This page has been archived.
Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats on the "Contact Us" page.
The Board is structured into five business units reflecting major areas of responsibility: Applications, Operations, Commodities, Planning, Policy and Coordination and Integrated Solutions. In addition, the Executive Office includes the specialized services of Legal Services and Regulatory Services.
The Applications Business Unit is responsible for processing and assessing most regulatory applications submitted under the NEB Act, including facilities and tolls and tariffs applications and construction and operation of international and interprovincial electric power lines. The Applications Business Unit is also responsible for other matters such as the financial surveillance and financial audits of companies under the Board’s jurisdiction and for addressing landowner concerns.
The Operations Business Unit is accountable for safety and environmental matters pertaining to facilities under the NEB Act, the COGO Act and the CPR Act. It conducts safety and environmental inspections and audits; investigates incidents; monitors emergency response procedures; regulates the exploration, development and production of hydrocarbon resources in non-accord Frontier lands; and develops related safety and environment regulations and guidelines.
The Commodities Business Unit is responsible for energy industry and marketplace surveillance, including the outlook for the demand and supply of energy commodities in Canada, updating guidelines and developing regulations relating to energy exports as prescribed by Part VI of the NEB Act. It is also responsible for assessing and processing applications for oil, natural gas and electricity exports.
The Planning, Policy and Coordination Business Unit is responsible for developing the NEB’s long-term regulatory framework and regulatory tools and for organization-wide planning and coordination. This includes providing communication, engagement, appropriate dispute resolution and technical excellence (through its professional leader and knowledge network services) services to the Board.
Integrated Solutions is responsible for developing, implementing and supporting strategies and solutions to enhance business outcomes. This includes Board-wide computer systems and services, materiel and facilities management, contracting, library services, corporate records management, financial management, human resource management, translation and document design and production.
The Executive Office is responsible for the Board’s overall capability and readiness to meet strategic and operational requirements, including providing legal advice for regulatory and management purposes,3 administering hearings and providing regulatory support.
Strategic Outcome |
Goals |
Measures |
Further information |
Safety, security, environmental protection and economic benefits through regulation of pipelines, power lines, trade and energy development within NEB jurisdiction. |
Goal 1 – NEB- regulated facilities and activities are safe and secure and are perceived to be so. |
Number of fatalities: 0 pipeline related; 1 electricity facility related Number of hydrocarbon pipeline ruptures per year: 0 Number of pipeline incidents per year: 55 COGO Act disabling COGO Act hazardous occurrences: 25 Number and significance of security infractions: 0 |
Section 2.3.1 |
Goal 2 – NEB-regulated facilities are built and operated in a manner that protects the environment and respects the rights of those affected. |
Percent of environmental conditions that achieved their desired end results: 100% in calendar year 2006 Number of major liquid hydrocarbon releases into the environment: 1 major release in calendar year 2006 |
Section 2.3.2 |
|
Goal 3 – Canadians benefit from efficient infrastructure and markets. |
Evidence that Canadian energy and transportation markets are working well Evidence that advice and information products benefit Canadians: Web visits doubled; media hits up 131% Evidence that the Board’s regulatory processes are efficient and effective: Service standards for non-hearing s.58 applications met |
Section 2.3.3 |
|
Goal 4 – The NEB fulfills its mandate with the benefit of effective public engagement. |
Stakeholders are involved in the Board’s public processes: stakeholder satisfaction approximately 86% |
Section 2.3.4 |
|
Goal 5 – The NEB delivers quality outcomes through innovative leadership and effective processes. |
Employee satisfaction: 84% (National EOS 2005) Per capita cost of regulation: $1.32 for calendar year 2006 |
Section 2.3.5 |
Departmental Planned versus Actual Spending ($ millions) |
||||||
|
|
2006-2007 |
||||
Main |
Planned |
Total |
Actual Spending |
|||
Energy Regulation and Advice |
38.1 |
