Natural Resources Committee on Nov. 18th, 2009

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you, Mr. Regan.

Madame Brunelle, we will go to you now, please.

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

Good afternoon, Mr. Rubin.

You said that Bill C-20 would not survive a charter challenge. Are you referring to the Charter of Rights? Is it the compensation amount compared to that of damages that would be challenged? Could you clarify what you mean?

[Norman Rubin]

Energy Probe and our co-plaintiffs pursued a number of avenues under sections 7 and 15 of the charter. They had to do with the security of the person, that in taking away normal incentives for safety, the existing act and its successor violate that part of the charter. That's one line of argument.

There are a number of lines of argumentation under which limiting liability and limiting compensation amounts would be seen as violating the charter rights of victims. We lost that case in large part, I would say, because our arguments were seen as theoretical and academic and what if. After an accident, they would not be seen as theoretical or academic or what if; they would be all too real.

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

Why would you want to limit the liability of those who would create such a catastrophic accident? You are leading us to say that we should increase the limit. I would like to ask you a question which has been on my mind since the beginning of our deliberations on Bill C-20. To what level should we raise it and what is the cost of a catastrophic accident?

If there was an accident in Pickering, could the people from Ontario Power Generation tell me who would be impacted and how much that might cost?

[Norman Rubin]

The good news is that there is no need to answer that question.

In the normal course of events, those who cause damage have no protection. If they go bankrupt because they created more damage than they're worth, then they go bankrupt. And that is why lawsuits for damage recovery often have multiple defendants, because it is possible, in a large case, that the first defendant will be bankrupted. So be it.

We heard Mr. Sweetnam say that the capacity of the owner and operator is not unlimited, the capacity to pay. Well, unfortunately, the capacity to create damages is unlimited. So there's a mismatch. That is why we need some mandatory insurance, or “depth of pocket” as I've called it, but we do not need to couple that, to join that, with a limit on liability. There is no reason to tell victims that they are limited, or to tell the operators in advance that we forgive them over some arbitrary number. There is no reason to put in that number, except as a favour to the risk-maker.

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

Mr. Sweetnam, do you wish to add a comment?

[Albert Sweetnam]

Thank you. I would.

I'd like to address specifically the comments that were made associated with the magnitude of an incident. And I'd like to actually quote from the Canadian Nuclear Safety Commission, which as you know is the nuclear regulator in Canada.

The Canadian Nuclear Safety Commission, in its reasons for a decision, responded as follows to an intervenor who raised concerns on the insufficiency of Canada's nuclear liability regime at the Pickering B environmental assessment hearing, which was held on January 23, 2009. What they reported was as follows:

CNSC staff reported that an analysis on costs associated with “design-based accidents”, conducted in 2005 by CNSC and Natural Resources Canada (NRCan) for Darlington and Gentilly-2 NGSs, taking into account different scenarios and types of radionuclides releases, estimated the clean-up cost of an accident at about $100 million and in most of the scenarios under $10 million.

That's a direct quotation from their report.

Thank you.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you.

Madame Brunelle, you have another minute and a half.

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

Mr. Loesby, you said that the civil liability limit of $650 million is too high for small facilities like yours. The insurance cost is too high but in your estimation, what would be the cost of the damages that might be caused by one of your reactors?

[Rex Loesby]

There was a comment from Mr. Rubin, too, who said that a private entity might be an operator of a nuclear reactor. Under the Canadian Nuclear Safety Commission regulations that we would have to adhere to, we would have to demonstrate that we as an organization had the capability to manage, operate, and so on, a reactor that is safe.

I think it goes to any type of risk that might be out there. If you want zero risk, we can't do that. What's the likelihood of a reactor incident? If you look at the requirements of the analysis of safety for reactors in general, you're looking at the probability of an incident happening once in one million years as something that may be acceptable. They'd like to see a better record than that. A small reactor has to be less of a problem than a big reactor.

When has there been a release of radiation from any nuclear reactor that had a reasonable safety regimen in place and a containment structure?

[The Vice-Chair, Liberal, Alan Tonks]

Thank you, Madame Brunelle.

Thank you, Mr. Loesby.

We'll now go to Mr. Rafferty, for seven minutes, please.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thank you very much. It's a pleasure to be here.

I'd like to start with Mr. Sweetnam, please.

Would the liability issue determine where you get your power from? For example, if there were unlimited liability, would OPG change how they searched for power to meet the needs of Ontario? Or would you continue with nuclear?

