Madam Speaker, it is a pleasure to stand today to speak to Bill C-3, an act to amend the Eldorado Nuclear Limited Reorganization and Divestiture Act and the Petro-Canada Public Participation Act.
The bill opens up two Canadian companies to greater foreign ownership and expands the individual ownership provisions. The intent of the bill is to allow greater flexibility on the part of the two companies, Petro-Canada and Cameco, to better position themselves within the global marketplace.
Within their industries Petro-Canada and Cameco are national and world leaders respectively. Petro-Canada is familiar to most Canadians because of its retail gas outlets. However it also has significant oil and gas exploration and development initiatives in Canada's north and along the east coast. It is involved in the Alberta tar sands as well.
We all know the oil and gas sector is doing well and benefiting enormously from the high price of oil and gas. Petro-Canada is well positioned within the sector to profit from both upstream and downstream production. However it continues, like any company, to look for growth opportunities. The legislation is expected to give Petro-Canada greater flexibility for strategic management as the oil and gas sector continues to evolve.
While the lessening of restrictions on foreign and individual ownership is one issue addressed by the legislation, the bill would also allow Petro-Canada to sell, transfer or otherwise dispose of its assets without separate provisions for upstream and downstream operations.
Upstream operations such as development in the Alberta tar sands, offshore oil exploration in Newfoundland and natural gas exploration in western Canada are some of the core businesses of Petro-Canada. Downstream operations, including the nearly 2,000 retail and wholesale outlets across Canada, make Petro-Canada one of the more recognizable names in the gas delivery business and the second largest petroleum refining and marketing company in Canada.
Petro-Canada has recently focused on its core businesses, specifically the oil and gas production that has proven successful on the east coast and in western Canada. The legislation could provide the company additional leeway to concentrate on areas that have proven successful while allowing it to dispose of operations that do not meet its core focus.
The legislation should allow the federal government to divest itself of its remaining 18% stake in Petro-Canada. Oil and gas companies are profiting from current market conditions and it is a favourable time for the federal government to get out of the industry. We all know to buy low and sell high. If the government wants to maximize its investment now is the time to sell.
How the government manages the windfall from such a sale is another question. It was the Canadian taxpayer who footed the bill when the government established Petro-Canada as a crown corporation in 1975 and it should be the taxpayer who benefits now. That does not mean further health care cuts or increased devolution of services to the provinces without corresponding increases in transfer payments.
The Nova Scotia government has recently been addressing its own problem in the oil and gas industry: insignificant royalties from east coast oil and gas development. Nova Scotia sees only 18 cents of every dollar generated by the offshore. The remainder goes to the federal government.
There must be a more equitable sharing of revenues between the federal government and the provinces. Petro-Canada has its headquarters in Alberta. That province manages to operate in the black because of the substantial royalties it accrues from resource companies like Petro-Canada. Nova Scotia is asking for a similar setup so that it too can realize the benefits of oil and gas development.
Last year Petro-Canada had record net annual earnings of $893 million, easily surpassing the previous year's earnings of $233 million and almost tripling the previous high of $306 million. Petro-Canada is clearly doing something right. Still, no company should rest on its laurels. If this legislation provides greater flexibility and allows for strategic positioning within the industry, it is important to support it. The PC Party does so.
The legislation affects another Canadian company, Cameco, the world's largest uranium supplier. Cameco supplies 30% of the western world's uranium, some 18 million pounds.
The legislation would provide greater flexibility to the company in terms of foreign ownership, although a fixed limit of 25% would remain in place. There is a big difference, however, between the oil and gas sector and nuclear energy.
Although both sectors provide energy sources and both have inherent risks associated with them that can have grave environmental impacts, Canadians remain skeptical about nuclear energy and the safe use of such energy. Radioactive waste is one aspect of uranium mining that concerns all Canadians.
I would like to spend some time today looking at radioactive waste and the role that public perception plays in uranium production. With legislation that opens up foreign ownership of this Canadian uranium producing company, the world's largest, I think it is important to understand what issues are really at stake here.
For instance, the briefing material provided by the Department of Natural Resources respecting the legislation clearly indicates that nuclear proliferation standards will be maintained and are not impacted by the legislation. However, when one looks at uranium mining there are serious environmental questions that need to be addressed, not just the issue of nuclear proliferation.
The report, “Inventory of Radioactive Waste in Canada”, examines radioactive waste in Canada according to three categories, nuclear fuel waste, low level radioactive waste, and uranium mine and mill tailings. At the end of 1998 the total waste of these three categories were, respectively: 5,600 cubic metres, 1.8 million cubic metres, and 210 million tonnes. Again, those three categories were nuclear fuel waste, low level radioactive waste and uranium mine and mill tailings.
The report estimates that by 2035, the year when the last power reactor is forecast to shut down, the waste totals will be: 14,500 cubic metres, 210 million cubic metres, and 248 million tonnes.
The report goes on to state:
Radioactive waste is currently managed in a safe and environmentally responsible manner by storing the waste away from the public and isolating it from the environment. The management of those wastes meets the requirements of the Atomic Energy Control Board, Canada's independent nuclear regulator.
It is interesting to look at what has been happening recently respecting the organization that oversees nuclear reactors and public safety in Canada. On May 31, 2000, the Canadian Nuclear Safety Commission replaced the Atomic Energy Control Board. In his December 2000 report, the auditor general devoted a chapter to the review of nuclear safety, with a focus on power reactor regulations.
In his report, the auditor general noted that the risk analysis of power reactors is not rigorous, raising questions about the safety of Canada's 22 existing nuclear power reactors. While Cameco may not be in the business of supplying nuclear power reactors, it is directly affected by undertakings within the industry because of the impact this has on Canadians' acceptance of nuclear products, nuclear energy and nuclear waste.
Supporters of nuclear energy advocate that it is one of the cleanest sources of energy available and one that can help meet future demands as fossil fuel sources are depleted. Certainly it is true that nuclear energy is a possible solution for energy, one that some countries have been more open to than others.
France has embraced nuclear power as its primary energy producer, relying on nuclear energy to supply 75% of its electricity production, the result of a 1974 initiative to be energy independent. However, to be supportive of nuclear energy we must also have a method of dealing with the byproducts and the residues of nuclear energy exploitation.
Cameco addresses these issues on a daily basis because, as a result of its mining operations, the company must dispose of its waste materials. This can range from mine tailings to the protective clothing worn by employees.
Currently the low level radioactive waste produced as a result of nuclear power production is compressed and disposed of within nuclear reactors. This is not a long term solution, however, and other disposal methods have been discussed, including the availability of other sites as possible receptacles for this waste material.
The Canadian shield, because of its stable rock formation and low water levels, could be opportune in this regard and is something that the Canadian nuclear fuel waste management program has discussed since 1978. Public acceptance of such disposal methods will determine whether this is a long term solution to radioactive waste disposal.
Cameco is a well respected and successful company. However, like Petro-Canada, it too needs the flexibility to adapt to new market conditions and strategically position itself within the global marketplace.
While I have some concerns about the application of nuclear energy, particularly in regard to waste disposal and byproducts, the intent of this legislation is to help these two companies grow and expand within their respective industries. The PC Party supports this initiative.
A recent Cameco press release announced that reserves at McArthur River in northern Saskatchewan, the world's largest and highest grade uranium mine, is now expected to exceed anticipated production by 50%. As Cameco continues to develop mine sites like the McArthur mine, it will need the flexibility to attract new investment and diversify its holdings. This legislation should be one step toward providing that flexibility. The PC Party supports the legislation for that very reason.