Natural Resources Committee on Oct. 21st, 2009

[Serge Dupont]

I've seen work from Rothschild.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

You haven't seen the final report, though.

[Serge Dupont]

Yes, I've seen a report.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Okay, you've seen the report.

The government hasn't officially announced when it's going to release that publicly to parliamentarians, has it?

[Serge Dupont]

No. That's because of the same considerations I mentioned earlier.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Sure.

The government doesn't actually have to come before the House to do this privatization, does it, by the legislation that guides AECL?

[Serge Dupont]

Yes, it does. There are some parts of the effort that could be done. For example, the management contract for Chalk River possibly could be done, under some conditions, under the current legislative framework, but there could not be a substantial sale of the assets of the commercial side of the business, for example.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Looking through the same report from the minister that was held onto for a while, and the same argument was made that it was the size of AECL, that it wasn't of the proper dimensions to be able to compete, what I'm concerned about is that you mentioned there being a niche market for the CANDU, but the record is, with more than 100 builds out in the world right now, we have none of them. A concern that has been expressed to us is that AECL will essentially be sold for parts, that the technology we're promoting and have promoted for a number of years in this county has not met with any sort of enthusiasm from the current marketplace.

While the government claims $8 billion in subsidies, I've heard numbers much larger in terms of what Canada, over time, if you add it all up, has poured into this particular operation. The fire sale that was mentioned before leads to some notion that Vena or somebody else would come in and simply pick off the best bits in terms of the knowledge, the intelligence we have that was mentioned earlier as well.

What I'm trying to understand here is that the minister, in a sense, has kind of talked down AECL a little bit. She has pointed out some criticisms. It doesn't have any contracts available. Ontario's bid has suddenly gone through the roof and they want subsidies from the federal government to build a CANDU, as the minister has said publicly and then pulled back entirely. All of these things have contributed to a lowering of the perceived asset value of AECL, which we poured many billions of dollars into, and anybody coming along will simply see it as a place to pick up some parts and some potential access to the Canadian market, and that's it, full stop. Whatever results at the end of the day will be a drastic diminishment of what AECL was just a short time ago.

How can you assuage those fears?

[Serge Dupont]

You say “diminishment of what AECL was”. I think you're correctly observing at this time that it is not participating in any of the new builds. So starting from where we are now, we have to be realistic about the prospects under the current structure.

As a large measure of the exercise, I cited the three objectives, the third one of which is really to position the industry to be more present in those markets and to enhance that capacity. If the government, upon seeing what is offered from potential investors, doesn't see that this results in more business and more activity and a better future for our nuclear industry than status quo, I would imagine it just won't go forward at that time.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Let me get back to a subsidy question.

We did a build in China. Was it in 1996 that the contract first came around?

[Serge Dupont]

I think so.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

There was $1.5 billion attached to that in guarantees from the Canadian government.

Is that not subsidizing the project?

[Serge Dupont]

Again, I'd like to come back to the committee on that point. My understanding is that there was some export financing under the Canada Account. My understanding is that those funds were subsequently reimbursed. Therefore, it would not necessarily qualify as a subsidy. It was some financing provided by the Government of Canada.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Have we ever done an internal asset assessment of AECL? Has AECL ever gone through the process, prior to this Rothschild study, of saying this is what we think the whole thing is worth?

[Serge Dupont]

No, because that was partly what we were trying to get from the financial advisers.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Many of these reactors weren't built by Canada; they were built by others. There's no causal link between AECL picking up the refurbishment contracts. Is AECL the only one in the world that can refurbish these reactors?

[Serge Dupont]

AECL is not the only party in the world that could refurbish the reactors. However, they are CANDU reactors and AECL has a natural advantage in servicing them, relative to the competition. But other engineering companies or others at some point could do this as well.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you, Mr. Cullen.

We have reached the end of our time, and I have just a couple of clarifications.

Mr. Cullen, you suggested the matter of enriched uranium, and on the advice of Mr. Dupont you may wish to submit the name of an additional witness on that. I'll leave that with you.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Yes, thank you.

[The Vice-Chair, Liberal, Alan Tonks]

You can perhaps ask Mr. Dupont who would be appropriate to bring in.

Mr. Bains asked for clarification on the dates. I think Mr. Dupont is going to submit that for the benefit of the committee.

[Serge Dupont]

Yes.

[The Vice-Chair, Liberal, Alan Tonks]

Do I have a motion to adjourn?

Are we all in favour?

(Motion agreed to)

[The Vice-Chair, Liberal, Alan Tonks]

The meeting is adjourned.