Evidence of meeting #3 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 liability.
A recording is available from Parliament.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
So pooling is not necessarily pooling that is specific to set as a reserve for the nuclear potential catastrophes.
November 27th, 2007 / 9:25 a.m.
Manager, Nuclear Insurance Association of Canada
There are no pooled reserves pertaining to the potential of a nuclear incident.
Liberal
Manager, Nuclear Insurance Association of Canada
We pool the capacity that is available through Canadian sources and match that with the capacity available through the British pool--it's called nuclear risk insurers--and through the American pool. It's equivalent to a phrase, “a promise to pay”.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Okay. Aren't all insurance companies committed to do that through the licensing process of becoming insurers?
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Are there any additional guarantees, deposits, or reserves that these insurance companies are expected to make because they're in the nuclear business?
Manager, Nuclear Insurance Association of Canada
There are no specific requirements concerning pooling of reserves.
Liberal
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Are you saying that you're able to pool the Canadian capacity with other capacities around the world?
Manager, Nuclear Insurance Association of Canada
Yes. For instance, upon enacting the legislation before the House at this time, whereby the limits will eventually increase to $650 million, we will be dependent upon the capacity available through the British pool and the U.S. pool to reach that limit. That level of limit is not available purely from the domestic Canadian market.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Alghabra. Your time is up.
Madame DeBellefeuille is next, for up to seven minutes.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
Thank you, Mr. Chairman.
Mr. Murphy, on page 2 of your document, you say that nuclear risks are not considered as ordinary risks.
There's no translation.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
I'll be able to get those seconds back, Mr. Chairman?
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
Thank you, Mr. Chairman.
From what we can read in your document, nuclear risks, in insurance matters, are considered to be different from other risks. The purpose of this bill, to all intents and purposes, is to determine compensation in the event of a nuclear accident. You also say that that can achieve a scale, an amplitude, that cannot be compared with other industrial accidents. You even say that radioactive waste from a nuclear reactor could contaminate an entire continent and affect millions of persons. In fact, your role is really to emphasize what the risks are.
Mr. Murphy, do you believe that $650 million would be enough to cover compensation in the event of a nuclear accident?
Manager, Nuclear Insurance Association of Canada
On the stated limit of $650 million, we are reluctant to express an opinion as to whether this is adequate. But we would hasten to point out that compared to the existing limit of $75 million, the limit of $650 million proposed for Canada is more in line with international limits available throughout the world. I would also mention that at $650 million we are approaching the maximum capacity available throughout the world markets.
On the difference between nuclear exposure versus others, the nuclear one--albeit unlikely--could be catastrophic in nature. We compare that in our notes to an incident at a chemical factory. Some airborne pollutants might migrate, but typically they would be contained to a geographic area much less than the potential geographic area associated with a nuclear incident.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
In his last appearance, the minister said there could be an increase of six times the present value of the premium.
Can you confirm that figure?
Manager, Nuclear Insurance Association of Canada
The present $75 million would eventually go to $650 million, which is an 8.6-fold increase. The premium commensurate with that would be somewhere in the region of four to six times the existing premium.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
Thank you very much, Mr. Murphy.
Mr. Elston, you said in your presentation that limiting financial security to 50% could have negative effects on the range of available options. Since I represent the interests of Quebec, and Hydro-Quebec belongs to Quebeckers, I'm somewhat concerned at the idea that the premium might increase by eight times its present cost.
I'd like to know how much Hydro-Quebec or the other members of your association pay in premiums and what impact maintaining the clause that you are seeking to have deleted, which limits the financial security to 50%.