This Act sets rules for Crown royalties, including how they are treated, paid, arbitrated, and recovered, with specific exemptions.
RSNL1990 CHAPTER C-43 CROWN ROYALTIES ACT Amended: 2001 c41 s11; 2004 cL-3.1 s23 CHAPTER C-43 AN ACT RESPECTING CROWN ROYALTIES Analysis 1. Short title 2. Royalties and payments 3. Royalties attached to land 4. Arbitration 5. Certain schemes, etc. disregarded 6. Arbitration Act and Public Inquiries Act 7. Application of Act 8. Recovery of royalties 9. Exemption Short title 1. This Act may be cited as the Crown Royalties Act. RSN1970 c73 s1 Back to Top Royalties and payments 2. (1) Where by virtue of an Act or an agreement made between the Lieutenant-Governor in Council and a person or corporation or a Crown grant, lease, licence, concession or other arrangement there is or has been reserved to the Crown a royalty or payment in the nature of a royalty or percentage upon the value, whether gross or net, of the profits, whether gross or net, derived from minerals, timber, power or other produce or thing or commercial operation, all of which are in this Act referred to as royalty, it shall be considered to be a term of the Act, agreement, grant, lease, licence, concession or other arrangement unless otherwise expressly stated that the mineral, timber, power or other product or thing shall be disposed of at or about the current commercial market value. (2) The sales shall be made and the operations carried on upon ordinary and reasonable commercial terms and conditions so as to give to the Crown the royalty that is fair under the circumstances. (3) Where the royalty is upon net profits or returns or values, the charges deducted from the gross in order to arrive at the net profits shall be fair and reasonable and according to commercial practice. RSN1970 c73 s2 Back to Top Royalties attached to land 3. (1) Where a royalty arises out of land, minerals, timber or water power it shall be considered to attach to and run with the land, minerals, timber or water power in the hands of every person or corporation to whom it is conveyed or by other means comes. (2) A person or corporation receiving the profits, is liable to pay and shall pay the royalty arising during his or her ownership or operation but where an enterprise is divided into parts by way of conveyance or otherwise, the arbitrators appointed as provided in this Act shall apportion the royalty amongst the owners or operators. RSN1970 c73 s3 Back to Top Arbitration 4. (1) Where royalty is payable to the Crown, the Lieutenant-Governor in Council shall order that an arbitration be held before 3 arbitrators, 1 to be appointed by the Lieutenant-Governor in Council, 1 by the party liable to pay royalty and the 1 by a judge of the Trial Division on the application of the Attorney General. (2) The royalty payable shall be the royalty decided on by the arbitrators or 2 of them, which award shall be subject to review by the Trial Division on the application of either party. (3) Where the party liable to pay the royalty does not appoint an arbitrator within 1 month after notice to do so, the arbitrator may also be appointed by the Trial Division on application of the Attorney General. RSN1970 c73 s4; 1986 c42 Sch A Back to Top Certain schemes, etc. disregarded 5. (1) A contract, scheme or device that in the opinion of the arbitrators is designed or tends improperly or unnecessarily to reduce the amount of royalty payable to the Crown shall for the purpose of this Act be considered to be of no effect. (2) The royalty shall be ascertained and paid as if the contract, scheme, or device did not exist. RSN1970 c73 s5 Back to Top Arbitration Act and Public Inquiries Act 6. The arbitrators shall have all the powers conferred upon arbitrators by the Arbitration Act and all the powers conferred upon commissioners under the Public Inquiries Act. RSN1970 c73 s6; 1986 c42 Sch B Back to Top Application of Act 7. (1) This Act applies to all royalties under an Act, agreement, Crown grant, lease, licence, concession or other arrangement whenever passed, made or given. (2) This Act shall be read and applied in conjunction with the Labrador Inuit Land Claims Agreement Act and, where a provision of this Act is inconsistent or conflicts with a provision, term or condition of the Labrador Inuit Land Claims Agreement Act , the provision, term or condition of the Labrador Inuit Land Claims Agreement Act shall have precedence over the provision of this Act. RSN1970 c73 s7; 2004 cL-3.1 s23 Back to Top Recovery of royalties 8. All royalties shall be considered to be debts due to the Crown and may be recovered by an action in the Trial Division in the name of the Attorney General. RSN1970 c73 s8; 1986 c42 Sch A Back to Top Exemption 9. This Act does not apply to (a) the Hibernia Development Royalty Agreement made or to be made between the Crown and Mobil Oil Canada Properties, Chevron Canada Resources, Petro-Canada Hibernia Partnership, Gulf Canada Resources Limited, Mobil Oil Canada, Ltd., Chevron Canada Resources Limited and Petro-Canada Inc.; and (b) petroleum as defined in the Petroleum and Natural Gas Act. 2001 c41 s11