House of Commons Hansard #101 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was nuclear.

Topics

Nuclear Liability and Compensation Act
Government Orders

3:45 p.m.

Bloc

Christian Ouellet Brome—Missisquoi, QC

Mr. Speaker, I very much appreciate the comments by my colleague from Western Arctic because this gives me the opportunity to point out that in the United States, there are 144 nuclear generating stations that share what they call one “pot”. They pool all their money together, between $9 billion and $11 billion. That is why this varies, since it is based on the assets that are invested.

There is no insurance policy. They do not deal with an insurance company. They never would have gotten such insurance from any company. They pool their money together. Here in Canada we have just 22 generating stations. Even if they pooled their money together, they obviously would not come up with $9 billion or $10 billion. That would force them to close. It may be a good idea, but that is not the issue. This is a matter of protecting the public.

The insurance companies have said that when it comes to protecting the public, they cannot go any higher than $650 million. It will be hard enough to find insurers. We will have to find reinsurers to get to $650 million.

Nuclear Liability and Compensation Act
Government Orders

3:45 p.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Mr. Speaker, this is a challenging topic for the House. One of the things I have heard in this discussion about Bill C-5, an act respecting civil liability and compensation for damage in case of a nuclear incident, is that we should support the new limits proposed in this bill because they are better than the old ones. It seems to me that argument, in itself, is fundamentally flawed because it is like saying half a loaf is better than no loaf at all.

We have seen other pieces of legislation proposed in the House of Commons that we subsequently had to go in and fix because they were inadequate. One of them was the voter identification piece of legislation, which disenfranchised over a million rural voters. Because the House did not perform its due diligence, we passed a piece of legislation that was deeply flawed.

In addition, we are being asked to say that we have trust and confidence in the current Conservative government to manage this particular file. Of course, the whole shemozzle around Chalk River was such that I would argue that Canadians do not have confidence in the government to deal with this in a fair and reasonable manner.

New Democrats have been raising issues and concerns around this piece of legislation. In particular, I want to talk about the very good work that the member for Western Arctic has done. He proposed many amendments to try to improve this piece of legislation and, unfortunately, they were not supported by members of the House.

In addition, I know that the members for Vancouver Island North and Victoria have also raised concerns around some of the challenges in this piece of legislation.

I want to talk a bit about where this bill came from. In order to facilitate the development of the nuclear industry in Canada, the federal government has developed legislation to limit the amount of damages a nuclear plant operator would have to pay out should there be an accident causing radiological contamination to property outside the plant area itself. Such legislation is necessary as private insurers refuse to compensate for damage due to a nuclear accident or incident.

The current legislation dates from the 1970s and is woefully inadequate with a liability limit of $75 million. By comparison, a new mine usually has to post an environmental bond of approximately $50 million. This low level of liability is creating an impediment for foreign, particularly American, private industry for purchasing Canadian nuclear industries.

Under American law, a foreign victim of an accident caused by an American headquartered company can sue for damages under American law if the foreign law is insufficient by international standards. These changes bring the legislation in line with minimum international standards. It is important to note that.

We look to Canada often to become a leader in any number of areas and, sadly, what we have seen over this last two years in particular is an erosion of Canada's leadership on many files, such as international human rights obligations.

We have certainly seen the government abandon our leadership role around the UN Declaration on the Rights of Indigenous Peoples by refusing to sign on to it, one of only three countries left. Australia reversed its position.

On the environment, we have certainly seen the government stonewall in every way possible with the Kyoto protocol and trying to demonstrate it is a leader as it is actually rejoining the age of the dinosaurs, I would suggest.

Bill C-5 limits the total liability of a nuclear operator to $650 million, which is the bottom of the international average. For amounts above that number, a special tribunal would be set up by the Minister of Natural Resources and further funds would come out of the public purse. This basically means that a nuclear operator would only have to pay out a maximum of $650 million while the public would be on the hook for millions, possibly billions, of dollars in case of an accident.

I mentioned the fact that the member for Western Arctic put forward 35 amendments and I am going to talk a bit about those amendments. One of the clauses he proposed was in relation to the removal of the $650 million international bottom line standard and actually having the full gamut available.

