AANR Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Tuesday, November 26, 2002

¹

1530

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.))

Mr. Joe Comartin (Windsor—St. Clair, NDP)

¹

1535

The Chair

Mr. Benoît Serré (Timiskaming—Cochrane, Lib.)

The Chair

Mr. Joe Comartin

¹

1540

Mr. Benoît Serré

The Chair

Mr. Benoît Serré

Mr. Joe Comartin

The Chair

¹

1545

Mr. Joe Comartin

¹

1550

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

¹

1555

º

1600

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

º

1605

º

1610

º

1615

º

1620

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Ms. Joanne Kellerman (General Counsel, Department of Natural Resources)

The Chair

º

1625

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

Ms. Susan Baldwin (Procedural Clerk)

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

º

1630

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)

The Chair

Mr. Clifford Lincoln

The Chair

Mr. David Chatters (Athabasca, Canadian Alliance)

The Chair

Mr. Joe Comartin

º

1635

The Chair

Ms. Joanne Kellerman

The Chair

Mr. David Chatters

Ms. Joanne Kellerman

The Chair

º

1640

Mr. John Finlay (Oxford, Lib.)

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

º

1645

º

1650

º

1655

The Chair

Mr. Joe Comartin

»

1700

»

1705

»

1710

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

»

1715

The Chair

Mr. Joe Comartin

The Chair

Mr. Joe Comartin

»

1720

The Chair

Mr. Serge Cardin (Sherbrooke, BQ)

»

1725

The Chair

Mr. Serge Cardin

»

1730

The Chair

Mr. Serge Cardin

The Chair

Mr. Serge Cardin

The Chair

The Chair

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CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

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NUMBER 006

l

2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Tuesday, November 26, 2002

[Recorded by Electronic Apparatus]

¹  (1530)  

[English]

    The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.)): I call the meeting to order.

    We are resuming proceedings from Thursday, November 21. The point we are at is the clause-by-clause consideration, although there's only one clause.

    We are dealing with an amendment by Mr. Comartin, and he resumes the floor, which he had last Thursday.

    Mr. Comartin.

    Mr. Joe Comartin (Windsor—St. Clair, NDP): Thank you, Mr. Chair.

    I'd like to pick up on the position we're confronted with in this committee on the status of Bruce Power and spend some time outlining that so that the committee fully appreciates the insecurity that corporation is presently confronted with.

    There was a meeting--I think these were hearings at the provincial level--and Mr. Hawthorne, who's the CEO, was asked questions and discussed the status of the corporation and its ability to meet its financial requirements, specifically its ability to deal with this bond situation they're required to have to deal with any decommissioning, cleanup, or contamination of the site. In case people don't recall from the last meeting, that was a requirement imposed upon them by both the management contract they entered into with the Province of Ontario and the nuclear safety authorities.

    At that hearing, Mr. Hawthorne, in response to a question about their status, said, “What I have talked to staff about is of the range of possible ways that Bruce Power can protect itself from an insolvency position”, so here we have the CEO acknowledging that they are in fact confronted with an insolvency position, specifically the insolvency position of the parent corporation.

He goes on, confirming that potential insolvency position of the parent, to set out some of the things they might be able to do, “including insurance for such a shutdown event, achieving our own credit rating”. Then he adds this little clause, which I find very interesting, in talking about the credit rating, “which is very, very likely given our operational track record to date.” But he then adds, “subject to some legislative changes we are hoping will be passed.” He goes on to say they would then “be able to have our own working capital facility.”

Here we have the CEO acknowledging that the parent corporation, which owns about 85% of them, is insolvent or on the verge of insolvency. I'm going to have more to say about that.

    One of the very important things for the Canadian corporation, I would suggest, is that in order for them to continue to operate, they need this amendment. They have very limited capacity to operate without this amendment that is proposed by the government in the form of Bill C-4.

    I suppose as an aside, Mr. Chair, I have to say that given that we're talking about a nuclear facility that at some point will have to be decommissioned and at some point may have a contamination problem, there is simply no way this committee, this House of Commons, this government should be considering providing this type of reduced liability to a corporation that is having trouble operating and meeting the requirements of both the Province of Ontario and the safety commissioner.

    Mr. Chair, with regard to the situation in the United Kingdom with British Power, just to bring people up to date, I'm going to read from a press story out of England. I don't see the date. I believe it was yesterday; if not, it was on the weekend.

    It said--and again, I believe this was Monday--the following:

Trade Secretary Patricia Hewitt revealed yesterday that the government has yet to decide what will happen to stricken nuclear power giant British Energy, despite a crunch financial deadline looming just days away.

At the CBI's annual conference in Manchester, Hewitt said: “We have a very difficult situation at British Energy with that loan expiring on Friday.”

    The loan that the minister is referring to is a loan that the British government floated on a temporary, interim basis to British Energy in order to keep them from going insolvent, part of which is being used to guarantee that bond that's required here by Bruce Power.

    The minister added:

No decisions have been made yet, but when they are made, I will announce it to Parliament. These are highly market-sensitive issues.

    Again, as an aside, Mr. Chair, I can't help but be astounded that the safety, the operational certainty of a plant here in Canada, in Ontario, is subject to “highly market-sensitive issues”. It has nothing to do with security or safety, but with the financial marketplace.

    The article goes on :

British Energy's controversial £650 million government bail-out package expires on Friday.

That's Friday of this week.

    The article goes on to say:

Shares in the East Kilbride-based company jumped 32.5 per cent to just over 13p yesterday amid speculation that a rescue deal with state-owned nuclear operator British Nuclear Fuels will be signed before the end of the week.

    So there's still hope, Mr. Chair, that the British government will in fact move in and bail them out. But this committee doesn't know that. We don't know what's going to happen, and we should not be proceeding with this legislation until we do know that.

¹  (1535)  

    The Chair: Mr. Serré.

    Mr. Benoît Serré (Timiskaming—Cochrane, Lib.): On a point of order, Mr. Chairman, could we read the amendment that the member is speaking on? We didn't have the amendment read at the beginning.

    The Chair: It's not a point of order, but do you accept, Mr. Comartin, that we read your amendment? And would you do so, please?

    Mr. Joe Comartin: Yes, Mr. Chair, I can do that.

    The amendment is to replace line 9 on page 1 with the following:

Commission shall, in addition to filing a notice

    The Chair: Thank you for that, Mr. Comartin.

    Mr. Joe Comartin: No, that's fine. I want the committee to be fully apprised of what we're dealing with, which is the risk that Canada would be confronted with should there in fact be a problem with contamination. This bill, in spite of the way it's worded, is all about protecting Bruce Power from further liability, and we need to address what the current legislation provides for and the effect of the amendment on that current legislation.

    With regard to that, I see a couple of members new to the committee. The present legislation is permissive in allowing the commission, after it conducts a hearing, to impose damages, or liability generally, to anybody who has an interest in the property, whether it be the owner-operator or anyone else with an interest. The effect of this amendment would be that once a finding is made by the commission, the imposition of damages on them would be made compulsory. That is, they would be required to meet all of the expenses of the on-site cleanup for the damages they've caused.

    Again, for those who are new to the committee today, this is separate from the Nuclear Liability Act, which imposes responsibility for contamination and damages caused off-site. So we're simply dealing with on-site damages.

    To continue with the article, there are just one or two more points I wanted to draw from it. The article does indicate that the minister is expected to announce her recommendation to Parliament on Thursday, which is two days from today. It also goes on to mention, as I raised at the previous meeting, the sale of Bruce Power in Canada.

