Regulatory Framework Plan: 2022 to 2025

The Onshore Pipeline Regulations (OPR) is the CER’s principal regulation for the physical (vs. financial) oversight of oil and gas pipelines that cross a national, provincial or territorial border. The OPR provides for safety, security and environmental protection outcomes and include management system requirements for regulated companies.

The OPR are predominantly performance based. This provides regulated companies flexibility to continually improve and innovate to meet the intended outcomes.

The CER is undertaking a review of the OPR. The review includes updates for alignment with the Canadian Energy Regulator Act (CER Act) and represents part of how we will deliver our commitments to enhance Canada’s global competitiveness and transform the way the CER and its regulated companies work with Indigenous peoples across the lifecycle of regulated facilities.

The review will address all areas of the OPR and related regulatory documents and guidance, as needed (e.g., Guidance Notes for the OPR, the Filing Manual, Online Event Reporting Guidelines, Remediation Process Guide, Audit Protocol, Operations and Maintenance Activities on Pipelines – Requirements and Guidance Notes, and the Decommissioning Streamlining Order and Guidance Notes).

The new regulation-making authority in the CER Act for human and organizational factors, which is related to safety improvement, will also be addressed.

In broad terms, our objectives for the OPR Review are to deliver regulations that:

• support the highest level of safety, security and environmental protection;
• advance Reconciliation with Indigenous peoples;
• address transparency and inclusive participation;
• provide for predictable and timely oversight; and
• encourage innovation.

Further details will be provided as regulatory development progresses.

Early engagement through a Discussion Paper is ongoing (Winter and Spring 2022). All input submitted, whether through a written submission, or orally at engagement sessions, is under review.

In December 2021, the CER launched the review of the OPR through written notifications and an OPR Review webpage where interested parties were invited to register to ‘Engage with Us’.

In January 2022, a Discussion Paper was provided through written notifications and on the CER’s OPR Review webpage and the Consulting with Canadians website to seek input on the themed questions found in the Discussion Paper. Interested parties were invited to register for sessions from February through March to find out more about the OPR Review, and how they can participate. Funding was made available to Indigenous groups to support participation in this early phase of engagement. The timeline for input on the Discussion Paper is 30 June 2022.

Engagement on a regulatory proposal with potential updates for the OPR is anticipated to begin in Spring 2023.

First included in the CER Forward Regulatory Plan: January 2020

Estimated completion (including implementation of related regulatory instruments and guidance): Summer 2025

Fern Hietkamp
Technical Specialist, Regulatory Strategy & Coordination
Telephone: (403) 919-7411
Email: fern.hietkamp@cer-rec.gc.ca

Section 87 of the CER Act provides that regulations may be made for recovering all costs attributable to the CER’s mandate.

The Cost Recovery Regulations (CRR) set out the manner in which the CER determines the costs related to carrying out its mandate and the process for recovering all or a portion of those costs from the companies it regulates.

The CER is undertaking a review of the Cost Recovery Regulations. The review includes updates for alignment with the CER Act and represents part of how we will deliver our commitments to enhance Canada’s global competitiveness.

Regulatory development is under way to:

• review whether and how to include costs related to the CER’s oversight of energy development in areas of the Canadian North and Arctic offshore that are under CER jurisdiction;
• expand cost recovery to include costs for applications that are denied by the Commission or withdrawn by proponents; and
• adjust fixed levies for small and intermediate companies.

The proposed cost recovery framework aims to:

• achieve fair and equitable cost allocation;
• simplify the method of cost recovery and its administration;
• make costs predictable for industry;
• ensure cost recovery mechanisms can respond to change; and
• provide some flexibility in the application of methodologies.

The feedback received in Fall 2021 on the Regulatory Proposal is currently under review.

A project working group (PWG) was formed with members from the CER’s standing Cost Recovery Liaison Committee (CRLC). The CRLC is comprised of representatives from CER regulated companies and industry associations representing those regulated companies.

In Fall 2020, a workshop was conducted by CER staff to gather initial feedback from the PWG of the CRLC on the elements and methodology for the cost recovery framework.

In November 2021, a Regulatory Proposal was released on the CER and Consulting with Canadians websites to seek feedback on proposed amendments. Pending the analysis of input received, there is a possibility for a second round of regulatory consultation to seek input on an amended regulatory proposal, in late Fall 2022.

