Natural Resources Committee on Nov. 22nd, 2016

[The Vice-Chair, Conservative, John Barlow]

Good morning, everyone. Welcome.

Before we get to the witnesses, Mr. Strahl, you had something you wanted to bring up.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

First, I'm sure that our regular chair is listening from home. I understand that he's not well, so we send him our best wishes.

I had a motion on notice that I wanted to move at this time just because of the time-sensitive nature of it. I hope it won't take long, so that we can quickly move to our witnesses. I don't know if we need to have it distributed before.

The motion states:

That the Committee invite the Honourable James Carr, the Minister of Natural Resources, to testify about the Supplementary Estimates (B) on or before December 6, 2016.

Obviously, we are running up against a deadline. That's why I wanted to move it today. We don't have committee business scheduled. We would like to hear him talk about those estimates, and I would welcome unanimous support for that motion from this committee.

[The Vice-Chair, Conservative, John Barlow]

Is there any discussion? All in favour?

(Motion agreed to)

[The Vice-Chair, Conservative, John Barlow]

Thank you very much.

We'll go on to our witnesses. I want to welcome Ms. O'Connell and Mr. Bratina for filling in today. Welcome. This committee can be trying at times. As you see, Mr. Maloney couldn't take it any more. His back gave out from trying to carry this group. I thank you very much for filling in today and being part of the meeting.

Thank you very much to our witnesses. We have two people here this morning: Jerry Hopwood from the University Network of Excellence in Nuclear Engineering, and Glenn Harvel from the University of Ontario Institute of Technology.

Each of you will have 10 minutes to give your presentation, and then we'll move on to questions from the committee.

We'll start with you, Mr. Hopwood.

[Jerry Hopwood, President, University Network of Excellence in Nuclear Engineering]

Thanks very much.

My name is Jerry Hopwood. I'm here today in two ways, one is as a long-serving nuclear energy professional and also currently as the president of the University Network of Excellence in Nuclear Engineering. It's a long title so we call it UNENE for short.

My own career in nuclear power technology started in the U.K. after which I moved to Canada to join Atomic Energy of Canada Limited, which was more than 35 years ago. I've been in nuclear power reactor design and development, safety assessments and regulatory affairs, and project development for building CANDU nuclear reactors here and around the world.

Ultimately, I served as vice-president of reactor and product development for AECL. After a stint in a similar role with the successor engineering organization, Candu Energy, after AECL's engineering group was reorganized, I left there at the end of 2015, and I have recently taken on the position of president of UNENE.

To introduce you to UNENE, it's a not-for-profit organization with a membership composed of the main nuclear power technology organizations in Canada, the Canadian nuclear universities, and government organizations, so it is a three-way partnership. UNENE’s goals are to foster the development of professionals in nuclear technology by providing post-graduate continuing education for professionals early in their careers, typically to provide a master's program in nuclear engineering or diploma programs in nuclear engineering; by carrying out university research in a coordinated way to support industry needs while building the capabilities of highly qualified personnel at the doctorate and post-doctorate level; and finally, by doing all this UNENE establishes a thriving network of university experts who can provide credible advice to industry, government, and civil society.

To this end, UNENE organizes the master's of engineering and diploma programs in nuclear engineering, whereby several of the Canadian nuclear universities offer courses that contribute to a UNENE degree. The courses are primarily arranged around weekends and one-week intensive courses so that young professionals can complete this education while they're in the early stages of their careers. UNENE also sponsors and organizes a group of university industrial research chairs in nuclear technology topics. UNENE also assembles and approves a series of co-operative research and development projects at member universities. Those are selected based on value to industry and value to Canada.

UNENE organizes this work by funding from industry. In most cases that funding is matched or supported by funding through NSERC, so the Government of Canada provides co-funding based on industry support because the work is of value to industry and based on government support because the work adds a value to the nation.

I should note that Glenn here is a colleague not only at the University of Ontario Institute of Technology but also as part of the UNENE organization. I'm sure he'll have comments to make as well.

That's the background to myself and why I'm here. UNENE is certainly a stakeholder in nuclear research and development and has an interest and a responsibility to the nuclear industry. We're part of the supply chain, if you like, because we supply professionals and highly qualified personnel. In terms of my comments with regard to the committee's questions I thought I would provide a little bit of background as I see it, then summarize the picture that UNENE sees as it goes about its work, and then maybe make a few comments on any individual questions, if I have time.

