Madam Speaker, it is my pleasure to be back discussing this bill one more time. It is the first time in this session of Parliament, but I know some of my colleagues who have been on the natural resources committee over the last couple of years, or even the last five years, are very familiar with it.
It is my pleasure today to rise in the House to present Bill C-15, the nuclear liability and compensation act. This legislation would replace the 1976 Nuclear Liability Act. Its purpose is to update the insurance framework that governs the nuclear industry and protects the interests of Canadians in the unlikely case of a nuclear incident.
Bill C-15, as I mentioned, will not be new to the members of the House. Indeed many individuals on both sides of the House and, in particular, members of the present and past House Standing Committee on Natural Resources have worked together and actively contributed to its improvement. Amendments proposed at committee were incorporated into the legislation that is being reintroduced. I would like to thank the members of the committee for their helpful contributions.
Canada's nuclear safety record is second to none. We have a robust technology, a well-trained workforce and stringent regulatory requirements. There are now two pieces of legislation that provide a framework for the regulation of the nuclear industry: the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act. Nevertheless, we must be prepared for the possibility of a nuclear incident that could result in civil damages and have specific legislation that prepares us for such an event if it were to happen. The responsibility of doing so falls under federal jurisdiction.
However, traditional insurance is not appropriate for dealing with this kind of liability. It is difficult, for example, to determine the levels of risk involved. Canada, like virtually all other nuclear countries, first addressed this void with the enactment of special legislation. In the 1970s, we in Canada put in place the Nuclear Liability Act.
What this means is that Canada's existing act reflects the thinking of an earlier period. In the interim, the evolution of jurisprudence has contributed to substantial increases in the potential liability for nuclear incidents, and our approaches to dealing with industrial accidents have evolved. Accordingly, our liability legislation must be upgraded.
Bill C-15 would modernize the older Nuclear Liability Act. It would do so by bringing victim compensation into line with internationally accepted compensation levels. It would do so by expanding categories of compensable damage, improving compensation procedures and increasing the financial liability of nuclear operators.
Up-to-date liability rules are needed to encourage investment in nuclear facilities. They are needed to provide certainty regarding insurance and legal liability for suppliers and for operators. Without this certainty, insurers would not extend coverage to nuclear facilities and nuclear development in this country would be severely curtailed.
The Government of Canada has taken action to assist Canada's nuclear industry remain at the forefront of a highly competitive field. It is investing $300 million in the operations of Atomic Energy of Canada Limited to try to help strengthen Canada's nuclear advantage.
Global nuclear needs are expanding. Nuclear energy is an important emission-free source of power and it is key to achieving Canada's objective of being a clean energy superpower. However, without certainty regarding insurance and liability, Canada would not be able to advance or attract leading international suppliers and technology firms in the development of our nuclear industry. Having a proper liability regime in place is mandatory if Canada's nuclear industry is to remain competitive.
Of course, it could be argued that Canada's current legislation more or less accomplishes these objectives. Why do we need new legislation when we have a serviceable act in place already? The simple answer is 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, as I said before, Canada's existing Nuclear Liability Act reflects the thinking of an earlier period. Our liability legislation must be upgraded.
Nevertheless, there are certain fundamental principles of the 1970 act that must be retained. These are the principles of absolute liability, exclusive liability and mandatory insurance.
Absolute liability means that the operator would be held liable for compensating victims in the rare case of a nuclear incident. This means that victims would not have to negotiate a highly complex industry to determine who was 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 party other than the operator, for example, no supplier or subcontractor, would be held liable.
This removes a risk that would deter secondary enterprises from becoming involved in a nuclear project. Nevertheless to modernize our liability scheme we must have legislation that goes further, while retaining those fundamental principles. This is what Bill C-15 would do.
I would like to talk for a minute about the proposed changes. The proposed legislation would increase the limit of liability for nuclear operators. The current act sets the maximum at $75 million, an amount that now stands as one of the lowest limits among the G8 group of nations.
The proposed legislation would reflect the conditions of today by raising that limit to $650 million. This would allow operators to provide adequate compensation without burdening them with huge ongoing costs for unrealistic insurance amounts, amounts for events highly unlikely to occur in this country. Moreover this increase would put Canada on a par with most western nuclear countries.
Bill C-15 would also increase the mandatory insurance that operators must carry by almost ninefold. It would permit operators to cover half of their liability with forms of financial security other than insurance. For example, this could be letters of credit, self-insurance and provincial or, in the case of AECL, federal guarantees. All operators would be required to conform to strict guidelines in this area.
