Canada is endowed with significant oil and natural gas resources, and is globally ranked third in crude oil reserves (proven 168.9 billion barrels) and eighteenth in natural gas reserves (1.9 trillion cubic metres).2 Today, Canada is a leading producer and exporter, ranking as the world's fourth-largest producer of natural gas and fifth-largest for oil.3 Canadians are among the most skilled people in the world at extracting, processing and transporting conventional and unconventional hydrocarbons, using the world's most advanced technology.
The Canadian oil and gas industry got its start in the 1850s in Enniskillen Township in the province of Ontario where early entrepreneurs exploited the oil springs and asphalt beds visible on the surface of swampy 'gum beds'. That oil was produced, transported, refined and sold as lamp oil and other products. With the adoption of innovations like the cable-tool drilling rig, which allowed drillers to access vast quantities of crude oil, the oil boom took hold in the United States and spawned a burst of activity in Southwestern Ontario in the late 19th century. While the oil potential of Ontario was limited, drillers gained valuable knowledge – knowledge they took with them to the prolific oil and gas fields of Western Canada and offshore Eastern Canada.
The dawning of the oil and natural gas industry in Western Canada began accidentally in 1866. Drilling for water near Medicine Hat, Alberta, a Canadian Pacific Railway crew encountered natural gas. Additional wells were drilled and more gas was discovered. Further natural gas discoveries were made in southern Alberta in the early 1900s. Thereafter pipeline construction began in order to move gas to larger population centres.
Oil was discovered in significant quantities in 1914 at Turner Valley, Alberta; in 1920, at Norman Wells in the North West Territories; and at Wainwright, Alberta in 1923. Not until 13 February 1947, however, did Canada emerge as an oil-rich nation. After 133 unsuccessful wells and years of frustration, Imperial Oil struck a prolific oil reservoir with its Leduc No. 1 Well. This was the turning point in Canada's oil history and led to a number of significant exploration successes in both oil and natural gas from the 1950s to the 1970s. These developments in the Western Canadian sedimentary basin brought substantial economic growth not just to Alberta but across Canada.
On the back of geoscience, engineering and technology (and a lot of trial and error), the industry matured. Geophysics became a critically important aspect of improving success rates, finding new pools and exploiting complicated geological structures. During the latter decades of the 20th century, the industry turned its attention to exploring the frontier areas of Northern Canada and offshore the west and east coasts, successfully drilling wells in the McKenzie Delta in the north and offshore the Maritime provinces. While the great potential of Alberta's oil sands was well known, it was not until the latter part of the century that modern attempts at mining took hold with modest commercial production beginning in the late 1960s. Concurrent with improved oil sands production economics, a number of federal and provincial changes to the tax and royalty regimes spurred significant development and investment in the 1990s and the first decade of the 2000s. With it came international recognition of the oil sands as one of the largest oil resources in the world.
The current decade has seen the emergence of shale and tight sands hydrocarbon opportunities in North America on a commercial scale, including Canada's Montney and Duvernay plays. The magnitude of these plays has had a dramatic impact on crude oil prices, regional natural gas prices and supply and demand trends. As domestic production in the United States displaces traditional suppliers of oil and natural gas to its economy, the immediate future has Canada and other producing countries in a race to find new markets around the world.
II LEGAL AND REGULATORY FRAMEWORK
Canada is a constitutional monarchy with a parliamentary democracy system of government. Power is divided between the federal government and the governments of the 10 provinces and three territories. Most of Canada's private legal system (contracts, transactions, etc.) is based on the English common law and legal precedents. In the province of Quebec, a Civil Code governs such matters. The provinces have jurisdiction over local matters including the exploitation of natural resources, including oil and gas, while the federal government is responsible for national and international matters, such as pipelines that cross provincial and international borders and the import and export of energy commodities.
i Domestic oil and gas legislation
The Constitution Act provides the federal and provincial governments with exclusive legislative control over an enumerated list of subjects. The power to regulate natural resources for example, generally falls under provincial jurisdiction, whereas the regulation of interprovincial or international pipelines and aboriginal affairs falls to the federal government. Legislative authority over environmental matters, however, is not expressly allocated to either government and is an area of shared responsibility.