First of all, I would say that it's important that nuclear power technology offers a very unique baseload, low or zero, GHG energy source. It's an essential component of a response to climate change and dealing with the reduction in greenhouse gases that we are all looking for.

Following COP21 in Paris last year, the recognition of the reality of taking action against climate change became much more widely accepted, much more widely acted upon. Yesterday I saw that Canada is announcing plans to reduce coal power in the country, which would be part of that response.

Today nuclear power plants already supply about 11% of the world's electricity and about 18% of Canada's electricity. Moreover, nuclear power supplies about one-third of the world's greenhouse-gas-free electricity. Hydro power is the largest component, and of course hydro power is a large component in Canada. Nuclear power, however, is the next-largest source of greenhouse-gas-free electricity.

Nuclear technology is not just about the power industry. It underpins amazing advances that have taken place in the last generation in the health and medical sectors. Canada has been a leader in this, and Canada's isotope production, among other things, is part of the advancement in medical technology that touches everybody. I've also been a recipient of Canada's technetium isotope diagnostic techniques, so I'm very glad that Canada is such a leader. It has affected my life as well. It's not just about power. It's also about medicine. It's also about the environment.

Canada's nuclear industry has a strong history. I'm sure you've heard this very many times. There are decades of research and development, and decades of industrial success in Canada's nuclear industry. Examples include the development of the CANDU reactor and other reactors; advancements in nuclear regulation; underpinning R and D undertaken at Canada's national laboratories and universities, which is an important factor for UNENE; and the supply chains for equipment, engineering, and project management.

As I travel around the world as part of my job, I find that Canada is highly respected around the world, and Canadian industry and Canadian regulation is highly respected around the world. People view Canada as a leader in nuclear technology.

CANDU is the foundation for this. It's the reactor technology we have in Canada. Certainly a lot of UNENE's work is relative to CANDU technology. Yet as we look ahead, we can see that at the same time as there is somewhat of a rebirth of CANDU, as the reactors at Darlington and Bruce become refurbished for another 30 years of life, there is also an interest in going beyond CANDU to other reactor designs in Canada and worldwide.

There's also an interest in using CANDU as a recycling process to take on fuel that has been used in other reactors and use it one more time so as to take more energy out before the fuel is used up. There are ways in which our traditional CANDU industry can expand, and UNENE would see that university R and D is one of the starting points, one of the early steps that can happen in any broadening of our nuclear industry.

With that background, UNENE would see that it has a responsibility. Our industry is here to stay, both in nuclear medicine and in nuclear power.

I'm sure you are aware that the Government of Ontario and Bruce Power have signed an agreement that sets the Bruce nuclear units running until the year 2063. That's certainly beyond my lifetime. It's beyond the working lifetime of the new grads UNENE is training, so UNENE will have to be here for another generation in order to see that the power plants now running in Ontario and elsewhere are able to operate for the future. Nuclear is here to stay, and UNENE has a responsibility in that. That's important to us. We need to be aware of our responsibility.

Nuclear technology provides important benefits to Canadian society. Its greenhouse-gas-free electricity in Ontario provides 60% of Ontario's electricity. It is the main reason why Ontario was able to get off coal some years ago. Ontario has had a very good experience in providing a clean and green electricity supply.

Nuclear technology is also a very good source of exports and potential exports for this country. We've had a very cyclic nuclear industry, but I was involved in preparing the projects in Romania and China, where CANDU reactors are being built and operated very successfully. We see our ability to export our products in that way as a tremendous asset for Canadian technology.

The other thing I would say is that, looking historically, nuclear power is still within an early stage of development. That may seem strange when you consider that Canada has been involved in nuclear technology for all of the years since the Second World War. However, there is still a great deal of development in order to improve it, make it more beneficial, and make it more widely applicable, so I believe we're far from reaching the end of the development stage in nuclear power and in nuclear medicine technology.

As an R and D organization, UNENE sees that as very encouraging. We look to continue the relationship we have with the Government of Canada—which is supporting UNENE, and we appreciate that—and to combine that work with industry so that we have valuable R and D and valuable professional development, both for industry and for Canada.

[The Vice-Chair, Conservative, John Barlow]

Thank you, Mr. Hopwood. I appreciate that.

Now we'll move on to Mr. Harvel for 10 minutes.

[Professor Glenn Harvel, Associate Dean, Faculty of Energy Systems and Nuclear Science, University of Ontario Institute of Technology]

Good morning. Thank you very much for inviting me. I'm very happy to be here. It's the first time I've been in front of such a committee.