In that context, I want to quote from the speech given by the member for Western Arctic:

One of the key amendments that we are looking for is to take out any limit on nuclear liability. Unlimited amounts would probably be the preferred method to deal with it, just as Germany does. It has an unlimited liability on nuclear facilities. That means that whatever the costs are, when there is an accident those who are responsible for the plant will need to pay those costs.

The $650 million limit set in this bill pales next to that of our major trading partner, the United States of America, which has an $8 billion to $10 billion liability ceiling on its nuclear facilities. Most of our nuclear facilities are located in highly populated areas in southern Canada, areas similar to where the nuclear facilities are located in the United States.

The Conservative members often tout U.S. policies on things, so surely they would want to be in line with one of our major trading partners on this very serious issue of nuclear liability. If, after examining the issue, the United States has determined that $8 billion to $10 billion is a reasonable amount for nuclear liability, that would seem something Canada should also seriously examine, although, as the member for Western Arctic has proposed, there should not be a limit on the nuclear liability.

I want to put this in the context of where this came from. The Vienna Convention on Civil Liability for Nuclear Damage tried to address some of the very serious concerns around civil liability around the world. This is a bit of background on what was happening:

In September 1997, the government took a significant step forward in improving the liability régime for nuclear damage. At a diplomatic conference at IAEA [International Atomic Energy Agency] Headquarters in Vienna, 8-12 September 1997, delegates from over 80 States adopted a Protocol to Amend the 1963 Convention on Civil Liability for Nuclear Damage and also adopted a Convention on Supplementary Compensation for Nuclear Damage.The Protocol sets the possible limits of the operator's liability at not less than 300 million Special Drawing Rights (SDRs) (roughly equivalent to 400 million US dollars). The Convention on Supplementary Compensation defines additional amounts to be provided through contributions by States Parties on the basis of installed nuclear capacity and UN rate of assessment.The Convention is an instrument to which all States may adhere regardless of whether they are parties to any existing nuclear liability conventions or have nuclear installations on their territories. The Protocol contains inter alia a better definition of nuclear damage (now also addressing the concept of environmental damage and preventive measures), extends the geographical scope of the Vienna Convention, and extends the period during which claims may be brought for loss of life and personal injury. It also provides for jurisdiction of coastal states over actions incurring nuclear damage during transport. Taken together, the two instruments should substantially enhance the global framework for compensation well beyond that foreseen by existing Conventions. Before the action in September 1997, the international liability regime was embodied primarily in two instruments, i.e. the Vienna Convention on Civil liability for Nuclear Damage of 1963 and the Paris Convention on Third Party Liability in the Field of Nuclear Energy of 1960 linked by the Joint Protocol adopted in 1988. The Paris Convention was later built up by the 1963 Brussels Supplementary Convention. These Conventions are based on the civil law concept and share the following main principles:

There are a number of principles outlined in these conventions, but I just want to talk about a couple of them.

One is that the liability is channelled exclusively to the operators of the nuclear installations. Another is that the liability of the operator is absolute; for example, the operator is held liable irrespective of fault. Another is that the operator must maintain insurance of other financial security for an amount corresponding to his liability. If such security is insufficient, the installation state is obliged to make up the difference up to the limit of the operator's liability.

It is on this last point where we are very concerned that Canadian taxpayers may be on the hook for the difference between the $650 million and the millions and millions over and above that amount which could be incurred in a nuclear incident.

We often hear Conservative members talk about being concerned about the taxpayers' purse and accountability. I would suggest they make sure to bring in legislation that actually does protect taxpayers from being on the hook for a potential incident.

I want to turn for a moment to the economics of nuclear power. One of the things that is important in this consideration is the age and the state of nuclear facilities, and the kind of investment that is made for future nuclear stations, if that is the direction the government should choose to go in. However, I know that many members in the House and certainly many of my constituents do not support nuclear power as a viable option.

In its paper “The Economics of Nuclear Power”, Greenpeace provided an analysis of a variety of elements that go into building and maintaining nuclear power stations. I am not going to deal in depth with a number of them, but the executive summary states:

The civilian nuclear power industry has been in operation for over fifty years. During such a long period, it would be usual for technological improvements and experience to result in learning and subsequently enhancements in economic efficiency. However, the nuclear industry has not followed this pattern.

It provided an analysis on the rising construction costs, rising construction times, falling construction demand and untested technology. It talks about generation III and III+ reactors and the fact that this is untested technology for the longer term.

