Treasury Board of Canada Secretariat
Symbol of the Government of Canada

ARCHIVED - RPP 2007-2008
National Energy Board


Warning This page has been archived.

Archived Content

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.


Section I

Overview

Chairman's Message

I am pleased to present the National Energy Board's plan for 2007 – 2008, contained in the Report on Plans and Priorities 2007 – 2008.

The National Energy Board's (NEB or Board) vision is to be an active, effective and knowledgeable partner in the responsible development of Canada's energy sector for the benefit of Canadians.   The NEB's purpose is to promote safety and security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development and trade.  As a cost-recovered, independent federal agency, the NEB continually strives to provide excellent service and strong leadership in energy regulation to Canadians. 

Canadians depend on a safe, reliable and efficient energy supply.  NEB-regulated facilities, which include 45,000 kilometres (km) of interprovincial and international pipelines and related infrastructure, as well as 1,100 km of international power lines, are crucial elements for transportation, distribution and reliability in the Canadian energy system.  The NEB, through its regulatory oversight, plays a critical role in ensuring that this is accomplished by infrastructure that is mostly invisible to consumers, which operates safely and with minimal environmental impact.

In the current environment of increasing global energy demand for safe and secure supplies of energy and continuing high energy prices, the NEB's role as Canada's national energy regulator is more significant than ever.   Concurrently, Canada is emerging as an important entity in the global energy spectrum, with increasing recognition of the importance of Canada's oil sands, the world's second largest petroleum resource.  Investment in Canadian oil and gas has been running at record levels, and this trend is expected to continue over the next few years.  To bring these new oil and gas supplies to market, tens of billions of dollars will likely be committed to projects such as long distance pipelines over the next 15 years.   These large and complex projects require multi-year lead times to successfully complete all the development steps, including the application assessment process.  

Our expectations for infrastructure applications include a substantially increased hearing load over the next three to five years, placing significant demands on the Board to provide expert knowledge and improvements to the regulatory framework.  The NEB is thus challenged on two fronts at the same time:  building and retaining a skilled and knowledgeable workforce in a competitive employment market, and an increasing volume of complex regulatory applications.  The NEB will require a higher level of resourcing to meet these demands, and is preparing a submission to Treasury Board outlining the resources we will require in order to ensure that we can meet our mandate.

The anticipated high number of applications presents an opportunity to introduce change in the way that we provide regulatory oversight.  To ensure that Canadians continue to have access to sufficient energy supplies, the NEB is focusing on three priority areas, which are reflected in our 2007 – 2010 strategic plan.

Our first priority is to continue to improve our regulatory processes and to provide effective and efficient regulatory outcomes.   To increase clarity and predictability, the NEB has created and will report on service standards for all of its key services.  Over the next planning period, we are implementing a number of improved regulatory instruments including an integrated compliance system, flexible, risk-based regulatory processes and a range of interest-based approaches.  We will continue to build effective partnerships with industry, other regulatory and government agencies and key stakeholders to ensure that the overall regulatory process is more effective and efficient.  The NEB remains committed to establishing the conditions under which it will be granted substitute authority for the Canadian Environmental Assessment Act, thereby improving the timeliness and effectiveness of the regulatory process, and preserving the quality of the environmental assessment.   This includes developing mechanisms by which the Board can directly provide funding to qualified public participants.

Our second priority—to enhance the NEB's capacity and culture—is critical to our on-going success in fulfilling our mandate.  To address the challenges with attracting and retaining staff in the current labour market, the NEB has recently introduced compensation measures such as market allowances for key professions and a pilot performance pay program for all staff.  Throughout this planning period, it is critical to ensure that we can retain and attract staff essential to achieving our mandate.  When infrastructure cannot be brought on line in a responsible, timely way, billions of dollars in revenue and capital investment are placed at risk with enormous impact on Canadians and their well-being. 

