or more of the following documents that

substantiate it:

(

a) the applicant’s most recent audited annual financial statement and, if the

applicant has been given a credit rating by a credit rating agency that is current

at the time the application is made, a document that indicates that credit rating;

(

b) a promissory note;

(

c) an insurance policy or a certificate of insurance;

(

d) an escrow agreement;

(

e) a letter of credit;

(

f) a line of credit agreement under which funds identified in the statement are

available;

(

g) a guarantee agreement;

(

h) a security bond or pledge agreement or an indemnity bond or suretyship

agreement.

(3) For greater certainty, the Board may require that the statement and substantiating

documents be audited by a qualified independent auditor and that the applicant

provide the Board with a report of the audit that is signed by that auditor.

Financial responsibility

(1) A pooled fund that is established for the purposes of subsection 160(1A) of the Act

must be located and administered in Canada.

(2) The fund is to be used only to make payments under subsection 160(2) of the Act,

except that the fund may be used to make payments

(

a) under subsection 168(2) of the federal Implementation Act, if it is also

established for the purposes of subsection 168(1.01) of that Act;

(

b) under subsection 163(2) of the Canada-Newfoundland and Labrador Atlantic

Accord Implementation Act (Canada), if it is also established for the purposes

of subsection 163(1.01) of that Act;

(

c) under subsection 158(2) of the Canada-Newfoundland and Labrador Atlantic

Accord Implementation Newfoundland and Labrador Act , R.S.N.L. 1990, c. C-2, if it is also established for the purposes of subsection 158(1.1) of that Act; or

(

d) under subsection 27(2) of the Canada Oil and Gas Operations Act (Canada), if

it is also established for the purposes of subsection 27(1.01) of that Act.

(3) Moneys that are required to be paid out of the fund must be paid by the administrator

of the fund on demand.

(4) The administrator of the fund must

(

a) every year, provide the Board with an audited financial statement that

demonstrates that the fund has been maintained at a minimum of $250 million

or at the higher minimum amount set by regulation;

(

b) notify the Board within 24 hours of the addition of a participant to, or

withdrawal of a participant from, the fund or of any change in the amount of

the fund, other than one that is solely attributable to an interest charge or a

banking fee;

(

c) notify the Board of a contravention by a participant in the fund of their

obligation under subsection 160(1C), 160(1D) or 160(5) of the Act within 24

hours after they become aware of the contravention; and

(

d) provide the Board with the phone number, email address and mailing address

of their contact person.

Reimbursement into pooled fund

5 For the purposes of subsection 160(5) of the Act, the reimbursement into the pooled fund

of an amount that is paid out of it must be made within 7 days after the day on which the

payment is made.

Board recommendations regarding lesser financial requirements

(1) For the purposes of subsection 160A(1) of the Act, the Board may make a

recommendation to the Minister in respect of an applicant if the Board is satisfied

that the estimated total of the losses, damages, costs and expenses, other than losses

of non-use value for which the applicant may be liable under clauses 159(1)(

b) and

159(2)(

b) of the Act in connection with the proposed work or activity to which the

application pertains, is less than the amount referred to in subsection 159(2B) of the

Act.

(2) The recommendation must identify the hazards that are relevant to the proposed

work or activity and must include an assessment of the risks associated with each

event that could occur in connection with each of those hazards and that could result

in debris, in a spill or in an authorized discharge, emission or escape of petroleum.

(3) The following information must accompany the recommendation:

(

a) the estimated total of the losses, damages, costs and expenses referred to in

subsection (1);

(

b) the recommended amount that is less than the amount referred to in subsection

159(2B) or clause 160(1)(

a) of the Act, as the case may be;

(

c) a

summary of the reasons for the recommendation;

(

d) a

summary of any information provided by the applicant to the Board that the

Board considers to be pertinent;

(

e) any information concerning the recommendation that the Board provided to the

federal Minister in connection with that Minister’s approval under subsection

160A(1) of the Act; and

(

f) any information requested by the Minister.

(4) The Board may submit to the Minister any other information that it considers to be

pertinent.