Thank you and good morning, Mr. Chair.
My name is Fred Dermarkar, and I'm the president and CEO of Atomic Energy of Canada Limited, or AECL, a Canadian Crown corporation established in 1952. Here with me today is Maude-Émilie Pagé, the acting vice-president of indigenous and stakeholder relations.
AECL's mandate is to drive and foster the development of nuclear science and technology, to derive optimal benefit for Canada from intellectual property related to CANDU reactor technology and manage the Government of Canada's radioactive waste and decommissioning responsibilities.
The government started restructuring AECL in 2009. This led to the implementation of a government-owned, contractor-operated—or GOCO—model. Under this model, AECL owns the sites and the associated facilities, assets, intellectual property and waste liabilities, while a private sector organization, Canadian Nuclear Laboratories—or CNL—is responsible for the day-to-day operations of the sites.
Our sites span the country, from the Northwest Territories to our lab at Whiteshell in Manitoba; several sites in Ontario, including Port Hope and the Chalk River labs; the Gentilly-1 reactor in Bécancour, Quebec; and our cybersecurity facility in Fredericton, New Brunswick.
The implementation of the GOCO model in 2015 was premised on leveraging unique expertise from outside Canada, particularly the United States, to help us manage CNL. The concept was that the U.S. had extensive expertise owing to their vast experience in nuclear waste management and lab operations at the U.S. Department of Energy's 17 nuclear labs. AECL initially contracted with the Canadian National Energy Alliance to manage CNL for 10 years. This contract has just ended, and we have just signed a new contract with Nuclear Laboratory Partners of Canada—or NLPC—to manage CNL.
There are three important points I want to stress about our activities and operations.
First of all, AECL is entirely responsible. We own these sites, and we manage the contract and the contractor. We set directions and priorities, and we supervise performance. We oversee everything that our contractor does, and our foremost goal is to obtain value-added in Canada.
The second is that our parliamentary appropriations are spent right here in Canada. The contract with NLPC is a management and operating contract for our sites, all of which are located in Canada. All of the CNL workforce—more than 4,000 people—is employed here in Canada. The supply chain executing the work for CNL is very much Canadian.
While the annual spend on this contract may seem high, the vast majority of our expenses are right here in Canada. What we are buying is the expertise of the NLPC parent companies in managing complex nuclear research and decommissioning sites like ours. Two of the three companies that make up NLPC have long-established Canadian operations, and half of the management team they recruited is Canadian. Only the fee, which is based on good performance as assessed by AECL, goes to NLPC. That's a very small portion of the total spend.
The third and last point is that our procurement process was initiated in 2022, and it unfolded in a deliberate and thorough manner between then and 2025. We followed legislative requirements and our procurement policies. We had a pre-qualification phase where interested bidders were evaluated against mandatory criteria, including technical, financial, security and integrity. We then issued a request for proposals to qualified bidders with a rigorous and thorough evaluation against technical and financial criteria, and we had an external fairness monitor who concluded that the competition selection process was carried out in a fair, open and transparent manner.
I'm happy to answer questions.