First included in the CER Forward Regulatory Plan: April 2019
Estimated completion: Spring 2024

Rumu Sen
Analyst, Regulatory Strategy & Coordination
Telephone: (403) 390-6177
Email: rumu.sen@cer-rec.gc.ca

The Rules of Practice and Procedure (the Rules) are made by the Commission. They govern the procedures to be followed during proceedings and set out the mechanisms for complaints, the conduct of public hearings and determine the manner in which applications are to be reviewed.

A comprehensive update to the Rules is needed to align with the CER Act, reflect the CER’s new governance structure and to formalize the practices, processes and terminology which have evolved in 27 years, since the Rules were first in effect.

In broad terms, our objective for the Rules review is to deliver regulations that align with the CER Act and reflect modern practices and processes.

Further details will be provided as regulatory development progresses.

Work is estimated to begin in Spring 2022.

The Commission intends to engage early with stakeholders and Indigenous peoples – i.e., at the onset of regulatory development. The details of anticipated engagement are not available at this time.

This project is not yet included in the CER Forward Regulatory Plan and it is too early to estimate a completion date at this time.

Melissa Mathieson
Technical Specialist, Regulatory Strategy & Coordination
Telephone: (403) 542-9274
Email: melissa.mathieson@cer-rec.gc.ca

Under section 142 (1) of the CER Act, the CER is mandated to make regulations to recover costs, expenses and damages associated with a pipeline release when a company has been “designated” by the Governor in Council (GIC), appointed by Parliament.

In the event of a pipeline release, the GIC may, on the recommendation of the Minister of Natural Resources, “designate” the responsible company if it 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 in instances where it does not comply with a CER Order with respect to the release.

Upon a company being designated, a number of things can happen:

• the CER can take over the response to the release (and fund that response);
• the CER can reimburse costs and expenses of third parties responding to the release; or
• where the GIC establishes a Pipeline Claims Tribunal, the CER pays all Tribunal costs and compensations awarded to third parties, as determined by the Tribunal.

All of these amounts would be paid out of the Consolidated Revenue Fund (CRF), withdrawn by the Receiver General of Canada.

This project entails the development of new regulations.

The objective of the Designated Company Cost Recovery Regulations is to recover any amounts withdrawn from the CRF; thereby shifting the burden from the taxpayer to the polluter.

Where a designated company is not capable of repaying the amount, costs would then be recovered from companies that operate pipelines transporting the same (or same class) commodity as the one released; thereby distributing the risk among operators.

This project is on hold until completion of the Cost Recovery Regulations.

A Regulatory Proposal was published for comment in 2018, input received was considered and posted to the CER website.

Once drafting work resumes and text is approved, draft regulations will appear on the Consulting with Canadians website for pre-publication in the Canada Gazette, Part I.

Public engagement is anticipated to resume in 2024.

First included in the CER Forward Regulatory Plan: October 2016

Completion date cannot be estimated at this time.

A preliminary draft of Designated Company Cost Recovery Regulations was developed in 2018, after consultations with stakeholders. The proposed regulations were put on hold due to federal elections and due to the tabling of Bill C-69, culminating in the CER Act in 2019.

Rumu Sen
Analyst, Regulatory Strategy & Coordination
Telephone: (403) 390-6177
Email: rumu.sen@cer-rec.gc.ca

Four existing regulations and associated guidance constitute the CER’s Export and Import Regulatory Framework. These provide the CER with critical information necessary to assess export and import applications and to understand the functioning of energy markets in Canada.

• The Part VI (Oil and Gas) Regulations list the information that applicants for hydrocarbon orders and licenses must provide to the CER, and the terms and conditions that the CER may impose on orders and licenses.
• The Electricity Regulations list the information that applicants for international power line permits and electricity export permits must provide to the CER, and the terms and conditions the CER may impose on permits.
• The Export and Import Reporting Regulations list the information that holders of export or import orders, licenses and permits must regularly report to the CER.
• The Toll Information Regulations require pipeline companies that charge tolls to submit certain information (e.g., capital, traffic, revenues, and expenses) to the CER on a regular basis.

These regulations require updates due to legislative changes passed in 2012 and with the CER Act in 2019.

The proposed changes to the Export and Import Regulations aim to:

• enhance clarity;
• ensure coherence of the CER Regulatory Framework; and
• simplify requirements for businesses involved in the export and import of oil, gas, or electricity.

We are currently working with the Department of Justice to draft the regulatory text for the proposed changes to these Regulations.