The National Energy Board (NEB) is the primary federal energy regulator and is governed by the National Energy Board Act. The NEB is responsible for, among other things, regulating: (1) pipelines that cross international or provincial boundaries; (2) energy imports and exports; and (3) offshore energy activities. The federal government is also responsible for regulating certain environmental activities under the Canadian Environmental Assessment Act, as well as aboriginal interests and the issuance of leases in respect of aboriginal rights through the Indian Act and the Indian Oil and Gas Act.
With regard to provincial regulation of natural resources in the western provinces, set forth below are the main regulatory bodies responsible for administering and overseeing oil and gas production and environmental regulation, as well as the primary legislation applicable thereto.
|British Columbia||Oil and Gas Commission
Environmental Assessment Office
|Oil and Gas Activities Act
Petroleum and Natural Gas Act
Environmental Assessment Act
|Alberta||Ministry of Energyr
Alberta Energy Regulatorr
|Mines and Minerals Act
Oil and Gas Conservation Act
Surface Rights Act
Oil Sands Conservation Act
Environmental Protection and Enhancement Act
|Saskatchewan||Ministry of the Economy||Oil and Gas Conservation Act
Crown Minerals Act
Mineral Resources Act
Environmental Assessment Act
Environmental Management and Protection Act
|Manitoba||Ministry of Innovation, Energy and Mines of Manitoba (Petroleum Branch)||Oil and Gas Act
Oil and Gas Production Tax Act
Surface Rights Act
With regard to provincial regulation of natural resources on the east coast, offshore oil and gas activities in the Atlantic are jointly regulated by the federal government and the provincial governments of Nova Scotia and Newfoundland through the Offshore Petroleum Boards. Activities in northern Canada (Northwest Territories and Nunavut) are under the authority of the NEB, the federal Departments of Fisheries and Natural Resources, and the Department of Aboriginal Affairs and Northern Development.
Canada is a member or signatory to several major trade and investment protection agreements, including the World Trade Organization, the North American Free Trade Agreement (NAFTA), the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership. Several of these agreements may be subject to significant change in the near future, in particular, NAFTA, which is being renegotiated between Canada, the United States and Mexico. CETA was finalised in February 2016 and approved by the European Parliament in February 2017. The Canadian bill to implement CETA received royal assent in May 2017, came into force provisionally on 21 September 2017 and will come into force fully and definitively upon ratification by all EU Member States.
Canada has bilateral free trade agreements with the following countries: Chile, Colombia, Costa Rica, Honduras, Israel, Jordan, Panama, Peru, South Korea and the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland).
All Canadian jurisdictions have implemented legislation permitting the enforcement of international arbitration awards domestically. Moreover, each province and territory has enacted its own legislation that generally adopts the UNCITRAL model law and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Owing to Canada's federal system, provinces have primary jurisdiction over arbitration and enforcement of awards. However, arbitration concerning matters of federal jurisdiction and involving the federal government, a departmental corporation or a crown corporation as a party are subject to the federal Commercial Arbitration Act.
Canada has also ratified the World Bank Group's Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID). The ICSID provides a neutral forum and framework for foreign investors and the Canadian government to arbitrate disputes brought under investment treaties.
i Ownership of mineral rights
In order to produce oil and gas in Canada, a party must own the rights to the minerals or be in possession of a lease obtained from the mineral rights owner. Generally, mineral rights in Canada can be owned in one of three ways: (1) by the provincial and federal governments (Crown rights); (2) by First Nations groups (Aboriginal rights); or (3) by individuals or corporations (freehold rights). The owner of freehold rights is said to hold a fee simple interest; the closest to absolute ownership of a mineral interest that an individual or company can obtain in Canada. Accordingly, the freehold owner may sell, lease or encumber the mineral interest as it sees fit, subject only to restrictions applied by the government for the greater good of the municipality, province or country.
ii Ownership of surface rights
The property rights to minerals and to the surface of the land under which minerals are situated are separate, and therefore, obtaining a right to extract minerals does not grant a right to occupy the land. In order to occupy the lands to conduct exploration and production activities, a party must either own the surface rights or have obtained a surface lease from the surface rights owner (which owner is not necessarily the same as the mineral rights owner). Surface leases for Crown rights can be obtained from the applicable provincial regulator or department. Surface leases for freehold lands can be obtained through negotiation with the landowner. If, however, negotiations with a landowner are unsuccessful, an order can be obtained from the provincial regulator to force the surface rights owner to provide access to the lands.
