Industrial Benefits
Research and Development/Education and Training
The legislative requirement for expenditures related to research and development and education and training (hereinafter referred to collectively as ‘R&D/E&T’) in the province is contained in Section 45 of the Atlantic Accord Implementation Acts (Acts).
Section 151.1(1) of the Acts (reference herein to federal version) authorizes the C-NLOER to issue and publish in such manner as it deems appropriate, guidelines and interpretation notes with respect to the application and administration of Section 45.
In 2004, the C-NLOER issued Guidelines for Research and Development Expenditures (superseded by the Benefits Plan Guidelines) and since that time, has annually calculated an R&D/E&T spending obligation for each producing project. The Regulator annually calculates an operator’s required amount of R&D/E&T spending under the Guidelines using this formula:
annual oil production x oil price x US-CAD $ exchange rate x 5-year average of Statistics Canada R&D Benchmark
With effect from January 1, 2017, the five-year average of the Statistics Canada R&D Benchmark is capped at 0.5% (0.005).
Operators may submit a R&D/E&T Work Expenditure Application to the C-NLOER for eligibility determination and pre-approval of a R&D/E&T activity.
Each year, actual R&D/E&T expenditures are required to be reported by Operators to the C-NLOER, and are reconciled against the spending obligation. For historical expenditure information, refer to the Project Eligible Expenditures in Research & Development/Education & Training.
For further information on Benefits Plan provisions in relation to research and development and education and training, refer to the Benefits Plan Guidelines.