ARCHIVED - National Energy Board - 2014-15 - Report on Plans and Priorities - Section I: Organizational Expenditure Overview
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Section I: Organizational Expenditure Overview
Organizational Profile
Minister: The Honourable Joe Oliver, P.C., M.P.
Chair and CEO: Gaétan Caron
Ministerial portfolio: Natural Resources
Year established: 1959
Main legislative authorities: National Energy Board Act (NEB Act)[v]
Other: In 2014, the National Energy Board will celebrate 55 years of ardently promoting safety and security, environmental protection and economic efficiency in the Canadian public interest.
Organizational Context
Raison d’être
The National Energy Board (NEB or the Board) is an independent federal, quasi-judicial regulator established in 1959 to promote safety and security, environmental protection and economic efficiency in the Canadian public interest within the mandate set by Parliament for the regulation of pipelines, energy development and trade.
Responsibilities
The main responsibilities of the NEB are established in the NEB Act and include regulating:
- The construction, operation, and abandonment of pipelines that cross international borders or provincial/territorial boundaries, as well as the associated pipeline tolls and tariffs;
- The construction and operation of international power lines and designated inter-provincial power lines; and
- Imports of natural gas and exports of crude oil, natural gas liquids (NGL), natural gas, refined petroleum products and electricity.
Additionally, the Board has regulatory responsibilities for oil and gas exploration and production activities in Canada Lands[vi] not otherwise regulated under joint federal/provincial accords. These regulatory responsibilities are set out in the Canada Oil and Gas Operations Act (COGO Act), and the Canada Petroleum Resources Act (CPR Act).
The NEB conducts environmental assessments (EA) during its review of applications for projects under its jurisdiction. For certain projects, an EA is also required by federal legislation, such as the Canadian Environmental Assessment Act, 2012 (CEAA 2012), the Mackenzie Valley Resource Management Act, the Inuvialuit Final Agreement or the Nunavut Land Claims Agreement. Certain Board inspectors are designated Health and Safety Officers by the Minister of Labour to administer Part II of the Canada Labour Code as it applies to NEB-regulated facilities and activities.
The Board also monitors aspects of energy supply, demand, production, development and trade that fall within the jurisdiction of the federal government. The Board reports to Parliament through the Minister of Natural Resources.
Strategic Outcome and Program Alignment Architecture (PAA)
1 Strategic Outcome: The regulation of pipelines, power lines, energy development and energy trade contributes to the safety of Canadians, the protection of the environment and efficient energy infrastructure and markets, while respecting the rights and interests of those affected by NEB decisions and recommendations.
- 1.1 Program: Energy Regulation Program
- 1.1.1 Sub-Program: Energy Regulation Development
- 1.1.2 Sub-Program: Energy Regulation Implementation, Compliance Monitoring and Enforcement
- 1.2 Program: Energy Information Program
- Internal Services
Organizational Priorities
| Priority | Type | Strategic Outcome(s) and/or Program(s) |
|---|---|---|
| Continuous improvement of safety and environmental outcomes | Previously committed to | Energy Regulation |
| Description | ||
Why is this a priority? Safety and environmental protection are of paramount importance to the Board. As an independent federal regulator, the Board regulates safety and security, environmental protection and economic efficiency in the Canadian public interest within the mandate set by Parliament. What are the plans for meeting this priority?
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| Priority | Type | Strategic Outcome(s) and/or Program(s) |
|---|---|---|
| A robust regulatory framework for the North | Previously committed to | Energy Regulation |
| Description | ||
Why is this a priority? The NEB is the federal body responsible for regulating oil and gas exploration and production activities in Canada Lands not otherwise regulated under joint federal/provincial accords. In 2011, the NEB conducted a comprehensive review of the regulatory framework for Arctic offshore drilling, which resulted in the development of filing requirements for offshore drilling in the Canadian Arctic (i.e., the Arctic Review). During the Arctic Review, the NEB committed to reviewing and strengthening its regulatory framework for the North to ensure that future decisions on applications will be made in a manner that enhances the safety of workers and the public and the protection of the environment. What are the plans for meeting this priority?
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| Priority | Type | Strategic Outcome(s) and/or Program(s) |
|---|---|---|
| A flexible and efficient organization able to meet new and ongoing priorities | Previously committed to | Internal Services Energy Regulation |
| Description | ||
Why is this a priority? A nimble organization is required for the NEB to achieve its strategic outcome and priorities in an effective and efficient manner, while an increase in industry activity is resulting in unprecedented demand for NEB services. As well, unprecedented changes including those to the NEB Act resulting from the Jobs, Growth and Long-Term Prosperity Act (JGLTPA) have impacted our responsibilities (e.g., navigation safety, the requirement to ensure expeditious handling of applications and an increased number of audits and inspections). What are the plans for meeting this priority?
