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.

Nuclear Liability and Compensation Act

[Peter MacKay, Conservative, Central Nova, NS]

moved 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.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Mr. Speaker, it is good to get up on Bill C-5, because it is such a good bill. I think that all members are going to be interested in it. I would encourage all of them, as I said, to support it.

I want to mention that the Standing Committee on Natural Resources did a great job in dealing with this bill. There was a very positive study of the bill by the committee and the bill was reported back to this House without amendment. We certainly appreciate the work the members of the committee put into their study of Bill C-5.

Canada's nuclear safety record is second to none in the world. We have a robust technology, we have a well-trained workforce, and we have stringent regulatory requirements.

There are two pieces of legislation that provide a solid framework for regulating the industry in Canada. Those are the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act.

Responsibility for providing an insurance framework, that is, a framework to protect Canadians and to provide stability in this important industry, falls under federal jurisdiction. The Government of Canada has the duty to assume its responsibilities in this area, and through this bill it is doing just that.

Canada, like virtually all other nuclear countries, addresses this responsibility with the enactment of special legislation. In Canada, we have put in place the Nuclear Liability Act. That act was passed years ago. Bill C-5 modernizes the Nuclear Liability Act. It does so by doing a number of different things. It brings the compensation levels into line with internationally accepted compensation levels. It expands the categories of compensable damage. It improves the compensation procedures and the way people make claims. It increases the financial liability of nuclear operators.

Up to date rules are needed to provide certainty regarding insurance and legal liability for suppliers, operators and the general public. Without this certainty, Canada would not be able to attract leading international firms and suppliers of technology in the nuclear industry. Of course, it could be argued that Canada's current legislation more or less accomplishes these objectives. Therefore, the question needs to be asked, why do we need new legislation when we already have a serviceable act in place? The simple answer is, as I mentioned, that the current act is outdated.

The Nuclear Liability Act was passed in 1970. In terms of today's nuclear technology, that is the middle ages. Several lifetimes of nuclear and related technologies have come and gone since then. In short, Canada's existing Nuclear Liability Act reflects the technology, the science and the thinking of an earlier period.

In the interim, it is not only the technology of nuclear energy that has advanced considerably, but the evolution of jurisprudence has contributed to substantial increases in potential liability. Therefore, the government has made the decision, and Canadians are supporting it, that our legislation must be upgraded.

There are, of course, certain fundamental principles of the 1970 act that must be retained. These include absolute liability, exclusive liability and mandatory insurance. I would like to take a couple of minutes to explain what those terms mean, because I know everyone in the House is very interested in them and fascinated by them.

Absolute liability means that the operator of a nuclear facility will be held liable for compensating victims in the rare case of a nuclear incident. This means that victims would not have to negotiate with a highly complex industry in order to determine who is at fault. There would be no question of where to take a claim for compensation.

A second and related principle, exclusive liability, means that no other party other than the operator, for example, no supplier or subcontractor, would be held liable. This removes the risk that would deter secondary enterprises from becoming involved in nuclear projects.

To modernize our liability scheme, we must have legislation that goes farther, although retaining certain fundamental principles. That is what Bill C-5 does.

The proposed legislation increases the limit of liability for nuclear operators. The current liability act sets the maximum at $75 million. That amount was substantial when it was set, but now stands as one of the lowest limits among the G-8 group of nations.

The proposed legislation reflects the conditions of today by raising that limit to $650 million. This balances the need for operators to provide adequate compensation without burdening them with huge costs for unrealistic insurance amounts, or impossible insurance amounts, for events that are highly unlikely to occur in this country. Moreover, this increase puts Canada on a par with most western nuclear countries.

Bill C-5 also increases the mandatory insurance that operators must carry by almost ninefold. It permits operators to cover half of their liability with forms of financial security other than insurance. This has been an important provision for the industry. These could, for example, be things like letters of credit, self-insurance, and provincial, or in the case of Atomic Energy of Canada, federal guarantees. All operators would be required to conform to strict guidelines in this area.

