Natural Resources Committee on Oct. 28th, 2009

[Geoff Regan, Liberal, Halifax West, NS]

Yes.

[Gerald Grandey]

I would observe that AECL is absolutely crucial. Since we're a one-third owner of Bruce Power, it is absolutely crucial to the future of the refurbishment efforts that there be an organization with the technical capability, the know-how, and the knowledge to address what will be critical for Ontario and Canada, and that is the life extension of these units. Of course, Bruce Power, in doing the refurb, is adding 25 to 30 years to that life.

In looking at it, I'm certainly aware of a report that has now been lodged with NRCan and is going to suggest paths forward. All I can say is that the survival of AECL in some form is essential in order to provide the technical know-how and the construction capability.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

Mr. Robbins, will privatization be the death knell of the CANDU?

[Wayne Robbins]

I'd have to leave that up to AECL to answer. From an industry perspective, certainty with AECL is our concern. We have to understand where the industry is. We have a lot of investment. We have a lot of technology. We have a lot of information that AECL possesses and we really have to make sure that's maintained going forward.

CNA does not have a position on AECL because it is a strong member of the CNA. We'd have to leave that.

[The Chair, Conservative, Leon Benoit]

Thank you.

Your time is up, Mr. Regan.

From the Bloc Québécois, we have Madam Brunelle for up to seven minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you, Mr. Chair.

Good afternoon, gentlemen. Thank you for being here today.

Mr. Grandey, I have some things I am wondering about. We have heard about nuclear energy, but not about the cost of disposing of nuclear waste. The committee will have to consider a major bill. I am wondering about the cost of insurance, for your respective companies, in the event of a nuclear accident.

My question is very simple: if we take all these factors into account, is nuclear power economically viable?

[Gerald Grandey]

It is a question that is often asked. I talked in my opening remarks about the nuclear industry having internalized these so-called environmental effects that people refer to as external costs. In many countries with substantial nuclear programs, like the United States and Canada, the generators of nuclear waste deposit cash into a fund that is intended to pay for the future disposal of the waste generated.

I ask you to remember that it doesn't go into the atmosphere or the water. It is a solid, very controllable, very manageable, and minuscule amount of waste. In fact, all of the waste generated in the 50-year history of this industry in Canada would fit within a hockey arena. You're talking about a very small amount of waste.

So, one, we've paid for it, and two, every country and think tank that has looked at this issue--and this includes Canada--has come to the conclusion that geological waste disposal is the answer. The difficulty the industry has routinely had, posed by the critics, is what political jurisdiction is going to accept it. That's been a very intractable problem, whether it be in Canada or the United States.

Technically, it's not an issue. It's paid for already from cash in a specially designated escrow fund. As I say, we have now internalized, including in the mining industry, the waste we generate. We've internalized the external costs that other industries, other forms of electricity generation, have not.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You are telling me that it is economically viable and the cost per kilowatt-hour of electrical energy is acceptable and profitable for a company. It is profitable to produce electricity with nuclear energy. It seems to me that the costs were much higher than with hydroelectricity, for example.

[Gerald Grandey]

I'm not familiar with hydro, but in the U.S., the amount of money being put into the waste fund is one mill per kilowatt hour, which is a very small part of the electricity charge, so it has almost no impact on the economics of generating electricity from nuclear energy.

Likewise, another issue that is often talked about is tearing down the plant at the end of its life. That has been done in a number of jurisdictions and has been demonstrated to be very manageable in terms of the economics of the life cycle of power production. In Canada, the amount we pay into the fund is also quite small compared with the other costs that are incurred in generating nuclear electricity.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You said something that bothered me. You said the regulatory system had to be rationalized so it would meet the rigours of competition. When I hear that, I think that our regulations are too stringent. Should we allow you more latitude? Why are you telling us this? Can you give me some examples?

[Gerald Grandey]

I preface my remarks by saying that I do not suggest that the standards of performance be any less than they are. Today when we make a discovery in Canada of a uranium ore body that we would like to advance and turn into a commercial project, it takes a minimum of 10 years to get through the delineation, the pre-permitting, and ultimately the licensing.

This is an industry where we have a special regulator. I talked about the CNSC. We also have a provincial regulator so we have overlap and duplication between the two. Then you have the interplay with the Canadian Environmental Assessment Act, CEAA. In addition to that, there are several other federal agencies that always get engaged, such Fisheries and Oceans. The combination of all of those coming together ends up taking us years and years to get through the regulatory process.

In the meantime, competitors are quite able to live up to the standards of their country, which may be less or equal to ours, but because the process is streamlined and because the country has made it a priority to move these projects forward, it puts Canada and Cameco at a tremendous competitive disadvantage. What this means is that our high-grade deposits that would be quite economic are standing behind those in South Africa, Kazakhstan, Namibia, and Australia, because they can move through the system much more quickly than we can.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. White, you talk a lot about research and development, and about how important it is. You are engineers. If the Chalk River reactor could not be started up again, what would your solution be? Do you consider that to be a threat to research and development in Canada?

[Peter White, President, Society of Professional Engineers and Associates]

Yes. The Canadian nuclear industry requires a source of neutrons to do its research. There's no question about that. The country would have to consider what investment it wants to make to have that source of neutrons.

[The Chair, Conservative, Leon Benoit]

Merci, madame Brunelle.

We'll go now to the New Democratic Party, to Nathan Cullen, for up to seven minutes.

Go ahead, please.

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

Thank you, Mr. Chair.

Thanks to our witnesses.

