Natural Resources Committee on March 30th, 2010

[Hugh MacDiarmid]

We have been actively involved, working with the investment advisers who have been retained and with officials from the government. The intention, broadly speaking, is that the commercial operations of AECL, which is by and large centred on the Sheridan Park campus in western Mississauga, would be the entity that would be sold. The nuclear laboratory, which is by and large the Chalk River campus and the Whiteshell campus, would remain as a government-owned nuclear science laboratory.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

The other question I have is with respect to the supplementary estimates, which allocated $72 million for the repair of the NRU. The minister told the committee that this was just for 2009-10 and that nothing has been allocated for the new fiscal year.

With their return to service now being pushed back to July, as you've indicated, what are you projecting the repair costs would be for 2010-11, in light of the fact that you've built in more prudency and you're working 24/7, around the clock? Does that cause additional costs, and what are those costs?

[Hugh MacDiarmid]

Yes. The budget cycle and the operating cycle don't always match. Indeed, we are dealing with a situation where we have an unexpected or unplanned repair requirement in this upcoming fiscal year. Our current assessment through the end of July is that our monthly impact on cash, which is a combination of the cost of the repairs and forgone net revenues, is approximately $11 million. So we're looking at $44 million.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

So it's $44 million above and beyond the $72 million?

[Hugh MacDiarmid]

That's correct.

[The Vice-Chair, Liberal, Alan Tonks]

We're going to have to take our two minutes now with Mr. Harris, and then Mr. Guimond.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you, Mr. Chair.

Thank you, gentlemen, for that excellent understanding you've given us about the complexity of the repairs. I understand this is the first time we've ever attempted something like this. The repairs are, as you pointed out, Mr. Pilkington, complex, precise, sophisticated, and have never been done before. It needs highly qualified staff.

I need to establish something really quickly. When was the need for repairs discovered?

[Hugh MacDiarmid]

About a year ago, in May.

[William Pilkington]

The reactor shut down on May 14, and it was apparent that there was a heavy water leak. The leak was discovered on May 18.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Is there anything that could have been done in the previous ten years, anything at all that would have foretold that this was going to happen?

[William Pilkington]

Actually, there were a number of inspections done over the preceding period. Unfortunately, the technology of the day, although it was very effective at the higher levels of the reactor vessel wall, was unable to reach the area where the corrosion existed. So the means that were used did not detect it.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

So the discovery you made a year ago identified that there was a problem and that the problem had to be fixed. It was a first-time, sensitive, complex repair, and every estimate of completion was first-time as well. We think it's going to be this, based on.... I'm trying to put the criticism in a sort of frame, because it appears to me that while there is a fear among people who are being so critical of what's happening—the fear of the shortage, which is, of course, a real fear—there doesn't seem to be an ability for many of those folks to understand the complexity of these repairs and balance them with the criticism. That's disturbing to me, because up to this time I have probably been on that side as well, saying, “Why the hell is it taking so long? Why are there all these delays?” Now, I have to tell you, I understand a lot better.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Cullen.

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

A point of order, Chair.

If the committee can agree--and I've talked with some members--can we send the analysts away for Thursday's meeting, not with a full report but with the outline of potential chapter headings of a report that might be considered? I'm concerned that Thursday we're going to spin our wheels for two hours. I'm wondering if the committee would consider that so we could hit the ground running on Thursday with a very base outline.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you for the point of order.

Could we agree to let the researchers think about that for 20 seconds and let Mr. MacDiarmid have his 20 seconds? Then we'll come back to that point of order. Okay, Mr. Cullen?

Mr. MacDiarmid.

[Hugh MacDiarmid]

Thank you, Mr. Chair. I appreciate the question, because there's as much art as science in the predictions. Indeed, it's a balance between the prudence and safety of having a prediction that you know you'll be able to meet and the desire to convey a sense of urgency and to convey to the team that we have to go as fast as we can. We're constantly balancing those variables, and sometimes we have erred on the side of being too aggressive, but it's always been with the best intentions to give the best guidance we can based on the evidence.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you, Mr. MacDiarmid.

Now, Mr. Guimond, I'm afraid we're out of time. Do I have your permission for the committee to now deal with the points of order, in view of the fact that we have a procedural issue with the next committee coming in? Perhaps we'll just note that for the next meeting Mr. Guimond can have twice as much time. Thank you.

Now, on the point of order of Mr. Cullen, do we have a consensus of the committee if research can put that together, and we'll have something to discuss? It will still be in camera, Mr. Cullen.

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

Of course.

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

I'm not sure that it's fair to ask the analysts to do that ahead of our giving them instructions, because I thought the point of the meeting was for us to come together to try to bring those things to them. I would suggest that the committee members need to come with their suggested direction, rather than expecting that the analysts will provide that.

[The Vice-Chair, Liberal, Alan Tonks]

Let's see if we can find an intersection of the two. If the analysts are looking for direction, they could be prepared to complement the discussion initially with some proposals they could put forward, so that we could have at least a discussion, to begin with, on what the report will deal with.

Is it on the same point of order, Mr. Allen?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

It's on a different one.

[The Vice-Chair, Liberal, Alan Tonks]

Okay, can we leave that one now, Mr. Cullen? Okay.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Last fall, Mr. MacDiarmid and Mr. Pilkington provided us with a critical path schedule, and they went through it with us, on a flow chart. Before our visit on April 13, could they provide an update of that showing where there is slippage and identify what those activities were?

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Pilkington, you've noted that? Okay.

We're looking forward to seeing you at Chalk River next time.

Thank you, members of the committee.

The meeting is adjourned.