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
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Murphy.
We now go to Mr. Ouellet for up to four minutes.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Mr. Guimond, I'd like to know whether the Hydro-Quebec people were consulted when this bill was prepared. You don't seem to be very pleased with clause 25.
Director, Regulatory Affairs, Canadian Nuclear Association
Hydro-Quebec and the other operators were consulted from the moment a Senate committee took an interest in the issue, that is in 2001. The Department of Natural Resources consulted us through the Canadian Nuclear Association and contacted the operators directly on numerous occasions.
We never saw the bill before it was tabled in the House. In accordance with the consultation procedures of the Government of Canada, the officials are very efficient and strict in this regard. Consequently, we learned about the main features of the bill, but did not see the final version until it was tabled in June.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Thank you very much.
Mr. Elston, you talked about the safety of the CANDU reactor. You say there have not been any accidents, but this bill opens the door to nuclear generators from other countries. Moreover, we think that is its aim. You referred to an excellent safety record in the past 40 years, but that only concerns the CANDU reactor. In the past 40 years, the nuclear energy industry has come up with no solution to the problem of nuclear waste, particularly plutonium-239, which is a real time bomb. Not only is it used to make bombs, but it is the substance that takes the longest time to decay.
Don't you think that the bill completely misses Canada's real safety issue, that is to say managing waste rather than continuing to produce it, supported by insurance?
President and Chief Executive Officer, Canadian Nuclear Association
I think the bill covers the areas that it must for the purpose of protecting the public from any damages associated with an incident that may arise. I think the preference of our industry has always been to instill a safety culture, not only in its leadership but also among the women and men who work inside the organization. We heard earlier that it's kudos to the leadership, but really it is a total team effort that we put together. It is the unions, the management--
President and Chief Executive Officer, Canadian Nuclear Association
We are a safety culture first. We know how to manage the spent fuel. We know how to manage low and intermediate waste. We know what steps we must take to protect not only the people who work inside our plants but the people who are neighbours of ours outside the plants. Do I think this bill represents the protections they require? I do, and I'm proud to say that I reflect specifically on the total effort--
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Wouldn't you be engaging in disinformation by not answering my question concerning the most dangerous places?
President and Chief Executive Officer, Canadian Nuclear Association
No, I'm not.
November 27th, 2007 / 9:55 a.m.
Conservative
The Chair Conservative Leon Benoit
You have 20 seconds, so you can have a very short question, Mr. Ouellet.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Mr. Murphy, as the mouthpiece of the insurers, could you tell me why the insurance companies are not open to the idea of residential insurance policies covering nuclear dangers, in addition to the $650 million measure provided for in Bill C-5.
Manager, Nuclear Insurance Association of Canada
I'm sorry, Mr. Chairman, but I don't fully understand the question.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Residential insurance policies could also include the nuclear aspect, but they currently do not. Don't you think that would be significant protection for people?
Manager, Nuclear Insurance Association of Canada
I think I understand, and I apologize.
If I understand the question correctly, it is about the extent to which coverage exists in regular insurance policies--home owners, commercial buildings, and so on. Virtually every single insurance policy has a nuclear exclusion. This allows insurance companies to dedicate their available capacity for nuclear liability to the operator's policy through NIAC. That way they're aware of what the exposure is right up front and it will not be claimed for under residential policies and commercial policies and so on. The available capacity is channeled to the operator.
Conservative
The Chair Conservative Leon Benoit
Thank you very much, Mr. Murphy.
The final questioner for these witnesses is Mr. Allen, for up to four minutes.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you, Mr. Chair.
I'd just like to ask a couple of quick questions. The first one is going to be following up on subclause 24(3), which is where Mr. St. Amand and Mr. Tonks started.
Subclause 24(3) says: “The portion of the alternate financial security that may be authorized may not, unless another percentage has been fixed by regulation, exceed 50 per cent”.
Now, do you not think, given this percentage, and considering that the federal government has played a pretty significant role in the development of the nuclear industry, that there's some responsibility on the part of the government to at least set some framework for that percentage? It is still allowing flexibility, because it can be fixed by regulation. Do you not believe that the government has some responsibility and can't just run away from something?
President and Chief Executive Officer, Canadian Nuclear Association
If you will consider the financial arrangements that are being made as a package in any event, I don't quite understand why you set 50% in legislation or otherwise. I think it's much easier to be flexible. You don't have to change the legislation every time there is an alternate financial arrangement brought from the market to the minister for approval. So I think in some ways it's a redundancy, if the minister has to approve it anyway.
Conservative
President and Chief Executive Officer, Canadian Nuclear Association
Eliminate it, yes, and that leaves you with maximum flexibility, and the minister can take a look at the arrangements and say good, bad, or indifferent. Certainly we then, as a market, looking at the market, can go out and say that we brought together the following arrangements, including whatever the percentage might be in alternate financial arrangements.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Do you believe, given the U.S. model, in which there is a certain contribution into a pool of funds, that this at least gives the nuclear operators some kind of responsibility, versus 50%? At least from the government's side, we're looking after the taxpayers in some respects. I'm hearing you saying no.
President and Chief Executive Officer, Canadian Nuclear Association
There are two interesting elements here. One is that we look after the price of electricity for our ratepayers. We think that if we can get a better price for the cost of covering the liability we're required to cover, this will look after them. It seems that probably we're not going to have to resort to the taxpayers. Remember that, certainly in the case of the consumers of electricity, our costs are passed on in the price. So if we can get a reduced price, we think this is a much better place for us to be. We think the 50% acts, in a sense, as an artificial limit to the variability of plans we might bring in front of the minister to comply with the new limit of $650 million. And we think that this probably is better not only for our ratepayers, our taxpayers, but probably for our shareholders as well.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
If that's your line of thinking, consider that in 2003, Natural Resources Canada and the Canadian Nuclear Safety Commission did a study on what the potential impacts would be and what the potential loss would be if there was an accident. I'm sure you're familiar with the study. It said an accident could range from $1 million to $100 million, depending on the time period, although in a highly populated area, it could go higher.
Well, if you're protecting your rate payers, then why aren't you arguing for an amount lower than $650 million?
