Thank you very much, Mr. Chair. It is my pleasure to be back before committee.
First of all, I'd like to thank you for your understanding when I had to provide you with an extra two hours free time in your schedule on Tuesday. I actually had an unscheduled cabinet committee hearing. Again, I thank you for being so gracious, not only to have cancelled at the last moment on Tuesday, but I'm glad we're able to actually be here to devote time to Bill C-5 and the estimates this morning.
With that, let me introduce my staff, as you did, Mr. Chair. Sue Kirby is the ADM of the energy policy sector. She's new at the department, has been there about three weeks, but has a wealth of experience. If she digresses and talks about fish today, it's because she just came from DFO. We'll try to keep her focused. So if you have some good fish questions, we can probably take those too.
Dave McCauley comes from the energy policy sector, specifically in the nuclear shop, so he has some expertise there.
With that, Mr. Chairman, thank you for giving me the opportunity to appear before you. Again, my appreciation for the all-party cooperation on Bill C-15. That was very appreciated. I think it's great for the people in Nova Scotia, to move that legislation through the House so quickly.
We're here this morning to focus on Bill C-5, the Nuclear Liability and Compensation Act. This proposed legislation is about protecting the interests of Canadians by modernizing Canada's nuclear compensation and civil liability framework. It does so to address damages as effectively and efficiently and fairly as possible in the unlikely event of a radioactive release from any nuclear facility in Canada.
As members of the committee will know, the current legislation dates back to the 1970s. So this legislation has been introduced for a number of reasons. First, it will ensure that Canada's laws governing nuclear liability are meeting the international standards. We want to not only ensure the highest standards for nuclear power in Canada, but also align our liability with that of international standards.
Secondly, it will increase the liability of nuclear operators for damages and injury. It will also increase the amount of compensation that will be available to address civil damages.
Third, Bill C-5 will broaden the number of categories for which compensation may be sought and improve the procedures for delivering that compensation.
It could be argued that Canada's current legislation, the Nuclear Liability Act, more or less accomplishes the objectives, a certainty regarding insurance and legal liability. So why do we need new legislation when we already have a serviceable act in place already? The simple answer, as I've said earlier, is that the current act is outdated. It was passed in 1970. Remarkable. I was not even in high school then, Mr. Chair, so it's going back quite a way. My notes say this was a period of ancient history, but I don't think I'll go there. But Bill Gates just turned 15. In any event, it's some time in the past.
Again, we need to ensure that the Nuclear Liability Act reflects the technology and science thinking as we move forward. In the interim, it's not only the technology of nuclear energy that has advanced considerably but the evolution of jurisprudence has contributed to substantial increases in the potential liability for nuclear incidents. Accordingly, we have to upgrade our legislation.
So what are we doing? Well, there are certain fundamentals of this current act that must be retained: number one, absolute liability; two, exclusive liability; and three, mandatory insurance.
Basically, absolute liability means that the operator will be held liable for compensating victims, if there were ever a nuclear incident, without the recourse of traditional defences available under the common law. This means that victims would not be faced with proving that the operator was at fault.
Secondly, in the related principle, exclusive liability means that there is no question who is responsible. No other party than the operator, no supplier, no subcontractor, nobody else can be held liable except for the operator. Again, it means the victims would not have to prove who was at fault, especially in such a highly complex industry, and there'd be no question about where they'd take their claim for compensation.
Nevertheless, to modernize our liability scheme, we must have legislation that goes further. For example, we must increase liability amounts, increase the mandatory insurance requirements, add new definitions of damage, and provide a more effective compensation process. We must do this to meet the practical needs and realities of today.
Mr. Chairman, the proposed legislation makes significant changes in the matter of compensation. In financial terms, it increases the liability for nuclear operators. The 1970 act sets the amount at $75 million, an amount that presently is one of the lowest within the G-8.
The international norm is just below $500 million, but in Bill C-5 we believe the standard that's been suggested as an appropriate amount will raise it to $650 million. This balances a need for operators to provide adequate compensation without burdening them with huge costs for unrealistic insurance amounts. Again it's striking that right balance. It's what is the right balance for the appropriate amount of compensation, while ensuring that we're providing realistic insurance amounts. This increase will put Canada on par with most of the western nuclear countries. The proposed legislation also increases the mandatory insurance operators must carry by almost ninefold.
As I've said, Bill C-5 makes Canada's legislation more consistent with international conventions. It does so not only with respect to financial matters, but also with clearer definitions of crucial matters such as what constitutes a nuclear incident, what damages do or do not qualify for compensation, and so on. These enhancements will place the Canadian nuclear firms on a level playing field with competitors in other countries. This is important if Canada is to maintain its international presence in matters of nuclear energy. Canadian companies welcome the certainty of operating in accordance with the accepted international norms.
Mr. Chair, both the current liability framework and Bill C-5 contain limitation periods restricting the time for making claims. Under the act passed in the 1970s, claims must be brought within ten years of an incident. However, since the passage of that earlier liability legislation, we have come to understand that for some related injuries obviously that's not adequate. Accordingly, the limitation period for claims has been extended to thirty years under Bill C-5.
Both the earlier Nuclear Liability Act and Bill C-5 provide for an administrative process that will operate faster than the courts in an adjudication of claims arising from a large nuclear incident. However, the proposed legislation clarifies the arrangements for a quasi-judicial tribunal to hear those claims. These new processes will ensure that claims are handled both equitably and efficiently.
In closing, Mr. Chair, I would like to underscore that Bill C-5 is about being prepared for the events that are unlikely to ever happen in this country. Our nuclear fleet is arguably one of the safest of any of the fleets in the entire world with an extraordinary safety record. Canada's experience goes back some 75 years. For the past 30 years nuclear power has been a regular part of Canada's energy mix. In all of this time, safety has been the watchword of Canada's nuclear industry. Moreover, the reactor for which we are known elsewhere is the CANDU, and as I said, it is one of the safest and cleanest reactors in the world. With the progress of nuclear technology, our reputation for safety will become even more secure.
Nevertheless, we must be realistic and we must be responsible. Although it is extremely unlikely that Canada will see a nuclear incident, we must be prepared. That is the principal reason we have proposed to modernize Canada's nuclear liability and compensation legislation by tabling the bill you are considering at this time.
Those are my opening comments, Mr. Chair. I look forward to the members' questions.
Thank you very much.