    You will recall, Mr. Chair, that in a Globe and Mail article a week ago Saturday, they actually named names of corporations that might be interested in the purchase. Very little information came out of that article about their experience in running a nuclear power plant and their ability to run a nuclear power plant, or about whether they would be approved by the Province of Ontario to take over the management corporation and whether the nuclear safety regulator would be willing to allow them to take over. There was just a whole bunch of question marks.

    In this article it's indicated that the price for the company could be as high as £500 million. It goes on to talk about British Energy selling off some other interests, and indicates that even with the sale, if they're as accurate and as optimistic as these figures are showing, it's not enough to bail out British Energy. So they're likely to disappear at some point, either by way of insolvency or through a receivership. There's a great deal of controversy in England over the bailout package the British government has provided so far and whether they're prepared to provide any more.

¹  (1540)  

    The European Commission also raises its head on this matter, Mr. Chair. They have the right, as well as the responsibility, to approve this £650 million loan package. There is some speculation in the article that they have serious reservations and may, in fact, not approve it. It not only needs approval from the British government, it needs approval from the European Commission.

    In addition, Mr. Chair, the environmental group Greenpeace, on Friday last, in England, won the right to challenge the legality of the loan package. The hearing on whether the British government can proceed with the loan package is not going to be heard until January of 2003. As the article puts it, it is putting a “further spanner in the works”, which is a nice English phrase for gumming it up pretty badly.

    In terms of uncertainty for both the British government and the European Commission, some court may, in January, rule that the loan package is outside the jurisdiction and competency of the British government.

    Mr. Benoît Serré: I have a point of order, Mr. Chairman.

    The Chair: On a point of order, Mr. Serré.

    Mr. Benoît Serré: Mr. Chairman, with all due respect to my colleague from the NDP, I think he's had ample chance to discuss the single amendment at the last meeting and at this meeting. I would like to move that we limit the debate on the amendment to ten minutes.

    An hon. member: We can't.

    Mr. Benoît Serré: Yes, we can, by a vote.

    Mr. Joe Comartin: A member from the opposite side has said what I was going to say: you can't. If you're going to do that, you have to do that before we start.

    The Chair: Just a moment. We should wait to be recognized. We cannot interrupt a speaker to present a motion. I'm very sorry.

    Mr. Comartin, you may continue.

¹  (1545)  

    Mr. Joe Comartin: Thank you, Mr. Chair.

    In summary--I think it's right up-to-date today, Mr. Chair--we have current law that makes it permissible to impose damages, even after you find responsibility on the part of the owner-operator or persons having any interest. The amendment I'm proposing would make that compulsory.

    Then we're looking at the other side. What is the risk that we're confronted with here? Again, it's only Bruce Power we're talking about. From the evidence we've had up to this point, nobody else in this country needs or is particularly seeking this amendment the government's putting forth.

    So the one corporation that requires it is in a very precarious financial position, and also a very uncertain financial position. You have its parent corporation, with all sorts of problems back in England as to its continued viability. It could collapse as early as two or three days from now. If it is life-extended, it could collapse on various occasions in the next few months.

    Again I come back to the point that they're the ones who have guaranteed that bond. Mr. Hawthorne from Bruce Power has made it clear that under the present circumstances, Bruce Power does not have the ability to provide that bond. They have to rely on the parent corporation, which is in deep financial difficulty.

    On the other side of the coin, we have the potential for the sale of Bruce Power to some corporation that there has been some speculation about, but this committee has no specific knowledge of and very little even speculative knowledge, if I can put it that way. As we hear from the government, we're faced with writing a very small amendment into the law that has very serious ramifications, of which we have very little knowledge. We're sitting here--it appears from the government's position--willing to do that.

    To deal more specifically with the position Bruce Power is in--I want to be sure I get my letters and numbers right here--there are two sets of reactors at Bruce. There's Bruce A and Bruce B. I believe that's correct. The Bruce A reactors are all functioning and providing energy. The Bruce B reactors were at one time mothballed.

    It is proposed by Bruce Power that two of the reactors be reactivated--and that will require some funds--and at some point down the road, the other two reactors also be reactivated.

    I believe we heard from the witnesses who came here a week ago from the nuclear safety agency that the application is outstanding, and from what I'm reading now, they are seeking a two and a half year licence that would, in the totality of those licences, allow for the reopening of those two reactors that have been mothballed.

¹  (1550)  

    Mr. Chair, the importance of this is that the liability this imposes on the Canadian people would be significantly extended if these two reactors were allowed on, and the next two, at some point down the road, were allowed back on line.

    It's important to note that the four that have been mothballed were in fact shut down in March 1998 because of technical problems, poor performance, and management deficiencies. The shutdown wasn't voluntary on the part of the operator at that time. The nuclear safety agency was quite concerned about those three points that I just covered--technical problems, poor performance and management deficiencies--and they in effect would have required the shutdown if it hadn't been done voluntarily at that point.

    As there are four reactors functioning now, the exposure to the Canadian taxpayer is therefore going to be initially expanded, by simple mathematics, by 50%. And then when the other two come on, if that's ever allowed, it will be expanded by a full 100%. So, again, if the government's amendment was to go through, we would expand the liability.

    The Chair: Mr. Comartin, would you speak to the amendment, please.

    Mr. Joe Comartin: Yes. I'm trying to set it in context, as I will for most of my comments.

    The Chair: You'll have to give some credit to members, that they can understand part of what you're saying on the amendment.

    Mr. Joe Comartin: I'm fully cognizant of their ability to hear that, Mr. Chair.

    The point is the understanding of how large the liability can be. We have a situation where we have four reactors there now; we have four more potentially coming. And from what we heard, they won't be coming unless we pass this amendment. I think Mr. Hawthorne's comments that I quoted from earlier today would confirm that we will not be exposing the Canadian public to those liabilities, that risk, if this government amendment does not go through. If it does go through, then the amendment that I'm proposing becomes even more important, because, in effect, it compels the commission to impose some liability, at least at that point, on the owner-operator.

    In terms of the sequence, Mr. Chair, the application to restart these two reactors, which are called 3 and 4 at Bruce, was made on April 6, 2001.

    The reactors are 24 and 23 years old. If they are restarted, and this is an important point, they will have the oldest operating fuel channels of any reactors in Canada. Again, this is a point worth considering by the committee in terms of the liability that we're exposing the Canadian people to.

    The Chair: Mr. Comartin, are you ready...?

    Mr. Joe Comartin: I'm trying to save a little bit of time, Mr. Chair.

    The Chair: Well, you can stop.

    Mr. Joe Comartin: I want to draw to the committee's attention other nuclear reactors that British Energy has an interest in. And one of them, interestingly, is the one at Three Mile Island. I think all of us know some of the history there.

    The Chair: Mr. Comartin, please speak to the amendment. You're just saying to us that we all know something, but we need you to share information with us. We will be patient, but our time is valuable and we want to give you all the time you want for evidence on the amendment at this point, please.

    Mr. Joe Comartin: Mr. Chair, before I go to the issue of the history there, I want to cover one more point; I just caught this piece of paper.

    On the potential for the companies that may purchase, we don't know anything about them in the sense that we have no information on that. The point I would like to make about that is, of the companies that have been speculating, who might have some interest in purchasing Bruce Power, to the best of our knowledge, none of them have any experience in operating--that is, operating and managing--a power plant based on nuclear energy.

    The lead corporation that has been speculated about is Cameco, a Canadian corporation. There's speculation that they may increase their.... They already have a small share of ownership; I think it's 15%.

    The point I would make is that if that information is in fact correct, that corporation, because it has no involvement in the daily management or operations as a corporation of Bruce Power now, would come with no experience whatsoever. But they are one of the companies being considered as potentially purchasing this. It begs the question as to whether they would get approval, but it worries me, and I suggest it should worry the committee, that if this corporation is the one, will they get approval from the nuclear safety regulators?