Once text is approved, draft regulations will appear on the Consulting with Canadians website for pre-publication in the Canada Gazette, Part I. This is anticipated to occur in Spring 2023. .

First included in the Forward Regulatory Plan: April 2014

Estimated completion: Winter 2024

Proposed amendments to the Export and Import Regulatory Framework were developed in 2014, after consultation with stakeholders. The proposed amendments were put on-hold due to federal elections and the anticipated legislative changes resulting from the Government of Canada’s Environmental and Regulatory Reviews, launched in 2016 culminating in the tabling of Bill C-69 and the CER Act in 2019.

Jenni Low
Analyst, Regulatory Strategy & Coordination
Telephone: (403) 607-3857
Email: jenni.low@cer-rec.gc.ca

This amendment package serves to make non-substantive miscellaneous amendments to three regulations:

• Administrative Monetary Penalties Regulations (AMP Regulations)
• Onshore Pipeline Regulations (OPR)
• International and Interprovincial Power Line Damage Prevention Regulations – Obligations of Holders of Permits and Certificates (IPLDPR-Obligations)

The AMP Regulations provide for financial penalties that may be applied by the CER to companies or individuals who fail to comply with the CER Act, regulations, decisions, permits, orders, licenses or certificate conditions intended to promote safety or environmental protection.

The OPR is the CER’s principal regulation for the physical (vs. financial) oversight of oil and gas pipelines that cross a national, provincial, or territorial border.

The IPLDPR – Obligations sets out the authorization framework for power line damage prevention, as provided in the CER Act, for those planning to conduct prescribed activities (e.g., construct a facility, cause a ground disturbance, or operate a vehicle) near a power line.

The CER Act has replaced the National Energy Board Act (NEB Act); therefore, the terms, names and section numbers used under the NEB Act and the AMP Regulations do not correspond with the terms and names used under the CER Act.

The AMP Regulations require updates due to legislative changes introduced with the CER Act in 2019. The French version of the OPR requires corrections to a grammatical error raised by the Standing Joint Committee on the Scrutiny of Regulations (SJCSR). The IPLDPR – Obligations requires a correction to a typo in the Interpretation section.

We are currently working with the Department of Justice to draft the regulatory text for the proposed changes to these Regulations.

Public engagement is not anticipated to take place for this project.

If approved, the miscellaneous amendments regulations and the accompanying Regulatory Impact Analysis Statement will be published in the Canada Gazette, Part II.

First included in the CER Forward Regulatory Plan: April 2019

Estimated completion: Winter 2023

Elliot McLauchlan
Analyst, Regulatory Strategy & Coordination
Telephone: (403) 561-7435
Email: elliot.mclauchlan@cer-rec.gc.ca

The Filing Manuals consist of two instruments: the Filing Manual which details filings for Pipelines and the Electricity Filing Manual which details filing for electrical power lines.

The Filing Manuals help applicants and interested parties understand what to include in an application to the Commission. Clear and complete filing requirements, continuously improved through broad public and Indigenous engagement, will build trust and confidence of Canadians in the CER by enhancing the transparency and inclusiveness of the regulatory process. Helping companies understand in advance what the Commission requires in an application improves predictability and efficiency of the regulatory process.

While it is ultimately the responsibility of the applicant to follow applicable legislation and regulations, these manuals have been developed to provide guidance about the information we expect to see addressed in an application to the Commission.

The Filing Manuals are arranged into Chapters and Guides which align with different types of applications the Commission considers. We adopt an approach of continual improvement to ensure the quality of content for Filing Manuals. Reviews and updates occur in stages, on a periodic basis and include input received from the Commission, internal Subject Matter Experts (SMEs) and external parties such as regulated companies, Indigenous peoples, landowners, and the public.

The current Filing Manuals Update Project has three phases:

• Phase I, amendments to align with the names, terms, and new sections in the CER Act was completed in August 2020.
• Phase II involves technical updates for many sections of the manuals. Work is ongoing.
• Phase III involves supporting the development of an integrated electronic means to support regulatory filings. Work is ongoing.

In broad terms, the Filing Manuals will be updated in order to:

• improve plain and accessible language for broader audience use;
• ensure that we receive data and information that supports application impact assessment and compliance verification; and
• simplify or eliminate filing requirements, as appropriate.

