Natural Resources Committee on June 5th, 2008

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I believe it will. From everything I have been briefed on and from everything I know of NRU, I'm confident that we'll be able to extend its licence beyond 2011 and it can continue to operate safely.

Having said that, ultimately it's a decision of the CNSC. I know AECL will engage them. But from the information I have, I have no reason to believe they will not be able to extend that beyond 2011. This gives us adequate time to ensure that that extension, and depending how long that goes for, will afford us an alternate supply of isotopes, more than likely being developed from the private sector. There are also international possibilities as well, and all of those are being explored.

[Catherine Bell, NDP, Vancouver Island North, BC]

Then, quickly, the MAPLES, what's left of them or what's there, will have to be decommissioned in some respects. What will be the process there, the cost? And is there anything salvageable from what we have there that could be sold or reused somehow?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

AECL will salvage all the parts and the pumps and motors, any parts that are salvageable and they can retrieve. One of the reactors is not radioactive at all. In fact, it has never been radioactive.

The first MAPLE reactor is doing their tests, in fact. So there will be some costs in the decommissioning of that, and we'll come back with those costs. Obviously, that's part of the process that will be in the decommissioning of the MAPLE project. So they will salvage everything that can be reused and is salvageable; then there will be some decommissioning costs.

The second MAPLE reactor, because it has never been radioactive, will obviously be much easier.

[Catherine Bell, NDP, Vancouver Island North, BC]

How much time do I have?

[The Chair, Conservative, Leon Benoit]

You have two minutes.

[Catherine Bell, NDP, Vancouver Island North, BC]

Those must have been short answers. Thank you, Mr. Minister.

Back to the NRU, the safety issues. You did outline some of the things to a previous question, but I think it's something Canadians are very concerned about, so I'm glad to hear you're going to make sure that CNSC is on board and having oversight. I think it's something that's critically important for Canadians, to have the security and peace of mind they need, to know there is oversight.

Again, back to NRU, because it's an aging facility, f there were to be any kind of a problem because of its age, is there a process in place to quickly rely on the world stage for our acquisition of isotopes, if we ever need that?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

In a managed shutdown...if we have to make enhancements or upgrades to the NRU, when they can be managed, then we can go to our international partners, and in their production schedules and their supplies, the isotope supply can be managed. That can be effective.

Obviously, they're very careful to ensure that they do.... I mean, it's the nuclear industry. There are so many safety systems. There are so many checks and balances to ensure that the ongoing NRU continues to operate in a safe manner. I can't predict what could happen in the future, but we're confident in the technology. We're confident in AECL and their ability to manage this and that the medical community will have isotopes.

[Catherine Bell, NDP, Vancouver Island North, BC]

In the case of an emergency, what processes are in place to rely on in world markets?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

There are a number of things that happen. In the event of an unexpected shutdown, they would go into the isotope supplies that we have and would manage that supply to ensure that the most urgent needs are met. Then we would engage with our international partners around the world, looking for alternate supply and doing everything we can.

We don't expect that to happen. As I said earlier, the NRU is operating more safely today than it ever has before in its 50-year history. It has more safety systems on it today than ever before. The CNSC is part of the checks and balances and inspections that happen, to ensure that it can be operated safely and can continue to operate.

Again, we don't anticipate that there will be any issues there. It's not impossible, but it's not something of which I believe there's a very high risk of its happening.

[The Chair, Conservative, Leon Benoit]

We'll go now to the government side, to Mr. Allen for up to seven minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Thank you, Minister and folks, for coming here today. I appreciate it.

In one of his questions, Mr. Alghabra talked about your November 1 memo in which you were provided with three options. I'm comforted to see that at least the management oversight gave you options to look at it, even though there's a recommendation. You made the comment that we might be looking a number of years out before this could ever be done.

The Auditor General, in her remarks of September 5, 2007, on the special examination, said that the estimate at that point in time was for probably around $130 million to complete the two reactors, one of which would be done in 2008 and one in 2009.

Given that consideration, what kinds of estimates did you foresee that it would have taken—just a ball park range—to finish these if you went ahead?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

They were a lot higher than that. Here's what I have been briefed on.

If there were a technological solution, the timeframe would be 2013 to 2018. If they found the technological solution to solve the positive power coefficient, and they haven't, the cost to make those changes and complete the project—and I find this troubling—would be in the range of over $300 million, bringing the total cost of the project to over $900 million. That's what it would take to complete, if they were able to find the solution. But I want to stress that the last tests, completed in the middle of April, were completely negative.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you. That's significant.

Can you or your staff tell me or briefly explain, because you talked about this positive power coefficient, what the technical problems are? It seems strange. Why couldn't they be corrected once you get this all built? I'd like to get my head around it.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

First let me have a kick at it, to see whether you can understand it. Then I'll ask Tom, who's the nuclear guy, and he can probably give us a more technical answer.

I want to stress that this is a small reactor; it's 10 megawatts. I've been advised that this is part of the problem. AECL built a research reactor in Korea, which is not the same, and it's 30 megawatts, three times the size. Part of the problem, they believe, is the size of the reactor. This has never been built before. That's why this project was so high-risk.

When it's operating, the reactor core cannot have a positive power coefficient; it's designed to have a negative power coefficient. I will say that they have engaged nuclear experts not just from AECL but from around the world to look at all the technical questions and all the modelling. In the modelling, it actually should have a negative power coefficient, but in reality it's the opposite. Nobody has been able to determine or ascertain why that is. That is the challenge.

I don't know whether Tom can add to that.

