Natural Resources Committee on Nov. 24th, 2016

[Julie Gelfand]

I will get back to you with an answer on that.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Thank you very much.

[Julie Gelfand]

You have a minute.

[The Chair, Liberal, James Maloney]

Mr. Sweet, I can give you three minutes.

[David Sweet, Conservative, Flamborough—Glanbrook, ON]

Thank you very much, Chair.

I'll start with a little bit of a statement, then I have one question to Mr. Jager.

I would think that it would have to be profoundly frustrating for Mr. Jager and other people who are suppliers of nuclear energy that the regulator is seen in this light in this report.

I think that in the general public, if there are two points of frustration or lack of trust, one of which my colleague from the NDP has already pointed out, they would be around the management of waste and the safety of the plants themselves.

When the commission does not have a standard that's excellent, it fuels that lack of trust. Unfortunately, your report will be used by people who are anti-nuclear. It will be used, I'm certain, in a way that is out of proportion to how it was intended. It will make it tougher on power producers who operate nuclear plants, as OPG does.

I find that very frustrating. I hope that their compliance is immediate and that they are able to show that and demonstrate it to the public so that any unneeded scrutiny is mitigated.

You mentioned a number of things, Mr. Jager, in your testimony. I wish I had 30 minutes, because some of them I would really like to ask you about in regard to the billions of dollars that some of these plants will generate in GDP.

The day before yesterday in The Kingston Whig-Standard there was a big story. A woman had to choose between rent and paying her electricity bill. I need to ask you this question, because every constituent that I represent would say, “Hey, you know what? One of the biggest concerns I have right now is my electricity bill,” and you just testified that it was low cost. I'll just give you an opportunity to explain that.

How do you represent a low-cost electricity provider when one of the biggest frustrations for Ontarians today is their electricity bill?

[Glenn Jager]

I would say that the electricity bill is made up of many contributors and many components. From the OPG standpoint, our cost is 40% below the average cost. You can draw a conclusion on the effect of our cost on the total price. It brings the price down.

One other thing—

[David Sweet, Conservative, Flamborough—Glanbrook, ON]

That 40% less is less than who?

[Glenn Jager]

Than all the other operators.

[David Sweet, Conservative, Flamborough—Glanbrook, ON]

In Ontario?

[Glenn Jager]

Yes, in Ontario. We're 40% less than—

[David Sweet, Conservative, Flamborough—Glanbrook, ON]

What about other jurisdictions?

[Glenn Jager]

I can't comment on the other.... We could probably get that information, but I don't have it for you.

[David Sweet, Conservative, Flamborough—Glanbrook, ON]

Would you table that with the committee at a later date?

[Glenn Jager]

We can certainly provide that, but we're 40% less than the average in Ontario.

One other thing I would leave you with—

[The Chair, Liberal, James Maloney]

Very quickly, Mr. Jager.

[Glenn Jager]

—is that all the taxes that we pay and the revenue that OPG makes goes directly back into the Province of Ontario to use as it sees fit, so it's actually better than that.

[The Chair, Liberal, James Maloney]

Thank you very much.

I'm going to have to stop it there. The good news is that we may have another chance to discuss this very shortly.

To our witnesses, thank you very much for joining us this morning. Your evidence is going to prove very helpful for what we're trying to accomplish here. We appreciate your taking the time to be here.

We're going to suspend for two minutes, and I mean two minutes, because we have three groups in the next hour, one of whom looks very familiar.

Thanks.

[The Chair, Liberal, James Maloney]

Welcome back. We're going to get going for the second segment of our meeting this morning. Thank you, everybody.

We have three groups of witnesses for this session. From Bruce Power, we have James Scongack. From the Nuclear Waste Management Organization, we have Laurie Swami, Derek Wilson, and Elena Mantagaris. Back by popular demand, from Ontario Power Generation, we have Mr. Jager.

Thank you all for joining us.

I will open the floor to Bruce Power.

[James Scongack, Vice-President, Corporate Affairs, Bruce Power]

Thanks very much for having us here today. My name is James Scongack, and I'm the vice-president of corporate affairs and environment at Bruce Power.

Before I give the Bruce Power overview and share some information with the committee, and before answering some questions and passing it off to my colleagues, I just want to thank this committee for looking into this important issue.

