CEO Welcome Letter to Deputy Minister Vandergrift
August 11, 2023
Deputy Minister of Natural Resources
580 Booth Street (Off-site)
Ottawa, ON K1A 0E4
Dear Deputy Minister:
On behalf of the dedicated public servants who make up the Canada Energy Regulator (CER), I would like to congratulate you on your appointment as Deputy Minister of Natural Resources. I look forward to working with you in your new role to advance shared objectives, including those outlined below.
The CER is Canada’s federal energy regulator, working to keep energy moving safely across the country. We have four core responsibilities: Energy Adjudication, Safety and Environment Oversight, Engagement, and Energy Information. Our mission is to regulate infrastructure to ensure safe and efficient delivery of energy to Canada and the world, protect the environment, recognize and respect the rights of the Indigenous peoples of Canada, and provide timely and relevant energy information and analysis.
The Canadian Energy Regulator Act (CER Act) establishes the governance structure of the CER. The CER is governed by a Board of Directors, and operates with a level of day-to-day independence from the Department of Natural Resources. However, the organization is ultimately accountable to the Minister of Energy and Natural Resources and supports the Minister’s accountability to the Prime Minister and to Parliament for the CER’s overall performance. The roles and responsibilities of each component of the governance structure are described in the Annex.
The CER regulates 71,000 kilometres of pipeline in Canada and 86 operating international power lines that total 1,546 km in length, many of which transport power generated from renewable sources. The CER is funded through Parliamentary appropriations, with an operating budget of $112 million and approximately 512 Full-Time Equivalents (FTEs) in 2022–23. As you may be aware, the Government of Canada currently recovers approximately 99 per cent of the CER’s appropriation from the industry we regulate.
We are currently in the third year of the CER’s first Strategic Plan (2021-24). Our Strategic Priorities of Trust and Confidence, Reconciliation, Competitiveness, and Data and Digital Innovation are the shared lens that has focused our work within our core responsibilities. We have made significant progress in these areas and look forward to sharing the next iteration of the CER’s Strategic Plan (2024-27) with you later this year.
As an organization, we continue to adapt to meet the changing needs of those we serve, and to ensure readiness to regulate Canada’s evolving energy landscape. Some of the major initiatives underway include work to enhance Canada’s global competitiveness, updating our Regulatory Framework including a comprehensive review of the Onshore Pipeline Regulations (OPR), and the ongoing work on the next iteration of the Canada’s Energy Future report. In addition, we are focused on our commitment to reconciliation and implementing the United Nations Declaration on the Rights of Indigenous Peoples (UN Declaration) within the CER mandate.
There are also three more specific matters to bring to your attention on which CER and NRCan are working together:
- Indigenous Advisory and Monitoring Committee (IAMC) Renewal: The CER continues to oversee the Trans Mountain Expansion Project (TMX) and the Line 3 Replacement Program (Line 3) and we have made significant progress in how we do this in partnership with their respective IAMCs. This work is helping to shape and guide our broader approach to incorporating Indigenous perspectives into our monitoring and oversight activities. The CER is considering its approach to IAMC renewal within its mandate, cognizant of the larger discussions being led by Natural Resources Canada on IAMC renewal options.
- United Nations Declaration on the Rights of Indigenous Peoples Act (UNDA) Action Plan Measure (APM): The CER along with the Department of Natural Resources, recently co-developed a proposed APM with the Indigenous Caucus of the TMX IAMC as part of the Government of Canada’s implementation of the UNDA with respect to projects and matters that are currently regulated by the CER. The co-development of the APM also included members of the Line 3 IAMC and the Indigenous Advisory Committee (IAC). The CER will continue to work with the IAMCs and NRCan on this initiative going forward.
- Crown Consultation: Under the CER Act, the CER became an Agent of the Crown and the Crown Consultation Coordinator for non-designated, CER-regulated projects. This has shifted roles and responsibilities for both the CER and Natural Resources Canada. The CER, in its role as Crown Consultation Coordinator for the NEBC Connector Project, submitted a report on Crown consultation activities with Indigenous Peoples on May 25, 2023 to the Commission and a Crown Consultation and Accommodation Report is expected to be submitted to the Minister of Energy and Natural Resources later this year.
We look forward to ongoing work with you in the fulfillment of our shared objectives and to future opportunities to brief you on priority issues.
Chief Executive Officer (CEO)
c.c.: Cassie Doyle, Chairperson of the Board of Directors – CER
George Vegh, Vice-Chairperson of the Board of Directors – CER
Katherine Murphy, Chief of Staff – CER
Jeff Labonté, Associate Deputy Minister – NRCan
ANNEX: CER GOVERNANCE STRUCTURE
OVERVIEW OF THE GOVERNANCE STRUCTURE
This section contains an overview of the CER governance structure. The CER Act establishes the governance structure of the CER. The roles and responsibilities of each component of the governance structure are described below:
- The CEO is responsible for the management and daily operations and affairs of the organization, including the supervision of its employees and their work and has all the responsibilities of a deputy head. The CEO works closely with the Board and provides the Board with the support needed to carry out its responsibilities. The CEO is responsible for providing the support services and the facilities that are needed by the Commission to exercise its powers and perform its duties and functions in accordance with the rules that apply to its work. The CEO may provide impartial and candid advice, but not direction, to the Commission on specific adjudicative matters.
- The Board of Directors is responsible for the governance of the CER, including providing strategic advice and direction. The Board’s oversight is focused on results and outcomes. It does not normally engage in routine operations, which are the purview of the CEO, and it operates at a high, directional level in matters of management and staff. However, the Board, under the leadership of the Chairperson, is ultimately accountable to the Minister for ensuring that the CER delivers effectively on its mandate and is appropriately aligned with government policy. The Board is not permitted to provide advice or direction to the Commission on specific adjudicative matters. The Board is comprised of between five and nine directors, including the Chairperson and Vice-Chairperson and at least one of the directors is required to be an Indigenous person. There are currently seven directors.
- The Commission is responsible for making independent adjudicative decisions and recommendations pursuant to the CER Act and other legislation. The Commission is part of the CER and, although its adjudicative role is independent, it contributes to the overall effective delivery of the CER’s mandate and Departmental Results Framework, in particular the CER’s Core Responsibilities of Energy Adjudication and Safety and Environment Oversight. The Commission is responsible for ensuring continuous improvement and effectiveness in the areas in which it works. Except as otherwise prescribed by law, the Commission may make rules for carrying out its work and managing its internal affairs vis-à-vis adjudication, including rules respecting the powers, duties and functions of Commissioners, its procedures and practices, its sittings and its decisions, orders and recommendations. The Commission is comprised of up to seven full-time Commissioners, including the Lead Commissioner and Deputy Lead Commissioner and at least one full-time Commissioner must be an Indigenous person. The Commission may also include a complement of part-time Commissioners.
- The Indigenous Advisory Committee (IAC) provides broad and strategic advice directly to the Board of Directors that is focused on how to enhance the involvement of the Indigenous peoples of Canada and Indigenous organizations in CER-regulated infrastructure. The IAC is not a decision-making body, nor does it engage in CER operational matters or provide advice on any specific projects or matters before the Commission.
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