Bill C-5 (Historical)

Nuclear Liability and Compensation Act

An Act respecting civil liability and compensation for damage in case of a nuclear incident

This enactment establishes a liability regime applicable in the event of a nuclear incident that makes operators of nuclear installations absolutely and exclusively liable for damages up to a maximum of $650 million. Operators are required to hold financial security in respect of their liability. This amount will be reviewed regularly and may be increased by regulation. The enactment also provides for the establishment, in certain circumstances, of an administrative tribunal to hear and decide claims. Finally, this enactment repeals the Nuclear Liability Act and makes consequential amendments.

[The Chair, Conservative, Leon Benoit]

Good morning, everyone. The Christmas party for the natural resources committee is now over and we'll get down to business.

We are continuing with the clause-by-clause discussion of Bill C-5, the Nuclear Liability and Compensation Act.

We had left the meeting last time after having stood clause 34, to which I will now return.

(On clause 34—Interim financial assistance)

I had indicated that I believed clause 34 would be inadmissible and that the amendment to clause 34 would be inadmissible. With advice from the clerk and having reviewed this again, I believe that is in fact the decision I have made, that the amendment to clause 34, reference number 3176561, is inadmissible.

I won't go through all of the information unless needed, but I will refer to Marleau and Montpetit, page 655, where it says: “An amendment must not offend the financial initiative of the Crown. An amendment is therefore inadmissible if it imposes a charge on the Public Treasury, or if it extends the objects or purposes or”—and this is the part I believe applies here particularly—“relaxes the conditions and qualifications as expressed in the Royal Recommendation”.

So that amendment is inadmissible. We will therefore go ahead with clause 34.

(Clause 34 agreed to)

[The Chair, Conservative, Leon Benoit]

Thank you very much for your cooperation.

We'll see you on Tuesday to hopefully complete clause-by-clause, to continue with clause-by-clause on Bill C-5.

The meeting is adjourned.

[The Chair, Conservative, Leon Benoit]

Good morning, everyone.

As everyone knows, we are dealing with clause-by-clause of Bill C-5, An Act respecting civil liability and compensation for damage in case of a nuclear incident.

(On clause 24—Insurance)

[Dave McCauley]

I believe it was last summer. It was first introduced as Bill C-63, I believe, in June, and it has been reintroduced as Bill C-5.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much.

When was this Bill C-5 actually drafted, physically? Was it over the summer or springtime? I know you've been fine-tuning it and continuing to work on it, but I mean the essence of the draft.

[The Chair, Conservative, Leon Benoit]

Okay.

Bill C-5 limits the financial liability of a nuclear installation's operator to $650 million. The amendment proposes to increase this threshold in cases where an operator fails to prove that a nuclear incident was not caused by the operator's negligence.

The rule against offending the financial initiative of the crown applies. And here I note that the bill is accompanied by a royal recommendation that provides for “the appropriation of public revenue under the circumstances, in the manner and for the purposes set out”.

This is expressed in Marleau and Montpetit on page 655: “An amendment is therefore inadmissible if it imposes a charge on the Public Treasury, or if it exceeds the objects or purposes or relaxes the conditions and qualifications as expressed in the Royal Recommendation.”

It's clear that in proposing to introduce an additional financial liability limit the amendment is altering the terms and conditions of the royal recommendation. Therefore, I find that the amendment infringes on the financial initiative of the crown, and on that basis I must rule it inadmissible.

[Dennis Bevington, NDP, Western Arctic, NT]

Yes, I'll go ahead and move that Bill C-5 in clause 21 be amended by adding, after line 39 on page 6, the following:

(1.1) If an operator fails to prove that a nuclear incident was not caused by the operator's negligence, the liability limit referred to subsection (1) is increased to three times that amount.

[The Chair, Conservative, Leon Benoit]

Good morning, everyone. We're here today, as you all know, to continue clause-by-clause of Bill C-5, An Act respecting civil liability and compensation for damage in case of a nuclear incident.

