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Canada hiking offshore liability
The Canadian government plans to raise the price of cleaning up oil spills in the Arctic and East Coast offshore regions.
Natural Resources Minister Joe Oliver said legislation will be introduced this fall to set a liability cap of C$1 billion — up from the current C$30 million in Atlantic Canada and C$40 million in the Arctic.
“This means companies would bear up to C$1 billion of responsibility for spill cleanup costs and compensation for damages whether or not they are at fault,” he said.
Oliver said the intention is to align Canada’s penalties with those in the United States, United Kingdom, Norway and Denmark.
The changes will also see Nova Scotia and Newfoundland have so-called polluter-pays principles included in provincial legislation later this year.
Oliver said companies are currently responsible only for cleanup costs and damages with measurable economic value.
The changes will include so-called non-use value such as damage to the environment in liability calculations.
He said that will provide “an additional basis for government to pursue operators and to recoup financial compensation for damages to coastlines, habitats and species.”
Proof of financial ability required Oliver said companies will be required to prove to regulators that they have the financial ability to cover their liability.
Currently, the minimum required proof is between C$250 million and C$500 million.
Changes aimed at increasing transparency would permit the public release of emergency plans, safety plans and environmental effects monitoring reports through the Nova Scotia and Newfoundland offshore regulatory boards.
Nova Scotia Premier Darrell Dexter said the changes will ensure safer operation in his province’s offshore.
“With the great potential in our offshore comes some risk,” he said. “The changes announced today help reduce that risk and makes companies more accountable for their actions.”
A spokeswoman for the Atlantic Canada Chapter of the Sierra Club said the increase in liability still doesn’t go far enough, arguing there should be no cap when a spill is involved.
Pipeline requirement In a separate announcement, Oliver said the government will require companies operating major crude oil pipelines to have C$1 billion available to fund spill cleanups.
The threshold could consist of cash on hand, bonds or lines of credit and will be applied, following a 12-month transition period, to existing pipeline operators.
Oliver said the measures “are a major contribution” to the combined efforts of the federal and British Columbia governments to reinforce safety on Enbridge’s proposed Northern Gateway pipeline.
—Gary Park
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