Evidence of meeting #11 for Natural Resources in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aecl.
A recording is available from Parliament.
January 29th, 2008 / 11:40 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you, Mr. Chair.
Ms. Fraser, thanks for being here. I have a couple of quick clarification questions to start out, just so I understand the context of this audit.
If I understand correctly, the report was issued in August 2007. Their audit plan was developed in the fall of 2006. Is that correct?
11:40 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
That would be correct.
11:40 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
What was the timeline for when this audit was conducted?
11:40 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
It was conducted from September 2006 to March 2007.
11:40 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Okay, and the audit findings were reviewed with AECL prior to the final report?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
Absolutely.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Okay.
As you pointed out, your special examination option states that you did not do a technical assessment; that was CNSC's responsibility. Just to clarify, none of the issues with respect to AECL and CNSC over the licence requirements or any extended shutdown were part of this audit?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
That is correct.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Do I also conclude, then, that the licensing of the reactor and the debate between AECL and CNSC was not part of your discussion with Minister Lunn, and specifically, AECL's work with respect to these pumps?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
That is absolutely correct. We had no indication at any time that there was difficulty with licensing. As I mentioned in my opening statement, there is certainly nothing in the report, other than, of course, the longer-term issue of having to replace the NRU for the isotope production, that could have indicated that there would have been the shutdown and the problem that occurred in November-December.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you.
One of the interesting sections I saw in the 2007 report was section 81, where you talked about how the CNSC established a regulatory office in the Chalk River site and hosted monthly meetings between CNSC and AECL at both the project and executive levels. These meetings existed to discuss regulatory matters and emerging issues of licence non-compliance.
Did you have an opportunity as part of your examination to know if these meetings were happening and if minutes were actually taken during those meetings?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
Yes, that's correct. The meetings were happening and there were minutes of those meetings.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Okay, so there would have been an ongoing monthly record of all the issues that were going on between AECL and CNSC, then?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
That's right.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
So in this case there could have been a pretty good indication over time of any types of issues that would lead up to a health crisis? It should have been documented in the minutes.
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
One would have expected it. This was, of course, after the period that we looked at, and I don't believe we had an indication of that. But one would have expected that obviously that would have come up in those meetings, yes.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you.
In the previous reports of 1998 and 2002 there's been pretty consistent tracking for some of these serious issues associated with AECL. As you stated previously, you did not meet with the previous minister after the 2002 report. Am I right to suggest that some of these basic issues have been ongoing, potentially as far back as the mid-90s?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
Yes. In fact I would say even in our first report back in 1988 some of those issues were coming up. So they are long-standing issues.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Would it be fair to say that the governments of the day, at least previously...? Based on your audit and on your follow-up audits, have you concluded that the previous governments have acted appropriately on the recommendations that you've made?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
There has been some improvement. I would say one of the major issues that was brought up in the past special examination report was the whole question of nuclear waste disposal. There is now a plan in place, and funding has been secured for five years. There has been improvement on some of the quality control mechanisms as well, the project management. So the corporation has responded.
I think the big issue that has affected the corporation for many years is the lack of a clear strategy, by various governments, on nuclear energy and what the role of AECL is in that. And then from there, of course, flow the decisions on the funding that would be required.
11:45 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
At the end of March 2007, there was an investment of approximately $300 million for developing the ACR. I want to ask you questions about the risk this has introduced into the marketing plans of AECL for the ACR reactor and about, basically, the comment with respect to pre-licensing being a major constraint for AECL in developing this in the future. The costs necessary to develop the facility by 2016 were estimated at $400 million, yet CNSC found it necessary to withdraw its service of pre-licensing, citing resource constraints.
I recall, when looking at the department's estimates, that there was an allocation of around $3 million for these pre-licensing activities when that whistle was blown. Yet I believe those dollars were never spent. Was there any insight you gained in the audit as to why CNSC made the abrupt change in pre-licensing when it looked like there was funding provided for that task?
11:45 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
What we understand, Mr. Chair, from the discussions with the commission--and that, of course, would have to be discussed with the commission--is that it was a question of a shortage of resources with the expertise to do these pre-licensing activities.
Sometimes in these specialized areas money isn't enough and the people just aren't available. And that seemed to be the explanation we were given. Of course, that would have to be explored further with the commission itself.
11:50 a.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
So there is no indication of why the CNSC had a drag-down in their technically competent staff, then, over the past number of years.
11:50 a.m.
Auditor General of Canada, Office of the Auditor General of Canada
It was just a question of them not having the resources available to do this in addition to the other assets and responsibilities they have. I think site inspections were mentioned. So it was a question of prioritizing the resources they had. But the commission would be better able to answer those questions.
