Natural Resources Committee on Nov. 2nd, 2009

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

This is a very small thing: I'd love to see the source of the 30,000 jobs statistic—where it comes from. I don't need it today, but perhaps one of your officials could offer it later.

What you just said about the conversation you haven't had with Mr. Smitherman is interesting--that Ontario wanted to have a conversation about support for their bid through a taxpayer subsidy. That conversation hasn't happened. What I've been trying to understand, in terms of the state of the nation involving the nuclear industry here in Canada, is that the government announced that a privatization option is on the table. That created a certain amount of uncertainty, to which you just alluded, that was involved in the Ontario bid's not going forward. My concern is that in this uncertain environment, the price Canadian taxpayers are going to get for our investment over the years would naturally be less than it would in a certain environment.

My point is this. You've mentioned the word “renaissance”, which is thrown around a fair amount in nuclear promotion circles. There are 130-plus new builds going on in the world, and AECL has none of them. It's in this discussion about potentially privatizing and yet is not in a conversation with the bidder for the only potential bid on the table, which is Ontario, about you folks possibly kicking in some money to make it happen, thereby raising the price Canadians might get for AECL.

It seems like a strange conundrum we've locked ourselves into here. Am I wrong in my reading of this?

[Lisa Raitt, Conservative, Halton, ON]

I don't think it's a conundrum; I think, quite frankly, it's the reality. Ontario stopped its process not only for the reason they indicated with respect to AECL, but they received their bids and the bids came in at the price that is associated with nuclear new builds in the world. They also indicated that they would like to have a discussion regarding the price associated with the proponents. We're not the only ones involved in this; there are other proponents involved as well.

AECL is in charge of their procurement policy; they are the ones having the conversation. When you indicate that I haven't had any conversation, I haven't had any conversation. My conversation with Minister Smitherman has been all about assuring him that what we're doing with restructuring AECL is to make it better, so that we can continue the service and continue to do R and D, and indicating that we have a common and shared interest in the industry.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Okay.

We had some testimony from the workers, whom you have talked about as being the biggest and brightest thinkers. Have you had any consultation with the workers at AECL concerning potential privatization?

[Lisa Raitt, Conservative, Halton, ON]

Yes. I've done two town halls and have met with SPEA, the Society of Professional Engineers and Associates. I met with them as well at Sheridan Park and have been to Chalk River.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I have some curiosity about the cost overrun notion. I'm finding this a little perplexing. It was raised earlier about Lepreau specifically, but it concerns some of the liabilities that AECL holds. Your testimony earlier today said that liability would be passed on to the eventual owners of AECL.

What's confusing is that while I appreciate that the Canadian taxpayers will no longer be on the hook for these very expensive bills, I don't know how an offer to an outside buyer to pick up a million-dollar-a-day tab that's going on in New Brunswick, and other things that AECL seems to have on the books, would possibly and successfully be included in a sale.

My last question, just in case I don't get it in, is this. I have an order paper question here, signed by you. We had asked some questions about the bonuses that were included....

I'll read it exactly:

(c) what amount went to executive compensations, including performance bonuses, and which executives received such compensation....

The response we got back, signed by you, was that you wouldn't tell us, that you were withholding that. I find it confusing that, concerning an arm's-length crown corporation that has been going through a serious number of problems, when we ask a question about performance bonuses—which I hope aren't being given out—the answer is that you are not going to bother to tell the taxpayer what we're paying for their bonuses.

[Lisa Raitt, Conservative, Halton, ON]

Right.

I'm going to address the first part, if I may. You indicated that I have said liability will be passed over to the new corporation. We've not prejudged what kind of restructuring deal would be in place. I think what I said was that in the future it's inconceivable for the Canadian taxpayer to be the sole call for both front-end load and for overrun liability. No decisions have been taken and no deals have been fleshed out with respect to how things come together. I don't want you to be mistaken.

Regarding the bonus issues, I'll turn to officials as to.... I will get back to you. I assume something has to do with private information in terms of compensation. But I give you my undertaking that I'll go back and ask them. We'll definitely come back and let you know.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister, for that. Thank you, Mr. Cullen. We'll be looking for that to come to the clerk of the committee.

[Lisa Raitt, Conservative, Halton, ON]

You're welcome.

[The Chair, Conservative, Leon Benoit]

We go now to the government side, to Ms. Gallant, for up to seven minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

Through you to the minister, your department is dealing with many intertwined issues arising from nuclear science, technology, and business, such as Canada's nuclear industry competitiveness, the restructuring of AECL, defining a future mission and management framework for Chalk River Laboratories, and gathering expert advice on the security of Canada's isotope supply. In the past, NRCan has provided stewardship for Canada's nuclear enterprise from the viewpoint of natural resources and our energy mix.

In considering the future of Chalk River Laboratories and the possible replacement of the NRU reactor with a new multi-purpose neutron facility, could you foresee that these endeavours might well be matched to another ministry or agency whose primary concerns are science, technology, innovation, and the competitiveness of Canadian industry in general?