    Mr. Chair, I think we need to have some sense of some of the problems experienced already at Bruce. There was a report in the Toronto Star--I think October 10 is accurate--that there was a maintenance accident at Bruce Power in June of this year. It damaged the tubing. What is important about this is that there's additional financial responsibility here, which, from what we can see, they may not have the ability to cope with.

    But there was a maintenance accident in June of this past year. It damaged the tubing in one of the reactors at Bruce B, and it was out of useful service for over a month. It occurred on June 11. The maintenance device had been inserted into a pressure tube in the reactor core, and then the maintenance device accidently--I'm quoting here--burned a hole through the pressure tube in the calandria tube that encases it.

    It took, I believe, the better part of 24 hours to bring that under control and resulted in it being off-line. It originally was supposed to come back online July 22 and did not come back on service until--I don't remember the exact date, but I believe it was in August--almost a month after it was supposed to come online.

    What we have is a corporation that has had that as an additional financial responsibility, a corporation that does not have the ability to provide for its own indebtedness and guarantee that bond. So we're really looking at a difficult, if not impossible, position, in being faced with what this amendment is about.

    If my amendment goes through, there is not going to be, from what we can see at this point if a person is being reasonable and objective, an ability on the part of the corporation, Bruce Power, to be held responsible, because they're probably going to be bankrupt, in all likelihood, before this committee finishes its work and the matter gets through the House and the Senate.

¹  (1555)  

    It would, I suppose, Mr. Chair, make more sense for us to suspend the committee until that happens, but I know from comments that have been made up to this point that is not going to be the result. Adding this amendment that I'm proposing at the very least gives the commission additional powers to impose damages and responsibility.

    Mr. Chair, I'd like to draw to the committee's attention as well some of the arrangements between the corporation, Bruce Power, and the Province of Ontario when they turned over the operation and management of Bruce to them. I'm quoting from an analysis of the lease:

Bruce Power will not be liable for underfunding of the eventual costs of used nuclear fuel management and decommissioning of the Bruce nuclear stations.

That's under the lease; they're not going to be held responsible under the lease for that.

I'm assuming, Mr. Chair, that as a result of some lawyer picking up the provisions in subsection 46(3), Bruce became aware after they took over and entered into the lease that even though the lease doesn't require them to assume that responsibility, the legislation does. We have to appreciate, as a committee, that there is no protection in the lease requiring Bruce to take on all of those eventual costs, as there is in the legislation.

    It goes on to say:

Under the lease with Bruce Power, Ontario Power Generation

--that's the crown corporation owned by the Ontario government--

has responsibility as the owner for future waste management and decommissioning of the Bruce stations, and the lease is terminated when the stations are permanently closed.

    So Bruce Power, the corporation owned primarily by British Energy, at that point simply walks away. Whatever they've garnered in the way of financial well-being during that period of time is not taken into account, and they have no responsibility, nor do they under the lease during the period of time the lease is in effect.

    So during operational periods when they are managing and after they walk away, they have no responsibility under the lease. The reason I think this is important is that I believe there was some comment--I think it was from the representative of the nuclear association--that led me, at least, to believe, and I'm anticipating some of the other members of the committee may have heard the same thing, that there were some added responsibilities on the part of Bruce Power under the lease arrangement, and in fact that's not the case. The only responsibility they have with regard to contamination and on-site decommissioning costs is the responsibility that's under the bond we've heard about, which was that it is a responsibility of the lease and the nuclear safety agency that compelled them to enter into that bond.

º  (1600)  

    The Chair: Mr. Comartin, I just want to make you aware that if there are things such as what you just stated that you wish to clear up, the department representatives are here. In the case that you are maybe not certain, or you want to convince the committee of the accuracy of comments, the department is here to assist us.

    Mr. Joe Comartin: Okay. I thank you for that, Mr. Chair. I quite frankly would not have thought they would, given that this is the relationship between the provincial Crown corporation and the operator--whom we haven't, of course, heard from. I'm not sure how much detail they have had. I suppose we might want to explore that at some point with them, but I'm not clear how much information they have. I don't think any of us asked them about that when they were giving testimony or responding to inquiries. I don't think we got into that particular point. It came up more when the nuclear association was here.

    The Chair: Yes, I only suggested it to give the members an opportunity to decide on their own if they wish to consume the information of the department people who work on this full time or of a member of a committee.

    Mr. Joe Comartin: I want to go on with the analysis that was done here in terms of understanding the extent of the liability. They go on to say, in this analysis:

Only when the dismantling work is underway will the full cost of reactor decommissioning be known with certainty.

This will be after the decision has been made to close it down permanently. They continue:

Since the province of Ontario is OPG's shareholder, unfunded costs will ultimately be paid by taxpayers or ratepayers several decades in the future.

That's assuming, of course, there is no nuclear accident and contamination during the period of operation. But if that's the case—if we get through that period with no contamination or accidents—we will not know for several decades after the decommissioning just what the price tag is going to be.

    However, if we go on from there—and this is one of the points I have been trying to emphasize—they say:

There are huge uncertainties associated with predicting costs for future waste and decommissioning liabilities. These costs for nuclear stations in Ontario were estimated by Ontario Hydro in 1999 to total $18.7 billion, and it was estimated that the Bruce share was $2.8 billion for decommissioning and $4 billion for waste management.

    The guarantee they have in place to protect the bond is for $222 million. That's 10% of what the share would be just dealing with decommissioning, and it is about half of that—or about 5%—for waste management. The only thing that we have sitting there is this bond for $222 million. It is all that the lease requires them to post.

    Mr. Chair, so we understand the lease and how extended out the liability could be—because we didn't get enough detail on it—the lease is an 18-year lease. On entering the lease, Bruce Power put up $85 million to purchase inventories, which is what they paid the OPG, Ontario Power Generation. Plus, it made an initial lease payment of $500 million. My understanding is that these payments have, in fact, been made. In addition to this, there is then a rental payment under the lease of $63 million in 2003. It increases by $2 million per year until it reaches $92 in 2018.

    I raise these figures, Mr. Chair, so that the committee can appreciate—given the financial instability of Bruce Power—that if Bruce is short of money or in financial difficulty, it would obviously be safe to assume, given normal business practices, that they would make these payments first, in order to continue to operate or to generate revenue for themselves.

    But when you look at the financial position they're in, it becomes obvious that they're not going to be able to meet the requirements on their own if British Energy goes down; or if British Energy is not bailed out by the British government; or if the British government bails them out, but the European Commission, or the courts in England, say they can't do it. There are a whole bunch of possibilities where British Energy is not going to be there. And Bruce Power, it would suggest, would look at their operating expenses without taking care of this bond that they have to post.

º  (1605)  

    It begs the question, of course, of what OPG will do to enforce the lease, which requires them to keep that bond in good standing.

    From our experience this summer, we already know that the nuclear safety regulators were very concerned about their ability to hold on to this, and in fact made some inquiries. I wouldn't say they were formal hearings, but they made some inquiries, and expressed concern in them about the ability of Bruce Power to hold the bond in place securely.

    There was certainly speculation—in August, I believe—that the nuclear safety regulator was so concerned that, if the bond had not been guaranteed through that temporary loan from the British government to British Energy, to secure the bond, they would have taken steps, in fact.... Undetermined steps, but certainly one of them may very well have been requiring the OPG to take it back, to forfeit the lease, and begin to operate it themselves again.

