Canadian Energy Perspectives

Developments in Energy and Power Law

Canadian Energy Perspectives

B.C. Government Tables Comprehensive LNG Tax Legislation

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas
British Columbia
Monika SawickaTJ KangBrian O'Neill

On October 21, 2014, British Columbia Finance Minister Michael de Jong announced Bill 6 – 2014, the Liquefied Natural Gas Income Tax Act (the “Act”), which proposes an income tax, effective for taxation years beginning on or after January 1, 2017, payable on net income from liquefaction activities at or in respect of a liquefied natural gas (“LNG”) facility in B.C.

Shortly following the announcement of the Act, McCarthy Tétrault’s LNG Team provided preliminary comments on its key highlights – see British Columbia Government Tables LNG Tax Legislation.[1] In this article, we provide a more detailed review and commentary of the Act. Our LNG Team would be happy to discuss the Act with you and how it may impact you in making LNG business and investment decisions in B.C. Continue Reading

National Energy Board Rules in Favour of Trans Mountain

Posted in Energy – Conventional, National Energy Board
AlbertaBritish Columbia
Paul CassidyGordon NettletonMonika Sawicka

1.               Background

On October 9, 2014, Trans Mountain Pipeline ULC’s (“Trans Mountain”) motion was heard by the National Energy Board (“NEB”) after a series of incidents between Trans Mountain and the City of Burnaby (“Burnaby”). Burnaby officials ticketed Trans Mountain contractors for contravening the Burnaby Street and Traffic Bylaw and the Burnaby Parks Regulation Bylaw (the “Bylaws”) while carrying out land surveys in and around the Burnaby Mountain Conservation Area (the “Subject Lands”).

The attempted surveys were in response to a ruling by the NEB that in order to assess Trans Mountain’s application for a certificate of public convenience and necessity, Trans Mountain was permitted to enter any Crown or private lands which lie in the intended pipeline route. After being unable to come to an agreement with Burnaby to enter the Subject Lands and conduct surveys, Trans Mountain filed a motion with the NEB seeking an order for access to the Subject Lands, as well as a Notice of Constitutional Question, submitting the NEB has authority to determine Burnaby’s bylaws are inoperative for the purposes of the rights granted to Trans Mountain under s. 73(a) of the National Energy Board Act (the “Act”). Continue Reading

BC Sets New Global Greenhouse Gas Emissions Standard for LNG Industry

Posted in Climate Change, Emissions Regulation, Liquefied Natural Gas
British Columbia
Paul CassidySelina Lee-Andersen

On October 20, 2014, BC Environment Minister Mary Polak introduced legislation for the management of greenhouse gas (GHG) emissions from the province’s burgeoning liquefied natural gas (LNG) industry. With the objective of ensuring that BC has the cleanest LNG facilities in the world, Bill 2 (also known as the Greenhouse Gas Industrial Reporting and Control Act) seeks to establish a GHG emissions intensity benchmark of 0.16 carbon dioxide equivalent (CO2e) tonnes per tonne of LNG produced. A number of details of the new GHG regime for the LNG industry have yet to be determined in regulations, but the legislation marks an important first step in keeping BC’s GHG emissions in check as the province strives to achieve its legislated GHG emission reduction target of 33% below 2007 levels by 2020.  The BC government estimates that five LNG plants in BC will generate 13 million tonnes of GHG emissions, on top of the province’s current annual GHG emissions of 62 million tonnes. Continue Reading

Hydro-Québec Distribution Announces New Deadline for Submission of Bids in 450 MW Wind RFP

Posted in Electricity, Québec Hydro-Québec, Wind
Louis-Nicolas BoulangerMathieu LeBlanc

Hydro-Québec Distribution issued today the third addendum to the call for tenders document in respect of its 450 MW wind call for tenders. Bidders will now be required to submit their bids by November 5, 2014. Bids will be opened on November 6, 2014, but the date for the announcement of successful bids remains to be determined.

The issuance of this addendum follows the much anticipated Régie de l’énergie approval on which we reported here.

