Nuclear liability limits raised, SMR class created

Summary#

The Canada Gazette publishes the final Regulations Amending the Nuclear Liability and Compensation Act and the Nuclear Liability and Compensation Regulations. They raise the maximum operator liability for large reactors to $1.2 billion and create a new liability class for smaller commercial reactors (SMRs) up to 1,400 MW, with most changes taking effect on January 1, 2027.

What it does#

• Updates the Nuclear Liability and Compensation Act and the Nuclear Liability and Compensation Regulations to increase financial liability and clarify classes of reactors.
• Raises the operator liability limit for large power reactors from $1 billion to $1.2 billion.
• Creates a new class for commercial small modular reactors (SMRs) of 1,400 MW thermal or less. The liability for these SMRs is set by the formula A × $600,000 + $60,000,000, where A is the reactor’s thermal power in MW.
• Increases liability amounts for lower‑risk facilities (research reactors, fuel and waste facilities) to reflect inflation, including:
  • Reactor of over 7 MW: $226.8 million
  • Nuclear fuel waste processing facility: $50.4 million
  • Nuclear fuel waste management facility: $16.4 million
  • Nuclear fuel conversion facility: $4.2 million
  • Nuclear fuel production facility: $2.9 million
  • Reactor of 1 MW to 7 MW: $1.6 million
  • Radioactive waste management facility: $1.3 million
  • Reactor of less than 1 MW: $0.6 million
• Adds the Darlington New Nuclear Project to the schedule of designated sites. That listing only comes into force when the Canadian Nuclear Safety Commission issues an operating licence for the project.
• Makes a technical wording change: replacing “thermal output” with “thermal power” in the English definitions.

Who's affected#

• Operators of existing nuclear power stations, including Ontario Power Generation, Bruce Power and NB Power.
• Future SMR operators, such as the project known as the Darlington New Nuclear Project (if it receives its licence). The first SMR is expected as early as 2030 (per the source).
• Approved insurers that provide nuclear liability coverage.
• The federal government (through its indemnity for amounts above operator limits).
• Electricity ratepayers near nuclear sites, particularly in Ontario and New Brunswick.
• Other operators of lower‑risk installations (fuel, conversion, waste facilities, and research reactors).

Why it matters#

• The total compensation available after a nuclear incident increases by $200 million, to $1.2 billion, so more funds would be available to pay claims before government assistance is needed.
• Recognizing SMRs with a separate, smaller liability formula should lower insurance costs for those projects compared with treating them like large reactors. That can make SMR projects more predictable and easier to plan financially.
• Operators will likely pay higher insurance premiums overall to meet the new limits; the government estimates a small industry cost (annualized) and only a minimal effect on household electricity bills (about less than $0.50 per year in Ontario and under $1 per year in New Brunswick, according to the regulatory analysis).
• Increasing the limit to $1.2 billion also aligns Canada more closely with international nuclear liability practices and affects how supplementary international funds could be used in the event of large incidents.
• The designation for the Darlington SMR site does not take effect until the regulator issues an operating licence, so the change does not immediately change on-site activities.