Natural Resources Committee on June 2nd, 2015

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Microseismic...?

[Daniel Lebel]

These things are being adopted.

We had a study done over the course of the last phase of the program. We had somebody who's an expert in the field of geoscience interview companies from across Canada about all the uptake, the results of this program, and we have testimony from a range of these mineral companies that—

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

This is where you would have gotten the information that Mr. Rafferty was looking for and what was also referenced in the notes. I think that was the Athabasca Basin in Saskatchewan and the Bathurst region of New Brunswick.

[Daniel Lebel]

Yes, exactly.

It varies. One of the most difficult questions in geoscience—we've been struggling with this for many years, and earlier there were some questions about performance of the program—is to attribute exactly the benefits from the program. Where we build a program structured on general principles, studies done some time ago indicate that for one dollar spent on public geoscience, you get about five dollars in investment in mineral exploration. In the end, you might even get over a hundred dollars of investment in terms of mineral development with the deposit coming online.

Of course, there are economic factors that work on this, so we've been working hard in the last few cycles to get to much closer metrics in interviews with companies so that we get some really interesting views. The mineral explorationists in Canada are some of the best in the world. As you know, the industry is based in Toronto on the stock exchange, the highest group of mineral exploration companies in the world, and we have geoscientists in Canada that are amongst the best in the world. Our programs really are framed as a knowledge infrastructure for that group of explorationists, so that they have not only new technology but ideas and ways of finding new mineral deposits in Canada.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Trost.

We have Ms. Charlton and Mr. Leef and Monsieur Caron left, and then we need just a minute or two for the votes so we can refer these to the House.

Go ahead, please, Ms. Charlton.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you very much, Mr. Chair, and thank you very much for being with us today.

I'm particularly concerned about the medical isotopes, so I'm going to focus my questions on that area. You all know that about 20,000-plus patients undergo nuclear imaging procedures every week in our country. As we learned here not all that long ago, the system can be at times, and quite often is, rather fragile, so I want to talk a little about the supply of radioactive isotopes.

The pending shutdown of medical isotopes at Chalk River means that about 40% of the world's supply is going to vanish, if I understand that correctly. That shutdown is scheduled to happen in 2016. We know from budget 2015 that the government announced plans to postpone the shutdown of NRU until 2018, but are those two related? Are we still shutting down the production of isotopes in 2016, even though there's been an extension to 2018 for NRU?

[Jean-Frédéric Lafaille]

I'm happy to take this question, Mr. Chair.

The government announced in 2010 that the NRU reactor would cease to produce the medical isotopes called molybdenum-99 in October 2016. That policy stands. If you look at the projections from the OECD on this, supply is projected to meet demand after 2016, even though the NRU reactor would cease to produce medical isotopes.

Just to put this in perspective, there was a prolonged shutdown of the NRU in 2009-10. At that time the NRU was producing between 40% and 50% of the world's molybdenum-99. Currently, the NRU on average is producing 15%. It's been decreasing because of the policy that was announced to the world in 2010 that the NRU will cease to produce medical isotopes and will promote the entry into the market of alternative ways to produce medical isotopes. The problem with the market as it was in 2009 was its reliance on aging reactors, which were, each of them, single points of failure in the system. At the time the plan was to fix that problem by encouraging the promotion of other sources of supply to enter the market.

With regard to the specific question about the announcement in 2015 on the future of the NRU, the government decided to prolong the life of the NRU to March 2018, so the NRU would continue to carry out the activities that it does now, which includes research and development, the support of industry for testing, as well as medical isotopes. Medical isotopes will only be done in a backup capacity. Should there be an emergency situation internationally, let's say a shortage that could not be compensated for by any other means in the system, the NRU would keep the capacity to fill the gap in the market, so there would be a contingency or insurance policy, if you will.

[Chris Charlton, NDP, Hamilton Mountain, ON]

That leads me in a bunch of different directions, and maybe I'm not understanding correctly. But whereas we used to produce 40%, you're saying we're now producing 15% of the world's supply? Right?

[Jean-Frédéric Lafaille]

That's correct.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Is that by design, or just because we're now laggards in production, so by definition we're falling further behind?

[Jean-Frédéric Lafaille]

No, it's because of how the market has evolved. The world has adjusted to the fact that Canada announced in 2010 that the NRU would cease to produce medical isotopes in 2016, and new sources of supply have come onto the market.

[Chris Charlton, NDP, Hamilton Mountain, ON]

So other countries have clearly invested in new sources of supply. What are we doing to engage in that field? Specifically, the additional appropriations that are being granted to AECL here, how much of that is going to any kind of research on alternative production methods of medical isotopes here in Canada?

[Jean-Frédéric Lafaille]

The answer is twofold.

First, the government has committed to ensuring that NRU can produce until October 2016. That's part of the funding going to AECL, to make sure that this will continue until 2016.

Then there are programs in our department, Natural Resources Canada, that have supported the development of alternative technologies, based not on reactors but on cyclotrons or linear accelerators, and bringing them to commercialization in a 2016 timeframe. Those would be Canadian technologies that would be able to compete in the market to try to sell medical isotopes after 2016.

Now, we have to understand that this is a global market, so the fact that NRU has decreased its market share over time has been compensated by other sources. Really, the isotopes are traded globally. We haven't seen the shortage in the magnitude we saw in 2009-10, which means the market has really adapted to the situation. When we look at the projections from third parties, from the OECD, the projections tell us that there will be enough capacity in the system and enough supply to meet demand.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Charlton.

Mr. Leef, you have up to five minutes.