    I think it's important for me, at this point, to comment on what would happen in those circumstances. Somebody may say, “Well fine, if they can't meet their lease requirements, and British Energy can't bail them out, let OPG, let the Ontario government, take them back.” From a personal position, I have to say to you that I would prefer that option to occur. I think it provides further safety if the government were involved. I would argue strongly that it would take more interest in safety than a private company might—especially a private company in financial difficulty.

    Mr. Chairman, the concern I have is that, if OPG takes them back after we've passed my amendment and the government's proposed amendment, we will then be in a position where OPG will be taking back a bigger liability. This is assuming that Bruce Power can get the financing to expand and open these other two nuclear reactors they're immediately looking at—and, subsequently, the other two.

    At some point, if the financial empire collapses and OPG takes it back, you will not be getting back four operating nuclear reactors and four mothballed ones that are, or were, reasonably secured. Instead, you will be getting back six, and potentially eight, operating nuclear reactors, with the additional waste that would have been generated during that time, and the additional risks and costs of decommissioning not four, but six, or even eight, reactors. These are the factors I believe we have to take into account.

    I suppose I have to point out as well that OPG is the holder of the stranded debt to indemnify the Province of Ontario. For those who may not be from Ontario, the stranded debt is the debt that was accumulated by all the nuclear plants. We'd get a promise for a nuclear plant to be opened for $2 billion, or $4 billion, or $6 billion, and the price would come in three, four, or five times that.

    In spite of the fact that the plants would operate and generate revenue, it was never sufficient to reduce the debt. When the Province of Ontario opted to deregulate—and, in the case of Bruce Power, to privatize—the nuclear industry, the Province of Ontario itself and OPG were left with a $21 billion debt.

    What we're going to be faced with—and I think this is the point we have to appreciate—if Bruce Power goes down, is that it goes back to OPG, who is on the hook. They don't have the ability to pay, because of the amount of debt they're carrying. The Province of Ontario would be on the hook. And ultimately, Mr. Chair, the federal government would be on the hook too. With the Province of Ontario faced with these kinds of bills, estimated two years ago to be $6 billion plus—just for Bruce, with only four reactors functioning—can you imagine what it's going to be like if all eight are functioning, and Bruce goes bankrupt?

º  (1610)  

    This amendment will go some distance to imposing liability, potentially, on Bruce. The government's amendment, in fact, takes it off. We look at it then and say, “Okay, then it's back to the owner at that point, the Ontario government, in the form of OPG”, and they don't have the ability. It's ultimately going to be the federal taxpayers, along with the Ontario taxpayers, who are going to be stuck with this cleanup. The cost of the cleanup we're about to facilitate, if the government's amendment goes through, will be substantially increased, potentially double over what it is presently.

    Mr. Chairman, I want to speak for a few minutes on the costs we're faced with and refer the committee to information that I've obtained on what it cost to clean up after Chernobyl. I'll start my comments in this regard by saying that the cost of Chernobyl's cleanup, or some figures I'm going to give you...though we don't know, because it hasn't been completed. Given the status of the governments that are responsible in this area, we may never know what the cost is. In fact, for the foreseeable future those governments don't have the ability to do the cleanup, so we still have all the contamination in that area of Russia and Belarus.

    One article I pulled out indicates that the single biggest socio-economic catastrophe of peacetime history was Chernobyl. It was more expensive than any other we've had to face. That expense--I'm just going to throw one out--represents 7% of Ukraine's present budget still going to the cleanup at Chernobyl. There's an estimate in here that it would actually take 20% of their budget for the foreseeable future to clean it up.

    Those are the kinds of expenses involved if we had any kind of major accident, and we're heightening the possibility of that by what we're proposing to do. Those are the kinds of expenses we're foisting onto the Canadian taxpayer.

    I point out--and this of course would move beyond the immediate site at Bruce if something happened--that in Chernobyl there's still 25 million cubic metres of topsoil that need to be removed and somehow dealt with. They figure they have 160 hectares of forestry that need to be, I suppose, dealt with--probably cut down--and then somehow those trees and the soil that's below them has to be dealt with. Those are the kinds of expenses we're looking at.

    There's a final figure I'll throw out about Chernobyl, this from the minister in Belarus who is responsible and has been involved. He says that to clean it up between when it first happened in 1986 to 2015--and I have to, again, emphasize that may not complete the cleanup--the Chernobyl catastrophe would cost $235 billion U.S. That's the kind of expense we're looking at.

    So when I hear members on the other side say it's only a seven-word amendment, Mr. Chair, there are some ramifications here--$235 billion U.S. for that one site. That's the kind of damage we're exposing ourselves to in the province of Ontario as well.

º  (1615)  

º  (1620)  

     Mr. Chair, with regard to the expenses, I had wanted to raise one other point. I don't have the notes on that, so I will stop my presentation with regard to this amendment. I would point out that there is a second amendment I've also proposed, and I will deal with it separately.

    The Chair: Are there any other comments? No?

    Mr. Comartin, you have been the first and the last speaker on this amendment.

    We're ready for the question.

    Mr. Joe Comartin: Mr. Chair, on a technical point, I wasn't sure if I had moved my first amendment. If I haven't already formally moved it, I would do so at this point.

    The Chair: We will make sure that it's done.

    We don't need a seconder. We're ready for the question.

    (Amendment negatived)

    The Chair: We are back on the main motion.

    I understand you have an amendment to the main motion?

    Mr. Joe Comartin: I do, Mr. Chair. I'm assuming the clerk has circulated this.

    The Chair: No, they have not, Mr. Comartin. Could you read your amendment.

    Mr. Joe Comartin: Yes.

    I move to amend clause 1 of Bill C-4 by adding, after line 14 on page 1, an additional section, which would be numbered 46(3.1), as follows:

(3.1) The owner or occupant of, or any other person who has a right to or interest in, the affected land or place, must be insured for a minimum of 10 billion dollars to cover the costs of decommissioning and decontamination.

    The Chair: Before accepting your amendment, and I'm not saying that I will not, I would like to ask the department to share with the committee as to whether liability is covered somewhere else in the bill or in other legislation. And if it is covered, I will not be able to accept your amendment, subject to appeal, of course. And if it is not, then of course we should deal with it.

    Ms. Joanne Kellerman (General Counsel, Department of Natural Resources): Thank you, sir.

    Liability off the site of a nuclear facility, on the part of the operator of the nuclear facility, is covered by the Nuclear Liability Act, which establishes that the operator is absolutely liable for any third-party liability. So that's off-site liability, and it could be any liability to a third party on-site of a nuclear facility. But given that this section of the Nuclear Safety and Control Act does not address liability to individuals but only to the question of contamination of a site, the on-site responsibility under the Nuclear Liability Act would not cover this.

    There certainly is no other provision in the Nuclear Safety and Control Act that addresses an insurance requirement. There is the ability of the commission to establish a financial guarantee as a licensing condition.

    The Chair: I therefore should accept the amendment.

    Mr. Comartin, do you accept that it's being photocopied so that everyone has it before I decide to accept or not?

    Based on the information provided to us, I will accept your amendment.

º  (1625)  

    Mr. Joe Comartin: May I address it?

    The Chair: Yes. Mr. Comartin, the floor is yours.

    Mr. Joe Comartin: Mr. Chair, we're attempting to in effect reach a compromise by allowing for an individual who is “any other person who has a right to or interest in, the affected land or place”--

    The Chair: Excuse me, Mr. Comartin; I apologize for interrupting.

    I'm being advised that this may be outside the scope of the bill. I will go back to asking our legal advisors to share with the committee the reason for suggesting that. Someone has suggested that it may be beyond the scope of the bill.

    Mr. Joe Comartin: I'll certainly want to address that.