To help Canadians understand our rapidly changing energy environment, our third priority is to inform Canadians about energy markets.  Our consultations on Canada's energy future over the past year have shown us that stakeholders value highly the Board's independent, objective and timely energy information and analysis. 

The Board works hard to ensure that it balances and integrates public safety, environmental interests and economic efficiency in arriving at decisions that are in the Canadian public interest.  While the next planning period presents significant challenges to the Board, there are many opportunities for the Board to realize its vision to be an active, effective and knowledgeable partner as a national regulator.  I am confident, as we succeed in resolving issues of capacity and delivering on our strategic plan, that Canadians will continue to benefit from the tremendous endowment of energy resources they possess.

Kenneth W. Vollman
Chairman

Management Representation Statement

I submit for tabling in Parliament, the 2007 – 2008 Report on Plans and Priorities (RPP) for the National Energy Board.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007 – 2008 Estimates: Report on Plans and Priorities and Departmental Performance Reports

  • It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;
  • It is based on the NEB's approved Strategic Outcome and Program Activity Architecture that were approved by Treasury Board;
  • It presents consistent, comprehensive, balanced and reliable information;
  • It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
  • It reports finances based on approved planned spending numbers from the Treasury Board Secretariat.

Kenneth W. Vollman
Chairman

Summary Information

NEB Mandate


The NEB's corporate purpose is to promote safety and security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest[1] within the mandate set by Parliament in the regulation of pipelines, energy development and trade.

The NEB is an independent federal agency that regulates several aspects of Canada's energy industry.  Its purpose is to promote safety and security, 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.  The NEB regulates the construction and operation of pipelines that cross international or provincial borders, tolls and tariffs, international power lines and designated interprovincial power lines.  The NEB also regulates natural gas, oil, and natural gas liquids imports and exports, electricity exports, and some oil and gas exploration on frontier lands, particularly in Canada's North and certain offshore areas.  Finally, the NEB provides Canadians with information about Canadian energy markets.

The main functions of the NEB are established in the National Energy Board Act (NEB Act).  The Board has additional regulatory responsibilities under the Canada Oil and Gas Operations Act (COGO Act) and under certain provisions of the Canada Petroleum Resources Act (CPR Act) for oil and gas exploration and activities on frontier lands not otherwise regulated under joint federal/provincial accords.  In addition, Board inspectors are appointed Health and Safety officers by the Minister of Labour to administer Part II of the Canada Labour Code as it applies to facilities regulated by the Board.

The NEB, established in 1959, is an independent regulatory tribunal guided by the principles of natural justice and procedural fairness.  The NEB reports to Parliament through the Minister of Natural Resources.  The Board is a court of record and has certain powers of a superior court of record including those with regard to the attendance, swearing and examination of witnesses, the production and inspection of documents, the enforcement of its orders and the inspection of property.  The Board's regulatory decisions and the reasons for them are issued as public documents.

The NEB's regulatory responsibilities for public safety, security and protection of the environment are set out in the NEB Act and the COGO Act.  The NEB is also required to meet the requirements of the Canadian Environmental Assessment Act (CEA Act) and the Mackenzie Valley Resource Management Act where the Board's environmental responsibilities span three distinct phases: evaluating potential environmental effects of proposed projects; monitoring and enforcement of terms and conditions during and after construction; and monitoring and regulation of ongoing operations, including deactivation and abandonment.


Summary of NEB Responsibilities
Regulatory Advisory
To regulate, in the public interest, those areas of the oil, gas and electricity, and various commodity industries relating to:
  • construction and operation of international and inter-provincial pipelines;
  • construction and operation of international and designated interprovincial power lines;
  • transportation, tolls and tariffs of pipelines under its jurisdiction;
  • exports of oil, gas and electricity and imports of oil and gas; and
  • oil and gas activities on frontier lands not subject to a federal/provincial accord
To provide advice to the Minister of Natural Resources on the development and use of energy resources by:
  • monitoring the energy sector;
  • issuing public reports; and
  • providing advice upon request to the Minister

Through the Public Safety Act, 2002 (Bill C‑7), amending the NEB Act, the NEB has legislative authority for the security of pipelines and international power lines.  The NEB has amended its corporate purpose statement to include the word security to reflect the amendments made to the NEB Act. 

