Natural Resources Committee on Nov. 22nd, 2007

[Dennis Bevington, NDP, Western Arctic, NT]

Both Germany and Japan, which have had experiences with catastrophes in nuclear contamination, have unlimited liability in their systems. So there is quite a difference in where you go internationally.

Another thing within this bill that we're having trouble with is that there is no provision for compensation for an accident in another country. Perhaps the best solution to this would be to have Canada sign the Convention on Supplementary Compensation for Nuclear Damage, which is an international document that would start to build the case that the responsibility for nuclear contamination from one country carries through to other countries that are affected by the potential.

If we are in a situation where we have good nuclear facilities that are unlikely to cause such contamination, it may well be in our interest to move ahead with this convention, because of course we live next to another country that has a lot of nuclear reactors, and they're not necessarily of the same kind as ours.

I think there is an argument to be made that we need to look at this compensation that spans international boundaries and would give us that support.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Your time is up. I don't know whether that was in the form of a suggestion—and I don't mean that impolitely—or a question.

If the minister wishes to comment very briefly....

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Really briefly, I have just two quick comments.

With respect to Germany and Japan, they are required to carry compensation insurance similar to the amount in Canada, where it's backstopped to an unlimited amount. But the insurance the actual operator is required to carry and pay the premiums on would be similar to the international standards.

With respect to what happens if there is an accident.... We're dealing with our own house and getting our own house in order. But if there were an accident in the U.S., we would be able to make a claim against the U.S. insurance for compensation; we don't want to place a burden on the Canadian operators to provide insurance in the event of an incident south of the border. They obviously carry insurance and are required to, and if there ever were an incident, then we would make a claim against their insurance. That's the way it should be.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you, Mr. Bevington.

Mr. Trost.

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

Thank you, Mr. Chair.

That actually is a fairly nice segue into where I'm going with a couple of my questions. One of the things I'm concerned about is public perception. We want to give the public a comfort level and as much reassurance as possible. I think, ultimately, that the safety of our nuclear power plants in Canada.... I do believe that we have some of the safest, if not the safest, in the world because of the talents and the people we have and because of the regulations and the oversight and their ultimate character.

One of the areas in the bill that I wish to have some comment on—and it's in some respects not direct, but tangential—falls in with what you were saying about the U.S. That's the point about reciprocating agreements. I guess, as I said, that I'm not all that concerned about the Canadian record. We've done very well. The American record has been very good, as has the western European one, and so forth. But you never know. So I'm a bit interested in what we have been working on and in what we have as reciprocating agreements.

If you want to elaborate more on how Canadians would go about making insurance claims, assuming that there are incidents in the United States, I'd appreciate that. And it's not just the Americans; it's other potential countries or various places that we may have reciprocating agreements with. How would we go about it?

If you would range over as broad as possible a commentary on reciprocating agreements and possible claims against the United States as you elaborate on that, that would be appreciated.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Sure. First of all, obviously, because of the close proximity, the United States is the prime country we have to deal with. We do have a reciprocal agreement. In the event of an event or incident in the United States, there is an agreement in place that should allow Canadians to make claims against their insurance system. That's their liability insurance, obviously. Likewise, the reverse is also true. It's a reciprocal agreement that goes in both directions. If there were ever to be an incident here, they would also, rightfully, be able to make a claim against our insurance.

So those agreements are in place. I'm not aware that we have agreements with any other countries other than the United States with respect to that.

But perception is important, and you talked about this. I think we actually need to take it beyond perception. This is an industry that has to ensure the safety and security of all Canadians. Obviously, it's very important, and not just in the production of electricity. Canada produces 50% of the world's medical isotopes--I don't know the exact number, but it's in the tens of thousands--for medical procedures used in nuclear medicine and the treatment of cancer every single day around the world. They also come from a nuclear reactor. People may not be aware of that. So all that is important, as well.

There are very strict standards, with respect to safety, from the regulator. They're monitored. It's a very highly regulated, tightly controlled industry, as it needs to be. But again, there are reciprocal agreements.

I'm being passed a note. This bill gives us authority to negotiate agreements that we don't have now with other countries. So there's something I've learned: we would have the ability to negotiate agreements. But obviously, with the United States, which is probably the most important one, we already have an agreement in place.

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

Just as a little follow-up to that one, that would then limit....