Substantive technical updates are planned for the following sections of the Filing Manual:

• Guide A, Section 2: GHG and Climate Change sections
  
  This section will be updated to reflect the revised Strategic Assessment of Climate Change and related technical guidance published by Environment and Climate Change Canada.
• Guide R: Transfer of Ownership, Lease or Amalgamation
  
  This section will be updated to address ambiguities and to incorporate existing best-practices and tools into the Guide.
• Guide A, Section 2: Environmental and Socio-economic Assessment
  
  This section requires improved alignment with the CER Act and the Impact Assessment Act. The project will evaluate the need for additional guidance around gender-based analysis plus (GBA+); review and seek input on approaches to consider Indigenous knowledge in environmental and socio-economic assessments; and incorporate learnings, court decisions and best practices from other regulators.

Review work (e.g., analysis, internal consultation with SMEs, planning etc.) is anticipated to begin late 2022 for the following sections of the Filing Manual:

• Guide BB: Financial Surveillance Reports
• Guide P: Tolls and Tariffs

Development work (e.g., review input received, draft and translate text, secure internal approval etc.) is anticipated to conclude with publication in Summer 2022 for the following sections of the Filing Manuals:

• Guide A, Section 3.1: Supply and Section 3.3: Markets
• Guide O: Variance Applications and Project Updates
• Guide N: Applications to Review, Rescind or Rehear
• Sections of both Filing Manuals dealing with Confidentiality

Our intent is to ensure that there are appropriate opportunities for regulated companies, industry proponents, Indigenous peoples, landowners and the public to engage with CER staff on the technical updates proposed.

Opportunities will be publicly posted on the new Filing Manual Updates webpage on the CER website. In addition, public comments on the Filing Manuals may be provided at any time via that page.

There is no estimated completion date for this regulatory improvement project since review of the Filing Manuals occurs continually.

At the beginning of each new fiscal year (April), we will publish those sections of the Filing Manuals that are identified for upcoming revisions.

Erin Tabah
Director, Energy Adjudication
Telephone: (403) 390-2571
Email: erin.tabah@cer-rec.gc.ca

In 2013, the CER directed regulated pipeline companies to report annually on pipeline performance measures (PPMs). The information reported focuses on company management systems and helps give us a picture of the operations of companies we regulate. The measures cover key company activities required by the CER for safety and security management, emergency management, pipeline integrity, environmental protection, and damage prevention.

We compile and summarize the data into in a yearly report published on the CER website.

When tracked over time, PPMs allow us to observe trends that help us better assess performance and provide benchmarks for industry. We also incorporate findings from the report into the work we do, using them as a guide for how we can better regulate pipeline operations.

The PPMs Improvement Project is part of our commitment to continual improvement and entails a review of the measures. Nine years have passed since the PPMs were introduced, there is now a need to align the measures with:

• changes made to the CER Regulatory Framework – such as, Damage Prevention Regulations – Obligations of Pipeline Companies and Authorizations; and
• company performance and proven business outcomes tied to the evolution of the industry over nearly a decade.

We propose to review, and possibly remove, update, enhance, or introduce PPMs in order to:

• apply current approaches to Key Performance Indicators (KPIs);
• better align measures with outcomes of our Departmental Results Framework (DRF) and regulatory objectives; and
• reduce administrative burden for companies, where possible.

A new set of measures is being proposed and drafted; we continue to identify impacts to the CER Regulatory Framework – such as guidance materials.

Engagement with companies that report on PPMs was delayed due to the Federal Elections but was completed in Winter 2022.

PPMs reporting is ongoing, but the Improvement Project resulting in the publication of new measures and related guidance material, is estimated to be done in Summer 2022.

The following calendar year (i.e., January to December 2023), companies will be expected to collect new measures for the first round of reporting by the CER, to be released to the public in Spring 2024.

Carson Bannon
Engineer, Research and Innovation
Telephone: (403) 837-9213
Email: carson.bannon@cer-rec.gc.ca

Regulated companies must submit to the CER, information on their physical assets (i.e., pipelines, pumps and compressor stations, meters etc.) which allows us to build an accurate picture of all buried and above-ground energy infrastructure, across the geography of our jurisdiction. At present, this information is submitted in text or detailed map based on formats.

The Regulatory Asset Data (RAD) project has been established to develop and pilot a solution with regulated companies to acquire digital geospatial and physical asset information in a more systematic and streamlined way.

The RAD project is part of our commitment to continual improvement and includes updates to internal systems, processes and eventual Filing Manual updates. The end goal of the RAD project is to improve the quality and business value of asset data and geospatial information reported, collected and leveraged to support key CER activities, such as:

• compliance verification;
• general oversight planning and risk modeling;
• emergency management;
• Energy Information and the Pipeline Information Programs, including the CER interactive Pipeline Map; and
• verification of financial assessments, including abandonment cost estimates.

