Dangerous-goods shipments remain regulated despite the widespread deregulation of the transportation industry. This is mainly due to the societal and environmental risks associated with these shipments. One of the common tools used by governments in mitigating transport risk is to close certain roads to vehicles carrying hazardous materials. In effect, the road network available to dangerous goods carriers can be determined by the government. The associated transport risk, however, is determined by the carriers' route choices. We provide a bilevel programming formulation for this network design problem. Our approach is unique in terms of its focus on the nature of the relationship between the regulator and carriers. We present an application of our methodology in Western Ontario, Canada.