The Real Cost 1 of 2: When a Spill Happens, We Pay

When a Spill Happens, We Pay — Not Them
Cleanup efforts following the Exxon Valdez oil spill in Prince William Sound, Alaska.
A major oil spill on BC's North Coast would cost billions to clean up. The law limits how much oil companies have to pay. The rest falls on taxpayers — and on the communities that loose their fishing season.

But what about "polluter pays"?

“Polluter pays” sounds simple, but in real life it does not protect coastal communities from the true cost of an oil spill, and it does very little to hold companies responsible.

Under Canadian law, a ship's owner is only legally required to pay around $162 million after a spill. A major spill here could cost $2.4 to $9.4 billion. Someone has to cover the gap — and it won't be the oil company's CEO.

1
Who Covers the Shortfall?
Canadian maritime law caps shipowner liability at approximately $162 million per incident under the Marine Liability Act.
Additional compensation can also come from the Ship and Rail Compensation Canada - Ship Fund, which is financed collectively by the oil shipping industry. The fund currently has about $427 million CAD.
There are also international funds, which brings the total available funds up to over $1 billion.
But, Canada will likely not be able to access that entire pot if there is a spill, and getting access to that money involves a complicated legal process that takes years.
If total damages and cleanup costs exceed both the shipowner’s cap and the available fund, the remaining costs do not disappear. Someone has to pay for the cleanup.
Credible estimates for cleaning up a major crude oil spill in BC's northern coastal waters range from $2.4 billion to $9.4 billion.
Therefore, the provincial and federal governments could end up funding parts cof the response using taxpayer money.
2
There is No Fund That Replaces Wiped-Out Fishing Years
If a spill shuts down:
Haida Gwaii roe-on-kelp
Prince Rupert charter fishing
Port Hardy salmon trolling
Tourism in the North Coast fjords
Ferry routes between islands
— there is no mechanism that steps in to replace those incomes.
Families absorb the damage. Communities absorb the costs. Local economies absorb the losses.
Assuming Canada can access the total amount of available cleanup funds, we may have up to $1.37 billion on hand to pay for an oil spill.
BC has around 3.6 million working‑age people. If an oil spill resulted in $5 billion in cleanup costs, every working person in BC would have to fork out $1,008 to cover the remaining costs.
And it's not just cleanup costs. What about the cost to local economies?
This isn't hypothetical. It already happened, on a much smaller scale, in 2016.
In 2016, the Nathan E. Stewart ran aground in Heiltsuk waters. Diesel fuel spread through key harvesting areas, forcing closures that cut off both food sources and commercial income.
One of the closures was a clam fishery, described as a former "breadbasket" for the community.
The Heiltsuk Nation has been in litigation for years seeking compensation for these losses, while also bearing the cost of conducting its own environmental assessment to understand the damage.
A relatively small-scale spill like the Nathan E. Stewart cost the Heiltsuk $200,000 a year - just in the one Gale Creek clam fishery that was closed.
The fishery has not opened until today, which means the closure cost the Heiltsuk at least $2,000,000.
This amount was never compensated by the ship owner.
Nathan E. Stewart spilled 90 to 100 tonnes, or 110,000 litres, of diesel. A supertanker like Exxon Valdez spilled 41 million litres of crude oil, or 35,000 to 37,000 tonnes.
Supertankers like Exxon Valdez, also known as Very Large Crude Carriers (VLCCs) are the type of vessel currently banned from BC's North Coast waters, and also the type of vessel Alberta Premier Danielle Smith wants back in.
The Exxon Valdez spill in 1989 cost over $7 billion CAD in cleanup, fines, and settlements. The herring fishery it destroyed has never come back. Our North Coast faces the same risk.
Click to reveal the costs of the Exxon Valdez spill
Over $7 billion CAD in cleanup, fines, and settlements
At least $300 million CAD lost by commercial fisheries
Tourism dropped by up to ~40% in the first year
2,000 km of coastline contaminated
Herring fishery collapsed and has never recovered
250,000–300,000 seabirds killed
~2,800 sea otters lost
22 orcas died
Imagine: the shipowner's insurer cuts a cheque and moves on; you're still here ten years later with a destroyed fishery and a boat loan.
Continue reading: History of the Ban →
Call Your BC MP
Sources for this page
Transport Canada
Marine liability and compensation: oil spills
Compensation for ship-source spills in Canada
ship-rail.gc.ca
The source of our funds
Where does the money for the Ship Fund come from?The polluter pays principle
northcoastoilcleanup.info
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Location where the Nathan E. Stewart articulated tug ran aground and spilled diesel fuel (Transportation Safety Board of Canada Marine investigation report (M16P0378))
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