The Board's mandate includes the provision of expert technical advice to the Canada-Newfoundland Offshore Petroleum Board, the Canada-Nova Scotia Offshore Petroleum Board, Natural Resources Canada, and Indian and Northern Affairs Canada.  Subsequent to devolution, the Board has a service agreement with the Yukon to provide technical advice.  The Board may, on its own initiative, hold inquiries and conduct studies on specific energy matters as well as prepare reports for Parliament, the federal government and the general public.  The NEB Act requires that the Board keep under review matters relating to all aspects of energy supply, production, development and trade that fall within the jurisdiction of the federal government.  In addition, the Board provides advice and carries out studies and reports at the request of the Minister of Natural Resources.

The NEB's vision describes the Board's direction in applying its mandate.   The words responsible development reflect the NEB's belief that the development of infrastructure by private interests within a competitive market framework serves the public interest. A key role of the regulator is that it must have regard for the potential social and environmental impacts not fully dealt with by markets. 


NEB Vision

The NEB is an active, effective and knowledgeable partner in the responsible development of Canada's energy sector for the benefit of Canadians.

NEB Values

At the NEB we strive for excellence in all that we do.  Excellence at the NEB is driven by organizational and personal commitment to three corporate values:

Integrity: We are fair, transparent, and respectful

Regulatory Leadership: We are responsive, proactive and innovative

Accountability:  We support and hold each other accountable to deliver timely, high quality results in the Canadian public interest


The NEB sees itself as a partner with all stakeholders and works with them to ensure that concerns are identified and understood and that the correct balance is achieved among economic, social and environmental factors.  To support this approach, the NEB is committed to being active, effective and knowledgeable. This means, for example, anticipating and preparing for issues that come before the Board, being results oriented, and having the capacity to deal with the highly complex multi-disciplinary matters surrounding energy regulation.

NEB Planning Process

In order to remain relevant with a clear focus on emerging priorities, the Board engages in an annual strategic planning process, resulting in an updated strategic plan.  The formal process begins with an analysis of external influences, including societal and economic trends.  This environmental scan is followed by the development of long-range strategic goals; resources, budget and work planning; and performance measurement and reporting processes. The plans that are established are regularly updated throughout the year as required.

NEB's Quality Policy


The NEB strives to meet its goals through excellence in execution and continual improvement, facilitated by a Board-wide Quality Management System.

The NEB's Quality Policy is followed by the entire organization through its Quality Management System. 

Link to the Government of Canada Outcome Areas

Though providing energy regulation and advice, NEB contributes to the following Government of Canada Outcome areas:

  • strong economic growth
  • a clean and helthy environment
  • a fair and secure marketplace

Additional information on the background and operations of the NEB may be found at the Board's Internet site:  www.neb-one.gc.ca.

Summary Information 2007 – 2008[2]

Financial Resources (million $)


2007-2008

2008-2009 2009-2010
38.1 38.1 36.6

Human Resources  (Full-time equivalents)


2007-2008

2008-2009 2009-2010
307.6

307.6

296.6

Departmental Priorities


Name Type

1.  Improve regulatory processes

Previously committed

2. Enhance NEB capacity and culture

Previously committed
3. Inform Canadians on energy markets

Ongoing


 


Program Activities by Strategic Outcome
  Planned Spending
(million $)
Contributes to priority
  2007-2008 2008-2009 2009-2010  
  38.1 38.1 36.6  
Strategic Outcome: Safety, security, environmental protection and economic benefits through regulation of pipelines, power lines, trade and energy development within NEB jurisdiction.
Program Activity: Energy Regulation and Advice

