Regulations Amending the Canada–Newfoundland and Labrador Offshore Area Petroleum Operations Framework Regulations: SOR/2026-97

Canada Gazette, Part II, Volume 160, Number 12

Registration
SOR/2026-97 May 29, 2026

CANADA–NEWFOUNDLAND AND LABRADOR ATLANTIC ACCORD IMPLEMENTATION AND OFFSHORE RENEWABLE ENERGY MANAGEMENT ACT

P.C. 2026-505 May 29, 2026

Whereas, under subsection 7(1)^{footnote a} of the Canada–Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act^{footnote b}, the Minister of Natural Resources consulted the Provincial Minister for Newfoundland and Labrador with respect to the proposed Regulations Amending the Canada–Newfoundland and Labrador Offshore Area Petroleum Operations Framework Regulations and the Provincial Minister approved the making of those Regulations;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, makes the annexed Regulations Amending the Canada–Newfoundland and Labrador Offshore Area Petroleum Operations Framework Regulations under subsection 149(1)^{footnote c} of the Canada–Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act ^{footnote b}.

Regulations Amending the Canada–Newfoundland and Labrador Offshore Area Petroleum Operations Framework Regulations

Amendment

1 Section 83 of the Canada–Newfoundland and Labrador Offshore Area Petroleum Operations Framework Regulations^{footnote 1} is repealed.

Coming into Force

2 These Regulations come into force on the day that, in the third month after the month in which they are published in the Canada Gazette, Part II, has the same calendar number as the day on which they are published or, if that third month has no day with that number, the last day of that third month.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issues

Since the Framework Regulations came into force in October 2024, a conflict has been identified with the Canada Shipping Act, 2001 (CSA, 2001). The Framework Regulations established a limit on the maximum volume of vented gas that may be authorized by a Regulator at 15 000 standard m³ per year. This limit was set with the intent of aligning with a similar requirement that applied at the time to upstream oil and gas facilities across the country — including offshore facilities — under the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) [the Methane Regulations], made under the Canadian Environmental Protection Act, 1999 (CEPA).

The limit on the volume of vented gas that may be vented at an offshore facility under both the Framework Regulations and Methane Regulations did not account for the venting that occurs as part of making cargo tanks gas-free and safe for personnel to enter to perform the mandatory internal inspections required under the CSA, 2001. This issue was not identified by industry during the development of the Methane Regulations or early in the development of the Framework Regulations.

Since there are no current or planned production projects in the Canada-Nova Scotia offshore area, the amendment will only apply to the four producing projects in the Canada-Newfoundland and Labrador offshore area. This amendment will resolve the operational problem whereby an operator of an FPSO could be penalized under the Framework Regulations for exceeding the venting limit, when doing so is necessary to comply with vessel safety requirements under the CSA, 2001.

Background

Joint management regime

The offshore areas of Newfoundland and Labrador and Nova Scotia are unique in that they are jointly managed by both the federal and provincial governments, as agreed to under two Accord Acts. The Canada–Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act and the Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation and Offshore Renewable Energy Management Act (known collectively as the “Accord Acts”), and their respective provincial mirror legislation, establish in law the joint-management regime for the Canada-Newfoundland and Labrador and Canada-Nova Scotia offshore areas.

The Accord Acts create the C-NLOER and the CNSOER, which independently regulate petroleum and renewable energy activities in the offshore areas off the coasts of the respective provinces. The Regulators administer the offshore regulatory regime to ensure, among other things, the health and safety of offshore workers and the protection of the environment.

Following the promulgation of the federal and provincial versions of the Accord Acts in the 1980s, a suite of regulations in each of the offshore areas (Drilling and Production; Installations, Certificate of Fitness; Geophysical Operations; Operations) was brought into force to establish requirements governing the safe operation of petroleum activities. These regulations established requirements related to the acquisition of operations licences, acquisition and retention of geophysical and geotechnical data, design of petroleum installations and the associated certificates of fitness for those installations, and drilling and production activities.

