Natural Resources Committee on Dec. 9th, 2009

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

Welcome to our guests.

Mr. Hénault, Mr. McCauley, and Ms. MacKenzie, thank you for being here again.

We're here today to continue our clause-by-clause of Bill C-20. When we left off we were about to start dealing with a new clause 26.1, which is amendment NDP-15. It is a new clause.

First of all, Mr. Cullen, do you want to move that motion?

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

I do. Would you like me to speak to it?

[The Chair, Conservative, Leon Benoit]

Go ahead and speak to it.

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

On proposed clause 26.1, I wouldn't mind hearing from our officials here today. What the government is telling us is that these liabilities are listed already. Is that correct?

[Dave McCauley, Director, Uranium and Radioactive Waste Division, Electricity Resources Branch, Department of Natural Resources]

Yes, that's correct.

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

Can our witnesses tell us what the current pool of liabilities are listed for in terms of value in this year's report?

Maybe while the witnesses are finding that, Chair, for committee members, the reason the listing of total liabilities is critical is because we're talking about insurance. We're talking about what the liability limit should be. If the liabilities are $100,000 or if they're $100 million or $1 billion, that obviously affects how much insurance the government may want the private groups to carry, but also what kinds of payments the government may be on the hook for if the insurance is not sufficient. In trying to have some public disclosure of the liabilities, what we are seeking to do is match the liabilities to the insurance regime, essentially. That is where the intent of this comes from.

Mr. McCauley, are you ready with this year's listing?

[The Chair, Conservative, Leon Benoit]

Mr. McCauley, do you have a response to his question?

[Dave McCauley]

Yes. Currently the liability or the exposure of the federal government under the Nuclear Liability Act is reported in the Public Accounts of Canada , in table 11.5, under “Guarantees by the Government”. It is reported every year. The most recent version we have represents the guarantees by the government as of March 31, 2009, and, under “Insurance programs of the Government”, “Insurance against accidents at nuclear installations under the Nuclear Liability Act”, it indicates an authorized limit of $1,050,000,000.

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

What I want to understand from our officials today is what exactly that encapsulates. Is it saying, in that $1 billion-plus figure, that all of the assets the Government of Canada owns with respect to nuclear installations come out to about $1 billion?

[Dave McCauley]

Mr. Hénault can correct me if I am wrong. No, what that represents is the $75 million liability limit set against 14 nuclear installations that are covered by the legislation, so the expectation is that if the federal government were considered to be liable for the first full $75 million, the total liability, considering there are 14 installations designated, would be $1,050,000,000.

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

Let me understand this again. The companies, as it stands right now, have to carry $75 million per installation, or as a company. Once you add up that times 14, essentially.... Am I still correct so far?

[Dave McCauley]

That's correct.

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

What is left over in liabilities for the government is plus another $1 billion.

[Dave McCauley]

No. If, for example, the liability were entirely covered by the government by reinsurance, for example, if one could anticipate that there was a loss that the insurers would not cover and therefore it fell to the government to provide total coverage, then that would be the full exposure of the government at the $75 million level. For example, if there were a reason that the insurance policy that is in place would not cover the damage and the federal reinsurance were implicated, then this assumes that reinsurance on each and every plant that is currently designated under the legislation. This is a very unlikely situation, so they are saying that the total exposure would be $1,050,000,000.

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

I guess I'm trying to drill down here. I'm specifically asking, what does that $1 billion value? Does it value the damages that might be sought by others? Does it value the actual physical plants and what they're worth?

[Dave McCauley]

No. What it values is damage that would not be covered by insurance. It doesn't value the plant, but it values a type of damage that's covered by the legislation but would not be covered by insurers under the policy and therefore would fall to the federal government.

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

Can you give me an example of that? I'm trying to find out what this covers exactly.

[Dave McCauley]

A nuclear incident, for example, that was associated with terrorism, I suppose, would be one.

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

Here's what I'm trying to understand: the government has said that outside of the insurance regime we have right now, the liabilities that exist for the taxpayers in the unlikely event, etc., will be a little over $1 billion--to pay for exactly what?

[Dave McCauley]

Personal injury that was not bodily injury, for example, psychological trauma: if you had a nuclear incident at a facility and the only damage that was experienced was personal injury, not bodily injury but psychological trauma. And if all the damage, $75 million, was associated with that damage, the federal government would have to pay that amount under the current reinsurance agreement. It's assuming that very unlikely exposure, because it would be likely that you would have other types of damages.

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

When I was trying to understand what liabilities the government declares to the Canadian people, what's sitting on the books, part of my assumption was that under the previous Nuclear Liability Act, anything that wouldn't be covered from the insurance held by the providers would be considered a liability that Canada holds. So anything in excess of the $75 million that's covered is something the Canadian people might have to pick up the tab for. No? Is that not a current covered liability?

[Dave McCauley]

No, only if Parliament were to appropriate additional funds. Under the current legislation, the limit of the liability is $75 million. There is no provision under the current legislation for moneys beyond that $75 million.

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

So what I'm asking about is that Bill C-20 seeks a different regime.

[Dave McCauley]

That's correct.

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

What new clause 26.1 attempts to do--and this is for the interest of the committee--is it attempts to say that under Bill C-20 the government, every year, must come forward to say, above and beyond the insurance coverage that reactors will have, what liabilities will Canada potentially be on the hook for.

Ms. MacKenzie is saying no.