39.8 |
37.9 |
37.9 |
43.4 |
44.5 |
Total |
38.1 |
39.8 |
37.9 |
37.9 |
43.4 |
44.5 |
Less: Non-respendable revenue |
42.8 |
38.6 |
39.4 |
39.4 |
39.4 |
35.6 |
Plus: Cost of services received without charge |
5.6 |
5.6 |
5.8 |
5.8 |
5.8 |
6.3 |
Total Departmental Spending |
0.9 |
6.8 |
4.3 |
4.3 |
9.8 |
15.2 |
Full Time Equivalents |
299.6 |
300 |
305.1 |
305.26 |
Financial Requirements by Authority ($ millions) |
|||||
Vote or |
Truncated Vote |
2006-2007 |
|||
Main |
Planned |
Total |
Actual |
||
30 |
Program Expenditures |
33.0 |
33.0 |
38.5 |
39.6 |
(S) |
Contributions to employee benefit plans |
4.9 |
4.9 |
4.9 |
4.9 |
|
Total |
37.9 |
37.9 |
43.4 |
44.5 |
Net Cost of Department 2006-2007 |
($ millions) |
Total Actual Spending |
44.5 |
Plus: Services Received without Charge |
|
Accommodation provided by Public Works and Government Services Canada (PWGSC) |
3.9 |
Contributions covering employers’ share of employees’ insurance premiums and expenditures paid by TBS (excluding revolving funds) |
2.3 |
Worker’s compensation coverage, cost recovery audit costs and miscellaneous costs provided by other departments |
0.1 |
Sub-total |
6.3 |
Less: Non-respendable Revenue |
35.6 |
2006-2007 Net Cost of Department |
15.2 |
Non-Respendable Revenue ($ millions) |
||||||
Actual |
Actual |
2006-2007 |
||||
Main |
Planned |
Total |
Actual |
|||
Energy Regulation and Advice |
42.8 |
38.6 |
39.4 |
39.4 |
39.4 |
35.6 |
Total Non-respendable Revenue |
42.8 |
38.6 |
39.4 |
39.4 |
39.4 |
39.4 |
The NEB is an independent regulatory agency, established in 1959 under the NEB Act. The NEB Act authorizes the Board to charge those companies it regulates costs attributable to the NEB’s operations in carrying out its related responsibilities.
NEB Service Standards identify targets for key aspects of service delivery. The Service Standards and annual results can be found on the NEB website at http://www.neb-one.gc.ca under “Who we are & our governance”.
Fee Activity |
Description |
Amount |
Energy Regulation and Advice |
The NEB regulates in the public interest those areas of the oil, gas, non-hydrocarbon and electricity industries relating to:
|
|
Fee Type |
Regulatory (R) |
|
Fee Setting Authority |
The NEB External Charging is in accordance with sub-section 24.1 (1) of the NEB Act. As of 1 January 1991 under the NEB Cost Recovery Regulations, the Board recovers the cost of its operations from the majority of the companies that it regulates. The Board has the delegated authority to determine what costs will be excluded from program expenditures for cost recovery purposes. |
|
Date Last Modified |
NEB Cost Recovery Regulations last amended on 6 November 2002 |
|
2006-2007 Forecast Revenue |
Regulatory |
39.4 |
2006-2007 Actual Revenue ($ millions) |
Regulatory |
35.6 |
Estimated Full Cost |
Regulatory |
45.9 |
Forecast Revenue |
Sub-Total 2007 - 08 Total |
39.6 117.5 |
Estimated Full Cost |
Sub-Total 2007 - 08 Total |
39.7 119.1 |
Service Standards |
Service Standard Results |
Reasons for Decision
|
Reasons for Decision Five hearings: 80% completed in 12 weeks |
Export/import authorizations
Electricity export permits: 80% in 75 days |
Export/import authorizations
Electricity export permits: 5 received; 40% completed in 75 days |
Landowner Complaints
|
Landowner Complaints
|
Onshore pipeline regulation (OPR) audits
|
Onshore pipeline regulation audits
|
Financial audits
|
Financial audits 3 audits conducted; both service standards met (100% of reports sent within specified period) |
Non-hearing Section 58 application cycle times
|
Non-hearing Section 58 application cycle times
|
* The Board met all of its service standards except two. The Board’s target of sending the final OPR audit report to the company was not met due to a process transition that occurred throughout the year. This transition will result in improved service, including a reduced turnaround time. Therefore, the service standard will be changed. The Board’s target of completing 80 percent of electricity export within 75 days was not achieved due to the nature of the exports. The service standard was reviewed and revised and will be reported on in the future and support continual improvement efforts. |
When the NEB Cost Recovery Liaison Committee (CRLC) was established in July 1990, the composition of the committee ensured that there was representation from each of the industry’s major associations and companies. The CRLC was established for ongoing consultation and communication regarding cost recovery methodology, regulations and new initiatives affecting cost recovery processes. In addition, the NEB tables and discusses its financial statements and anticipated expenditures with the CRLC. The NEB’s performance results are presented to the CRLC at regularly scheduled meetings.
