One of the legal foundations in Canada that governs energy companies and their projects is the Canadian Energy Regulator Act (CER Act). From establishing the regulator of energy companies and their projects, to protecting the people and the environment near these projects, the CER Act certainly has a lot to say about energy projects in Canada.
In this article, we'll review the basics of the CER Act and its important provisions. If you're looking for something that is not discussed here, it's better reach out to an energy lawyer for electricity, who can definitely help you regarding this law and its regulations.
What is the Canadian Energy Regulator Act?
The CER Act is a federal law that sets out the rules for certain energy matters that are regulated at the federal level. Under this law, the Canadian Energy Regulator (CER) is set up as a federal corporation, which is one of the main regulators for energy projects in the country.
At its core, the CER Act regulates the facilities of energy projects (e.g., pipelines, power lines), so that they're constructed, operated, and abandoned in a safe and efficient manner. All of this is to protect the people around these projects, their property, including the environment.
In addition, the CER Act also grants the CER regulatory powers and allows it to conduct regulatory hearings through its decision‑making power. The law also provides a system so that these processes are fair, inclusive, and transparent.
Watch this video on how the CER primarily administers the CER Act by reviewing applications from energy companies:
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What are the highlights of the Canadian Energy Regulator Act?
The CER Act revolves around the life cycle of an energy project: starting from its application process, its operations, and until it is decommissioned or abandoned. By doing so, it helps projects to become safe for everyone, while allowing Canada to benefit economically from these projects.
Below are some of the highlights of the CER Act:
Establishing the Canadian Energy Regulator
Previously called NEB, the Canadian Energy Regulator is an energy regulatory body that is responsible for federally regulated pipelines, power lines, and offshore renewable energy projects. The CER Act is the law that gives this regulator its powers, duties, and structure.
Aside from being composed of a Board of Directors and a Chief Executive Officer, the CER Act also mandates that a Commission under the CER be created. All three of these entities have distinct roles when it comes to energy projects in Canada.
Protecting Canadians and the environment
Under the CER Act, it is the duty of energy companies to ensure the safety and security of the communities and the environment throughout a project's life: from its construction, operation, until its abandonment. For their negligence or for violating the CER Act, liability can be attached to an energy company, including their officers, and other persons responsible.
The video below further shows how the CER Act protects the environment surrounding federally regulated energy projects, before and after it is approved to operate:
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Regulation of energy projects' facilities
The CER Act states how facilities of energy projects are regulated by the CER. It tells how pipelines and power lines are born, until their eventual closure. The law also sets rules on how lands (both Crown and private lands) can be used by these projects. Lastly, there are conditions to follow under the CER Act before one can export or import energy resources from or out of Canada.
Pipelines
Before a pipeline can be built or operated, an energy company must first secure a certificate with the CER's Commission. Conditions may be imposed by the Commission before issuing this certificate. Similarly, a pipeline can only be abandoned when it is allowed by the Commission.
In addition to granting them its powers, the CER Act allows the CER, specifically its Commission, to make orders related to the traffic, tolls, and tariffs of pipelines.
Power lines
Power lines of whatever type are also regulated by the CER Act, whether it is:
- international
- interprovincial
- offshore
Just like pipelines, specific rules about permits, certifications, and abandonment are also applicable for power lines.
The CER Act further provides for the offences related to power lines and their appropriate punishment. For instance, it is an offence to construct or operate a power line in navigable water without the necessary permit.
Crown and private lands
When Crown or private lands are used for pipelines, the CER Act intervenes by governing the relationship of the landowner and the pipeline operator. These include:
- how the land can be taken or used for constructing pipelines
- what are the consequences for improper taking of lands (e.g., compensation)
- the specific rights of landowners and energy companies (e.g., right of entry)
Exporting and importing energy
Although exporting and importing oil, gas, and electricity is definitely allowed, it must be done with a permit or licence issued by the CER's Commission. Just like in an application, this permit or licence may also have certain conditions for its approval. Civil and criminal offences related to importation and exportation are also laid down in the CER Act.
Regulations under the Canadian Energy Regulator Act
With the Governor in Council's approval, the CER is empowered by the CER Act to create specific Regulations to help implement the CER Act itself. These Regulations usually specify or supplement the broad provisions of the CER Act. The Governor in Council can also create Regulations regarding specific matters under the law.
Although the National Energy Board Act (NEBA) was already repealed by the CER Act, the Regulations executed under this previous statute still apply today. Given that the National Energy Board (NEB) has now become the CER, the Regulations under the NEBA are now under the care of the CER.
Here are some of the Regulations under the CER Act:
Administrative Monetary Penalties Regulations (SOR/2013-138)
This Regulation provides for the penalties that may be imposed for violating the CER Act. It classifies these violations either as Type A or Type B, which have a corresponding penalty under the law. Penalties are also classified according to the offence's gravity and other criteria.
Canada Offshore Renewable Energy Regulations (SOR/2024-272)
Offshore renewable energy projects are the focus of this Regulation, such as those concerning wind energy and other renewable resources. It sets out the requirements for:
- application and conditions for authorization
- construction, operation, maintenance, decommissioning, and abandonment of facilities
- requirements for project operators
Canadian Energy Regulator Onshore Pipeline Regulations (SOR/99-294)
All onshore pipelines are governed by this Regulation, except for hydrocarbon processing plants. When these pipelines are designed, constructed, operated, or abandoned, energy companies must comply with the conditions in this Regulation.
Canadian Energy Regulator Pipeline Damage Prevention Regulations
There are two specific Regulations regulating pipeline damage prevention, namely the Authorizations (SOR/2016-124) and Obligations of Pipeline Companies (SOR/2016-133). Altogether, these Regulations govern, for example, what happens when a pipeline is constructed that would cause ground disturbance, or when an emergency happens in these areas.
Pipeline Arbitration Committee Procedure Rules, 1986 (SOR/86-787)
These Rules provide for how arbitration committees hold hearings between energy companies and landowners. Among other things, the Rules prescribe what notices of arbitration and replies must contain, and set timelines and service requirements, including substituted service.
What laws are related to the Canadian Energy Regulator Act?
Below are some of the laws that are related to the CER Act, or which concerns the CER in its interactions with the energy companies:
- Canada Oil and Gas Operations Act (COGOA): the CER Act applies the same idea to exploration and exploitation of oil and gas when regulating pipelines, power lines, and energy projects
- National Energy Board Act (NEBA): several Regulations that were created under the NEBA are still applicable to the energy industry players that are also governed by the CER Act
The Canadian Energy Regulator Act: What it means for energy projects
Born out of a push for a modern federal energy regulator that reflects Canada's priorities, the Canadian Energy Regulator Act regulates energy projects to be safe and efficient. Along with the CER, this law shapes where and how energy infrastructure moves forward, making it an important law for energy companies.
As such, sound legal advice grounded in the CER Act is vital for anyone planning or responding to major energy projects in Canada. For this, lawyers and law firms who are experts in energy law can help both energy companies and communities that have anything to do with these projects.
Check our energy law news page for more recent updates on Canadian energy laws, such as the Canadian Energy Regulator Act and other similar laws.
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