iii Acquiring freehold rights
To extract minerals from freehold lands, a party must own the freehold rights or obtain a lease from the freehold owner. Freehold leases acquired from the freehold owner through negotiation create a contractual relationship between the owner in possession of the mineral rights (the lessor) and the party contracting to exploit those rights (the lessee). In general, a freehold lease grants a lessee the rights to extract minerals in exchange for a royalty on the produced substances. A freehold lease has two terms: the primary term and the extended term. Subject to certain exceptions, a lease will survive and continue past the primary term and into the extended term only if production has been obtained. During the extended term, a lease will typically terminate if production or production operations on the lands cease.
iv Acquiring Crown rights
To extract minerals from Crown lands, a party must obtain a lease or licence from the provincial government through an auction process, or acquire an existing lease. Auctions are generally held at regular intervals with the location of the offered interests being requested by a prospective lessee or selected by the ministry in charge of the auction. Typically, a sales notice will be issued by the province and a lease or licence awarded to the highest bidder. Short-term licences are granted for a defined term for exploratory operations, whereas leases with indefinite terms are granted for production operations. Typically, licences are initially issued and converted into leases if production is obtained. If a licence is not converted into a lease, or if production stops during the term of a lease, the mineral rights revert to the Crown.
IV PRODUCTION RESTRICTIONS
Although there are restrictions regarding the type or extent of oil and gas activities that can be undertaken, generally there are no explicit statutory or common law restrictions on production in Canada. Restrictions on activities, such as the use of spacing units to limit the number of wells within a specific geographic area, are aimed at ensuring the orderly and efficient development of oil and gas rights.
Potential exporters of oil and gas are required to obtain export licences from the NEB. When reviewing an application for an export licence, the NEB will consider foreseeable energy requirements in Canada.
V ASSIGNMENTS OF INTERESTS
Subject to certain restrictions on fractional ownership, interests in freehold minerals can be transferred in accordance with the applicable provincial legislation. Interests in Crown licences or leases can also be assigned, in whole or in part, to a registered corporation or an individual over the age of 18. The forms to be submitted and associated fees required to effect both types of transfers vary by province.
i The Income Tax Act and taxable income
Corporate income taxes are imposed at the federal and provincial or territorial level. Federal income tax is levied on the worldwide income of every Canadian resident, subject to applicable income tax conventions. There are three categories of income that residents and non-residents are taxed on: business, employment and capital gains on disposition of certain types of Canadian property. The combined federal and provincial income tax rate imposed on corporations varies depending on the nature, size and location of the business as well as other factors. Tax credits and other incentives are available to reduce effective tax rates. Non-residents that earn passive income in Canada (such as dividends and royalty fees) are subject to a 25 per cent withholding tax.
ii Branch v. subsidiary
A subsidiary is a corporation that is resident in Canada and subject to Canadian federal and provincial taxation. Conducting Canadian operations as a subsidiary carries a number of consequences. For example, transactions between related companies, even the parent, must be effected at fair market value for tax purposes. A benefit of conducting Canadian operations as a subsidiary is that the parent is shielded from most Canadian liabilities because the parent and subsidiary are considered distinct legal entities.
A branch is a business carried on by a non-resident corporation in Canada. A non-resident corporation must pay Canadian tax on income earned in Canada. However, Canadian tax treaties typically limit tax to income attributable to a permanent establishment in Canada (i.e., a fixed place of a business). A branch is typically subject to a branch tax of 5 per cent to 15 per cent. If the non-resident corporation pays taxes on its Canadian source income, the home jurisdiction typically offers tax credits for taxes paid in Canada. Branches are considered to be an efficient way to initiate operations in Canada because start-up losses may be deductible against the non-resident corporation's taxable home income. Once profitable, the branch may be transferred into an incorporated subsidiary without adverse Canadian tax consequences.
iii Resource pools
Canadian tax law provides certain incentives to deduct the cost of exploration, acquisitions and development of oil and gas reserves. Resource tax pools provide expedited deduction rates compared to deduction rates available for the depreciation of other capital property. The costs associated with exploration are deductible at a rate of 100 per cent per tax year. Development expenses are deductible at a rate of 30 per cent. Property expenses, including acquisition costs, are deductible at 10 per cent per year. Any unused deductions may be rolled-over into future tax years.
