Oil Import Compensation Regulations No. 1, 1975 (C.R.C., c. 335)

Short Title

1 These Regulations may be cited as the Oil Import Compensation Regulations No. 1, 1975.

Interpretation

2 In these Regulations,

barrel

barrel means 34.9722 standard gallons within the meaning of subsection 13(1) of the Weights and Measures Act, being the now repealed Chapter W-7 of the Revised Statutes of Canada, 1970; (baril)

Board

Board means the Energy Supplies Allocation Board; (Office)

date of loading

date of loading means,

• (a) in relation to a quantity of crude oil, the date the crude oil was cleared for export by the host government at the port of loading, and

• (b) in relation to a quantity of petroleum product, the date the petroleum product was cleared for export by the national government at the port of loading; (date de chargement)

eligible importer

eligible importer means a person described in section 5; (importateur admissible)

f.o.b. cost

f.o.b. cost means,

• (a) in relation to a quantity of crude oil, the free on board cost at the port of loading in the country in which the petroleum was produced, extracted, recovered or derived, and

• (b) in relation to a quantity of petroleum product, the free on board cost at the port from which the petroleum product is transported to Canada: (coût franco à bord)

host government

host government means, in relation to any quantity of petroleum, the government of the country in which that petroleum was produced, extracted, recovered or derived but does not include the government of a state, province or other political subdivision of that country; (gouvernement du pays d’origine)

import

import means, in relation to a quantity of petroleum, to unload the quantity of petroleum from a ship or barge at a Canadian port or at a place outside Canada for transmission by pipeline to Canada; (importation)

import compensation

import compensation means the amount that may be paid pursuant to these Regulations to an eligible importer in respect of a quantity of petroleum imported into Canada and includes any special payment made under section 11; (indemnité d’importation)

Minister

Minister means the Minister of Energy, Mines and Resources; (Ministre)

petroleum

petroleum means crude oil and petroleum products; (pétrole)

quantity of petroleum

quantity of petroleum means, for the purpose of calculating import compensation,

• (a) the aggregate, as determined by the Board, of

  • (i) the volume measured at the point of discharge, in barrels, of petroleum loaded on a ship or barge for transport to Canada or to a place outside Canada for transmission by pipeline to Canada, and

  • (ii) a volume of petroleum, by way of an allowance for ocean loss, not exceeding the lesser of

    • (A) actual ocean loss incurred in transporting the volume of petroleum described in subparagraph (i), and

    • (B) one per cent of the volume of petroleum measured in barrels at the port at which it was loaded on a ship or barge for transport to Canada or to a place outside Canada for transmission by pipeline to Canada, or

• (b) the volume of the petroleum measured in barrels at the port at which it was loaded in a ship or barge for transport to Canada or to a place outside Canada for transmission by pipeline to Canada,

whichever is the lesser; (quantité de pétrole)

tanker freight costs

tanker freight costs means the costs incurred in the process of transporting petroleum by water; (coût du transport par pétrolier)

tax paid cost

tax paid cost means, in relation to any quantity of petroleum, the aggregate of

• (a) all charges that are properly associated with the production, extraction, recovering, deriving or purchasing of the quantity of petroleum, are imposed by the host government and are borne by the person performing such functions, the taxes and royalties levied in connection therewith and the costs of acquiring the petroleum from the host government, but does not include any charges that discriminate on the basis of the destination of the petroleum and any charges specifically associated with the costs of manpower, energy, material and equipment or the use thereof in operations in the country of the host government, and

• (b) the operating costs related to the production, extraction, recovery or derivation of the quantity of petroleum accepted for income tax calculations by the host government or, where it is impossible to obtain such costs, such amount as is proven to the satisfaction of the Board by an eligible importer to be reasonable. (coût après imposition)

Prescription of Crude Oil and Petroleum Products

• 3 (1) For the purposes of Vote 53c of Appropriation Act No. 5, 1974, the following are prescribed as crude oil:

  • (a) any crude oil or other hydrocarbon or mixture of hydrocarbons recovered in liquid or solid state from a natural reservoir outside Canada, including any hydrocarbon or mixture of hydrocarbons produced by extraction from oil sands outside Canada; and

  • (b) any natural gasoline or condensate resulting from the production, processing or refining outside Canada of gas recovered from a natural reservoir outside Canada.

