Canada - Oil & Gas: A Comparative Guide to the Regulation of Oil and Gas Projects

Canada is a federation of 10 provinces and three territories and, with the exception of Quebec, is a common law jurisdiction. Canada’s constitution divides legislative authority between the federal Parliament (the federal Crown) – which has jurisdiction over matters of interprovincial, national and international scope – and the provincial legislatures (each a provincial Crown) – which have jurisdiction over matters of a more local nature. Participants in the oil and gas industry are often subject to both federal and provincial regulators because these levels of government have overlapping or shared legislative authority in the areas of natural resource development, transportation, marketing and the environment.

Canada is rich in oil and natural gas and currently has the world’s third largest proven reserves of crude oil. On a regional basis, Alberta, British Columbia, Saskatchewan and the Maritime Provinces all produce substantial quantities of oil and gas. However, the vast majority of Canada’s proven oil and gas reserves and production facilities are located within the province of  Alberta. Discoveries of oil and gas in Alberta (in particular, in the Athabasca oil sands) have made Alberta the largest producing region in North America. For example, in 2011, Alberta produced 1.7 million barrels of oil per day, and it is estimated that this figure will rise to over 3 million barrels per day by 2020.

Given this reality, the primary jurisdictional focus of this chapter will be on the development, ownership and operation of oil and gas in Alberta. Having said that, business enterprises that are interested in conducting oil and gas business in Canada’s other provinces or territories should be aware that although the fundamental legal concepts and provincial legislation in these provinces are substantially similar, there are certain differences that should be taken into account; these differences are, however, beyond the limited scope of this chapter.

Canada chapter originally published by The European Lawyer (Thomson Reuters), 2013.