Natural Resources Committee on Nov. 27th, 2007

[Murray Elston]

I'm sorry...?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

If the maximum exposure could be $100 million, for example, in one of these accidents, then why are you supporting $650 million, which is causing a higher premium, versus the 50% on the other?

[Murray Elston]

I think we recognize that in terms of public policy, while there are real practical limitations like the ones you've just identified, we don't wish to be seen to be significantly out of step with the rest of the world. We look at having excess coverage. I do that on a personal basis. While I don't expect to have a problem with my automobile, I have excess coverage just in case. I think that probably provides some security.

Having said that, when I go to the market, I like to think that I can have the widest possible arrangement that lets me get the best price. That's no different from our members, who also want to have the broadest range of possibilities, moving up to the $650 million, which government policy has now identified. We support that, but we also want the access to the market so we have the most flexible opportunity for the best benefit of premium price.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Elston. Thank you, Mr. Allen.

I want to express my great appreciation, first to the witnesses, but secondly to our two members of Parliament from Saskatchewan, who never once mentioned that their Roughriders won the Grey Cup the day before yesterday. That's remarkable restraint. So thank you, gentlemen.

Thank you all very much for coming today. We really do appreciate your input.

I will suspend for two minutes. If you could, leave the table and the area as quickly as you can so the next witnesses can get settled. Then we can start again in two minutes.

[The Chair, Conservative, Leon Benoit]

We'll get started now with our next witnesses. We have, from the Canadian Association of Nuclear Host Communities, Franklin Wu, secretary-treasurer; from the municipality of Port Hope, Linda Thompson, mayor; and then in our second group, from Greenpeace Canada, Shawn Patrick Stensil, energy and climate campaigner.

We will have your comments, up to ten minutes from each group. Then we will only have time for one round from each party with these final witnesses, so keep that in mind.

Please go ahead, whoever's going to make the presentation.

Ms. Thompson, go ahead please.

[Linda Thompson, Mayor, Municipality of Port Hope]

Thank you, Mr. Chair and members of the standing committee.

My name is Linda Thompson. I'm the mayor of the Municipality of Port Hope. I'm also a member of the Canadian Association of Nuclear Host Communities.

Our association chair is Mayor Ryan of the City of Pickering. Unfortunately, he cannot be here today. I'm therefore acting on behalf of Mayor Ryan, and in his capacity I appear before you today.

As noted, Mr. Wu is our association's secretary-treasurer and he is also the chief administrative officer with the Municipality of Clarington, Ontario. Mr. Wu will be assisting me, if you have any questions.

The Canadian Association of Nuclear Host Communities, also known as CANHC, is comprised of ten municipalities located in Ontario, Quebec, Manitoba, and New Brunswick. These municipalities proudly host various nuclear-related facilities, such as power generation stations, research facilities, and nuclear industries, which are vital to Canada's continuing supply of electricity. As well, they contribute to the prosperity and economic development of our communities.

Our member municipalities are in the province of Ontario, the county of Bruce, the municipality of Clarington, the town of Deep River, the region of Durham, the municipality of Kincardine, the city of Pickering, and the municipality of Port Hope. In the province of Quebec, we have the town of Bécancour; in the province of New Brunswick, the city of Saint John; and in the province of Manitoba, the district of Pinawa.

First and foremost, CANHC welcomes and supports the general thrust of Bill C-5. Over the past few years, our association has continually urged the government to increase the liability insurance and compensation limits for nuclear facilities and it is most pleased that government is taking a very positive step in this direction.

Specifically, we're very encouraged to see that Bill C-5 provides for three very important elements, being the increase in the liability insurance to be carried by nuclear operators, the ability to establish a tribunal for the timely and orderly settlement of claims, and of course the regular review of the amount of insurance coverage that is required.

While our association generally endorses these provisions, we do feel these provisions can be strengthened in the following manner. Firstly, on the limit of the liability, our association is of the opinion that the $650 million is not sufficient insurance coverage, particularly in locations where a nuclear facility is located in a densely populated area, such as in the city of Pickering, where some 80,000 people live within ten kilometres of the Pickering nuclear facility.