The project entails collaborating with selected regulated companies to define the digital geospatial and regulatory asset data to be collected, as well as testing the integration of that data through internal systems, such as the Operations Regulatory Compliance Application (ORCA).

In broad terms, our objective for the RAD project is to deliver rigorous management of asset data and geospatial information in order to:

• support the highest level of safety, security and environmental protection and
• provide for efficient and timely oversight.

A Proof of Concept (POC) has been established and a coordinated approach for collecting the required data from companies is being developed.

We will engage with regulated companies in Summer 2022.

Estimated completion Winter 2023.

Carson Bannon
Engineer, Research and Innovation
Telephone: (403) 837-9213
Email: carson.bannon@cer-rec.gc.ca

Pipeline companies regulated by the CER are divided into two groups for financial regulation purposes: Group 1 companies are generally identified as those with extensive pipeline systems under CER jurisdiction, whereas those with lesser operations are designated as Group 2 companies.

All companies are required to report to the CER certain financial and commercial information. The frequency and type of reporting vary depending on the company (Group), and includes information such as:

• daily volumes of substance flow through a pipeline;
• company spending on pipeline integrity programs; and/or
• audited financial statements.

Financial reporting requirements are found in Guide BB and Guide P of the Filing Manual.

The Financial Regulatory Improvement Project (FRIP) is established to improve the overall framework for CER oversight of financial requirements, in terms of – one, internal operations (e.g., work processes, records management, systems etc.) and – two, the Regulatory Framework instruments where those requirements and guidance for financial filings are found, currently in the Filing Manual and regulatory documents.

We propose to update relevant sections of the Filing Manual and, as the project advances, to develop or amend regulatory documents as required, in order to:

• ensure financial filing requirements are fair (i.e., align with potential harm and capacity by company type);
• ensure guidance materials on financial requirements is clear, integrated and appropriate for both Group 1 and 2 companies;
• reduce gaps in the information being gathered; and
• eliminate requirements resulting in duplicate reports.

We are resuming internal review with an analysis of comments received to date and updating workplans for further early engagement.

Public engagement is anticipated to occur in Fall 2022 or Winter 2023.

Estimated completion Winter 2024.

Cassandra Wilde
Technical Leader, Tolls and Tariffs Adjudication
Telephone: (403) 973-2342
Email: cassandra.wilde@cer-rec.gc.ca

Onshore Pipeline Regulations
Principal regulations for the physical (vs. financial) oversight of oil and gas pipelines that cross a national, provincial or territorial border; providing for safety, security and environmental protection outcomes and management system rules for companies.

Cost Recovery Regulations
The framework that sets how the CER determines the costs related to carrying out its mandate and the process for recovering those costs from the companies it regulates.

Rules of Practice and Procedure
Regulations made by the Commission; they govern the practices and procedures to be followed for application reviews and proceedings before the Commission.

Designated Companies Cost Recovery Regulations

Export and Import Regulations
The framework that provides the CER with critical information necessary to assess export and import applications and to understand the functioning of energy markets in Canada.

Miscellaneous amendments to:

• Administrative Monetary Penalties Regulations
• Onshore Pipeline Regulations
• International and Interprovincial Power Line Damage Prevention Regulations – Obligations of Holders of Permits and Certificates

Filing Manual^{Table Note a}
Applies to pipelines regulated by the CER.

Materials that support the Onshore Pipeline Regulations (OPR), being amended in 2025.
We anticipate a number of instruments will need updating. Each will result in a Project to appear in future iterations of the Plan. For now, we are simply identifying the anticipated effort and timeline on the horizon, in broad terms.

Pipeline Performance Measures (PPMs) Improvement Project
Regulated pipeline companies must report PPMs on safety management, security, emergency management, integrity management, environmental protection, and damage prevention. The CER publishes the data into in a yearly report.

Regulatory Asset Data (RAD) Project
Regulated companies must submit geospatial pipeline information on their physical assets. This information allows the CER to build an accurate picture of all buried energy infrastructure, across the span of our jurisdiction.

Financial Regulatory Improvement Project (FRIP)
Regulated companies must report certain financial and commercial information, such as: daily volumes of substance flow through a pipeline, spending on pipeline integrity programs and audited financial statements.