Of course, when we are talking about liability, we want to understand a variety of factors in terms of the condition of the nuclear industry in Canada. In talking about an unfavourable marketplace, it states:

The economics of nuclear power have always been questionable. The fact that consumers or governments have traditionally borne the risk of investment in nuclear power plants meant that utilities were insulated from these risks and were able to borrow money at rates reflecting the reduced risk to investors and lenders.

Again, it comes back to insurance. The taxpayers could be on the hook. They are in a position where the industry itself is not bearing the true cost of what it takes to maintain and operate a nuclear power plant. In this case I would argue once again that the limit to liability should be removed. It is the nuclear industry itself that should have the full responsibility for insurance around operating these plants.

This paper, “The Economics of Nuclear Power”, goes on to talk about a nuclear renaissance. It states:

The much touted “nuclear renaissance” assumes that new plants will be built cheaper than the alternatives, on time and to cost, that they will operate reliably and that the cost of dealing with long-term liabilities such as waste disposal and decommissioning will stabilize. However, wishing for an outcome is not sufficient to make it fact. Until nuclear power actually meets all these criteria on a sustained basis, the additional risks of nuclear investment will be large.

It goes on to talk about the fact that the nuclear industry only survives because of significant subsidies. It states:

It is now 29 years since the last order for a new nuclear power plant in the U.S. and 34 years since the last order for a plant that was actually completed. Utilities suffered heavy losses in the 1980s as economic regulators became increasingly unwilling to pass huge cost overruns from nuclear projects on to consumers, forcing utilities to bear the extra costs. The introduction of power markets has meant that plant owners are now fully exposed not just to the risk of cost overruns but also to plant unreliability.

Again it is all of these factors that have to be considered when we are talking about potential risk to the taxpayer in Canada.

I want to talk a bit about decommissioning. Decommissioning of these plants is a long and complicated process. Many times the costs for decommissioning are passed on decades into the future for future generations. Of course, when the costs for decommissioning at today's current rates are considered, they are often completely out of line with what the eventual decommissioning costs will be.

With respect to funding long term liabilities, the Greenpeace paper, “The Economics of Nuclear Power”, states:

There is a moral imperative for the “polluters” to take all reasonable measures to ensure that those that have to perform the cleanup are given sufficient money to do the job. This imperative has three main dimensions:

Estimates of the expected cost should be conservative or pessimistic, especially where the cost is not well established so that funds are not inadequate because the cost is greater than expected;

Funds collected from consumers should be placed in very low risk investments to minimize the risk that the funds will be lost. Such investments inevitably yield a low interest rate;

Funds should not be accessible by the company that owns the plant other than for decommissioning purposes.

The Greenpeace paper refers to the experience of the United Kingdom:

The experience of the United Kingdom in dealing with long term liabilities is salutary, with costs consistently underestimated and provisions not adequately safeguarded.

There is certainly experience throughout the world which says that the true cost and liabilities for operating these plants are not borne by the plant operators. Costs are often underestimated, in the construction phase and subsequently in the decommissioning phase and at some point taxpayers are on the hook for this. That does not seem to be a responsible way to proceed with this.

In a conversation about nuclear power and nuclear liability, one of the other things that has to come up is whether or not this is the best use of taxpayers' money and whether or not we should actually be investing our time and our energy in alternative energy strategies. The document, “The Economics of Nuclear Power”, talks about energy efficiency and renewable electricity sources:

Energy efficiency must be the cornerstone of future energy policies. The potential for energy efficiency is huge. According to the French Ministry of Economy, changes in the production, transmission and use of energy (including transport) could result in a halving of global energy consumption--from the business as usual scenario--resulting in the saving of 9,000 million tonnes of oil equivalent...per year by 2050.

This is in terms of the conservation end of it and using more efficient appliances, more efficient automobiles, more efficient home heating, and more efficient building and retrofitting of housing and commercial and industrial buildings. We need to pay full attention and put our resources toward improving energy efficiency in this country.

The other piece is renewable electricity sources. In the context of a global study, it was found that hydroelectricity and wind energy are expected to deliver the biggest increases in electricity production by 2020. In the context of renewable energy sources, Canada is lagging behind the rest of the world.