We have with us the officials, the same as the last meeting, Brenda MacKenzie, David McCauley, and Jacques Hénault. We will continue by resuming debate on clause 8.

Is there any further debate on clause 8 before we go to the vote on that clause?

I'll just give you a few seconds to take a look at that again and remind yourselves.

I'll call the vote on clauses 8 to 11.

(Clauses 8 to 11 inclusive agreed to)

(On clause 12--No recourse)

[The Chair, Conservative, Leon Benoit]

We will resume the meeting with clause-by-clause of Bill C-5.

We have as witnesses today, from the Department of Natural Resources, Brenda MacKenzie, Dave McCauley, and Jacques Hénault.

If you could just let us know what your positions are and in what capacity you're here, I'd appreciate that. We usually have that information, but we don't today because of the short notice.

[Gordon Edwards]

In an ideal world, I would think, any bill that is going to give such a benefit to the nuclear industry in limiting the burden of liability on their shoulders....

It is in fact a piddling amount. I mean, $650 million is not even the cost of a modest retubing of a nuclear reactor. So this is a relatively small amount.

If we're going to give them this enormous benefit on behalf of the people of Canada, then surely we can strike a bargain and say, “If you're going to build new reactors, you darn well better build them in such a way as to limit the liability to the Canadian population and to Canada.”

For example, why not build them underground? Why not build them in remote areas far from cities? Why are there not considerations in this bill to limit the damage rather than to just limit the financial responsibilities of certain corporations? Why is it the public purse is considered to be bottomless?

There's no consideration given to how much money might have to be paid out of the public purse as a result of an accident that was none of the government's or public's doing.

I think it would be the responsibility of serious legislators to ensure that a piece of legislation was designed to do what the elected representatives of the people are primarily there to do, which is to protect the best interests of the people and not of the nuclear industry. I am concerned about this governance issue. I do believe that while this committee is asked to basically rubber-stamp a technical document, Bill C-5, which is going to allow them to meet certain conventions internationally, it's going to be interpreted as more or less a rubber stamp of the nuclear industry also.

It basically is a green light that says, “Go ahead, build them wherever you want. We'll limit your liability, and you don't have to worry about it.” I think that's a very sad state of affairs in a country as proud and democratic as Canada, and such a leader on the world stage in terms of our institutions. It's a sad comment on the state of Canadian politics that the House of Commons and the elected representatives of the people do not have a more important say on matters of much greater import than protecting the liability of the operators of nuclear reactors.

Just recently, for example, within the last year, we've had the government, without consulting Parliament at all, approve a plan by the nuclear industry, under which it is going to cost $25 billion minimum to centralize nuclear waste at some central location in Canada. Why was this not brought in the form of a bill to the House of Commons to be debated and to be considered and deliberated upon? Those decisions are made without any deliberation, and you are asked as a committee to simply rubber-stamp this relatively insignificant bill.

Believe me, if such an accident were to happen, a Chernobyl-type accident, it would be very small comfort to know that the Government of Canada was going to establish a tribunal to adjudicate claims.

[Gordon Edwards]

No insurance company—in North America, certainly, and to the best of my knowledge, in the world—will offer any protection whatsoever in the event of your property being damaged by a nuclear accident.

That's why Bill C-5 is before us, so the Government of Canada will take the place of an insurance company. The private financial investors, who will insure almost everything in the world, will not insure against a nuclear accident.

[Prof. Michel Duguay]

As I said, there's a lot of talk in the AECL documentation about being in harmony with the United States. Well, in the United States they're talking about a $9 billion limit on liability. That's a little more serious.

One point that I make in the resumé that I passed around is the fact that people in this country ought to be aware that nuclear power is expensive and does carry with it a great danger. Your Bill C-5 could recognize that officially.

[Prof. Michel Duguay]

Okay, I just wanted to make sure.

I find that in formulating this new Bill C-5, there are two important aspects. One of them is compensation for damages suffered, and the other is the expansion of nuclear power.

