Evidence of meeting #5 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 nuclear.
A recording is available from Parliament.
9:55 a.m.
NDP
Dennis Bevington NDP Western Arctic, NT
You've explained that the government will then be involved in the reinsurance of a plant after there's a major accident.
9:55 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Yes. The situation is that there is an insurance policy for the operator, and there are two elements of the insurance policy: coverage A and coverage B. The total liability is $650 million. Coverage A risks would be borne by the insurance company and coverage B risks would be borne by the federal government. These are risks that the insurers are unwilling to cover.
For example, we have suggested latent injuries to 30 years should be included in the bill. The insurers will only provide 10 years of coverage. So rather than have victims not be covered for those kinds of damages, the federal government would pick up the amounts between 10 years and 30 years.
9:55 a.m.
NDP
Dennis Bevington NDP Western Arctic, NT
So within that $650 million liability, the federal government could quite easily be one of the major contributors to any kind of settlement that would come under that.
9:55 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
They could have some liability.
9:55 a.m.
Conservative
The Chair Conservative Leon Benoit
Mr. Bevington, I'm not the expert on this, obviously, but if you look at clause 27 and then you go right up to clauses 60 and 61, you see the flow of funds. That's all part of why I made the ruling I did, on the advice of the clerk. It's how the funds flow as well.
Is there anything further, Mr. Bevington, or should we go to the next speaker?
We have a list on the clause still. There is no motion. I ruled it out of order.
Is there anything else?
Then I'll go to the next speaker, Mr. St. Amand, and I have four others on the list as well.
9:55 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
Thank you, Mr. Chair. I'll try to be brief.
As I understand it, under the current legislation there is no provision for an increase commensurate with the consumer price index. Is that the case?
9:55 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
That's correct.
9:55 a.m.
Liberal
9:55 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Roughly, 40 years...30 years, excuse me.
9:55 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
So although at first glance this seems to be a considerable bumping up of the coverage, frankly, $75 million 40 years ago is probably not too much different from $650 million today.
9:55 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
We looked at inflation, and if it was just an inflationary increase it would be somewhere around $250 million to $300 million, actually.
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Liberal
Lloyd St. Amand Liberal Brant, ON
All right. So it's not really going from $75 million to $650 million; it's really simply doubling the current coverage in real dollar terms?
9:55 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Yes.
9:55 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
You can sense we're feeling a little disquiet about the $650 million ceiling, and maybe you could make us feel less uneasy about it.
When I think of the thousands of people who could potentially be adversely affected by a nuclear incident, and when we consider the heads of damage under which they will be compensated—bodily injury, property damage, economic loss, psychological trauma—boy, a very modest amount would potentially be payable to each claimant. That's my one concern.
Secondly, when we're talking about other countries and the insurance coverages available in other countries, are we talking apples and apples or apples and oranges? By that I mean is the coverage limited to, for instance, bodily injury and property damage, or are they in other countries also insured for psychological trauma and economic loss?
10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
On the first issue, our view is that we were looking at foreseeable incidents. In establishing the $650 million limit we weren't looking at a catastrophic loss because we did not believe that would be an appropriate parameter to determine an operator's insurance, the worst-case catastrophic loss, similar to Chernobyl. We did not anticipate that we would set the operator's liability. We looked at something that could be foreseeable, in terms of evacuations, etc. In fact, we found, after looking at the Magellan study, that the $650 million was well placed, far in excess of what that study had found.
10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
This is my phrasing, not yours. So minor incidents are reflected in this bill and major incidents are not reflected in this bill?
10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
I would say catastrophic losses are not. They're all addressed by this bill, but if one could contemplate that there could be a catastrophic loss, then we would be moving into the second part of the bill, the tribunal. There would have to be a determination of what the total cost is, and Parliament would have to decide whether it was to appropriate additional funds.
10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
All right. And the second question was the insurance available in other countries, what heads of damage are covered?
10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
All of the developed countries would use a similar definition of nuclear damage. For some time it was static, and they were looking at property damage and injury, but since 1997 there's been an evolution. Now countries are moving to a more comprehensive list of damages.
10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
That is that economic loss and psychological trauma are being compensated.
10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Yes.
10 a.m.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
Thank you, Mr. Chair. A number of people around this table seem to be uneasy about the limit of $650 million. Among our witnesses was the mayor of Port Hope, who represented all the municipalities with nuclear facilities nearby.They also feel that $650 million is not enough to compensate for the damage caused by a nuclear incident.
The mayor of Port Hope painted a picture for us when she talked about all the municipal infrastructures, contaminated water, devalued property, the loss of tourism and so on. The damages made quite the list. I think that, if we want to be fair, we should accept that the total could be more than $650 million. The bill looks like it is drafted to accommodate the financial means of the insurers rather than to deal with the harm an incident could cause. That is my feeling, and I think it is shared by my colleagues.
You say that, in Europe at the moment, the coverage is somewhere around a billion dollars, but their act cannot go into effect because the insurance companies cannot come up with a billion dollars in coverage. What happens in Europe now? What amount of coverage is legally required?
10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
The amount of insurance in European countries today is 300 million SDRs, or about $500 million Canadian dollars. Countries now want to increase that to a billion dollars, but it is not possible. They are looking for other ways to get the financial security. They cannot ratify conventions about this. They want to, but it is not possible. So they are looking for other ways to guarantee the security they need.