FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 19, 1998

• 0905

[English]

The Acting Chairman (Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.)): Colleagues, I want to welcome this morning our witnesses from the Department of Foreign Affairs, the Atomic Energy Control Board, and the Canadian International Development Agency. As you know, we're studying the issue of nuclear non-proliferation.

Mr. Green, please begin.

[Translation]

Mr. Lorne Green (Director, Nuclear Non-Proliferation and Disarmament Implementation Agency, Foreign Affairs and International Trade): Mr. Chairman, My name is Lorne Green and I am the Director of the Nuclear Non-Proliferation and Disarmament Implementation Agency at the Department of Foreign Affairs. If you will allow me, I will make my presentation in English.

[English]

Mr. Chairman, I will discuss today Canada's non-proliferation policy and I will also briefly discuss the possible disposition of surplus American and Russian weapons plutonium as a mixed oxide fuel in Ontario Hydro CANDU reactors.

Canada's nuclear non-proliferation objectives are, first, to ensure that Canadian nuclear exports are used only for peaceful, non-explosive purposes; and second, to strengthen the international non-proliferation regime's ability to prevent the spread of nuclear weapons beyond the five declared nuclear weapons states. At the heart of the international non-proliferation regime are the Non-Proliferation Treaty, the nuclear safeguards regime of the International Atomic Energy Agency, and multilateral supplier regimes.

The Non-Proliferation Treaty, which entered into force in 1970, requires non-nuclear-weapons states to commit to nuclear non-proliferation, to accept full-scope safeguards in all their nuclear activities, and that each party authorize nuclear exports to non-nuclear weapons states only when such exports are subject to safeguards. By the same token, the nuclear weapons states promise to pursue negotiations aimed at nuclear disarmament.

Canada, one of the original signatories to the NPT, entered into a full-scope safeguard agreement with the International Atomic Energy Agency in 1972. Implementation of these safeguards in Canada is the responsibility of the Atomic Energy Control Board, and you'll be hearing more shortly from Dr. Wagstaff. The 1995 NPT review and extension conference agreed to an indefinite extension of the Non-Proliferation Treaty.

Now, if I may, some details on safeguards. Safeguards are the central pillar of international efforts to prevent the horizontal proliferation of nuclear weapons. Concerns following the 1991 Gulf War about a clandestine nuclear weapons program in Iraq and similar concerns about North Korea made it clear there was a need to strengthen the international safeguards regime. The crucial step was to acknowledge that the International Atomic Energy Agency should have a mandate to detect undeclared nuclear material and activities.

Expansion of the agency's mandate was carried out in two steps, with the agency last spring approving the text of a model protocol to existing bilateral safeguards agreements which set out the new measures the agency would be authorized to undertake. These new measures require member states to provide enhanced information about their nuclear activities, to provide enhanced access at sites where nuclear material customarily is used, and importantly, now to provide access at sites where nuclear material is not present.

Canada of course has been fully supportive of this effort. In January of this year we were the first country having a large and diversified nuclear fuel cycle to engage the agency in consultations on applying the model protocol in Canada. Talks are going on at this moment and it is possible that Canada could be in a position to sign a protocol in the next few months.

• 0910

Now to suppliers' regimes. In 1974 a group of major nuclear supplier states party to the NPT, the so-called Zangger committee, agreed on a common set of guidelines applying to exports to ensure that they are subject to safeguards. Another group, the Nuclear Suppliers Group, in 1978 also agreed on common guidelines that would apply to nuclear exports. Both of these groups have also agreed on a list of items subject to the guidelines. Canada participates in both groups.

By establishing common export guidelines in the interests of non-proliferation, they also seek to create a level playing field for trade in nuclear items, for peaceful, non-explosive uses, so that competition between suppliers does not create a kind of pressure to weaken national non-proliferation requirements. Following the 1991 Gulf War, the Nuclear Suppliers Group agreed to a series of measures that strengthened the guidelines and brought them closer to Canadian national policy, particularly by requiring full-scope safeguards as a condition of supply for exports.

I'd like to turn now to Canada's bilateral nuclear cooperation with other countries.

As you know, Canada is the world's largest exporter of uranium. Many countries wish to cooperate with Canada in order to benefit from Canadian nuclear knowledge, technology, and material. This is entirely consistent with article 4 of the Non-Proliferation Treaty, which calls on member states having nuclear capability to cooperate with other states, particularly developing countries, in the development and peaceful uses of nuclear energy.

Bilateral nuclear cooperation is permitted with a non-nuclear weapons state only when it has made a commitment to nuclear non-proliferation by becoming a party to the Non-Proliferation Treaty or an equivalent legally binding international instrument and thereby accepting full-scope International Atomic Energy Agency safeguards on all its nuclear activities.

More than that, whether it be a non-nuclear weapons state or a nuclear weapons state, Canada requires that there be a bilateral nuclear cooperation agreement in place with that state. Through such an agreement, Canada's partner is required to provide a number of binding bilateral nuclear non-proliferation commitments. These include: assurances that Canadian-obligated nuclear items shall be used only for peaceful non-explosive uses; provision for fallback safeguards in the event that the International Atomic Energy Agency is unable to continue to perform its safeguards functions; control over the retransfer of Canadian-obligated nuclear items to third parties; control over the reprocessing of Canadian-obligated fuel and over the subsequent storage and use of the separated plutonium; control over the high enrichment of Canadian-obligated uranium that is 20% or more of U-235 and over the subsequent storage and use of such highly enriched uranium; and lastly, assurances that adequate physical protection measures will be applied to all Canadian-obligated items.

I've made much mention of the word “obligated” material to Canada. What does that mean? The provisions of our nuclear cooperation agreements apply not only to Canadian nuclear items exported directly or indirectly through a third party; they also apply to non-Canadian items used in conjunction with Canadian-supplied items. For example, if spent fuel was generated from the use of non-Canadian uranium in a CANDU reactor in another country, that would be obligated to Canada for non-proliferation purposes. They also apply to equipment manufactured by a partner country that is derived from technology provided by Canada.

