Finance Committee on May 11th, 2010

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McKay.

I need unanimous consent to allow Madame Brunelle to ask questions.

[Some hon. members]

Agreed.

[The Chair, Conservative, James Rajotte]

Thank you.

Madame Brunelle, vous aurez cinq minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you, Mr. Chairman. Good afternoon, madam and gentlemen.

Mr. Ivanco, we were surprised. We received a summary report on the strategic review of AECL in May 2009. Now we see that Part 18 of this bill prevents all debate and AECL will thus be quickly privatized. I sit on the Standing Committee on Natural Resources and we were unable to determine how much AECL was worth and whether it would be divided into sections.

How do you assess the government's lack of transparency in this matter? A number of people and I are wondering what that conceals. We're also wondering what impact this is having on you and on the people you represent and who work in the nuclear energy field.

[Dr. Michael Ivanco]

One of our biggest issues has been the lack of transparency, as I mentioned in my presentation. Mostly what's for sale is the expertise of our members. They're the ones who are really uncertain about what's going on, are highly stressed, and are not really being consulted. This is one of our biggest worries.

That is a short answer to your question: it's one of our biggest worries.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

We've talked a lot about the isotope crisis. Everything is definitely delayed. Now we're told that we'll have isotopes in July. I'll subsequently request Mr. MacDiarmid's opinion, but I would like to know, Mr. Ivanco, whether you believe AECL will be fragmented into a number of sections and whether it will continue to manage isotopes at its Chalk River laboratory.

[Dr. Michael Ivanco]

AECL is being split up into at least two pieces, and remember, the part that's for sale doesn't really have anything to do with isotope production. The part that's for sale is the CANDU reactor division. For what it's worth, we have traditionally been the money-making part of AECL, up until last year. I can't think of the last time we didn't make money, except 2009.

As far as whether AECL will continue to make isotopes, that's beyond my scope.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. MacDiarmid, what do you have to say about that?

[Hugh MacDiarmid]

The path forward at this point in time is that AECL will be partitioned into two distinct entities, really representing the very different business models, in the sense that the CANDU reactor division is designed to be, is intended to be, and will be a commercially viable business, whereas the Chalk River Laboratories are designed to be pre-commercial, a laboratory focusing on scientific research.

Those two different missions are going to be pursued separately. The Chalk River Laboratory will continue to be owned by the Government of Canada, and as you well know, the Prime Minister has clearly indicated, and my minister has given us the direction, that we are to re-license the NRU to produce isotopes past its current licence expiry date of October 2011 and be prepared to produce isotopes through to 2016.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. Alexander, I'm troubled by one thing. AECL has had a number of problems in recent years. We know about the failure of the MAPLE reactors, the problems at Chalk River, the rebuilding problems at Pointe Lepreau, the costs that have tripled, and so on. If AECL is divided and sold, what will happen to the CANDU technology? Let's indulge in a little science fiction. Aren't you simply going to go and buy through the French, through AREVA? Then they can break down the competition, which is to say you.

[Dr. Neil Alexander]

Those are very good questions, and we refer again to the statements made in the Rothschild's investment summary. We think they are very important. One of the objectives needs to be the ongoing health of the industry.

We talked a little bit about Nortel. I see the situation as slightly different from the Nortel situation. It's a bit like suddenly inheriting a small family shop or restaurant that you see the opportunity to take global. You go to the bank, and the bank says, “I like your plan, but actually it's just too big and too risky”, which is something Canadian banks occasionally do and which has been very helpful to us. You then ask what your next alternative is to take this small family firm and make it into a multinational organization, and that is to seek a partner who is going to help you do it.

That is the situation I see us in with regard to AECL. This gives us an opportunity to take a big position in a very fast-growing industry.

[The Chair, Conservative, James Rajotte]

Okay--very brief.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

As a parliamentarian, I would have liked a little transparency from the government—my comment is aimed at the government people—and to be able to understand a little. You have to consider that $20 billion has been spent on AECL since 1950. In addition, I saw in the budget that $300 million had been set aside to cover commercial losses. I wondered whether that was a gift for future investors. That's my comment, and it does not require an answer.

[The Chair, Conservative, James Rajotte]

Okay. If someone does want to respond briefly, we can. No comment? Okay. Thank you.

Ms. Gallant, please, for a five-minute round.

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

Thank you, Mr. Chairman.

Mr. MacDiarmid, I am going to talk about the people too, because they are the treasury of the AECL and Chalk River Laboratories. As you are aware, the greatest asset AECL has to offer is its well-educated and well-trained professional workforce.

For some individuals, the uncertainty we're experiencing can be very unsettling. What are you doing to reassure your employees regarding the future of AECL?

[Hugh MacDiarmid]

The most important thing is to remind them of the many opportunities that we have in both Canadian and international markets and that we are continuing to invest heavily in the development of new products and the support of the revitalization and modernization of the infrastructure at Chalk River, through project new lease and many areas of investment in the company.

So when all is said and done, the future of AECL and of CANDU does not depend as much on our corporate form as it does on our ability to succeed in the marketplace with fundamentally good products and good marketing. So in terms of reassurance to employees, I don't necessarily want to get them too much reassured, because we do have to compete and we do have to battle with very determined competition globally. So my reassurance to them is that we should keep going, keep pushing hard to develop great products and market them successfully in the world.

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

So there's no imminent thousand-employee layoff. This is what people are concerned about, because they are hearing that AECL doesn't have its full year's cheque worth for both the repairs as well as the operating costs and that combined with a mass e-mail that engineers and retired engineers got saying that Bill C-9 is designed to sell AECL out from underneath Canadians by stealth. Just by virtue of having this discussion dispels that notion. So that is why I asked that question. And contrast that to representatives from the Technicians and Technologists Independent Union, who are working together so as the company goes through the restructuring they can be a part of it and work together with it.

And as many of my colleagues here are aware, and Madame Brunelle, I've been working with a group of employees at Chalk River. We call ourselves the CREATE committee, which stands for Chalk River Employees Ad-hoc Taskforce for a national laboratory. Of course their main focus at this point is getting NRU back and running, and I hope eventually the case will be made that a multi-purpose reactor should go there.

But regardless of whatever decisions are made about the future of the commercial side of AECL, we believe the proposal for a national laboratory should be pursued, and we see the current restructuring as much as an opportunity as anything else.

Should the decision not to restructure AECL proceed, what does the CREATE committee need to do to encourage AECL to support their proposal that could result in a different government agency, such as the National Research Council, or some newly created agency, like a public-private partnership, to play an enhanced role at the Chalk River site, particularly when it comes to nuclear research and development?

[Hugh MacDiarmid]

I would be stepping beyond my bounds to comment on what kinds of corporate forms or structures should be considered. It's really the purview of our shareholder.

What I will say, though, is that the Chalk River laboratory is an incredible repository of human talent. The primary missions are isotope reduction, of course; support for the CANDU fleet through a variety of services to enhance the performance of the existing fleet; support for our future-oriented R and D and also the waste management decommissioning mission of the organization; and, very important, support for Canada's academic and scientific research communities. So many different missions, and it's simply the continued pursuit of those and having the facilities to enable the talented people to continue to fulfill that. That's the vision.

[The Chair, Conservative, James Rajotte]

Thank you, and thank you very much, Ms. Gallant.

I want to thank all the witnesses for your appearance here today, for your patience, for your presentations, and for responding to our questions. We appreciate it very much. If there's anything further you want the committee to consider, please submit it to the clerk and we will ensure everyone gets it.

Thank you very much.

The meeting is adjourned.