• Key Legislative Updates
  • March 12, 2015 | Authors: Dionysios Rossi; Graham Walker
  • Law Firm: Borden Ladner Gervais LLP - Vancouver Office
  • Bill C-22

    Bill C-22, the Energy Safety and Security Act, modifies the civil liability regimes in the offshore oil and gas and nuclear energy industries. Bill C-22 brings about a number of notable changes to offshore legislation including explicitly adding the “polluter pays” principle, and raising the financial capacity requirements for drilling, production and development to $1 billion. Furthermore, the amendments proposed by the bill would increase absolute liability for oil and gas companies operating in the Atlantic offshore from $30 million to $1 billion and in the Arctic from $40 million to $1 billion. In an effort to efficiently and effectively address problems, Bill C-22 provides regulators access to funds for each project to assist with managing any issues that may arise. Lastly, spill treating agents, including chemical dispersants, are permitted under the bill, when the agents would achieve a net environmental benefit.

    The House of Commons debated Bill C-22 at Third Reading on September 15th, 2014, and November 7th, 2014. During the debates, the NDP criticized the bill for failing to uphold the “polluter pays” principle in the nuclear part of the bill, as well as failing to create an inclusive consultation process for projects. Further- more, the NDP noted that the bill would reduce the minister’s accountability by permitting the minister to be subject to lobbying.

    Nevertheless, Bill C-22 passed Third Reading in the House of Commons and was transferred to the Sen- ate. After completing First Reading on November 18th, 2014, Bill C-22 is currently undergoing debates at Second Reading in the Senate.

    Bill C-3

    Bill C-3 is a comprehensive bill, entitled Safeguarding Canada’s Seas and Skies Act, that seeks to amend various legislation related to both maritime and aviation law. Part 4 of Bill C-3 modifies the Marine Liability Act (the “MLA”) and makes Canada a State Party to the 2010 HNS Convention. A number of notable amend- ments to the MLA proposed by Bill C-3 are highlighted below:
    • The Admiralty Court is given jurisdiction for dis- putes regarding compensation by a ship owner for HNS damage under the HNS convention;
    • All ships are required to hold a certificate con- firming insurance for pollution caused by a HNS incident;
    • The HNS Fund created by the 2010 HNS Conven- tion is given the status of a natural person and the Administrator is appointed representative of the HNS Fund in Canada; and
    • The Ship-source Oil Pollution Fund assumes li- ability for damage caused by a ship-source oil spill, and will provide compensation for damages caused by oil pollution from a ship owner under the 2010 HNS Convention.
    Part 5 of Bill C-3 amends the Canada Shipping Act (the “CSA”). Noteworthy amendments to the CSA provided by Bill C-3 are summarized below:
    • Marine safety inspectors are given authority to carry out inspections regarding pollution preven- tion;
    • Operators of oil handling facilities are required to submit to the Minister oil pollution prevention and emergency plans that satisfy the requirements of the regulations;
    • Minister is given authority to direct oil handling fa- cilities to update their oil spill prevention or emer- gency plans and take measures to remedy, mini- mize or prevent pollution damage; and
    • Justices of the peace are given authority to issue warrants for marine safety inspectors to legally enter living quarters after consideration is given to how necessary the entrance is and whether entry is likely to be refused.
    Bill C-3 completed Second Reading in the Senate on October 8th, 2014, and has been passed to the Standing Senate Committee on Transport and Communications for their report. During Second Reading debates, it was noted that despite the bill’s various positive attributes, it does fail to address issues such as the capacity of spill responders to effectively respond to spills and funding for sufficient and thorough inspections.

    Regulations Amending the Martine Transportation Security Regulations

    The Marine Transportation Security Regulations were amended on June 19th, 2014, with a number of signifi- cant changes. The amendments were brought about to respond to Canada’s international obligations, alter Canada’s regulatory regime to correspond with that of the United States, reduce the regulatory and com- pliance burden imposed by the regime, and address gaps and inconsistencies. Specifically, the amend- ments include:
    • Adding new suspension and cancellation provi- sions regarding marine security documents issued to marine facility operators and port administra- tions;
    • Requiring the master of a vessel to submit specific pre-arrival information reporting data prior to en- tering Canadian waters;
    • Allowing Canadian-flagged vessels, while on do- mestic voyages, to interface with non-regulated ports and facilities;
    • In response to change to the International Con- vention on Standards of Training, Certification and Watchkeeping for seafarers, adding obligations that all seafarers, including those without security responsibilities, be properly trained and educated and hold a certificate of proficiency;
    • Expanding the definition of “Certain Dangerous Cargoes” to be aligned with that of the United States;
    • Expanding the flexibility for Canada to enter into alternative security arrangements with other coun- tries when it is agreed that the requirements of the International Ship and Port Facility Security Code are too onerous for that specific region;
    • Addressing interpretation issues that were raised during consultation with both Government and industry stakeholders such as ensuring all defini- tions are located within the Interpretation section of the regulations; and
    • Addressing regulatory gaps which align the marine security regulatory framework with international requirements and security practices currently im- plemented by industry stakeholders.