Bill C-5 makes Canada's legislation consistent with international conventions. It does so not only with respect to financial matters, but it also does so with clearer definitions of nuclear damage reflecting today's legal and international nuclear civil liability conventions. These definitions include crucial matters as to what constitutes a nuclear accident, what damages do or do not qualify for compensation, and so on.

These enhancements will place Canadian nuclear firms on a level playing field with competitors in other countries.

Bill C-5 also makes changes to the time period for making claims. Under the act that was passed in 1970, claims had to be brought forward within 10 years of the incident. However, the proposed legislation raises the time limit on compensation for claims to 30 years. Both the earlier Nuclear Liability Act and Bill C-5 provide for an administrative process that will operate faster than the courts in the adjudication. However, the proposed legislation clarifies what the arrangements for the quasi-judicial tribunal must be in order to hear those claims. This new process will ensure that claims are handled both equitably and efficiently.

There has been a lot of debate about some of these proposed measures. For example, there has been discussion about how and why the government arrived at the $650 million amount. Questions have been raised as to other international practices and what goes on in other countries. We believe the $650 million liability limit will adequately address any foreseeable incident in a Canadian nuclear power plant.

Although the U.S. operator liability is cited as $10 billion Canadian, in practice, individual U.S. operators effectively carry $300 million Canadian in primary insurance coverage. A few countries, namely Germany, Switzerland and Japan, do incorporate unlimited liability to the operator under the provisions of their nuclear civil liability legislation. However, in practice, that liability is always limited to the amount of coverage provided by existing insurance plus the net worth of the operator that is liable.

Questions have been raised as to how the $650 million liability limit will stay modern. It is important to note that the $650 million limit set out in Bill C-5 can be increased by regulation, and that limit needs to be reviewed at least every five years. This review will examine changes in the consumer price index and international trends, but will have the flexibility to take into consideration any other criteria that is deemed appropriate.

We have made the argument, and Canadians have accepted it, that this is a proper limit in order to ensure that we have the nuclear liability amounts that we need.

The challenge for the government in developing this legislation was how to be fair to all stakeholders and to strike an effective balance in the public interest. In developing Bill C-5, we consulted with nuclear operators, suppliers, insurers, the provinces with nuclear installations, as well as the public. They generally support the changes that I have described.

I know that some nuclear operators may be concerned about cost implications for higher insurance premiums, but they also recognize that the current levels have been outdated. 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 issues.

Provinces with nuclear facilities have been supportive of the proposed revisions to the current legislation. Municipalities that host nuclear facilities have been advocating revisions to the Nuclear Liability Act for some time. They are supportive of the increased levels of operator liability and improved approaches to victim compensation.

In short, Bill C-5 was not developed in isolation. The evolution of policy was guided by consultations with key stakeholders and by experiences gained in other countries. The reality is that we have general support of the industry at large for Bill C-5. I would urge the members of the House to join in that consensus.

To conclude, Bill C-5 establishes the compensation and civil liability regime to address damages resulting from radiation in the unlikely event of a radioactive release from a Canadian nuclear installation. It ensures that a proper compensation program is in place and channels civil liability to operators.

The introduction of Bill C-5 adds to this government's track record of making responsible decisions on the safe, long term future of nuclear power in Canada. It adds to the government's record of promoting a safer, more secure and cleaner world through the responsible development of nuclear energy for peaceful purposes.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, based on the debacle of what occurred last year with respect to the current Minister of Natural Resources and what took place at Atomic Energy, I want to ask a simple question. What assurances can the member give Canadians that there is an open and transparent process by which Canadians can be confident that the oversight mechanism at Atomic Energy is actually competent and transparent, and that Canadians will be aware of the process and the findings of what occurs when we are examining our atomic energy facilities?