VII ENVIRONMENTAL IMPACT AND DECOMMISSIONING
The federal and provincial governments work together to regulate the environment through the implementation of legislation pertaining to the release of hazardous substances, the granting of emissions licences, the protection of fish and wildlife, and the remediation of contaminated sites. These acts and regulations also often contain provisions relating to offences such as the failure to obtain licences or permits, or unlawfully discharging pollutants, which offences can result in fines and potentially, although rarely, jail time.
ii Environmental assessments
An environmental assessment and a related approval is often required in advance of a project breaking ground and is generally a precondition to the issuance of ancillary licences and permits from the federal and provincial governments.
The main federal environmental legislation, the Canadian Environmental Assessment Act, regulates interference with fish, species at risk and migratory birds and provides the framework for the federal environmental assessment process as administered by the Canadian Environmental Assessment Agency. In addition, certain provincial environmental acts provide a separate environmental assessment framework; for example, the Environmental Assessment Act in British Columbia and the Environmental Protection and Enhancement Act in Alberta. Although shortened timelines can be expected for smaller projects, an assessment for a large project can take 24 to 36 months and often involve court-like hearings. Once a project has received substantive environmental approval the issuance of related and incidental permits generally follows relatively quickly.
A single project can trigger both federal and provincial environmental assessments. In order to manage this overlap, and to clarify the roles of the regulatory agencies involved, many provincial governments have entered into agreements with the federal government pertaining to joint environmental review processes. Where such is the case, the agencies work together to conduct a coordinated assessment, with one agency acting as the lead for the project.
iii Carbon taxes
The federal government intends to implement a national carbon tax to come into force in January 2019, setting a minimum surcharge on carbon-based fuels, in an effort to meet international commitments for the reduction of greenhouse gases. If implemented, the federal programme will impose a carbon tax on provinces without provincial carbon pricing programmes currently in force. The federal programme will be modelled after Alberta's Climate Leadership Act, which applies a carbon levy effective as of 1 January 2017 throughout the fuel supply chain, including at the point of purchase and import.
iv First Nations consultation and accommodation
Consultation with aboriginal groups is required for projects that may impact aboriginal rights and interests. While the duty to consult rests with the provincial and federal governments, many procedural aspects of this obligation can be delegated to the project proponents. The duty to consult does not strictly require a proponent to obtain consent from the affected aboriginal group. Rather, it requires a commitment to a meaningful process of consultation carried out in good faith. The scope of the duty is assessed on a case-by-case basis. There is no stand-alone duty to accommodate aboriginal groups. However, good faith consultation may reveal a duty on the Crown to accommodate aboriginal rights or interests. Both federal legislation and the common law with regard to First Nations consultation are evolving rapidly, and should be carefully considered for all oil and gas projects in Canada.
v Personal liability
Under provincial environmental legislation, corporate directors and officers may be held personally liable for the restoration of contaminated sites, particularly where they had managerial control over the pollutants or made decisions that resulted in contamination. Moreover, and in addition to certain fiduciary duties and standard of care requirements, provincial environmental legislation typically deems directors liable for corporate offences that they authorised or directed.
When oil and gas activities on a parcel of land end, the party holding the well licence is responsible for decommissioning and remediating the site. British Columbia, Alberta and Saskatchewan have all instituted Licensee Liability Rating (LLR) programmes to reduce the occurrence of 'orphaned' properties where the responsible party is financially unable to fund remediation. The LLR programmes calculate the deemed asset to liability ratio of each business with a well licence in the province. Depending on the resulting ratio, the provincial regulator may require security deposits to be paid to offset the possibility that a party will be unable to fund future remediation obligations. As concerns over orphan wells grow owing to the increased number of bankruptcy events affecting oil and gas producers in Canada, regulators have sought new ways to ensure reclamation costs are not borne by taxpayers. In particular, the Alberta Energy Regulator now requires buyers of oil and gas assets to achieve a post-transfer LLR of 2.0 (as opposed to the standard 1.0 requirement imposed on the sellers of the assets) or pay a security deposit in order for well and facility licenses applicable to the purchased assets to be transferred to the new owner. This requirement, although temporary, resulted in widespread uncertainty in the industry and buyers and sellers alike remain wary of changes to LLR programmes by provincial regulators.