    Ms. Susan Baldwin (Procedural Clerk): The only actual change in the bill is the underlined part, “who has the management and control of”. The bill itself is a very small bill, addressing solely to vary the classes of persons that the Canadian Nuclear Safety Commission may order to take measures. It has nothing to do with insurance, and this is about liability and insurance.

    The Chair: [Technical difficulty--Editor]...react to that? I will reserve my final decision on whether we can accept it or not.

    I admit to you that I verbally said that I'm accepting it, but we'll try to work together to see if we can overcome this. The final judgment will be that I did say I would accept it. Therefore, my error, if it is one, would put the committee through the...I was going to say the “misery”, but I don't want to be offensive...of listening.

    Mr. Joe Comartin: The joy, Mr. Chair, the joy.

    The Chair: Mr. Comartin, please respond to the statement just made.

    Mr. Joe Comartin: I will. In fact, the comment I was going to make about the background and purpose for this directly addresses the issue of scope.

    I'd argue strenuously that this is within the scope of the bill before us. On one side you have the present legislation, which potentially imposes absolute liability, no limited liability. That's what we have now in subsection 46(3). What we're proposing on the other side--that is, the government's amendment--is to eliminate liability completely for a certain category of personages, being “any other person who has a right to or interest in”. We're going to eliminate that entirely. What I've done with this amendment is impose liability in the mid-range. They won't have, as the present law requires, absolute unlimited liability and they won't have no liability at all, but they will have some limited liability in the form of having to post this insurance policy that would guarantee coverage for up to $10 billion. If the present bill has this scope, the other bill has that scope, and I'm coming down in the middle, on that basis it's clearly within the scope of the amendment.

    What I'm suggesting in effect, Mr. Chair, is that in the insurance amendment, if I can put it that way, I'm only prepared to give partial liability on the part of the person who has a right to or interest in. I'm happily in between the two positions of what we have now and what we're going to. It's clearly within the scope of the bill.

º  (1630)  

    The Chair: The suggestion is that the liability is covered in another part of the act, which is not before us. Do you understand? I'll have to come back to you after--

    Mr. Joe Comartin: We've already heard from Ms. Kellerman that there are no insurance provisions within this act. The insurance provisions are within the Nuclear Liability Act.

    The Chair: Yes, but the other part of the act is not before us.

    Mr. Joe Comartin: I'm not proposing to amend the Nuclear Liability Act. I'm proposing to amend the Nuclear Safety and Control Act.

    The Chair: Mr. Lincoln, do you wish to speak to the acceptability of the amendment?

    Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.): Yes.

    The Chair: Please do.

    Mr. Clifford Lincoln: Without presuming as to whether $10 billion is too much or too little and not speaking on the amount suggested by Mr. Comartin, in the government amendment, which is Bill C-4, it clearly says “that the owner or occupant of, or any other person who has the management and control of, the affected land or place take the prescribed measures to reduce the level of contamination.” I would suggest that this is one measure. The amendment presented by Mr. Comartin definitely speaks about decontamination. Surely, it would be in order, considering it's not covered in any other place, for insurance to be provided to cover the cost of reducing contamination by the owner or occupant as part of the measures prescribed in the act. So in that sense I think it could be argued that it is within the scope of the present bill.

    The Chair: Mr. Chatters.

    Mr. David Chatters (Athabasca, Canadian Alliance): I don't necessarily disagree with Mr. Lincoln. But the prescribed measures that are referenced here are those that are laid out by the nuclear safety and control board. They are laid out in a different part of the act. If that board wanted to impose this as one of the prescribed measures, it could do so. I think it has the power to do that now. But the power of the board to make those prescribed measures isn't laid out in this particular subsection, so I don't think this belongs there.

    The Chair: Any comments on the acceptability of the amendment?

    Final word to Mr. Comartin.

    Mr. Joe Comartin: To address Mr. Chatters' point, and the other point as well, we shouldn't get hung up on the use of the insurance, because it's in effect the mechanism only. If we simply put in the $10 billion figure, let's think for a minute; they didn't have to put up insurance for it, but they had to post $10 billion as a bond.

    Specifically on that point, Mr. Chatters, there's certainly nothing in the legislation that forbids the legislature from imposing this type of duty. What it does is to allow the commission conducting the hearing to have, under this section, a sum of money to which they are limited, because that's the limit on which they could impose liability.

    The two-part point is that there's nothing limiting us, or legislatures, from doing this, clearly, in this part of the bill or anywhere else. We shouldn't get hung up in any way around the use of insurance. The insurance I'm talking about here is simply an asset. It could be a bond, it could be cash. There's no magic to it. Any one of those are assets. The point is, the commission conducting the hearing is having imposed on it a limit, which it doesn't have now, on the amount they would be able to assess against any person, owner-operator, or any other person having an interest in the land.

    So you have to view it from that perspective. It's just an asset. The fact that it's insurance quite frankly makes it a little easier on the owner-operator or the person having any interest in the land as opposed to having to post money in cash or in the form of a bond. This allows them to in effect pay a premium and post it in the form of an asset.

    What it's doing is consistent with the existing legislation and to some degree is in line with what's being attempted by the government, which is taking all the liability off completely from any person having interest to, in my case, putting a limit on what their liability is, as opposed to what we have now, where there is no limit. That's all it's doing.

º  (1635)  

    The Chair: We'll continue with our discussion on the acceptability of the amendment. I'll just tell the committee that at a given point it may become easier for me to accept it and get it done than to debate it all night and then accept it anyway.

    Before I make my decision, I will ask the officials if they have any information to share with committee members. When I make my decision it can be challenged, and the members will have an opportunity to vote.

    Ms. Joanne Kellerman: I'd like to respond, sir, to Mr. Lincoln's point about what “prescribed measures” means within the context of subsection 46(3). In the legislation, it means “prescribed by regulation”.

    So to determine the ability of the commission to enact regulations, one has to look at the scope of section 44, and I don't believe the regulation-making authority refers to establishing an insurance requirement.

    The Chair: I will give an opportunity to our legal counsel to share any information with the committee that could clarify this issue. It came from there, from that part of the table, that it may be outside the scope of our responsibility.

    Mr. Chatters.

    Mr. David Chatters: Mr. Chair, I need more clarification from the department's legal counsel.

    The Chair: Please carry on, then.

    Mr. David Chatters: Within this bill, is it not within the power of the nuclear safety board, as a condition of licensing, to impose this or any other prescribed measures upon the owner-operator and so forth of a facility?

    Ms. Joanne Kellerman: The prescribed measures are established by regulation. “Prescribed in the legislation” means prescribed by regulation. The ability of the commission to require a financial guarantee is established in section 24 of the legislation. The ability of the commission to make regulations is established in section 44 of the act.

    The Chair: Mr. Finlay is first.

º  (1640)  

    Mr. John Finlay (Oxford, Lib.): I am concerned, Mr. Chair, about the wording. It seems to me, by saying it must be insured for a minimum of $10 billion to cover the costs of decommissioning and decontamination, we are putting a cap on something. Are we concerned about covering the costs? Mr. Comartin is trying to hit on a median position. Are we doing it or are we simply obfuscating the whole business?

    The Chair: My problem is not addressing that issue; it's addressing the issue of whether or not I should accept the amendment. That's the dilemma I have at this point.

    Mr. Lincoln. No?

    Therefore, I will make my decision. I will follow the advice of legal counsel and not accept the amendment. Of course, this is subject to appeal.

    Mr. Comartin.

    Mr. Joe Comartin: I'm told, from our recent experience, that I'm supposed to formally say I challenge that ruling.

    The Chair: That's right.

    Mr. Joe Comartin: I would indicate on the record that I am challenging that ruling.

    The Chair: The decision of the chair has been challenged. I will put it to a vote.