From a Bruce Power perspective, one of the things we've always said is that if we look at the role of energy in Canada broadly, and where we want to be as a country, it's really a three-legged stool.

The first component consists of a modern, strong, successful oil and gas sector, primarily based in western Canada, but which we see impacting the entire country.

The second component is looking at provinces like British Columbia, Manitoba, Newfoundland, with very successful long-standing hydroelectric generation and a real role on that front.

The third leg of the stool is the nuclear industry, an industry that unfortunately sometimes does not get the recognition that it deserves, frankly.

It's really important that all three of those elements be connected and successful for Canada to have a modern, clean, successful, and economically viable electricity system. My comments will be very consistent on that front today.

For those of you who aren't aware of Bruce Power, we're Canada's only private sector nuclear generator. We operate the largest nuclear facility in the world, located in southwestern Ontario. We're entirely Canadian-owned. Our ownership consists of the OMERS pension benefit plan that invests pension funds for about 400,000 to 500,000 public service employees in the Province of Ontario; TransCanada, a massive energy player in North America; and our two unions on site. Ninety per cent of our workforce is unionized, and the Power Workers' Union and the Society of Energy Professionals are also owners in our business. In addition, over 90% of Bruce Power employees are self-investors in our company. That's our ownership structure. It's unique.

The structure of our company itself is also unique. We lease our facility from the Ontario government under a long-term lease that will run until 2064. We sell all of our output under contract, through the IESO in the province of Ontario. We're the largest public-private partnership in Canada. Over our first 15 years of operation, we've invested about $10 billion into our site. We have a plan, over the course of the next 20 years, to invest nearly another $13 billion to $20 billion.

One of the previous questioners from the other session asked about the price of power. For those members who are not from Ontario, this is one of the top-of-mind issues on the electricity file right now in Ontario. We are paid for all of our output through a contract with the IESO. As Mr. Jager alluded to, like the OPG nuclear division, we're a low-cost electricity producer.

Just to put that into perspective, there are a number of components that make up your electricity bill if you're an electricity consumer in Ontario. One component of your electricity bill, anywhere from 40% to 50% of it, depending on where you live in the province, is actually the cost of electricity. As Mr. Jager alluded to, similarly to Bruce Power, if you receive 100% of your electricity from any of the nuclear facilities in Ontario, the cost of electricity on your bill would drop between 40% and 45%.

Sometimes there's a myth that the cost of nuclear electricity doesn't cover everything, when in fact it does. When we talk about the 6.5¢ that Bruce Power is paid per kilowatt, that covers every cost of our operation. It pays for the spent fuel that will eventually be in Laurie's care and control. It covers all of our long-term liabilities. It includes all of our capital. It includes everything we generate from our operation. That's a really important point. That's why we've been recognized as a unique public-private partnership in Canada.

Obviously my comments have been a bit more Ontario-centric, because that is where we operate, but I think there are a number of important, broader Canadian elements to our operation that would be of interest to the committee, the first in the area of clean air. As we saw earlier in the week, the Minister of Environment talked about moving towards a coal phase-out agenda for Canada by 2030. I know that's going to be an issue that will be actively discussed in the coming weeks.

As people are also aware, 2015 was the first year that we had no coal generation in Ontario. Ten years ago, about a quarter of our electricity in Ontario came from coal.

Yesterday the Asthma Society of Canada released a report marking the first anniversary of the passage of the Ending Coal for Cleaner Air Act and acknowledging that Bruce Power was responsible for 70% of the extra electricity needed to phase out coal. That $10 billion we spent effectively enabled coal phase-out in Ontario.

As we look at the carbon-pricing regime that is expected, whether it's cap and trade at the provincial level or some other construct, one of the things the Asthma Society also concluded yesterday is that compared to the alternatives, our continued operation will avoid a lot of additional carbon costs. That's estimated to be between $12 billion and $63 billion over the next 50 years, or up to $14,000 per family, so as we're talking about clean air, it's important that nuclear gets mentioned in that equation.

Before I wrap up, there are two other important points. I know that the member of Parliament covering the Chalk River facility is here today, and she'll be very aware of this file. One of the key elements in our nuclear industry in Canada that is often not recognized is the contribution to the medical community internationally. Bruce Power, along with Glenn's facility over at Pickering, is the world's largest provider of cobalt-60.