1.   Improve regulatory processes

2.   Enhance NEB capacity and culture

3.   Inform Canadians on energy markets

Expected Results:

The expected results of the Energy Regulation and Advice activity are expressed in the NEB's Strategic Plan Goals, as follows:

Goal 1.  NEB-regulated facilities and activities are safe and secure, and are perceived to be so

Goal 2.  NEB-regulated facilities are built and operated in a manner that protects the environment and respects the rights of those affected

Goal 3. Canadians benefit from efficient energy infrastructure and markets

Goal 4. The NEB fulfills its mandate with the benefit of effective public engagement

Goal 5.  The NEB delivers quality outcomes through innovative leadership and effective support processes


The NEB's priorities for 2007 – 2008 are implemented through the NEB's planned work to meet its Goals, which is explained in detail in Section II. 

Departmental Plans and Priorities

Operating Environment

In establishing priorities for 2007 – 2008, the NEB considered evolving trends, risks and challenges that might influence how it carries out its responsibilities and delivers results to Canadians. A number of important elements are discussed below.

Economic context

Canadians depend on a safe, reliable and efficient energy supply.  The 45,000 kilometres of interprovincial and international pipelines regulated by the NEB are a crucial element in Canada's transportation and distribution system.  These systems include large-diameter, cross-country natural gas, oil and oil products pipelines, small-diameter pipelines, and commodity pipelines.  In 2006, approximately $100 billion worth of products flowed through Canadian pipelines to markets at home and in the U.S. (7 percent of GDP). The cost in 2006 of providing these transportation services is estimated to be around $5 billion through tolls regulated by the NEB, not including fuel costs paid by shippers on natural gas pipelines.  This was accomplished by infrastructure that is mostly invisible to consumers and that operates with a low rate of failure and minimal environmental impact. 

The 1,100 km of international power lines under NEB jurisdiction represent approximately 0.7 percent of all electric transmission lines in Canada. They account for virtually all the trade in electricity between Canada and the U.S. and provide important reliability benefits on both sides of the border. The value of electricity exports was about $2.8 billion in 2006 and imports amount to $1.1 billion.

Energy market context

World oil prices continue to be high and volatile. In 2006, reflecting geopolitical events, significant demand growth, and limited spare production and refining capacity, the price of benchmark West Texas Intermediate crude oil reached a record high in mid-July of $US78.40 per barrel. Afterward, prices retreated and averaged around $US60 for the remainder of the year due to high inventories and a slight softening in demand. Prices are expected to remain strong in 2007 in the face of an environment similar to that which prevailed in 2006. While prices are expected to remain volatile, a combination of factors is expected to keep prices in the (US$55-US$65) range during the next few years.    

Natural gas prices have been extremely volatile. Following the peak reached in late 2005 ($US15/MMBtu, NYMEX Henry Hub) in the aftermath of supply disruptions caused by hurricanes in the Gulf of Mexico, prices fell to around $US4/MMBtu by fall 2006. Depending upon the severity of the upcoming winter, prices could average $US5-7/MMBtu for the 2006 – 2007 heating season, with the potential for price spikes above this average. This past year demonstrated the substantial and unpredictable volatility that gas prices can experience because of changing market conditions.

Canadian energy consumption has been steadily increasing over the past decade, driven by economic growth and population increase. Recent higher prices have not had a great impact on overall consumption. The Board has improved the availability of price information to Canadians by posting up-to-date information on its website. Steadily increasing website "hits" suggests that the public is very interested in energy pricing information.  Figure 1 illustrates the composition of Canadian energy demand.        

Figure 1
Canadian Energy Demand

Canadian Energy Demand

The high price energy environment is encouraging the petroleum industry to develop new and unconventional sources of oil and natural gas to meet future energy needs. The exploration and production sector in Canada posted another record for drilling activity in 2006 with an estimated 25,700 wells, compared with the previous record of 23,700 in 2005.   Investments in Canadian oil and gas in 2006 are estimated to be $45 billion (Canadian Association of Petroleum Producers), similar to the amount in 2005, which was a record in Canada.  High upstream activity is expected to continue over the planning period.

