WHEREAS The Surface Rights Acquisition and Compensation Act does not require oil and gas companies to compensate landowners for right-of-entry on privately owned lands;

WHEREAS other provincial jurisdictions require oil and gas companies to compensate private landowners for right-of-entry either by way of payment of a set fee or payment of an amount to be negotiated; and

WHEREAS oil and gas companies currently refuse to negotiate for right-of-entry on private lands because it is not required by legislation in Saskatchewan;

BE IT RESOLVED that SARM lobby the Province of Saskatchewan to amend The Surface Rights Acquisition and Compensation Act to require oil and gas companies to compensate land owners for right-of-entry on privately owned and leased lands.

Response from Honourable Bill Boyd, Minister of Energy and Resources: 

Thank you for providing me with a copy of the resolution by Saskatchewan Association of Rural Municipalities (SARM) concerning the payment of entry fees for oil and gas exploration and development on private lands. The resolution requests that a basic entry fee be paid to land owners whenever an oil and gas company enters the surface of land to carry out the drilling of wells and the construction of related facilities.

The resolution is correct in that this type of entry fee is not provided for under The Surface Rights Acquisition and Compensation Act.   This is a key difference between the Saskatchewan legislation and surface rights legislation in Alberta. The Ministry of Energy and Resources is not aware of any other provincial jurisdictions that require payment of this type of entry fee. Overall, the methods for calculating surface rights compensation in Alberta and Saskatchewan are comparable except for the payment of this fixed entry fee.

Under section 19 of Alberta’s Surface Rights Act, land owners are entitled to receive the lesser of $5000 or $500 per acre for the lands affected by an entry order of its Surface Rights Board.  A minimum payment of $250 is required for all surface entries.  This entry fee was adopted in the early 1980s and is paid in addition to the compensation ordered by the Board for the use of the surface rights. Although the legislation is silent on the purpose of this fee, it appears that it was put in place to cover, in part, the cost to landowners of participating in the arbitration process.

Implementing the SARM resolution would require amendments to The Surface Rights Acquisition and Compensation Act.   These amendments would only be brought forward by the government after consultations with land owner associations, the oil and gas industry, and organizations such as SARM. The changes would need to consider the overall purposes of the Act as set out in section 3 of the legislation.   This section states:

3. The purposes of this Act are:

(a) to provide for a comprehensive procedure for acquiring surface rights;

(b) to provide for the payment of just and equitable compensation for the acquisition of surface rights; and,

(c) to provide for the maintenance and reclamation of the surface of land acquired in connection with surface rights acquired under this Act.

The issue of whether to establish a fixed entry fee, such as that imposed in Alberta, is tied to the issue of providing just and equitable compensation for the acquisition of surface rights. The Act currently provides a broad range of factors that the Board must consider in establishing compensation levels. One of these factors includes the payment to the land owner of their reasonable expenses incurred as part of participating in the arbitration process.   These payments are not a fixed fee but rather an amount determined by the Board of Arbitration on a case-by-case basis.

As you may know, the Government of Saskatchewan recently appointed new members to the Surface Rights Board of Arbitration (SRBA).  I will be seeking the SRBA’s input in the coming months on the adequacy of the province’s current legislation for achieving the purposes set out in the Act.  I recognize that your members are anxious to move quickly on the fixed entry fee concept but this idea needs to be considered within the context of the entire legislation.  I would also like to provide the new Board an opportunity to review its existing practices and procedures to see if some of these issues can be addressed under the current legislation.

Once these internal discussions are completed, I will be making a decision on whether to initiate a broader review of the Act including the provisions dealing with the method for establishing compensation.