The Regulations Amending the Nuclear Liability and Compensation Act and the Nuclear Liability and Compensation Regulations (SOR/2026-198) update Canada’s nuclear liability framework to account for inflation, establish liability limits for small modular reactors (SMRs), and prepare the regulatory system for new nuclear technologies. The amendments increase the maximum liability limit for conventional power reactors from $1 billion to $1.2 billion and adjust financial security requirements for lower-risk nuclear installations.

The Nuclear Liability and Compensation Act (NLCA) establishes a mandatory financial security and compensation framework to protect the public in the event of a nuclear incident. Operators of designated nuclear installations must maintain financial security equal to their applicable liability limits through approved insurance or other authorized arrangements. The framework covers nuclear power reactors, research reactors, nuclear fuel facilities, and radioactive waste management installations.

When the NLCA came into force in 2017, the liability limit for power reactors was $650 million. It increased to $1 billion by 2020 but remained unchanged during the first statutory five-year review, completed in January 2022. That review found that inflation would justify increasing the limit to $1.1 billion, but the increase was deferred because the existing limit had only recently taken effect. A subsequent review conducted between 2025 and 2026 supported raising the limit to reflect inflation and maintain alignment with international standards. The new $1.2 billion limit represents a 20% increase over the previous amount, accounting for inflation between 2020 and 2025.

The amendments also increase liability limits for lower-risk nuclear installations by approximately 26%, reflecting inflation between 2017 and 2025. The revised limits range from $226.8 million for reactors exceeding seven megawatts to $600,000 for reactors below one megawatt. Other categories include nuclear fuel processing, conversion, and production facilities, as well as radioactive waste management installations. These changes update financial security requirements while preserving distinctions based on the risks associated with different facility types.

A significant change establishes a separate liability class for commercial SMRs with thermal power capacities of 1,400 megawatts or less. Their liability limits will be calculated using the formula A × $600,000 + $60 million, where A represents the reactor’s thermal power in megawatts. Developed using technical risk assessments by the Canadian Nuclear Safety Commission (CNSC), the formula considers factors such as accidental criticality, radioactive material inventories, potential uncontrolled releases, and necessary control measures. Linking liability to reactor capacity provides greater predictability for operators while aligning financial requirements with relative risk.

Canada (198/2026) October 7, 2026
Disclaimer: Insights are for informational purposes only and does not reflect RRI’s official position or constitute legal opinion.