ARCHIVED – National Energy Board – 2014-15 Departmental Performance Report – Section I: Organizational Expenditure Overview
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Section I: Organizational Expenditure Overview
Organizational Profile
Appropriate Minister: The Honourable Jim Carr, P.C., M.P.
Institutional Head: C. Peter Watson, P.Eng., FCAE
Ministerial Portfolio: Natural Resources
Enabling Instrument(s): National Energy Board Act (NEB Act)
Year of Incorporation / Commencement: 1959
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, in specified areasFootnote 1 the Board has regulatory responsibilities for oil and gas exploration and production activities under the National Energy Board Act, the Canada Oil and Gas Operations Act (COGOA), the Canada Petroleum Resources Act (CPRA), and the Northwest Territories’ Oil and Gas Operations Act (OGOA) and Petroleum Resources Act (PRA).
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, and 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. The Board reports to Parliament through the Minister of Natural Resources.
Strategic Outcome(s) and Program Alignment Architecture
- 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
- 1.1 Program: Energy Regulation Program
Internal Services
Organizational Priorities
Organizational Priorities
Priority | TypeFootnote 2 | Strategic Outcome(s) [and/or] Program(s) |
---|---|---|
Continual improvement of safety and environmental outcomesFootnote 3 | Previously committed to | Energy Regulation |
Summary of Progress | ||
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 interestFootnote 4 within the mandate set by Parliament. The Board is committed to strengthen and improve industry-wide performance and awareness of the role that safety culture plays in contributing to or building defences against incidents. Progress for this organizational priority is linked to the Energy Regulation program, and Energy Regulation Implementation, Compliance Monitoring and Enforcement sub-program. Detailed performance analysis is included in Section II of this report.
|
Priority | Type | Strategic Outcome(s) [and/or] Program(s) |
---|---|---|
A robust regulatory framework for the North | Previously committed to | Energy Regulation |
Summary of Progress | ||
The NEB previously committed to reviewing and strengthening its regulatory framework for the North, to ensure that future decisions on applications are made in a manner that enhances the safety of workers and the public and the protection of the environment. Progress for this organizational priority is linked to the Energy Regulation Development sub-program. Detailed performance analysis is included in Section II of this report.
|
Priority | Type | Strategic Outcome(s) [and/or] Program(s) |
---|---|---|
A flexible and efficient organization able to meet new and ongoing priorities | Previously committed to | Energy Regulation, Internal Services |
Summary of Progress | ||
Increased industry activity continued to result in high demand for NEB services this year. A nimble organization is required for the NEB to achieve its strategic outcome and priorities in an effective and efficient manner. Progress for this organizational priority is linked to the Energy Regulation Development and Energy Regulation Implementation, Compliance Monitoring and Enforcement sub-programs. Internal Services activities are also linked to this priority. Detailed performance analysis is included in Section II of this report.
|
Risk Analysis
Key Risks
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. |
|
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. |
|
1.1 Energy Regulation Program 1.2 Energy Information 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. |
|
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. |
|
Internal Services |
The safety of Canadians and protection of the environment in the construction, operation and abandonment of pipeline facilities regulated by the NEB continue to be top priorities. The NEB has shared its safety culture expectations with companies to promote the common goal of zero incidents. The NEB conducted 335 compliance verification activities, including 192 inspections. The NEB conducted six audits to observe regulated companies’ operating environments to keep aware of emerging risks and trends, and the analysis informs the NEB’s risk-based compliance verification plans. The NEB has a suite of enforcement tools available to ensure regulated company compliance with rules and regulations that are designed to promote safety and protection of the environment.
In early 2015, the Chair and CEO embarked on a National Engagement Initiative, in an effort to demystify the NEB’s role and regulatory processes, while hearing from Canadians about regional energy matters. This is a first step in creating an ongoing dialogue to ensure information about the NEB’s role and mandate is communicated accurately.
The NEB proactively released online safety and environmental compliance information to Canadians regarding regulated company performance, and the reach of this information was expanded through our Twitter account and targeted communications products. Lastly, the NEB has taken a “detect and correct” approach to rectify inaccurate media coverage.
The NEB continued to meet legislated time limits in 2014-15, by constantly monitoring application process times and accessing our resource allocation plan.
The skills and experience needed to carry out the NEB’s mandate are critical to regulating in the Canadian public interest. In 2014-15, the NEB saw renewal in several senior leadership positions including a new Chair and CEO, Vice-Chair, Chief Operating Officer, and several Vice-Presidents and Directors. These highly-qualified professionals bring experience and commitment that energized the management team. The NEB regularly reviewed its People Strategy, staffing and recruitment levels, and resource needs throughout the year to remain a nimble organization during a time of change. The NEB continued to support and measure employee work-life balance and engagement, and encouraged employee learning and development as part of the organization’s people retention strategy.