Rigorous implementation procedures are in place to ensure that the provision of our nuclear cooperation agreements are implemented effectively. The Atomic Energy Control Board is responsible for their implementation. Again, I'm sure you'll hear from Dr. Wagstaff about that.

I would also note that the provisions of the Export and Import Permits Act, which is administered by my department, the Department of Foreign Affairs and International Trade, and the Atomic Energy Control Act, administered by the Atomic Energy Control Board, provide a strong legal framework to ensure that Canada has the necessary authority to control nuclear exports from Canada. A licence and permit are required before the export of a Canadian nuclear item such as uranium is authorized.

If I may turn to the subject of surplus American and Russian weapons plutonium, American and Russian nuclear disarmament initiatives have created a situation where significant quantities of weapons-grade plutonium now are surplus to their defence requirements. It is generally accepted that in the interest of nuclear disarmament and non-proliferation. this material should be rendered effectively inaccessible for re-use in weapons. Various options have been considered, notably consumption as fuel in reactors to produce electricity and immobilization in glass or ceramic so-called logs. The preferred option for the large part at least of the surplus plutonium for the Americans and Russians is consumption in reactors. But to be usable in a reactor, the plutonium must be converted first to a fuel known as mixed oxide, or MOx. The conversion process would take place in the countries of origin.

• 0915

The Russians lack the capacity to convert the large amounts of their surplus plutonium into MOx fuel. Nor do they have the current capacity to consume large quantities of the fuel quickly in their own reactors. Accordingly, if Russian plutonium is to be converted into usable fuel, no matter where it is consumed, a fabrication facility would have to be built in Russia. International discussions about this are going on now. This still leaves the question of where the fuel would actually be consumed.

Prime Minister Chrétien said at the Moscow nuclear safety and security summit in April 1996 that Canada had approved in principle the use of MOx fuel made from surplus American and Russian weapons plutonium in Canadian reactors. Such use would, of course, be subject to all licensing and review requirements of federal and provincial policies and legislation.

Any decision by a Canadian utility—specifically, here, Ontario Hydro—to consume this MOx fuel would be on a strictly commercial basis. Let me be clear: there currently is no proposal from either the United States or from Russia to consume fuel produced from surplus weapons plutonium in Canadian reactors. It is one option, and only an option, that is out there for consideration. If there were such a request in the years ahead, then it would have to be assessed in great detail.

As part of their considerations, the United States Department of Energy and the Russian Ministry of Atomic Power have concluded an agreement with Atomic Energy of Canada Limited, AECL, to conduct tests on small MOx fuel samples in the AECL research reactor at Chalk River later this year. These tests, which are expected to take a few years to complete, are well within the expertise of AECL staff and within the mandate of the AECB site operating licence.

I couldn't predict at this stage what the chances are of a proposal eventually being put for consumption of fuel from some of this plutonium in Canadian reactors. What I can say is that no weapons surplus plutonium would come to Canada. It would be converted into usable fuel first. Any such fuel destined for Canada would be subject to the full-scope safeguards of the International Atomic Energy Agency. I'm not a scientist, but I understand that the amount of spent fuel from MOx, once it was consumed in reactors, would be less than the amount of spent fuel from traditional natural uranium. If consumed as part of MOx fuel, the weapons plutonium would then both have contributed to the creation of electricity and be rendered effectively inaccessible for any possible future weapons use.

[Translation]

Thank you, Mr. Chairman.

[English]

The Acting Chairman (Mr. Bob Speller): Thank you.

Dr. Wagstaff, welcome. I guess Dr. Hodgkinson and Dr. Stocker are accompanying you.

[Translation]

Mr. Kenneth Wagstaff (Head, Nuclear Non-Proliferation Section, Non-Proliferation, Safeguards and Security, Atomic Energy Control Board,: Good Morning, Mr. Chairman.

[English]

Mr. Chairman, members of the standing committee, what I'd like to do this morning is briefly address the Atomic Energy Control Board's perspective on the implementation of Canada's nuclear non-proliferation policy, which, as you are aware, has two objectives. My colleagues from the Department of Foreign Affairs and International Trade, with whom the AECB works and cooperates very closely on this subject, have already addressed the international nuclear non-proliferation regime, the requirements of Canadian policy and multilateral supply mechanisms. I'll therefore try to complement this information by focusing more on the role and functions of the AECB and the AECB's contribution to the achievement of Canada's policy objectives.

That said, I do not intend to discuss the implementation of safeguards in Canada by the IAEA. My colleagues from the AECB can address any questions the committee may have in this regard. What I would like to do is address three other major activities of the AECB.

First, with respect to licensing of nuclear exports and imports, the authority given to the AECB in 1946 under the Atomic Energy Control Act allowed Canada to participate effectively in measures of international control of atomic energy. Pursuant to this statutory instrument, the AECB has made regulations for licensing the export and import of prescribed substances and any other things currently described as prescribed items that in the opinion of the board may be used for the production, use, or application of atomic energy.

• 0920

In light of its broad nuclear regulatory responsibilities and expertise, the AECB assesses all relevant factors within its regulatory mandate when exercising its export and import licensing powers. These factors include health, safety, physical security and nuclear non-proliferation issues.

For each licence application, actions are taken by the AECB, as necessary steps prior to the issuance of licences, to ensure that proposed nuclear exports and imports comply, as appropriate, with the relevant AECB regulations, with the multilateral Convention on the Physical Protection of Nuclear Material, and with Canada's nuclear non-proliferation policy, including our bilateral and multilateral non-proliferation obligations.

These obligations involve the commitments arising from bilateral nuclear cooperation agreements, the NPT, Canada's NPT-type safeguards agreement, and other voluntary undertakings with the IAEA and Canada's membership in the Zangger committee and the Nuclear Suppliers Group.

Exporters and importers may be required, through licence conditions set by the AECB, to report within specified timeframes any information on actual transfers of nuclear items. With this information, the AECB is then able to fulfil Canada's reporting undertakings with our bilateral partners or from our multilateral commitments.

