Oil or gas
- Document symbol
- G/LIC/N/3/CAN/22
- Original language
- English
- Published on
- 01/11/2023
Outline of Systems
Q1. Give a brief description of each licensing system as a whole and, with respect to each, reply to the following questions as relevant, placing all of the material with respect to a given system in sequence together, and using cross references as appropriate when elements which have already been described are also present in another system.
The outline of system (reflects NEB Act amendments, but not the regulations being updated). Clarification to all below: The CER Act will remove the requirement for importation licences in the future, either after 28 August 2022, or after regulations prescribing what importation information is to be submitted to the Regulator and the frequency of submission. Currently the import order regime remains in place as a transitional provision.
On 28 August 2019, the National Energy Board Act (the NEB Act) was repealed and replaced with the Canadian Energy Regulator Act (the CER Act). The CER Act establishes a new Canada Energy Regulator (CER), replacing the National Energy Board (NEB). The CER comprises a Board of Directors to provide oversight and strategic direction and a Chief Executive Officer (CEO), who is responsible for day-to-day operations, and is separate from the Chair of the Board.
The new CER also includes a group of independent Commissioners who are responsible for timely, inclusive and transparent project reviews and decision-making. The Commission has all the powers, rights and privileges vested in a superior court of record with respect to any matters within its jurisdiction. The CER Act also allows for regulations permitting the CEO to designate officers of the CER to perform certain powers, duties and functions of the Commission, some of which may potentially relate to importation.
A major consequence of the CER Act is that licenses and orders will no longer be required for the importation of oil and gas into Canada on or before 28 August 2022.
The Canadian Energy Regulator Act and the National Energy Board Act Part VI (Oil and Gas) Regulations (Part VI Regulations) made under the predecessor NEB Act control imports of natural gas, whether in gaseous or liquid state, by pipeline, railway tank cars and tank trucks or tankers. Imports are authorized by both licences and orders. Licences are issued for long-term imports while orders are used in the case of long-term small volume imports, emergency imports or and short-term large volume imports. An application is made to the Board for import authorization. No licence is effective until approved by the Governor-in-Council. The issuance of an import order requires the approval of the Board and does not require a public hearing or Governor in Council approval. The new Canadian Energy Regulator Act removes the requirement to obtain a license or order before importing oil and gas into Canada subject to changes to the Part VI Regulations).
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
Under the CER Act, licenses or orders will no longer required for the importation of oil or gas as of 28 August 2019. The import license and order requirements of the Part VI Regulations will remain in effect until the earlier of the date they are amended or replaced, or 28 August 2022.
Q3. The system applies to goods originating in and coming from which countries?
The system described applies to gas originating in and coming from any country.
Q4. Is the licensing intended to restrict the quantity or value of imports, and if not, what are its purposes? Have alternative methods of accomplishing the purposes been considered and if so which? Why have they not been adopted?
The import license and order requirements of the Part VI Regulations will remain in effect until the earlier of the date they are amended or replaced, or 28 August 2022.
Q5. Cite the law, regulation and/or administrative order under which the licensing is maintained. Is the licensing statutorily required? Does the legislation leave designation of products to be subjected to licensing to administrative discretion? Is it possible for the government (or the executive branch) to abolish the system without legislative approval?
The authorization of imports is maintained under the Canadian Energy Regulator Act for all new import activities on or after 28 August 2019. For imports authorizations initiated prior to 28 August 2019, the National Energy Board Act, a statute of the Parliament of Canada, and the National Energy Board Act Part VI (Oil and Gas) Regulations continue to apply. The term "gas" is defined in the Act and is not subjected to administrative discretion. Legislative action would be required to abolish the system.
Procedures
Q6. For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
Q6.I. Is information published, and where, concerning allocation of quotas and formalities of filing applications for licences? If not, how is it brought to the attention of possible importers? Of governments and export promotion bodies of exporting countries and their trade representatives? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
Q6.II. How is the size of the quotas determined: on a yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for fresh licence on a six-monthly or quarterly basis?
Q6.III. Are licences allotted for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are the names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate.)
Q6.IV. From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
Q6.V. What are the minimum and maximum lengths of time for processing applications?
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
Q6.VII. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Q6.VIII. If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and, if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
Q6.IX. In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Q6.X. In cases where imports are allowed on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Q6.XI. Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?