British Columbia Government Tables LNG Tax Legislation

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas, Natural Gas
British Columbia
Paul CassidyGordon NettletonSven MilelliMonika Sawicka

On October 21, 2014, the British Columbia Government tabled Bill 6, the Liquefied Natural Gas Income Tax Act.  The Bill will be considered at the Legislature’s next sitting. Continue Reading

Régie de l’énergie Approves Weighting Table for 450 MW Wind RFP

Posted in Electricity, Québec Hydro-Québec, Régie de l’énergie, Wind
Mathieu LeBlancLouis-Nicolas Boulanger

On August 22, we reported here that Hydro-Québec Distribution was postponing to an undetermined date the deadline for submission of bids in its latest call for tenders for the purchase of a block of wind power produced by facilities with an installed capacity of 450 MW (A/O 2013-01), pending the approval by the Régie de l’énergie, Québec’s energy board, of the weighting table for the applicable evaluation criteria.

In a decision issued on October 20 and available here (in French only), the Régie de l’énergie finally approved the weighting table. Of interest, the Régie de l’énergie modified the weighting table by reducing the number of points allocated to the “cost of electricity”, “project feasibility”, “relevant experience” and “financial capability” criteria and reallocating those points to the “Québec content in excess of the 60% minimum requirement” and “manufacturing of strategic components in Québec” criteria. Continue Reading

Minister Bennett Addresses Opening of Clean Energy BC Conference; Sees Continued Opportunities for Renewable Energy even as Province Nears Final Investment Decision on Site C

Posted in BC Hydro, BC Ministry of Energy, Mines and Natural Gas, Energy – Renewable, Alternative and Clean, Independent Producers, Power
British Columbia
Sven Milelli

British Columbia’s Minister of Energy and Mines Bill Bennett addressed the province’s independent power producers at the opening of Clean Energy BC’s annual conference in Vancouver on October 16, 2014.  Speaking in the wake of the announcement earlier in the week that the Site C clean energy project (Site C) has received environmental approvals from the B.C. and federal governments, Minister Bennett confirmed that the B.C. government has not yet made a final investment decision with respect to Site C and is in the final stages of a “due diligence” process that includes comparisons to other potential alternatives, including a portfolio of renewable resources.

Noting that “all signs” point toward greater economic growth and electricity demand in B.C., Minister Bennett reviewed the four key components for meeting forecast load growth in the province, as described in BC Hydro’s current Integrated Resource Plan (IRP): (1) conservation and other demand side management (DSM) initiatives, currently targeted to satisfy 78% of future load growth; (2) refurbishment of and upgrades to existing heritage hydro assets; (3) acquisitions from independent power producers; and (4) Site C. Continue Reading

Court Gives Deference to OGC’s Water Act Approval Policy

Posted in British Columbia Oil and Gas Commission, Fossil Fuel, Natural Gas, Water
British Columbia
Paul CassidyMonika SawickaSelina Lee-Andersen

On October 10, 2014, the British Columbia Supreme Court (“Court”) issued reasons in Western Canada Wilderness Committee v. British Columbia (Oil and Gas Commission), 2014 BCSC 1919.  In this case, the petitioners, Western Canada Wilderness and Sierra Club of British Columbia Foundation (together, the “Petitioners”), brought a judicial review application against the British Columbia Oil and Gas Commission (“OGC”).

At issue was the proper interpretation of the Water Act as it relates to the granting by the OGC to the oil and gas industry of short-term water use approvals under s. 8 (“Approvals”). The issue focused on whether recurrent Approvals may be granted, and whether such Approvals may extend beyond the 24-month maximum term specified in the Water Act.  According to the Petitioners, the OGC consistently acted in contravention of the Water Act by granting repeated Approvals which, in effect, authorized companies to use and divert water for more than one term and for more than 24 months. The Petitioners’ main concerns were the negative effects of water use for hydraulic fracturing (or “fracking”) purposes. Continue Reading

Québec Government Proposes a Discount on Industrial Electricity Rates

Posted in Electricity, Plan Nord, Power, Québec, Québec Hydro-Québec, Régie de l’énergie
Louis-Nicolas BoulangerFranck Marvel Ngandui