The NEB has a Dispute Management Process in accordance with Treasury Board External Charging Policy, to ensure that disputes and issues raised by stakeholders related to external charging are addressed and resolved fairly and efficiently. In this process, there are three hierarchical levels to resolve a dispute. The first level of resolution rests with the Chair of the CRLC. If the dispute is unresolved at the first level, the issue will be passed on to the second level where a committee is formed. Where the first level and the second level fail to result in a resolution, the matter will be referred to the Chairman of the Board. Each level is given 90 days from the date of receipt of notification or escalation to resolve the dispute.
The disputes and issues may include but will not be limited to:
Fee Activity |
Description |
Amount |
Energy Regulation and Advice – Canada Oil and Gas Operations Act Under the COGO Act, the NEB regulates oil and gas activities on Frontier lands not subject to a federal/provincial accord. |
||
Fee Type |
Regulatory (R) |
|
Fee Setting Authority |
Canada Oil and Gas Operations Act |
|
Date Last Modified |
1992 |
|
2006-2007 Forecast Revenue |
Regulatory |
900 |
2006-2007 Actual Revenue |
Regulatory |
750 |
Estimated Full Cost |
Regulatory |
4,900,000 |
Forecast Revenue |
Sub-Total 2007 - 08 Total |
900 2,700 |
Estimated Full Cost |
Sub-Total 2007 - 08 Total |
4,300,000 12,900,000 |
Service Standards |
Service Standard Results |
COGO Act applications Well drilling applications
Geological and geophysical applications
|
COGO Act applications Well drilling applications
Geological and geophysical applications
|
CPR Act applications
80% of decisions for both rendered within 90 calendar days |
CPR Act applications
|
The NEB’s COGO Act and CPR Act service standards are reviewed with stakeholders on an opportunity basis at meetings with companies, organizations (such as the Canadian Association of Petroleum Producers), and at other venues (such as the Annual Oil and Gas Forum).
Fee Activity |
Description |
Amount |
Access to Information ActFees charged for the processing of access requests filed under the Access to Information Act (ATIA) |
||
Fee Type |
Other products and services (O) |
|
Fee Setting Authority |
Access to Information Act |
|
Date Last Modified |
1992 |
|
2006-2007 Forecast Revenue |
Other Products and Services |
100 |
2006-2007 Actual Revenue |
Other Products and Services |
25 |
Estimated Full Cost |
Other products and Services |
32,805 |
Forecast Revenue |
Sub-Total 2007 - 08 Total |
100 300 |
Estimated Full Cost |
Sub-Total 2007 - 08 Total |
35,000 105,000 |
Service Standards |
Service Standard Results |
Responding to Access to Information requests
|
Responding to Access to Information requests
|
Regulatory Instrument |
Expected Results and Progress |
National Energy Board Damage Prevention Regulations |
Less prescriptive, goal oriented regulations for NEB regulated facilities to more effectively address safety in the proximity of pipelines. Will replace the National Energy Board Pipeline Crossings Regulations, Parts I and II. These regulations are being reviewed by the Department of Justice in collaboration with the Board during this fiscal year. |
National Energy Board Onshore Pipeline Regulations (OPR-99) and National Energy Board Processing Plant Regulations |
Revise regulations to include concept of decommissioning. Ministerial approval has been received to proceed to publication in Canada Gazette Part I. |
National Energy Board Cost Recovery Regulations |
Amend regulations to: respond to a request from the electricity industry and to align billing with the NEB’s fiscal year. These regulations are being reviewed by the Department of Justice during this fiscal year. |
Canada Oil and Gas Diving Regulations; Newfoundland Offshore Area Petroleum Diving Regulations; and Nova Scotia Offshore Area Petroleum Diving Regulations |
Less prescriptive, goal-oriented regulations for activities under the Canada Oil and Gas Operations Act and under the Accord implementation acts*. Updated and harmonized regulations for diving activities in support of oil and gas programs in Frontier lands. These regulations were being reviewed by Department of Justice during this fiscal year. |