[Lisa Raitt, Conservative, Halton, ON]

Thank you very much for your question.

Mr. Chair, the honourable member is correct. The restructuring is an opportunity to take a look at all aspects of how we're delivering on our nuclear dollar that the Canadian taxpayer is fronting.

With respect to CANDU, we've spoken a lot about the industry side. But on the Chalk River side, the ingenuity and the expertise we possess on the R and D side and nuclear needs to have the opportunity to flourish and to compete on the international scale. We are envied in the world for the skill and the expertise and the sheer volume of nuclear engineers we have, quite frankly.

I've met with my counterpart in the United Kingdom, where they are trying to restart their nuclear program. They don't possess the capabilities we possess here. And it behooves us to make sure we are maximizing that ingenuity, that innovation, we have.

In terms of taking a look at how we spend the dollars, a number of round tables are upcoming with respect to R and D, specifically from Natural Resources Canada. One is non-fossil fuel research and development. And I'm hoping I'll be hearing some ideas from stakeholders about the role nuclear can play and what kind of research they'd like to see.

But Chalk River certainly is a unique place. It has unique scientific tools and expertise. And part of the reason we want to restructure is to make sure we leverage these the best way.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

In terms of the files you oversee on the nuclear issues, how important is the NRU's return to service? In your opinion and in the government's opinion, what level of priority should AECL give to returning the NRU to service?

[Lisa Raitt, Conservative, Halton, ON]

We've been very clear with AECL that Canadians expect to have the return to service as safely and as expeditiously as possible.

I've been to Chalk River to tour the site. We receive weekly briefings. I receive weekly briefings or I have weekly contact with the CEO and with the chair of the board to ensure they understand the importance of making sure that, as project managers, they're on schedule and continue to move forward as quickly as possible. So their number one priority is to return the NRU to service.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Minister, there was a press release from the CREATE group, which as you know stands for Chalk River Employees Ad hoc Task ForcE for a national laboratory. The press release highlighted their report asking the government to build a new national laboratory. I'm wondering if you have any comments on that report.

[Lisa Raitt, Conservative, Halton, ON]

We're very grateful to have the report. One of the reasons we announced on May 28 that we were proceeding the way we were was in the hope of bringing together these kinds of groups that would give us feedback and input and stakeholder positions regarding the future of AECL. So we're very receptive to receiving it.

My staff has received the report, as have the officials at NRCan, and it's all part of the mix. It's all part of the advice that is being received to come up with the best restructuring plan in the best way to maximize the Canadian taxpayers' dollars, keeping in mind not only the physical assets but the intellectual assets we have as well.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I'm interested in the funding history of AECL. We've heard here in committee--and I believe it's something that Canadians and certainly all members of this committee seem to recognize, as I believe Mr. Cullen and others have mentioned in the past--is that one of the causes of the problems we're seeing with AECL, including the recent problems with the NRU, is that over 13 years the Liberal government starved and neglected funding for AECL. This neglect has led to some serious problems, and we see the Liberals--including the previous Liberal ministers of natural resources, Ralph Goodale and John McCallum--trying to exploit these problems for partisan political gain. Do you believe the long-term neglect from the past Liberal governments has left AECL with significant challenges in the current nuclear environment?

[Lisa Raitt, Conservative, Halton, ON]

I certainly think the facts are the facts; AECL's annual appropriation was reduced by 40% in 1989. For the past three years, we've tried to catch up to that funding gap, and as a government we've funded an estimated $1.15 billion, whereas between 1993 and 2006, the total funding was only $2.1 billion.

Certainly it's the case where if you're only given a limited amount of money as a crown corporation, you need to stretch it as far as you can. In this situation, we ended up having to play catch-up to ensure we were well-positioned to take advantage of what was happening in the world, which was the AREVAs of the world and the GEs and the Hitachis and the Mitsubishis coming together to form strong partnerships to move forward and sell nuclear reactors in the world, and we slipped.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you.

Do you feel there are immediate and longer-term opportunities for Canada in the global industry? Do you believe there's a need to bring AECL's strength to that opportunity now?

[Lisa Raitt, Conservative, Halton, ON]

Yes, I do. That's the other part of it. I know I speak a lot about the workers, and it's not just lip service, because they really are a phenomenal group of scientists and innovators who possess a knowledge that is second to none in the world. It really is our opportunity to make sure that Canada takes advantage of it. We've invested in it for so long, and it makes sense for us to be able to take advantage of the timing of it, so we want to restructure, we want to make sure that people have the tools to take advantage of it. I believe the stakeholders are indicating they understand, and certainly the people who work at these two facilities and facilities across Canada understand as well.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Gallant, and thank you, Minister.

We are out of time for the first 45-minute segment of this meeting, so I will suspend for two minutes while everyone gets their information organized. We'll come back in two minutes with the minister's presentation to lead off the second session.

[The Chair, Conservative, Leon Benoit]

Okay, we're here with the second part of our meeting today, dealing with Bill C-20, an act respecting civil liability and compensation for damage in case of a nuclear incident.

