2022–23 Annual Report of the Commission of the Canada Energy Regulator – The Commission’s achievements in 2022–23

Improving Regulatory Proceedings

Under the CER Act, the Lead Commissioner sets service standards for the completion of section 214 applications and time limits for other types of applications, which must not exceed the maximum number of days specified in the CER Act. The CER and the Commission continually pursue efficiency gains and process enhancements to meet legislated time limits. In 2022–23, the Commission exceeded all service standards and legislated time limits, achieving a success rate of 100% on all service standards and legislated time limits. Appendix D provides further detail on applications that were subject to these service standards and time limits.

These goals were achieved in an environment where timely decisions are required to ensure the Canadian energy sector remains globally competitive, as aligned with the CER’s Strategic Priorities, while preserving Canada’s reputation as a responsible energy producerthat respects safety, the environment, and the rights of all interested parties, including Indigenous Peoples and others.

The Commission attributes this success to its continual monitoring of application timelines and its attention to communicating regulatory expectations to proponents throughout the application process.

During 2022–23, the CER introduced an Applications Dashboard which provides a quick-access portal that applicants, hearing participants and interested parties can consult to interact with application timelines, major milestones (past and upcoming), documents, related forms, and regulatory requirements. This new tool has been rolled out to some application types, with more being added in the future. The Applications Dashboard increases transparency and certainty regarding the CER’s and Commission’s expectations during the application process.

A purpose of the CER Act as stated in section 6 is to regulate certain energy matters and to ensure regulatory hearings and decision-making processes are fair, inclusive, transparent, and efficient, as defined in paragraph 6(d). Following the Fall 2022 hearing schedule, the Commission focused its attention on how hearing formats have evolved since COVID-19 with respect to virtual, hybrid and in-person hearings. The Commission conducted research and gathered learnings on how other adjudicators adapted their hearing formats as health restrictions eased and will continue to refine technologies and define best-fit formats for hearings, workshops, and information sessions.

During the 2022–23 reporting period, the Commission released its Draft Phase 1 Report on Abandonment Cost Estimates and Set-Aside and Collection Mechanisms, which was posted for comment on 24 February 2023. The Commission undertakes a regular review of abandonment funds every five years to ensure that each pipeline company regulated by the CER can safely cease operations of pipelines when the time comes, and they can fund continued monitoring upon abandonment. This five-year review cycle began in 2021 and included a series of comment processes and workshops to discuss the development of a new calculation method that companies would use to set aside funds for the abandonment of their pipelines. It is important to note that the list of participants and commentors in this process expands beyond affected companies to include landowners and Indigenous Peoples who may be affected.

Also, during the reporting period the Federal Court of Canada dismissed an appeal filed in 2021 in relation to the Commission’s decision on the implementation and tracking of commitments made in connection with the Manitoba Hydro – Manitoba-Minnesota Transmission Project (MMTP).^Footnote 4 The MMTP had been recommended for GIC approval by the National Energy Board on 15 November 2018, and GIC approved the project on 14 June 2019. The Federal Court of Appeal’s decision upheld the Commission’s decision. This appeal dismissal illustrates that the Commission makes thorough and balanced decisions, which contribute to achieving the expectations laid out in the CER’s Departmental Results Framework.

Transparency is a key pillar of delivering fair adjudicative processes. The Commission began planning for a comprehensive review of the National Energy Board Rules of Practice and Procedure, 1995 (the Rules), as authorized by the CER Act, to better align with the CER Act, including meeting objectives outlined in the Act’s preamble. The Rules govern the procedures to be followed during Commission proceedings and sets out the mechanisms for complaints, the conduct of public hearings and determining the way applications are assessed. The goal is to thoughtfully modernize related practices and procedures, including enhancing competitiveness through predictable and timely processes. Public engagement will be a key aspect of the Rules update.

The Commission also engaged in regular dialogues with counterparts across Canada and the globe, and continued attending meetings, conferences, webinars and other educational offerings such as Canada’s Energy and Utility Regulators Association, the United States’ National Association of Regulatory Utility Commissioners, the Canadian Institute for Administration of Justice, and the Canadian Council of Administrative Tribunals. Additionally, participation in organizations such as the Council of Federal Tribunal Chairs, the network of French-speaking energy regulators, and other networks of energy mandated adjudicative bodies has benefited the Commission by providing a setting for dialogue, learning, and the sharing of best practices. These connections also enable Commissioners to tap into the expertise from others in the regulatory community while sharing their own expertise with these valuable organizations.

Highlights from Regulatory Proceedings

During 2022–23, Commissioners adjudicated and released 738 decisions on applications related to pipelines, powerlines, tolls and tariffs, export and import licences, exploration and production, leave to open and other matters that spanned the energy infrastructure lifecycle. Appendix B (Application Activity) and Appendix C (Summary of Released Commission Decisions, Recommendations and In Progress Hearing Applications) provide additional details.