With respect to exports of Canadian uranium in particular, the AECB also ensures that export licence applications are consistent with contracts accepted by the interdepartmental uranium exports review panel. That panel is composed of representatives of the AECB, the Department of Foreign Affairs and International Trade, and the Department of Natural Resources.

Where controlled nuclear items may be exported outside the terms and conditions of a bilateral agreement, the AECB obtains the necessary end-use assurances during its assessment of the export licence applications to assure that the exports will not contribute to the development of any nuclear explosive device and are consistent with Canada's multilateral commitments, as appropriate. Depending upon the circumstances of each case, these assurances may be obtained directly from the exporter, the importer, or on a government-to-government basis, with the assistance, if necessary, of the Department of Foreign Affairs and International Trade.

With respect to the second major activity, the administration of nuclear cooperation agreements, in accordance with Canada's policy, exports for peaceful, non-explosive nuclear end uses of Canadian nuclear material, heavy water, nuclear facilities, equipment especially designed or prepared for those facilities, and related technology must be made pursuant to a nuclear cooperation agreement with Canada.

Guidance on this was provided by cabinet in 1974. With a few historical exceptions, Canada's bilateral agreements explicitly identify the AECB as the appropriate governmental authority for establishing procedures for the effective implementation of these agreements.

For each agreement, the AECB negotiates and implements with its counterpart in the agreement state a body of procedures known as an “administrative arrangement”. The administrative arrangement specifically provides for an agreed set of notification and reporting procedures, the exchange of annual bilateral inventory reports, general principles, and points of contact and channels of communication.

Notification and reporting procedures govern exchanges of information between the AECB and its counterpart organization with respect to nuclear transfers between Canada and its partner, either directly or indirectly through third countries. These routine exchanges of information, when carried out in a timely manner, enable the governmental authorities to monitor and account effectively for the transfer of items subject to the nuclear cooperation agreement.

In addition to these transfers between the parties to an agreement, there can also be transfers to and from third parties, particularly when there is further processing of nuclear material either at the front end or the back end of the nuclear fuel cycle.

The administrative arrangement contains procedures for seeking the prior consent required by the agreement for this type of transaction, as well as procedures for timely information exchange. The primary objective of these procedures for retransfers is to ensure that the item to be retransferred remains subject to the terms and conditions of a nuclear cooperation agreement with Canada at all times, and that the inventories pursuant to the relevant agreements are appropriately adjusted.

The annual bilateral inventory reports provide accounts of nuclear items supplied subject to an agreement, either by Canada or its nuclear trading partner, as well as nuclear items produced or processed on the basis, or by the use, of supplied items. While it is possible to identify uniquely some nuclear items, it is not possible to identify uniquely nuclear material and heavy water once these materials have been processed, produced or mixed with similar materials from another source.

• 0925

Thus the internationally accepted and widely employed concept of fungibility is used to account, for example, for exports of Canadian uranium subject to a nuclear cooperation agreement. Accordingly, instead of accounting for individual Canadian uranium atoms, the inventory identifies quantities of uranium equivalent to those originally exported from Canada. In this way specific quantities of uranium can be appropriately allocated and tracked through the international nuclear fuel cycle, allowing for the proportional allocation of product and losses at each operational stage, such as uranium conversion, enrichment, fuel fabrication, irradiation in reactors, and reprocessing.

Effective implementation of these agreements requires efficient means of communication between the authorities in the two states. In addition to regular exchanges of information on international transfers of nuclear items, annual consultations between the authorities are usually held to review the operation of the administrative arrangement, reconcile the bilateral inventories, and address any outstanding issues.

About our advisory activities, in view of our extensive experience and responsibilities in nuclear export and import licensing and in administering Canada's bilateral agreements, the AECB is responsible for giving advice on a wide range of nuclear non-proliferation and export policy issues. These include the negotiation of bilateral nuclear cooperation agreements and bilateral consultations thereunder; the development and negotiation of Canadian positions in multilateral nuclear non-proliferation fora, such as the NPT conferences, the Zangger committee, the Nuclear Suppliers Group, and the IAEA, as appropriate; the development and application of Canada's nuclear non-proliferation policy; and Canada's uranium export policy.

On the Zangger committee and the Nuclear Suppliers Group in particular, these multilateral bodies emerged from the consultations in the 1960s and the 1970s among nuclear supplier states which had legitimate concerns that international cooperation in the peaceful uses of nuclear energy could result in the spread of nuclear weapons or other nuclear explosive devices. As a result, each of the two bodies agreed separately on requirements for appropriate nuclear non-proliferation assurances in order to provide for peaceful nuclear trade on a long-term and predictable basis.

The Zangger committee has met regularly since it formulated its guidelines and common understandings. The Nuclear Suppliers Group has been meeting regularly since 1991. The respective guidelines and lists continue to make an effective contribution to nuclear non-proliferation by having the two groups meet regularly in plenary sessions and in working groups. The multilaterally agreed guidelines of the Zangger committee and the Nuclear Suppliers Group help to provide an environment of confidence to facilitate legitimate commerce in the peaceful non-explosive uses of nuclear energy between states by ensuring that such commerce does not result in the spread of nuclear weapons or other nuclear explosive devices.

As a founding member of both the Zangger committee and the Nuclear Suppliers Group, Canada has played a significant role in the development and evolution of these mechanisms. The commitments arising from these mechanisms represent a subset of Canada's policy requirements and together with the additional requirements of national policy are reflected in Canada's bilateral agreements.

For its part, the AECB actively and substantively supports the Department of Foreign Affairs and International Trade in the deliberations of these two bodies by participating in their plenary sessions and by representing Canada in their working groups. Indeed, at present the president of the Atomic Energy Control Board, Dr. Agnes Bishop, is the chair of the Nuclear Suppliers Group, and a member of the AECB staff currently on secondment to the Canadian mission in Vienna is the chair of the Nuclear Suppliers Group dual-use consultations.

