Mr. Speaker, we are debating Bill C-5 today at third reading, which is quite an important bill in the scheme of things.
The need for the bill was generated over a number of years. Suffice to say that the nuclear power option and the use of nuclear power plants for energy production began here after the second world war and was highly regulated under a statute that stayed pretty much the same for most of those years, and, as in so many other areas, an update or a modernization is required. This particular bill addresses, for the most part, the liability component of the envelope.
The area is highly regulated. No matter what we do involving the nuclear industry, it is always highly regulated. Some people in Canada do not believe we should be as reliant on nuclear energy as we are. The fact is that in Ontario, Quebec and New Brunswick, there is substantial reliance. I think in Ontario, one-third of the current power needs are generated by nuclear energy. I am saying that to indicate that the nuclear generation option is not going away. We will continue to rely on it for many years and some of our provinces have made that decision.
To be sure, there are other sources of energy. We are capable of improving our production of hydroelectric energy. We continue to generate electrical energy from gas. We may be using coal in some parts of Canada. Our neighbour to the south is certainly using it in some parts the country. Wind and solar options are there too but nuclear will remain.
Is it efficient? Is it cost effective? Is it clean? Is it safe? Is it renewable? All those questions are there and are part of the continuing debate.
The bill does not alter any of those but it does recognize that there have been a lot of changes in Canadian society, in the world, in the financial world, in the insurance world and in our perspectives on nuclear energy and the risks associated with it that caused us to modernize the statute that governs this very regulated industry.
If people wanted to produce some solar energy, some wind energy in a particular province, they would call it co-generation and plug it into the electricity grid, and they could probably do it without much regulation. However, if they were to try to do some nuclear generation, they could not move without a licence in their back pockets or maybe a dozen licences.
I should also say that Canadians, whether or not they know it, are actually quite reliant on some radioactive processes, both for health care and for some industrial processes. Radioactivity and radioactive isotopes are found in many of our communities. They are closely controlled and serve us all very well, whether we actually know it or not.
To be sure, there are some background radiation sources with low level radiation. They are found in various places across the country, including where uranium is mined or has been mined and where there are tailings. We generally manage those things fairly well and the Government of Canada is quite involved in that. Wherever it is higher than background level of radiation, the Government of Canada believes it has a jurisdiction and it acts.
The bill itself re-establishes a revised liability scheme for civil liability and compensation for this envelope of activity. It is worth pointing out that the previous statute had a maximum liability for an operator of a paltry $75 million.
These days, when it comes to potential liability for anything, whether we have some bad peanut butter, or drive a car, or a truck, or a train or fly an aircraft, $75 million is not a lot of coverage for potential liability. That has been recognized now for some time. The bill would correct that by increasing the limit up to $650 million.
Some may say that is not a lot either. However, the bill was reviewed by the standing committee of the House of Commons and that limit was selected after looking at the basic principles of nuclear liability.
I will reiterate the four principles for the record. First, the operator is the party that is liable, nobody else. Second, the operator of the nuclear facility is exclusively liable for damages if there is an accident. Third, the operator must carry insurance. Fourth, the liability is by statute limited. There are time limitations and dollar limitations, in this case running up to $650 million. This is important. Those who supply materials to the nuclear operator do not face liability for second and third party liability. They can safely deliver the commodity or service to the nuclear operator and they do not have to deal with the potential liability if there is an accident.
Fortunately we have not had any serious accidents in Canada. There have been accidents in two, three or four in various places around the world. The one most people will recall is Chernobyl. The implications of that have been experienced right around the world for all these years.
The factors involved in picking this number include the foreseeable risk. That means the amount chosen was based on what an operator might anticipate as a risk and not from a catastrophic unforeseen event. Our nuclear reactors all have second and third backup fail-safe systems.
This legislation would bring Canada up to par and to the same level as most of the other countries that produce nuclear energy, certainly the western countries. We would get to the $650 million limit not in one slice, but in several years of phase-in, which would be done by regulation.
Under the bill, the government and Parliament will be able to review this every five years. Things may change some more in the coming years.
The statute takes account of what are actually huge changes in the insurance industry. The insurance will have to be obtained only through an approved insurer. The government and the House have recognized that there are other ways of insuring these days, which perhaps were not available 50 years ago. They include government guarantees, letters of credit, some types of self-insurance and the big one of reinsurance.
In some cases some carriers of insurance will not insure unless they have the ability to reinsure, and that means spreading out the risk to shareholders and investors in different parts of the jurisdiction or even around the world. A lot of major insurance contracts now are reinsured to spread the risk around the world. The reinsurance mechanism, which is now an industry standard, can be used here where an approved insurer will not insure without the reinsurance piece.
The insurance and civil liability also cover the movement of radioactive materials, either the uranium coming in if it is above the level and the spent uranium in the fuel rods or whatever else might be radioactive and transported. There have not been any accidents that I am aware of right now, but there can be with these things and people can be harmed, so we are insuring against those too.
It is notable that since the nuclear industry began, we have realized that sometimes the harm associated with an exposure to radiation will not be seen for many years. Therefore, the time limitation on a claim for bodily injury from exposure to radiation is now pushed out to 30 years. The other limitation for property damage is 10 years, but for bodily injury and death there is a 30 year limitation period.
In the event that a nuclear accident crossed a provincial boundary, if we did not have this legislation, we would probably have litigation going on in two separate provincial court systems. There is a provision in the bill that where there is a boundary straddling circumstance, the claim may be made in the Federal Court.
The last thing I want to say about that is in the event of a major accident, the government may establish a nuclear claims tribunal, in other words, to take it out of the courts and establish a special tribunal to deal with actual liability claims and any awards that will have to be made.
What the government has provided for in the bill and what the House has approved is a certain amount of free market interplay with the insurance and reinsurance scheme. In theory, that should keep the insurance costs down or at least competitive and the nuclear station power operators will have the benefit of having improved accessibility to insurance and improved cost efficiencies.
The proposed bill also provides for a reciprocating arrangement with other countries. There is always the risk that a nuclear operator is a corporation that straddles international boundaries or the nuclear operation may be close to a boundary. For example, in my riding of Scarborough—Rouge River, the very east end of the city of Toronto, is only 10 or 20 kilometres from the Pickering Nuclear Generating Station. The generating station is on the shore of Lake Ontario and that itself is only a few kilometres from the boundary of the United States of America.
There is the ability under this statute for the Government of Canada to enter into an agreement with another country to deal with the possibility of nuclear accidents and liabilities in a reciprocating agreement where it would accept our procedures and we might accept its. The ability is there and in the increasingly global environment, that is probably a good thing.
I commend the committee that looked at the bill. I cannot assume anything about third reading, but my party certainly will support it. My hope is that we will get to third reading fairly soon.