I worked in the nuclear industry for 11 years as an engineer and also as a manager, mostly supporting the CANDU product, and then later the smaller reactor technology, such as MAPLE and NRU. I have some knowledge of that aspect of the work cycle.

I then went to the University of Ontario Institute of Technology for 10 years as a professor in research. If you ask a professor to come before a committee about R and D funding, of course they're going to say they want more money. That kind of goes without saying.

I find that in Canada, we cover the entire spectrum of the nuclear industry, right from digging it up out of the ground, and milling it and mining it, to the work that Cameco does, to the designing of nuclear power plants and facilities, processing the construction, operations, maintenance, and decommissioning. We have it all.

In the beginning, in the 1950s and 1960s, that was great and wonderful. We had strong support for that. Nowadays, it's too much. There's so much scope to it, it's hard to fund every single piece of it. The R and D funding at the university level ends up being spread out, trying to cover every bit of area. We end up with marginal improvements in each area, as opposed to significant advancements in maybe some key focus areas. That may be something worth considering, to see where would we like to focus the research at the university level, so that we can start making the major significant advances that we would like to make.

One of the advantages that we have is in our personnel. Our university, alone, has produced over 500 nuclear engineering undergraduates in the past 10 years, which is a significant increase in the workforce. That said, that means the oldest of them is about 10 years active in the service. We have many people who are very close to retiring, and we are at risk of losing that knowledge skill set.

We need the programs at the graduate level, the UNENE programs that Jerry Hopwood talked about, and perhaps some other R and D focused programs at universities, to strengthen the skill set of our core workforce to maintain the strength that Canada currently has. We need to maintain those strengths, not only for our own industry but because this is a major exportable skill set.

If you look at the United Arab Emirates, they're hiring Canadians to help construct a nuclear power plant designed by Korea that doesn't use Canadian technology. Why are they using Canadians? Because they like working with Canadians. They're good people to work with. They have the skill set and knowledge to be able to work on almost any reactor design around the world. They're very good at project management, very good at construction work. This is a skill set we need to maintain in our country, because we can export it around the world and have a strong economic impact to our country.

The other aspect that we should consider developing, at least to some extent, is the nature of the social licence in dealing with the public. In the nuclear industry, we've had pretty much a hands-off affair. We've developed the programs to educate the public through the regulator. Each utility has its own responsible areas for their information centres, and we have programs in high schools to help with the education.

However, by and large, we are not making major efforts at explaining this technology to Canadians. Therefore, they still don't necessarily understand it. If you don't understand the technology, then it's hard to make informed decisions about what the risks are and whether or not we should be proceeding with new builds, etc. We always run into this resistance. That is another area where I'd like to see some focus or effort going forward.

In terms of supporting the current CANDU fleet, the main focus is on finding ways to do it safer, faster, and cheaper. We don't have to sit there and design a new CANDU 6. We already have one of the best machines in the world. We know how to build it. We know how to run it. It works very well in New Brunswick. It works very well in China, in Argentina, in Romania. Countries that do not have strong nuclear backgrounds can run this machine and run it very well. The technology is good, but we need to find ways to make it cheaper to build, make the maintenance cheaper to do, and get the costs down, so it can be even more economical, especially going forward.

With respect to new designs, such as the supercritical water reactors or small modular reactors, basically, I believe we need to focus on one. Canada needs to decide what it is it wants to do.

Do you want to develop a supercritical water reactor? Then we should put money into it and focus on that one design and not worry about the rest. If you want to go toward a small modular reactor, then that's where we should be concentrating the funds. If we try to do it all, what will end up happening is that other countries will develop that technology before we will, and we will end up in a support role as opposed to a lead role.

Anyway, I have answers to your questions, but I think it's better if I let you ask the questions, and I'll do my best to answer them.

Thank you.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Harvel. You're the first witness we've ever had to finish well under time. I wish we had a prize for that, but we don't.

That gives us more time for questions, and we'll start with Mr. Tan, who's furiously preparing his research, for seven minutes.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you, Chair.

Thank you both for coming, especially UNENE. I know UNENE very well. I know it's very successful in education and in the research field of our Canadian nuclear industry, as well as supporting other nuclear sectors. I used to have a few co-workers who actually earned their master's of engineering through UNENE.