If any of you folks ever have to go into the operating room of a hospital, you want to make sure that every single piece of equipment and any medical supplies are absolutely sterilized and clean. Over the last 30 years, we've seen a dramatic drop in infection rates in hospitals because all of that material is sterilized from the cobalt-60 we produce in nuclear plants around the world. Seventy per cent of the world's supply of cobalt-60 comes from the province of Ontario and Bruce Power.

Just two weeks ago, we announced a major project at Bruce Power. When the Chalk River facility ceases operation at the end of March, we will start to produce a new product called “high specific activity cobalt”. We're going to be one of the world's largest suppliers of medical-grade cobalt , which will be used to treat people with brain tumours and various forms of cancer. If you've ever had a loved one or a neighbour or a friend who has had a brain tumour and has been able to go in for this innovative medical technique, where they don't need to do operations but can effectively shrink a tumour through the gamma knife technology, all of that is going to be coming from Bruce Power in a number of years.

The final thing I would like to say in conclusion is that there has been a lot of talk about the regulatory regime in Canada. I certainly don't want to open up a full dialogue on that, but I want to share with you our perspective. If you were to come to the Bruce Power site today—and I encourage any of you to come to the site—you would see a very active level of engagement from our regulator. They're based on site. They're integrated into everything that happens on the site.

I recently had the honour of travelling to Vienna with a number of members of Parliament for the IAEA general assembly. I think Ms. Gallant and Ms. Rudd would be able to reinforce this. It is amazing how respected Canada's nuclear industry is on the international scale.

There is an international fleet of about 400 nuclear plants. Canada has a very small portion of that, with between 18 and 20 plants. We really punch above our weight as a country, and we should be very proud of that, not just from a nuclear operator perspective but also from a regulatory perspective. Canada's regulatory regime in the post-Fukushima period was one of the first to step up and was internationally recognized.

When I was at the IAEA in Vienna, what was also amazing to me was the significant role that CNSC staff play at the international level. We shouldn't underestimate the importance of that. There's always room for improvement, and we as nuclear operators always talk about “gaps to excellence” and how we can do better. I think that's a standard that we should always hold ourselves to, but we shouldn't confuse gaps to excellence with something that we, as Canadians from every walk of life and from every party, should be very proud of.

I think we have a strong story to tell as an industry. I'm thrilled to be here today to share that with you.

[The Chair, Liberal, James Maloney]

Thank you very much.

Ms. Swami, are you going to take the mike for your team?

[Laurie Swami, President and CEO, Nuclear Waste Management Organization]

Yes. Thanks very much.

Good morning, Mr. Chairman and members of the committee. It's an honour to appear before you today as one of my first official acts as the new president and CEO of the Nuclear Waste Management Organization, or NWMO. My colleagues Derek Wilson and Elena Mantagaris are also here today to assist with any questions you may have.

I'd like to provide some background on the work currently under way at the Nuclear Waste Management Organization and provide an overview of where Canada stands relative to our peers in the world.

First of all, Canada has the required framework to move forward with safely managing used nuclear fuel over the long term. We have the benefit of a clear federal policy, a federal act, robust regulations, and sufficient funding. At the NWMO, our current work is focused on identifying an informed and willing host for a deep geologic repository. Our goal is to achieve a partnership with interested municipalities, first nations, and Métis communities, working together to implement the significant national infrastructure project that we have in front of us.

Let me run through a little bit of our history. The NWMO was established in 2002 by Canada's nuclear electricity producers as a requirement of the federal Nuclear Fuel Waste Act. Our mandate is to work collaboratively with Canadians to design and implement Canada's plan for the safe long-term management of used nuclear fuel. As a requirement of the act, we submit an annual report to the Minister of Natural Resources, who tables it in Parliament and issues a public statement within 90 days of receiving it. The 2015 statement indicated the following: “The Government of Canada believes strongly in the importance of the NWMO’s mandate, and will continue to ensure that the organization fulfills its responsibilities under the Nuclear Fuel Waste Act as it implements Canada’s plan for nuclear fuel waste.”

Ontario Power Generation, New Brunswick Power Corporation, and Hydro-Québec are the founding members of the NWMO. Along with Atomic Energy of Canada Limited, they are required to fund our operations. Trust and segregated funds have been established and are funded.