On October 14, 2014, the Minister of Energy and Natural Resources and the Minister Responsible for the Northern Plan, Mr. Pierre Arcand, and the Minister of the Economy, Innovation and Exports, Mr. Jacques Daoust, introduced Québec’s strategy to use its electricity surpluses: a 20% discount on the current industrial electricity rates to encourage investments and new projects in the province. Continue Reading

Site C Project Granted Environmental Approvals by B.C. and Federal Governments

Posted in Aboriginal, BC Hydro, Electricity, Hydroelectric
British Columbia
Paul CassidySven MilelliSelina Lee-AndersenMonika Sawicka

The B.C. and federal governments have granted environmental approvals to BC Hydro for its Site C Clean Energy Project (Site C).  B.C. Environment Minister Mary Polak announced on October 14, 2014 the issuance of an environmental assessment certificate (EA Certificate) for Site C, concluding that the project is in the public interest and that its benefits outweigh the risks of significant adverse environmental, social and heritage effects.  In addition, federal Environment Minister Leona Aglukkaq issued a decision statement (Decision Statement) approving Site C, declaring that the significant adverse environmental effects that Site C is likely to cause are justified in the circumstances.

With these approvals in place, the B.C. government must now decide whether to proceed with Site C based on an investment decision. Continue Reading

The National Energy Board Saga between Trans Mountain and Burnaby Continues …

Posted in Wind
British Columbia
Paul CassidyKimberly HowardGordon NettletonMonika Sawicka

On October 9, 2014, the National Energy Board (the “NEB”) heard oral argument for a motion by Trans Mountain Pipeline ULC (“Trans Mountain”) seeking an order pursuant to sections 12, 13, and 73(a) of the National Energy Board Act (the “Act”). Submissions were made by Trans Mountain and the City of Burnaby (“Burnaby”).  At the end of the hearing, the NEB advised a decision will be made soon, but did not provide a specific time frame.

1.       Background

On August 19, 2014, the NEB issued Ruling No. 28 (the “Ruling”). The Ruling concluded that under s. 73(a) of the Act, Trans Mountain is permitted to enter any Crown (federal or provincial) or private lands which lie in the intended route of its pipeline to carry out surveys and examinations. This included a small portion of the Burnaby Mountain Conservation Area (the “Subject Lands”). Continue Reading

Québec Government and Gaz Métro Partner for LNG

Posted in Liquefied Natural Gas, Plan Nord, Québec, Wind
Louis-Nicolas BoulangerFranck Marvel Ngandui

On September 30, 2014, Québec Premier Philippe Couillard, jointly with the Minister of Energy and Natural Resources and the Minister Responsible for the Northern Plan, Mr. Pierre Arcand, the Minister for Transport and the Implementation of the Maritime Strategy, Mr. Jean d’Amour, and Mrs. Sophie Brochu, President and CEO of Gaz Métro, the principal distributor of natural gas in Québec, announced an investment by Investissment Québec of $50M in the share capital of the Gaz Métro subsidiary responsible for marketing liquefied natural gas (“LNG”), Gaz Métro LNG. According to the media, this investment represents a 42% stake in Gaz Métro LNG.

These funds will enable Gaz Métro LNG to increase its LNG offer through the addition of an LNG train to its eastern Montreal plant. Continue Reading

Quebec Introduces An Act respecting the Société du Plan Nord

Posted in Plan Nord, Québec
Louis-Nicolas BoulangerDaniel Bénay

On September 30, 2014, the Quebec government introduced Bill 11 to create the Société du Plan Nord which will be responsible for, inter alia, the coordination of the implementation of the Plan Nord. We invite readers to see our summary of the Bill’s highlights, originally posted on our firm’s main website.


OPA Updates Price Schedule for FIT/microFIT Programs

Posted in Energy – Renewable, Alternative and Clean, Feed-in-Tariff, FIT, Micro-FIT, FIT 2.0, Ontario Power Authority
Omar SolimanSeán O'Neill

On September 30, 2014, the Ontario Power Authority (the “OPA”) posted an updated FIT/microFIT price schedule.

The updated price schedule was made pursuant to a directive dated August 29, 2014 from the Ontario Minister of Energy, the Hon. Bob Chiarelli, and is part of an annual review by the OPA of prices offered to generators under the FIT/microFIT programs.