The nuclear power industry has been saying that they need this bill in order to meet international conventions, and also to perhaps reassure the public that if there were an accident, there would be proper compensation.

As you all know, the city that is most threatened by a major accident is Toronto. In the Toronto area, $650 million would come to a compensation of about $200 per person or house. Many people feel that this is not very much. In the United States, the figure that is thrown about is $9 billion for a major accident at one nuclear reactor site. That would come to $3,000 per person or house.

The Pembina Institute in Canada has estimated that an accident in the Toronto area would cause damages of about $1 trillion. That would come to $300,000 per person or house. In my opinion, that would not be a desirable event and sufficient compensation, even at that high figure.

The second aspect is expansion of nuclear power because of the climate change question.

The first aspect I address in the short resumé I sent you is that there is room for liability coverage in the case of nuclear reactors, because if you read the AECL documentation, which I do every year, and also the CNSC documentation, you find that all of these people in the nuclear industry are terribly worried about a major accident. It's a nightmare, and they have confessed it, even in public.

So a major accident is possible, and in the resumé I sent around, I quote AECL in 2002, where they addressed the question of the positive nuclear coolant void reactivity coefficient. In the existing CANDUs, if you have a loss of cooling water, or bubbles, or anything that diminishes the density of water trying to cool the reactor, the nuclear reactions increase in their intensity. This is called a positive feedback, and this feature has been recognized by AECL as being undesirable.

It makes the old CANDU reactor illegal in England or in the United States. It does not meet the security standards of England or the United States. So in their effort to develop a new reactor, AECL has insisted on having a negative coolant void reactivity problem, but as far as I know, it still has not been solved completely.

That makes the old CANDU reactors very dangerous. I'm upset by the fact that instead of building new reactors, which are far safer, they retube a design that was made in the 1970s.

In the last four decades, there has been tremendous progress in all areas of technology, including nuclear power, so I find it very upsetting that they're proud of doing retubing contracts here and there, in New Brunswick, at Bruce around Toronto, and now they want to do Gentilly in Quebec. It's just going back to a design of the 1970s, a design that does not meet the security standards of England or the United States, the first two nuclear countries in history.

Regarding expansion, I work in the field of renewable energy, and I was at a convention on wind power about a month ago. What's amazing about wind power is that it has been increasing by 25% a year for the last decade. Canada is positioning itself in this area. Ontario already has 400 megawatts of installed power. Quebec has about 500 megawatts. B.C. has a big project to have 350 megawatts near Prince Rupert, with further expansion to 15,000 megawatts in the coming years.

In Europe, the European Union passed a law in September that calls for the production of 20% of electrical power in the European Union by renewable energy by 2020.

In the United States, people are talking about having 25% renewable electricity by the year 2025.

If you look at the wind energy maps and the solar energy maps that are available online, you will find that Canada is blessed with tremendous wind and solar resources.

The main point I want to make to the Minister of Natural Resources is that if we manage—if you manage with us correctly—our natural resources, which include wind and power and geothermal, we could easily increase government income by a tremendous amount and lower the income taxes.

I will stop here.

[Gordon Edwards, President, Canadian Coalition for Nuclear Responsibility]

Thank you very much, Mr. Chairman, and members of the committee.

My name is Gordon Edwards. I have a PhD in mathematics. I graduated originally with a gold medal in mathematics and physics from the University of Toronto. I have been involved for over 30 years as president of the Canadian Coalition for Nuclear Responsibility and also as a consultant to both governmental and non-governmental bodies on nuclear issues, on issues related to nuclear safety and radioactive materials.

Before it is used in a nuclear reactor, uranium fuel can be safely handled using only a pair of gloves. Inside the reactor, however, hundreds of new radioactive substances are created, called fission products. These are literally the broken pieces of uranium atoms, which are split in order to produce energy.