Canada Oil and Gas Drilling and Production Regulations; Newfoundland Offshore Area Oil and Gas Drilling and Production Regulations; and Nova Scotia Offshore Area Oil and Gas Drilling and Production Regulations |
A goal-oriented regulation resulting from the amalgamation and updating of the current Drilling Regulations and Production & Conservation Regulations. Three mirror versions are being created for the three Frontier and offshore jurisdictions. Draft Drilling and Production Regulations were released to stakeholders in early April 2005 for a comment period ending 17 August 2007. Anticipated completion of the draft regulations and beginning of the government approval processes is fall 2008. Target timing for promulgation is Q3 2008. Draft guidance notes for the regulations are in preparation with the same target completion date. |
Regulations made under the Canada Oil and Gas Operations Act:
|
Incorporation of recommendations made by the Standing Joint Committee for the Scrutiny of Regulations. |
*Accord implementation acts refers to the Canada-Newfoundland Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Accord Implementation Act. |
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended 31 March 2007 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the department’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department’s Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff; by organizational arrangements that provide appropriate divisions of responsibility; and, by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the department.
The financial statements of the department have not been audited for the 31 March 2007 fiscal year. However, the National Energy Board also produces financial statements on a calendar year basis that are audited by the Office of the Auditor General.
National Energy Board |
||
2007 |
2006 |
|
REVENUES |
||
Regulatory fees |
35,630 |
38,617 |
Miscellaneous revenue |
5 |
4 |
35,635 |
38,621 |
|
EXPENSES |
||
Salaries and employee benefits |
36,344 |
32,363 |
Accommodations |
4,658 |
4,538 |
Professional and special services |
4,518 |
4,462 |
Travel |
2,800 |
2,341 |
Amortization |
821 |
634 |
Repairs and maintenance |
515 |
219 |
Acquisition machinery and equipment |
387 |
|
Supplies |
375 |
448 |
Communications |
310 |
203 |
Other |
109 |
216 |
Total operating expenses |
50,837 |
45,424 |
Net cost of operations |
(15,202) |
(6,803) |
The accompanying notes form an integral part of these financial statements. |
National Energy Board |
||
2007 |
2006 |
|
ASSETS |
||
Financial assets |
||
Accounts receivable and advances (Note 4) |
9,651 |
8,634 |
|
9,651 |
8,634 |
Non-financial assets |
||
Prepaid expenses |
210 |
353 |
Tangible capital assets (Note 5) |
2,294 |
2,508 |
|
2,504 |
2,861 |
TOTAL |
12,155 |
11,495 |
LIABILITIES AND EQUITY OF CANADA |
||
Liabilities |
||
Accounts payable and accrued liabilities |
4,599 |
2,560 |
Vacation pay and compensatory leave |
1,390 |
1,390 |
Employee severance benefits (Note 6) |
5,611 |
5,191 |
Total liabilities |
11,600 |
9,141 |
Equity of Canada |
555 |
2,355 |
TOTAL |
12,155 |
11,495 |
Contingent liabilities (Note 7) Contractual obligations (Note 8) The accompanying notes form an integral part of these financial statements. |
National Energy Board |
||
2007 |
2006 |
|
Equity of Canada, beginning of year |
2,355 |
3,210 |
Net cost of operations |
(15,202) |
(6,803) |
Current year appropriations used (Note 3) |
43,973 |
39,785 |
Revenue not available for spending |
(35,635) |
(38,621) |
Change in net position in the Consolidated Revenue Fund (Note 3) |
(1,164) |
(1,185) |
Services received without charge from other government departments (Note 9) |
6,228 |
5,969 |
Equity of Canada, end of year |
555 |
2,355 |
The accompanying notes form an integral part of these financial statements. |
National Energy Board |
||
2007 |
2006 |
|
Operating activities |
||
Cash received from: |
||