The new price schedule is effective September 30, 2014 for FIT projects (including FIT contracts offered through the extended FIT 3 procurement, but not those FIT contracts offered pursuant to the July 30, 2014 Offer List) and January 1, 2014 for microFIT projects (including Application Approval Notices issued on or after January 1, 2014).

British Columbia to Unveil LNG Tax Rules in October 2014

Posted in Liquefied Natural Gas, Regulation
British Columbia
Monika SawickaPaul CassidyKimberly HowardGordon Nettleton

On September 21, 2014, British Columbia (BC) Deputy Premier Rich Coleman announced that BC will unveil its tax rules for the liquefied natural gas (LNG) industry next month.  It is anticipated that the BC Government will table the Bill for debate within the first two weeks of the fall session’s start on October 6, 2014 with the aim for the tax regime to be in place by November 30, 2014.

As noted in an earlier blog post, the Government of BC delayed the release of its tax regime back in February 2014 for the purpose of completing further consultations with industry and LNG project proponents. To date, no final investment decisions have been made, but certain proponents have indicated they intend to do so before the end of 2014.

McCarthy Tétrault will be preparing a detailed review and commentary of the draft LNG tax legislation immediately following its publication. Should you or your colleagues wish to receive email notification of this publication please ensure you are on our mailing list.

Hydro-Québec Distribution 450 MW Wind RFP Submission Deadline Delayed

Posted in Energy – Renewable, Alternative and Clean, Québec Hydro-Québec, Régie de l’énergie, Wind
Daniel BénayCristel Chabot-LapointeMathieu LeBlanc

On December 18, 2013, we reported that Hydro-Québec Distribution (HQD) had issued a call for tenders for the purchase of a block of wind power produced by facilities with an installed capacity of 450 MW. A link to this blog post can be found here (

HQD issued yesterday Addendum #2 to the call for tenders document. This latest Addendum replaces the timetable already provided under Section 3.1 of the call for tenders document and postpones to an undetermined date the deadline for submission of bids, which deadline was initially scheduled for September 3, 2014.

HQD will grant bidders a minimum additional period of 10 business days for the submission of their bids, based on the date on which the Régie de l’énergie will issue its decision regarding the approval of the weighting table for the applicable evaluation criteria (petition R-3866-2013).

We will be most interested to learn the exact additional delay which will be granted by HQD for the submission of bids, especially in the unlikely event that the weighting table is significantly modified by the Régie de l’énergie in its decision.

A link to Addendum #2 can be found here ( (in French) and here ( (in English).

Ontario to Reduce Consumption of Electricity

Policy Roll-out has OPA Implementing Ambitious Demand Reduction Targets

Posted in Conservation, Electricity, Power
Stephanie Yarmo

The Ontario Power Authority (the “OPA”) received a direction from the Minister of Energy to coordinate, support and fund the delivery of certain programs under the Conservation First Framework (the “Framework”) over the next 6 years, beginning in January 2015.

The purpose of the Framework is to keep Ontario on track to achieving the province-wide conservation and demand management (“CDM”) target of 30 terawatt hours (TWh) by 2032 that was set pursuant to the Ontario Government’s 2013 Achieving Balance: Ontario’s Long-Term Energy Plan, which is discussed here and here. The “short-term” goal established under the Framework is a 7 TWh (or 7 billion kilowatt hours (kWh)) reduction in energy consumption by December 1, 2020 via the implementation of programs aimed at reducing the draw from the electricity grid.

The Minister likewise issued a direction to the Ontario Energy Board (the “OEB”), instructing the OEB to amend the license of each licensed electricity distributor (“Distributors”) to add a condition that specifies the Distributor will, between January 1, 2015 and December 31, 2020, make CDM programs available to its customers and will do so in relation to each customer segment in its service area. Continue Reading

Proposed Amendments to the National Energy Board Export and Import Reporting Regulations

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas, National Energy Board, Natural Gas
Gordon NettletonMargarete Daugela


A number of recent Letter Decisions[1] of the National Energy Board (Board) note the need for the Canadian natural gas industry to access overseas markets due to an increase in the North American gas resource base. It is necessary that the legislation and regulations governing the export of natural gas reflect the realities of selling liquefied natural gas (LNG) to overseas markets.  While some amendments to the statutory framework have been made, important changes are necessary in order to create a commercially sensible regulatory regime.