From the above, it may be seen that the AECB plays a key role in implementing Canada's policy and in fulfilling Canada's bilateral and multilateral commitments. Through its nuclear export licensing mandates and obligations prescribed in Canada's bilateral agreements, the AECB takes steps to ensure Canada's nuclear exports do not contribute to the development of any nuclear explosive device. Furthermore, through these actions and its advisory activities in a wide range of Canadian and multilateral nuclear non-proliferation policy issues, the AECB helps in the promotion of a more effective and comprehensive international nuclear non-proliferation regime. This role for Canada's nuclear regulator is strengthened and more clearly enshrined in the new Nuclear Safety and Control Act, which received royal assent earlier in 1997 and is awaiting entry into force upon completion of the appropriate regulations.

Thank you, Mr. Chairman.

The Chairman: Thank you, Dr. Wagstaff.

Now Charles Bassett, from CIDA. Welcome.

• 0930

[Translation]

Mr. Charles Bassett (Vice-President, Central and Eastern European Branch, Canadian International Development Agency): Thank you, Mr. Chairman. I am happy to be here today to talk to you about the support provided by the Canadian International Development Agency, CIDA, to the nuclear sector.

[English]

Mr. President, when I took over responsibility for the central and eastern Europe branch of CIDA in 1995 the first thing I did was to look at the list of projects. One of the projects I saw was a project by the Canadian forestry service to assist the forestry service of Belarus. As it was the only project we were doing in Belarus and I wondered about all of the needs of Belarus and the capacities of Canada, I wondered why this was the project that we were undertaking, so I asked the project officer to explain it to me.

He explained that when Chernobyl blew up in 1986, the first thing the fallout cloud tracked across, once it crossed the Ukrainian border, were the forests of Belarus. It deposited an enormous quantity of fallout, which killed the forests and the vegetation. The danger was that if there were a forest fire it would once more release into the atmosphere all of the fallout that had come from Chernobyl in the first place.

And yet this was a country that had no effective system for the prevention, surveillance, monitoring or management of forest fires. I then understood why we chose this project and I immediately understood the complexity, the pervasiveness and the importance of the nuclear sector for the program I was managing.

[Translation]

I will begin by making a few remarks on the political and strategic framework, and then I will give some examples of projects we have.

The Canadian Technical Assistance Program in the nuclear sector is a response to the priority given to nuclear non-proliferation by the international community, particularly since the break-up of the Soviet Union. It embodies one of the Canadian government's priorities concerning foreign policy, that is, to promote Canada's interests and security, including nuclear safety.

Canadian interests regarding security in Central and Eastern Europe focus on the following issues: consolidation of democratic governments, the membership of certain Central and Eastern European countries in NATO, the safety and control of nuclear arsenals in Russia, conversion of the military industry in Russia, management of the consequences of the Chernobyl disaster and management of the aftermath of the conflict in the former Yugoslavia.

[English]

I think an important point to note is that most of the CIDA projects financed in the nuclear sector derive from pledges made by the Government of Canada at key G-7 summits, in Munich in 1992, in Naples in 1994 and in Denver last year. To give you a better sense of what we are trying to do with all these initiatives, I will now talk about the three main thrusts of our nuclear technical cooperation program.

The first thrust is to enhance the safety of Soviet-designed nuclear power plants. Canada's projects and commitments in the field of nuclear technology are generally focused on the issue of nuclear safety and particularly on upgrading the safety standards of the old-style Soviet reactors which are still in use in much of eastern Europe and which are inherently unsafe in their design. To assist in this work, Canada established a $30 million nuclear safety initiative following the G-7 Munich summit in 1992.

Let me give you some examples of the projects we undertook. The first one was in response to a request by a delegation of Russian scientists for western assistance in improving the safety of the RBMK nuclear reactors. The Government of Canada financed the participation of Atomic Energy of Canada Ltd. in a western consortium in response to this request.

[Translation]

This led to a second project. Following this first initiative, Atomic Energy of Canada Ltd received funding to implement a second project, the Nuclear Safety and Engineering Program. Under this project, Canadian experts worked with their Russian and Lithuanian colleagues on transferring Canadian know-how with a view to improving the safety of nuclear plants from the point of view of design and operation. The project comprised research activities, equipment transfers and training.

• 0935

[English]

A third project—and this is the one with the Atomic Energy Control Board—is working at strengthening the regulatory framework in Russia, Ukraine and Lithuania. A key element of any country's nuclear safety is having an independent and competent nuclear regulatory agency. The regulatory agencies in Russia, Ukraine and Lithuania are now independent, but the norms and processes by which they regulate have not yet reached the level of recognized international standards. This project is working to remedy this by transferring Canadian licensing and inspection practices and by improving the ability of these regulatory agencies to run training in nuclear safety by training the trainers.

The second thrust of our nuclear technical assistance program is to help Ukraine deal with the aftermath of Chernobyl. The 1986 Chernobyl disaster destroyed unit 4 of the nuclear power plant. The nuclear explosion left the 1,000-megawatt reactor with 190 tonnes of highly radioactive fuel in a lava-like state, covered by 5,000 tonnes of sand, clay, lead and radiation-absorbing boron.

The Chernobyl accident contaminated an area of 5 million hectares, which is about the size of the province of Nova Scotia, and forced the permanent evacuation of 160,000 people. It had serious health consequences and rendered large areas of farm and forest land unfit for use.

Helping Ukraine cope with the aftermath of the accident has been an important part of the Canadian government's cooperation program with Ukraine. CIDA has supported a series of projects related to health, environmental restoration, radioactive monitoring, nuclear safety and nuclear waste management.

At the G-7 Naples summit in 1994, Canada pledged $24 million U.S. toward the action plan for Chernobyl. This action plan led to the signing in Canada, here in the House of Parliament in Ottawa in 1995, a memorandum of understanding between Ukraine, the G-7 countries and the European Union on the closure of Chernobyl by 2000.

The assistance we provide is helping to enhance the safety of the one reactor that is still operating at Chernobyl and to assist Ukraine with energy sector reform.

On this issue of energy sector reform, it's worth noting that $9 million of that Naples summit pledge is being used to finance the participation of Hydro-Québec and Saskatchewan Power in the preparation of World Bank projects in the hydro and thermal power sectors—in other words, helping Ukraine develop alternative sources of energy.