While the chances of something happening are small, if something did happen, it would be catastrophic. Canadians have a right to know what safeguards the government is putting into place to make sure those catastrophes will not happen.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, I need to point out that the Canadian technology being used is extremely safe and the likelihood of any sort of a nuclear incident is very, very small. I think we will hear that from other members who will speak to this bill, who were at committee and understand that issue.

I should explain the oversight mechanism as it is at present. Clearly, AECL has been the provider of the nuclear technology in this country for a number of years. We have initiated a review of AECL to determine what its role should be in the future. Apart from that, the Canadian Nuclear Safety Commission provides the oversight of the safety of nuclear installations in this country. We have confidence that the commission can do that and it has been tasked with that job.

Overall, the Canadian nuclear industry is healthy. It is a safe industry and we look forward to the future.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, I have a question about the liability the Government of Canada may have with respect to its involvement in the nuclear industry. I am not sure if the member can answer the question, but I will ask it anyway. There are two incidents that I will point out on which I think we have had liabilities or currently have liabilities.

I wonder to what extent this piece of legislation restricts the federal government's liability with respect to the nuclear industry. In the summer of 2005, the government of the day transferred $2.3 billion from the Government of Canada to its crown corporation, AECL, in order to recapitalize the corporation with respect to its liabilities for waste management.

Another liability that comes to mind is the liability associated with the medical isotope reactors that were to be built at Chalk River. That project was recently cancelled. My understanding is that the Government of Canada is partly responsible for the cost overruns and liabilities associated with that.

Could the member indicate whether or not this piece of legislation in front of us limits the Government of Canada's liabilities, either with respect to these sorts of incidents or in any other way?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, there are a number of areas there which I could talk about for some time. I will try to make it short so other people have an opportunity to ask questions.

Clearly, in the development of the bill and the changes to the Nuclear Liability Act, there was an examination of what would happen in the unlikely event there was any sort of an incident in this country. There was a study of what level of compensation needed to be put in place in order to deal with whatever situation might arise. The former amount was $75 million. It was felt that $650 million was a good requirement in order to cover any incident that may occur in this country. That is why that number was picked. It is a practical number which, after studies, debate and discussion about what liability would exist, it was felt would cover more than adequately any event that would take place in this country.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, I listened carefully to the parliamentary secretary’s remarks. We are now at third reading and he knows that the Bloc Québécois will support the bill.

My question is closely related to Bill C-5. Today, in La Presse, we see a front page article by François Cardinal with the headline, “Nuclear: Safety is less than maximum” due to a lack of resources.

Today we are discussing a bill that offers guarantees, that assigns responsibilities to operators and that provides for compensation to people who suffer the consequences of a nuclear accident.

Can my colleague tell me whether, in his opinion, the Canadian Nuclear Safety Commission has all the necessary means and all the human and financial resources to properly play its role of monitoring and ensuring the safety of all the nuclear installations under its responsibility?

After reading the article published this morning, we have doubts about that. Since we are discussing responsibilities related to nuclear energy, I hope the parliamentary secretary will take this opportunity to reassure us by telling us that the Canadian Nuclear Safety Commission has all the human and financial resources it needs to carry out its entire mandate.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, I want to reiterate that Bill C-5 deals with a number of these issues in terms of providing the environment we need to ensure the nuclear environment in this country is safe.

The bill would bring compensation into line with internationally accepted compensation levels. It would expand the categories of things that are compensatory. It would improve the compensation procedures. It puts in a number of procedures that would make it much easier for people to make claims in the event of an incident. It would increase the financial liability of financial operators. On that side, Bill C-5 would put a very strong framework in place for Canadians.

On the other side, in terms of AECL, this government has provided extra resources to AECL. We have also undertaken a review of AECL and its role in Canada. As was mentioned by my colleague earlier, we have provided extra resources for cleanups and those kinds of things.

The Canadian Nuclear Safety Commission has been given the resources that it needs to do its job, which is to supervise the safety of our nuclear installations in Canada. We believe it now has adequate resources to do that job.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I want to go back to my original question for the hon. member because he did not answer it. It is a very fundamental question for most Canadians because most Canadians want to know if the nuclear industry is safe.

