Natural Resources Committee on Nov. 16th, 2009

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you very much, Chair.

With respect to an issue that's come up time and time again, where does Canada rank vis-à-vis other jurisdictions? One issue that's come up with our previous witnesses as well is with regard to the amount of $650 million, and if that's a sufficient level to account for the liability.

I also want to look into the notion of the scope of the liability in Canada. In the bill that's being proposed and that we're discussing here, is the scope wide enough for the liability, and how does it compare to other jurisdictions? One example that was cited to us before was this notion of unlimited liability, but there was a way of manoeuvring around that by creating a separate company and/or separate mechanism of limiting that unlimited liability--you have to be very careful.

To the witnesses in general, what is the scope of the liability, not necessarily the threshold?

[Peter Mason]

I'm not qualified to answer that.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Binder.

[Dr. Michael Binder]

I have enough trouble with nuclear without trying to understand the insurance. I'm not qualified in this. We do not set up those details.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Hénault, you have indicated you would like to answer.

[Jacques Hénault]

Yes, I would like to get more clarification on what you mean by scope.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

What would that $650 million cover in liability? Is it just simply the operations? What should it cover?

[Jacques Hénault]

Again, I can tell you in scope what damages it would cover.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

That's what I was getting at.

[Jacques Hénault]

Essentially, we've expanded the scope under Bill C-20. Under the current Nuclear Liability Act it was basically limited to bodily or personal injury and property damage. With revisions to the international convention, we've seen that this has not given enough direction to the courts about what compensation should be awarded. We've expanded it in line, I guess you could say, with the international conventions to include certain forms of environmental damage, certain forms of economic loss against directly related forms of psychological trauma, and preventive measures.

I trust that answers your question.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I guess I'll clarify that later. But since we have limited time, I have another set of questions and I'll come back to it if I have time.

This question is for Mr. Mason. You mentioned that there was concern with GE shareholders because of the fact that there was a limited liability and that GE might be ultimately held accountable for greater liability. Because you're a global enterprise and you have operations around the world, how does this bill and this liability threshold compare to other jurisdictions? Will this put Canada in a comparable position vis-a-vis other jurisdictions where you have your operations?

[Peter Mason]

Yes, it would

For example, before we sell nuclear equipment into a country, our lawyers review the nuclear liability regime of that country. If they're satisfied, then we move forward. Some of the countries we do business with are Korea, Japan, Argentina, and Romania--those countries that have a regime in place that is acceptable to our lawyers.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Binder, this is a question for you.

You mentioned in your remarks that you have a very important responsibility to detect any risks in a proactive fashion. Do you feel you have sufficient resources in place to keep your mandate? You mention on page 4 of your remarks that you deployed 800 staff, including 150 inspectors, conducting over 2,000 inspections of every type to ensure compliance. Do you have sufficient resources you need to be able to execute your mandate, to make sure you're able to detect problems in a proactive manner?

[Dr. Michael Binder]

Yes, I do.

In fact, in the last few years we've ramped up to anticipate whatever new activity might come in this sector. We now figure that roughly, in a plateau, we have the right size for the current operation. Remember, a big part of our operation is cost-recovery from the industry. If there were to be an increase in demand, again, that would be supplemented by the industry itself.

[The Vice-Chair, Liberal, Alan Tonks]

I'm going to have to interrupt there, Mr. Bains, and go on to Madame Brunelle for five minutes.

Mr. Thompson, if you wish to answer a question, give me a hand signal and we'll try to bring you in.

[Dr. Gordon Thompson]

Well, yes--

[The Vice-Chair, Liberal, Alan Tonks]

That's exactly the kind of hand signal I was looking for.

[Dr. Gordon Thompson]

Okay. I do have one--it does pertain to Mr. Bains' question.

[The Vice-Chair, Liberal, Alan Tonks]

Sorry, not right now, because we're going to the next one. We'll try to bring you back in a moment.

Madame Brunelle.

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

Mr. Thompson, perhaps I can bring you into the discussion.

You tell us that the probable risks must be assessed. In your opinion, was the cap of $650 million established as a result of this risk analysis?

[Dr. Gordon Thompson]

That's a good question. Before I answer that, I'd just like to address Mr. Bains' question about the scope of Bill C-20. The scope of damages has been expanded, and that's a change that I welcome. The expansion is not in the magnitude but simply in the range of types of damage that would be addressed. I believe the current scope is a better match with what we know about the long-term consequences.

In regard to your question about the basis for the $650 million liability cap, Mr. Hénault spoke to that issue, as I said, at a conference in Toronto in October. He said it comes from a balance of considerations, one of which is that it addresses what he terms “foreseeable” accidents, which as I explained is a term of art meaning design-basis accidents, accidents that plants are designed to withstand. Experience and a very large body of technical literature show that there is actually a universe of accidents well beyond the design basis that are indeed entirely foreseeable, because two major events of this kind have occurred.

Insurance against an industrial accident surely has to accommodate events that are foreseeable in the sense that they have occurred and in the sense that technical analysis shows they could occur again.

In the chemical industry, for example, the Bhopal accident is a historical event. It was beyond the design basis, and yet it's part of a reality. If one were insuring a chemical plant, one would have to consider a Bhopal-type event.

The $650 million limit does not consider events that are foreseeable and that indeed have occurred.

[The Vice-Chair, Liberal, Alan Tonks]

Madame Brunelle, you still have some time.

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

Mr. Binder, there is more and more talk of terrorism and more and more concern because of it. You know that the city of Trois-Rivières sits right next to the Gentilly nuclear generating station.

To what extent does Bill C-20 deal with it? Would terrorism be considered an exclusion like any other disaster that might happen? In some policies, for example, there are exclusions for armed conflicts and things like that.

[Dr. Michael Binder]

If I understand the question correctly, you are asking me if terrorism is included. I think so.

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

You think so.

Should the growing threat of terrorism cause us to amend this bill? Is it something that we should take into account?

I think Mr. Hénault wanted to answer as well.