Canada’s liability and compensation regime for oil spills is based on the “polluter pays” principle, which means that the polluter is always responsible for paying for the cost of an oil spill clean up, including third party damages. This means that if a ship causes a spill, its owner is liable for losses and damages under federal legislation.
Furthermore, in accordance with international conventions, ship owners are subject to compulsory insurance to an amount which is linked to the tonnage of their vessel. If the amount of damages exceeds the shipowner’s liability, international and domestic funds provide additional compensation to a total amount of approximately $1.36 billion.
The Government of Canada is committed to reviewing Canada’s liability and compensation regime and is taking further action to ensure that it has a world-class tanker safety system for shipping resources safely through Canada’s waterways before any major new energy export infrastructure becomes operational.
The government will undertake a comprehensive review of the oil pollution liability and compensation regime associated with marine transportation spills, based on a risk assessment. The review will include examining the adequacy of the compensation available in the event of a spill and the relevant legislation will be updated to ensure a comprehensive oversight system that places the cost of paying for pollution with the polluter, not Canadian taxpayers.
This review, to be completed in fall 2013, will guide the Government of Canada as it modernizes the Ship-Source Oil Pollution Fund, examining its overall application and use.
The concepts of polluter pays, international uniformity and shared liability between ship owners and cargo owners are cornerstones of the current liability and compensation regime, and will continue to be integral to it in the future. The review will ensure that those principles are applied in a way that protects Canadians and is consistent with current realities and that Canada continues to be a leader in this area.
March 2013