[Albert Sweetnam]

There are two parts to that question. First of all, to operate a nuclear reactor in Ontario, or in Canada, you have to meet the regulations of the CNSC. One of those regulations is that we comply with this act. If it's impossible to comply with the act because of the unlimited liability set and the inability of the utilities and the insurance companies to deal with an unlimited liability, then you would have a situation where we could not operate legally in Canada. We would have to shut down the reactors, and so would Bruce, and so would Gentilly and the New Brunswick reactor, simply because the CNSC requires you to comply with the act, and if you can't comply with the act, you can't operate, and if you can't get insurance or you can't get some sort of coverage on unlimited liability, you'll be forced to shut down.

Would we look for different sources of generation of electricity? We are presently doing that. At OPG, in the first quarter of 2009, 90% of our electricity was generated from non-emitting sources. We intend to keep that record and increase it. The way we're doing it is by looking at more hydroelectric development. Obviously those are limited. We think we have located a few additional ones in which we intend to invest. In addition to that, we are looking at the possibilities of converting some of our fossil plants to biomass. Again that's a little way down the road, but we have already approved an investment in that area.

I hope that helps with your question.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thank you.

Mr. Tremblay, I don't want you to be left out. You've come all this way, so I'd like to ask a few questions.

Pickering, of course, is one of the oldest plants. How does proximity to populated areas affect liability now?

[Pierre Tremblay]

First of all, I was introduced as the site vice-president for Pickering, which I no longer am, but I was the site vice-president for Pickering B and I re-licensed that plant in 2008. Clearly I've spent my 32-year career making an event that would require access to the act highly unlikely and focusing our attention on safety and prevention and having a strong safety focus. We're very proud of Pickering, the plant and our relationship with the community.

Clearly, as the density of the population around the Pickering plant has increased, we have changed and modified our emergency contingencies and plans and factored that into our overall game plan for the facility. It does have an impact, as it does at the Darlington facility that we operate as well. It's a matter of contingency planning, and preparing and accommodating the changes in the community.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Just briefly, is security an issue with an old plant like that, or if it was, what has been done to improve that?

[Pierre Tremblay]

One of the files that I carry on behalf of the nuclear fleet is the plant security program. Since 9/11, the OPG program has developed substantially. We've enhanced the security of our facilities, and with the oversight of the Canadian Nuclear Safety Commission, we have significantly enhanced the security of our facilities. I can assure you that we are safe and secure at OPG.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Rubin, I'd like to ask you a couple of questions, please.

Are you aware of any other subsidies to the cap on the liability cost? In fact, what a $650 million cap amounts to is a subsidy to the nuclear industry. Are you aware of any other situations in any other countries where this exists?

[Norman Rubin]

Yes, there are liability limits in other countries. They're set at various levels. Some may be more outrageous than Canada's. Those aren't the ones I'm focusing on. If the industry internationally has proven it is capable of operating without a liability limit, then that's where I want to focus and that's where I have focused.

If I can add one other point, Ontario Power Generation has proven it can operate with unlimited liability because it does so now with its hydroelectric facilities, including a dam that is hovering upstream of Ottawa, and including in its gas facilities its natural-gas-fired generating stations, some of which are in highly populated environments. There is no law from the federal government or the provincial government that caps their liability. Their liability is only capped by the damage their plant might do on a bad day, so we're not talking about requiring an infinite insurance policy. That might be impossible, but just saying that victims will have the right to compensation without limit, only limited by their damages, that seems to me common sense, and that shouldn't stop OPG from doing anything. If it does, it's because they're scared of what their plant might do on a bad day, and if they're scared, you should be scared.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Rafferty, we're out of time on that one, but we might be able to come around on that.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thank you.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you, Mr. Rubin.

We'll go to Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

I'll start with one of the most basic questions. In OPG's deck here, it says “timely passage of Bill C-20 is essential”. Could you elaborate--briefly, of course--on what particular elements make this bill essential to OPG?

[Albert Sweetnam]

I'll start, and then I'll let Pierre finish.

For us to have the correct service providers in the industry, these service providers need to be protected from the liabilities associated with the extreme possibility that a nuclear incident could occur. To do this, we need to have the bill passed. If we don't have this done, we don't have the competitive aspect that's associated with putting out contracts in the industry, because only a limited number of companies would respond. This is one of the major issues.

In addition to that, as you know, until it was suspended, Ontario was contemplating a new build, and one of the requirements of the bidders is that this act would be passed. The reason for that, again, is for them to be clear that a nuclear incident is the responsibility of the operator. Certain parts of the present act allow that responsibility to seep away from the nuclear operator, potentially to suppliers and sub-suppliers and sub-sub-suppliers, so even the little guy on the street could be impacted in an overall lawsuit if something like this happened. This is why it's essential that the bill be passed as soon as possible.

Pierre.