The fission products are millions of times more radioactive than the fresh uranium fuel. Immediately after discharge from a reactor, a single CANDU fuel bundle can deliver a lethal dose of penetrating radiation in just 20 seconds to any unprotected person standing one metre away. Indeed, the irradiated fuel is so radioactive that is has to be cooled under 14 feet of circulating water for at least 7 to 10 years or it will spontaneously overheat, experience self-inflicted damage, and release radioactive gases and vapours into the surrounding atmosphere.

Inside the core of a reactor, even after the fission process has been completely terminated, the radioactivity of the fission products is so intense that the core continues to generate 7% of full power heat. That's an awful lot of heat, and if adequate cooling is not provided, even after complete shutdown of the reactor itself, the residual heat is more than enough to melt the core of the reactor at a temperature of 5,000°F.

When the fuel melts, large quantities of fission products are released as gases, vapours, and ashes. I have provided the committee members with excerpts from four official Canadian documents. These excerpts confirm the fact that core melting accidents are possible and even probable in Canada, if Canada chooses to build a large fleet of nuclear reactors.

Unfortunately, committee members, I neglected to bring the bag that has those exhibits in them. I'm going to deliver it later today to the clerk, and you will be getting copies of these. They are available in both French and English.

The official bodies that produced these statements, which I have prepared for you, are the Ontario Royal Commission on Electric Power Planning, the Atomic Energy Control Board, the federal Department of Energy, Mines and Resources, and the Select Committee on Ontario Hydro Affairs.

As a participant in the deliberations of both the Royal Commission on Electric Power Planning and the Select Committee on Ontario Hydro Affairs, I can assure the committee members that the rationale for this bill, C-5, is based on the potential damages of fuel melting accidents. Without fuel melting, it is not possible for a nuclear accident to have off-site property damage exceeding $10 million.

However, the consequences of core melting accidents can typically run into the tens of billions of dollars or even hundreds of billions of dollars and can make large regions of land uninhabitable for a considerable period of time.

In the case of such a catastrophe, Bill C-5 limits the liability of nuclear operators to a very modest amount. It eliminates all liability for nuclear equipment suppliers, even if they supplied defective equipment that caused the accident, yet it does not address any important measures that would limit the overall financial liability to the Canadian taxpayer or the social liability of any affected population.

The Canadian Coalition for Nuclear Responsibility feels that it is important for the elected representatives of the people to ensure that the nuclear industry is held publicly accountable and to ensure that the best interests of Canadians are not compromised in order to serve the interest of the nuclear industry.

We believe the figure of $650 million cited in the act has no sound scientific or financial basis, and this arbitrary amount merely serves to distract the committee from much more important questions. For instance, just how great might the total damage be in case a core melt accident occurs here in Canada? Have these studies been carried out? Have they been given to the committee members? Have they been discussed in Parliament? What if such an accident occurred at the Pickering site? How much of the Toronto population would have to be evacuated and for how long? How far would the radioactive contamination spread?

It is sobering to realize that even today, 20 years after the Chernobyl accident in the Ukraine, some sheep farmers in northern England and Wales still cannot sell their mutton because of radioactive contamination of the meat, caused by radioactive cesium-137 given off by the Chernobyl reactor.

Will farmers in the Ottawa Valley and Quebec have to curtail their agricultural practices following a nuclear accident near Toronto, such as those envisaged in this bill? Is the Canadian Parliament expected to pass this Bill C-5 to limit the liability of the nuclear industry without giving any careful thought to the question of limiting the ultimate financial liability to the crown?

One way of limiting public liability would be to require that any new reactors be sited far away from large population centres. Observers both inside and outside of the nuclear industry have commented that the Pickering reactors are among the worst-sited reactors in the world because of the catastrophe potential, so close to such a large and vital city. Such a catastrophe could be realized in the event not only of a severe industrial accident, but also as the result of external causes, such as a large earthquake, causing multiple pipe breaks in the reactor core area, or an act of deliberate sabotage or terrorism, which can no longer be discounted as fanciful.