Regulatory and other fees |
34,588 |
41,011 |
Cash paid for: |
||
Salaries and employee benefits |
(31,273) |
(30,370) |
Professional services |
(4,530) |
(4,714) |
Travel |
(2,788) |
(2,491) |
Machinery & equipment |
(430) |
- |
Rentals |
(740) |
(615) |
Supplies |
(375) |
(448) |
Other |
(309) |
(425) |
Repairs & maintenance |
(515) |
(405) |
Communications |
(310) |
(353) |
Cash provided by operating activities |
(6,682) |
1,190 |
Capital investment activities |
||
Acquisitions of tangible capital assets |
(492) |
(1,170) |
Financing activities |
||
Net cash provided by Government of Canada |
(7,174) |
20 |
The accompanying notes form an integral part of these financial statements. |
1. Authority and Objectives
The National Energy Board (NEB) is an independent regulatory agency, established in 1959 under the National Energy Board Act and is designated as a department and named under Schedule I.1 of the Financial Administration Act, reporting to Parliament through the Minister of Natural Resources.
The NEB regulates the following specific aspects of the energy industry:
Other responsibilities of the NEB include providing advice to the Minister of Natural Resources Canada on the development and use of energy resources.
NEB’s corporate purpose is to promote safety, environmental protection and economic efficiency in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development and trade. This principle guides the NEB in carrying out and interpreting its regulatory responsibilities. The companies that are regulated by the Board create wealth for Canadians through the transport of oil, natural gas and natural gas liquids, and through the export of hydrocarbons and electricity. As a regulatory agency, the Board’s role is to help create a framework which allows these economic activities to occur when they are in the public interest.
The NEB operates in a manner similar to a civil court. For major applications and inquiries, the Board holds public hearings at which applicants and interested parties have full rights of participation.
The NEB has the authority to charge those companies it regulates, in accordance with sub-section 24.1(1) of the NEB Act, the total costs attributable to the NEB’s operations in carrying out its related responsibilities.
Under the National Energy Board Cost Recovery Regulations (the Regulations) approved by the Treasury Board, the National Energy Board recovers from the companies it regulates the cost of its operations, effective 1 January 1991. It has the delegated authority to determine what costs will be excluded from program expenditures for cost recovery purposes.
The NEB operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the NEB is deposited to the CRF and all cash disbursements made by the NEB are paid from the CRF.
2. Summary of Significant Accounting Policies
The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Significant accounting policies are as follows:
a) Parliamentary appropriations – the Department is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the department do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.
b) Net Cash Provided by Government – The department operates within the CRF, which is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the department are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
c) Change in net position in the CRF is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded by the department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
d) Revenues:
e) Expenses – Expenses are recorded on the accrual basis:
f) Employee future benefits
i) Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The department’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the department to make contributions for any actuarial deficiencies of the Plan.
ii) Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
g) Accounts receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
h) Contingent liabilities – Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
i) Foreign currency transactions – Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect on 31 March 2007.
j) Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The department does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset class |
Amortization period |
Machinery and equipment (Furniture) |
10 years |
Machinery and equipment (Audio visual equipment) |
5 years |
Informatics hardware (PCs and accessories) |
3 years |
Informatics hardware (Computer servers & accessories) |
5 years |
Informatics software (Commercial software) |
2 years |
Informatics software (In-house developed software) |
5 years |
Vehicles |
5 years |
Leasehold improvements |
Lesser of the remaining term of the lease or useful life of the improvement |
Assets under construction/development |
Once in service, in accordance with asset type |
Leased tangible capital assets |
In accordance with asset type if ownership is likely to transfer to the department; otherwise, over the lease term |
k) Measurement uncertainty – The preparation of these financial statements in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
3. Parliamentary Appropriations
The Department receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
(a) Reconciliation of net cost of operations to current year appropriations used: |
||
(in thousands of dollars) |
2007 |
2006 |
Net cost of operations |
15,202 |
6,803 |
Adjustments for items affecting net cost of operations but not affecting appropriations: |
||
Add (Less): |
||
Services provided without charge |
(6,228) |
(5,969) |
Amortization of tangible capital assets |
(822) |
(634) |
Revenue not available for spending |
35,635 |
38,621 |
(Loss) gain on disposal and write-down of tangible capital assets |
- |
- |
Vacation pay and compensatory leave |
(45) |
|
Employee Severance Benefits |
(420) |
(146) |
Other |
(528) |
29 |
42,839 |
38,659 |
|
Adjustments for items not affecting net cost of operations but affecting appropriations |
||
Add (Less): Acquisitions of tangible capital assets |
492 |
387 |
|
642 |
739 |
Current year appropriations used |
43,973 |
39,785 |
(b) Appropriations provided and used |
||
(in thousands of dollars) |
2007 |
2006 |
Vote 30 – Operating expenditures |
38,157 |
33,341 |
Vote 30a – Operating expenditures |
- |
- |
Transfer from TB Vote 15 |
102 |
- |
Governor General’s special warrants |
- |
2,242 |
Statutory amounts |
4,890 |
4,639 |
Less: |
||
Lapsed appropriations: Operating |
- |
(437) |
Operating overexpenditure |
824 |
- |
Current year appropriations used |
43,973 |
39,785 |
c) Reconciliation of net cash provided by Government to current year appropriations used |
||
(in thousands of dollars) |
2007 |
2006 |
Net cash provided by Government |
7,174 |
(20) |
Revenue not available for spending |
35,635 |
38,621 |
Change in net position in the Consolidated Revenue Fund |
||
Variation in accounts receivable and advances |
(1,017) |
2,353 |
Variation in accounts payable and accrued liabilities |
2,460 |
(955) |
Other adjustments |
(279) |
(213) |
Subtotal |
1,164 |
1,185 |
Current year appropriations used |
43,973 |
39,785 |
4. Accounts Receivable and Advances
The following table presents details of accounts receivable and advances:
(in thousands of dollars) |
2007 |
2006 |
Receivables from other Federal Government departments and agencies |
261 |
371 |
Receivables from external parties |
12,311 |
11,144 |
Employee advances |
(5) |
35 |
12,567 |
11,550 |
|
Less: allowance for doubtful accounts on external receivables |
(2,916) |
(2,916) |
Total |
9,651 |
8,634 |
5. Tangible Capital Assets
(in thousands of dollars) |
||||||||||
Cost |
Accumulated amortization |
|||||||||
Capital asset class |
Opening balance |
Acquis. |
Disposals and write-offs |
Closing balance |
Opening balance |
Amort. |
Disposals and write-offs |
Closing balance |
2007 |
2006 |
Informatics (Hardware) |
1,950 |
40 |
- |
1,990 |
1,449 |
197 |
- |
1,646 |
344 |
501 |
Informatics Software |
1,975 |
- |
- |
1,975 |
710 |
409 |
- |
1,119 |
856 |
1,265 |
Machinery and equipment |
132 |
- |
- |
132 |
123 |
6 |
- |
129 |
3 |
9 |
Other mach. & equip (incl. furniture) |
114 |
66 |
- |
180 |
31 |
11 |
- |
42 |
138 |
83 |
Vehicles |
25 |
- |
- |
25 |
15 |
5 |
- |
20 |
5 |
10 |
Leasehold improvements |
513 |
386 |
- |
899 |
150 |
194 |
- |
344 |
555 |
363 |
Assets under construction/ development |
278 |
115 |
- |
393 |
- |
- |
- |
- |
278 |
662 |
Total |
4,987 |
607 |
- |
5,594 |
2,478 |
822 |
- |
3,300 |
2,294 |
1,972 |
Amortization expense for the year ended March 31, 2007 is $821,332 (2006 - $633,932). |
6. Employee Benefits
a) Pension benefits: The department’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the department contribute to the cost of the Plan. The 2006-07 expense amounts to $3,477,641 ($3,432,879 in 2005-06), which represents approximately 2.6 times the contributions by employees.