Frontier and Offshore Regulatory Renewal Initiative

In 2005, the Frontier and Offshore Regulatory Renewal Initiative (FORRI), led by NRCan in partnership with the Governments of Newfoundland and Labrador and Nova Scotia, the Canada Energy Regulator, Crown-Indigenous Relations and Northern Affairs Canada, and ECCC, was established to oversee the process of regulatory renewal and modernization of Canada’s nearly two-decade-old offshore petroleum regulatory regime. The goal of FORRI was to improve the regulatory framework in Canada’s frontier and offshore areas, in addition to supporting the offshore petroleum industry’s contribution to Canada’s economy and competitiveness by maintaining the highest standards for operational safety, environmental protection and management of offshore petroleum resources.

Under FORRI, federal and provincial government partners first took steps to modernize the Newfoundland Offshore Petroleum Drilling and Production Regulations, which addressed the safety, environmental protection and conservation of resources during drilling and production activities. These Regulations came into force in 2009 and set out, among other requirements, provisions that would prohibit operators from venting gas, other than in an emergency circumstance or in accordance with an authorization issued by the Regulator.

In 2012, government partners continued efforts toward developing a modern suite of operational requirements for offshore petroleum work and activities through the amalgamation and modernization of the five operational regulations that existed in each of Canada’s offshore jurisdictions, including the Newfoundland Offshore Petroleum Drilling and Production Regulations.

In 2016–2017, NRCan, ECCC and the Governments of Newfoundland and Labrador and Nova Scotia agreed that, with respect to the regulation of offshore methane emissions, ECCC would establish venting requirements under the CEPA, while NRCan and the provincial governments would subsequently incorporate requirements that are at least as stringent as those set out in the CEPA regulations into the finalized Framework Regulations.

In 2020, the Methane Regulations came into force and prescribed an annual limit of 15 000 standard m³ on the volume of gas that may be vented at any upstream oil and gas facility in Canada. For offshore facilities, the annual limit excluded any volumes that are required to be vented to avoid serious risk of health and safety arising from an emergency. The Methane Regulations also prescribed detailed requirements related to gas emissions from compressors, including leak detection and leak repair, and set out that Part 2 (Offshore Upstream Oil and Gas Facilities) would stand down once regulations that are at least as stringent were in place under the Accord Acts and the Minister of the Environment publishes the title of the regulation in the environmental registry established under CEPA.

In October 2024, the Framework Regulations, made under the Accord Acts, came into force and established a comprehensive and modern suite of technical requirements aimed at optimizing safety, environmental protection and resource management of offshore petroleum work and activities, including what requirements the operator must satisfy before the Regulator will authorize any work or activity in the offshore area.

The Framework Regulations require operators to develop, implement and maintain an overarching management system for the purposes of reducing safety and environmental risks, preventing pollution and ensuring resource conservation, using documented processes and performance objectives for how they will carry out their work and activities. The management system must include processes for the proactive management of safety and environmental issues throughout the lifespan of a project, from early planning through decommissioning, and must include processes for the identification of hazards, the evaluation of the risks associated with those hazards, and the implementation of mitigation measures to reduce the risk to as low as reasonably practicable.

Requirements related to the protection of the environment and the venting of gas

As part of an application for authorization to carry out any work or activity in the offshore area, an operator must develop and submit to the Regulator for its approval an Environmental Protection Plan (EPP) that sets out the procedures, practices, resources and monitoring measures that are necessary to protect the environment from the potential effects of a proposed work or activity. For development projects, the EPP includes mitigation for environmental hazards and measures to reduce environmental risks identified in the environmental assessment (EA) or impact assessment (IA), as the case may be, as required under either the Canadian Environmental Assessment Act, 2012, or its successor, the Impact Assessment Act.

By implementing the environmental protection measures required by the Regulations, and those measures arising from the EA or IA processes, both of which must be described in the EPP, an operator is expected to reduce environmental risks to a level that is as low as reasonably practicable. The Regulators, in their published Guidelines for the Framework Regulations, state that they expect an operator to make every effort to reduce the volume of venting to as low as reasonably practicable.