VIII FOREIGN INVESTMENT CONSIDERATIONS
A business acquisition can generally be structured as either a purchase of shares or assets. Acquiring assets is often preferable to a buyer because the buyer only pays for the specific property it wants and does not acquire liabilities of the seller, such as pension obligations, debts or judgments. However, acquiring assets has downsides as well, for example, buyers do not receive the benefit of retained losses that may be deductible against future taxable income. In a share transaction, the buyer acquires and is exposed to both disclosed and undisclosed assets, rights and liabilities of the corporation such as employment contracts, accounts and tax obligations.
A corporation is the entity most often used to carry on business in Canada. A corporation is a legal entity separate from its owners. As a result, the property, rights and liabilities are those of the corporation, not the shareholders. Corporations may be created under both federal or provincial statutes. If the corporation's business will be in a sector of federal jurisdiction (e.g., banking), it must be formed under the federal statute.
United States businesses coming to Canada often use unlimited liability companies (ULCs) as a vehicle for their business activity in Canada to take advantage of favourable treatment afforded to ULCs as flow-through entities under United States tax law.
Unlike a corporation, a partnership is not a separate legal entity from its owners. It is a business organisation comprised of individuals or business entities that share in profit, losses and liabilities. Partnerships are often used to flow through losses to its partners to deduct against the partners income. A partner's exposure to liability may be minimised by forming a limited partnership, rather than a general partnership. In a limited partnership, a partner's liability is limited to the extent of its investment in the partnership, as long as it takes a passive role in the business and management of the partnership.
ii Capital, labour and content restrictions
Non-Canadian residents or citizens carrying on business-related activities for compensation in Canada generally require a work permit. There are, however, a number of exemptions to the work permit requirements. For example, multinationals can temporarily transfer management or executives for training to their Canadian locations. If Canadian employers are unable to fill positions with qualified Canadian citizens or residents, they may apply under the Temporary Foreign Worker Program (TFWP). However, the federal government implemented changes to the TFWP in 2014, making it more costly and difficult to hire foreign workers.
iii Foreign ownership of land
Pursuant to the federal Citizenship Act, non-residents may purchase, hold and dispose of real property in Canada as though they are residents of Canada. However, provinces have the right to restrict the acquisition of land by non-resident individuals as well as by corporations and associations controlled by non-residents. For example, in Alberta, the Agricultural and Recreational Land Ownership Act and the Foreign Ownership of Land Regulations restrict non-Canadians from buying significant amounts of agricultural and recreational lands. A withholding tax is also applied to the sale of Canadian land by a non-Canadian, unless the land is considered to be protected property under a treaty between Canada and the seller's resident country.
iv Investment Canada Act
The Investment Canada Act (ICA) is the only federal foreign-investment law of general application. Whether a foreign investor establishes a Canadian operation through an acquisition or by starting a new Canadian business, the investment may be subject to notification, filing, review and approval requirements under the ICA.
Investments to form a new Canadian business and acquisitions of control of existing businesses that do not exceed applicable thresholds are subject to notification requirements, namely the filing of an information form before or shortly after closing of the transaction. Investments that exceed applicable thresholds are subject to review, which requires the filing of more detailed information concerning the target business and the investor's intentions. In general, the review process takes 45 days and focuses on whether the proposed transaction 'is likely to be of net benefit to Canada'.
Where a proposed acquirer of a Canadian business is an enterprise controlled directly or indirectly by a foreign government, certain guidelines are applied. The guidelines reflect concerns regarding the 'governance and commercial orientation' of state-owned enterprises. The guidelines permit the Minister to examine whether the corporate governance and reporting structure of the enterprise adhere to Canadian principles of corporate governance such as transparency, independence of the board of directors and independent audit committees. Although state-owned enterprises have been afforded control of Canadian oil and gas businesses in the past, in 2012 changes to Canada's policy for reviewing investments by state-owned enterprises were implemented. In particular, it was announced that the acquisition of control of a Canadian oil sands business by a foreign state-owned enterprise will be found to be of net benefit only in exceptional circumstances.
v Competition Act
The federal Competition Act contains non-criminal or administrative provisions that allow the Competition Tribunal to review certain business practices and issue orders to prevent anticompetitive practices in the marketplace. In general, if a proposed transaction exceeds the thresholds set forth in the Competition Act regarding the size of the parties (assets or sales exceeding C$400 million) or the size of the proposed transaction (exceeding C$92 million), the parties are required to notify the commissioner, supply information and obtain approval, prior to the completion of the transaction. In certain circumstances, the parties may be able to obtain an advanced ruling certificate, such as where the transaction raises minimal substantive law issues.
