Natural Resources Committee on Dec. 11th, 2025

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

You're right about that.

What measures have been put into place to ensure CNL's IP remains in Canadian hands? Are there accommodations with respect to Internet infrastructure? Is the Internet structure or are any communications subject to the USA PATRIOT Act? It's a group of U.S. companies, so information will flow back and forth. The concern is that, if it flows through routers or, even, on different computers, it could be subject to that, in which case the NSA could look at whatever it wants.

[Fred Dermarkar]

My understanding is that CNL is careful about the location of its cloud servers, to ensure that they are protected in Canada.

I want to take a step back and say that there is a very rigorous security program at CNL. They have a chief security officer. AECL has a chief security officer. AECL monitors CNL's security program and exercises oversight over it, and the two CSOs—the AECL and the CNL CSO—are in very close communication, so I am confident that our information, the information on CNL's servers, is well protected and is being overseen by us.

However, I need to add one more thing. The whole issue of security is also subject to the operating licence that CNL has with the regulator, the Canadian Nuclear Safety Commission, and they, completely independently, provide oversight over their cybersecurity.

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Does the contract have any non-competition clauses to ensure that companies in the consortium cannot take the business away from CNL? For example, Kinectrics—former Sheridan Park workers put that together—was purchased by U.S. company, BWXT. Now, that company, Kinectrics, has a working knowledge of CNL's materials analysis technology, especially for the pressure tubes. That's a large income for CNL. How can we be assured that we will not have that technology, and, thereby, our jobs and the income for CNL, compromised?

[Fred Dermarkar]

Kinectrics, to make a small correction, was born out of the old Ontario Hydro research division, and it was created with the restructuring of Ontario Hydro around the turn of the century.

You are quite correct. They do have capabilities that overlap with capabilities at CNL. However, what's important to note is that there are very strict provisions in the contract to firewall and manage conflicts of interest. The conflict of interest provisions are such that if there's somebody from Kinectrics who is involved in the work, either they have to recuse themselves or they get firewalled so the information does not leak from CNL to Kinectrics. Our job is to make sure those conflict of interest firewalls are being properly managed by CNL.

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Were there any considerations or concerns once the consortium did become all American and we didn't actually have Kinectrics, which was Canadian? Is that where former Sheridan Park engineers work now as well?

[The Chair, Liberal, Terry Duguid]

Give a quick answer, Mr. Dermarkar.

[Fred Dermarkar]

Sheridan Park is in Mississauga on the border with Oakville, and Kinectrics is on Kipling Avenue in Etobicoke. There is no mixing. Sheridan Park was the old AECL. Kinectrics was the old Ontario Hydro.

[The Chair, Liberal, Terry Duguid]

Thank you both.

We're going to go on to Mr. Guay for five minutes.

Mr. Guay, go ahead.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you, Mr. Chair.

I want to thank the witnesses for being here and spending this lovely pre-Christmas time with us.

Let's talk about the consortium, NLPC. NLPC is incorporated in Canada. Is that correct?

[Fred Dermarkar]

That is correct.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Is there an expectation that they're going to pay taxes in Canada?

[Fred Dermarkar]

That is correct. They are required to pay taxes in Canada.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

They will have to behave according to Canadian laws. Is that correct?

[Fred Dermarkar]

That's correct.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Okay.

Can we go a little bit further and talk about the footprint of NLPC in Canada? Can you enlighten the committee on that?

[Fred Dermarkar]

Yes, I would be happy to.

NLPC is made up of three parent companies. They are BWXT, Kinectrics and Amentum.

BWXT has had a presence in Canada for decades in Cambridge, but I understand now it has broadened altogether to seven sites, including Arnprior, which is not far from here, and Peterborough and so on. They are the old Babcock & Wilcox. A lot of people would remember that name. As I say, it's been there for decades. They have about 1,200 employees based in Canada altogether.

Kinectrics, of course, is entirely based in Canada, although, as I recall, it does have an American arm. I don't know the details. It's more an American piece that's owned by Kinectrics, but they have an American office. They have offices in some European countries as well. Their operations are predominantly or almost entirely based here in Canada.

As for Amentum, I do not believe they have a significant footprint in Canada. I'm not aware if they have a significant footprint in Canada, but BWXT certainly has a very large footprint and so does Kinectrics.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

There's a whole discussion going on in the committee about protecting Canadian IP. Can you enlighten us on the structure, the contract and the measures that have been taken to protect Canada's IP?

[Fred Dermarkar]

As I was mentioning, there are strict provisions in the contract around managing conflicts of interest. This is not new in the contract, by the way. This exists today and has existed all along.

As I mentioned earlier, the number of companies that play in this space is very small. It would be very difficult, if not impossible, to find companies to manage the GOCO that would not have some kind of a conflict of interest, because they engage in the same kind of work. That's why we've hired them. Having conflict of interest provisions is a vital part of managing the GOCO. It has been there all along. It will continue to be there in the new contract.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

There might be some confusion for Canadians. We own the CANDU brand and this is Canadian expertise.

How does it relate to this sector of activity in any way, shape or form, just so we're clear?

[Fred Dermarkar]

AECL developed the CANDU reactor technology and AECL continues to own CANDU reactor technology. As part of the restructuring that commenced in 2009, AECL sold exclusive rights to the technology to SNC-Lavalin, which is now AtkinsRéalis.

The CANDU technology continues to be very important to AECL and the CNL. That's because the lab type of expertise around CANDU is very much in residence at our labs today. The engineering portion of CANDU was sold but not the research and development—not the fundamental technology portion. It's important to us to see CANDU continue to grow. We have that capability in our labs to continue to sustain CANDU technology.

I'm not sure if I answered your question directly.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

You did. Those employees of AECL are still Canadians—

[The Chair, Liberal, Terry Duguid]

Mr. Guay, that's your time. Maybe you can come back to that in a future round.

Mr. Simard, you have the floor for five minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Mr. Dermarkar, does the American consortium have a role to play in decommissioning Gentilly‑1?

[Fred Dermarkar]

Yes, but I'll explain.

They do have a role to play in the decommissioning of Gentilly-1 in that one of the objectives of CNL is to decommission Gentilly. The CNL employees will be the ones executing the work, but at a very senior level, NLPC will be providing the management direction around that decommissioning activity.

The decommissioning activity itself will be planned and executed by CNL using subcontractors that are likely to be Canadian subcontractors. There are no contracts right now. That's why I say, “likely”; it has not really commenced.

[Mario Simard, Bloc, Jonquière, QC]

I'd like to talk about your approach to decommissioning Gentilly on Quebec land. How does information sharing with the Government of Quebec function?

I assume that you're also governed by environmental standards and rules specific to the Government of Quebec. I don't know if you can tell us whether you're accountable for following any specifications issued by the Government of Quebec. Are you required to follow any rules? What kind of coordination exists between the consortium, you and the Government of Quebec?