The $650 million would work out to a little over $8,000 per person, a rather inadequate amount under the scenario of a nuclear disaster. We understand that there are compensation benchmarks established in European communities, but we would urge the committee to consider the unique challenges faced by nuclear host communities, with nuclear facilities installed in our backyards.

Secondly, the principle of establishing a tribunal to handle claims is a reasonable approach; however, we ask that such a tribunal be totally independent and that a timeframe be entrenched in the legislation or regulations to ensure that all claims are in fact processed in a timely manner, without causing further undue hardship.

Lastly, we would ask that Bill C-5 contemplates the regular review of the amount of insurance coverage at least once very five years. We understand and support the rationale for regular reviews; however, we would suggest that Bill C-5 should also provide for an automatic annual indexing of the coverage, with a more comprehensive review to be undertaken every five years.

In addition to the foregoing comments, our association wants to see clarity in the bill pertaining to compensation for the nuclear host communities. We all know that in the unlikely event of a major nuclear incident, these municipalities will be burdened with the need to repair or replace damage to municipal buildings and infrastructure, of course, such as roads, bridges, water and sewage plants, etc.; the huge cost of providing emergency services such as police, fire, paramedic services, as well as providing for evacuation, emergency shelters, and recovery efforts; and the very significant economic loss as residents and businesses are unlikely to return to the municipality after a nuclear incident, given the inevitable negative media coverage from any nuclear incident.

We believe that such an incident will significantly damage the image of the host municipality, and we do not believe this matter is addressed in Bill C-5. Bill C-5 should therefore clearly identify and provide compensation entitlements to all nuclear host communities and ensure that they be afforded every right to recoup financial and economic loss resulting from damages caused by a nuclear incident.

In summary, our association is supportive of Bill C-5 and strongly urges the committee to give serious consideration to our request to strengthen various provisions of the bill to ensure our residents, businesses, and host municipalities are fairly and quickly compensated for any losses, financial and otherwise, that we may incur as the result of a nuclear incident.

I thank you for the opportunity to come before you and express our views on Bill C-5. And we would be more than happy to answer any questions as they come forward, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Ms. Thompson, for your presentation.

We will now go to Greenpeace Canada, Mr. Shawn Patrick Stensil, energy and climate campaigner.

Go ahead with your presentation for up to ten minutes.

[Shawn-Patrick Stensil, Energy and Climate Campaigner, Greenpeace Canada]

Good morning. My name is Shawn-Patrick Stensil, and I am an energy and climate campaigner for Greenpeace Canada. I'll make my presentation in English, but I'll be pleased to hear your questions in French.

I'd like to thank the committee for this opportunity to present to you today.

In ten short minutes, I'm going to speak to you of three general issues of concern for Greenpeace regarding the proposed Nuclear Liability and Compensation Act.

First, the revisions to the act that have been put forward are indicative of how nuclear policy decisions are made in Canada. I would urge the committee to look further into this bill, as well as other nuclear policy decisions that are being made behind closed doors.

Second, I'd like to call into question the need for the Nuclear Liability Act and address specific issues of concern in the bill.

Third, I'd like to raise an issue of what I see as a policy gap between the Nuclear Liability Act and the Canadian Environmental Assessment Act in regard to nuclear terrorism.

First, in regard to the Nuclear Liability Act as an example of how policy decisions are made on nuclear issues in Canada, I would like to urge the committee to take a closer look at this bill and seek the opinion of many more non-industry stakeholders.

As background, in January 2006 Greenpeace Canada submitted a petition to the federal environment commissioner regarding the failure of Natural Resources Canada to bring revisions to the Nuclear Liability Act. This followed two previous petitions by a grassroots group called Citizens for Renewable Energy, to which Natural Resources Canada had said they would bring revisions by the end of 2005.

I have requested the clerk to provide the committee with copies of this petition.

In the petition, we cited numerous documents that Greenpeace had acquired through access to information showing that Natural Resources Canada had intentionally avoided consulting with non-industry stakeholders, such as the City of Toronto and environmental groups, regarding revisions to the Nuclear Liability Act, which is in front of you today, while it had “carried out extensive consultations with the nuclear industry”. Other correspondence showed that despite long-time public demands for revisions to the act, the nuclear industry was advising the government against renewing the act—probably for some reasons of political expedience; I'm not sure.

