Natural Resources Committee on Feb. 7th, 2008

[Grant Malkoske]

Let me think about that, because I don't know if I have the answer exactly at my fingertips here.

What we were aware of on November 22 was that the situation was fluid. There were a number of scenarios being played out. One of them was early December, one was mid-December, and then as time went on we were informed that it could run into January—which was part of the issue around our press releases, frankly.

Maybe at this point in time I could correct the record about our press releases, if I could just interject.

In fact, on November 30, when we issued the press release, we mentioned that we expected to have a $4 million to $5 million impact on our business. In the December 5 letter, once we thought things would get perhaps even longer in duration, we mentioned that it could be $8 million to $9 million.

It would seem to me that around the early December time, we were getting indications that this outage could be extended beyond the December 3 period. But frankly, I don't have that at my fingertips.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

We're trying to correlate this with other information from AECL, which was being reassuring on November 30 that this was going to start. That's the basis of where my question came from.

I want to turn to Professor Nathwani and go over a few things.

I don't usually take my questions from the CBC, unlike some colleagues, but there was a very good interview that you had there. In it, you said, on The House, on January 12, “it is a failure of judgment...most certainly on the part of the Canadian Nuclear Safety Commission”. Why do you feel that the CNSC had a failure in judgment?

[Dr. Jatin Nathwani]

The CNSC could have readily determined the licence condition that was invoked to shut the reactor down and its consequences, and it could have thoroughly weighed the risk of continued operation, that risk being so small that—

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

“Infinitesimally small” is what you say later on in the interview.

[Dr. Jatin Nathwani]

Yes.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Let me go to the next thing you said, that “in their policy was a precise stipulation to consider both the cost and the benefits of any decision”. I think you were getting into that in response to another question. Would you elaborate a little more on why their policy was a precise stipulation to consider both costs and benefits across the board?

[Dr. Jatin Nathwani]

The CNSC policy document, for the record, is P-242. It's only a short document of about four or five pages. It was written by the CNSC upon discussions during the amendments to the Atomic Energy Control Regulations. The desire here was to ensure that you make decisions about safety in light of the fact that it is not just in isolation but in a broader consideration of the kinds of costs that it could impose upon either the licensee or society in general.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

The terminology used in the interview was that the CNSC were fixed in their position and were unable to see the larger perspective.

[Dr. Jatin Nathwani]

That was the gist of my comments. The point I make about regulatory policy P-242 is that it appears they have not—

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

It was specifically put in there to deal with something like this, and yet it was ignored.

[Dr. Jatin Nathwani]

Something along these lines, but they chose not to do that.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Yes. And I have to say, as someone who has actually read the policies--unlike the journalists, who don't seem to be reading anything when they write the stories on this thing--I find it amazing that the policy was ignored. I'm of the same opinion as you are.

[Dr. Jatin Nathwani]

So do I, and I shake my head--

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Trost. Your time is up.

We go now to the third round of questioning, starting with Mr. Tonks.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you, Mr. Chairman.

And to all of you, thank you for being here. It's been very helpful, at least to me.

I've been particularly impressed, Mr. Malkoske, with your understanding of and the manner in which you've let the committee know about the role MDS Nordion plays with respect to the whole strategic relationship within the industry and within the international community and the relationship with AECL. Because I see that it's so fundamentally important, I'm going to question you further on that.

To give you the benefit of that knowledge, back in 2005 the Auditor General reported serious shortcomings with respect to the implementation of the capital program, with respect to NRU. It wasn't on a safety basis; it was more a question of when was this work going to get done, who was accountable for making sure that the capital program...?

In view of the importance that you have enumerated, were you aware of the situation that existed with respect to AECL and the NRU, and the whole industry with respect to its dependence on NRU?

[Grant Malkoske]

First of all, of course we know about the industry dependence upon NRU. But in terms of the Auditor General's report, we had the pleasure of seeing it at about the same time as everybody else in the public saw it, which was just recently.

We do know, however, that AECL—just because of our regular meeting with them, and we're kind of joined at the hip here in terms of providing these medical isotopes—has been endeavouring to continue to obtain support, to continue to get funding for the Chalk River site and for the ongoing operation of those facilities. So to that extent, yes, we were aware.

[Alan Tonks, Liberal, York South—Weston, ON]

I'm not sure how to frame this question.

You have heard from Dr. Nathwani. Without being unnecessarily partisan and taking sides, in retrospect, if this were to happen today, would your role be any different in terms of the action you would take on behalf of the industry, on behalf of the whole international dependence on the isotopes? You've indicated there still is a huge dependence on NRU, that NRU could satisfy an international shortage but other suppliers couldn't. So would your role be the same?

[Grant Malkoske]

Our role would be essentially the same. We would implement our contingency planning. We would be reaching out to customers. We'd be reaching out to the other suppliers to get as much as we could and try to make sure that isotopes were flowing into Canada, or at least the results of those isotopes were flowing into Canada.

We also need to recognize that the production of these isotopes takes time. The production of molybdenum-99 in a reactor is a process. It takes some days to get the right amount of material. It has to be processed. It has to be shipped. It has to then be purified and distributed. So there are a number of links in this supply chain that have to continue to be honed, and we work at that all the time. But frankly, the world capacity is what it is, and we don't see any increase in that.

[Alan Tonks, Liberal, York South—Weston, ON]

Do I have time for one more question, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Yes, you do. You have another minute, Mr. Tonks.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you for that, Mr. Malkoske.

We were told that there is a protocol being worked out with the Ministry of Health. It seems to me there's a chain of relationships, and that this protocol would need to be implemented if that were ever to happen again. Your answer indicates that you don't view yourself as solely accountable for hitting the red button on that.

[Grant Malkoske]

We are aware that there is a communication protocol being worked on, and we've been consulted on that. So we think it's important to carry on.

[Alan Tonks, Liberal, York South—Weston, ON]

Okay.

Dr. Nathwani, you have suggested several things. If something like this were ever to happen again, would it not be incumbent on AECL and CNSC to make, in a transparent way, an application for a licence, under certain circumstances, to continue the operation, as it would have been in this instance, to make a joint application for a licensing amendment so that a public weighting of the costs and benefits could have taken place?

[Dr. Jatin Nathwani]

It is a suggestion, perhaps, that one could work it through that type of process. It's workable. Among the suggestions I've made, it's another one that could work.

[Alan Tonks, Liberal, York South—Weston, ON]

And reporting to two different ministries?