Thank you.
On behalf of the International Union of Operating Engineers, the IUOE, and our nearly 55,000 members across Canada, we thank the committee for allowing us the opportunity to appear today.
My name is Steven Schumann. I am the Canadian government affairs director for the operating engineers. Unfortunately, Lynda Cloutier, who was supposed to be here with me today, had a family emergency, so I am here by myself. She gives her regrets.
The IUOE is a progressive and diversified trade union. We are involved in all facets of natural resource extraction. We work in the oil fields and build pipelines, hydroelectrical facilities, wind turbines, and solar farms, and of course we build and maintain nuclear facilities. As you can see, we build it all. I'm here today to give you a labour perspective on how we see the future of nuclear.
For our members and the members of the Canadian building trades union, who we belong to, the future looks very bright at both the Darlington nuclear facility and the Bruce Power nuclear site. The Darlington nuclear station will invest $12.8 billion over the next 10 years to refurbish all four units. This refurbishment, which began in October, will create jobs for thousands of skilled trades workers in the province of Ontario and provide an opportunity for apprentices to gain valuable work experience. The passing of industry expertise down to our apprentices is something you cannot put a price tag on. It allows future construction workers to work throughout Canada. Bruce Power is also scheduled to begin refurbishment on its fleet of CANDU reactors in 2020, with a targeted completion date of 2033. This massive undertaking again will supply thousands of highly skilled jobs to our members.
Most of this work will be under a project labour agreement, a PLA, and anything not covered by the PLA falls under a collective bargaining agreement, a CBA. Both the PLA and CBA language emphasize that skilled trades workers must be “nuclear ready workers”, and our local unions for each of the crafts are responsible to ensure the training so that their workers meet this threshold. It gives a great opportunity for us to provide the necessary training to our workers.
So we would agree with those who appeared before you that the future looks bright for these two facilities in terms of providing construction and work for our members.
I would now like to discuss the Canadian Nuclear Laboratories Chalk River facility and its subsequent facilities. I believe the committee also has been given a very rosy picture for the future of Chalk River. However, we do not completely agree with that view. Under the previous government, it was decided that Chalk River and its related facilities would be transferred to a GOCO model, government-owned and contractor-operated. This operating model is the first of its kind in Canada. We find it concerning that the nuclear sector would be chosen as the first model for a GOCO model. Proponents of GOCO say it operates well in the U.K. and the United States. I cannot speak on the U.K. experience, but I do believe, from talking to my colleagues in the U.S., that it is not a perfect model. We clearly do not support the GOCO model in Canada's nuclear sector, and believe it may be asking for problems.
Just because it works well in one country does not mean it will work well in other countries. Countries operate under different regulations and are governed differently, and therefore success in one country does not mean it is destined for success in another country. To be clear, we do not oppose change. For example, we are one of the few unions that believe there is a benefit in the P3 model. We're very open to new ideas, we're just very concerned about this model.
Our first concern with this new approach is the fate of the roughly 3,400 employees. Under the GOCO agreement with all employees, all employees will no longer be able to participate currently in the public service pension plan, the PSPP, which they belong to now, and they will no longer be considered government employees, although the facility remains owned by the Government of Canada.
Under this model, all employees are being forced to move into a new pension plan that will be developed in conjunction with the employer and the employees. Negotiations to develop this plan are currently taking place, but they are not progressing very well. If an agreement cannot be made between the employer and the employees by September 2018, the GOCO agreement forces all employees to go into a plan that has already been set in agreements.
The current PSPP is a defined benefit plan; the new plan will be a defined contribution pension plan. We can provide you with more detailed differences between the two plans...to focus on more things on Chalk River.
We are not sure why the employees are being forced out of their current plan. One argument appears to be around savings. However, one thing we know is that we are unaware of any cost analysis done on the GOCO model. Nothing has been shared with us. Neither CNL operators nor AECL have been very forthcoming in sharing any details of the GOCO model to us or any other unions.
The reason this is a problem is that it creates uncertainty, and there has been a lot of uncertainty around the Chalk River facility. The creation of this new plan and the direction of the new operators have greatly affected the morale of the employees. New hires currently are without a pension plan, and this issue is yet to be resolved.
How do you attract new people if there's uncertainty, and if they don't even know if they're going to be part of a pension plan that others have around them?
There's also uncertainty around the numerous upcoming collective bargaining agreements, since bargaining units have no idea what the pension plan will look like in the future. How can you bargain when you have no idea what your pension plan will look like?
One of the biggest clouds hanging around this GOCO model is the fact that the SNC-Lavalin operating consortium, as we understand it, currently has a five-year contract with an option to renew. What happens if they decide after five years not to renew? How do you attract a new suitor in this situation? What if the new suitor doesn't want to come in under the current agreement, i.e. the pension plan? What if there is no new suitor? Does the government take over the facility again? What would this mean for our employees? Do they get back into the pension plan? There's a lot of uncertainty that hangs around this facility, and it has a negative impact on employees and employee morale.
Chalk River once was a shining star for employment in the nuclear sector. However, over the last few years, for various reasons that reputation has greatly diminished. It has been hard to attract and retain new people to work at the facility. Part of the problem is that the location of the Chalk River facility makes it difficult for people who want to move out there.
Beforehand, the public service pension plan was used as a sort of lure to incentivize people to come and work there, but now this lure will no longer exist. Under the current direction of the facility, we're not sure how they're going to attract these new, high-quality people they talk about for the facility.
We do not share the optimism that has been expressed by others who have appeared before you about Chalk River and subsequent facilities. We encourage the government and all parties to re-examine the use of a GOCO operating model. If we want a bright and thriving nuclear sector, a GOCO model may not be the best option for the future.
I'll leave it at that and answer any questions.