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Risk Analysis
The NEB takes risk into account in its integrated business planning and decision-making processes, which is codified in the NEB’s Integrated Risk Management Policy and process. Risks with the potential to affect the achievement of organizational objectives are identified, analyzed, evaluated, monitored and reviewed at the strategic and operational levels to inform decision-making, priority setting, resource allocation and corporate reporting.
| Risk | Risk Response Strategy | Link to Program Alignment Architecture |
|---|---|---|
| Due to several drivers such as an increase in the transportation of oil and gas products, there is a risk that an incident at a regulated company results in a fatality(ies) and/or significant environmental damage. | Implement additional controls and monitor | 1.1 Energy Regulation Program |
| Due to limited use of data standards combined with aging information systems, there is a risk that inaccurate, incomplete or inadequate information about NEB-regulated facilities or NEB operations is communicated to Canadians. | Implement additional controls and monitor | 1.1 Energy Regulation Program |
| Due to an increase in resource demands driven by the number and scope of applications and hearings, there is a risk that they are not dealt with in a timely and expeditious manner and/or legislated time limits are not met resulting in a compromised predictability of the NEB’s regulatory processes. | Implement additional controls and monitor | 1.1 Energy Regulation Program |
| Due to a highly competitive labour market, there is a risk that key positions within the organization are vacant resulting in a loss of corporate knowledge and delays in regulatory processes. | Implement additional controls and monitor | 1.3 Internal Services |
In 2013, the NEB regulated approximately 73,000 kilometres[vii] of pipelines operated by 98 companies and approximately 1,400 kilometres of international power lines operated by 11 companies across Canada. These pipelines shipped approximately $134.4 billion[viii] worth of crude oil, petroleum products, natural gas liquids and natural gas to Canadian and export customers at an estimated transportation cost of $7.1 billion. NEB-regulated international power lines transmitted approximately $2 billion of electricity into and out of Canada.
The NEB’s responsibilities are not only shaped by emerging energy trends, but also by the proactive consideration of safety, environmental, societal and economic trends that may influence the NEB’s ability to carry out its responsibilities in the Canadian public interest.
A number of incidents from 2010 to 2013 involving the oil and gas sector, including the Gulf of Mexico crude oil spill resulting from a 'blow out' during the drilling of a sub-sea well, have changed the regulatory environment for the NEB and other energy regulators. Parliamentarians and members of the public are showing an increased interest in the energy industry, the safety of pipelines and environmental impacts of pipeline failures, and the role of the public in influencing regulatory and political decisions regarding the development of Canada’s energy industry. The NEB recognizes the need to communicate better and timelier information to Canadians about its regulatory process (e.g., applications and incidents).
The emergence of shale oil and shale gas developments in recent years has created renewed uncertainty regarding natural gas development in Arctic environments; however, there has been a growth in energy development in the northeastern British Columbia shale gas areas. As well, low prices and the growth of natural gas resources from shale gas in the United States is leading to a decrease in Canadian exports to the U.S. and a growing interest in cultivating overseas markets. Due to the factors outlined above, the NEB expects the recent high rate of industry applications for new facilities and for adjudication of tolling disputes to continue in 2014-15.
Planned Expenditures
| 2014-15 Main Estimates |
2014-15 Planned Spending |
2015-16 Planned Spending |
2016-17 Planned Spending |
|---|---|---|---|
| 71,316,050 | 84,663,473 | 69,153,310 | 69,153,310 |
| 2014-15 | 2015-16 | 2016-17 |
|---|---|---|
| 423.6 | 423.6 | 423.6 |
| Strategic Outcome(s), Program(s) and Internal Services | 2011-12 Expenditures |
2012-13 Expenditures |
2013-14 Forecast Spending |
2014-15 Main Estimates |
2014-15 Planned Spending |
2015-16 Planned Spending |
2016-17 Planned Spending |
|---|---|---|---|---|---|---|---|
| Strategic Outcome 1: The regulation of pipelines, power lines, energy development and energy trade contributes to the safety of Canadians, the protection of the environment and efficient energy infrastructure and markets, while respecting the rights and interests of those affected by NEB decisions and recommendations. | |||||||
| Energy Regulation Program | 34,867,506 | 44,125,872 | 52,800,000 | 39,482,860 | 56,018,272 | 46,581,292 | 46,581,292 |
| Energy Information Program | 8,259,353 | 5,974,560 | 7,200,000 | 5,294,553 | 6,820,972 | 5,831,489 | 5,831,489 |
| Strategic Outcome 1 Subtotal | 43,126,859 | 50,100,432 | 60,000,000 | 44,777,413 | 62,839,244 | 52,412,781 | 52,412,781 |
| Internal Services Subtotal |
21,248,754 | 19,445,209 | 24,200,000 | 26,538,637 | 21,824,229 | 16,740,529 | 16,740,529 |
| Total | 64,375,613 | 69,545,641 | 84,200,000 | 71,316,050 | 84,663,473 | 69,153,310 | 69,153,310 |
The NEB is funded through parliamentary appropriations. The Government of Canada recovers approximately 90 per cent of the appropriation from the regulated industry. The revenues are deposited directly into the Consolidated Revenue Fund. This process is regulated by the National Energy Board Cost Recovery Regulations.