The EPP must also include a description of all of the discharge streams and the limits of any discharge into the environment. The Regulators, in their published EPP guidelines, state that the term “discharge” includes liquid and gaseous discharges to sea, discharges or emission of any substance or form of energy into the environment from work or activity and, of particular concern in relation to the Regulations, all gaseous and particulate emissions to air. The EPP guideline further notes that all discharges not described in the EPP are considered “pollution.” The Framework Regulations require the operator’s management system to prevent pollution, and, should pollution occur, the operator must cease the work or activity.

The Framework Regulations prohibit gas venting unless the Regulator has authorized the venting as part of the authorization or associated with an approved formation flow test, or if it is necessary to remediate an emergency that may cause serious risk to human health or safety. As part of the application for an authorization, the operator must provide detailed information on any proposed venting of gas to the atmosphere, including the rationale for venting and the estimated rate, quantity and period of the venting.

The Framework Regulations further established that the maximum volume of vented gas that can be authorized by the Regulator is 15 000 standard m³ per year, which, at the time the Framework Regulations were published, aligned with the venting limit set out in the Methane Regulations, per the earlier agreement between ECCC, NRCan, and the Governments of Newfoundland and Labrador and Nova Scotia. Similar to the Methane Regulations, the Framework Regulations also established detailed requirements related to gas emissions from compressors, including leak detection and leak repair.

Compliance challenges

In April 2023, CAPP, which represents the operators of the four producing projects in the Canada-Newfoundland and Labrador offshore area, sent a letter to ECCC to raise its concern regarding its members’ ability to comply with the annual maximum allowable vented gas limit under the Methane Regulations. CAPP also shared the letter with NRCan, given the proposed plan for the Framework Regulations to align with the venting limit set out in the Methane Regulations.

In its letter to ECCC, CAPP noted that the 15 000 standard m³ annual limit is unsuitably low for facilities with production volumes as high as offshore projects. CAPP also emphasized that environmental hazards and risks are already addressed through the comprehensive offshore regulatory framework. In addition, operators of FPSOs would face difficulties meeting the venting limit because mandatory inspections under the CSA, 2001 require all cargo tanks to be internally inspected at regular intervals, which results in unavoidable venting.

Under the Framework Regulations, cargo tanks on an FPSO must be arranged, equipped and managed to prevent the formation of an explosive atmosphere. The tanks must be maintained in an inert state, except when they need to be gas-free for inspection or repair work. This is achieved by adding a blanket gas mixture to lower the oxygen concentration below ignition levels.

However, because these tanks are considered confined spaces under occupational health and safety legislation, they must be purged, cleaned, gas-freed and ventilated before inspectors can safely enter and conduct the mandatory inspections. During this process, the blanket gas — itself a hydrocarbon mixture — must be vented to a safe location. Given the number of cargo tanks on an FPSO and the inspection frequency under the CSA, 2001, operators risk exceeding the maximum venting limit set by the Framework Regulations when required to vent the hydrocarbon blanket.

Both FPSOs currently operating in the Canada-Newfoundland and Labrador offshore area were offline for extended periods between 2020 and 2024 to undergo retrofits that will extend the lifespan of their respective projects. During those periods, the operators were able to plan and complete the required internal inspections, reducing the potential for conflict. Going forward, however, mandatory inspections will likely take place during regular operations, creating a risk of exceeding the maximum venting limit set by the Framework Regulations.

Penalties under the Accord Acts

Contravention of certain provisions of the Framework Regulations, including the provision related to the venting limit, may be subject to an administrative monetary penalty under the Canada–Newfoundland and Labrador Offshore Petroleum Administrative Monetary Penalties Regulations or the Canada-Nova Scotia Offshore Petroleum Administrative Monetary Penalties Regulations, as the case may be, up to a value of $100,000. In addition, failure to comply with any provision in the Regulations is a prosecutable offence under the Accord Acts, and penalties include on summary conviction, a fine up to $100,000, imprisonment for a maximum term of one year, or both; and, on conviction of an indictment, a fine up to $1 million, or imprisonment for a maximum term of five years, or both.