The member is right when he says that it has been safe in our country but that does not mean that it will always be safe. Let us look at the situation in Chernobyl in Ukraine. If we had asked representatives of the Russian nuclear energy agency at the time whether Chernobyl was safe, they would have said that there was never going to be a problem. Therefore, saying something is safe does not mean that it will be safe.

My question for the member is a very fundamental one, a non-political one and one which I hope he answers. What assurances can he give Canadians that the mechanism of observing and ensuring that the atomic energy industry in Canada and our atomic energy facilities are safe? What can he tell us about the process the government has implemented to ensure those safety mechanisms are transparent, open and available to the public?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, those structures, for the most part, are already in place. The public has access. It is an open process in terms of understanding what is going on.

As I have mentioned a couple of times, the CNSC has been given the responsibility for overseeing the safety of nuclear installations in Canada. It has clear guidelines and directions as to what needs to happen in these facilities. I think we saw some of that previously this year in terms of the things that it demands from the installations themselves.

I do not think it is fair for the member to even consider that we can compare with Chernobyl because our technology is completely different. We have decades of safety and safe operation behind us. It is not the same technology at all. For him to be even comparing the two is not realistic.

AECL is developing new technologies and, obviously, the technologies are becoming safer as the procedures are becoming more demanding. We are willing to work with that.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Mr. Speaker, I will be sharing my time with my colleague from Thunder Bay—Rainy River.

[The Acting Speaker, Andrew Scheer]

As this is the first round of speaking, I will need to ask the House if there is unanimous consent to allow the member for Mississauga—Erindale to split his time. Is it agreed?

[Some hon. members]

Agreed.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Mr. Speaker, I am glad to have the opportunity to speak to the bill again. Bill C-5, the nuclear liability bill, is an important bill. It is a culmination of years of examination and review of the old bill and is a concise overhaul of the old bill.

I want to take this opportunity to echo what the parliamentary secretary said earlier. I want to thank members of the natural resources committee for their diligent work in reviewing the bill, for listening to various stakeholders and for offering constructive discussion throughout our hearings. I also want to thank the officials at Natural Resources Canada for their diligent work and for offering an insightful presentation of the bill.

This is an administrative bill that overhauls the 1970 act . It offers new and tighter definitions, clearer objectives, a new liability limit and defines financial security. It also proposes a new tribunal for claims.

We heard throughout our study that Bill C-5 was very much needed for the industry and for Canadians. Nuclear suppliers, host communities, independent professors and stakeholders offered our committee very comprehensive thoughts on the bill.

While there were many legitimate questions about what the limit should be, what type of financial security there should be and how the tribunal should be structured, the overall consensus was that the bill was needed. Host communities, industry and many Canadians are waiting for it. We will be supporting the bill as presented to the House.

However, I cannot miss the opportunity to speak about the nuclear energy situation in our country.

Earlier this year we witnessed a lot of issues with respect to Atomic Energy and the government's management of AECL. We had a national health crisis when the NRU reactor at Chalk River was shut down because of a licensing issue. As a result, we had a severe shortage of nuclear isotopes. Many Canadians, in fact many citizens around the world who depend on the supply of isotopes, were left scrambling for alternative medicine. Some people had their appointments or examinations delayed. I remember the minister at the time saying that many lives were at stake, and I agreed with his comments. Many lives were at stake.

That problem resulted from the Conservative government's mismanagement of the situation. The fiasco was blamed on the Canadian nuclear safety regulator who was doing her job. The government accused her of partisanship. It claimed to consult independent experts, who, by the way, happened to either be a Conservative or a former AECL employee. Rather than address the root cause of the problem, which was the shortage of isotopes, the government placed the blame exclusively on someone else and, in fact, ended up firing her without any justification.

It is important to raise this issue today because we were just reminded of this a week ago when the government again showed its incompetence by announcing that it would stop the MAPLE reactors, which were supposed to replace the old NRU reactor that produces isotopes, without providing Canadians with a plan on how the supply of isotopes will be supplemented.