[Ryan Leef, Conservative, Yukon, YT]

Indeed, thank you, Ms. Charlton.

Thank you to our guests today. I was actually pretty interested in some of the questions one of my colleagues asked around your efficiencies and GHG reduction plans. You were very well prepared for that question, so congratulations on those initiatives. I think they're great.

We've talked a lot about program and service delivery. I think you would agree that a lot of the programs you're doing are wonderful, but we're nowhere without our employees at times, are we? I see here that you have a seemingly relatively small number of $0.3 million related to the employee benefits plan. I'm just wondering if you could expand a little bit on what that investment is for and what it will do.

[Kami Ramcharan]

It's definitely related to the overall salary we pay to our employees on a regular basis. As part of that, we have an employee benefits plan. That is statutory funding. It's not just part of our budget. When we have an increase in the overall cost for employees, when we increase in terms of the initiatives, salary budgets related to the targeted geoscience initiative, or anything related to the infrastructure program, we have an increase in the number of employees. Therefore, we need to have a bit of an increase in the number of statutory dollars we pay as they relate to employee benefits, which are statutory benefits.

[Ryan Leef, Conservative, Yukon, YT]

Perfect.

Going back to the targeted geoscience initiative, you note on page 11 of your speaking points that there are 730 publicly available documents and that there were over 500 scientific presentations at conferences, workshops, and events. You note specifically that it is helping industry in the development and planning of their exploration activities. Perhaps I'll give you an opportunity to expand on that a little bit.

I'm also curious; when you're doing 500 scientific presentations and producing 730 documents, I would assume that within those presentations, within those documents, there is community uptake in this as well. We spend a lot of time talking about community consultation when we discuss responsible resource development plans. That includes our aboriginal communities' participation.

How broadly were those presentations available? Were they centralized in a particular part of Canada, or were they vastly used across Canada? What level, that you know of, did engage community uptake and not just industry uptake on these presentations?

[Kami Ramcharan]

Perhaps I'll turn it over to my colleague Daniel Lebel to respond.

[Daniel Lebel]

These publication presentations are largely technical, aimed at the geoscientist or explorationist community members who are very savvy about that sort of documentation, looking for breakthroughs in knowledge and science and new models, so that they can look out for the haystacks that are out there in nature and find the needles in them.

We have an array of meetings that we attend every year. We restrain ourselves in terms of attendance so that it's within reason, but at the same time we go so that connections are made. For instance, one scientist might present for several others when we attend these meetings.

Canada is a vibrant place for mineral exploration, so we have yearly open houses, as they call them, in each of the provinces and territories of Canada. Usually they happen in the fall just after the field season, so we have the mineral industry and provincial organizations that do some work in this field. People get together and it's part of networking and knowledge transfer face to face. Generally there are technical presentations that are made. It could also be through a poster presentation, because some of these things are really crowded—if you think about PDAC, for example, which gets into the multi-thousands.

We look for the best opportunity to do this knowledge transfer. Sometimes it is through workshops also with universities that are operating in this field.

With regard to bridging this knowledge to communities, we have examples through geoscience for mapping in the north where we're really reaching over to the communities of the north and letting them know that the first element of development is sometimes a mineral exploration company arriving in their territory. We try to bridge the knowledge with them so that they can build capacity in their own community to interact with developers that are coming there and know what this is about. It could take five or 10 years sometimes before the actual development, and there is a lot of chance it will not go the way people hope. There's a lot of chance that they don't quite find what they are looking for in that industry. It is high risk.

[The Chair, Conservative, Leon Benoit]

Thank you.

We'll go now to Monsieur Caron and Ms. Charlton.

Go ahead, please, Ms. Charlton.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I just wanted to continue the conversation we started a little while ago. You were saying there are allocations that have been made by the department toward research and development of alternative types of isotopes. In those investments we are making, what is our goal with regard to what percentage of the market share we are aspiring to contribute?

[Jean-Frédéric Lafaille]

Since 2010 our department has invested $60 million in these alternative technologies. The policy has been that after 2016 the market should pick up what the health community finds to be the best medical isotopes that fit its needs, so the goal of the program really is to bring these technologies up to commercialization so it can compete with other sources of medical isotopes going forward.

The advantage of these technologies—

[Chris Charlton, NDP, Hamilton Mountain, ON]

Is that the world supply or Canadian supply?

[Jean-Frédéric Lafaille]

They are Canadian suppliers but they can compete internationally. This is a global system, so they can sell the technologies wherever they would fit the market needs.

The advantage of a technology like the cyclotron, for instance, is that it is localized. As opposed to being a big reactor that produces a large volume of medical isotopes, these are smaller machines that are sitting in universities or S and T campuses or close to hospitals and really can provide medical isotopes on a regional basis. We have examples from our Canadian proponents who have successfully been producing a volume that could supply a large urban area such as Vancouver. TRIUMF had an announcement on this scale recently. The University of Alberta and the university in Sherbrooke in February, announced that the quality of medical isotopes produced is of the same purity as what we would find on the market, and linear accelerators also demonstrated they can produce volumes comparable to what is in the market, so they are making progress toward being able to compete in 2016.

On your specific question about market share, we cannot predetermine at this point in time what that would be.

[Chris Charlton, NDP, Hamilton Mountain, ON]

It seems to me that, if we used to have 40% of the market and we dropped to 15% of the market—under a different program—we might have an aspirational goal if we're making pretty significant investments.

You're saying we have invested $60 million over the last five years, and now we're asking for additional appropriations of $164 million just for this year. If you break out that number of $164.9 million, how much of that is for nuclear science and how much of it is for medical isotope production?