Amendments to the Methane Regulations

In December 2025, Regulations Amending the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) [the “amendments to the Methane Regulations”] were published in the Canada Gazette, Part II. ECCC noted that these amendments aimed to further reduce methane emissions from the upstream oil and gas sector by introducing new emission standards, inspection and repair requirements, and performance-based compliance options focused on emissions outcomes.

Notably, the amendments repealed Part 2 (Offshore Oil and Gas Facilities) of the Methane Regulations in its entirety, consistent with the original intent to have those regulations stand down once venting was addressed under the Framework Regulations. For onshore facilities, the previous prescriptive venting limit of 15 000 standard m³ has been replaced with a general prohibition on venting, subject to limited exceptions. This approach aligns with the Framework Regulations. The move to a more performance-based compliance regime for onshore venting received broad support from environmental organizations during public consultation following a prepublication in the Canada Gazette, Part I.

Objective

The Regulations will ensure that offshore venting requirements are appropriate for marine-based facilities, consistent with onshore standards, supportive of safe and effective operations, and protective of the environment.

The Regulations will resolve the conflict inadvertently created when the Framework Regulations introduced a new limit on the volume of gas that the Regulator may authorize to be vented — a limit that FPSOs are unlikely to meet due to mandatory safety inspections under the CSA, 2001. Therefore, the Regulations will also prevent operators from being penalized under the Framework Regulations for actions required to comply with the CSA, 2001.

Operators remain prohibited from venting unless authorized by the Regulator or where necessary to address an emergency that may cause serious risk to human health or safety. In addition, operators must continue, through their Environmental Protection Plans under the Framework Regulations, to identify environmental hazards — including any discharge of particulate emissions to air — and reduce the risks associated with those hazards through the implementation of control measures.

Description

The Regulations will repeal section 83, which sets the limit on the volume of gas that the Regulator may authorize to be vented at an installation to be no greater than 15 000 standard m³ per year. This will allow the Regulator to authorize venting above that threshold that is required for safety inspections in accordance with the CSA, 2001.

The Regulations will come into force three months after the date of publication in the Canada Gazette, Part II.

Regulatory development

Consultation

Since 2023, NRCan has regularly engaged in discussions with CAPP and ECCC to better understand the concerns raised by CAPP members. NRCan also sought input from the C-NLOER on facility design and environmental protection measures and expectations, and from TC on the various requirements under marine safety legislation related to FPSO tank inspections and confined space entrance requirements.

NRCan met with CAPP members on the proposed regulatory amendment. CAPP and its members have indicated their support for this amendment.

NRCan notified Indigenous groups in Newfoundland and Labrador and Nova Scotia of the proposed amendment and offered meetings to discuss it. Only the Kwilmu’kw Maw-klusuaqn Negotiation Office (KMKNO) accepted the offer, and NRCan met with them and received their written comments.

KMKNO indicated its support for efforts to prohibit unnecessary methane venting but emphasized that any exceptions — such as those needed for inspection activities — must be extremely limited. They called for mandatory use of the best available technologies, regular updates to any exceptions as technology improves, and yearly verification — possibly by an independent expert — that more cannot be done to capture or conserve gas during inspection activities or emergency events, without using cost as a reason not to adopt improvements. They also stressed that the Regulations should require companies to proactively adopt new technologies as they emerge.

No changes were made to the proposed Regulations as a result of these comments because the concerns raised are already addressed within the existing modernized Framework Regulations. The approach under FORRI was intentionally designed to move away from prescriptive requirements and toward a technology-neutral regulatory framework. This approach ensures that operators — subject to the approval and oversight of the Regulator — can adopt and implement the best available technologies and methodologies as they evolve, promoting innovation and continuous improvement in both safety and environmental protection.