It is noteworthy that in 2003, Natural Resources Canada pushed through fairly quickly the passage of what was called Bill C-4 at the time, which amended the previous act, in order to meet the need of Bruce Power—a private nuclear company that had formed since 2000—to indemnify investors who were looking to invest in its project. So it quickly pushed through amendments to the act but was holding back on the wider revisions.

All this is to say that this act has been held up for many years seemingly to suit the desires of the nuclear industry. Natural Resources Canada has intentionally avoided consulting the public and non-industry stakeholders, probably because doing so raises a number of big issues for the nuclear industry: one, the threat of accidents, and two, the inherent subsidies that go along with this act.

As a recommendation to the committee, I would like to ask the committee to look at this bill more in depth and to seek the advice and perspectives of people outside the industry. It's the nuclear industry who are the risk-makers; we as Canadians are the risk-takers in this act implicitly, and we have the right to be consulted on that.

I'd like now to speak to the need for the Nuclear Liability Act and to specific concerns about the act.

I would like to say to the committee that the fact that we have this act in front of us should underline the fact that the nuclear industry has failed to develop into an independent and viable industry, despite years of trying and subsidies. Nuclear protection regimes began in the 1950s, and the idea at the time was to give the industry a running start to prove itself. The United States passed the Price-Anderson Act. We've been renewing these acts for 40 years, because the industry has never been able to gain the confidence of the insurance industry to be completely independent without these acts.

It has been estimated that in Canada the current limit on liability amounts to a subsidy of approximately 1¢ to 4¢ per kilowatt hour. As I mention in my petition to the auditor, Greenpeace also discovered that post-September 11 the federal government had begun assuming increased insurance costs for terrorist risk coverage for the industry. The government's stated intent was to avoid the adverse effects of high premium increases on nuclear power competitiveness in a deregulated electricity market. What was the cost of this? It was about $200,000.

The question why we are paying for it should furrow some eyebrows. Why should Canadians and the environment at large be subject to the risks that exceed the capacity of the insurance market? This goes against the principle of polluter pays which, I would remind the committee, Canada has ratified or signed onto in numerous international agreements. It is Canadians who will be forced to bear the expense and risks of a nuclear accident. This is an unacceptable subsidy to the industry.

I would now like now to address a number of specific concerns, because I think my time is running out.

First, regarding the increase to $650 million, that amount is a limit not based on the projected costs of a nuclear accident, but on what the global insurance industry has admitted it can handle. It is noteworthy that a 2006 federal government study of the costs of a dirty-bomb attack in downtown Toronto that released a small amount of radiation over four kilometres concluded that the costs of such a small accident would be $24 billion. That is way out of sync with what we're being told at the committee today for an accident releasing a small amount of radioactivity at a nuclear site. It is difficult to see, then, how even a small-scale release of radioactivity could be covered by the limits established in this bill, let alone a Chernobyl-scale event occurring in Canada—which the federal government has completely discounted.

As I mentioned in my petition to the environment commissioner, Greenpeace is concerned about the quality, rigour, and transparency of the risk studies carried out by the Canadian Nuclear Safety Commission, studies that are used to claim that Chernobyl-style accidents wouldn't occur. I don't have time to discuss this in depth, but I would encourage the committee to investigate it.

It is Greenpeace's position that this cap on liability is inadequate, and nothing should stop this committee from recommending that the cap be taken off, as Germany has done. You could still insure up to $650 million, take the cap off, and then examine other options that have been mentioned this morning, such as industry pooling, so that we can internalize more of the costs of the nuclear industry.

A second issue I'd like to raise is the period for compensating victims, which has been extended from 10 to 30 years. The bill needs to address the nature of nuclear accidents. The impacts from radiation exposure, such as cancer and genetic damage, can take long periods to appear and then may be difficult to trace or attribute. Proving causation is obviously a cause for concern in regard to the proposed 30-year limitation period. For example, if it takes 10 years to prove the link between radioactive emissions and, say, an inter-generational effect, then a 30-year limit is clearly too short for claimants. We should extend this period.

