moved that Bill C-5, An Act respecting civil liability and compensation for damage in case of a nuclear incident, be read the second time and referred to a committee.
Mr. Speaker, it is my pleasure to rise in the House to present Bill C-5, the nuclear liability and compensation act. This legislation will replace the 1976 Nuclear Liability Act.
The purpose of this bill is to update the insurance framework that governs the nuclear industry and protects the interests of Canadians. This is an area in which we as a federal government have a responsibility to take action. The existing insurance framework was introduced in the 1970s and has become outdated in the last 30 years.
Today, I would like to explain a bit more about our role in this area, the principles of the insurance framework, and the modernizations this bill proposes.
The history of nuclear energy in Canada goes back some 75 years. For the past 30 years, nuclear power has been an important part of Canada's energy mix. Currently, there are 22 nuclear reactors in Canada providing over 15% of our electricity needs. These reactors are located in three provinces: Ontario, Quebec and New Brunswick.
The operators of these reactors are different in each province. In Ontario, Ontario Power Generation and Bruce Power are the operators. In New Brunswick, it is New Brunswick Power. In Quebec, it is Hydro-Québec, which has safely managed its nuclear program for more than 30 years.
Decisions on the appropriate role, if any, that nuclear energy plays are decisions made by individual provinces. As I have said before, at the end of the day it will be up to each and every province to decide on its own energy mix, but we will be there to support them if they believe nuclear power should be part of their energy mix.
The responsibility of providing an insurance framework for the nuclear industry falls under federal jurisdiction. The Government of Canada has a duty to assume responsibility in this area. I am pleased to say that we are doing just that.
Canada addressed this responsibility with the enactment of the Nuclear Liability Act of 1976. This legislation established a comprehensive insurance framework for injury and damage that would arise in the very unlikely event of an incident. It is the framework in existence today. Both this earlier legislation and Bill C-5, now before the House, apply to nuclear power plants, nuclear research reactors, fuel fabrication facilities and facilities for managing used nuclear fuel.
The framework established under the legislation of 1976 is based on the principles of absolute and exclusive liability of the operator, mandatory insurance, and limitations in time and amount. These principles are common to the nuclear legislation in most other countries such as the United States, France, the United Kingdom, Germany and Japan. These principles are just as relevant today as they were when the original act was introduced.
Let me explain these principles in more detail.
Absolute liability means there is no question as to who would be at fault in the unlikely event of an accident. There is no need to prove that an operator was at fault in an accident, only that injuries and damages were caused by the accident.
As well, the legislation holds the operator of the facility to be exclusively liable for civil damages. In other words, no other business, organization, supplier or contractor can be sued for these damages.
This has two advantages. First, it makes it very easy for those who would make a claim for damage. They know who is liable. They do not need to prove fault or negligence. The other advantage is that exclusive liability allows the insurance industry to direct all of its insurance capacity to the operators.
The principle of mandatory insurance is straightforward. All nuclear operators must carry a prescribed amount of liability insurance in order to be licensed to operate its facility. This is a widely accepted practice across the world in countries generating nuclear energy.
The Canadian regime also places limitations on liability in both time and amount. In terms of the amount, the maximum that is payable under the current 30 year old legislation is $75 million. As well, injury and damages claims must be made within 10 years of an incident.
These underlying principles of Canada's existing nuclear insurance framework both protects the interests of Canadians, ensuring that they are covered in the unlikely event of a nuclear incident, and provides the certainty and stability that allows the nuclear sector to develop.
The insurance framework makes it easier for claimants and guarantees that funds are available to provide compensation.
Although there have been no major claims under the act, it has served as an important safety net for Canadians. At the same time, it has provided the stability and security needed to support the continued development of Canada's nuclear power industry.
Although the basic principles underlying the existing legislation and insurance framework remain valid, the act is over 30 years old. It needs updating to keep pace with international norms and standards.
The bill is intended to strengthen and modernize Canada's nuclear insurance framework through an all-encompassing package of amendments. It would put Canada in line with the internationally accepted compensation levels and it would clarify definitions for compensation: what is covered and the process for claiming compensation.
The bill is a culmination of many years of consultation involving extensive discussions with major stakeholders, including nuclear utilities, the governments of nuclear power generating provinces and the Nuclear Insurance Association of Canada. They wanted to be consulted and they have been.
Canada's nuclear compensation and liability legislation should be consistent with international nuclear liability regimes. This requirement goes beyond financial issues related to liability and compensation. It extends to definitions of what constitutes a “nuclear incident” and what is a “compensable damage”, and so on.
Consistency brings Canada a broader national benefit. It makes it possible for us to subscribe to international conventions we do not already belong to should we wish to subscribe in the future. There are two international conventions that establish compensation limits: the Paris-Brussels regime and the Vienna Convention.
In the case of the Paris-Brussels regime, the maximum compensation is approximately $500 million Canadian, available through a three tier combination of operator, public and member state funds.
The Vienna Convention sets the minimum liability limit at approximately $500 million Canadian. The operator's liability can be set at $250 million by national legislation, provided public funds make up the difference to $500 million.