Several key regulatory requirements directly meet the KMKNO’s concerns. Each operator must maintain a comprehensive management system that drives continual improvement, identifies and manages all safety- and environment-critical systems, sets measurable performance indicators, and includes ongoing inspection, monitoring, testing, and corrective action. This system must be continuously updated, ensuring operators regularly reassess and enhance their environmental protections.

Similarly, the EPP requires operators to implement measures that reduce environmental risks to as low as reasonably practicable (ALARP), establish discharge limits and monitoring processes, and update the plan as new technologies and scientific knowledge emerge. Additional oversight mechanisms — such as the regularly updated Concept Safety Analysis; the Certification of Fitness process, which involves an independent third-party review and validation of key safety and environmental requirements along with annual and monthly reporting; and mandatory annual environmental reporting — provide continuous independent verification and strengthen regulatory accountability.

NRCan is committed to reviewing the Framework Regulations at least every five years to ensure continued appropriateness and alignment with the best available technologies and international standards. Taken together, these existing measures ensure that any exceptions remain narrow, the best available technologies are continually applied, and operators are subject to robust and recurring oversight. As a result, the intent of the recommendations provided by the KMKNO is already fulfilled within the current regulatory structure.

Environmental organizations that previously actively participated in the development of the Framework Regulations were also notified of the proposed amendment. No concerns were raised, as no responses were received. In addition, during consultations on the proposed amendments to the Methane Regulations, environmental organizations broadly supported the move to a more performance-based compliance regime for onshore venting.

The Governments of Newfoundland and Labrador and Nova Scotia, as joint-management partners in the offshore, participated in developing the regulatory amendment and support it, as it resolves the inadvertent conflict and prevents a situation where operators could face non-compliance penalties under the Framework Regulations for exceeding venting limits when required to comply with vessel safety requirements under the CSA, 2001. Both provincial governments are committed to making the corresponding amendment to their mirror regulations and aligning the coming-into-force date with the federal amendments.

Exemption from prepublication in the Canada Gazette, Part I

The Regulations were not prepublished in the Canada Gazette, Part I, for several reasons. First, they will resolve a regulatory conflict and prevent operators from facing penalties under the Framework Regulations for exceeding venting limits when such an action is required to comply with vessel safety requirements under the CSA, 2001. CAPP and the operators of the four offshore production projects were consulted on, and are supportive of, the amendment to the Framework Regulations, which addresses the regulatory conflict that they originally identified and raised with NRCan and ECCC.

In addition, the Regulations will align with recent amendments to the Methane Regulations, which replaced the prescriptive venting limit of 15 000 standard m³ with a general prohibition on venting, subject to limited exceptions. That move to a more performance-based compliance regime for onshore venting received broad support from environmental organizations during public consultation following prepublication in the Canada Gazette, Part I.

Finally, as explained in the “Regulatory analysis” section below, the Regulations are not expected to result in any incremental costs for stakeholders.

Indigenous engagement, consultation and modern treaty obligations

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether this amendment is likely to give rise to modern treaty obligations. The assessment examined the geographic scope and subject matter of this proposal in relation to modern treaties in effect and concluded that implementation of this amendment is unlikely to impact on the rights, interests, or self-government provisions of treaty partners.

Instrument choice

Because the Framework Regulations include a venting threshold that may result in a practical, operational conflict with venting requirements under the CSA, 2001, regulatory intervention is necessary to address the conflict. Non-regulatory options were not considered.

Regulatory analysis

Benefits and costs

There are no costs associated with this amendment, as it is intended to correct a regulatory conflict with other federal legislation and avoid situations where operators may be forced into non-compliance with one regulation in order to maintain compliance with another.

The amendment is not expected to change the total volume of gas vented. In the baseline scenario, operators must vent gas in order to comply with the requirements under CSA, 2001, meaning venting would occur, despite the prescribed limit. As a result, the amendment is not expected to have any material change in cost to the environment.