I was one of the fortunate few to attend a 1977 conference of the nuclear fuel cycle, sponsored by the International Atomic Energy Agency, held in Salzburg, Austria. At that conference, one of the leading American nuclear scientists, Alvin Weinberg, spoke for an hour to an audience of about 300 nuclear scientists from every corner of the world. His message was stark. He said: We nuclear scientists have not faced up to the full consequences of complete success. If we succeed in building tens of thousands of nuclear reactors around the world, which we must do to make any noticeable dent in the world's use of petroleum, we can expect to have a core meltdown approximately every four years. The lesson is clear. W e must stop building these reactors near large cities.

I was very impressed by the sincerity of Mr. Weinberg's proposal. In fact, he recommended that large tracts of land should be set aside specifically for nuclear reactors and nothing else. As he put it, if the reactors are going to melt down, let them do so there, far away from the population centres.

Alvin Weinberg's proposals may strike some of us as extreme. But perhaps it is only because we have not taken the time and trouble to educate ourselves about the science behind core melting and the possible consequences of such events. In 1978, one full year before the Three Mile Island accident in Pennsylvania, the Ontario Royal Commission on Electric Power Planning spent several months on the question and found that if there were 100 reactors operating in Canada at some future date, then under the worst assumptions of probability, there could be a core meltdown here in Canada once every 40 years.

In his report, Arthur Porter, a professor of engineering from the University of Toronto, wrote that serious consideration should be given to building any new nuclear reactors underground, so that the radioactive releases from an uncontained core meltdown could be largely trapped in subterranean caverns and prevented from spreading over vast land areas.

Another way of limiting the nuclear liability of the crown and of the Canadian population is to invest in other energy technologies that can reduce greenhouse gases faster and more efficiently than nuclear power can possibly do, without posing the same risks of catastrophic impact, requiring bills such as this Bill C-5, which is available for no other industry that I am aware of.

According to a report issued in May 2007 by the Intergovernmental Panel on Climate Change, nuclear power currently provides about 16% of the world's electricity, which amounts to about 2.7% of total energy use. In the next quarter century, the IPCC estimates that nuclear power could increase its contribution from 16% to 18% of electricity supply. This is far from solving the climate change problem.

Meanwhile, the same IPCC report states that renewable electricity currently accounts for 18% of electricity worldwide—that's the target in 25 years for nuclear—and that in the next 25 years renewable electricity could account for 35% of all electricity. That's twice as much as nuclear can provide in the same timeframe. Evidently, renewables are a much better bet than nuclear, at least for the next 25 years, in the opinion of this estimable panel.

Germany decided about 10 years ago to phase out of nuclear power. They have shut down two of their seventeen reactors already and will soon shut down a third one. In that same 10-year period Germany has installed 20,000 megawatts of wind power. That's more than the entire Canadian nuclear program. Meanwhile, Germany is leading all other European countries in reducing greenhouse gas emissions.

So perhaps instead of just passing Bill C-5 , the committee members should be refusing to pass it and recommending that a comprehensive inquiry into the risks and benefits of nuclear energy, in comparison with other energy technologies, be undertaken. In the public interest such an inquiry is long overdue. It would be a shame for this committee to approve a piece of legislation that is so peripheral to the larger issues.

Ultimately, Bill C-5 is based on much misinformation, and perhaps even a profound misunderstanding of the nature of the energy choices that we all must confront. I am concerned about the marginalization of our democratic institutions. I am concerned about the problem of governance of this industry. I do not believe, if we are going to embark upon an enlargement of this industry, it is responsible to continue to allow it to operate outside of public scrutiny, outside of responsible accounting, and I would hope this committee would do something about that.

Thank you.

[Linda Thompson, Mayor, Municipality of Port Hope]

Thank you, Mr. Chair and members of the standing committee.

My name is Linda Thompson. I'm the mayor of the Municipality of Port Hope. I'm also a member of the Canadian Association of Nuclear Host Communities.

Our association chair is Mayor Ryan of the City of Pickering. Unfortunately, he cannot be here today. I'm therefore acting on behalf of Mayor Ryan, and in his capacity I appear before you today.