Background and Regulatory Context

As a result of the July 2012 amendments to the National Energy Board Act (NEB Act), the Board has now proposed changes to the regulations that govern the licencing of the export of LNG: the National Energy Board Part VI (Oil and Gas) Regulations (Part VI Regulations) and the National Energy Board Export and Import Reporting Regulations (Reporting Regulations).  While the proposed changes to the regulations represent a move toward increased efficiency, the current regulations and Board interpretation have the potential to create problems for the commercial reality of LNG exportation.  Continue Reading

Sunny Days Ahead for 500 FIT 3.0 Applicants

OPA offers 500 renewable energy contracts through FIT 3.0 process and is prepared to make 63 additional offers under the Unconstructed Rooftop Solar Pilot

Posted in Aboriginal, Energy – Renewable, Alternative and Clean, Ontario Power Authority
Will FyfeJustin Shoemaker

On July 7, the Ontario Power Authority (“OPA”) published a list of 500 renewable energy contract offers under its Feed-in Tariff  3.0 (“FIT 3.0”) Program, which are expected to produce 123.5 megawatts (“MW”) of power.

The list of successful applicants is heavily skewed in favour of solar projects. Of the 500 contract offers, 490 are solar photovoltaic (“PV”) projects, which account for 120.89 MW of the 123.5 MW approved by the OPA. The 10 successful non-solar applicants can be divided into eight bioenergy projects; one wind energy project, and one waterpower project.

The successful solar projects vary in size. Smaller approvals include several 15-40 kilowatt (“kW”) rooftop solar PV projects for local school boards while the larger approvals include nearly 100 projects in the 500 kW range. Projects above 500 kW are subject to a separate procurement process known as the Large Renewable Procurement process (discussed in previous posts found here, here, here and (most recently) hereContinue Reading

New Procurement Process for Large Renewable Projects

Launch of RFQ Phase

Posted in Energy – Renewable, Alternative and Clean, Ontario Power Authority
Suzanne V. MurphyChristopher ZawadzkiOmar Soliman

On July 14, 2014, the Ontario Power Authority (the “OPA”) released final materials for the first request for qualifications (“RFQ”) phase of the Large Renewable Procurement (the “LRP”) process, a new competitive procurement process in Ontario for renewable energy projects generally greater than 500 kW. The OPA intends to use the RFQ phase to qualify applicants for a potential future request for proposal (“RFP”) phase involving up to 565 MW of certain specified procurement targets (300 MW for wind, 140 MW for solar, 75 MW for waterpower, and 50 MW for bioenergy).

As noted in earlier blog postings here and here, the LRP originates from an Ontario Ministry of Energy directive, issued on June 12, 2013, which instructed the OPA to develop a new competitive procurement process for large renewable energy projects in Ontario. Following sustained community and stakeholder consultations, the OPA released a Final Recommendations Report for the LRP process on February 28, 2014. The RFQ phase is designed to ensure that applicants and their respective project teams possess sufficient energy development experience and financial capacity to minimize any risks that projects will fail to reach commercial operation. The OPA will be tasked with assessing submissions based on completeness and on specific mandatory requirements. Please see the attached charts for a summary of the assessment criteria in respect of the RFQ phase as well as the proposed LRP timetable.

RFQ applicants are required to submit information regarding past project development experience, team members’ development experience, audited financial statements, officer’s certificates and commitment letters, among other information.

RFQ applicants are also required to adhere to certain non-collusion requirements. Specifically, RFQ applicants must:

  • not coordinate their submissions with any other RFQ applicants;
  • keep their submissions confidential until the conclusion of the RFQ and selection of the qualified applicants, if any;
  • ensure that no member of the RFQ applicant team has entered into any agreement or arrangement with any member of another RFQ applicant team which may affect their respective submissions; and
  • not engage in any activity or communication that results in a conflict of interest, collusion or a violation of the any of the civil or criminal provisions of the Competition Act (Canada).