My province of British Columbia is fortunate because a significant portion of its electricity comes from hydroelectric sources. The dams were built many years ago so the environmental damage has already been done. British Columbia is in a fortunate position because it has a fairly clean energy source.

Many of the provinces in Canada, such as Ontario, have been under pressure to build new nuclear facilities because they have not invested in some of the other more environmentally friendly, cleaner, renewable energy sources. That is why this bill is an important piece of legislation. If people are starting to propose the addition of new nuclear facilities, it is important that the plant owners bear the true cost of building those plants.

Canada does not have a comprehensive strategy from coast to coast to coast to look at the needs of Canadians in terms of electricity sources. Recently, a newspaper story stated that the government of Nunavut is spending 25% of its budget on diesel because it has not had the support of the federal government to develop alternative energy strategies. As fuel prices climb in this country communities are going to be increasingly marginalized because they do not have access to other tools and resources that we should have been developing over the last 20 years.

The member for Western Arctic proposed a number of amendments in order that the bill would better suit the needs of the Canadian public. Because those amendments were not supported, the NDP is not in a position to support this piece of legislation.

Nuclear Liability and Compensation Act
Government Orders

4:05 p.m.

NDP

The Deputy Speaker Bill Blaikie

Before I entertain questions and comments, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Hull—Aylmer, Minister of the Environment; the hon. member for Kitchener Centre, Ethics; the hon. member for Gatineau, Official Languages.

Questions and comments. The hon. member for Beauharnois--Salaberry.

Nuclear Liability and Compensation Act
Government Orders

4:05 p.m.

Bloc

Claude DeBellefeuille Beauharnois—Salaberry, QC

Mr. Speaker, I share many of the same concerns as the NDP member, and I understand her worries about this bill. However, I think that she agrees that the status quo was no longer acceptable.

I am very disappointed today. When we talk about nuclear liability, we should also be talking about nuclear safety. But this morning the NDP sided with the government to keep the Standing Committee on Natural Resources from talking about nuclear safety at the Chalk River laboratory, isotopes and the MAPLE reactors. It is discouraging to see the NDP talking about the importance of nuclear liability, yet this morning they sided with the Conservative government against a study we had committed to.

I would like the deputy who just spoke to tell us where the consistency is between this morning's decision to block the nuclear review and her interest in nuclear liability. I would really like to hear her explanation.

Nuclear Liability and Compensation Act
Government Orders

4:10 p.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Mr. Speaker, that is not my understanding of what happened. I know the member for Vancouver Island North has been pushing hard for a review of this matter. I hardly believe that we would be aligned with the Conservatives on issues around renewable energy and nuclear liability. It does not seem possible given the context of what we have been talking about.

We do share concerns around the inadequacy of the current limits. However, it is unfortunate that the Bloc was not able to support the amendments put forward by the member for Western Arctic. Those amendments would have ensured we were able to protect the liability of Canadian taxpayers from nuclear incidents.

Nuclear Liability and Compensation Act
Government Orders

4:10 p.m.

Liberal

Shawn Murphy Charlottetown, PE

Mr. Speaker, I would like to get the member's views on what is happening internationally. Canada, for quite some time now, has not had a new nuclear facility, nor have that many been built in the United States. However, in other countries there have been quite a number of new nuclear facilities and new technologies vis-à-vis the disposition and storage of waste, especially in France.

We are certainly under no obligation to follow what is going on in some of the G-7 or G-20 countries but would this legislation conform to what is going on in this area in other developed countries?

Nuclear Liability and Compensation Act
Government Orders

4:10 p.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Mr. Speaker, my understanding is that we are again at the bottom of the international standards with this particular legislation and once again Canada is in a position of playing catch-up with other countries.

The amendment put forward by the member for Western Arctic to remove the $650 million liability and make it an unlimited liability that the plant operators would be responsible for, would have been an opportunity for Canada to demonstrate some leadership.

I talked about some of the new generation of technology when I was speaking to this. Some of the newer generation of technology is still relatively unproven. I cannot remember in which country it was being implemented, but the Generation III and III+ reactors are being implemented. However, these reactors have not been around for a sufficient period of time to demonstrate whether they will be efficient enough or whether the cost will justify them, particularly in light of the liability.

