Proposed Designated Company Cost Recovery Regulations

The authority to develop the Designated Company Cost Recovery Regulations was made under the Pipeline Safety Act (PSA) which came into force on 19 June 2016. The PSA amended the NEB Act to reinforce the “polluter pays” principle by, among other things, imposing financial requirements on pipeline companies in respect of an unintended or uncontrolled release of oil, gas or any other commodity (NEB Act sections 48.12 to 48.17).

In the event of a release, the Governor in Council (GIC) may, on the recommendation of the Minister of Natural Resources, “designate” the responsible company if the company does not have, or is not likely to have, the financial resources necessary to pay the costs, expenses and damages associated with the release, or the company does not comply with an NEB order with respect to the release. Designation could occur immediately, or any time after a release in the event that a company is unable to pay for compensation that is in the process of being settled or unwilling to continue to follow Board orders with respect to the release.

  • The Minister of Finance, on the recommendation of the Minister of Natural Resources, is authorized to establish an amount to be paid out of the Consolidated Revenue Fund (CRF) to fund NEB directed activities related to a designated company release.

As provided in the NEB Act, subject to Treasury Board’s approval, the Board shall make the regulations for the purposes of recovering these amounts. Amounts are to be recovered from the designated company and the companies who operate pipelines that transport the same commodity (e.g. oil, gas and non-hydrocarbon) or a commodity of the same class (e.g. liquids vs gases) as the commodity that was released.

Taxpayers should not be responsible for paying the charges back to the CRF in a designated company situation.

Stakeholder Letters of Comment

7 June 2018

The NEB received a follow up letter from CEPA providing further comments on possible cost recovery approaches. Feedback provided by stakeholders informs our decisions and our work. We will take into consideration the comments noting that we have proceeded to the regulatory drafting stage and that there will be another opportunity for comment anticipated in late 2018.

20 March 2018

The NEB will consider all comments received  as we proceed to regulatory drafting. Please note that we anticipate  another opportunity for comment in late 2018.

The NEB is committed to continual improvement. Should you have questions or would like to follow up on your letter of comment,  please write or contact Rumu Sen at rumu.sen@neb-one.gc.ca or 403-390-6177. You can also submit questions by email to designatedcompany@neb-one.gc.ca.

27 February 2018

The NEB released a Regulatory Proposal to seek feedback on the design of regulations for recovering amounts paid out by the CRF, when a company has been designated by the GIC, following an unintended or uncontrolled release. The comment period was from 8 January 2018 to 7 February 2018, and was extended to 14 February 2018, at stakeholder request.

The Board received the following letters during the public comment period. The comments posted here are not the views or opinions of the National Energy Board. The comments are posted in the language in which they were submitted.

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