With vast reserves in the oil sands and development off the coast of Newfoundland, Canada is steadily increasing its oil production. For example, total Canadian production is expected to increase by about 69,000 cubic metres per day between 2005 and 2007, to a level of 464,000 cubic metres per day. Most of this growth is attributable to oil sands production. As oil production has grown, pipeline capacity has become an issue. In 2006, many of the major oil pipeline systems had to occasionally apportion their capacity, thereby limiting flows below market demand. 

Canada is the number one exporter of crude oil to the United States and it is expected that Canadian exports will grow as production from the oil sands steadily increases over the coming decade. Considerable new investment in the pipeline transportation sector is required to transport increasing production to markets.

Inadequate capacity imposes costs on producers as they have to discount the price of their products.  This situation may worsen over the next three years as pipeline proposals move through the regulatory process and before new capacity becomes available.

Canadian gas production is expected to remain largely unchanged over the next three years. It is anticipated that a slight decline in conventional gas production will be offset by robust growth in coal bed methane. Over the longer term, industry is pursuing the development of frontier gas resources in the Mackenzie Delta. The Board has an application before it to build a major pipeline from the Delta along the Mackenzie Valley to Alberta from which gas can access both domestic and export markets. Industry is also looking into maintaining production from offshore Nova Scotia through the enhanced development of currently producing fields and the potential development of the Deep Panuke field.  In anticipation of a need for additional energy supplies for the North American market, developers have proposed liquefied natural gas (LNG) import terminals at sites located in the Maritimes, Quebec and British Columbia.

Over half of Canadian natural gas production is exported to the U.S.  Exports in 2006 were the third highest on record, generating a record $35.6 billion of revenue due to the high gas price environment that existed following hurricane-induced production disruptions in the U.S.

Changing dynamics in markets for Canadian gas include rising Canadian demand for gas-fired power generation, especially in Ontario, and for oil sands production in Alberta.  Canadian export markets may also be impacted by new pipelines intended to move gas from the U.S. Rockies to eastern U.S. markets and by growing LNG import volumes into the U.S.  As the shape of the industry changes, the Board will be faced with new and innovative proposals.  For example, the provision of short notice pipeline services for power generators and the removal of pipeline capacity from gas service for conversion to oil service have come in front of the Board this year and equally complex issues may continue to come before the Board in the future.

In summary, industry is responding to market needs  by developing new large infrastructure projects, including oil pipelines, natural gas pipelines, LNG receiving terminals and power generation and transmission facilities. These projects could bring additional energy supplies to Canadians and help ensure future energy security. The NEB is responsible for reviewing many of these infrastructure projects and ensuring that, when they are found to be in the public interest, they proceed in ways that provide the greatest benefits to Canadians while minimizing any adverse impacts.

Changing NEB Business Environment

The NEB's workload is expected to increase substantially over the planning horizon for three main reasons.

1.   With the current favourable investment conditions and the steady increase in energy demand, the submission of infrastructure applications to the NEB is predicted to be the highest in the past decade (Figure 2).  The NEB will be required to address the increased filing for extra facilities, and also to deal with the increase in market issues with respect to capacity allocation. 

2.   The Board must undertake significant pre-application work related to major facilities applications. There are two significant components to this work:

a.   Changes to federal responsibilities mean that the Board must enter into negotiations with other government departments to clarify and agree on the process that will be followed.  This can often be a complicated and time-consuming effort.

b.   Public expectations have increased and the Board is responding by engaging the public affected by major projects.  This means that the Board must allocate resources to town hall meetings, correspondence, information bulletins, etc. to ensure that affected members of the public can effectively participate in project review processes.