As noted, Mr. Wu is our association's secretary-treasurer and he is also the chief administrative officer with the Municipality of Clarington, Ontario. Mr. Wu will be assisting me, if you have any questions.

The Canadian Association of Nuclear Host Communities, also known as CANHC, is comprised of ten municipalities located in Ontario, Quebec, Manitoba, and New Brunswick. These municipalities proudly host various nuclear-related facilities, such as power generation stations, research facilities, and nuclear industries, which are vital to Canada's continuing supply of electricity. As well, they contribute to the prosperity and economic development of our communities.

Our member municipalities are in the province of Ontario, the county of Bruce, the municipality of Clarington, the town of Deep River, the region of Durham, the municipality of Kincardine, the city of Pickering, and the municipality of Port Hope. In the province of Quebec, we have the town of Bécancour; in the province of New Brunswick, the city of Saint John; and in the province of Manitoba, the district of Pinawa.

First and foremost, CANHC welcomes and supports the general thrust of Bill C-5. Over the past few years, our association has continually urged the government to increase the liability insurance and compensation limits for nuclear facilities and it is most pleased that government is taking a very positive step in this direction.

Specifically, we're very encouraged to see that Bill C-5 provides for three very important elements, being the increase in the liability insurance to be carried by nuclear operators, the ability to establish a tribunal for the timely and orderly settlement of claims, and of course the regular review of the amount of insurance coverage that is required.

While our association generally endorses these provisions, we do feel these provisions can be strengthened in the following manner. Firstly, on the limit of the liability, our association is of the opinion that the $650 million is not sufficient insurance coverage, particularly in locations where a nuclear facility is located in a densely populated area, such as in the city of Pickering, where some 80,000 people live within ten kilometres of the Pickering nuclear facility.

The $650 million would work out to a little over $8,000 per person, a rather inadequate amount under the scenario of a nuclear disaster. We understand that there are compensation benchmarks established in European communities, but we would urge the committee to consider the unique challenges faced by nuclear host communities, with nuclear facilities installed in our backyards.

Secondly, the principle of establishing a tribunal to handle claims is a reasonable approach; however, we ask that such a tribunal be totally independent and that a timeframe be entrenched in the legislation or regulations to ensure that all claims are in fact processed in a timely manner, without causing further undue hardship.

Lastly, we would ask that Bill C-5 contemplates the regular review of the amount of insurance coverage at least once very five years. We understand and support the rationale for regular reviews; however, we would suggest that Bill C-5 should also provide for an automatic annual indexing of the coverage, with a more comprehensive review to be undertaken every five years.

In addition to the foregoing comments, our association wants to see clarity in the bill pertaining to compensation for the nuclear host communities. We all know that in the unlikely event of a major nuclear incident, these municipalities will be burdened with the need to repair or replace damage to municipal buildings and infrastructure, of course, such as roads, bridges, water and sewage plants, etc.; the huge cost of providing emergency services such as police, fire, paramedic services, as well as providing for evacuation, emergency shelters, and recovery efforts; and the very significant economic loss as residents and businesses are unlikely to return to the municipality after a nuclear incident, given the inevitable negative media coverage from any nuclear incident.

We believe that such an incident will significantly damage the image of the host municipality, and we do not believe this matter is addressed in Bill C-5. Bill C-5 should therefore clearly identify and provide compensation entitlements to all nuclear host communities and ensure that they be afforded every right to recoup financial and economic loss resulting from damages caused by a nuclear incident.

In summary, our association is supportive of Bill C-5 and strongly urges the committee to give serious consideration to our request to strengthen various provisions of the bill to ensure our residents, businesses, and host municipalities are fairly and quickly compensated for any losses, financial and otherwise, that we may incur as the result of a nuclear incident.

I thank you for the opportunity to come before you and express our views on Bill C-5. And we would be more than happy to answer any questions as they come forward, Mr. Chair.