Canada will also contribute to the shelter implementation plan, which will help rebuild the sarcophagus covering the destroyed nuclear plant, and to repair the venting stack, both of which are now in imminent danger of collapsing. So Chernobyl is still very much a preoccupation for us.

The third and last thrust of our nuclear technical cooperation program is to promote non-proliferation. In an effort to promote non-proliferation and disarmament in the region, CIDA financed a number of projects as part of a $15 million assistance program announced in April of 1994. The program represented Canada's support, together with other western nations, of Ukraine's efforts to remove and dismantle all former Soviet strategic warheads stationed on its territory as part of the START agreement, and of Ukraine's efforts to be considered a non-nuclear weapon state under the terms of the Non-Proliferation Treaty.

I'll tell you about two projects CIDA has funded along these lines.

[Translation]

The first one is an evaluation of the intercontinental ballistic missile sites. This project, carried out by Environment Canada, deals with the clean-up of disused intercontinental ballistic missile sites. The project aims to train and equip a group of Ukrainian engineers, chemists and technicians so that they can safely clean up the 176 or so disused silos and thus transfer Canadian evaluation and clean-up techniques.

• 0940

[English]

The second project is to help reduce the risk of proliferation of former Soviet weapons of mass destruction. Canada agreed to fund the Science and Technology Centre in Ukraine, along with Sweden, Ukraine and the U.S.A. The aim of the STCU, the Science and Technology Centre project, is to support research and development projects submitted by Ukrainian scientists and engineers who were formerly involved with the development of weapons of mass destruction and their means of delivery, as part of the general process of conversion from a military to a civilian, market-oriented environment.

There are several regimes in the world that would love to recruit these scientists, and it would not be for peaceful purposes.

Phase one of this project was a success, and the STCU-supported projects provided employment for around 2,000 Ukrainian scientists, exposing them to western methods of commissioning and carrying out scientific projects. The Canadian contribution was managed by the University of Manitoba.

The second phase of this project has recently been approved, and Canada will devote considerable effort to promoting the sustainability of the STCU by encouraging it to support research and development in commercially viable sectors. Examples of the projects we've already core-funded are the following: the development of improved titanium alloys, with better response to heat treatment, for the aerospace, energy, and chemical industries; the development of magnetic measuring devices capable of operating under high conditions of radiation; and the industrial production of lecithin using agricultural waste from Ukrainian sunflower and soybean production.

I hope this overview will give you a clearer picture of the ways in which Canadian technical assistance in the nuclear sector is working in concert with other donors to improve the safety of Soviet RBMK reactors, to help Ukraine deal with Chernobyl, and to support the objectives of non-proliferation.

[Translation]

Thank you, Mr. Chairman.

[English]

The Acting Chairman (Mr. Bob Speller): Thank you.

Colleagues, we only have a half-hour, so I think it would be appropriate if we just moved right into five-minute questions and answers.

I have a brief question first. One of the roles of our committee and of us as parliamentarians in terms of MOx is to try to get information out to people on it. One of the biggest criticisms of it, of course, has been the lack of information on it. There seems to be a lot of secrecy about it. I'm wondering if you could address that issue. Is the government planning to release more information? Are they planning to involve the public more in dialogue on this?

Mr. Lorne Green: Mr. Chairman, in the agency that I head within Foreign Affairs, the Nuclear Non-proliferation and Disarmament Implementation Agency, we created some months ago a web site in which MOx features prominently. We do all we can through outreach to bring to people's attention our web site and the information on MOx therein.

Part of the problem is we're grasping at air here in a way, because there isn't a MOx project at the moment. It's something that's been out there for a couple of years now, and the United States and the Russians are looking at it, but they're looking at a lot of other things as well. We've had to work to get information and intentions from the Americans and the Russians.

I led an interdepartmental and industry team to Washington before Christmas to try to get a better handle on whether the Americans are still looking to the CANDU option as one possibility, and I'm leading a similar team to Moscow in a couple of weeks. So we're working very hard ourselves to understand.

It's something that's out there but really beyond our control to some extent at this stage, while it is one of a number of options being considered by those who have the surplus plutonium. But to the extent that we do have information, that goes out on our web site and in whatever public relations outreach capacities we have within Foreign Affairs.

The Acting Chairman (Mr. Bob Speller): Thank you.

Mr. Grewal.

Mr. Gurmant Grewal (Surrey Central, Ref.): Thank you, Mr. Chair.

I have two brief questions. You brought out a very interesting point about public education. To follow it further, I would also be interested in the impact on the Canadian public as well as the safety issues relating to Canada. We are planning, as I understand it, that weapons-grade plutonium, when changed to MOx, will be used in atomic energy in Canada.

Mr. Lorne Green: Maybe.

Mr. Gurmant Grewal: Yes. So in that situation, what are the implications and impacts on the Canadian population from a safety point of view?

• 0945

The other question is with respect to the extent of the role of CIDA in technical cooperation programs, which you mentioned. There are about $75 million worth of programs cramped in the pipeline, and I would like to know the extent of the role of CIDA in that.

Mr. Lorne Green: Perhaps I may address the first question, Mr. Grewal, and maybe Mr. Bassett could take the second one.

With regard to MOx, yes, there's understandable Canadian questioning out there about this possible initiative on Canada's part, and it's our responsibility to be transparent and to have an exchange with Canadians on this. For instance, Professor Franklyn Griffiths of the University of Toronto, who I think you'll be hearing later, hosted a workshop in the autumn of 1996 on this subject, and the Department of Foreign Affairs, among other institutions, was happy to be part sponsor of that workshop. We provided some of the wherewithal to make it possible. We have produced a background paper to respond to queries on the MOx issue.

You asked about the question of safety in particular. CIDA has funded a feasibility study to look into the technical feasibility of the consumption of MOx in CANDU reactors. The results of that study are positive in terms of the technical possibilities.