[Tom Wallace, Director General, Electricity Resources Branch, Department of Natural Resources]

I think Mr. MacDiarmid may be able to provide further technical details, but the problem, as the minister outlined, is that there was behaviour that was predicted by the design and safety codes that were presented to the CNSC, and there was an observed behaviour that was different. AECL to date has not been able, despite engaging experts from all over the world, to ascertain exactly why the actual behaviour observed is different from that predicted in the safety case.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

On November 15, 2002, the Auditor General wrote to the then minister, the Honourable Herb Dhaliwal, to talk about some of the issues regarding the inconsistent application of quality assurance processes. One of the comments was that from 1999 to 2001, internal and external audits of QA identified numerous weaknesses in AECL's QA processes, the most serious being in the MAPLE reactor project.

Mr. Dhaliwal, in his interview this year, said that they actually set up a process whereby they were evaluating their different options. He said that unfortunately he had left politics while they were looking at this, and final decisions were not being made. “[W]e did have a process in place to make those decisions. People who came on later decided it was not a priority; only they can answer for that.”

Was there any priority put on this from 2002 on?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

You can read between the lines, and you can read what Mr. Dhaliwal has said. I'll let the media and the public judge for themselves what he was saying.

The reality is that under the previous government, which began the project in 1996, up until they left office in 2005--despite numerous warnings from the Auditor General--the flags were there. This was a political decision. They elected not to make that decision. For whatever reason, they chose to ignore this and not make the decision.

I'll say that we've been in office for two years. Listen, when you're making nuclear decisions, there's a lot of work to be done. There's a lot of due diligence. You know, you don't come into office and make a decision six months later. These are significant decisions. I think we've acted appropriately. Should a decision have been made a long time ago? I think these tests and this work could have been done a long time ago, and it would have saved a significant amount of money. The fact is that they weren't, but our government is prepared to take leadership and make the decisions we have made to terminate this project. We believe it's in the best interest of the taxpayer, AECL, and the medical community.

I'll just add something. Why is it in the best interest of AECL? As you know, we are having a nuclear renaissance. And I want to say this about AECL. They are in the business of building power reactors. Their reactors operate as some of the most efficient reactors anywhere in the world. Their performance on the international stage has been to build nuclear reactors on time and under budget. The men and women who work at AECL--the nuclear engineers, the nuclear scientists--are some of the best in the world. I think this decision also allows them to focus on what they do best, and that's building nuclear reactors to produce electricity.

The reality is that the world is changing. We're seeing opportunities both at home and abroad. That's another reason this decision is so important. They warned previous governments about the risk of this project. I think it's safe to say that this project should never have started. But we can allow them to get back to what they do well. That's an important part of this decision.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen and Minister.

We'll go to Mr. St. Amand for up to five minutes.

[Lloyd St. Amand, Liberal, Brant, ON]

Thank you very much, Mr. Chair.

Good morning, Minister. Thank you for coming. It is nice to see you.

I can't resist just a bit of a comment with respect to your approach to decision-making--being deliberate and thoughtful and not rushing into decision-making.

You'll know, Minister--and I'm not inviting an answer to this--that many have suggested, with justification, that you and the Prime Minister acted with uncommon haste in firing Linda Keen. You know that's out there.

Minister, with respect to AECL, as I understand your presentation to the committee this morning, the possibility of AECL being privatized is there. That is one of the options being looked at.

Is that fair to say?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I wouldn't draw any conclusions to that effect, no. But we have not taken any options off the table. I wouldn't want to acknowledge that as being where we're going, because I think that would be a misrepresentation.

[Lloyd St. Amand, Liberal, Brant, ON]

If it transpires that AECL is in fact privatized, then it will be up to the private owner or entity to decide whether isotopes will any longer be produced at Chalk River.

Would you agree with that?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

First of all, you're speculating about what may or may not happen to AECL, and I'm not going to speculate on that. Therefore, I can't answer the question.

We haven't taken any options off the table. But I don't want to leave anyone with the opinion that this is a course we are pursuing or even that it is a preferred option. I think that would be inaccurate.

[Lloyd St. Amand, Liberal, Brant, ON]

Minister, you've said that, and you've repeated it now. If AECL is privatized, the Government of Canada will no longer be a decision-maker with respect to whether or not isotopes will continue to be produced at Chalk River. Would you agree with that?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

No, I wouldn't at all, and let me explain why. We are doing a review of AECL. Without trying to speculate, there are many pieces to AECL. There is the research side; there is the production of medical isotopes; and there is the commercial side to produce power reactors. Part of this could be to do just one piece of that and maybe not necessarily the other pieces, or a combination. Again, I would completely disagree with that statement.

[Lloyd St. Amand, Liberal, Brant, ON]

Through the diligence of my colleague, Mr. Alghabra, we've received, under access to information, a briefing note, Minister, that you received back in September. It is a briefing note dealing with the Auditor General's special examination with respect to Chalk River. And her report, as you've come to know, talked about a significant deficiency regarding AECL's ability to resolve certain challenges, one of them being the replacement of aging facilities at Chalk River.

You'll know that in your briefing at that time, the Office of the Auditor General would encourage the public disclosure of the report. Some four or five months later the report was tugged or coaxed out of the government. The briefing note you received, which shed some light on the reticence of your ministry to release the Auditor General's report, says the following:

While the tone of the report is balanced, critics of AECL will find ammunition if the document is published, particularly vis-à-vis its performance on the dedicated isotope facility.

Given the totality of the significant deficiency and other problems identified by the OAG, making the report public may have an impact on the AECL restructuring project and reduce interest from the private sector investors.

Minister, I put it to you again: there's not just a possibility but a very strong possibility that this government is going to allow the privatization of AECL. Do you have any comment?