New Democrats oppose bill increasing liability limits for nuclear, offshore energy sectors

Canada’s opposition New Democratic Party will not support Bill C-22, in which the ruling Conservatives propose to increase the absolute liability limits, in the offshore oil and gas sectors, as well as for nuclear sector, to $1 billion.

The Energy Safety and Security Act, if passed into law, would make $1 billion the limit of liability, “without proof of fault or negligence,” to which certain offshore energy producers would be “subject in the event of a spill or damages caused by debris.”

For nuclear operators, Bill C-22 would “increase the amount of compensation available to address civil damage from $75 million to $1 billion,” Natural Resources Minister Greg Rickford told the House of Commons Sept. 15. That was when Rickford tabled Bill C-22 for third reading. The Liberals said they would support it, the NDP said they would not and it has yet to be put to a recorded vote because the Commons ran out of time.

“The proposed legislation maintains the key principle of absolute and exclusive liability for operators of nuclear facilities for injury and damage,” under the existing Nuclear Liability Act, Rickford said. “This means that the liability of the operator will be unqualified and undivided. There will be no need to prove fault, and no one else will be held liable.”

But the proposed law “does not include the polluter pay principle on the nuclear liability side,” said Jack Harris, NDP MP for St. John’s East, Newfoundland.

“We have asked to see the polluter pay principle in both aspects of this bill,” Harris added. “In the oil and gas section there is a $1 billion absolute liability, whether the operator is at fault or not, and in the case of fault on the part of an operator in the oil and gas industry, there is an unlimited liability. They have to find the resources or insure against the resources up to whatever the cost of the damage is.”

For nuclear operators, Bill C-22 would “broaden the definition of compensable damage to include physical injury, economic loss, preventative measures, and environmental damage,” Rickford said. “It will also extend the limitation period for submitting compensation claims for bodily injury from 10 years to 30 years. This will help address any latent illnesses that may only be detected years later, after an accident.”

Where negligence on the part of a nuclear or offshore oil or gas operator is proven, liability for an accident is unlimited, noted Geoff Regan, MP for Halifax West and vice-chair of the Standing Committee on Natural Resources.

“The operator would have to pay for the entirety of the damages, whatever they might be,” Regan said in the Commons. The $1-billion limit applies “where negligence is not proven and the liability is absolute. This means that regardless of whether someone proves that the operator was negligent, it still has to pay, because the operator was undertaking this risky activity.”

The bill was the subject of hearings last June before the before the House of Commons Natural Resources committee. Jeff Labonté, director general for energy safety and security at Natural Resources Canada, told the committee that Bill C-22, if passed into law, would “substantially change the premiums in the insurance market for the operators.”

In Canada, four nuclear power plants are generating electricity. A fifth – Hydro Quebec’s Gentilly station on the St. Lawrence River southeast of Trois Rivieres – was shut down in December, 2012. In New Brunswick, NB Power operates the Point Lepreau plant, about 50 kilometres west of Saint John. The other three stations are in Ontario. Pickering is on Lake Ontario about five kilometres east of the Toronto city limits. Darlington is about 35 kilometres east of Pickering and Bruce, on Lake Huron, is about 50 kilometres north of Goderich. 

“The bill proposes to increase absolute liability to $1 billion over a period of three years in several steps,” Jeff Labonté told the natural resources committee in June. “It requires that operators have a commensurate amount of insurance or fiscal security that demonstrates they are able to handle the $1 billion worth of absolute liability. It also provides that the government will provide coverage where there is no insurance, and there are several instances where we might find that in this part of our economic sector.”

Liability and first-party property insurance is provided by the Nuclear Insurance Association of Canada (NIAC), a non-profit association of insurers.

“The number of operators is small and the community of insurers is small and has to be approved,” Labonté said during committee hearings in June. “Under the bill the Minister of Natural Resources has to approve an insurance policy to make sure it’s consistent with the act.”

The Canadian Nuclear Association is asking the federal government to “increase the number of eligible insurers,” CNA president and CEO John Barrett told the committee in June.

“It is my understanding that under the previous act and the limits there, the pool of insurers – the Nuclear Insurance Association of Canada – was able to handle the requirements, and the premiums were paid on that basis,” Barrett said during the hearings. “As it goes up to $1 billion, the view of industry is that, as in any market, a little more competition might help.”