Below is the 2022–23 summary of CER Commission decisions and recommendations:

The overall number of applications reviewed by the Commission decreased in 2022–23 (738 decisions compared to 771 decisions in 2021–22). The largest reduction in applications was noted in the infrastructure category, followed by tolls and tariffs decisions, and export and import applications being filed with the CER. Offsetting this difference was an increase in the complexity of both infrastructure and tolls and tariff applications, and the assessment steps required to ensure robust consultation with Indigenous Peoples, concerned stakeholders and impacted parties.

While the appendices contain further information related to all Commission decisions and recommendations, some highlights are provided below.

During 2022–23, the largest ongoing construction project that the CER oversaw – the Trans Mountain Expansion Project – continued construction activities across all pipeline spreads, including at terminals and pump stations. Oversight also continued for construction activities on three major NOVA Gas Transmission Line (NGTL) projects during this period, including NGTL’s 2021 System Expansion Project (NGTL 2021), the Edson Mainline Expansion Project, and the North Corridor Expansion Project. NGTL’s construction on both the 2021 and Edson Mainline projects concluded this past fiscal year.

During the post-approval and construction phases of projects, the Commission adjudicates on an assortment of condition compliance activities and all variance requests. Conditions are attached to most Commission decisions whether related to legislated requirements, CER regulations, the terms and conditions of service or as outlined in a decision or order. During the reporting period, the CER received 1357 post-approval compliance documents, some of which required Commission decisions. Appendix G provides a detailed breakdown of the compliance documents submitted.

In situations of unsatisfactory compliance with conditions, Commission orders or decisions, or provisions of legislation or regulations, an Administrative Monetary Penalties (AMP) Officer may issue a notice of violation (NOV) with a penalty against a non-compliant company or individual. If the company or individual requests a review of the violation and / or the penalty, the Commission is required to hear the matter. On 22 March 2022, Trans Mountain Expansion Project requested the review of an NOV and $88,000 penalty issued to it on 24 February 2022, which was the first AMP review hearing conducted by the Commission since the establishment of the CER in 2019. The Commission held a proceeding to review this request, and on 22 December 2022 issued its decision upholding the AMP, but reduced the penalty to $4,000.

Proposed projects and developments can also impact landowners. Since the CER’s inception and within its jurisdictional boundaries, affected parties including landowners, can submit compensation disputes for a decision by the Commission. During 2022–23, the CER received four applications related to compensation disputes. Including applications submitted in previous years, there were two active compensation applications with assigned Panels, two applications were in adjournment, two applications were withdrawn, two were placed in abeyance at the applicant’s request, and two applications in the preliminary comment process as of 31 March 2023. Please see Appendix H for more information on compensation disputes.

The Commission also regulates pipeline tolls and tariffs under its jurisdiction to ensure they are just and reasonable. In 2022–23, the Commission adjudicated several tolls and tariff complaint applications, including an application by CNOOC Marketing Canada (CNOOC), that requested the Commission determine CNOOC’s right to access certain facilities at Trans Mountain's Edmonton Terminal and whether those rights were being unfairly impeded, as further described in Appendix C. The hearing and final oral argument was the first held by the Commission in person since the easing of the pandemic restrictions. The Commission chose a hybrid hearing format where parties attended both virtually and in person while members of the Commission and CER staff attended in person.

As the complaint involved an alleged denial of access, the Commission was mindful of the impact the length of the hearing would have on participants. In response, the Commission chose to deal with the process steps expeditiously to shorten the overall hearing length. These types of process efficiencies will be considered for future applications, when appropriate.

Companies are required to seek permission from the Commission before opening a pipeline or a section of pipeline for the transmission of hydrocarbons or any other commodity. The Commission issued 42 Leave to Open Orders in 2022–23 to nine different companies related to 18 different projects. Applications for leave to open are made after approved construction on a facility segment is complete and the company can demonstrate that the facility can begin operations safely.

The Commission also plays an important role in the CER’s safety and environment oversight. The Commission can issue Directions or Orders to ensure the safety and security of persons and facilities and/or for the protection of property or the environment. In 2022–23, the Commission issued one order in relation to safety, while four orders issued in previous fiscal years were still active and being monitored by the CER. Appendix F provides more information on these orders as of 31 March 2023.

During this reporting period, it should be noted that there were no assessments ongoing or completed for applications designated under the Impact Assessment Act, which would require a joint review with the Impact Assessment Agency. The Commission stands ready to undertake any joint reviews with the Agency should any such projects be submitted in the future.

Date modified:

2023-09-29