In September, our government, and more precisely SNC-Lavalin and Candu Energy, signed an agreement-in-principle with the China National Nuclear Corporation to develop markets and build the advanced fuel CANDU reactor. They are also going to form two design centres, one in Canada and one in China.

What are the technical details of this agreement? How is it going to benefit Canada? I know it's going to create jobs or a market internationally, but how is it going to benefit Canadians here at home?

[Jerry Hopwood]

Of course, I can't comment on the details of the agreement. It's not something I'm fully aware of, although in my previous life I had some knowledge of it.

I would comment on two or three different aspects. One is that Canada's nuclear technology, which the country paid for in research and development, led to the development of the CANDU reactor, and a lot of that technology has been shared with others around the world during previous projects. So China, for example, does have a technology transfer agreement from the previous projects of 20 years ago, in building two CANDUs in China.

Canada and China may be considered to be two countries that share some nuclear technology. Canada has a tremendous amount of development. China is also extremely highly active in developing nuclear technology of different kinds. From a technology point of view, there's a benefit in sharing; that is to say, China will have access to the technology that we have and we will have access to the technology that China has.

From the point of view of projects, any further projects to build CANDUs will have some benefit to Canada. Certainly, if a project is built in China, I would expect the Chinese government would intend that a lot of the supply chain would be provided from China, but some of the supply chain would come from Canada, and some of the engineering would come from Canada. There would be an exports and jobs benefit from this agreement.

Finally, this will encourage the potential for CANDU exports to third countries as well. The more CANDU projects proceed, the easier it is to go ahead with other projects elsewhere, in terms of desirability and financing.

[Prof. Glenn Harvel]

I was part of the trade mission to China in April, and at that time there were several Chinese universities that were very interested in the Canadian technology. We're currently having very preliminary discussions about memorandums of understanding between our university and the Chinese universities, mostly in the area of student exchange.

The interest here is that possibly Canadian students will be able to go to China as part of what we're talking about here, and that will grow their ability to work overseas and work in more international markets.

[Geng Tan, Liberal, Don Valley North, ON]

I see that you both just mentioned that our CANDU technology or CANDU reactors perform quite well internationally, either in Qinshan III or in others, in Romania or Argentina.

That sale was done many years ago, so within that span of 20 years, why have there been no new builds or new CANDU reactors sold to other countries? Is it just mainly our Canadian researchers who are highly respected or regarded internationally, and our technology covers the whole spectrum of nuclear technology in this area?

I don't know what the reason is behind that. Why? We have good technology, but we don't have the market.

[Jerry Hopwood]

I have one or two comments.

One is that the nuclear power building industry has been very cyclical, and the last two decades have been a low part of that cycle. CANDU went through a good period of building in the 1990s to the 2000s, and then subsequent to that, there has been a slackening in sales of nuclear reactors all over the world with a couple of exceptions. The exceptions are China, India, and, to a lesser extent, Russia.

Those are countries that build reactors as much as possible based on their own domestic supply chain. Although India is importing designs, it's trying to have the maximum amount of work done on reactors within India. China has been a very strong proponent of nuclear power and is building literally dozens of nuclear power plants today. That's a tremendous market, but it is dominated by Chinese industries and organizations.

Canada, as a middle power, doesn't have the kind of market power that some of our neighbours to the south, the U.S., or countries like France, which have a very monolithic nuclear industry, have had in making sales. I'm not sure whether that's a good thing or a bad thing; it's a fact of life.

I believe that the likely future of nuclear sales around the world is that they will increase a great deal. The response to climate change is one driver, but the recognition of the reliability and the maturity these days of nuclear power will be another driver.

[The Vice-Chair, Conservative, John Barlow]

Thank you, Mr. Hopwood.

Thanks, Mr. Tan.

Now we'll go to Mr. Strahl for seven minutes, please.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

Thank you to our witnesses.

Mr. Harvel, you mentioned the social licence. Coming from British Columbia, I think it's more a lack of awareness of nuclear technology. If you ask most of my constituents what they think of when they think of nuclear they would probably list The Simpsons and then go down to some of the more unfortunate incidents that have happened across the last number of decades with nuclear accidents. I think that's the challenge the industry faces.

The industry was mentioned this weekend. There was a release of Canada's mid-century, long-term, low greenhouse-gas development strategy, a very catchy title. It didn't mention the oil and gas sector at all, but it did mention nuclear energy. We had talked in previous meetings about how this had not even come up as a clean technology, so that's positive for nuclear development. We heard in our mining study, which we just finished up, about small modular reactors.

