Natural Resources Committee on June 5th, 2014

[Dr. Michael Binder]

No. The way the budget is set is on an annual basis as to what the work is that we anticipate for the year. We invoice. Part of it, 30%, is appropriation, and the rest is up to the actual licensee, depending on the work that's going to be done.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

Mr. Barrett, you mentioned this issue, and it was also in the submission from Bruce Power, who noted that the bill allows the minister to authorize additional insurers, something that they in their words “strongly encourage”. Why is this important to your industry, and what happens if the government refuses or drags its heels on this matter?

[Dr. John Barrett]

Well, it is my understanding that under the previous act and the limits there, the pool of insurers, the Nuclear Insurance Association of Canada, was able to handle the requirements, and the premiums were paid on that basis. As it goes up to $1 billion, the view of industry is that, as in any market, a little more competition might help. It has been a kind of monopoly by the small group of insuring companies, and this might be a good way of seeing if there's enough competition to bring down the premium. I think, like individuals in their households, industry looks to try to see a better deal when it comes to premium paying. So that was the main driver behind it.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Are you finished, Mr. Regan? Okay, thank you.

We go now to Mr. Calkins.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

We still have 21 minutes.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

I'll be as brief as I can. I didn't think I was going to get an opportunity to ask questions.

Thanks to my colleague, Mr. Regan, for being so brief.

I do have a question in regard to the definitions, Mr. Barrett, that you talked about, insofar as nuclear installation and so on.

I know the department officials who were here before talked about the next steps coming forward. I didn't get a chance to ask them a question, but they talked about bringing forward these similar types of definitions in the regulations versus putting them in the act. My question to them was, why would they put it in the regulations and not in the legislation in the first place?

I'm wondering if you could clarify for us whether having those definitions more clear, does it matter to you whether they're in the act or in the regulations?

[Dr. John Barrett]

I think it is the clarity of the definition, because as I mentioned at the outset, the nuclear industry is a pretty wide tent, and it involves a number of members, some of whom are involved in uranium mining, for example. Others we talked about today, the power generators, are mostly affected by the legislation that's at hand.

Along the way in the fuel cycle, nuclear fuel is produced from the uranium in Canada in the form of being fabricated, prepared, assembled, and ready for the CANDU reactors. It's for the industry to know which particular facilities are being considered as part of the legislation. So it's simply a clarification to make sure both the backgrounder and the legislation has exactly the same....

[Blaine Calkins, Conservative, Wetaskiwin, AB]

But it doesn't really matter to you where it exists. I would imagine that the government wants it in the regulations because the regulations are more nimble than legislation passed in the House of Commons. As we can see, there have been five iterations of this bill up to this particular point in time.

The other question I have—and anybody can answer this if they choose to—is that if you take a look at the 1970 legislation that came into force in 1976, with the cap at $75 million, and you put that $75 million in 1970 into today's dollars, that works out to about $465 million, and the absolutely liability cap has now gone to $1 billion. So it's actually exceeded the consumer price index, or whatever value a dollar has, by more than double. I'm just wondering if I can get some clarification from any of you who want to comment on why it's $1 billion. Is it more driven by international standards or international agreements or is it actually driven by experiences derived from other incidents?

Mr. Barrett.

[Dr. John Barrett]

I would offer my own opinion on that. Until September 2013, I served as Canada's ambassador to the International Atomic Energy Agency, and I chaired the board of governors. I was present there during the Fukushima accident as well as the follow-up to that. Mr. Binder mentioned earlier the very extensive 12-point action plan on safety that was developed at the IAEA following the accident. My own take on it is that it's partly driven by the understanding that liability is something that needs to be addressed and updated and securely placed. It doesn't matter where you are in the world, although we have to take into account the specificities of each bit of technology and where it's located, etc. But that being said, I think, collectively, the mood there was that all countries should look at their own legislation and boost it up.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Stensil.

[Shawn-Patrick Stensil]

No matter what, I think that number will be arbitrary. Natural Resources Canada had three criteria for determining the $1 billion number, including the capacity of the insurance market, and foreseeable accidents, which I believe was the second one. We should not confound the amount of insurance capacity or the required security with a liability limit. That's what we're importing into this legislation from the 1970 legislation. Greenpeace would suggest that this legislation be designed to ensure industry-based compensation for any type of accident up to a national catastrophe, in which case, of course, the government would step in, and that is not served by having a cap on liability.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

I appreciate that. You already mentioned that earlier.

I don't know how much more time I have, but I have one last question for Mr. Barrett.

You talked about the ratification of the International Convention on Supplementary Compensation. I believe once we get this legislation passed, and Canada ratifies it, and, I think, one or two other countries—maybe Japan or Korea—ratify it—the international convention is close to coming into force—as you said in your comments here, it will provide further protection in the case of an international incident.

Could you expand on that or give us an example of how the legislation would actually further improve safety if there were an international incident?

[Dr. John Barrett]

Indeed.

I think the first example that comes to mind is again with reference to the Japanese situation. I remember very clearly that the countries surrounding Japan were quite concerned about the impact of the accident and whether it would reach their shores and affect their countries. As you know, without rehearsing all the background to it, the CSC is building on other previous treaties, and strengthening it. With that, I think there's going to be much more effective international recognition that the accident or incident would not have any boundaries and is transboundary in nature.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Calkins.

We're down to a little over 15 minutes. All of you have in front of you a copy of the budget. You can look at that and we could vote on it at the next meeting. The total budget for this study is $3,900.

Do you want to just approve the budget?

[Some hon. members]

Agreed.

[The Chair, Conservative, Leon Benoit]

The budget is approved.

Okay.

Thank you very much to the three witnesses for being with us today. Sorry for the disruption. We would have appreciated more time, but that's the way it works around here.

The meeting is adjourned.