    The question is--if I remember the wording--shall the decision of the chair be sustained? Or just a moment; I think I should leave the chair, and I think the clerk has to do it. It's my decision being challenged. If it's a tie, it carries.

    No, I guess I can do this.

    Shall the decision of the chair be sustained?

    Mr. Joe Comartin: Can we have a recorded vote?

    The Chair: We'll have a recorded vote.

    (Chair's decision sustained--See Minutes of Proceedings)

    The Chair: We are back on the main motion. Is there any debate on the main motion, the clause?

    Mr. Comartin.

    Mr. Joe Comartin: I forget, Mr. Chair; is time limited on this one?

    The Chair: No one has directed the chair to establish a time limit. I've started the debate, so we are too late to do so.

    Mr. Joe Comartin: Thank you, Mr. Chair.

    The Chair: And I regret to say that. However, I can assure you this will be addressed at a near future meeting.

    Mr. Joe Comartin: Mr. Chair, in terms of the main motion by the government, and it really begs the question about the implications, some of which I've addressed, I can't underline enough the significance of this in the overall picture of the nuclear industry in this country. What we are doing with this amendment is this. Through the back door, and there is just no other way to interpret this, the government is signalling their willingness to allow the nuclear industry in this country to be privatized.

    And in spite of some of the things we've heard from the Nuclear Association, the reality is that the nuclear industry, from its inception in Canada, has been an industry owned and operated, either directly or indirectly, by governments, provincial or federal. So even the small reactors we have for medical isotopes have either directly or indirectly had control exercised over them by government. Historically, then, this will be the first time the federal government has involved itself in the privatization of the industry.

    There is no question that the decision made by the Progressive Conservative Government of Ontario, in entering into the lease with Bruce Power, explicitly accepted that this would be the first step down the road to privatization of the industry in Ontario.

    The federal government wasn't involved in that decision, and it has not in fact been involved in any other decision that I'm aware of, and I think I've canvassed the field fairly extensively. Until this amendment came forth this past spring, the federal government had never considered allowing, permitting, condoning, any other way you want to put it, the privatization of nuclear energy, nuclear reactors, any aspect of the industry. And that's the big issue.

    Given the inherent risk nature of this industry, a decision should not be made in a seven-word amendment. A decision should be part of, quite frankly, a massive review of the state of the nuclear industry and nuclear energy and of the role it's going to play in providing energy to our society. Who best is able to deliver that both from a safety standpoint, which has to be with this type of an industry the absolute first priority, and from a distant second priority, which would be, of course, the financial interest that would surface in that review....

    I'm highly critical of the government for taking this approach. It's grossly irresponsible that we're allowing the privatization, we're endorsing it, we're enhancing it if this amendment is passed without that review being conducted.

    In my earlier submissions I've obviously given some of the consequences that I believe flow to the Canadian taxpayers. And if we did the full extensive review, I would advocate that we also would find that we are extending and expanding the risk to the Canadian public of contamination.

º  (1645)  

    I think the factual situation we have around Bruce Power is very much supportive of the position I would take, supportive in the sense that we have a corporation that is clearly, from everything I've shown to the committee, not economically viable without support that is in very serious question at this point. That's not even debatable. They've admitted that themselves, that they are not functionally viable without assistance from British Power, and of course British Power is about to become insolvent.

    Mr. Chair, the risk on the safety side is that, as dollars become scarce, safety becomes compromised. How many times have we seen that in any number of other industries?

    We saw it to some degree in the Three Mile Island accident. Some corners were being cut, and those corners were being cut out of consideration that had nothing to do with safety and had everything to do with the bottom line of the company that was running that facility at the time.

    I suppose the industry, the private sector, would argue, well, certainly governments from time to time have cut corners out of financial consideration. All one has to do is look at the Walkerton situation in Ontario to accept that. I think it would be naïve to suggest that there are not times when governments, crown corporations, and government agencies place an undue emphasis on the bottom line over public health and public safety. But given the nature of the two markets, public versus private, it is much more likely, simply because governments have deeper pockets, that safety becomes compromised out of financial consideration in the private sector to a much more significant degree than it would in the public sector.

    In terms of the type of review that's really required, not what we saw here, two days of witnesses, one pro, one con...and now, dare I say, a day and a half of clause-by-clause? I don't think we've even gotten to that. It's two days of hearings and less than four hours of clause-by-clause on an issue that is as fundamental as I believe this one is.

    The review that is necessary here as to whether Canadian society is prepared to accept the privatization of the nuclear industry is one that would require extensive hearings, evidence and testimony from experts on both sides of the question, and probably a review of the impact of privatization in other countries, other countries that have not privatized, who have maintained their industry in the public sector for all times. I suppose we would have to take a look at situations where other governments, other countries, have maybe tried a combination of private and public sector, and the type of regulation or the regulatory framework they build into those circumstances.

    If we are going to privatize, do we enhance our nuclear safety regulators? Do we give them more authority? Do we give them more resources to do more inspections? Do we expand their qualifications? Those are just some of the questions that would occur if we were thinking of going down those lines.

º  (1650)  

    On the other hand, if we were staying in the public sector, would we need to conduct that type of extensive review? I would suggest not. We've had several reviews of the industry, but never in that context.

    I think the nuclear regulatory safety people, on a regular basis, are looking for enhancements, and we address those as they are proposed and deal with them in an appropriate fashion. But if we are going down this route--and obviously we are, if this amendment goes through--we need to conduct that major review. We don't slip this one in through the back door.

    I've said this on other occasions. We've concentrated at this time on Bruce Power, because they're obviously the ones who precipitated the government moving on this, since they require it at this time, but I believe it has been mentioned in passing that the Point Lepreau reactor in New Brunswick is going to be decommissioned and taken out of service over the next number of years. We may potentially be faced with that being privatized, not just for operations but for the actual ownership of that facility.

    From my reading and research, the Province of New Brunswick has certainly signalled it has no intention and, I would add, no ability to pay for the upgrading that's required at Point Lepreau. Clearly, its intent has been expressed by the premier and has been unequivocal for the last few months because it's not going to repeat the mistakes that the Province of Ontario did of the stranded debt. I think it has a very clear example and precedent there of what not to do.

    It begs the question, is the private sector--people like British Energy, some of the major operators in the United States, others around the world--interested in coming in? We don't know that. But that's the type of review we would have to undertake in order to understand the implications of the amendment we're proposing here. Again, if we are to follow the route of privatizing the industry, then let's be clear about it.

    I haven't even heard that, to this committee, from any member on the government side. It certainly has not been signalled by the minister in the House or in any other statement. No policy paper has been issued on this. Nothing has been said to the Canadian public that we're going to privatize the nuclear industry. It is really quite...I don't want to use the term “dishonest”, but there is a lack of proper representation to all those bodies, and to the Canadian public in particular, about the implications of this amendment.

    Whether further items will flow from it I suppose would again be part of the review we would need to undertake. One can speculate that if we follow this route, Point Lepreau will come up for consideration. Will the next step be the outright purchase of Bruce by some private company?

º  (1655)  

    Either Bruce Power will somehow get on its feet financially or some other private-sector company will come in and say they're operating it and they have an 18-year lease. The length of that lease, by the way, will probably be close to the life of the existing reactors that are on line and the ones that are proposed to be put on line....

    I want the committee to know that the ringing phone just now was my wife calling, and in spite of the source of that call, it's much more important that I continue this talk.

    An hon. member: Delete that from the record.

    Some hon. members: Oh, oh!

    The Chair: She may have good advice for you.

    Mr. Joe Comartin: She may very well, but I'm sure if I took that advice I would lose my order in speaking, and I know how chagrined the committee would be if that happened.