Mr. Robbins, I want to start with you. With regard to the picture painted of the benefit of the nuclear industry—Mr. Grandey was also pointing this out—to the Canadian economy and for the Canadian public, has there ever been a study done, to your knowledge, to determine what the equivalent in terms of economic input would have been for the country if equal subsidies had been given to other industries or similar energy-producing industries?

It's sometimes difficult for us as committee members when we hear how strong it is and how fantastic it is but without having any comparison. Has there ever been an economic comparison that you've been made aware of?

[Wayne Robbins]

Thank you, Mr. Cullen.

I don't recall any study we've had on the Canadian economy that's comparable to the nuclear study, so I couldn't give you any facts on that right now.

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

That's all right. Mr. Shearer used the analogy of the Olympics, in terms of Canada going out.... I thought it might be an unfortunate one in terms of the cost overruns, the massive subsidies, and the controversy over the project in Vancouver.

Mr. Robbins, to your issue, on your slide of the nuclear future in Canada, Ontario is now potentially off the books or is delaying its request in asking Ottawa for some billions in subsidies in order to do the build. Alberta is looking at a greenfield build, which the industry itself says is very difficult to do. In these contexts, brownfield builds are much easier. Saskatchewan is at the speculative stage. New Brunswick's refurbishment of the Lepreau is delayed and is costing a million dollars a day in electricity costs to the people of New Brunswick. It's not necessarily a great assessment.

One of the challenges I've been having in listening to the testimony on the state and health of the nuclear industry in Canada in this so-called global renaissance is that somewhere around 130 build contracts are out there—the number varies—either in the process of.... None of them that we're aware of is using CANDU technology.

Also, we seem to have a vicious cycle going on with the way the government has approached this privatization process. This is my question to you. They've announced that they want to privatize. This has created a level of uncertainty. There are no new contracts as everybody waits to see what the structure of the privatization is going to be--and there's a question I want to bring to Mr. Ivanco in a second--which I would assume affects the price the Canadian taxpayers are going to get for their investment in AECL. That's as a starter.

This cycle continues in this realm of uncertainty. I don't understand how the industry can seem so rosy. We don't have folks banging on our doors wanting us to build them reactors. The one place, Ontario, that looked as though it was willing to do it is only willing to do it if all taxpayers across Canada subsidize the build.

I know that part of your job is as a supporter of the industry—that's your enthusiasm—but I'm finding difficulty in squaring the circle for that enthusiastic feeling about where the industry in Canada stands right now.

[Wayne Robbins]

Thank you, Mr. Cullen.

As far as Ontario is concerned, the energy minister, Mr. Smitherman, actually supported nuclear. He saw that nuclear has a very valuable spot in the energy mix going forward.

When we went through the selection process, it really came down to the bids. At that time, he wasn't prepared to carry on, as he was uncertain of the bids, but it wasn't lack of support. He based it on the performance of the nuclear reactors we have in operation. Darlington has been mentioned as having very good performance right now. It's recognized not only in Canada but in the world.

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

Can I ask you something about that bid process?

[Wayne Robbins]

Yes.

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

It's been brought to our attention that something different about the Ontario call for proposals was that they wanted all of the costs put into the bid, which is a bit unusual. They wanted the full lifetime costs.

I see Mr. Grandey nodding.

Did that, in your perspectives, affect the way AECL went through the bidding process with Ontario and with this having to be delayed?

[Wayne Robbins]

You'd have to talk to the government. I was not involved in the bid process or the IO process for the selection. I really can't comment on that, not being privy to the government's inside information.

[The Chair, Conservative, Leon Benoit]

Mr. Elston indicated that he'd like to respond to Mr. Cullen, if that's all right.

Go ahead.

[Murray Elston, Past President, Canadian Nuclear Association]

Thank you very much, Mr. Chair.

Mr. Cullen, a couple of things are important for us. It would be wrong for people to think that the entire investment made by the Government of Canada over the several decades would have to come back in response to a bid of restructuring.

As you've seen, we're a $6.6-billion industry. We put taxes to a total of $1.5 billion per year into the federal and provincial coffers. As a result, it's fair to say that the industry is already, through their 30,000 jobs, putting a pretty good return into the economy. So firstly, that's a concern I want to make clear to the committee: there is value already.

Secondly, and quickly, I think Mr. Schneider made the case for why it's a critical element for the Government of Canada to ensure that AECL is available to pick up the work that is looming ahead for the nuclear industry worldwide. He's not wrong to say that there will be a requirement to renew some of the existing reactors, but the strategy, certainly for us at Bruce Power—I now work at Bruce Power—has been to refurbish existing reactors to extend their lives so that we can continue to generate.

Also, as you heard from Mr. Grandey, there is the same sort of strategy to renew the machines in several other countries. That work is there and it would help create more jobs for Canadians and in fact provide AECL with a platform for doing more commercial work internationally.

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

If I may, I'll go to Mr. Schneider next.

Mr. Schneider, the appealing thing about your testimony is that you're one of the few witnesses looking at the global scenario and how Canada's nuclear industry fits into it.

To my question about why so few of the bids out there, the current calls for proposals, are for receiving a CANDU reactor, is there something in the way that our reactors are built? From this side, we've talked about how great the reactors are and how they perform very well and are very safe. With all those factors, you'd think that the U.S., Europe, and Asia would be picking up our reactors first and foremost, but they're not.

We're trying to study the health of the nuclear industry right now in Canada. Why is Canada absent on so many of these bids?