I mentioned that if such a proposal were made to Canada, part of the consideration would have to be environmental, safety, transport kinds of issues, and those would be subject to all the regulations, all the policies, all the legislation of all the authorities implicated, federal and provincial. The board, the AECB, would be required to approve the necessary licensing for use of Canadian facilities for that purpose and so we can be satisfied that the stuff isn't going to come into Canada until Canadian safety concerns are met.

Mr. Charles Bassett: Mr. Chairman, I have and can circulate a copy of a sheet that shows all of the initiatives that we are undertaking and will be undertaking under each of the three major initiatives, the three major thrusts I spoke about in my submission. I can also leave with you and with all members a copy of the entire list of all our projects in the nuclear field and all the initiatives we are currently looking at.

In general terms, Mr. Chairman, it is along the lines of the projects that I have described. It is to support non-proliferation, the upgrading of the safety of the old Soviet-designed reactors and then dealing with the aftermath of Chernobyl. All of the projects are confined to those three thrusts. But we can let you have a copy of every project we're undertaking.

The Acting Chairman (Mr. Bob Speller): That's already been distributed. Thank you.

Mr. Gurmant Grewal: Thank you.

[Translation]

Mr. Daniel Turp (Beauharnois—Salaberry, BQ): Thank you, gentlemen, for appearing before our committee. I have two questions.

First, Mr. Green, you have just referred to the work done by Professor Griffiths and the summary of a study he submitted in July, 1997. I would like you to comment on what he says about the MOx initiative you talked about. He says that the MOx initiative would be harmful for Canada, but that what's worse is that it could be carried out by the G-7 and Russia as early as 1998 if the United States maintained their decision to choose from among their own disposal solutions by then. I would like you to comment on that statement by Mr. Griffiths. He will no doubt have the opportunity to explain himself before the committee, but I'd like to know what you think of his views.

Mr. Bassett, my question for you concerns your agency and its support for certain projects. I noticed there were a few Quebec firms that had contracts and were taking part in the work, including Hydro-Québec international and Photosur Géomat international.

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Do you think the Agency awards a fair share of its contracts to Quebec companies?

[English]

Mr. Lorne Green: Mr. Turp, the capacity does not exist today in the Russian federation, first of all, to produce MOx fuel in quantity. That capacity cannot be made available in Russia in very short order. Even if MOx fuel was produced, the capacity does not exist today in Russia to consume MOx fuel quickly in quantity.

So we're looking at a multi-year project here, not 1998. Even with the best will in the world and if all sorts of international money was thrown at this, it would be impossible to begin this project. The small test alone, the so-called parallax test of small quantities of MOx fuel at Chalk River, will take a couple of years.

[Translation]

Mr. Daniel Turp: What is the United States' role in all of this? It's not just Russia that's involved, it's also the US. Why isn't the US playing a more important role?

[English]

Mr. Lorne Green: The United States, of course, is playing a central role in all of this in negotiations and discussions with the Russians. It's important to both sides that there be an agreement between the two on the draw-down of this. There's a wish not to get out of sequence. Perhaps one could say the United States, if it has the inherent capacity—which, by the way, it doesn't today either; it is looking at the possibility of producing MOx fuel from its surplus plutonium in quantity as well. It's not doing that now. It will take some lead time to do that in the United States. But it's important in this disarmament process to have a kind of draw-down on both sides to give assurance to both sides that one isn't perhaps stealing a march on the other, that by going slow one is left with some potential capacity that the other doesn't have. So it's important to the United States, as I understand it, that the Russians be brought along with them in this process, but there are these special financial, technical problems vis-à-vis Russia.

Clearly, the United States has more evident capacity to deal with its own situation, but it feels from a security point of view that it must bring the Russians along with them in step. This may be a case of the slowest one dictating the pace, except that the whole of the G-7, through the non-proliferation experts group, is working with the Russians to try to find solutions, because the Russians, frankly, now see this surplus plutonium as a kind of national treasure. That's what they've called it. They see this as a mean of converting something that otherwise has no value...converting it into electricity and making some money from it.

So we have to assist the Russians in finding the wherewithal to produce their surplus plutonium, and the Americans want to move in step with the Russians in that process.

[Translation]

Mr. Charles Bassett: Mr. Chairman, the field we're talking about here is a highly specialized one. Even if Quebec firms like Hydro-Québec and Photosur Géomat are taking part in it, the two big players in the field are AECB and AECL. These organizations have the expertise required to really master the complexities of most of the projects. So, it's not really representative, since, with the exception of these two firms, very few Canadian organizations are involved.

Secondly, CIDA's expenditures in this area altogether amount to between $20 and $25 million a year out of a total budget of $2 billion. As far as equitable distribution is concerned, a much broader view would be required, beyond this area that is so specialized it has only two really important organizations. If you look at all the projects, I think you'll conclude that distribution is equitable in relation to the economic weight of the provinces in Canada, of Quebec, for instance.

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Mr. Daniel Turp: I agree that in this case, it's a matter of $4.5 million out of some $25 million.

Mr. Charles Bassett: From 15 to 20 per cent or something like that.

[English]

The Acting Chairman (Mr. Bob Speller): Ms. Augustine.

Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Welcome.

I'm asking a question, and I want more or less a layperson's answer, so I can understand some subtleties here. It seems to me you've told us you're taking leadership in the Zangger group, you're taking leadership with the 33 or 35...the NPT group, and we have some leadership among the nuclear suppliers. At the same time it seems to me the agency is not dealing with the five declared nuclear states. I'm just wondering how.... On the one hand we have the five declared nuclear states, and that seems to be one piece that's over here, and then you're working in another sphere of activities.

Do you understand my question, in the first place, and could you somehow put the pieces together for me?

Mr. Lorne Green: Ms. Augustine, a kind of compact is implicit—perhaps explicit—in the Non-Proliferation Treaty, a three-way compact. First, those countries which do not have nuclear weapons agree never to acquire them. Second, those countries which have nuclear energy capability, whether it be to produce electricity or to assist in medicine or agriculture, make the fruits of the peaceful uses of atomic energy available to those countries, particularly developing countries, which could benefit from them. The third part of the compact is that those states which do have nuclear weapons work very deliberately to reduce and ultimately eliminate nuclear weapons. That is the three-way compact.