    Oh, I've just lost my train of thought. My wife has the ability to do that to me on a regular basis.

    The point about the purchase of Bruce is not beyond speculation at all. In fact, if one looks at the length of the lease, it's certainly a possibility. Given the liability that proposed subsection 46(3) would impose on the owner, if Bruce decides to buy, are we going to be faced with another short amendment eliminating more responsibility under this subsection, or will the section be taken out completely? Are we going to be faced with that in a year or two if somehow they manage to get their financial house in order and think about buying, or are we going to be faced with that if Point Lepreau is on the market?

    That's not the way we should draft legislation and conduct the legislative process. The government is suggesting this is an inconsequential amendment and doesn't really matter very much, but if it doesn't matter very much, why are we doing it? There are very serious implications.

    The other point that comes up in this is what is the long-term likelihood of the nuclear industry continuing to exist in Canada? We haven't built a nuclear reactor in Canada since the mid-1970s, and no additional reactors have been put back on line. Now this proposal has come forward, and the proposal at Pickering.

    The Pickering site is much younger than Bruce. The operations are somewhat different because they are newer; the technology is somewhat more advanced. If a site is going to be brought back on, it certainly would make much more sense for Pickering to be brought back on.

    The scary part of what is going on at Bruce is that for the first time in over 25 years, almost 30, we are having some expansion in the nuclear industry. A few years ago, most people in the industry would have simply said, “We will continue to operate these plants, and we will provide for alternative energy as we're doing that, and when these plants are no longer viable we will decommission them, and over the next 20 to 40 years the nuclear industry will be phased out in Canada.” If this amendment goes through, we'll be saying to the industry, “You have some hope that will not happen. You have some right to expect that this government will assist you in expanding the industry.”

    I don't know what other message we'll be sending. If I were part of the Nuclear Association, that's certainly the message I would take if this amendment went through.

    Part of the message this government is sending, by this amendment, to other parts of the private sector is, “Take a look at Point Lepreau. If you need legislative restructuring, we're prepared to do it. We did it on this one for Bruce. If you need that kind of assistance, next time it may be a paragraph or a page of a bill or a law, or maybe it will mean writing a whole new one, but we'll do that for you.” That's the message the private sector has to take from this.

»  (1700)  

    Mr. Chair, I'd like to switch to another point, and that is the issue of what it also says to the financial community, either within Canada or outside. I believe it's the same type of message that is being sent to them.

    Subsection 46(3), as the lawyers told them, sends one message as it presently is. The message it sends is, if you're going to get involved in what is a potentially very high-risk industrial sector, as the law presently provides you may very well have to accept that you're going to be held responsible.

    I've never found that offensive, Mr. Chair, because of the nature of the industry. What we're really saying with subsection 46(3) to the financiers, whether it be the banks, the insurance industry, venture capitalists, or whatever, or what the government I believe was saying when they passed it--as opposed to what we heard from the industry, that it was a mistake--was: “This is a high-risk industry. It's going to cost the taxpayers a tremendous amount of money if there is a problem at the time of decommissioning or if there is a major accident, even sometimes a minor to moderate accident. We're going to be on the hook and we want you”--this is a subtle message--“the financial industry, to be part of the safety side of it, so that if you are going to lend money”, and that's what this message is about, “you had better be very sure the operator and the owner are conducting themselves at the absolute maximum level of safety for this operation.”

    So in effect they're part of the safety umbrella group we've built. It's not just the owner or operator; it's not just the regulators; it's not the government; it's not the legislation: it's a package--and “You, as the financier, are part of that package.” That's the message we're sending to them. That's the message, I believe, the legislature was trying to send to them when this bill was passed originally, with subsection 46(3).

    I can't think of any comments, other than the industry's, about its being an anomaly, a mistake, something we had to correct...whatever the other wording was he used. That's not the way legislation gets passed. I guess I'm wearing my lawyer's hat for a minute, but if I were taking this in front of a judge, I know this is how a judge would interpret it, and this is the message we're sending, that what was clearly intended is, “You're going to be on the hook.”

    For me, that policy standpoint by the federal government made good sense. It made good sense when they did it and it makes good sense today. The alternative is that the financier may very well be willing to take on an operation that is a little shaky on safety, a little shaky on the financial side, because ultimately there's no responsibility upon them. They'll build the financial package around protecting themselves as much as they can from that perspective.

    But at this point, if this amendment goes through, they have no obligation and quite frankly no particular reason to be inclined to look at the safety side of it, to encourage the operator and the owner to maximize the safety factors. The message we send is: “You're off the hook. Be as careful or carefree as you want to be.”

»  (1705)  

    If they do get into financial difficulty and you're worried about your security, you may be going in and actually making some recommendations that, from either a lack of knowledge or from greed, have an end result of shaving off some responsibility for safety, and that's the message we send them if we pass this amendment.

    As to the implications to the Canadian people, I just want to talk about this a bit more. I'm sure if we went out into the streets right now and asked the average Canadian person whether they have any sense that at the federal level we're privatizing the nuclear industry, we can almost be assured of close to 100% lack of knowledge on their part. We've not done anything to advance any education or distribute any information. We've not tried to sample the industry and the various aspects of it, including those environmental groups that have been adamantly opposed to this amendment and the expansion or proliferation of the industry. We haven't talked to them at all about it, other than the few minutes in which they gave testimony here last week; and then for the Canadian people, nothing at all, no signal from this government. That's really shameful, because it is such a dramatic change that we're going to be going to.

    If the amendment goes through, as I'm expecting it will, given the position the government has taken, both you and the committee, and goes through in the House, I expect we'll see a bit more knowledge going out at that point to the community, but not very much, and that the ramifications of what we've done here, both just the very specific ones of letting off the hook those with the right to, or title, or interest in and the fact that we've opened the door, won't become common knowledge or in the public domain for maybe years, or even decades.

    It won't be, in fact, until one of two things happens: somebody comes along and actually buys a nuclear plant and just takes over full ownership and operation, not just leasing it, not just managing it; or until we have an accident and the financial burden gets foisted on us.

    If we think any of the provinces, even Ontario, has the ability to deal with that, we're deluding ourselves. The bill, that invoice, is going to end up on our doorstep, on the federal government doorstep, at some point if we have a significant, and I'll say even a moderate, accident. I've already given out the figures on what we saw at Chernobyl, and how bad it was.

»  (1710)  

    The Chair: Exactly, Mr. Comartin. We're beginning to be repetitious. That's, like, the third time, so I would urge you to share new information with us.

    Mr. Joe Comartin: Well, I've just been given a bit on Three Mile Island, so let me touch on that so we have some appreciation.

    That accident took place in 1979. I think we all have an appreciation of the significance of that as being one of the first meltdowns, or close to, that occurred and that we became aware of. There's some speculation that there may have been one or two in Russia, as well, that we never became aware of, that were sealed up.

    The Chair: Mr. Comartin, we're going from repetition to speculation. We are being patient as a committee, and I'm sure every member is willing to stay here until Christmas Eve if we can be productive, but I think we should have respect for the members, the staff, and the observers who have families. We'll put in the time that is needed, but I think we have to respect one another and not be repetitious, please.

    Mr. Joe Comartin: What happened at Three Mile Island was actually, at the end of the day, a minor to moderate accident, as opposed to Chernobyl, which was obviously the most severe one that we've ever had on the planet. And in 1979, in spite of the fact that the contamination was contained on-site and there were no adverse health effects--no deaths, no injuries--identified, at least in the first year or two, this being a minor to moderate accident, the on-site cleanup alone was $973 million U.S.

»  (1715)  

    The Chair: We heard that before, Mr. Comartin.