The Nuclear Fuel Waste Act required the NWMO to study approaches for managing used nuclear fuel and recommend an approach to the Minister of Natural Resources. In 2005, after a three-year dialogue that included 120 information sessions in every province and territory, the NWMO proposed an approach that best reflected priorities and values expressed by Canadians. We called that approach “adaptive phased management”, or APM.

The Government of Canada then selected APM in June 2007. The plan includes centralized safe containment and isolation of used nuclear fuel in a deep geologic repository located in an informed and willing host community. Following the government's decision, the NWMO undertook an additional two years of engagement with Canadians to collaboratively develop a fair and ethical site selection process that identifies technical and social criteria for suitability.

In May 2010, when the site selection process was initiated, 22 communities came forward and expressed interest in learning about this approximately $22-billion project. Following the initial screenings and preliminary assessments, the number of communities has been narrowed down to nine in Ontario. No decision has been made yet by any community to host the deep geologic repository. Like the NWMO, all are still learning. Over the next several years, NWMO will be doing technical studies and working with communities to identify a preferred site, followed by regulatory approvals. We estimate that the repository will be in service between 2040 and 2045.

There is international consensus that repositories are the responsible approach for managing used nuclear fuel over the long term. For instance, the IAEA and NEA recognize geologic disposal as a safe and permanent solution.

Like other countries, Canada is moving forward with an environmentally responsible approach that protects people and the environment. For example, Finland, Sweden, and France are all moving forward with repository programs. The U.S. Department of Energy is initiating a consent-based process to site a repository.

The NWMO is committed to excellence in research efforts. Since 2010 we have worked with 21 Canadian universities and colleges, as well as international centres of learning, on over 85 research projects. The NWMO is also working with research partners in Switzerland, Sweden, and Finland.

Adaptive phased management requires that the NWMO ensure technological innovations are incorporated in how we advance Canada's plan. For example, the NWMO has developed an innovative containment system with existing proven technology that is optimized for used CANDU fuel. This system can be manufactured entirely in Canadian facilities and could be used by companies looking to export Canadian expertise and materials in managing the back end of the CANDU fuel cycle. Adaptive phased management gives our organization the flexibility to respond to technological innovations and future changes in the nuclear sector, while ensuring the core mission of the organization can continue.

In conclusion, as stewards of Canada's plan, we take our responsibility to protect people and the environment extremely seriously. As mentioned earlier, we have all of the necessary frameworks in place to move forward.

We are happy to answer any questions you may have.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Jager, we'll go back to you.

[Glenn Jager]

Thank you, Mr. Chairman and committee members, for inviting me to speak about Ontario Power Generation's deep geological repository and our industry.

OPG has a strong tradition of generating electricity for almost 100 years. It grew out of the Hydro-Electric Power Commission of Ontario and Ontario Hydro. In the first half of the 20th century, all of our assets were hydroelectric, which laid the foundations for the economic and social development of Canada.

Fossil plants followed in the fifties and the sixties as an additional source of energy to fuel a growing and thriving province. In the seventies and nineties, nuclear stations were added to that mix.

OPG owns three nuclear stations in the province, the Pickering, Darlington, and Bruce power stations, and together they produce more than half of Ontario's electricity—stable, clean, affordable, and safe energy that has helped Ontario and Canada move to a low-carbon economy. It was nuclear power that helped the province get off coal-powered electricity, significantly reducing the province's and the country's greenhouse gas emissions, and it will be this way as nuclear continues to be an integral part of our electricity mix and the decarbonization of our economy.

In October, OPG embarked on a $12.8-billion megaproject, the biggest clean energy project in the country, refurbishing the nuclear generating station, one of our most important assets.

As I mentioned earlier, Darlington generates 20% of the province's electricity and has done so since the early nineties. It needs a mid-life refurbishment, and we're spending 10 years to do just that. Once this is completed, Darlington will continue to provide to Ontario stable and cheap energy, free of greenhouse gas emissions, for 30 or more years.

As with any industrial operation, nuclear plants produce waste, and in Canada there are strict regulations around the storage and disposal of nuclear waste. Unlike gas- or coal-burning plants that send their waste up into the atmosphere, the vast majority of nuclear waste is solid. It's stored as per the rules of Canada's radioactive waste policy framework, which dictate that waste producers and owners are responsible for the funding, organization, management, and operation of disposal and other facilities required for their waste. The policy recognizes that there may be different categories for each waste category.