Finally, I'd like to raise an issue I also raised in my petition regarding a gap in federal legislation between the Nuclear Liability Act and the Canadian Environmental Assessment Act. This former act excludes the damages and the costs from a nuclear incident caused by terrorism. Implicitly, that means we Canadians are assuming the risks for a terrorist act such as that. If so, we should have the ability to evaluate and discuss in public what those potential impacts could be. A forum for this may be the Canadian Environmental Assessment Act. During environmental assessment hearings on nuclear projects in the past, such as the current life extension of Pickering B, Greenpeace requested that terrorist attacks be addressed in the Environmental Assessment Act. The response from the Canadian Nuclear Safety Commission was that this was not a requirement under CEAA and therefore they don't have to do it.

I would note for the Canadian Nuclear Safety Commission that in the United States last year, a federal court, as well as the Supreme Court, directed the U.S. Nuclear Regulatory Commission that in licensing decisions they had to consider the environmental impacts of a terrorist attack. We should be making those amendments to our legislation here in Canada, so that at least the people who are taking on the risks will be aware of the full costs.

With that, I believe my ten minutes may be up.

Thank you very much for your attention.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Stensil, for your presentation.

We'll go directly to questioning. As I've said before, there will be one round, and we'll have to limit it to five minutes to include all parties within the time we have left.

So we'll go directly to the official opposition and Mr. Alghabra, for up to five minutes.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

I'm going to split my time with Mr. St. Amand, so please alert me at the halfway point.

Thank you, all, for coming here this morning.

Ms. Thompson, I have a couple of questions for you, but would you mind distributing your remarks to us? I'm sure all of us are very interested in the actual recommendations you've highlighted today. I think they would be very helpful for us to review later on.

I think you were here for the first hour of testimony. On behalf of the municipalities you represent, do you have an opinion on this issue of self-insurance or 50% insurance liability?

[Linda Thompson]

In regard to the presentation, it was made available this morning to your clerks. I'm sure it will be copied to you.

In regard to self-insurance, we have had discussions with industry, and I can speak for my own community and with other areas where there are generating facilities. As an association, I don't think we would object to that.

In regard to the cost, if the profits are being made by the individual companies that are producing the power, I think they should share in some of the cost.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I didn't catch your last comment.

[Linda Thompson]

I would believe, yes, they should share in some of the cost.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

You don't have a problem with allowing the producers in your local communities to carry self-insurance 100% on their own?

[Linda Thompson]

As I understand it, a portion of the pool would be acceptable.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

The legislation now allows up to 50% in self-insured or another means, and 50% in buying policies. So are you okay with what is being proposed?

[Linda Thompson]

Yes.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I'm okay with that.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Alghabra.

Mr. St. Amand, you have two and a half minutes.

[Lloyd St. Amand, Liberal, Brant, ON]

To you, Ms. Thompson, if I may, you indicated that, in the view of your association or council, $650 million of insurance is not adequate. Have you a figure in mind that you or your colleagues would consider adequate?

[Linda Thompson]

We are aware of the review that was done by CNSC also, which was more in line with, I believe, $100 million. While our association has not put forward a specific number, I think we would be more in line with the study that proposed the $100 million.

[Lloyd St. Amand, Liberal, Brant, ON]

In a community like Port Hope, obviously located close to a nuclear facility, do you have a rider in your municipal insurance coverage that provides compensation in the event of a catastrophe?

[Linda Thompson]

Not that I'm aware of, and I don't believe that Clarington does either.

[Franklin Wu, Secretary-Treasurer, Canadian Association of Nuclear Host Communities]

I can perhaps speak on behalf of the Municipality of Clarington. Darlington nuclear station is located in our municipality. I do not believe we have that kind of rider in our insurance coverage at all.

[Lloyd St. Amand, Liberal, Brant, ON]

Lastly, to Mr. Stensil, you've asked us to be cautious about the risk assessments that have been proffered by the nuclear associations. Has Greenpeace itself done a risk assessment?