Actual Expenditures
2014-15 Main Estimates |
2014-15 Planned Spending |
2014-15 Total Authorities Available for Use |
2014-15 Actual Spending (authorities used) |
Difference (actual minus planned) |
---|---|---|---|---|
71,316,050 | 84,663,473 | 92,482,848 | 87,321,083 | 2,657,610 |
2014-15 Planned |
2014-15 Actual |
2014-15 Difference (actual minus planned) |
---|---|---|
423.6 | 440.6 | 17.0 |
Strategic Outcome(s), Program(s) and Internal Services |
2014-15 Main Estimates |
2014-15 Planned Spending |
2015-16 Planned Spending |
2016-17 Planned Spending |
2014-15 Total Authorities Available for Use |
2014-15 Actual Spending (authorities used) |
2013-14 Actual Spending (authorities used) |
2012-13 Actual Spending (authorities used) |
---|---|---|---|---|---|---|---|---|
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. | ||||||||
1.1 Energy Regulation Program | 39,482,860 | 56,018,272 | 52,632,974 | 48,926,812 | 51,792,827 | 45,310,493 | 47,970,746 | 44,125,872 |
1.2 Energy Information Program | 5,294,553 | 6,820,972 | 5,620,814 | 5,225,464 | 6,589,085 | 6,567,390 | 6,156,305 | 5,974,560 |
Subtotal | 44,777,413 | 62,839,244 | 58,253,788 | 54,152,276 | 58,381,912 | 51,877,883 | 54,127,051 | 50,100,432 |
Internal Services Subtotal | 26,538,637 | 21,824,229 | 19,296,723 | 17,445,245 | 34,100,936 | 35,443,200 | 27,555,630 | 19,445,209 |
Total | 71,316,050 | 84,663,473 | 77,550,511 | 71,597,521 | 92,482,848 | 87,321,083 | 81,682,681 | 69,545,641 |
The NEB is funded through parliamentary appropriations. The Government of Canada recovers approximately 95 per centFootnote 6 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.
The NEB’s planned spending of $84.7 million was adjusted during the fiscal year to reflect changes in authorities granted in Budget 2014 (primarily for mega-hearings and to a lesser extent Public Awareness activities), and adjustments to statutory items. The overall net increase of $7.8 million is a result of increases and decreases, as detailed below.
Increases included funding received in Budget 2014 ($6.5 million); Operating Budget Carry Forward ($2.6 million); and a year-end adjustment to our contributions to employee benefit plans ($1.2 million).
Decreases included the cash management of both the top-up to the Collective Agreement that expired 31 October 2014 ($2.1 million) and a portion of our Paylist Expenditures for 2014-15 ($0.4 million).
The NEB’s actual spending of $87.3 million compared to total authorities of $92.5 million resulted in a lapse of $5.2 million. This was primarily due to lapses in the Participant Funding program ($2.7 million), $2.25 million of which has been frozen so that funding for the TransMountain Expansion (TMX) project could be re-profiled to future fiscal years. The remaining lapse included the move to our new location ($1.2 million) and reprofiled funding related to delayed mega-hearing applications ($1.3 million).
Alignment of Spending With the Whole-of-Government Framework
Strategic Outcome | Program | Spending Area | Government of Canada Outcome | 2014-15 Actual Spending |
---|---|---|---|---|
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 | 45,310,493 |
1.2 Energy Information | Economic Affairs | Strong Economic Growth | 6,567,390 |
Spending Area | Total Planned Spending | Total Actual Spending |
---|---|---|
Economic Affairs | 62,839,244 | 51,877,883 |
Social Affairs | 0 | 0 |
International Affairs | 0 | 0 |
Government Affairs | 0 | 0 |
Departmental Spending Trend
Text description of this graph
Departmental Spending Trend
This bar graph shows the National Energy Board’s planned and actual spending for the fiscal years 2012-13 to 2017-18.
Total Spending and planned spending by period is as follows:
- 2012-13: $69.6 million
- 2013-14: $81.6 million
- 2014-15: $87.3 million
- 2015-16: $77.6 million
- 2016-17: $71.6 million
- 2017-18: $59.1 million
For fiscal years 2012-13 to 2014-15, the figure represents the actual expenditures as reported in the Public Accounts.
The NEB’s expenditures in 2014-15 show an increase of $4.8 million over the prior year, mainly as a result of Budget 2014.
For the period 2015-16 to 2017-18, the figure represents the total planned spending as reported in the 2015-16 Report on Plans and Priorities. Safety and Public Awareness funding is scheduled to expire at the end of fiscal year 2016-17. One time funding for mega-hearings granted in Budget 2014 is due to expire at end of fiscal year 2016-17.
As per Budget 2015, $80 million has been approved for safety and environmental protection, and greater engagement with Canadians.
Expenditures by Vote
For information on the National Energy Board’s organizational voted and statutory expenditures, consult the Public Accounts of Canada 2015, which is available on the Public Works and Government Services Canada website.
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