Mr. Speaker, it is good to get up on Bill C-5, because it is such a good bill. I think that all members are going to be interested in it. I would encourage all of them, as I said, to support it.
I want to mention that the Standing Committee on Natural Resources did a great job in dealing with this bill. There was a very positive study of the bill by the committee and the bill was reported back to this House without amendment. We certainly appreciate the work the members of the committee put into their study of Bill C-5.
Canada's nuclear safety record is second to none in the world. We have a robust technology, we have a well-trained workforce, and we have stringent regulatory requirements.
There are two pieces of legislation that provide a solid framework for regulating the industry in Canada. Those are the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act.
Responsibility for providing an insurance framework, that is, a framework to protect Canadians and to provide stability in this important industry, falls under federal jurisdiction. The Government of Canada has the duty to assume its responsibilities in this area, and through this bill it is doing just that.
Canada, like virtually all other nuclear countries, addresses this responsibility with the enactment of special legislation. In Canada, we have put in place the Nuclear Liability Act. That act was passed years ago. Bill C-5 modernizes the Nuclear Liability Act. It does so by doing a number of different things. It brings the compensation levels into line with internationally accepted compensation levels. It expands the categories of compensable damage. It improves the compensation procedures and the way people make claims. It increases the financial liability of nuclear operators.
Up to date rules are needed to provide certainty regarding insurance and legal liability for suppliers, operators and the general public. Without this certainty, Canada would not be able to attract leading international firms and suppliers of technology in the nuclear industry. Of course, it could be argued that Canada's current legislation more or less accomplishes these objectives. Therefore, the question needs to be asked, why do we need new legislation when we already have a serviceable act in place? The simple answer is, as I mentioned, that the current act is outdated.
The Nuclear Liability Act was passed in 1970. In terms of today's nuclear technology, that is the middle ages. Several lifetimes of nuclear and related technologies have come and gone since then. In short, Canada's existing Nuclear Liability Act reflects the technology, the science and the thinking of an earlier period.
In the interim, it is not only the technology of nuclear energy that has advanced considerably, but the evolution of jurisprudence has contributed to substantial increases in potential liability. Therefore, the government has made the decision, and Canadians are supporting it, that our legislation must be upgraded.
There are, of course, certain fundamental principles of the 1970 act that must be retained. These include absolute liability, exclusive liability and mandatory insurance. I would like to take a couple of minutes to explain what those terms mean, because I know everyone in the House is very interested in them and fascinated by them.
Absolute liability means that the operator of a nuclear facility will be held liable for compensating victims in the rare case of a nuclear incident. This means that victims would not have to negotiate with a highly complex industry in order to determine who is at fault. There would be no question of where to take a claim for compensation.
A second and related principle, exclusive liability, means that no other party other than the operator, for example, no supplier or subcontractor, would be held liable. This removes the risk that would deter secondary enterprises from becoming involved in nuclear projects.
To modernize our liability scheme, we must have legislation that goes farther, although retaining certain fundamental principles. That is what Bill C-5 does.
The proposed legislation increases the limit of liability for nuclear operators. The current liability act sets the maximum at $75 million. That amount was substantial when it was set, but now stands as one of the lowest limits among the G-8 group of nations.
The proposed legislation reflects the conditions of today by raising that limit to $650 million. This balances the need for operators to provide adequate compensation without burdening them with huge costs for unrealistic insurance amounts, or impossible insurance amounts, for events that are highly unlikely to occur in this country. Moreover, this increase puts Canada on a par with most western nuclear countries.
Bill C-5 also increases the mandatory insurance that operators must carry by almost ninefold. It permits operators to cover half of their liability with forms of financial security other than insurance. This has been an important provision for the industry. These could, for example, be things like letters of credit, self-insurance, and provincial, or in the case of Atomic Energy of Canada, federal guarantees. All operators would be required to conform to strict guidelines in this area.
Bill C-5 makes Canada's legislation consistent with international conventions. It does so not only with respect to financial matters, but it also does so with clearer definitions of nuclear damage reflecting today's legal and international nuclear civil liability conventions. These definitions include crucial matters as to what constitutes a nuclear accident, what damages do or do not qualify for compensation, and so on.
These enhancements will place Canadian nuclear firms on a level playing field with competitors in other countries.
Bill C-5 also makes changes to the time period for making claims. Under the act that was passed in 1970, claims had to be brought forward within 10 years of the incident. However, the proposed legislation raises the time limit on compensation for claims to 30 years. Both the earlier Nuclear Liability Act and Bill C-5 provide for an administrative process that will operate faster than the courts in the adjudication. However, the proposed legislation clarifies what the arrangements for the quasi-judicial tribunal must be in order to hear those claims. This new process will ensure that claims are handled both equitably and efficiently.
There has been a lot of debate about some of these proposed measures. For example, there has been discussion about how and why the government arrived at the $650 million amount. Questions have been raised as to other international practices and what goes on in other countries. We believe the $650 million liability limit will adequately address any foreseeable incident in a Canadian nuclear power plant.
Although the U.S. operator liability is cited as $10 billion Canadian, in practice, individual U.S. operators effectively carry $300 million Canadian in primary insurance coverage. A few countries, namely Germany, Switzerland and Japan, do incorporate unlimited liability to the operator under the provisions of their nuclear civil liability legislation. However, in practice, that liability is always limited to the amount of coverage provided by existing insurance plus the net worth of the operator that is liable.
Questions have been raised as to how the $650 million liability limit will stay modern. It is important to note that the $650 million limit set out in Bill C-5 can be increased by regulation, and that limit needs to be reviewed at least every five years. This review will examine changes in the consumer price index and international trends, but will have the flexibility to take into consideration any other criteria that is deemed appropriate.
We have made the argument, and Canadians have accepted it, that this is a proper limit in order to ensure that we have the nuclear liability amounts that we need.
The challenge for the government in developing this legislation was how to be fair to all stakeholders and to strike an effective balance in the public interest. In developing Bill C-5, we consulted with nuclear operators, suppliers, insurers, the provinces with nuclear installations, as well as the public. They generally support the changes that I have described.
I know that some nuclear operators may be concerned about cost implications for higher insurance premiums, but they also recognize that the current levels have been outdated. Suppliers welcome the changes as they provide more certainty for the industry. Nuclear insurers appreciate the clarity provided in the new legislation and the resolution of some long-standing issues.
Provinces with nuclear facilities have been supportive of the proposed revisions to the current legislation. Municipalities that host nuclear facilities have been advocating revisions to the Nuclear Liability Act for some time. They are supportive of the increased levels of operator liability and improved approaches to victim compensation.
In short, Bill C-5 was not developed in isolation. The evolution of policy was guided by consultations with key stakeholders and by experiences gained in other countries. The reality is that we have general support of the industry at large for Bill C-5. I would urge the members of the House to join in that consensus.
To conclude, Bill C-5 establishes the compensation and civil liability regime to address damages resulting from radiation in the unlikely event of a radioactive release from a Canadian nuclear installation. It ensures that a proper compensation program is in place and channels civil liability to operators.
The introduction of Bill C-5 adds to this government's track record of making responsible decisions on the safe, long term future of nuclear power in Canada. It adds to the government's record of promoting a safer, more secure and cleaner world through the responsible development of nuclear energy for peaceful purposes.