• (2) For the purposes of Vote 53c of Appropriation Act No. 5, 1974, the following are prescribed as petroleum products:

  • (a) aviation fuels;

  • (b) motor gasoline and motor gasoline blending components;

  • (c) stove oil and kerosene;

  • (d) diesel fuel;

  • (e) fuel oils;

  • (f) semi-refined feedstreams for manufacture of the products set out in paragraphs (a) to (e);

  • (g) feedstreams for the manufacture of petrochemicals;

  • (h) slack wax;

  • (i) asphalt;

  • (j) petroleum coke; and

  • (k) feedstreams for refining into lubricants, process oils and hydrocarbon solvents.

• (3) For the purposes of Vote 53c of Appropriation Act No. 5, 1974, the following are not prescribed as petroleum products:

  • (a) finished aromatics;

  • (b) finished hydrocarbon solvents;

  • (c) finished waxes;

  • (d) finished lubricants and process oils;

  • (e) lubricating oil blending stocks; and

  • (f) petrochemicals.

Payment of Import Compensation

• 4 (1) Upon application therefor to the Board by an eligible importer who establishes that he qualifies for import compensation by reason of the purchase by him of a quantity of petroleum, the Board may, subject to these Regulations, authorize the payment to the eligible importer of import compensation pursuant to these Regulations.

• (2) Every application for payment of import compensation in respect of the purchase of a quantity of petroleum shall

  • (a) be in the form prescribed by the Board and contain the information specified therein; and

  • (b) be accompanied by such records and other documents as the Board may require to satisfy itself of the accuracy of information specified therein and the eligibility of the applicant for payment of import compensation under these Regulations.

Eligible Importer

• 5 (1) A person who purchases or otherwise acquires a quantity of petroleum the date of loading of which is on or after March 12, 1975 and

  • (a) imports it for the purpose of having it processed in his refinery or other processing operations in Canada for consumption in Canada,

  • (b) imports it to be purchased by others persons in Canada for consumption in Canada, or

  • (c) imports it to be purchased by other persons in Canada for the purpose of having it processed in their refineries or other processing operations in Canada for consumption in Canada

  is an eligible importer if, in the period from March 12, 1975 to the date of the application under section 4, he or the persons for whom he imported the petroleum, as the case may be,

  • (d) has or have voluntarily maintained the level of prices for the petroleum products obtained from imported petroleum at the level that is or has been suggested from time to time in a communication by the Minister; and

  • (e) has or have given an undertaking in writing to the Board to maintain the suggested level of prices in respect of the quantity of petroleum for which import compensation is paid pursuant to these Regulations.

• (2) A person who purchases or otherwise acquires a quantity of petroleum the date of loading of which is on or after March 12, 1975 and imports it for use in manufacturing, processing, transporting or any other operations of his own in Canada that result or will result in the manufacture of products not derived from petroleum, or the provision of services, if an eligible importer.

Compensation for Crude Oil

• 6 (1) Subject to subsection (3), the amount of import compensation that may be authorized by the Board to be paid to an eligible importer in respect of a quantity of crude oil shall be the aggregate, as determined by the Board, of

  • (a) the amount of the allowance calculated in accordance with section 8 for any change in tanker freight costs incurred by or charged to the importer in the transportation of that crude oil from its port of loading to its port of entry for Canada; and

  • (b) any change in the costs to the importer attributable to any change in the tax paid cost incurred since November 30, 1973, not exceeding the amount of any increase in the amount of the f.o.b. costs incurred or deemed by the Board to have been incurred by or charged to the importer since November 30, 1973.

• (2) In calculating the amount of import compensation pursuant to subsection (1), there shall be excluded from the quantity of crude oil

  • (a) any portion thereof, and the volume of any petroleum product obtained therefrom, sold or supplied for export from Canada;

  • (b) the volume of any petroleum product obtained therefrom used by the eligible importer or sold or supplied to any person for use as a fuel

    • (i) in a ship that is not registered in Canada, unless it is permitted by law to engage in the coasting trade of Canada or in other marine related activities in Canada and is so engaged, or

    • (ii) in an aircraft not registered in Canada; and

  • (c) any portion thereof consumed or lost in the processing or refining of that quantity of crude oil to produce any petroleum product referred to in paragraph (a) or (b).

• (3) The amount of import compensation that may be authorized to be paid to an eligible importer pursuant to subsections (1) and (2) shall be reduced by the sum of $0.90 per barrel of crude oil for which import compensation may be paid.

