About the Review

Background

The Polluter Pays Principle

Polluters must pay for damages caused by a spill. This is a fundamental principle of the existing regime, and for the future.

In line with this principle, the current Regime for oil spills south of 60° N latitude: 

• Requires certain vessels and oil handling facilities to have an arrangement in place with a government-certified response organization. Response organizations are Canadian-based, private-sector organizations that earn their certification from the federal government by demonstrating their ability to effectively prepare for and respond to ship-source and oil handling facility oil pollution incidents.
• Allows the resources of a specific area to be supplemented with those from other regions (geographic areas) or from our international partners, as needed in the event of a spill. This is known as the principle of cascading resources.

And while oil tankers have been moving safely and regularly in Canadian waters and along Canada's coastline, it is essential that we have a system in place that can meet future needs. (Additional information on marine safety can be found here.)

Economic Action Plan 2012 announced measures to strengthen tanker safety and strengthen Canada's capacity for oil spill preparedness and response. One key measure was creating this panel.

A Panel review of the current regime is timely, due in part to:

• an increase in oil shipments and the transport of other potential pollutants such as liquefied natural gas and other hazardous and noxious substances through Canadian waters;
• concerns raised in the Commissioner of the Environment and Sustainable Development 2010 Fall Report, Oil Spills from Ships; and
• Public interest in oil tanker safety issues.

Scope of the Review

The panel was mandated to conduct a pan-Canadian review and assessment of Canada's Ship-source Oil Spill Preparedness and Response Regime, as it applies to oil handling facilities and ship-source oil spill preparedness and response. In particular, the review examined the:

1. Regime’s current regulated preparedness capacity of 10,000 tonnes (covered in Phase I of the review)
   • Is the current maximum preparedness capacity of 10,000 tonnes adequate? Is it a world-class standard?
   • What are the implications of increasing this requirement above 10,000 tonnes?
2. Regime structure and key components (covered in Phase I of the review)
   • How effective is the Regime’s governance structure, including such elements as the private-public model, funding and fee arrangements, placement of response assets, and cascading resources?
   • How are preparedness and response linked to liability and compensation?
3. Regime coverage  (covered in Phase II of the review)
   • Is there a need for, and what are the financial implications of, creating a cost-effective preparedness and response regime in the North and extending the current regime to hazardous and noxious substances, such as liquid natural gas, and new or unconventional oil products?

Process

Stakeholder Engagement – The Panel engaged with provincial and territorial governments and various industry stakeholders, including response organizations, owners and operators of oil handling facilities, vessel owners and operators, industry associations and key Aboriginal organizations. A web portal was established to accept public submissions. The Panel also had the option to conduct a limited number of targeted engagement sessions with individuals or organizations who submitted their comments through the web portal.

Pan-Canadian Risk Assessment – Transport Canada commissioned an objective, evidence-based risk assessment of the likelihood and consequences of an oil spill or hazardous and noxious substances incident in Canadian waters, as well as a risk assessment of spill likelihood specifically in the Arctic. The risk assessments provided credible information for the panel’s review of current arrangements for spill preparedness and response.

Timelines

The Panel submitted two reports to the Minister of Transport. The first report was completed in November 2013, and addressed the current regime south of 60^o N. The second report focusing on requirements for the Arctic and for hazardous and noxious substances nationally was completed in September 2014.