The Nuclear Liability and Compensation Act

The Nuclear Liability and Compensation Act establishes a compensation and liability regime in the unlikely event of a nuclear accident resulting in civil injury and damages. This new law entered into force on January 1, 2017 and replaces the Nuclear Liability Act, legislation which dated back to the early 1970s.

Under the new law, the operator of a nuclear power plant will now be responsible to pay up to $1 billion for civil damages resulting from an accident at that plant. This is a major increase from the $75 million that operators were required to pay under the old law.  The $1 billion amount will be phased in from $650 million in 2017 to $1 billion beginning in 2020.

Among other changes, the new law expands the types of damages for which people and businesses affected by the accident can be compensated. It provides a longer time period for making claims for bodily injury.  It elaborates a system that can be established by the Government of Canada to accelerate and provide efficient and equitable claim settlements.

Nuclear installations, operators and liability limits

The new law applies to Canadian nuclear facilities listed in regulations, such as nuclear power plants, nuclear research reactors, fuel processing plants and facilities for managing nuclear fuel waste. For the purposes of the legislation, these facilities are defined as “nuclear installations” to distinguish them from other nuclear facilities such as uranium mines, to which the legislation does not apply.

The level of risk is different for the activities of each class of nuclear installation, so the operator of a particular class is assigned a liability amount that is proportional to the level of risk posed by that class of nuclear installation.

The liability amount for each class of nuclear installation must be re-assessed at least once every five years and, based on the assessment, the Government of Canada may increase the amounts by regulation.

Table 1: Canadian nuclear installations and related liability amounts
Name of installation Class Operator Liability amount
2017 2018 2019 2020
Bruce Nuclear Generating Stations A and B Power Reactor Bruce Power $650 million $750 million $850 million $1 billion
Darlington Nuclear Generating Station Power Reactor Ontario Power Generation $650 million $750 million $850 million $1 billion
Pickering Nuclear Generating Station Power Reactor Ontario Power Generation $650 million $750 million $850 million $1 billion
Point Lepreau Nuclear Generating Station Power Reactor New Brunswick Power Nuclear Corporation $650 million $750 million $850 million $1 billion
Chalk River Laboratories Reactor over 7 MW Canadian Nuclear Laboratories $180 million $180 million $180 million $180 million
McMaster Nuclear Reactor Reactor 1 MW to 7 MW McMaster University $1.3 million $1.3 million $1.3 million $1.3 million
École Polytechnique: SLOWPOKE 2 reactor Reactor less than 1 MW École Polytechnique de Montréal $0.5 million $0.5 million $0.5 million $0.5 million
Royal Military College of Canada: SLOWPOKE 2 reactor Reactor less than 1 MW Royal Military College of Canada $0.5 million $0.5 million $0.5 million $0.5 million  
Saskatchewan Research Council: SLOWPOKE 2 reactor Reactor less than 1 MW Saskatchewan Research Council $0.5 million $0.5 million $0.5 million $0.5 million
University of Alberta: SLOWPOKE 2 reactor Reactor less than 1 MW University of Alberta $0.5 million $0.5 million $0.5 million $0.5 million
Cameco Fuel Manufacturing Nuclear Fuel Production Facility Cameco Fuel Manufacturing Inc. $2.3 million $2.3 million $2.3 million $2.3 million
Port Hope Conversion Facility Nuclear Fuel Conversion Facility Cameco Corporation $3.3 million $3.3 million $3.3 million $3.3 million
Douglas Point Waste Storage Facility Nuclear Fuel Waste Management Facility Canadian Nuclear Laboratories $13 million $13 million $13 million $13 million
Gentilly-1 —Waste Storage Facility Nuclear Fuel Waste Management Facility Canadian Nuclear Laboratories $13 million $13 million $13 million $13 million
Gentilly-2 Nuclear Fuel Waste Management Facility Hydro-Québec $13 million $13 million $13 million $13 million
Western Waste Management Facility Nuclear Fuel Waste Management Facility Ontario Power Generation $13 million $13 million $13 million $13 million
Whiteshell Nuclear Research Establishment Nuclear Fuel Waste Management Facility Canadian Nuclear Laboratories $13 million $13 million $13 million $13 million
Nuclear Power Demonstration Waste Management Facility Management of Radioactive Waste other than Nuclear Fuel Waste Canadian Nuclear Laboratories $1 million $1 million $1 million $1 million

Nuclear insurance

Approved insurers

The law requires all operators of nuclear installations to buy insurance to make sure they will be able to compensate claimants for civil damages arising from an accident. The insurance must be in the amount of the operator’s liability. Operators can only buy insurance from insurers that have been approved by the Minister of Natural Resources Canada.

At this time, the insurers approved by the Minister are:

The operator of a nuclear installation can also choose to use some other form of financial security (for example, provincial government guarantees, self-insurance, etc.) to cover up to half of its liability. Applications for other forms of financial security must be approved by the Minister.

Insurance agreement

Each nuclear installation operator has entered into an insurance agreement (or agreements) with the approved insurer (or approved insurers) of their choice to cover their liability. A standard insurance policy, approved by the Minister, is used by all approved insurers as the basis for providing insurance cover for the operator’s liability.

Indemnity agreement

Approved insurers will insure most, but not all, risks for which nuclear operators are liable. For example, insurers do not currently provide coverage for claims for bodily injury made beyond 10 years after a nuclear accident.  The Government of Canada provides the coverage for these risks through an indemnity agreement between the nuclear operators and the Minister.  Click here to see the wording of the indemnity agreement.

Compensable damages

Damages that can be compensated under the law include bodily injury, property damage, psychological trauma of a person who suffered bodily injury, environmental damage, economic loss, lost wages, and costs related to preventive measures (such as evacuation costs).

Time period for submitting claims

The time period under the new law for submitting claims for the compensation of bodily injury is thirty years. This time period has been increased from the 10-year limitation period under the old law. The time period for submitting claims for the compensation of other forms of damage is 10 years.

Special compensation system to accelerate and provide efficient and equitable claim settlements

The new law – like the old law – provides for a special compensation system to accelerate and provide efficient and equitable claim settlements. Normally, an individual or a business making a claim would go directly to the operator’s insurer to seek compensation. If unsatisfied with the insurer’s offer of compensation, the individual or business could seek a settlement in court. However, in the case where numerous claims occurred, the Government of Canada may determine that the public would be better served by the establishment of a special tribunal to deal with claims.   The new Act elaborates the features and process of this special tribunal system.

International nuclear liability policy 

The new law reflects modern international principles in the area of nuclear liability.  As such, it has permitted Canada to join the International Atomic Energy Agency’s Convention on Supplementary Compensation for Nuclear Damage, which it officially ratified on June 6, 2017. As a member of the Convention, Canada will commit to harmonizing its nuclear liability principles with those of other member countries, and will provide compensation for civil damages in other member countries resulting from a nuclear accident in Canada.  Reciprocally, another member country would provide compensation for civil damages resulting from a nuclear accident in that country.  The Convention also provides for the establishment of a pool of funds that would be available in the event of an accident, should it be required, to compensate for damage in countries that are members of the Convention. 

With Canada’s ratification, the Convention now has ten members:

  • Argentina
  • Canada
  • Ghana
  • India
  • Japan
  • Montenegro
  • Morocco
  • Romania
  • United Arab Emirates
  • United States

Find out more about nuclear liability in Canada

For specific information on nuclear liability in Canada, please contact us.