Additional funds were received in 2012-13 to enhance NEB safety and security programs. Funding was also provided to cover special allowances.
In 2013-14, the increase in spending is largely due to a $12.4 million amount for moving to the NEB’s new location.
The remaining moving costs of $8.3 million will be incurred in 2014-15. The 2014-15 planned spending also includes an anticipated $7.2 million due to the approval of a new Collective Agreement and $6.1 million for eligible paylist expenses (including anticipated one-time severance liabilities).
Similarly, the 2015-16 planned spending includes $7.2 million related to the anticipated Collective Agreement and $1.2 million for eligible paylist expenses.
Alignment to Government of Canada Outcomes
| Strategic Outcome | Program | Spending Area | Government of Canada Outcome | 2014-15 Planned Spending |
|---|---|---|---|---|
| 1 The regulation of pipelines, power lines, energy development and energy trade contributes to the safety of Canadians, the protection of the environment and efficient energy infrastructure and markets, while respecting the rights and interests of those affected by NEB decisions and recommendations. | ||||
| 1.1 Energy Regulation | Economic affairs | Strong economic growth | 56,018,272 | |
| 1.2 Energy Information | Economic affairs | Strong economic growth | 6,820,972 | |
| Spending Area | Total Planned Spending |
|---|---|
| Economic Affairs | 62,839,244 |
| Social Affairs | - |
| International Affairs | - |
| Government Affairs | - |
Departmental Spending Trend
Departmental Spending Trend Graph
Text description of this graph
Spending Trend
This bar chart shows the National Energy Board’s six-year spending trend. It includes actual spending for the fiscal years 2011-12 and 2012-13, forecast spending for the year 2013-14 and planned spending for the years 2014-15 to 2016-17.
Actual Spending by period is as follows:
- 2011-12: $64.4 million
- 2012-13: $69.6 million
Forecast Spending by period is as follows:
- 2013-14: $84.0 million
Planned Spending by period is as follows:
- 2014-15: $84.7 million
- 2015-16: $69.2 million
- 2016-17: $69.2 million
The increase in actual spending from 2011-12 to 2012-13 is due to an increase in funding related to the Safety and Public Awareness Treasury Board Secretariat Submission. The increase in forecast spending between 2012-13 and 2013-14 is largely attributed to the move to a new location. Planned spending increases between 2013-14 and 2014-15 are attributable to one-time severance payouts stemming from the provisions of a New Collective Agreement partially offset by lower move costs in 2014-15.
The NEB has one sunset program, Public Awareness activity, valued at $0.6 million that will cease at the end of FY 2013-14, which was part of the 2012-13 Safety Submission.
Estimates by Vote
For information on the National Energy Board’s organizational appropriations, please see the 2014-15 Main Estimates publication.[ix]
Contribution to the Federal Sustainable Development Strategy (FSDS)
The 2013-16 Federal Sustainable Development Strategy (FSDS)[x], tabled on November 4, 2013, guides the Government of Canada’s 2013-16 sustainable development activities. The FSDS articulates Canada’s federal sustainable development priorities for a period of three years, as required by the Federal Sustainable Development Act (FSDA).The NEB contributes to Themes III - Protecting Nature and Canadians and IV - Shrinking the Environmental Footprint - Beginning with Government, as denoted by the visual identifiers below.
These contributions are components of the following Programs and are further explained
in Section II:
- Program 1.1 Energy Regulation; and,
- Internal Services.
The NEB’s decision-making process includes a consideration of the FSDS goals and targets through the strategic environmental assessment (SEA). An SEA for policy, plan or program proposals includes an analysis of the impacts of the proposal on the environment, including on the FSDS goals and targets. The results of SEAs are made public when an initiative is announced or approved, demonstrating that environmental factors were integrated into the decision-making process.
For complete details on the Strategy, please see the Federal Sustainable Development Strategy[xi] website.
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