Canada: Canada’s New Nuclear Liability And Compensation Regime Under Review By Senate Committee

Bill C-22, An Act respecting Canada's offshore oil and gas operations, enacting the Nuclear Liability and Compensation Act, repealing the Nuclear Liability Act and making consequential amendments to other Acts (the "Bill") was first introduced in the House of Commons on January 30 2014 and was referred to the Standing Senate Committee on Energy, the Environment and Natural Resources for study on December 4, 2014.

The Bill is organized into two parts : Part 1 relates to Canada's offshore oil and gas regime, and Part 2 proposes to replace the existing nuclear liability regime under the Nuclear Liability Act (Canada) with a new Nuclear Liability and Compensation Act (the "Act").

The Act is the government's sixth attempt to bolster Canada's forty year old regime of civil liability for nuclear incidents, after Private Bill C-415, Bill C-63, Bill C-5, Bill C-20 and Bill C-15 failed to be passed. The current regime, which was adopted in 1976, is outdated and is out of line with international standards, especially with respect to the $75 million liability cap that is lower than in most jurisdictions.

The Act follows through on the government's objective to establish a strengthened compensation and civil liability regime to address damages resulting from a nuclear accident and to reflect the provisions of the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage.

Key measures proposed by the Act include the following:

  • Geographical Extent of Liability : If a nuclear incident occurs, the operator is liable for damage caused within (i) Canada or its exclusive economic zone, (ii) a State other than Canada that has ratified, accepted or approved the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage or such State's exclusive economic zone, or (iii) a country that has implemented an arrangement with Canada relating to compensation for injury or damage resulting from nuclear material.
  • Preservation of Principle of Absolute Liability : As with the existing regime, subject to certain exceptions, the operator's liability for damage caused by a nuclear incident is absolute. Therefore no proof of tort (or fault within the meaning of the Civil Code of Québec) is required. This principle applies even if a nuclear incident is caused by "terrorist activity" (as defined in the Criminal Code).
  • Preservation of Principle of Exclusive Liability : As with the existing regime, no person other than an operator is liable for damage that is caused by a nuclear incident. Consequently, in respect of damage that is caused by a nuclear incident, an operator has no right of recourse against any person other than an individual who intentionally caused the nuclear incident by an act or omission. If two or more operators are liable, each is jointly and severally (or solidarily within the meaning of the Civil Code of Québec), liable to the extent that it cannot reasonably be determined what portion of the liability is attributable to each operator.
  • Exclusion of Other Sources of Liability : An operator is not liable for any resulting damage other than that provided for under the Act.
  • Compensable Damage : Unlike the existing regime, the Act provides for specific compensable damages, including bodily injury or death and damage to property, psychological trauma suffered by a person if it results from bodily injury to that person, economic loss incurred by a person as a result of bodily injury, damage to property, or psychological trauma resulting from bodily injury, costs incurred by a person who loses the use of property and the resulting wage loss by that person's employees, and reasonable costs of remedial measures taken to repair, reduce or mitigate environmental damage.
  • Increase of Liability Cap : Whereas the existing regime limits an operator's liability for damage resulting from a nuclear incident to $75 million, the Act provides for a progressive increase in the operator's liability as follows:
    • $650 million if the nuclear incident arises within one year after the Act comes into force;
    • $750 million if the nuclear incident arises during the second year after the Act comes into force;
    • $850 million if the nuclear incident arises during the third year after the Act comes into force; and
    • $1 billion if the nuclear incident arises after the third year after the Act comes into force.
  • Preservation of Financial Security : An operator must maintain, for each of the operator's nuclear installations, financial security to compensate persons who suffer damage that is caused by a nuclear incident, in an amount that is equal to the applicable liability cap. The financial security is to be in the form of an insurance policy with an approved insurer.
  • Limitation Period : As with the existing regime, an action or claim must be brought within three years. While the Governor in Council (executive branch of government in Canada) may extend this limitation period by regulation, no action or claim is to be brought (i) in relation to bodily injury or death, 30 years after the day on which the nuclear incident to which the action or claim relates occurred, and (ii) in any other case, 10 years after the day on which the nuclear incident to which the action or claim relates occurred.
  • Jurisdiction : While an action involving damage that is caused by a nuclear incident must be brought in the court in Canada that has jurisdiction in the place where the incident occurs, the Governor in Council may declare that claims in respect of a nuclear incident are to be dealt with by a nuclear claims tribunal, if he or she believes that it is in the public interest to do so, having regard to the extent and the estimated cost of the damage and the advantages of having the claims dealt with by an administrative tribunal.

The latest version of the Bill (as passed by the House of Commons) is available here.

To view the original article please click here.

After the Standing Senate Committee on Energy, the Environment and Natural Resources studies the Bill, it will report back to the Senate. We will continue to monitor the progress of the Bill.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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