Although Canada is not a party to either of these conventions, it has participated in them in order to monitor international third party liability trends and other issues of interest, such as definitions of nuclear incidents and the extension of time limits for death and injury claims. It encourages investment in Canada. It also levels the playing field for Canadian nuclear companies interested in contracts abroad. These companies may be inhibited from bidding because of uncertainty about liability and compensation issues.
Consistency is important for a more fundamental reason. It demonstrates Canadian solidarity with other nations on issues of safety and liability. And, as a major user and exporter of nuclear power technology, Canada must uphold its reputation for uncompromising excellence, responsibility and accountability.
The key change proposed in Bill C-5 is an increase in the amount of the operator's liability from $75 million to $650 million. The current limit of $75 million is outdated and unrealistically low. Changing this limit balances the duty for operators to provide compensation without burdening them with huge costs for unrealistic insurance amounts. This increase would put Canada on par with most western nuclear countries.
It is important also that what is proposed in this bill is consistent with international conventions, not only on financial issues but also in regard to definitions of what constitutes an incident, what qualifies for compensation and so on. These enhancements would establish a level playing field for Canadian nuclear companies that will welcome the certainty of operating in a country that acknowledges international conventions.
Both the current insurance framework and Bill C-5 contain limitation periods restricting the time period for making claims. Under the current act, claims must be made within 10 years of an incident. However, since we know today that this is not adequate, the limitation period has been extended under Bill C-5 to 30 years for personal injury claims.
Both the current legislation and Bill C-5 provide for an administrative process to replace the courts in the adjudication of claims arising from a large accident.
The new legislation clarifies the arrangements for a quasi-judicial tribunal to hear claims. The new claims process would ensure that claims are handled equitably and efficiently.
In developing this legislation, we needed to be fair to all stakeholders and to find the right measures to protect the public interest. I firmly believe that the proposed legislation fully meets this challenge.
We have consulted with nuclear operators, suppliers, insurers and provinces with nuclear installations and they are supportive of the changes I have described. It is our intent to continue this practice and that stakeholders with expertise are consulted as the necessary regulations are drafted.
I know that some nuclear operators may be concerned about the cost implications or higher insurance premiums but they also recognize that 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 concerns.
Provinces with facilities have been supportive of the proposed revisions to the current legislation. Municipalities that host nuclear facilities have been advocating for revisions for some time. They are supportive of the increased levels of the operator liability and improved approaches to compensation.
Parliamentarians have also spoken on this issue. In 2001, the Standing Senate Committee on Energy, the Environment and Natural Resources recommended that the government increase the mandatory operator liability limit from $75 million to $600 million.
In short, Bill C-5 was not developed in isolation.
The evolution of policy was guided by consultations with key stakeholders over the years and by experience gained in other countries.
I will now broaden my remarks and talk about the context within which I put forward the proposed legislation. As I said earlier, nuclear energy in Canada has a long history that goes back some 75 years. I should note that never in the history of Canada have we had a significant nuclear incident. We are a leader in peaceful development of this technology.
To highlight one of the great Canadian success stories, Canada is a leader in the production of radioisotopes, an element produced by nuclear reactions. Isotopes have been put to dozens of uses that have improved agriculture and made industry more efficient. Their most significant applications, however, have been in medicine where they have performed wonders in the prevention, diagnosis and treatment of disease.
It is a little known fact that Canada supplies 50% of the world's reactor-produced radioisotopes for nuclear medicine and is used for the treatment of cancer and in over 12 million diagnostic tests each and every year. I believe the medical isotopes produced here in Canada are used in some 76,000 medical procedures each day.
The most widely used radioisotope is produced at AECL's Chalk River laboratory and prepared at MDS Nordion's facility in Ottawa. The short half life of this radioisotope requires efficient transportation around the world. Shipments are on airplanes within 24 hours of the material coming out of the reactor. Globally, an estimated 76,000 people benefit from these diagnostic procedures each day.
The improvements provided by Bill C-5 are now necessary for Canada to remain a leading player in the nuclear industry.
Much of our work in the nuclear industry has been to produce electricity, electricity to provide home comforts, to drive industry and to promote jobs across the country. Nuclear electricity has contributed to a healthy environment and affordable clean energy.
Purely from an environmental point of view, one has to consider nuclear power as a clean, greenhouse gas emission-free technology. Our government recognizes that Canada needs this type of clean energy. We need to encourage the development of all types of clean energy in Canada.
I believe that as an emerging energy superpower, Canada must become a clean energy superpower.
Under our eco-action plan, we are contributing to the development of clean energy technologies and practices that will provide cleaner air, reducing pollution and greenhouse gases and sustaining both our environment and economic competitiveness.
These cleaner sources involve hydroelectric power, wind, solar, tidal, biomass and other forms of renewable energy. I see nuclear power as part of that clean energy mix that will advance Canada as a clean energy superpower.
However, in order for Canada to advance in clean energy production, we need the certainty provided by the appropriate and up to date nuclear reliability framework to protect Canadians and provide stability to this important industry.
Canada's nuclear safety record is second to none in the world. Nuclear power is an important part of Canada's diversified energy mix. Now we need to update and modernize our nuclear insurance framework to reflect international norms and continue to provide the protection Canadians deserve. For this reason, I would ask all members to support this legislation.