OPG is responsible for the interim storage and long-term management of low- and intermediate-level waste. High-level waste, as Laurie mentioned, is the responsibility of the Nuclear Waste Management Organization, the NWMO, which is in the process, as you've heard, of working on a plan for the safe long-term management of used nuclear fuel.

For 40 years, the low- and intermediate-level waste produced from the three nuclear plants has been safely stored at the Bruce generating station on Lake Huron. It has been trucked there without incident, and every single piece of waste generated over 40 years is accounted for. Currently, all the waste is stored safely above ground within the secure Bruce site.

The low- and intermediate-level waste is stored in concrete storage buildings and in in-ground containers. There are approximately 100,000 cubic metres of low- and intermediate-level waste stored there, about half of the total that would be placed into the DGR when it's done. The spent fuel is placed in dry storage containers at each of the three stations. The containers, designed by OPG, are made of reinforced concrete and carbon steel and weigh about 70 tonnes when full. Each container holds 384 fuel bundles and, to date, we've loaded 2,500 containers.

Just as we as a society are trying to deal with the carbon waste sent up in the atmosphere by fossil fuel use, we have an obligation to future generations to safely dispose of nuclear waste responsibly, where it cannot pose a threat to the public or the environment. In this vein, OPG has identified and has been working on a safe, permanent solution to manage low- and intermediate-level waste, a deep geological repository, or DGR. DGRs are recognized internationally as the best long-term solution for nuclear waste. DGRs are used safely in the United States, Finland, South Korea, and Sweden. Countries such as Germany, Switzerland, France, and Japan are among the other developed countries seeking to construct a DGR.

OPG's proposed plan would take the waste from where it's stored above ground, move it 100 metres, then 680 metres underground—lower than the CN Tower is high—and into some of the most impermeable rock on earth. The proposed site is designed to contain 200,000 cubic metres of low- and intermediate-level radioactive waste.

This isn't just OPG's best guess for disposal; rather, the project and the site have been subjected to a rigorous environmental and approvals process for nearly 16 years. It's been studied and peer-reviewed by scientists from around the world. In addition, the project has been the subject of nearly a decade of scrutiny, public hearings, and input from local residents.

A federal joint review panel was established in 2012 by the Minister of the Environment and the president of the Canadian Nuclear Safety Commission to study the proposal. It also agreed that it was the ideal site to permanently contain the waste, and recommended that the project be built sooner rather than later. As part of the process, OPG reached out to the Saugeen Ojibway Nation, or the SON. The site is located in traditional SON territory, and OPG has given its commitment to the SON that the DGR will not proceed to construction without the support of the SON community. The panel said the following in its report: “The Panel believes that important bridges have been built between the scientific information for this environmental assessment and the cultural and spiritual worldviews of the Aboriginal people who participated in this review.”

OPG also engages with and has the strong support of the host community, the Municipality of Kincardine, as well as neighbouring jurisdictions. Every study or review has concluded that DGR would not cause any adverse effects to the environment or Lake Huron.

Following the endorsement of the joint review panel, OPG continues to seek EA approval. The federal Minister of Environment and Climate Change has asked for three further studies, and OPG is finalizing its answers to those. OPG has committed to provide this additional information to the minister by year-end. Our results from those additional studies still show that the Bruce nuclear site remains the preferred site for the safe long-term management of low- and intermediate-level waste.

In conclusion, let me leave you with this observation from the joint review panel's report:

The proposed DGR is an important, unique, precedent-setting project. It would be the first of its kind in North America, and it is the first of its kind in the world to propose using limestone as the host rock formation. It is likely that the knowledge and experience gained through the project will assist the Canadian government in its separate Adaptive Phased Management process for the long-term management of used fuel.

Thank you. I'm available to answer any questions you may have.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Serré, you're first up.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for coming in today.

In the seven minutes that I have, I want to follow up on our earlier testimony. I agree that the Canadian nuclear industry is probably the safest in the world and a world leader, but we heard earlier from the audit, which I'm sure you've seen, that it has some pretty significant gaps and some recommendations that I'm sure you as an industry would want to....

I'm speaking now to both Bruce Power and OPG. What are you doing proactively to work with the regulator and the commission to address some of these gaps and to have them comply as soon as possible so that we can put this issue to rest?