Because Canada, in the past, has not appropriately funded places like Chalk River, we are way behind the mark on this. We probably are years behind in terms of taking any kind of leadership role.

Nuclear Liability and Compensation Act
Government Orders

4:10 p.m.

NDP

Catherine Bell Vancouver Island North, BC

Mr. Speaker, I wish to make a comment and ask the member a question.

Unfortunately, the member for Beauharnois—Salaberry said that the NDP was somehow in cahoots with the Conservatives by agreeing to study the issue of greening of electricity in Canada, which we are very interested in, while all the time the nuclear liability bill was at committee, the Bloc was agreeing with the Conservatives and not supporting our amendment. I am confused that when we agree on one hand and disagree on the other that we are somehow in cahoots.

When I spoke to the bill earlier, I mentioned that some of the programs the government had in place, such as the ecoenergy program, were inadequate and that members from my community and other communities had written to tell me that.

The hon. member for Nanaimo—Cowichan spoke about alternative energies to nuclear, which we should be advocating, but the member for Cambridge basically told me that I was not doing my job and telling people that these programs were not working well.

I just received an email from a woman telling me that the program does not include solar panels, wind or electric heating. She has provided the link so that he can better understand the program. She called on the member to issue an apology to me, which I found quite flattering.

I just wonder if the member for Nanaimo—Cowichan could expand on some of the things that she is hearing in her riding from constituents who are not able to access the programs because they are inadequate.

Nuclear Liability and Compensation Act
Government Orders

4:15 p.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Mr. Speaker, I want to thank the member for Vancouver Island North for her work on trying to promote green renewable energy sources.

On Vancouver Island many homeowners are suffering because of the rising fuel prices. People are having trouble deciding whether to pay for food or heating.

With regard to accessing the programs the Conservative government put forward, I have heard consistently from people in my riding that it takes tremendous effort for very little return. Many people have simply given up, if they can even find the information to begin with.

I would echo the constituent of the member for Vancouver Island North who wrote her about the challenges with the program. If we are truly serious about this, we need to actually put money into retrofits and ensure they are accessible and available, particularly for middle and low income families.

We also need to ensure that programs around fuel efficient cars are such that they do support the greening of the auto sector, along with a number of other initiatives that would help us actually conserve energy and make us much more productive and efficient in those areas.

Nuclear Liability and Compensation Act
Government Orders

4:15 p.m.

Liberal

Derek Lee Scarborough—Rouge River, ON

Mr. Speaker, we are debating Bill C-5 today at third reading, which is quite an important bill in the scheme of things.

The need for the bill was generated over a number of years. Suffice to say that the nuclear power option and the use of nuclear power plants for energy production began here after the second world war and was highly regulated under a statute that stayed pretty much the same for most of those years, and, as in so many other areas, an update or a modernization is required. This particular bill addresses, for the most part, the liability component of the envelope.

The area is highly regulated. No matter what we do involving the nuclear industry, it is always highly regulated. Some people in Canada do not believe we should be as reliant on nuclear energy as we are. The fact is that in Ontario, Quebec and New Brunswick, there is substantial reliance. I think in Ontario, one-third of the current power needs are generated by nuclear energy. I am saying that to indicate that the nuclear generation option is not going away. We will continue to rely on it for many years and some of our provinces have made that decision.

To be sure, there are other sources of energy. We are capable of improving our production of hydroelectric energy. We continue to generate electrical energy from gas. We may be using coal in some parts of Canada. Our neighbour to the south is certainly using it in some parts the country. Wind and solar options are there too but nuclear will remain.

Is it efficient? Is it cost effective? Is it clean? Is it safe? Is it renewable? All those questions are there and are part of the continuing debate.

The bill does not alter any of those but it does recognize that there have been a lot of changes in Canadian society, in the world, in the financial world, in the insurance world and in our perspectives on nuclear energy and the risks associated with it that caused us to modernize the statute that governs this very regulated industry.

If people wanted to produce some solar energy, some wind energy in a particular province, they would call it co-generation and plug it into the electricity grid, and they could probably do it without much regulation. However, if they were to try to do some nuclear generation, they could not move without a licence in their back pockets or maybe a dozen licences.

I should also say that Canadians, whether or not they know it, are actually quite reliant on some radioactive processes, both for health care and for some industrial processes. Radioactivity and radioactive isotopes are found in many of our communities. They are closely controlled and serve us all very well, whether we actually know it or not.