The department’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
b) Severance benefits: The department provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
(in thousands of dollars) |
2007 |
2006 |
Accrued benefit obligation, beginning of year |
5,045 |
|
Expense for the year |
1,299 |
|
Benefits paid during the year |
(1,153) |
|
Accrued benefit obligation, end of year |
5,191 |
7. Contingent Liabilities
Claims and Litigation
Claims have been made against the department in the normal course of operations. Legal proceedings for claims totalling approximately $60,000 ($35,000 in 2006) were still pending at 31 March 2007. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. The likelihood of these claims being realized cannot be determined so no amount has been accrued in the financial statements.
8. Contractual Obligations
The nature of the department’s activities can result in some large multi-year contracts and obligations whereby the department will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
(in thousands of dollars) |
2008 |
2009 |
2010 |
2011 and thereafter |
Total |
Vendor contracts |
279 |
160 |
9 |
- |
448 |
Operating leases |
2,629 |
107 |
- |
- |
2,736 |
Total |
2,908 |
267 |
267 |
- |
3,184 |
9. Related-party transactions
The department is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the department received services which were obtained without charge from other Government departments as presented in part (a).
a) Services provided without charge:
During the year the department received without charge from other departments, accommodation and the employer’s contribution to the health and dental insurance plans. These services without charge have been recognized in the department’s Statement of Operations as follows:
(in thousands of dollars) |
2007 |
2006 |
Accommodation |
3,917 |
3,924 |
Employer’s contribution to the health / dental insurance plans |
2,311 |
2,045 |
Total |
6,228 |
5,969 |
The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the department’s Statement of Operations.
b) Payables and receivables outstanding at year-end with related parties:
(in thousands of dollars) |
2007 |
2006 |
Accounts receivable with other government departments and agencies |
261 |
371 |
Accounts payable to other government departments and agencies |
- |
43 |
c) Administration of programs on behalf of other government departments
The NEB administers the Northern Gas Project Secretariat (NGPS) and Environmental Studies Research Funds (ESRF). NGPS expenses are part of the NEB’s appropriation whereas ESRF expenses are not.
The concept of the Northern Gas Project Secretariat was first unveiled in the Cooperation Plan, a document produced by the Northern Pipeline Environmental Impact Assessment and Regulatory Chairs’ Committee in June 2002.
This Plan describes the framework that the authorities with environmental impact assessment and regulatory mandates, called the Agencies, will follow to implement coordinated environmental impact assessment and regulatory processes for a proposed major northern gas pipeline project and associated developments. It outlines methods of cooperation between the Agencies that will avoid duplication of effort and provides clarity and certainty of process for the public, companies and other stakeholders.
The environmental review process commenced with the filing of the Preliminary Information Package in June 2003. The regulatory processes commenced with the filing of the five applications for the construction and operation of the Mackenzie Gas Project in October 2004.
The Northern Gas Project Secretariat office was officially opened in December 2003. With offices in Yellowknife and Inuvik, staff at the Project Secretariat will help northerners and interested public effectively participate in the environmental review and regulatory processes.
According to the Treasury Board submission approved on 1 December 2003, the operating costs of NGPS incurred by NEB are recoverable under the National Energy Board Act because the Secretariat functions are classified as part of the application process of the Act.
The NEB administers the Environmental Studies Research Funds. These funds are provided by INAC and NRCan. None of the NEB’s appropriation is included in these funds. Any unused balances in the ESRF accounts are transferred to the partner departments at year end. ESRF expenses are reflected in the financial statements of INAC and NRCan.
10. Comparative information
Comparative figures have been reclassified to conform to the current year’s presentation.