Compensation for Petroleum Products

• 7 (1) Subject to subsection (3), the amount of import compensation that may be authorized by the Board to be paid to an eligible importer in respect of a quantity of petroleum product shall be the aggregate, as determined by the Board, of

  • (a) the amount of the allowance calculated in accordance with section 8 for any change in tanker freight costs incurred by or charged to the importer in the transportation of the petroleum product from its port of loading to its port of entry for Canada; and

  • (b) any change that, between November 30, 1973 and the date of loading of the petroleum product, has occurred in the tax paid cost of such crude oils as are selected from time to time by the Board, not exceeding the amount of any increase in f.o.b. costs incurred or deemed by the Board to have been incurred by or charged to the importer since November 30, 1973.

• (2) In calculating the amount of import compensation pursuant to subsection (1), there shall be excluded from the quantity of petroleum product

  • (a) any portion thereof sold or supplied for export from Canada; and

  • (b) any portion thereof used by the eligible importer or sold or supplied to any person for use as a fuel

    • (i) in a ship that in not registered in Canada, unless it is permitted by law to engage in the coasting trade of Canada or in other marine related activities in Canada and is so engaged, or

    • (ii) in an aircraft not registered in Canada.

• (3) The amount of import compensation that may be authorized to be paid to an eligible importer pursuant to subsections (1) and (2) shall be reduced by the sum of $0.90 per barrel of petroleum product for which import compensation may be paid.

Allowance for Change in Tanker Freight Costs

• 8 (1) For the purposes of paragraphs 6(1)(a) and 7(1)(a), the amount of the allowance for any change in tanker freight costs incurred by or charged to the importer in the transportation of a quantity of petroleum from its port of loading to its port of entry for Canada is the aggregate of

  • (a) the amount determined by calculating any change in freight costs from those prevailing on September 4, 1973 through application of a scale established from time to time by the Board and based on published commercial indexes of tanker freight costs; and

  • (b) any change since September 4, 1973 in the aggregate of all taxes, tolls or tariffs that do not discriminate on the basis of the destination of the cargo imposed by the host government with respect to marine transportation and borne by the importer.

• (2) Where an eligible importer’s transportation arrangements are such that, by reason of

  • (a) the type or size of vessel used to transport the petroleum,

  • (b) the port from which the petroleum is transported to Canada, or

  • (c) the port of entry for Canada of the petroleum,

  it is impossible to apply the calculation referred to in paragraph (1)(a), the Board may deem the allowance for any change in tanker freight costs to be such amount as it thinks fit, having regard to the allowance calculated for similar voyages.

Time of Payment of Compensation

9 No payment of any import compensation shall be authorized by the Board to be paid to an eligible importer in respect of a quantity of petroleum imported into Canada before the occurrence of the latest of the following events:

• (a) the payment by the importer of the full price for the petroleum under the purchase arrangements,

• (b) the expiration of 30 days from the date of loading of the petroleum, and

• (c) the date unloading of the petroleum was completed for delivery to the importer in Canada or at a port of entry for Canada.

Undertaking

10 No payment shall be made under these Regulations to an eligible importer unless he has

• (a) undertaken in writing to the Board that

  • (i) he will allow any person designated by the Board to enter any premises of the eligible importer in order to examine, take copies of or extracts from, any record, book, paper or other document found thereon that, in the opinion of that person, relates to the payment of import compensation to that eligible importer, and

  • (ii) he will repay to the Receiver General

    • (A) any amount paid to the eligible importer as or on account of any import compensation to which he was not entitled or that is not authorized under these Regulations, and

    • (B) any amount paid to the eligible importer in respect of a quantity of petroleum if he or the persons for whom he imported the petroleum fail to comply with the undertaking given by him or them to the Board pursuant to these Regulations; and

• (b) certified in writing to the Board that

  • (i) all information submitted by him to the Board is correct as to fact and fair and reasonable as to estimates, and

  • (ii) except as may be permitted by the Minister pursuant to section 11, he has complied with all the requirements of an eligible importer set out in subsection 5(1) or (2), as the case may be.

Special Case

11 If, on consideration of an application for payment presented by an eligible importer or by any person whom the Minister on the recommendation of the Board may deem to be an eligible importer, it appears to the Board that the strict application of these Regulations will in the circumstances result in an undue financial hardship to that importer, the Board may recommend to the Minister that a special payment be made to that importer towards relief of all or part of that hardship and the Minister may direct the Board to make such payment.