It's material financial risk.
Evidence of meeting #47 for Natural Resources in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aecl.
A recording is available from Parliament.
Evidence of meeting #47 for Natural Resources in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aecl.
A recording is available from Parliament.
4:05 p.m.
Deputy Minister, Department of Natural Resources
It's material financial risk.
4:05 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
What I don't understand is that throughout the process of this uncertainty, we're putting in another $900 million.
Are you prepared to break down the costs that are going into Chalk River, AECR, which is now mothballed, cost overruns at Point Lepreau, Bruce, and Wolsong? Will you break down all those costs for us?
4:05 p.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
Absolutely. As I told you, we are stuck with contracts that have been signed in the past under the previous government, and there are overcosts and delays and overruns. So it's $418 million, the aggregate of the refurbishments. This is it.
After that, you have $102 million, which was in the main estimates. For the Chalk River laboratory requirements, we have $117.2 million. As I said, there was an audit by the Auditor General in 2007 saying that these laboratories were in a very, very bad state, so we had to put money towards keeping them in good operation. This is a matter of responsibility.
4:05 p.m.
Conservative
The Chair Conservative Leon Benoit
Mr. Cullen, your time is up, actually. You may get another round.
We'll go to Mr. Allen for up to seven minutes.
4:05 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you very much, Mr. Chair.
Minister and Mr. Dupont, thank you for being here today. I appreciate it very much.
I just want to pick up on where I think Nathan left off. I just want to make sure I heard correctly on this.
Being from New Brunswick, of course, I am quite concerned with respect to the Point Lepreau station and the project that's going on there. I do appreciate your standpoint of taxpayer protection on this, because absolutely we want taxpayer protection on money going forward.
The first part of my question is this. How much money has been provided to AECL? Some of these contracts, as you're aware, Minister, were signed quite some time ago. The NB Power contract was signed quite some time ago. Can you tell us how much there has been for the total refurbishment projects since these things started? Can you say at this point in time when you're expecting these projects to be completed with any level of certainty?
4:10 p.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
The money allocated to the refurbishment in the last three years was $130 million. This is where we are--the aggregate of the projects--and this is why I asked two advisers to provide me with some more numbers to indeed have more certainty for the future.
Now, for Point Lepreau we are talking about a timeline of May 2012. As I'm telling you, there are two aspects of this. We have to get through the restructuring, but aside from that, we signed contracts, and we will respect these contracts. This is why, in the meantime, we won't take any more contracts with material financial risks.
4:10 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Okay.
Can you just clarify the $130 million? You mentioned $418 million a minute ago, and I just wanted to know what the difference is--
4:10 p.m.
Conservative
4:10 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Okay.
I thought $130 million might be a little light.
So it's $830 million for all these refurbishment projects.
4:10 p.m.
Conservative
4:10 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
That leads me to my next question.
To get these things under control, obviously we need a strong project management plan, and we need a good sense of when we're going to finish and a sense that we have good control of the project, and what the deliverables and the major milestones are. What specific steps are you taking, as minister, to ensure that AECL is on the pin to get this thing done?
4:10 p.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
As I said, shortly after I was appointed Minister I asked for their to be two consultants, one for finance, Ron Thompson, and the other for project management, Pierre Charlebois. Mr. Charlebois is an expert in the nuclear field. These people have helped us to set more realistic deadlines.
In terms of Point Lepreau, as I said, we are talking about a deadline that would bring us to May 2012. The main enemy in this case is always to promise things and not be able to keep the promises. So I have asked whether we could get a genuine picture of the situation and base the work on that. It will help us to progress better in terms of the restructuring and setting a budget. The contract that was signed in 2005 presents a problem. We have always said we would honour it. We have to make sure it is honoured.
At the same time, we have to continue our restructuring. In terms of both management and the tax burden for Canadian taxpayers, solutions have to be implemented. It is all dependent on restructuring. That is why we have solicited the participation of potential investors from the private sector with expertise that can help the company operate in future on a commercial basis. That is how the viability of the company will be achieved.
4:10 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you, Mr. Minister.
We talked about not taking on any more material financial risk. These existing contracts that we have today for the refurbishment jobs--is there anything in these contracts that would be at risk, or any provisions in these contracts that would at risk, on the sale of AECL?
4:10 p.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
As I stated, we have these contracts. They are our remaining contracts, and we will honour these contracts. Whatever happens with the restructuring process, the bottom line is that we will have to honour them. This might be part of the negotiation with the committed investors, but there is a matter of responsibility here, and we will fulfill our responsibilities.
4:15 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Under the contract, you talked about these two experts and special representatives. Are they actually on site, or are they doing site work at AECL, or are they actually on the project sites of the refurbishment jobs?
4:15 p.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
Yes, they went on the project sites. This is what I clearly asked for, because that's the way to monitor the things. They spent a lot of time there.
Yes, they were on site.
4:15 p.m.
Conservative
4:15 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
I have one last thing on these contracts, in the minute I have left.
With AECL and the risk, supposing we are able to conclude a deal quickly, as you've indicated, what do you, as minister, see as the major financial saving to the taxpayer?
4:15 p.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
It's huge.
First of all, our policy is to stop taking contracts with material financial risk. We've seen in the past that these contracts cost too much. As I said, it's been $830 million in the last three years. We don't want to be stuck with that in the future. It's unacceptable.
We are confident that in going through the restructuring process in the future, these kinds of contracts will be taken on a commercial basis.