We'll start off this part of the meeting with a presentation from the minister once again. When she is finished, we'll go to questions from the members and answers from the minister.

Madam Minister, if you would, go ahead with your presentation, please.

[Lisa Raitt, Conservative, Halton, ON]

Thank you very much, Mr. Chair.

I'd like to tell the committee on this one that I do have a much shorter presentation; therefore, you'll have lots of time.

I'm pleased to have this opportunity to speak to the standing committee today on Bill C-20, an act respecting civil liability and compensation for damage in case of a nuclear incident. The legislation passed second reading in the House of Commons in June, and it's to repeal the Nuclear Liability Act and bring Canada's liability legislation in line with the other pieces of our modern nuclear regulatory framework.

As committee members know, a strong nuclear industry brings great economic and environmental benefits, but there's also responsibility to ensure that the public interest, health, safety, and the environment are protected through strong legislation and regulations, and to ensure the legal framework is in place to allow nuclear development to proceed efficiently.

Canada's nuclear safety record is second to none in the world. We have a robust technology, a well-trained workforce, and we have stringent regulatory requirements. The three main pieces of legislation that govern Canada's nuclear industry are the Nuclear Safety and Control Act, the Nuclear Fuel Waste Act, and the Nuclear Liability Act. Both the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act are modern pieces of legislation that put Canada at the forefront of nuclear regulation. The Nuclear Liability Act, while standing the test of time, does need to be updated to complete our modern legislative framework for nuclear power.

In Canada, we put in place the Nuclear Liability Act over 30 years ago to establish a comprehensive liability framework for injury and damage arising from nuclear incidents. Both this earlier legislation and Bill C-20, now before the House, apply to the following: nuclear power plants, nuclear research reactors, fuel fabrication facilities, and facilities for managing used nuclear fuel. The framework established under the initial Nuclear Liability Act is based on the principles of absolute and exclusive liability of the operator, mandatory insurance, and limitations in time and amount. These principles are common to nuclear legislation in most other countries such as the U.S., France, and the United Kingdom, and these principles are just as relevant today.

Mr. Chairman, the underlying principles of Canada's existing nuclear liability framework balance the needs of victims with society's interest in nuclear development. It has provided the stability and the security needed to support the continued development of Canada's nuclear power industry.

However, although the basic principles underlying Canada's nuclear liability legislation remain valid, the act does need updating to address issues that have become evident over the years and to keep pace with international developments. As a result, the Government of Canada has conducted a comprehensive review of the act and is proposing the new legislation that the committee is considering.

Bill C-20 is a major step forward in a comprehensive modernization of Canada's nuclear liability legislation. It puts Canada in line with internationally accepted compensation levels, and it clarifies definitions for compensation, and as well the process for claiming it.

The challenge for the government in developing this legislation was to be fair to all stakeholders and to strike an effective balance with the public interest. The bill is the culmination of years of consultation involving extensive discussions with major stakeholders, including nuclear utilities, the governments of nuclear power generating provinces, and the Nuclear Insurance Association of Canada--and it has received broad support.

I know that some nuclear operators may be concerned about cost implications for higher insurance premiums, but they also recognize that they have been sheltered from these costs for some time. Suppliers welcome the changes, as they provide more certainty for the industry. Nuclear insurers appreciate the clarity provided in the new legislation and the resolution of some long-standing concerns. Provinces and municipalities with nuclear facilities have also been supportive of the proposed changes.

In conclusion, Mr. Chairman, Canada's nuclear safety record is second to none in the world. The Nuclear Safety and Control Act and the Nuclear Liability Act provide a solid legislative framework for regulating the industry, and have done so since Canada's industry emerged as a world player: the former seeks to prevent and minimize nuclear incidents, while the latter applies should an incident occur. However, unlikely as it may be, we must be prepared for the possibility of a serious nuclear incident that could result in significant compensation costs. For these and other sound reasons, I would ask the honourable members to support this legislation, and I stand open for questions.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister, for your very concise statement.

We'll now go directly to questioning, starting with Mr. Tonks from the official opposition. If there is time left, we'll go to Mr. Regan.

Go ahead, Mr. Tonks.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you, Mr. Chairman.

I thank the minister and staff for being here.

Minister, I want to ask a question on your previous presentation with respect to the expert panel on medical isotope production, and you are indicating we will receive the report on November 30. You also indicated that this report will provide the government with advice on medium- and long-term options for isotope production.

When the committee was hearing from expert witnesses, specifically on the MAPLE technology with respect to isotope production, I'll admit, and I'm sure the committee is aware, that many of the people had a firsthand operating and research interest in the MAPLEs. We are aware that there was an expert panel that came up and did an evaluation.

The question I would think the committee would like to have an answer on is, will the expert panel be dealing with the technological shortcomings, if you will, of the MAPLE reactors, or will they be emphasizing the business case aspects of it? Is it technological, is it business case, or is it both?