Nova Scotia introduces law to increase liability for offshore spills up to $1B

HALIFAX – Nova Scotia is moving to align itself with changes announced by Ottawa that would see offshore drilling and production companies face a liability of up to $1 billion for the costs of cleaning up spills and compensation when they are not at fault.

The proposed amendments to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act mirror changes announced by the federal government in June 2013, Energy Minister Andrew Younger said Tuesday.

Younger said the changes would raise the liability cap when companies aren’t at fault from the current $30 million, while still upholding the so-called polluter pays principle.

“This means that if operators pollute our waters, no matter what the cost, they are responsible for the cleanup,” said Younger. “Liability for fault remains unlimited.”

Younger said the changes would make the energy sector more accountable in the event of offshore spills.

The legislation would also raise the minimum financial capacity a company must demonstrate in order to prove it has the resources to prevent or respond to a potential spill from $250 million to $1 billion.

As well, it would raise the financial deposit that is required before approval is given for drilling by the Canada-Nova Scotia Offshore Petroleum Board from $30 million to $100 million, while companies would be allowed to pool their resources as an alternative in a $250-million industry fund.

Other changes would allow public access to emergency response and environmental plans, and other documents filed with the offshore regulator, while the offshore boards would also be given the authority to levy fines.

Those fines would range from up to $25,000 a day for an individual and up to $100,000 a day for a company under yet-to-be determined regulations.

Younger said the legislation would take effect once it has been passed by both Nova Scotia and Ottawa. He said the federal bill is currently before the Senate.

Younger said Nova Scotia’s intent is to pass the legislation this fall.

“We don’t have an exact timeline but I would hope early in the new year it would be proclaimed,” Younger said.

When the federal government initially announced the changes it said the goal was to align Canada’s rules with countries such as Norway, Denmark, the United States and the United Kingdom.

Note to readers: This is a corrected story. A previous version said the liability would be up to $1 billion whether or not companies are at fault.