The Criminal Code of Canada (the Code) creates an offence for bribing private and government officials. The provisions capture all aspects of corruption, including the solicitation, offer, payment and receipt of a bribe. Consequently, both the payer and the official receiving the bribe can be prosecuted. Corporations may also be held responsible for offences under the Code, including corruption offences.
At common law, a corporation can be held criminally liable if the criminal act or omission was committed by an individual determined to be the 'directing mind and will' of the corporation.4 However, the Code creates statutory criminal liability for 'organisations'. Broadly speaking, an organisation may be found to be a party to an offence if a senior officer acting within his or her authority, with the intent to at least partially benefit the corporation, is a party to an offence. An organisation may also be liable if a senior officer directs a representative of the organisation to be a party to an offence or knowingly does not take all reasonable measures to prevent a representative of the organisation from being a party to an offence.
According to the federal Corruption of Foreign Public Officials Act (CFPOA), it is a criminal offence for any person to offer or pay a bribe to a foreign public official. The CFPOA prohibits Canadians from directly or indirectly offering, agreeing to give or giving a loan, reward, advantage or benefit of any kind to a foreign public official in order to obtain or retain an advantage in the course of business. In recent years, the Royal Canadian Mounted Police and the Crown have vigorously enforced the CFPOA. Although the CFPOA does not create an offence for foreign officials who receive bribes, the Code has been used to prosecute foreign officials who receive bribes while in Canada.
IX CURRENT DEVELOPMENTS
Over the past few years, the oil and gas industry in Canada has been in a period of upheaval due to the significant drop in the price of oil that first began in 2014. Although low oil and gas prices continued to wreak havoc on the revenues of Canadian oil and gas producers, and oil and gas prices are expected to remain volatile for the foreseeable future, there are signs that the industry is beginning to adapt to the new energy climate in Canada. In particular, by driving down costs and consolidating core assets, senior and integrated producers have made headway in the struggle to once again become profitable, and we may see junior or intermediate producers making a comeback in Canada as commodity prices stabilise and improve.
In 2017, deal activity in the Canadian oil patch has been driven in large part by an exodus of international players from the oil sands, while Canadian producers have expanded their position in those assets. In particular, domestic companies like Cenovus Energy Inc and Canadian Natural Resources Limited, which have proven to be profitable amid the price drop, have greatly increased their exposure to the Canadian oil sands market through blockbuster deals involving the purchase of oil sands assets from ConocoPhillips and Shell Canada Limited, respectively.
2017 also brought about significant developments in respect of the approval and construction of various pipeline projects across the country. While in late 2016, the federal government approved the Kinder Morgan Trans Mountain pipeline (which runs from Edmonton, Alberta to Burnaby, British Columbia) and Enbridge's Line 3 replacement pipeline (which runs from Hardisty, Alberta to Wisconsin in the United States), many pipeline projects, including the Trans Mountain project, have been hindered or complicated by ongoing regulatory uncertainty and acts of civil disobedience.
Despite these issues, the oil and gas industry remains a significant and important part of the Canadian economy. Moreover, the response of Canadian producers to the lower commodity prices of the past several years has set the stage to ensure that Canada remains a global force in the oil and gas industry, in particular as producers continue to embrace new technologies, improve efficiencies and reduce costs.
1 Cameron T. Hughes is a partner and Curtis Merry and Niki Gill are associates at McCarthy Tétrault LLP.
2 BP Statistical Review of World Energy, 67th ed (June 2018), online: https://www.bp.com/content/dam/bp/en/corporate/pdf/energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf.
4 Kent Roach, Criminal Law (3rd Ed.) (Irwin Law, 2004) at pages 200–201.