The following is an overview of key developments in Canadian law and regulatory practice applicable to private M&A in the oil and gas industry from January 1 to March 31, 2016.

Oil & Gas Regulatory

The NEB approved, for the first time, a 40-year liquefied natural gas export licence for the Shell-led LNG Canada Development facility in Kitimat, British Columbia.

Alberta’s NDP announced a summary of a Modernized Royalty Framework it intends to implement. While important details have yet to be worked out, industry’s preliminary reaction has been positive

Litigation

The federal government has already imposed conditions on Enbridge’s Northern Gateway pipeline project, but provincial conditions may also be forthcoming as a result of a B.C. court’s ruling that the province must fulfil its own duty to consult with affected First Nations and make its own decision.

Tax

The federal budget proposes to introduce a specific regime that will treat emissions allowances as inventory, which will apply to emissions allowances acquired in taxation years beginning after 2016.

Although the Liberal government had previously promised to change the tax treatment of stock options, the 2016 budget is silent on this issue, meaning there will be no changes to taxation of stock options in the upcoming year.

Employment

The Ontario Court of Appeal found that two contractors that worked exclusively for one company were “dependent” contractors entitled to notice periods akin to those that similarly situated employees would receive, even though the company had labelled these individuals as independent contractors.

Competition

The Ontario Court of Appeal held that the confidentiality provisions set out in the Investment Canada Act do not prevent courts from ordering companies to disclose the undertakings they are required to make to the Canadian government in order to obtain ICA approval for foreign acquisitions.

Key Stikeman Elliott Publications