Some countries don't subscribe to the NPT. One might mention India, for example, which will cite the failure of the nuclear weapons states to put out a road map with time lines on it to reach the stage of absolute, total nuclear disarmament. Well, the nuclear weapons states would have their response to that, saying that security wasn't built in a day, it's a question of building confidence, and so on, but that there is a quite deliberate approach through the American-Russian START process, for instance, to bring about a draw-down in the levels of their nuclear weapons. Equally, with the changes in Europe, with the Berlin Wall coming down, the number of nuclear weapons on both sides has gone down very considerably. There are fewer nuclear weapons in the world today than there were 10 years ago. The major nuclear powers, the United States and Russia in particular, have pledged themselves to continue this process, working eventually, we can hope, towards a world where one day there will be no nuclear weapons.

That is the deal the nuclear weapons states have struck through the NPT with the non-nuclear-weapons states. There is a requirement on both sides to serve those mandates faithfully.

Dr. Kenneth Wagstaff: Mr. Chairman, I may just add a couple of remarks.

All five nuclear weapons states are members of the Zangger committee. That committee exists to give interpretation and understanding to what is meant by article III.2 of the NPT. All five nuclear weapons states are bound by that article in connection with exports to non-nuclear weapons states. Four of the nuclear weapons states are also members of the Nuclear Suppliers Group. In the course of the discussions that take place in those two groups, the nuclear weapons states are involved and are bound by the same commitments.

The Acting Chairman (Bob Speller): We've had situations where Iraq has almost built a nuclear weapon, or has built a nuclear weapon, North Korea.... Are the safeguards in place? Is the system as it's set up now safe enough to make sure...? In essence, are the safeguards to stop it in place? Because we have examples where obviously the safeguards haven't worked. They've gone to certain countries.

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Mr. Lorne Green: If we may, we'll both try to answer that one.

In my own view, the safeguards obviously were not good enough in 1991, when this was exposed in Iraq, and it was the situation exposed in Iraq and the concerns since then about North Korea that led the International Atomic Energy Agency to review its safeguards and try to get a tighter, more effective regime.

We're just now in the process of putting into place that tighter regime. Some measures have already been implemented that require more reporting from member states. Also, means are being put in place now through negotiation of protocols to allow the IAEA inspectors to look at undeclared sites, to look at places where there may not be ostensible nuclear activity but where maybe there's an activity that would be supportive of a clandestine nuclear program.

Perhaps Dr. Wagstaff could describe in more detail what these new reinforced safeguards will do.

Dr. Kenneth Wagstaff: Before addressing that point, Mr. Chairman, perhaps I could just add to what Mr. Green has said.

With respect to Iraq, that country clearly flouted its obligations under the treaty on the non-proliferation of nuclear weapons and it also violated the terms of its agreement with the IAEA for the implementations of safeguards in Iraq. It is also clear that the IAEA fully implemented the safeguards that it was authorized to, and that is why, throughout the last five or six years, the international community has moved in the direction of giving the IAEA greater authority to seek out the kinds of things that Iraq has been doing.

In connection with the nature of those activities, that additional power that has been given to the IAEA recently, I will let my colleagues answer.

Dr. John Hodgkinson (Head, Safeguards Section, Atomic Energy Control Board): The protocol that Lorne Green has talked about and Ken Wagstaff has referred to will give the agency considerably greater powers. It will give the agency greater access to information associated with a state's nuclear cycle and nuclear endeavours, and it will also give the agency enhanced access to locations in the state in order be able to look at nuclear sites in more detail and even go to areas that don't have nuclear sites, on the basis of information coming in from other sources and analysis of detailed safeguards information.

The safeguard system will be considerably strengthened and will be very much better, I feel, than the previous system, which was based on agency verification of declared material only, and the restriction, essentially, of inspectors and inspection activities to certain parts of declared facilities. The new protocol will give the agency a lot more ability to sort out situations like those in the Iraq business.

One of the problems that was highlighted by the Iraq situation was that there were parallel streams of activity going on, parallel streams of clandestine activity. And under the terms of the NPT and the safeguards agreement that the agency had with Iraq, inspectors weren't able to even go next door to look at another building to see what was going on or to even look in the basement of the building they were inspecting. The system is going to be much better, much more searching and more reliable, I feel.

The Acting Chairman (Mr. Bob Speller): Thank you. Ms. Debien.

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[Translation]

Ms. Maud Debien (Laval-Est, BQ): Good morning, gentlemen.

My first question is addressed to Mr. Bassett. Did you actually say that CIDA was conducting feasibility studies concerning the use of MOx? Did I understand properly or am I totally mistaken?

Mr. Charles Bassett: You understood properly. We funded an AECL study to see whether the conversion of plutonium to MOx was feasible. The Americans had already done an experiment and the Russians were not convinced it was possible in their situation.

There was a second problem. It's that the Russian people are very aware of the fact that they have lost their weight as a great world power. They hesitate a lot to give the impression they might be dominated by the Americans in this business. So, one of the reasons why we did this is that it enabled us to see not only whether it was technically and economically feasible, but also whether it was possible to put ourselves in a situation whereby Canada, for instance, could use American MOx and Russian MOx. In this way, we can also deal with the matter of the Russians' impression of really being pulled along by the Americans, because they would both be in the same situation then. So, yes, we funded that study.

Ms. Maud Debien: How much did that study cost?

Mr. Charles Bassett: It cost $1.6 million.

Ms. Maud Debien: You won't be surprised to hear me say I think it's appalling that, within its mandate, CIDA allows itself to do feasibility studies on such a controversial topic, when one of the chief CIDA mandates, I think, is to help the most disadvantaged countries in the world and eliminate poverty. I'm thinking about poverty here, of course, but also CIDA's mandate, which is to eliminate poverty in the world. We also know that NGOs' budgets have been drastically reduced in the past few years.

I find it unacceptable that CIDA should allow itself to do feasibility studies on such a controversial subject as the use of MOx. This was an observation and I don't know whether you wish to respond to it.