To be sure, there are some background radiation sources with low level radiation. They are found in various places across the country, including where uranium is mined or has been mined and where there are tailings. We generally manage those things fairly well and the Government of Canada is quite involved in that. Wherever it is higher than background level of radiation, the Government of Canada believes it has a jurisdiction and it acts.

The bill itself re-establishes a revised liability scheme for civil liability and compensation for this envelope of activity. It is worth pointing out that the previous statute had a maximum liability for an operator of a paltry $75 million.

These days, when it comes to potential liability for anything, whether we have some bad peanut butter, or drive a car, or a truck, or a train or fly an aircraft, $75 million is not a lot of coverage for potential liability. That has been recognized now for some time. The bill would correct that by increasing the limit up to $650 million.

Some may say that is not a lot either. However, the bill was reviewed by the standing committee of the House of Commons and that limit was selected after looking at the basic principles of nuclear liability.

I will reiterate the four principles for the record. First, the operator is the party that is liable, nobody else. Second, the operator of the nuclear facility is exclusively liable for damages if there is an accident. Third, the operator must carry insurance. Fourth, the liability is by statute limited. There are time limitations and dollar limitations, in this case running up to $650 million. This is important. Those who supply materials to the nuclear operator do not face liability for second and third party liability. They can safely deliver the commodity or service to the nuclear operator and they do not have to deal with the potential liability if there is an accident.

Fortunately we have not had any serious accidents in Canada. There have been accidents in two, three or four in various places around the world. The one most people will recall is Chernobyl. The implications of that have been experienced right around the world for all these years.

The factors involved in picking this number include the foreseeable risk. That means the amount chosen was based on what an operator might anticipate as a risk and not from a catastrophic unforeseen event. Our nuclear reactors all have second and third backup fail-safe systems.

This legislation would bring Canada up to par and to the same level as most of the other countries that produce nuclear energy, certainly the western countries. We would get to the $650 million limit not in one slice, but in several years of phase-in, which would be done by regulation.

Under the bill, the government and Parliament will be able to review this every five years. Things may change some more in the coming years.

The statute takes account of what are actually huge changes in the insurance industry. The insurance will have to be obtained only through an approved insurer. The government and the House have recognized that there are other ways of insuring these days, which perhaps were not available 50 years ago. They include government guarantees, letters of credit, some types of self-insurance and the big one of reinsurance.

In some cases some carriers of insurance will not insure unless they have the ability to reinsure, and that means spreading out the risk to shareholders and investors in different parts of the jurisdiction or even around the world. A lot of major insurance contracts now are reinsured to spread the risk around the world. The reinsurance mechanism, which is now an industry standard, can be used here where an approved insurer will not insure without the reinsurance piece.

The insurance and civil liability also cover the movement of radioactive materials, either the uranium coming in if it is above the level and the spent uranium in the fuel rods or whatever else might be radioactive and transported. There have not been any accidents that I am aware of right now, but there can be with these things and people can be harmed, so we are insuring against those too.

It is notable that since the nuclear industry began, we have realized that sometimes the harm associated with an exposure to radiation will not be seen for many years. Therefore, the time limitation on a claim for bodily injury from exposure to radiation is now pushed out to 30 years. The other limitation for property damage is 10 years, but for bodily injury and death there is a 30 year limitation period.

In the event that a nuclear accident crossed a provincial boundary, if we did not have this legislation, we would probably have litigation going on in two separate provincial court systems. There is a provision in the bill that where there is a boundary straddling circumstance, the claim may be made in the Federal Court.

The last thing I want to say about that is in the event of a major accident, the government may establish a nuclear claims tribunal, in other words, to take it out of the courts and establish a special tribunal to deal with actual liability claims and any awards that will have to be made.

What the government has provided for in the bill and what the House has approved is a certain amount of free market interplay with the insurance and reinsurance scheme. In theory, that should keep the insurance costs down or at least competitive and the nuclear station power operators will have the benefit of having improved accessibility to insurance and improved cost efficiencies.