The OPA has facilitated a question and comments period on the RFQ phase until August 8, 2014. The final qualification submission deadline is set for September 4, 2014 at 3:00 p.m. EPT.

Is “Net Benefit” to Canada different for State-Owned Enterprise Investments?

Posted in Investment Canada Act, State-Owned Enterprises
Oliver J. BorgersMichele Siu

Investments in Canadian businesses by foreign state-owned enterprises[1] (“SOE”) may receive greater scrutiny than investments by non-state owned enterprises.  The Canadian government has made it clear that investments by SOEs will be assessed differently than other investments under the Investment Canada Act.    For example, at the end of 2012, the Minister of Industry indicated that investments by SOEs to acquire control of a Canadian oil sands business will, going forward, only be approved on an exceptional basis[2].  This focus on SOE investors, which will likely result in more SOE investments being scrutinized under the Minister’s pre-closing review and approval, is reflected in recent amendments to the Investment Canada Act and related guidelines:

  • Threshold for review for SOE investments will be lower: Generally, where a transaction involves the acquisition of control of a Canadian business by a non-Canadian, and the gross book value of the assets of the acquired business exceeds C$354 million (2014), the transaction is reviewable by Industry Canada pursuant to the Investment Canada Act.   Under proposed amendments, the review threshold is to progressively increase to C$1 billion[3].  However, the review threshold for SOE investments will be amended such that the existing C$354M threshold will remain in place.  Continue Reading

Energy Storage Update

Posted in Energy – Renewable, Alternative and Clean, Ontario Power Authority
Will FyfeLynn ParsonsJames KleinRoya Baryole

It has been a busy month for energy storage in Ontario.

New Contracts Awarded:

Five companies have now been selected to provide energy storage services as part of the Independent Electricity System Operator’s (the “IESO”) 35 MW procurement of renewable energy storage capacity.  They are Canadian Solar Solutions Inc., Convergent Energy and Power LLC, Dimplex North America LTD, Hecate Energy and Hydrogenics Corp.  The IESO’s press release can be found here.

Interestingly, the IESO has explicitly described this round of procurement as a way of testing new storage technologies. This in part explains the structure of the services contract to be entered into by storage providers. As outlined in a previous post, rather than laying the foundation for the long-term financing of a capital intensive project, the procurement allocated a higher point total to proponents that bid shorter contract terms and the form of services contract included several termination rights in favour of the IESO which make the contract difficult to finance.  Continue Reading

British Columbia Enacts LNG Facility Regulation

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas
British Columbia
Paul CassidyMonika Sawicka

On July 21, 2014, the BC Oil and Gas Commission (OGC) enacted the Liquefied Natural Gas Facility Regulation[1] (LNG Regulation) under the authority of the Oil and Gas Activities Act (OGAA).[2]  On the heels of BC’s increasing emphasis on the liquefied natural gas (LNG) industry, the LNG Regulation expands and updates the sparse LNG-related provisions which were previously in the Pipeline and Liquefied Natural Gas Facility Regulation,[3] which consequently has now been amended by removing the LNG provisions and been renamed the Pipeline Regulation. In addition, the Consultation and Notification Regulation[4] under the OGAA was amended to include consultation and notification requirements for proposed activities that include LNG facilities.  Continue Reading

New Government-Industry Working Group on Wind Energy Development in Québec

Posted in Energy – Renewable, Alternative and Clean, Québec, Wind
Louis-Nicolas BoulangerMathieu Bernier Trudeau

Québec Minister of Energy and Natural Resources Pierre Arcand announced yesterday the creation of a Government-industry working group destined to assess the development of the provincial wind power industry.

Turbine suppliers, project developers and component manufacturers will be solicited in the coming weeks to join the 15-member task force whose aim is to find innovative solutions so as to reinforce the sector’s competitiveness. Work will be carried out in a targeted approach in order to support businesses involved in the industry with the development of their expertise and products in order to increase exports and their capacity to respond to specific needs.

Both the Canadian Wind Energy Association and the AQPER (Québec Association for the Production of Renewable Energy) are prepared to participate in the consultation process. According to Mr. Arcand, a report summarizing the task force’s observations and recommendations is scheduled to be delivered next Fall and will fuel reflection on Québec’s next energy policy.