Bill C-15 would make Canada's legislation more consistent with international conventions. It would do so not only with respect to financial matters; it would also do so with clear definitions of nuclear damage reflecting today's jurisprudence and more closely aligned with international nuclear civil liability conventions.
These definitions include crucial matters such as 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.
Both the current liability framework and Bill C-15 contain limitation periods restricting the time period for making claims. Under the act passed in 1970, claims must be brought within 10 years of the incident. However since the passage of that earlier liability legislation, we have come to understand that some radiation-related injuries have long latency periods.
Accordingly, the proposed legislation would raise the time limit on compensation for claims related to injury or death from 10 to 30 years. Both the earlier Nuclear Liability Act and Bill C-15 provide for an administrative process that would operate faster than the courts in the adjudication of claims arising from a large nuclear incident.
However, the proposed legislation would clarify the procedural arrangements for a quasi-judicial tribunal that would hear these claims. This new process would ensure claims were handled both equitably and efficiently.
There has been previous debate about some of Bill C-15's proposed measures. For example, there has been discussion about how and why the government arrived at the $650 million amount. Questions have been asked about the adequacy of $650 million for compensation of victims: why the civil liability of a nuclear operator should be limited in amount when the civil liability of other industries is unlimited, why the civil liability of Canadian nuclear operators should be limited at $650 million when operators in some other countries have unlimited liability and why the civil liability of Canadian nuclear operators should be limited at $650 million when we are told U.S. operators have a liability in the order of $10 billion Canadian.
The government's position is that the $650 million liability would adequately address the public's need for compensation in the event of any foreseeable incident at a Canadian nuclear plant. Although the U.S. operator liability limit is cited as $10 billion Canadian, in practice individual U.S. operators effectively carry $300 million Canadian in insurance coverage.
A few countries, like Germany, Switzerland and Japan, do incorporate unlimited liability of the operator under the provisions of their nuclear civil liability legislation. However in practice their 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 also been raised as to how victims would be compensated if damages from a nuclear incident exceeded the operator's $650 million liability limit. Bill C-15 makes it clear that the minister would be required to assess the need for additional funds and report this information to Parliament. Parliament would then make the appropriate decision on providing funds for compensation.
There has been discussion on the provision in Bill C-15 that limits the ability of operators to carry more than 50% of the required financial security in forms other than insurance to cover their liability.
This provision was introduced in the bill to address operators' concerns regarding, first, the substantial increase in insurance premiums that they may face and, second, their perception of the monopoly held by nuclear insurers in providing the required financial security.
However, certain operators have said they would like more flexibility in negotiating the percentage of alternative securities which they could hold to cover their liability. This 50% limit may be changed by regulation.
Worldwide nuclear insurers have been providing nuclear civil liability insurance to operators for more than 50 years. They provide secure capacity. They are knowledgeable when it comes to assessing and pricing nuclear risks. They have experience handling claims.
Generally, a first tier compensation under national legislation or international conventions governing civil liability requires operators to cover their liability with private insurance or other forms of financial security. Worldwide private insurance continues to be the choice for nuclear operators over other forms of financial security.
The challenge the government faced in developing its legislation was to be fair to all stakeholders and to strike an effective balance in the public interest.
In developing Bill C-15, we consulted with nuclear operators, suppliers, insurance companies and provinces with nuclear installations. They generally support the changes I have described.
I should mention that this bill has also been the subject of a lot of consultation at committee. I think this will be maybe the fourth time that it has been before committee, and we have had extensive hearings each time. There has been widespread consultation on the bill.
While some nuclear operators may be concerned about cost implications for higher insurance premiums, they also recognize they have been sheltered from these costs for some time.
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 the improved approaches to victim compensation.
In short, Bill C-15 was not developed in isolation. The evolution of policy was guided by consultation with the key stakeholders, with Canadians, and by experienced gained in other countries.
The reality is that we have the general support of the nuclear industry and Canadians at large for Bill C-15. I would urge members of this House to join in that consensus.
To conclude, Bill C-15 would establish the compensation and civil liability regime to address damages resulting in the unlikely event of a radioactive release from a Canadian nuclear installation. It would ensure that a compensation scheme is in place for victims and would promote nuclear development by channelling civil liability to operators, effectively indemnifying contractors and suppliers.
The introduction of Bill C-15 adds to the 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.