3.  The Board is moving to a goal-oriented approach to regulation.  Under this approach, companies can benefit from expedited approval processes which enable them to develop their projects on a more timely and economic basis.  In turn, they are subject to increased scrutiny during the construction and operations phases. 

Figure 2
Supply Forecast and Proposed Pipeline Projects

Supply Forecast and Proposed Pipeline Projects

*      Total crude oil pipeline capacity out of the  WCSB assuming maximum heavy oil volumes.
**     TMX North would expand capacity by an additional 400 Mb/d but no date has been disclosed for the project.
***   Keystone could be expanded by 156 Mb/d with pump stations and an extension to Cushing is being discussed.

The Board is dedicating more resources to audits and inspections to ensure compliance with safety and environmental objectives.  The goal-oriented integrated compliance approach also requires extensive database management of companies' performance. 

The sum result of these three influences is that the Board expects it will require an increase of up to 20 percent in its funding over the planning period.  The Board will be making a detailed submission to Treasury Board regarding its resource requirements.

The current and projected project proposals include:

  • New pipelines connecting northern gas supplies to existing gas infrastructure
  • Natural gas expansions in the east to facilitate market development in eastern Canada and the U.S. Northeast
  • Pipeline capacity connecting existing infrastructure to proposed LNG receiving terminals in Nova Scotia, New Brunswick and Quebec
  • Oil pipeline expansions and new pipeline proposals to facilitate the expected growth in the next decade in oil sands production
  • New pipelines to provide needed diluent for growing oilsands production

Regulatory efficiency and effectiveness

These projects will involve issues relating to Canadian energy supply and demand, environmental impacts, Aboriginal considerations and a wide range of societal and cultural expectations and interests.  Under the existing regulatory framework, a complex and fragmented approval process involving a number of departments and regulatory agencies is typically triggered by proposals for energy infrastructure development.  For example, there are fourteen agencies with some type of regulatory authority with respect to the proposed Mackenzie Gas Pipeline. Similarly, a number of provincial and federal agencies have legal mandates to review elements of applications for offshore facilities and LNG terminals.  This regulatory complexity affects the timing for bringing infrastructure capacity on stream, and the energy sector is indicating that delays in developing infrastructure will result in delays in bringing on new supplies with attendant costs to Canadians.   For example, Canadian Energy Pepeline Association (CEPA) estimates that a two year lag in the time new pipelines are brought into operation could cost Canadians an additional $57 billion in terms of higher energy prices over the period of 2006 – 2025.[3]  

On the other hand, Canadians who are affected by these projects require clarity in order to effectively participate and influence the outcomes.

Both project proponents and affected stakeholders are looking for more effective and efficient regulatory processes that will help enable the responsible development of desirable infrastructure on a timely basis.

Another challenge for the Board is in understanding how the evolving law on Aboriginal consultation affects its role as an independent quasi-judicial tribunal. The courts have not yet provided clear guidance on the impact of the principle of the honour of the Crown on independent tribunals. The Board will continue to monitor legal developments in this area and in the meantime will continue in its efforts to ensure that it has information regarding Aboriginal interests that may be affected by proposed projects before rendering decisions that may affect those interests.

Northern exploration and development

In addition to pipeline infrastructure in the North, the NEB regulates frontier exploration and production.  NEB clients and stakeholders in the North have communicated that the current legislative framework, based on the CPR Act and the COGO Act, needs to be modernized.  Oil and gas activity in the near North is small scale and conventional, but is subject to regulation under frontier legislation that was designed for large, offshore projects.   As the level of drilling increases in response to demand, it is becoming increasingly difficult to address this growth with the current regulatory process.  The NEB is working to streamline regulation where possible.  However, some amendments to three acts (NEB Act, COGO Act, CPR Act) are required, and efforts to modernize that regulatory framework will be a priority in this planning period. 

