Natural Resources Committee on Dec. 9th, 2009

[The Chair, Conservative, Leon Benoit]

I can see, Ms. MacKenzie, you would like to respond.

[Brenda MacKenzie, Senior Legislative Counsel, Advisory and Development Services Section, Department of Justice]

Just as a point of clarification, and my colleagues will correct me if I'm expressing this incorrectly, the total liabilities assumed under the act cannot exceed whatever the liability limit is in the act. There is no liability assumed under the act beyond the liability that is set out in the act. So that means in the act and in new clause 26.1, when we talk about the total liabilities assumed under the act, it cannot exceed, under the existing legislation, $75 million per facility, or whatever the higher limit is under the new legislation.

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

At what point and where can the Government of Canada say to the Canadian people every year, adding up all the potential damages and the costs that we may be on the hook for, “These are our current standing liabilities, this is what we may, in the unlikely event of a nuclear accident, be on the hook for”? Where can that appear? Why would it not appear in conjunction with an act like Bill C-20?

I understand the point of the limited liability is that this is all that can be made liable under Bill C-20, but there may be more, and there is an estimation. This whole thing has to be based on the idea that there's about this much needing to be paid out in the event of a nuclear accident, right? That's the whole premise of the bill.

We also would want to know, because we've talked about what damages would be covered under Bill C-20, which ones wouldn't. I think it's a worthwhile exercise for the Canadian people to know, of those that wouldn't be covered, this is what sits on the books right now for liabilities for the Canadian government.

[Dave McCauley]

That's what's covered in the public accounts. In fact, I think this is inflated, because this assumes you're going to have those types of damages happen in that year at every nuclear installation to that maximum amount, and it's going to be a type of damage that's not going to be covered by the insurers. So I really think it inflates it. That's what you're getting here. You're getting the total exposure of the federal government under the current laws.

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

Where does that number come from? Who gave you that number? Was it an outside adjuster? Was it...?

[Dave McCauley]

This number is simply $75 million multiplied by the designated installations covered by the legislation today. Under a revised scheme, one would expect that the number...and we don't produce it. This is produced by, I guess, the Treasury Board.

Under the revised scheme, this would likely be $650 million, times the number of designated installations. So it would be a much larger number.

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

We've moved a number of amendments to this bill to help clarify what will and will not happen in the event of a nuclear accident. One of the things we're trying to understand is in terms of cross-border damage, in terms of all the liabilities. The government has claimed that under the study that was done in 2002, the liability regime of $650 million is adequate, having looked at Gentilly and another reactor.

What we're trying to establish here is more transparency in terms of the total liabilities in the event of a nuclear accident and what the government bases those liabilities on.

Do you follow me so far?

Where am I going sideways on this?

[Dave McCauley]

No, no, I'm following you.

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

Okay.

[Dave McCauley]

I think the issue you're probably getting to is the fact that there is absolutely no commitment in the legislation itself--certainly under the existing legislation, and I think this was a criticism of it--for additional funding beyond the $75 million. I think the courts have held that it's ludicrous that the government would not step in should an incident occur where damages exceeded $75 million.

The new legislation addresses that by requiring the minister to actually table in Parliament an estimate of the anticipated costs of damage. Parliament can then take whatever action it considers prudent.

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

That's where this billion dollars comes from.

[Dave McCauley]

No, the billion dollars is the limit, times the installations.

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

Yes. Okay.

In the event that...and Bill C-20 does this. As you said, it requires the minister to prepare, or at least to anticipate the need for Parliament to release more funds--yes?--in the event that it exceeds the $650 million covered by private insurers.

[Dave McCauley]

It provides a mechanism--

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

Yes.

[Dave McCauley]

--that requires Parliament to address the issue.

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

Exactly.

What we're trying to understand is...and have a mechanism for the government every year to declare, “The total liabilities we would estimate, under a nuclear accident, would be the following: these are the liabilities that we deem are out there right now, every year.” Those will shift, depending on how many reactors there are in the country, the nature of those reactors, and their close proximity to....

We need to base that upon some sort of research, some sort of assessment. If you add more onto your house, let's say, your insurance gets adjusted. If the neighbourhood gets more expensive to live in, your insurance gets adjusted. Things change. Insurance regimes change.

Bill C-20 is trying to set up an insurance regime, and will do so for many years. We didn't change the last act for however many years. One has to imagine this thing lasting a while without any major changes. We want to be able to tell the Canadian people that this is the total liability that's out there--every year, as it changes.

[Dave McCauley]

I think that's the advantage of the new bill versus the old act. We've built into it the provision that at least every five years the minister has to reassess that limitation. This number will go up every time the minister establishes a new liability limit. There's no prospect of moving the liability limit down. The only provision in the bill is that the number has to move up.

So it will be reassessed. It will be initially $650 million, times the installations, so it will rise considerably. The next time the minister increases the liability limit, it will also increase. It's being kept current.

[The Chair, Conservative, Leon Benoit]

I'll go to Ms. MacKenzie first, and then Mr. Cullen.

Mr. Anderson and Mr. Regan, I know you have questions. I'll get to you, certainly.

Ms. MacKenzie, you wanted to add something.

[Brenda MacKenzie]

I just wanted to clarify that we're talking about the amendment proposing new clause 26.1. This amendment only speaks about the liabilities assumed under the act by the government, and that is whatever the liability limit is times the number of installations in the country.

It's just a point of clarification on what new clause 26.1 is about.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Anderson.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I guess that's along the lines of what I wanted to point out as well, that this number will go up, obviously, when this legislation is approved. But the number is in the public accounts. It can be seen clearly.

So I really think the amendment is redundant. The information is already provided. It's provided clearly.

We won't be supporting the amendment. We just think there's no need for it.

[The Chair, Conservative, Leon Benoit]

Is there any response?

Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chairman.

If I understand correctly, the present limit of the Government of Canada's liability effectively is $75 million times 14, or $1.05 billion. Under this bill, it would become $650 million times 14, or $9.1 billion, whereas if you had unlimited liability it could be tens or hundreds of billions of dollars, or more. Is that correct?

[Dave McCauley]

It would be unlimited. That's correct.