Evidence of meeting #6 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 clause.
A recording is available from Parliament.
9:05 a.m.
Conservative
The Chair Conservative Leon Benoit
Good morning, everyone.
As everyone knows, we are dealing with clause-by-clause of Bill C-5, An Act respecting civil liability and compensation for damage in case of a nuclear incident.
(On clause 24—Insurance)
9:05 a.m.
Conservative
The Chair Conservative Leon Benoit
We had started with clause 24 and we had actually had several interventions on clause 24.
9:05 a.m.
Conservative
The Chair Conservative Leon Benoit
Yes, you were on, Mr. Alghabra. That is correct.
I don't have the remainder of the speaking list from last time. There was one other person other than Mr. Alghabra on the list, so please let me know if you want to be on the list.
We are on the BQ-3 amendment.
Mr. Alghabra, you go ahead and continue your intervention.
9:05 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Thank you, Mr. Chair, and good morning.
Good morning, everybody.
Mr. McCauley, we were discussing the insurance business, as you recall, and how it works. You were in the middle of explaining to us the process of selecting insurers, who does the insurance, and how it works. My question still revolves around NIAC and the fact that they're not really the insurer. They're an association, of sorts, to the insurance companies that demonstrate interest and ability in underwriting nuclear liability.
As far as I understand it, there are only two requirements to become eligible to underwrite a nuclear liability insurance. First you need to be authorized or approved by the financial insurance agency—I'm not saying the proper name—and second, to be approved by the minister. In order to be approved by the minister, does the insurance company have to be a member of NIAC?
9:05 a.m.
Dave McCauley Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
No, the insurance company wouldn't have to be a member of NIAC. NIAC is the approved insurer today. That was done many, many years ago, and they're the only approved insurer. But no, it wouldn't be necessary. If another insurance company came forward, had received approval by the Office of the Superintendent of Financial Institutions to provide insurance in Canada, and then subsequently put a submission to the minister, the minister could approve that company to provide nuclear liability insurance.
9:05 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
So really you have to be a member of NIAC to be automatically approved, unless you're coming to the minister with another large pool of assets or financial strength, because NIAC right now is the only approved insurer.
9:10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
In most countries there's one approved insurance pool. I think in the United States there are two. In most countries there is only one insurance pool. Under our current legislation, the Nuclear Liability Act, there is only one approved insurer, for historic reasons, to the Canadian operators.
What I'm saying is, that doesn't preclude other insurers. There's nothing in the legislation that would preclude, as you said, another pool coming forward and saying they want to provide insurance. They would have to be approved by OSFI as well as by the minister.
9:10 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
I would like you to comment on the testimonies we heard from the industry that they feel they are able to get much lower insurance rates in other countries or that the markets in other countries are much cheaper than they are over here. Do you think that is accurate? If so, why do you think that is, given your knowledge of the industry and how it operates?
9:10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
I don't know what the premiums are that insurers charge in other countries, so I'm unable to comment on that. It's a commercial issue, and we don't look at the premiums.
9:10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
Thank you very much, Mr. Chair.
Mr. McCauley, you and I discussed minor or major incidents the other day, if you'll recall, and also the insurance intended to cover major incidents, but not necessarily catastrophic incidents. Do you recall that exchange?
9:10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Yes, but the insurance is there to address all nuclear damage relating to a nuclear installation, be it minor, major, or catastrophic.
9:10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
Right. On that—and this is within the scope, in my view, of our deliberations—are you familiar with the prolonged maintenance shutdown of the reactor in Chalk River?
9:10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Yes.
9:10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
As I understand it, the reactor was to have been up to speed again by November 26, or some such date, but it's been a prolonged shutdown. So there are consequential effects for those who are undergoing treatment for cancer.
Will that type of incident be covered by insurance, firstly? Secondly, can you reassure the public, particularly the people in my riding who are concerned about their inability to access the treatment they require?
9:10 a.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
On a point of order, I believe we're getting off the topic, which is the discussion of the bill here. I would like to stay within that if we can.
9:10 a.m.
Conservative
The Chair Conservative Leon Benoit
The discussion is actually on Bloc amendment number 3. It would be expected and appreciated if we could keep the questions to the substance of the amendment.
Go ahead, Mr. St. Amand.
9:10 a.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
When I ask the questions, if the witness is directed by the chair not to answer, so be it. In my view, the question or questions fall within the scope of what we're discussing, that is, the insurance and what types of incidents would be covered by the insurance.
9:10 a.m.
Acting Director, Uranium and Radioactive Waste Division, Department of Natural Resources
Well, I think in terms of the first part of your question, certainly I could say that as long as there's nuclear material at the reactor, the reactor is covered under the legislation. So even if it's shut down, it still continues to be covered under the legislation, and any damage that would result from that facility, even in a shutdown period, would be compensable.
As to your second question, I really can't address that. I don't have that knowledge.
9:10 a.m.
Conservative
9:10 a.m.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Thank you, Mr. Chair.
My question is for Mr. McCauley.
Subclause 24(1) requires that the insurance policy be approved by the minister. Subclause 24(2) states this:
(2) The Minister may enter into an agreement with the operator that authorizes that a portion of the financial security be alternate financial security.
What more does that do, Mr. McCauley? Does it provide additional security? The minister already has to approve the insurance company and the insurance. Does he also have to approve the alternate security?