Mr. Charles Bassett: Yes.

Ms. Maud Debien: I know it's an observation that is more of a political nature, but I nevertheless wished to make it.

Mr. Charles Bassett: Mr. Chairman, it's important to know that CIDA has two mandates.

Ms. Maud Debien: There is a technical cooperation mandate, of course, I know that.

Mr. Charles Bassett: The technical cooperation mandate is quite separate from the other CIDA mandate. Funding for these projects doesn't come from the funding allocated to developing countries. It's a separate fund.

Ms. Maud Debien: I'm well aware of that, sir, but I find it appalling, nevertheless.

My second question is for the Department's employees. It comes a bit in the wake of the observations by Mr. Bassett concerning help for the clean-up of the various sites in Eastern Europe.

We know there are contaminated sites in Canada. Some witnesses who came here to appear during our study of Canadian foreign policy, I think, spoke to us about it. Is the Atomic Energy Control Board familiar with these contaminated sites in Canada? Is it possible to know where they are located? Who used them? Are clean-up efforts taking place there?

[English]

The Acting Chairman (Mr. Bob Speller): Thank you. Dr. Stocker.

• 1010

Dr. Harold Stocker (Director, Non-proliferation, Safeguards and Security Division, Atomic Energy Control Board): I think this question would perhaps best be addressed by Dr. Brown of NRCan, if he wouldn't mind coming to the table.

Dr. Peter Brown (Associate Director, Uranium and Nuclear Energy Division, Natural Resources Canada): Yes, we are aware of the contaminated sites within Canada. Most of the contaminated sites result from activities in the past. In 1981 the federal government recognized that there had to be a federal authority that would deal with these sites, and established the low-level radioactive waste management office, which is operated out of Atomic Energy of Canada. Its mandate is in fact to clean up these sites.

These sites have been cleaned up over that period of time, and we continue to work on the sites. Some of the ones being worked on at the present time are up in the Northwest Territories and out in British Columbia. The biggest one we have, of course, is in the area around Port Hope.

All of those sites are being cleaned up with the concurrence of the local people. The question often becomes one of what type of clean-up is required. It's ongoing work, and it continues to this time through the low-level radioactive waste management office.

The Acting Chairman (Mr. Bob Speller): Your time is up.

[Translation]

Ms. Maud Debien: I would simply like to know, Mr. Chairman, whether we could have a document reporting on the progress of clean- up, or at least what has been done and what remains to be done, along with a list of the costs.

[English]

The Acting Chairman (Mr. Bob Speller): Okay. We will request that, certainly. Thank you.

Mr. McWhinney.

Mr. Ted McWhinney (Vancouver Quadra, Lib.): I have just one question. The CANDU reactor is one of our export items that has received great praise because it's very safe in comparison with many of the competitors'. We have been receiving letters and other representations concerning the controls on misuse of CANDU reactors, such as their conversion into eventually nuclear weapons.

Would you make a statement on that for the record, Mr. Green?

Mr. Lorne Green: Before there's any substantial nuclear cooperation with another country there must be in place a nuclear cooperation agreement. That agreement requires partners to give legally binding commitments on the use of any Canadian-obligated nuclear material. We have such agreements in place with any of the countries about which I suspect you may be getting letters, because it must be in place before there is a degree of nuclear cooperation.

It's not my place to talk about the performance characteristics of CANDU reactors internationally. I can only observe that there is in place, with every country where CANDU technology is working, iron-clad nuclear cooperation agreements that provide strict non-proliferation commitments administered through inventory checks, annual checks, by the AECB.

Mr. Ted McWhinney: I'll ask you a follow-up, then. Have you found, by virtue of this inspection process, any evidence of abuse or misuse in those we've sold abroad?

Mr. Lorne Green: I'll ask the board to comment on that.

Dr. Kenneth Wagstaff: The answer is no, not with respect to our current trading partners. Of course, in the very beginning we had bad experiences with some of our earlier partners in the south Asia area.

Mr. Ted McWhinney: Are you satisfied that the methods of inspection you use are systematic and as reasonably foolproof as anything can be?

Dr. Kenneth Wagstaff: Yes. The bilateral agreements Canada concludes with its partners call for international atomic energy agency safeguards on those reactors as a matter of course. That is backed up by our own bilateral accounting of items. That includes reactors and equipment, therefore, and the nuclear material that's used and produced in those reactors.

Mr. Ted McWhinney: The IAEA itself would have the ability to inspect.

Dr. Kenneth Wagstaff: That's correct.

Mr. Ted McWhinney: Thank you very much.

The Acting Chairman (Mr. Bob Speller): Thank you, Mr. McWhinney.

Unfortunately, colleagues, our time is up.

I have one brief question. You mentioned that there are new procedures in place. Canada was the first country to ratify it. How long do you figure the process will take for all these other countries to ratify? If they don't ratify, they don't have to play along with the game? How does it work?

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Mr. Lorne Green: We haven't ratified yet. If you're talking about the enhanced safeguards, we are in the process of negotiating a protocol now. We've made good progress, and we anticipate this spring that Canada will be the first major nuclear energy state to have concluded one. We think by doing that—and we've been quite deliberate in wanting to be first off the mark—we can set an example by the terms we negotiate and the approach we take to it. We can set an example that will be helpful in encouraging other states to sign on quickly.

The Acting Chairman (Mr. Bob Speller): How long? What is the usefulness of them if they don't sign on?

Dr. Kenneth Wagstaff: Clearly, the intention, Mr. Chairman, or the hope, is that most states will sign on to this protocol. The protocol was supported in Vienna, where it was negotiated by the member states of the agency. One can simply hope that those states will follow through with their good intentions, but it will take some time.

The Acting Chairman (Mr. Bob Speller): Thank you very much for coming forward. I know this issue—especially the issue of MOx—will probably grow in importance over the next number of months. We may in fact as a committee want to have you back on this issue, since I'm sure it will grow in the public's mind.

Thank you again, colleagues. We'll take a two-minute break before the next session.