You mentioned it in your presentation, but how close are we to actually having that technology commercialized and available? If we're 20 years off from that—or 10 or five, I don't know—I think we need to have an honest discussion, and government needs to be honest. If they're going to promote this as a way to get remote communities off diesel-generated power or to power large industrial development in remote regions, but it's not actually commercially available and it's a theoretical thing that maybe some day someone can come up with, that's disingenuous and doesn't serve the discussion well on greenhouse gas emissions.

Can you give me your best guess, or your best idea as to how far away Canada or the world is from actually having something in the window that can be utilized in the Canadian setting?

[Prof. Glenn Harvel]

For a small modular reactor...?

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Yes.

[Prof. Glenn Harvel]

It's a very good question because it's almost impossible to answer. The problem is that all of the companies that are doing this are keeping their cards very close to their chests. For several years now I've been going to conferences and I see wonderful three-dimensional graphics that my students could do in a day. That's all they want to show you. They do not want to show you the actual cost. That's what it's going to come down to. Can they be built? Yes. I have no problem believing that they can actually be constructed. I do believe that, technically, they will work and function. It comes down to what the capital cost is going to be, and more importantly, how much staff we would need to operate one of these units, because that's going to affect the capital costs and the profitability of them. That's what we need to start getting the focus on. If we can get them to focus on what that cost will be, then we can answer that question as to how close it is.

New Scale is one of the leads in the United States. It's quite likely that they're targeting the aircraft carrier market with their design. Therefore, they're probably quite well advanced, but again, they don't want to tell anybody just how far advanced.

In Canada, probably the most lead-interesting unit will be Terrestrial Energy's molten salt concept. They're putting a huge amount of effort into it, and they certainly have some very intriguing, new ideas on how it can be used and implemented, which are quite fascinating. But, again, what's the cost going to be, etc.?

I think they could get a design completed maybe within five years and get some nice cost figures, but we're not going to have one ready for construction before 10 years, in my opinion, based upon what I see right now. It gets back to what I meant with focus. Now we have a lot of NRCan money being spent towards the supercritical water reactor. If that money was converted and redirected to SMRs, maybe we can actually push that along a bit. But we have to pick an SMR design. I think there are something like 30 options out there in the world right now, and that's somewhat ridiculous. We have to pick one.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

You also mentioned that relative to some other technologies, the economics of nuclear energy is a higher cost option, and it's obviously low-emitting. Where would the targets be to reduce that. Obviously, people want to maintain safety; they want to maintain reliability. Along the supply chain, if you will, where should the targeting be to look for those cost savings?

[Jerry Hopwood]

I'll take a shortcut on this. The most significant way to reduce costs would be in replication. The reason that nuclear plants have been expensive and have run over budget, which is perhaps even more of a concern because it leads to uncertainty in the minds of those who are investing in it, is that we keep building first-of-a-kind. We've had numerous examples around the world where new technologies are being developed that look very attractive, and will be very attractive, but that first-of-a-kind build runs into trouble. It's only later that the technology becomes well settled and people are building repeat plants. That has actually been the case in CANDU, where the CANDU 6 units built in the second generation around the world in the 1980s and 1990s benefited from being effectively a replication-type plant. I think that's one benefit, but that means there needs to be a sustained commitment to ordering that may be a worldwide agreement.

Glenn, do you want to comment?

[Prof. Glenn Harvel]

I agree with your comment. When you look at the Darlington refurbishment, the fourth unit to the refurbishment is going to go very well because they will have learned everything from the first unit. We have to keep in mind that first unit may be delayed, it may have some issues associated with it, because it's the first time that group of people are trying to do that. This is where I believe some R and D—

[The Vice-Chair, Conservative, John Barlow]

Sorry, Mr. Harvel, I'm going to have to cut you off there at seven minutes. Maybe Mr. Cannings will leave you a chance to finish your response.

Mr. Cannings, you have seven minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Yes, keep going.

[Voices]

Oh, oh!

[Prof. Glenn Harvel]

Okay.

There's some good R and D that could be done in universities in the mechatronics and robotics areas, where we could start developing tools to shorten the human time involved in some of this work. That also helps with the repeatability of it, because now you have a device that's actually going to do the job the same way every single time it's used. That is the area where I think we can start putting some R and D effort in at the university level to start developing these techniques.