Natural Resources Committee on Nov. 25th, 2009

[Dave McCauley]

I think you'd have to ask the CNSC. The risk of what? The risk of a catastrophic loss?

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

Correct.

[Dave McCauley]

I would say that it is virtually nil. I don't think you would say nil, but I think the CNSC would be better able to comment on that.

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

So when it comes down to it, in order to study economic loss, the government, through liability, has to set some sort of boundaries as to where those losses can be compensated for and where they can't. One thing we've established, at least in this section—and I hear your point about further psychological damage and the rest that is contained here. In section 15 it is contained around physical harm that then causes trauma.

The second recommendation that came out talked in terms of economic loss. The recommendation from, again, its own study said don't just look at Gentilly-2 and Darlington, because the population concentrations around those plants are not that great. It says here to consider Pickering, which has within its vicinity a much larger population. Did the government take this recommendation and go and look at a higher concentration of population around a plant like Pickering?

[Dave McCauley]

No, we didn't.

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

Was there any reason for that?

[Dave McCauley]

For basically the same reason that we felt the $650 million was a suitable level for establishing liability of the operator.

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

Okay. So on the first point—and I'm not going back to it—you said the reason you didn't consider a severe accident was because the probability was so low that it wouldn't be fair to set an insurance liability rate so high. Probability isn't one of the main factors in setting insurance rates; usually the greatest factor in setting them is what amount of protection is actually required. I'm still confused about it, but I don't want to upset Mr. Anderson, so I'll leave it.

The question around not looking at Pickering, though, doesn't fall into the same rubric. If you're saying that the probability of a severe accident is too low in order for us to set a limit for it, the population is a legitimate concern that the authors of your report raised, saying that you've looked at far less dense sites than a site like Pickering and the government should also study Pickering. There isn't any probability regime we're talking about here; we're just talking about a site that may affect more people—many more people in the case of Pickering.

I'm trying to understand, when we're talking about economic loss incurred, why the government didn't choose to also look at a site that has a lot more people around it, as the authors have recommended. These aren't my thoughts; these are from the report itself. Do you follow me?

The report says to look at Pickering; there are many more people there. The consequences for government and for insurance might be different. The government didn't go look at Pickering.

[Jacques Hénault]

I would just perhaps refer you to an earlier part of the report, on page 8. The study realizes that, and I quote from this: “These sites”--Gentilly and Darlington--“are considered representative of the medium range of the potential costs because of their characteristic designs, location and demography.” So essentially this study came out with a range of losses under these severe design-basis accidents that range from $1 million to $100 million. So considering a station like Pickering relative to that, I think it would still fall within the $650 million.

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

You raise an interesting point here, because what was done when governments considered economic loss... You've decided that one of the barriers around where the limits are set is about probability. If the government deems a severe nuclear accident to be very rare, you don't set liability rates according to severe accidents. We've established that. Isn't that correct?

[Dave McCauley]

That's correct.

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

We're now talking about population and proximity to what is anticipated in insurance, which is a nuclear accident.

That's why you set up insurance; it's in the anticipation of something going wrong. To quote from that same page, “The near range covers an area up to a radius of several tens of kilometers. For this analysis the near range was selected as 55 km.” So the government has said, when constructing Bill C-20 and trying to understand where the economic loss may happen, that you're going to choose an area in a radius around the site of 55 kilometres.

Is that right, or is that exclusive to this study?

[Dave McCauley]

I think you're mixing the concept of economic loss with our review of the liability limit. The concept of economic loss applies across the board.

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

There is no physical limit to its size?

[Dave McCauley]

There is no physical... It's defined as it is right here. It applies, as I indicated previously, in a foreseeable incident or in a very large incident. It's the same definition that we use.

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

Right. The very next sentence says “The far range, which would extend beyond this 55 km”, when considering economic loss. You make no distinction, because you deem that an accident is only going to happen on-site; that it's going to be what's called a design-basis accident.

[Dave McCauley]

A design-basis accident also involves a release of the contamination, of the radiation, off-site. So you may have an eventuality, I suppose, in a very unlikely situation, in which there may be contamination released from the facility, and anyone who is damaged as a result of that contamination would be able to receive compensation.

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

So the economic loss incurred by a person under what is called a controlled release is imagined in clause 15. Is that right?

[Dave McCauley]

It's a controlled or an uncontrolled release; it's any release, any damage associated with radiation.

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

Okay. I'm sorry. I'm starting to connect controlled release to design-basis accident.

[Dave McCauley]

That's correct.

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

You're also assuming non-design-basis accidents for an uncontrolled release. Is that right?

[Dave McCauley]

I'm saying that the legislation applies to any incident that's defined earlier in the legislation—foreseeable, unforeseeable, etc. But in terms of the limit of the operator, we only considered a foreseeable event, which is containment with controlled release.

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

I just heard two different things from you, and I want to make sure I understand this.

Under this bill, and under this clause, we're talking about design-basis accidents. We've looked at economic loss, and what is imagined by government is only those foreseeable accidents that happen in a way such as you anticipate.

[Dave McCauley]

No. Under this bill, we are not looking at design-basis incidents; we're looking at all incidents. That includes design-basis and non-design-basis incidents. The limit is not, I wouldn't say, tied to a design-basis incident, but once we chose the limit, or once we made a recommendation of the limit, we did a study to see how that limit related to a design-basis incident. We didn't do a study to see how the limit related to a non-design-basis incident, because we didn't think one would be likely.