The following table presents a summary of NEB Public Hearings from 1 April 2006 to 31 March 2007.
Oral Hearings |
Results |
Outcomes |
Mackenzie Gas Pipeline (MGP) |
Application seeking approval to construct and operate a natural gas pipeline and related facilities through the Mackenzie Valley. |
Ongoing process. 40 hearing days held between 1 April 2006 and 31 March 2007. |
TMX – Anchor Loop OH-1-2006 |
Application seeking approval to build and operate a 158 kilometre pipeline loop and other facilities to increase the capacity of the Trans Mountain’s TMX Pipelines. Oral hearing held in Calgary on 8-9-10 August 2006. Reasons for Decision (RFD) issued on 26 October 2006. |
Conditional approval to build and operate a 158 km pipeline loop and other facilities. |
Emera Brunswick Pipeline Company Ltd. GH-1-2006 |
Application seeking approval to build and operate a 145 kilometre, 762 millimetre diameter pipeline from the CanaportTM Liquefied Natural Gas Facility at Mispec Point in Saint John, New Brunswick to a point on the international border near St. Stephen, New Brunswick. Oral hearing held in Saint John, NB between 6-21 November 2006. |
Decision pending. |
TransCanada PipeLines Limited (TransCanada) and TransCanada Keystone GP Ltd. (Keystone) MH-1-2006 |
Application seeking approval for the transfer of certain pipeline facilities from TransCanada to Keystone. RFD issued on 9 February 2006. |
Sale and purchase of the Facilities from TransCanada to Keystone is approved. |
Enbridge Pipelines (Westspur) Inc. (Enbridge) OH-2-2007 |
Preliminary Information Package filed on 7 September 2006 for the proposed Alida to Cromer Capacity Expansion (ACCE) Project. Hearing scheduled to be held on 11 April 2007. |
Ongoing process. |
TransCanada Keystone PipeLine GP Limited (Keystone) OH-1-2007 |
Application to construct and operate the Canadian portion of the Keystone Project – a proposed crude oil line that would run from Alberta to markets in Illinois. Hearing scheduled to begin in Calgary on 4 June 2007. |
Ongoing process. |
TransCanada PipeLines Limited (TransCanada) RH-1-2006 |
Application to change the tariff on the Mainline natural gas pipeline Hearing held in Toronto (18-22 September) and in Calgary (27-29 September). RFD issued on 23 November 2006. |
TransCanada is directed to file with the Board, two years after natural gas starts to flow under an FT-SN contract, a report on the use of FT-SN and SNB services. |
EnCana Corporation GH-2-2006 |
Applications to develop the Deep Panuke Offshore Natural Gas Project. Hearing held on 27 & 29 November 2006 and 5-9 March 2007. |
Ongoing process. |
TransCanada PipeLines Limited (TransCanada) RH-1-2007 |
Application seeking approval of a new receipt point at Gros Cacouna (QC) for the receipt of regasified liquefied natural gas (LNG). Affirmation is also being requested for the tolling methodology that will apply to service from that point. Hearing to be held in Québec City on 16 April 2007. |
Ongoing process. |
There were no parliamentary committee reports issued concerning the NEB during the reporting period.
The following evaluations and reviews conducted under the auspices of the NEB Audit and Evaluation Committee were completed in 2006-2007:
The above reports are available upon request and following management review and response they will be posted on the NEB website for improved access.
The procurement and contracting functions are the responsibility of the Finance, Facilities and Procurement Services Team within the Integrated Solutions Business Unit. In 2006-2007, there were some 223 procurement instruments issued for a total contract value of $3.6 million. Of these, 22 contracts/local purchase orders were issued under the auspices of the Procurement strategy on Aboriginal Business program for a total value of $610,610.00.
The NEB became a separate employer under the Public Service Staff Relations Act, effective 31 December 1992 under Order in Council (OIC) (P.C. 1992-2595). Through the OIC, personnel management, as defined by the Financial Administration Act, was delegated to the Chairman of the NEB. For unionized employees, the NEB has agreed to adopt the policies of the National Joint Council, as amended from time to time, as part of the conditions of employment.