Canada Oil and Gas Operations Act — O-7 27
Financial responsibility 27 (1) An applicant for an authorization under paragraph 5(1)(b) shall provide proof of financial responsibility in the form of a letter of credit, guarantee or indemnity bond or in any other form satisfactory to the Commission of the Canadian Energy Regulator, (a) in the case of the drilling for or development or production of oil or gas in any area referred to in paragraphs 3(d) and (e), in the amount of $100 million or, if the Commission considers it necessary, in a greater amount that it determines; or (b) in any other case, in an amount that is satisfactory to, and determined by, the Commission. Pooled fund (1.01) An applicant to which paragraph (1)(a) applies may, rather than provide proof of financial responsibility in the amount referred to in that paragraph, provide proof that it participates in a pooled fund that is established by the oil and gas industry, that is maintained at a minimum of $250 million and that meets any other requirements that are established by regulation. Increase in amount by regulation (1.02) The Governor in Council may, by regulation, on the recommendation of the Minister, increase the amount referred to in subsection (1.01). Continuing obligation (1.1) The holder of an authorization under paragraph 5(1)(b) shall ensure that the proof of financial responsibility referred to in subsection (1) or (1.01) remains in force for the duration of the work or activity in respect of which the authorization is issued. Extended obligation (1.2) The holder of an authorization under paragraph 5(1)(b) shall also ensure that the proof referred to in paragraph (1)(a) or subsection (1.01) remains in force for a period of one year beginning on the day on which the Commission of the Canadian Energy Regulator notifies the holder that it has accepted a report submitted by the holder indicating that the last well in respect of which the authorization is issued is abandoned. The Commission may reduce that period and may decide — other than in the case of a holder that participates in a pooled fund — that the proof that is to remain in force during that period is for an amount that is less than the amount referred to in paragraph (1)(a) and that is determined by the Commission. Payment of claims (2) The Commission of the Canadian Energy Regulator may require that moneys in an amount not exceeding the amount prescribed for any case or class of cases, or determined by the Commission in the absence of regulations, be paid out of the funds available under the letter of credit, guarantee or indemnity bond or other form of financial responsibility provided under subsection (1), or be paid out of the pooled fund referred to in subsection (1.01), in respect of any claim for which proceedings may be instituted under section 26, whether or not those proceedings have been instituted. Manner of payment (3) Where payment is required under subsection (2), it shall be made in such manner, subject to such conditions and procedures and to or for the benefit of such persons or classes of persons as may be prescribed for any case or class of cases, or as may be required by the Commission of the Canadian Energy Regulator in the absence of regulations. Deduction (4) Where a claim is sued for under section 26, there shall be deducted from any award made pursuant to the action on that claim any amount received by the claimant under this section in respect of the loss, damage, costs or expenses claimed. Reimbursement of pooled fund (5) The holder of an authorization under paragraph 5(1)(b) that is liable for a discharge, emission or escape of oil or gas that is authorized by regulation or for any spill or debris in respect of which a payment has been made under subsection (2) out of the pooled fund, shall reimburse the amount of the payment to the fund in the prescribed manner. R.S., 1985, c. O-7, s. 27; 1992, c. 35, s. 25; 1994, c. 10, s. 10; 2015, c. 4, ss. 21, 118 2019, c. 28, s. 142