On February 26, 2015, the federal Nuclear Liability and
Compensation Act under Bill C-22 received Royal Assent. Once
in force, it will replace Canada's outdated liability regime
for damage from nuclear incidents.
The substance of the new legislation generally mirrors four
previous bills that the government has introduced since 2007 to
replace the 1976 Nuclear Liability Act. However, each of
those bills died on the order paper.
Increase the maximum compensation payable by the operator of a
nuclear facility to third parties on an absolute liability basis
(i.e., payable regardless of negligence or fault) to $650
million, from $75 million, as soon as the new legislation comes
into force. This principle of absolute liability applies even if a
nuclear incident is caused by a "terrorist activity", as
defined in the CriminalCode.
This absolute liability limit will progressively increase to
$750 million one year after the new legislation comes into force,
to $850 million after two years and finally to $1 billion after
three years. The government will then review these limits at least
every five years.
Operators will be required to maintain insurance (or
alternative financial security) for this full liability limit.
The new legislation will harmonize Canada's nuclear
liability regime with the global liability regime contemplated in
the International Atomic Energy Agency's Convention on
Supplementary Compensation for Nuclear Damage, which is to
come into force in April 2015. Canada signed that treaty in 2013,
and enacting the new legislation will permit Canada to ratify the
treaty, under which a country must ensure that minimum compensation
is available for damage that a domestic nuclear incident causes
outside that country. Once ratified, Canada can establish a
relationship for civil nuclear liability with the United States
(which is already a party to the treaty) to limit responsibility
for damages in the other country. The Nuclear Liability and
Compensation Act will come into force by order of the Governor
Part 1 of Bill C-22 amends the liability regime for offshore oil
and gas. Although liability for damage resulting from fault or
negligence is unlimited, offshore oil and gas operators currently
have absolute liability for $30 million in the Atlantic offshore
areas and $40 million in the Arctic. Once Part 1 is in force (for
the majority of this part, on or before February 26, 2016), the
absolute liability for both areas will increase to $1 billion.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).