Energy sector employment market

The rapid growth in the energy industry is expected to continue to 2020.  Transmission pipeline projects representing tens of billions of investment dollars over the next 15 years are under consideration.  When production exceeds pipeline capacity, this creates a situation where billions of dollars of capital investment in exploration and production are at risk.  With this kind of economic reality and the cost of infrastructure, companies require multi-year lead times.  The environmental and regulatory assessments of applications form just one step of many in the development process.   A skilled, knowledgeable workforce is required by both industry and the regulator to develop and consider projects in the Canadian public interest in a timely way.

The energy industry is actively competing for individuals with the same technical skill sets that the NEB requires. The Board's rate of attrition due to industry's active recruitment across the energy sector at the mid and senior levels is increasing and retention is expected to continue to be a challenge throughout the 2007 – 2008 planning period.  The annual attrition rate has risen from seven percent in 2003 to 14.5 percent in 2005 – 2006, compared to a mean turnover rate for the large energy companies that compete for talent with NEB of eight percent, and an even lower attrition rate across the federal government.

NEB Priorities in 2007 – 2008


1.  Improve regulatory processes.

The NEB is committed to providing efficient and effective regulatory processes delivered in a transparent, accountable and responsive manner.  With the projected increased hearing workload in 2007 – 2008, there is an opportunity to increase efficiency and effectiveness of the Board's processes.   These changes require an integrated approach that fully utilizes the NEB's suite of regulatory tools and NEB leadership in coordinating efficient assessment processes. 

Plan to Achieve Priority

The Board is focusing on opportunities to improve regulatory processes, while making decisions in the Canadian public interest.  Results are oriented toward improved efficiency and effectiveness, which can be described in the following way:

  • Efficiency:   making regulatory processes clearer, faster and more cost-effective
  • Effectiveness:  producing higher quality results

Specific initiatives in the next planning period to improve regulatory processes include:

Integrated compliance

The NEB's direction is to employ a risk-based life cycle approach to regulation, incorporating the principles of management systems covering each phase of a facility's life cycle.  The NEB's integrated compliance approach will enable regulatory oversight to be based on company performance and implemented through tools such as management system reviews and audits.   Integrated compliance will also enable the NEB to adjust regulatory processes to fit the scope and risk of applications and other regulated activities.  For example, companies with a good track record that are building low risk facilities can expect an expedited approval process. 

Effective environmental assessment processes

The NEB continues to participate with other regulators and environmental assessment boards and agencies to simplify regulatory processes and enable integrated decision-making.  For example, the NEB is working actively with the CEA Agency on initiatives such as substitution pilots, where Board processes can substitute for the environmental assessment process as provided for under the CEA Act. 

Efficiencies in application processing

In order to have available more flexible processes and to reduce cycle times, the NEB will develop a suite of process options that reflect the complexity of the project and extent of the public interest issues associated with applications.  Elements of these processes include high level criteria for determining the types of regulatory processes that best suit the different applications it receives and refined assessment oversight tools.  This streamlining approach will be applied, for example, to small pipeline applications submitted under section 58 of the NEB Act.  This objective will be implemented in conjunction with the NEB's integrated compliance approach.

Using interest-based processes

For those applications and processes under the Board's control, the NEB plans to use interest-based processes where possible and, generally, to explore their use prior to relying on adjudicative processes.  this will provide parties with a wide range of options for resolving issues.  In many cases, with more opportunities for negotiated settlements, processes should become more efficient.  This should also result in fewer matters requiring formal hearing processes thus expediting resolutions and reducing costs.  There will remain instances where a hearing is the most effective and appropriate approach; therefore, interest-based approaches and hearings together form a range of process options which the Board can use according to the specifics of the application. 

Quality Management System continuous improvement cycle

By implementing a Quality Management System (QMS) in all the Board's processes, the NEB engages in a cycle of continuous improvement.  In the next planning period, the Board will review its suite of corporate measures to support continuous improvement toward effective and efficient regulatory processes. QMS also provides a framework through which we ensure we meet the needs of our stakeholders, today and in the future.  QMS provides the foundation and continuity required to improve the Board's regulatory processes, ensuring that the Board maintains its regulatory oversight role in an effective manner.