In December of last year, Canadians witnessed what could happen if the NRU reactor were to go out of production: severe shortages that could potentially cost Canadian lives.

The minister, after hiding for a month and getting training from a media consultant, told Canadians that he had to fire the nuclear regulator because Canadian lives were at stake. Now he has the gall to say that the government will end the project of replacing the NRU reactor and that we should not worry about it because everything is under control. By the way, we do have a 30 year contract to supply isotopes but we will keep the 50-year-old reactor to produce those isotopes.

Any reasonable observer can be forgiven for not trusting the government's word on having any sense of reliability or competent management of the situation. If the government had presented a plan at the time of its announcement of shutting down the MAPLE project, it would have been excused for its decision. However, the fact that it has announced that it will no longer pursue the MAPLE reactor but has offered no real plan to supplement the production of isotopes, leaves those questions in the minds of many Canadians.

I would not be doing my job here today if I did not ask those questions and raise those points. My Conservative colleagues cannot disagree with me. At the time, supposedly they justified the firing because lives were at stake. Now they cannot claim that there is no risk involved here.

There is another issue here. The Conservatives are secretly considering the privatization of AECL but they are not sharing their plans with Canadians. They are not telling us what they are working on. Instead, they want to do the write-off of the MAPLE reactors on the backs of taxpayers so that if they want to privatize it, taxpayers will pay for that write-off.

It is important that the government, the Minister of Natural Resources and his parliamentary secretary tell us here today what their plans are for AECL. It is not just important for me. It is important for Canadians. It is important for the Ontario government, which is looking to hire AECL to build a nuclear reactor, but right now the Ontario government is skeptical about the future of AECL because the federal government has said nothing about it. There are jobs at stake and talent at risk. We need to know what the Conservative government plans to do with AECL.

I do not think anybody can attack me for asking these questions. This is my job. This is what Canadians are asking for and the Conservatives are failing Canadians. They are not explaining what they are doing. They are not assuring us that they are worried about nuclear safety. They are not telling us that they concerned about the supply of isotopes. In fact, they are not even telling us what their plan is for the future of nuclear energy.

We know that nuclear energy has a bright future, not just in Canada but around the world. We know that AECL has a wealth of talent, people with high degrees of experience and education that have been inventing and creating products unparalleled around the world and they deserve an honest answer from the government. They need to know what the future holds for them. They need to know what the government plans to do. The Conservatives need to do it transparently, apolitically and publicly. They cannot do it in secret.

I want to take this opportunity here today to urge the government to consult publicly and share with us its plans for AECL. Again, future projects depend on it, jobs depend on it and our nuclear energy future depends on it.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Mr. Speaker, I am glad to have the opportunity to respond. It is good that the member used his time to ask us questions, but I do want to talk about AECL because we have been, as he said, transparent. We have been apolitical and we have been very public about what we are doing. I think he knows that. I think he is perhaps just trying to confuse people a bit.

Clearly, in budget 2008 we recognized that nuclear energy and specifically the Candu technology is an important component of the programs that we are developing internationally and domestically. The minister has been more than clear about the fact that he is committed to restoring prudent management of the nuclear energy file after years of neglect by the previous government. Everyone knows that.

He announced a full review of AECL last fall as part of that changeover to responsible management of the crown corporation. The review of AECL is ongoing and all options are on the table. No decision has been made on that yet. I think everyone is aware of that as well. His department is working closely with the other departments, the Department of Finance and with the full collaboration of AECL.

I should point out that everyone who has been following this file also understands that National Bank Financial has been hired as financial adviser to the government and is currently preparing its first report on the financial position of AECL. Therefore, there is a review ongoing. There has been a financial report that has been developed about AECL. Management has been updated. In the coming months the government is going to have the results of those reviews and will gladly release them. The member knows these things, but the Canadian public needs to understand that he has been well aware of them as well.