The proposed bill also provides for a reciprocating arrangement with other countries. There is always the risk that a nuclear operator is a corporation that straddles international boundaries or the nuclear operation may be close to a boundary. For example, in my riding of Scarborough—Rouge River, the very east end of the city of Toronto, is only 10 or 20 kilometres from the Pickering Nuclear Generating Station. The generating station is on the shore of Lake Ontario and that itself is only a few kilometres from the boundary of the United States of America.

There is the ability under this statute for the Government of Canada to enter into an agreement with another country to deal with the possibility of nuclear accidents and liabilities in a reciprocating agreement where it would accept our procedures and we might accept its. The ability is there and in the increasingly global environment, that is probably a good thing.

I commend the committee that looked at the bill. I cannot assume anything about third reading, but my party certainly will support it. My hope is that we will get to third reading fairly soon.

Message from the Senate
Government Orders

May 29th, 2008 / 4:30 p.m.

NDP

The Deputy Speaker Bill Blaikie

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed certain bills.

The House resumed consideration of the motion that Bill C-5, An Act respecting civil liability and compensation for damage in case of a nuclear incident, be read the third time and passed, and of the motion that this question be now put.

Nuclear Liability Compensation Act
Government Orders

4:30 p.m.

NDP

Dennis Bevington Western Arctic, NT

Mr. Speaker, I rise to speak to some of the issues that my hon. colleague brought up. We were concerned with many of them. We put forward amendments, both at committee and in the House, over the time we dealt with the bill, which is a considerable length of time. One of them is the reinsurance provisions.

The hon. member alluded to the reinsurance provisions within the bill and said that the insurance companies could reach out to other insurance companies. If they felt they could not take this risk on themselves, they could reinsure with other insurance companies.

However, in the bill the federal government is empowered to be the reinsurer of the nuclear facilities. If they are unable to accomplish the insurance with the insurance company, the government can step in and become the reinsurer. In other words, it can take over the liability of the insurance for the particular facility. We had a lot of trouble with this clause. We did not see this as setting up the nuclear industry as separate, distinct and on its own two feet. We saw this as the government would be brought into insuring high-risk nuclear facilities.

How does this match up to understanding that the industry will work in an unsubsidized, unsupported manner from the government? How will this phase, which we tried to eliminate, prevent government from holding the liability for the nuclear plants that are not up to the standards that regular insurers would cover?

Nuclear Liability Compensation Act
Government Orders

4:35 p.m.

Liberal

Derek Lee Scarborough—Rouge River, ON

Mr. Speaker, the hon. member, either on his own or with his party, was not comfortable with the Government of Canada stepping in, or I suppose a provincial government could as well, as a reinsurer or a guarantor. I take it he is referring to the guarantee piece for a government. My understanding of the bill is a government could become a guarantor of a insurance contract or be a surety for a reinsurance contract.

The member is correct in suggesting that having the government do it is a non-market mechanism in many respects will appear to be a benefit or a subsidy to the nuclear industry. However, it is also a fact that it is highly unlikely we would have any nuclear capability in our country if it were not for a government infrastructure that regulated it in the first place. Most people will recognize that the essential component of the nuclear industry carries a lot of risk with it. It is simply not something we can carry around in our back pocket. Therefore, the presence of the government should not be a surprise.

I know the bill offers the potential, with government approval, of normal insurance-reinsurance mechanisms so the risk is spread around and the costs of the insurance are kept within reason.

Nuclear Liability Compensation Act
Government Orders

4:35 p.m.

NDP

Dennis Bevington Western Arctic, NT

Mr. Speaker, I want to refer to subclause 26(1) in the bill. It states:

The Minister may enter into an agreement with an approved insurer under which Her Majesty in right of Canada reinsures some or all of the risk assumed by the insurer under insurance referred to in subsection 24(1).

Subclause 26(2) states:

The risks that may be reinsured are those that, in the Minister’s opinion, would not be assumed by an approved insurer without the agreement or those that are prescribed by regulation.

Subclause 26(3) states:

The reinsurance agreement may provide for the payment of premiums to Her Majesty in right of Canada.

Quite clearly, we see that the government then becomes the reinsurer. It is collecting the premiums. It is assuming the risk. This is not a question of a guarantee. This is a question of the government actually providing the services of the private sector in insurance.

We tried to remove this from the bill so we would have a more level playing field for nuclear energy, where nuclear energy had to stand on its own two feet. Does the member not think this should be excised from the bill?