Natural Resources Committee on June 5th, 2014

[Jeff Labonté]

Dave, could you take this question?

[Dave McCauley]

Certainly. Thank you very much for the question.

On proclamation of the act, the amount of liability would be $650 million. One year after that date, it would rise to $750 million. Two years after the date of proclamation it would rise to $850 million, and then three years after the date of proclamation, it would rise to a billion dollars.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much.

I'm also interested in knowing a little bit more about the types of damage that will be compensated under the new legislation. Could you go through that for me as well.

[Joanne Kellerman]

The legislation provides in clause 14 that bodily injury, death, and damage to property are compensable, and then in clause 15 it's more precise than I think the previous version of the bill that the committee saw was. It provides that psychological trauma will be compensable when it arises from bodily injury of an individual. So if there is a physical injury that then gives rise to psychological trauma, it's compensable. There are also more specific provisions in relation to economic loss, that being time off work, for example, and loss of salary arising from a personal injury, a bodily injury. Economic loss that arises from property damage is compensable.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I know you have referenced the limitation periods for making claims and I'm wondering if you could just provide us with a little bit more information about the limitation periods.

[Jeff Labonté]

Certainly.

The limitation period in the current act is 10 years. The proposed act before us would increase the limitation period for making claims for bodily injury and death to 30 years from the current 10 years. In the event of an incident, a person could make a claim for damages related to bodily injury or death up to 30 years after the incident, which is what is seen to be the period of time, in the event of exposure, of a rare instance, during which some illnesses may take form and be resident and be able to be detected. So it's in that instance that the period of time is extended.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay. Thank you.

[The Chair, Conservative, Leon Benoit]

You still have a minute, Ms. Block.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Can you tell me a little bit about the consultation and whether there was more recent consultation that helped to inform some of the most recent changes to this legislation?

[Dave McCauley]

Thank you very much.

Yes, this bill has undergone quite a bit of consultation since it was first introduced, of course, in an earlier form.

Most recently, however, and as Mr. Labonté indicated, because the bill has been before committee twice previously, we've been able to benefit from the comments that have been made by committee members and witnesses on the bill, and that's gone into, I think, building a stronger piece of legislation.

Also, in 2012, the department issued a consultation paper on how the bill might be updated, putting the issue specifically on the operator liability and what would appear reasonable and appropriate for increasing that liability. That was one of the key reasons moving us to the $1 billion consideration.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Block.

Finally to Mr. Rankin for four minutes.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Thank you, witnesses.

Mr. Labonté, in the big picture, the trend through environmental legislation over the last few years has been that the polluter pays and internalization to the person causing the harm. In my province of British Columbia, we have joint and several retroactive, absolute liability for contaminated sites. Chemical manufacturers internalize all of their costs if there's an accident.

So in the big picture, why is the nuclear industry getting a break from that normal regime, the notion of entire internalization to the industry?

[Jeff Labonté]

I appreciate the question, and certainly the polluter-pay principle exists in common law and it's resident, I think, in a number of different pieces of legislation.

In the particular instance here, the context around polluter pays is one in which there seemed to be a limit to which the community could operate, and that limit is not constrained in a Canadian context but is a global issue. Certainly, the aspects of the bill demonstrate that the polluter will pay and the polluter will be held accountable.

[Murray Rankin, NDP, Victoria, BC]

But only to a cap of $1 billion.

[Jeff Labonté]

To the extent that the law provides, correct. Of course, I would again reinforce that ultimately the owners of the reactors in Canada, and the ownership of the reactors are taxpayers to put it as bluntly—

[Murray Rankin, NDP, Victoria, BC]

But that only applies at present. In the future this would cover private operators that may exist 10 years from now, correct?

[Jeff Labonté]

They could, but I think it would be fair to say that the design and development and build of a nuclear facility 10 years from now would probably be starting the regulatory phase now.

[Murray Rankin, NDP, Victoria, BC]

But I'm just saying in principle that we can have private operators. We do have one, and we can have more. Is that not correct?

[Jeff Labonté]

We have a private operator of a publicly owned facility, so certainly there's an operator who operates a publicly owned facility, and I grant your point that there could be the possibility of a privately owned and developed facility in Canada.

[Murray Rankin, NDP, Victoria, BC]

I don't know the answer to this, but I'm advised that the United States Price-Anderson Act on nuclear liability contemplates an insurance pool, which is now at $12 billion U.S., or about $13.25 billion Canadian. Is that correct?

[Jeff Labonté]

Mostly. The United States has a limit to liability for each operator of about, I think, $375 million. If there is an incident that exceeds that amount, which is, if you will, the polluter pay cap in the United States of $375 million, then all of the other reactor owners contribute to a pooled fund that at this point would push about $12-plus billion.

[Murray Rankin, NDP, Victoria, BC]

In your very helpful slide presentation, you mentioned the $1 billion liability, and then below it you say that the act maintains government coverage for impacts where there is no insurance.

[Jeff Labonté]

Correct.

[Murray Rankin, NDP, Victoria, BC]

Then it goes on to say that the increasing response capability provides for compensation of costs of remedial measures to repair environmental damages.

I just don't understand those two thoughts. There's $1 billion and then there's a government pool in addition, is that what that means?

[Jeff Labonté]

No. There's $1 billion that's required of operators. The regulation phase that follows passage of the bill will identify nuclear installations. There are different types.

A reactor that generates electricity will be one type and there would be an expectation of $1 billion. There are research reactors in universities across the country that are quite small, that are quite different than, say, electricity generation. In those instances, their ability to find $1 billion worth of insurance coverage doesn't exist.

The government will provide coverage for those research communities and then have a fund in which they contribute a premium to offset that particular aspect. So there are a couple of instances.

There's another instance where it's likely that the insurance community will not cover the 10 to 30-year change in bodily injury. So the government will have to contemplate that in an insurance process.

So there are two stages to the regulatory phase: one, to set up the classes; and two, to put applicable insurance in place as an approved policy, if you will. That discussion is under way with the insurance community.

To answer an earlier question from one of the members, we were actually consulting with them a few weeks ago. There is an element that the government may have to provide a portion if you will.