Q7. Where there is no quantitative limit on importation of a product or on imports from a particular country:
Q7.a. How far in advance of importation must application for a licence be made? Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence (for example, owing to inadvertency)?
Application for a licence should be made in advance of importation by a reasonable length of time, depending on the size and complexity of the importation arrangement. In some cases, imports commence immediately upon issuance of the authorization, or, depending on the requirements of the import arrangement, there may be some interval between the authorization and the commencement of the import.
Q7.b. Can a licence be granted immediately on request?
An order can be granted very quickly by the Commission. A licence may, at the discretion of the CER require that a public hearing be held.
While the requirement to obtain a license remains in effect, for processing license applications a public hearing may be required and is at the discretion of the CER. The length of time to process a licence application is approximately four months or longer depending on whether a public hearing is deemed necessary. Applications for orders can be approved very quickly. Typical processing time for emergency and short-term imports is 48 hours, while processing time for long-term import orders is two to six weeks or more.
Q7.c. Are there any limitations as to the period of the year during which application for licence and/or importation may be made? If so, explain.
There are no limitations as to the period of the year during which application for import authorization may be made.
Q7.d. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
The prospective importer has to approach one administrative organ only, the Canada Energy Regulator.
Q8. Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria? Are the reasons for any refusal given to the applicant? Have applicants a right of appeal in the event of refusal to issue a licence and, if so, to what bodies and under what procedures?
An application for a licence may be refused for failure to meet criteria set out in the Part VI Regulations or where the import is not in the public interest. An applicant, in the event of refusal to issue a licence, may resubmit his application to the Canada Energy Regulator with appropriate amendments or may request a review. Appeal can be made to the Federal Court of Appeal on a question of law or jurisdiction, on leave being obtained from the Court. The import license and order requirements of the Part VI Regulations will remain in effect until the earlier of the date they are amended or replaced, or 28 August 2022.
Eligibility of Importers to Apply for Licence
Q9. Are all persons, firms and institutions eligible to apply for licences: (If not, is there a system of registration of persons or firms permitted to engage in importation? What persons or firms are eligible? Is there a registration fee? Is there a published list of authorized importers?) a) under restrictive licensing systems? b) under non-restrictive systems?
Any person is eligible to apply for an import licence.
Documentational and Other Requirements for Application for Licence
Q10. What information is required in applications? Submit a sample form. What documents is the importer required to supply with the application?
The Governor-in-Council may make regulations respecting the information to be furnished by applicants and the procedures to be followed in applying for import authorization. Section 5 of the Part VI Regulations entitled "Information to be Furnished by Applicant for Licence to Import Gas" sets out the information required to be filed by an applicant for a licence to import gas. These Regulations will be updated to reflect changes to the import/export regime under the CER Act. In addition, the Canada Energy Regulator may require further information about import activities. With respect to import orders, applicants must file such information as the Canada Energy Regulator may require. However, no specific information requirements for order applications are set out in the Act or in the Part VI Regulations.
Q11. What documents are required upon actual importation?
No documents are required upon actual importation. However, the holder of an import authorization is required to provide the Canada Energy Regulator with information as required, including the actual volumes imported during the term of the authorization, and their value in Canadian currency.
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
There is no fee or administrative charge in respect of an application at present.
Q13. Is there any deposit or advance payment requirement associated with the issue of licences? If so, state the amount or rate, whether it is refundable, the period of retention and the purpose of the requirement.
There is no deposit or advance payment requirement associated with the issue of the import authorization.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
No import license may be issued for a term in excess of 25 years. The validity of an order cannot be extended beyond this period without an amendment to the Act by Parliament.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
There is no penalty for the non-utilization of an order or a portion of an order. Orders are permissive only.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Yes. They are transferable subject to Canada Energy Regulator and Governor-in-Council approval.
Q17. Are any other conditions attached to the issue of a licence? a) for products subject to quantitative restriction? b) for products not subject to quantitative restriction?
Conditions attached to the issue of orders may include those matters prescribed by the Part VI Regulations, including: duration of the order, the period within which the import must commence, the quantities of import, points of importation into Canada, environmental requirements and the granting of export authorization by the appropriate foreign government agency.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
Apart from procedures defined in the Regulations made pursuant to the Act, including requirements associated with inspection, metering and reporting, no additional administrative procedures are required.