• Bill C-22 — The Energy Safety and Security Act (the "ESSA")
  • January 8, 2016 | Authors: Dionysios Rossi; Graham Walker
  • Law Firm: Borden Ladner Gervais LLP - Vancouver Office
  • The ESSA, which relates to Canada's offshore regime for oil and gas exploration and operations in the North and Atlantic regions, received Royal Assent in early 2015. The majority of the provisions affecting the off-shore oil and gas industry will come into force on or before February 26, 2016. The ESSA includes the following legislative changes:
    • Amendments to the Canada Oil and Gas Operations Act, RSC 1985, c O-7 and the Canada Petroleum Resources Act, RSC 1985, c 36 (2nd Supp) to provide the National Energy Board with new tools to regulate oil and gas activities in the North;
    • Amendments to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, SC 1988, c 28 and the Canada-Newfoundland Atlantic Accord Implementation Act, SC 1987, c 3; and
    • The Nuclear Liability Act, RSC 1985, c N-28 is replaced by the new Nuclear Liability and Compensation Act, SC 2015, c 4, s 120 to implement the International Convention on Supplementary Compensation for Nuclear Damage and increase the absolute liability limit of operators in the nuclear context from $75 million to $1 billion.
    Specifically, the amendments revise the civil liability regime for the oil and gas industry by incorporating the "polluter pay" principle, increasing the limits of liability in the Atlantic offshore and Arctic areas to $1 billion, and requiring proof of financial resources to cover claims when applying for permits to drill, develop or produce offshore oil or gas. The amendments will identify Offshore Boards as "responsible authorities" under the Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52, and grant them the authority to levy administrative and monetary penalties for contraventions of the regulations.

    To improve spill response, regulators will have "direct and unfettered access" to $100 million in funds per project to help compensate affected parties and can authorize the use of chemical dispersants or other spill-treating agents as part of a spill response strategy. The ESSA also establishes a basis for governments to seek environmental damages to compensate for damage to species, coastlines or other public resources.

    The ESSA will not apply on Canada's west coast due to the federal moratorium on oil and gas activity on offshore British Columbia. An unofficial ban on offshore oil and gas exploration in this region dates back to 1972, when the Government of Canada issued Orders in Council suspending the rights under existing permits for offshore oil and gas exploration and made a policy decision to decline to renegotiate the exploration permits as required by subsequent legislative developments.