It is worth nothing that, since the Framework Regulations came into force in October 2024, there have been no instances where the venting limit was exceeded due to the conflict with the CSA, 2001. Prior to the Framework Regulations coming into force, operators of the two FPSOs used their time in dry dock for repairs and retrofits to complete the required inspections under CSA, 2001. Under the Framework Regulations, operators of all petroleum projects continue to be prohibited from venting gas, except in specific circumstances, including in accordance with the authorization issued by the Regulator. In granting an authorization, the Regulator considers the vessel safety requirements that an FPSO must meet under the CSA, 2001.

Small business lens

An analysis under the small business lens concluded that the Regulations will not impact Canadian small businesses. The operators that are impacted by this amendment are not considered small businesses with fewer than 100 employees or less than $5 million in revenue annually.

One-for-one rule

The one-for-one rule does not apply, as there will not be any incremental change in administrative burden on businesses and no new regulatory titles will be created.

Regulatory cooperation and alignment

This regulatory amendment is not related to an international agreement or obligation, nor does it impact any work plan or commitment under a formal regulatory cooperation forum. However, it was developed in partnership with the Governments of Newfoundland and Labrador and Nova Scotia under the joint management framework for the Canada-Newfoundland and Labrador and Canada-Nova Scotia offshore areas. Consistent with the joint management framework, the provinces will develop a mirror amendment to the Regulations under the authorities of their respective provincial Accord Acts. The federal and provincial regulations will be coordinated to come into force at the same time.

NRCan has consulted with ECCC and TC on the regulatory conflict and both are supportive of this amendment to the Framework Regulations. In addition, the amendment aligns with amendments to the Methane Regulations, which replaced the previous prescriptive venting limit of 15 000 standard m³ at onshore oil and gas facilities with a general prohibition on venting, subject to limited exceptions.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental and economic assessment is not required. No material environmental impact is anticipated from these Regulations, as they are not expected to change the total volume of gas vented. Under the Framework Regulations, operators remain prohibited from venting gas except in specific circumstances, including where authorized by the Regulator. In granting such authorizations, the Regulator considers the vessel safety requirements that an FPSO must meet under the CSA, 2001.

Gender-based analysis plus

A gender-based analysis plus (GBA+) was conducted as part of the development of the Regulations. The Regulations are not expected to result in any differential impacts on the basis of identity factors such as gender, race, ethnicity, sexuality, religion, age, ability status, etc.

Implementation, compliance and enforcement, and service standards

Implementation

NRCan is working with the Governments of Newfoundland and Labrador and Nova Scotia and the Regulators to coordinate the implementation of the amendment, along with the amendment to the mirror provincial regulations.

The Regulators will update their published guidance materials, which are intended to help interested parties and future operators interpret the regulations, to reflect this amendment. These guidance materials, available on each Regulator’s website, will be revised to coincide with the coming into force of the Regulations.

Compliance and enforcement

There are no changes being made to the compliance and enforcement regime under the Accord Acts. Compliance and enforcement activities would continue to follow established Regulator approaches and procedures to monitor and enforce compliance under the Accord Acts and the regulations made thereunder.

Compliance is monitored through regular inspections, condition reviews, meetings, audits, and incidents and near misses, which are to be reported to the Regulator under the Framework Regulations through immediate or periodic reporting requirements. The Regulators have a variety of compliance and enforcement tools, such as facilitated compliance, issuance of orders, directives, notices, administrative monetary penalties, suspension or revocations of approvals and authorizations, and/or prosecution. More than a single tool may be employed to obtain or promote compliance, deter future non-compliance or to prevent harm.

Failure to comply with a direction, requirement or order of an operational safety officer or conservation officer, or any provision of Part 3 of the Acts or the Framework Regulations, is a prosecutable offence under the Acts, and penalties include on summary conviction, a fine up to $100,000, imprisonment for a maximum term of one year, or both; and, on conviction of an indictment, a fine up to $1 million, or imprisonment for a maximum term of five years, or both.

Contact

Kim Phillips
Senior Regulatory Officer
Offshore Management Division
Natural Resources Canada
Telephone: 902‑402‑0285
Email: kim.phillips@nrcan-rncan.gc.ca