Improvements to Canadian Regulations for Oil Tankers and Pipelines

Following changes to railroad safety regulations in April, the Canadian government released back-to-back announcements of changes governing oil tankers (on May 13) and pipelines (on May 14). Regarding spills from oil tankers, the new regulations will increase company liability from the current $161 million per incident to $400 million per spill, and will also impose a levy on companies, with a total of $1.6 billion available to clean up an oil spill and provide compensation. (The government’s own expert panel had recommended that corporate liability be unlimited in its report, delivered December 2013.) See the government press release at: http://news.gc.ca/web/article-en.do?nid=847519 or the CBC report at: http://www.cbc.ca/news/politics/new-tanker-spill-rules-raise-liability-for-companies-1.2641217.

The changes to pipeline safety announced on May 14 include the introduction of “absolute liability” for all National Energy Board (NEB)-regulated pipelines, making companies liable for costs and damages irrespective of fault, up to the limit of $1 billion for major oil pipelines; companies continue to have unlimited liability when at fault or negligent. The powers of the National Energy Board are expanded to give the NEB authority to order reimbursement of any cleanup costs incurred by governments, communities or individuals, and to take control of any clean-up operations if the company is unable or unwilling to do so. The regulations also call for developing a strategy with industry and First Nations communities to increase First Nations’ participation in pipeline safety operations. See the government press release and backgrounder at: http://news.gc.ca/web/article-en.do?nid=848059.

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