Performance Indicators

  • Reduced cycle times
  • Regulatory processes that are transparent and responsive
  • NEB able to conduct regulatory oversight based on company management systems

 


2.  Enhance NEB capacity and culture.

The NEB is recognized as a knowledge-based organization and is working hard to create and reinforce a results-based culture of excellence.  By investing in and challenging our people, we seek to establish their commitment and loyalty which is essential to achieving our mandate.  The importance to Canadians of the work performed by NEB staff clearly substantiates the need for a skilled, knowledgeable workforce.

Plan to Achieve Priority

The Board is developing a strategy and pro-active processes for attracting and retaining people with the skills necessary to our success.   The focus is on supporting career management through development plans, mentoring and challenge opportunities.  Also, the Board has taken steps, with support from Treasury Board, to improve its compensation package, which includes market-based compensation and a pilot performance pay program.

In light of the projected substantial increase in the NEB's workload over the planning horizon, the NEB will be preparing a detailed submission to Treasury Board outlining its resource requirements.  Based on workload projections, it is anticipated that the Board will require an increase of up to 20 percent in its funding over the planning period and through projections into the further future.

The NEB has updated its human resource plan—the People Strategy, to reflect a pro-active approach for maintaining its workforce.   The NEB People Strategy is integrated into the NEB's business planning process and has been updated to immediately address:

  • Recruiting and retaining key talent
  • Leadership development
  • Employee engagement
  • Performance management
  • Staffing levels
  • Training effectiveness
  • Succession planning

Key elements of the NEB's People Strategy include:  

  • Transforming the organizational culture with greater emphasis on a results-based culture of excellence, using tools such as performance management and succession planning
  • Implementing the changes to human resource management accountabilities resulting from the Public Service Modernization Act
  • Attracting and retaining highly qualified people based on the NEB's human resources plan
  • Evolving organizational learning to better meet current and future business needs
  • Improving mechanisms to share knowledge more effectively across the organization

To maintain capacity to fulfill its mandate, and to ensure a results-based culture, the NEB continues to implement its Quality Management System.  The system of repeatable process with a cycle of continuous improvement helps the NEB to adapt to a quickly changing labour market. 

Performance Indicators

  • New compensation package in place
  • Rate of attrition
  • Recruitment and retention tools adapted to the current and projected labour market
  • Staff are leadership and results oriented

3.  Inform Canadians on energy markets.


The Board will focus on informing Canadians on energy market developments and issues related to the Board's regulatory mandate (primarily gas, oil and electricity market developments).  Given the current high price energy environment and growing energy demand, Canadians in both the public and private sectors are required to make choices about energy sources for the future.  The electric power sector must make decisions about which energy sources to invest in, oil producers about which markets to target, governments about which technologies to invest in, consumers about which vehicles and home heating systems to purchase, and industry about which technologies, processes and types of energy to adopt.

The Board will focus its role in advising policy makers on providing input and advice on matters directly related to its regulatory role. 

Plan to Achieve Priority

To ensure Canadians understand our rapidly changing energy environment, and have access to independent, objective energy information, the NEB is implementing an energy information program that focuses on emerging market issues and regulatory challenges.  The energy information program includes: 

  • Energy Market Assessments, which provide Canadians with an update on developments and key issues in energy markets related to the NEB's regulatory oversight (e.g. electricity, natural gas and oil markets, oil and natural gas supply and demand, long-term outlook for Canada's energy future) 
  • Energy pricing website
  • Short-term energy market outlooks
  • Topical briefing notes to Board Members and the public on emerging issues   

Performance Indicators

  • Frequency of NEB information products being accessed
  • Feedback from stakeholders regarding NEB information products