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ARTICLE · 02 NOVEMBER 2016

Ottawa Issues New Regulation Setting Pipeline Companies' Financial Obligations

Aird & Berlis LLP
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Recently, the Federal Government published its proposed Pipeline Financial Requirements Regulation. This new Regulation would implement some aspects of the new Federal Pipeline Safety Act.

CanadaEnergy and Natural Resources
David Stevens
David Stevens
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Recently, the Federal Government published its proposed Pipeline Financial Requirements Regulation. This new Regulation would implement some aspects of the new Federal Pipeline Safety Act that came into force in June 2016.

As we discussed earlier, the Pipeline Safety Act imposes greater obligations and liability on companies that operate federally-regulated oil and gas pipelines. An important part of the Pipeline Safety Act is the codification of the "polluter pays" principle (this is effected through changes to the National Energy Board Act). One of the key new items is absolute liability of up to $1 billion on a pipeline operator for a release, even where no fault or negligence is shown. Those companies that operate pipelines will be required to maintain financial resources necessary to pay the amount of their without-fault liability exposure.

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