Liability cap in Ottawa–Alberta pipeline deal

Ottawa and Alberta’s pipeline agreement includes a liability provision that critics warn may be too low to deter either government from backing out of related climate commitments. The Globe and Mail reports that, according to the Alberta government, total liability is not explicitly detailed in the agreement but is capped at $1.2 billion

Partner and leader of Torys’ Climate Change practice, Tyson Dyck, shared his optimistic outlook on the cancellation fee with The Globe.

Read: A carbon and crude compromise: Canada-Alberta agreement on oil pipeline, pathways and carbon pricing

Tyson noted that while the liability cap could serve as an exit mechanism, he doesn’t believe that was its intended purpose. In any case, he explained that future governments could eliminate the liability through legislation.

“I would veer in that more optimistic direction, rather than predicting one of the parties finds a way to get out of this agreement as soon as possible,” Tyson said.

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