On 12 August 2003, the Treasury Board of Canada approved the External Charging Policy (the Policy) to be implemented by all federal government departments as defined in section 2 of the Financial Administration Act. The Policy sets out the conditions under which external charging is appropriate and addresses the requirements for greater accountability, transparency and stakeholder consultation in the development and management of user charges.

The purpose of the Policy is to:

promote an equitable approach to the funding of government programs by fairly charging those who derive benefits beyond those enjoyed by the general taxpayer or by fairly charging those whose activities generate the need for regulation;
permit the government to earn a fair return, for Canadians, for rights or privileges granted and access to or use of resources owned or controlled by the government on their behalf;
promote the efficient allocation of resources by subjecting programs to a market test of supply and demand, thereby reducing or eliminating the demand for products or services that are perceived as "free".

The objective of the Policy is to strengthen accountability, through consultation, monitoring, and reporting, as it pertains to the establishment, amendment and ongoing management of external charges.

One of the specific requirements of the Policy is stakeholders' consultation. The Policy further emphasized that consultation with the stakeholders must be initiated on all aspects of proposals to establish, amend and manage external charges, including specifically:

analysis in support of proposed external charging;
costing;
establishing the charge;
service delivery methods and standards; and
dispute management.

Before the National Energy Board (the Board) takes further steps in developing the Dispute Management Process, it is necessary to review and understand the Stakeholders' Consultation process which gives rise to issues and events that cause disagreements and differences between the Board and the Stakeholders.

Overview of the Stakeholders' Consultation

Once an initial proposal is developed to establish or amend an external charge, the Board should identify affected and interested stakeholders and should develop a consultation strategy plan.

The purpose of the consultation process is:

to disclose to stakeholders information relevant to the establishment, amendment and management of an external charge; and
to allow stakeholders an opportunity to provide their input and to receive timely and considered feedback from the Board.

The scope of consultation should be proportionate to the significance of the proposed charge and other factors such as the diversity of the stakeholders and the nature and level of their interest.

Consultations with stakeholders must cover the following:

the rationale for introducing or amending charges and how this relates to the overall objectives and priorities of the Board;
the nature of the activities for which there will be charges, other associated costs and information relating to the service delivery;
service delivery standards, stakeholder and the Board's responsibilities for the results, and proposed options to be implemented by the Board in the event that service standards are not met;
how the level of the proposed charge was determined;
the manner by which the Board will consult and communicate on a continuing basis;
the process available to stakeholders for raising issues or disputes related to external charging.

Dispute Management Process

As a pre-requisite for the implementation of the Treasury Board's (TB) External Charging Policy, the Board must develop a Dispute Management process.

Objective

The National Energy Board wants to ensure that disputes and issues raised by stakeholders related to external charging are addressed and resolved fairly and efficiently.

Purpose

The Dispute Management process is a tool to provide resolution to disputes and issues after the charges are developed and established and the fees are set. The disputes and issues may include but shall not be limited to:

failure to meet the agreed standard of services or products;
negotiated charges are perceived to be unreasonable;
issues regarding specifications and descriptions of the required services or products;
cancellation of the negotiated services or products;
failure to meet deadlines.

Guiding Principles

An effective Dispute Management process must be available to stakeholders for raising disputes or issues related to external charging. The Board must ensure that the process:

is clearly communicated to the stakeholders;
is well-publicized;
is easily accessible;
observes the same principles of openness and transparency that guide the conduct of consultations in general.

The total obligation or settlement will be limited to the fees established in accordance with the External Charging Policy for the specific service or product.

Procedures

There are three hierarchical levels in the resolution of a dispute. The first level of resolution will be initiated by the Chair of the Cost Recovery Liaison Committee (CRLC). If the dispute remains unresolved at the first level, the issue will be passed on to the second level where a committee is formed to develop and negotiate a resolution. The members of the committee will represent both Parties to facilitate a fair and reasonable solution. Where the first level or the second level failed to come up with a resolution, the third level is for the Chairman of the Board or representative to make the final offer.

All notification from the stakeholder(s) of any dispute or issues related to external charging must be brought forward to the NEB within 90 days from the date of notice of the event that results in the dispute and addressed to the Chair of the Cost Recovery Liaison Committee at:

National Energy Board
444 Seventh Avenue SW
Calgary, Alberta
Canada T2P 0X8

When a dispute is filed, the Chair of the CRLC will advise all affected parties.

1^st Level:

Upon receipt of a notification from a stakeholder(s), the Chair of the CRLC will work with the stakeholder(s) to define the issue being disputed, discuss mutually acceptable options for resolution and present a proposed settlement to the dispute to all parties affected. Any agreed settlement would be accepted in writing.

If a resolution is not reached at the 1^st Level within 90 days from the date the notification was received by NEB, it will be escalated to the 2^nd Level for resolution.

2^nd Level:

If the 1^st Level failed to produce a resolution, the Chair of the CRLC will
evaluate the issue to a Committee comprised of:

a. The Chief Operating Officer or delegate;
b. A representative appointed by the stakeholder(s);
c. A facilitator to assist the Parties in the negotiations who could be the Board's Appropriate Dispute Resolution Coordinator or another party mutually agreed upon by all participating parties;

The Committee is responsible to:

c. Define the issue and develop a resolution process giving consideration to timing, documentation, confidentiality and other factors;
d. Work towards mutual resolution;
e. Ensure that the agreed resolution is accepted in writing.

If a resolution is not reached at the 2^nd Level within 90 days from the date the dispute issues were elevated from the 1^st Level, it will be escalated to the 3^rd Level for resolution.

3^rd Level:

If the dispute remains unresolved after the 1^st and the 2^nd levels, the Chairman of the National Energy Board or representative will review the issue and will make the final settlement proposal within 90 days of escalation from the 2^nd Level.

References

External Charging Policy by Treasury Board Secretariat; External Charging Policy - Part 1 of 2 [ASP]
Guide to the Costing of Outputs in the Government of Canada; Cost Recovery and Charging Policy [ASP]
Appropriate Dispute Resolution - Guidelines - July 2003 [PDF: 1033 KB]
NEB External Charging Policy - Non Regulatory [HTML]

Enquiries

Enquires related to the Dispute Management process should be directed to:

Corporate Services, Finance
Financial Advisor
Resource Management, Revenue & Cost Recovery
Telephone: 403-299-3816

Approved:

______________________________
Kenneth W. Vollman
Chairman and Chief Executive Officer

Date:

____________________

External Charging Policy - Dispute Management Process

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