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Canadian spill liability and compensation protects taxpayers, says Transport Canada

Published by , Senior Editor
World Pipelines,

Canadian taxpayers are protected from the cleanup and compensation costs associated with oil spills according to a recent statement by Transport Canada.

The federal transportation agency detailed land-based and marine-based compensation regimes that are either in place or pending, in a response to British Columbia’s call for comment on its proposed policy to expand provincial spill management jurisdiction.

“Canada has world-leading regimes for prevention, preparedness and response, and liability and compensation for the transportation of petroleum and other products, as well as clear jurisdiction for interprovincial pipelines, and rail and marine transportation,” Transport Canada stated in its response to B.C.’s call for comment. “The current railway, marine, and pipeline regimes are robust and continue to be advanced and improved and include comprehensive liability and compensation systems to minimize impacts on Canadians, ensure they are protected from costs and damages, and that the environment is protected.” 

Below are some key statements from Transport Canada’s response.

Land-based compensation

Canada now has one of the most rigourous and effective pipeline safety systems in the world. Pipelines are the safest means of transporting all oil types, including conventional and non-conventional.

The (federal) Pipeline Safety Act enshrines the ‘polluter pays’ principle in law so that polluters, not Canadian taxpayers, are financially responsible for the costs and damages they cause. Companies are responsible for all actual losses or damages incurred by any person; costs incurred by government (federal or provincial) or any Indigenous governing body; as well as costs associated with the loss of non-use values which consists of public resources such as a national park or eco-system.

In an exceptional circumstance where a company is unable or unwilling to respond to an incident, the National Energy Board would have the authority to take over control if the Governor in Council (the Prime Minister and the Cabinet) agrees. Any costs would be 100% cost-recovered from industry.

Marine compensation

The Government of Canada is accountable to Canadians to ensure that the public interest is being protected in the event of a marine pollution incident. Canada’s ship-source oil spill prevention, preparedness, response, and liability and compensation regime is already well established.

The ship-source oil spill preparedness and response regime is based on the “polluter pays” principle, whereby the polluter is responsible for costs related to cleanup and pollution damage.

The total amount of compensation available for a tanker spill in Canada is approximately CAN$1.5 billion for a single incident (inclusive of the ship-owner’s liability and the current per-incident limit of liability of the Ship-Source Oil Pollution Fund).

Under the Oceans Protection Plan, the Government of Canada is making major improvements to the Ship-Source Oil Pollution Fund to ensure unlimited industry funded compensation is made available to those affected by ship-source spills.

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