The other concern I have is this. Say that a small Canadian incident happened. In the American system, they're very good at suing people for large amounts. So this would also provide our nuclear operators with protection, particularly if they have assets, say, cross-border. Right now, it's crown corporations. I don't know quite how many assets they may or may not have in the United States. But this would protect our nuclear—current and any future—operators from being sued too aggressively in the United States and from being, basically, financially run out of business through aggressive American lawsuits. Is my interpretation of that correct?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Well, first of all, Canadian law would apply. But this bill sets out absolute and exclusive liability. So there is no lawsuit regarding who is liable. There is no lawsuit regarding exclusive and absolute liability....

Pardon me?

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

Again, my concern is what the Americans could do through their court system. Would this provide some protection? It's very difficult, I understand. This may be way beyond our ability to decide.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

We could try to get back to you on it. My obvious answer is that if there's an incident in Canada, Canadian law would apply. It would go through the legal processes here in Canada.

This does set out absolute and exclusive liability. So there is no question of who's liable. There are no legal proceedings. That's a fact predetermined by legislation. The issue is just in assessing damages, and how much a claim would be.

And the reverse would be true in the event of an incident in the U.S. Obviously, we--

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

My general point is just to stress that we need to do all we can to protect our operators from unnecessary harassment, and these agreements....

How is my time, Mr. St. Amand?

[The Vice-Chair, Liberal, Lloyd St. Amand]

You have another minute, Mr. Trost.

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

I'm just wondering if you have any commentary. My understanding is that there has been some modelling done on potential things; it actually gave some reassurance as to what could be paid out. Most of the probable incidents would be relatively small.

Do you have any comments on that as far as some of the modelling that's been done goes?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Yes, all of the modelling I've seen—you're correct—shows that this would be more than adequate. There would be very small amounts, if there were—

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

And this has been done both by NRCan and by actually even looking at Three Mile Island in the States and what was paid out in real dollars? That's my understanding as well.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Yes, that's correct.

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

So we have a real-life incident, something that actually happened, which this was applied to.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Yes, exactly. And this would be the correct amount. You have to strike that balance regarding what we're going to require the operator to carry.

Again, the industry, generally, has been very supportive. They recognized that this had to be done to bring it up to this level of standard, but yes, you're correct in your assumption.

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

Thank you, Mr. Chair.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you, Mr. Trost.

We do have time for a second round, which will involve three questioners. This is the five-minute round, as you will recall.

We'll start with Mr. Boshcoff. On deck are Mr. Ouellet and then Mr. Allen.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Minister, one of the laws of ecology is that you can't do only one thing. So if we assume that there are no small nuclear accidents, they're either catastrophic or not, which is really the purpose of insurance for catastrophe—we would conclude that it would either be some form of airborne, or at least something international in scope as a distinct possibility, which means that we could have contamination not only of the air but going into the ocean or other land masses.

When we talk about the $650 million limitation, it's quite possible that the lawsuits may come from people, for instance, in Spain, Portugal, or the United States who feel their fishing entitlements have been jeopardized, or from people who feel that their ability to breathe—Iceland, for instance—and those types of things.... Something like that could occur.

So I'm questioning the $650 million as a limitation, bearing in mind two factors: one, the size of it, which you have already alluded to, of course; and two, general inflation, which would make us come back to review it.

Would you not build into that some form of standardized changes to account for inflation, history, time, chronological progress, and the impact of what may happen in international scope?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

First of all, in the very unlikely event of a catastrophe, if this were not an adequate amount, it would come back to Parliament, which is the appropriate vehicle to deal with the excess.

As far as dealing with inflation goes, we actually can increase the amount. That will give us authority to increase the amount by regulation, and it's also subject to a five-year review to ensure that we've got the appropriate amounts going forward. So we do have the ability to ensure that it is adequate five years from now. That way, it can be dealt with.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

In a catastrophic eventuality in any other form of energy production—say, a dam collapsing or a pipeline bursting or a gas pipeline exploding—is the same situation applied to the Canadian citizen or taxpayer, in that the insurable limits have been exhausted? In all these cases, does it come back to Parliament in an essentially similar process, with the assumption that the citizens themselves become liable for this decision-making capability?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I've just had a discussion with Sue, and she can correct me if I'm wrong. I'm not aware that they're required to carry insurance.

Obviously most large energy companies do look after their own insurance needs, but I'm not aware that there is an actual requirement for them to carry a certain amount of liability insurance such that in fact the operator is required by law to carry not the full $650 million, and this comes back to Madame DeBellefeuille's question. I think 50% of it is required to be carried as insurance, and then that other 50% can be self-insured or arrived at through other agreements.

They have to be able to meet $650 million per incident, but with respect to any other large infrastructure, I'm not aware if they're actually required to carry liability insurance. We would get a more specific answer and get back to you if you'd like.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

I'd appreciate that. Thank you.