    Mr. Joe Comartin: No, this is the first time I've raised Three Mile Island. I said I didn't have those figures. I was looking for them, but I didn't have them.

    The Chair: I want to be fair with you. There seems to be provisions in the procedure bylaws whereby if the committee feels we're being repetitive and not relevant to the actual clause, the committee could ask for an end to the debate. I don't want to go there, but this is becoming.... It is repetitious, and it is not always relevant to the clause we have to deal with.

    So I urge you to focus on the work we have before us. I have asked the committee if clause 1 shall carry. That is what we're dealing with at this point.

    Mr. Joe Comartin: I'm sorry, I didn't hear you there.

    The Chair: The question I asked the committee, at the beginning of the meeting, which was not today but last Thursday, was whether clause 1 shall carry. That's what we're talking about at this point, so I would hope that we'd focus on clause 1.

    Mr. Joe Comartin: Well, I believe I am focusing on clause 1 and its implications, Mr. Chair.

    The Chair: Yes, but if it's the fifth time, we say that it's too much focus.

    Mr. Joe Comartin: Mr. Chair, this is the first time I've had available for the committee the figures on Three Mile Island. I referred to them but didn't have them.

    As I was saying, the cost in 1979 in U.S. dollars was $973 million; however, I would point out it took almost 12 years for that cleanup to occur. To extrapolate that into today's dollars, it would be roughly two and a half times that, getting on near three times, and then if we extrapolate it into present Canadian dollars, we are in the range of, in a minor to moderate accident, as this one was, $3 billion plus.

    That again is just for the on-site cleanup. I'm not talking about the nuclear liability. So if we have that kind of an accident, those are the kinds of dollars that we as a community will be faced with, on a site where the bond for this is $222 million. That's what we have now, and of course the reliability of that bond is very suspect.

    Remember that Three Mile Island was the site of only one reactor that they had problems with. On a site like Bruce, where you would have potentially, as right now, four reactors, but perhaps six to eight at some point, you would have to multiply this many times over in order to get an accurate figure of what we're faced with.

    In summary, Mr. Chair, we're dealing with very high-risk liability in this industry, with no ability on the part of the current manager of that site to deal with decommissioning or decontamination. The wherewithal within the lease requirements and the nuclear safety regulator requirements of $222 million...nowhere near the ability to deal with that level. The messages that we're sending out both to the financial sector and to the potential private sector market, without the review that this should encompass, are way beyond what we should be expected, as a committee, to endorse.

    Based on that, we have to argue strenuously that this amendment should not be passed.

    And I will stop my comments at that point.

»  (1720)  

    The Chair: Thank you, Mr. Comartin.

[Translation]

    Mr. Cardin.

    Mr. Serge Cardin (Sherbrooke, BQ): Thank you, Mr. Chairman.

    Despite the apparent simplicity of this amendment to the Nuclear Safety and Control Act, the fact remains that from the very beginning, it has been patently clear that the focus of this debate was privatization and the development of nuclear power plants. The government was never willing to admit that any more than committee members were willing to understand or accept this fact. Yet, representations to the committee by Bruce Power and the Canadian Nuclear Association left no doubt whatsoever that the legislation opened the door to the further development and, above all, to the privatization of nuclear power plants. In a letter to the committee from the Directors of Legal Affairs and Secretary of Bruce Power, this objective is made abundantly clear:

Generally speaking, the legislation adversely affects the ability of the private sector to invest in nuclear power plants as well as the future development of the Canadian nuclear industry.

    That's fairly clear: ...“invest in nuclear power plants...”. What choice do we have but to conclude that the real goal here is the development by the private sector of nuclear power plants.

    The Canadian Nuclear Association confirmed this to us, to all intents and purposes, in its testimony. The following is noted in the documents submitted:

Current wording blocks investment

The current wording of subsection 46(3) has had the unintended effect of denying private sector companies in the nuclear power sector access to debt financing as banks are refusing to accept the extraordinary liability created under the NSCA.

    One element of this pronouncement that we should focus on is the reference to “unintended effect”. I find it appalling to think that when the provision was enacted in 1997, the legislator did not intend to prevent, to all intents and purposes, private sector or debt financing of nuclear power plants or, in other words, to prevent the private sector from owning nuclear power plants. It was possible to be convinced at the time that that was in fact the legislator's intention and that the debate was now underway to privatize and development the nuclear industry. The following was also noted:

Current wording is an anomaly

The current wording is not contained in any other Canadian environmental legislation. As such, it represents a significant barrier to private sector investment in the nuclear industry, and puts nuclear power at an unfair disadvantage with other forms of electricity production.

    Therefore, this pronouncement is indirect proof that Mr. Comartin as well as the Bloc Québécois were justifiably concerned that no debate had been initiated, and that the government was taking it for granted that the Canadian public as a whole was in favour of nuclear power plant proliferation and, even worse, of private sector management of the industry. Especially in this case -- because we checked with a representative of the Canadian Nuclear Association -- since no requests of this nature had been received prior to private sector investment in nuclear power plants. What's more, this same private sector firm is experiencing major financial problems. It's a known fact that in virtually all environmental companies, whether they're involved in household waste management, nuclear waste management or nuclear energy production, when it comes to safety concerns and safety and environmental repercussions, the private sector shouldn't necessarily be allowed to get involved because their main concern is to limit their liability.

»  (1725)  

    The consequences of this could be enormous. It's easy for a company to limit its liability, if it owns another company. As everyone well knows, companies in financial difficulty will often cut first in such areas as safety because safety is an extremely costly area.

    Mr. Chairman, a debate has been initiated with the proposed change to the act. However, it was fundamentally wrong to make the claim that all Canadians favour the development of nuclear power plants. Not that long ago, some surveys suggested that over 60 per cent of Canada were opposed to nuclear energy as a means of generating electricity.

    The Chair: Mr. Cardin, kindly focus on the clause in question.

    Mr. Serge Cardin: That's precisely what I'm doing, Mr. Chairman.

»  (1730)  

    The Chair: I don't believe it will make any difference to this legislative provision to know whether people were in favour or not in the past. Facts are facts. Please confine your comments to clause 1.

    Mr. Serge Cardin: That's exactly what I'm doing. I'm trying to get people to understand today that this particular clause is far more complex and goes beyond simply providing companies with advantages for the purpose of developing nuclear energy.

    I've said it before, Mr. Chairman, and I'll say it again: We're putting the cart before the horse. We don't even know if most Canadians support nuclear energy development and now, we're going to promote development of the industry by the private sector and the proliferation of nuclear power plants. It couldn't be any clearer, and yet this amendment appears to be simplicity itself. Mr. Chairman, no consultations were held on nuclear energy - government officials, Liberal MPs and witnesses admitted as much during our hearings - and now, this legislation appears to shamelessly promote nuclear energy.

    Furthermore, Mr. Chairman, Atomic Energy of Canada tabled a report last week containing a reference to its new nuclear reactor. The corporation expects to sell one hundred reactors over the next several years, if memory serves me correctly. However, the reality of the nuclear industry is totally different. Nuclear energy is losing some popularity in Canada and in particular in foreign countries. No new projects are in the works in this country. Through this legislation, the government is attempting to promote nuclear energy development. I believe I was right on point, Mr. Chairman, when I mentioned this in connection with this amendment.

    What I wanted to point out to the Liberal members opposite, in so far as this amendment is concerned, is that we are overstepping our mandate. We are acting outside the scope of our mandate by promoting the development of nuclear power plants in Canada and the worldwide expansion of nuclear energy.

    I realize that in its report, the Canadian Nuclear Association always refers to the nuclear industry. Indeed, since this provision was first enacted, the nuclear sector as a whole, aside from the power plants, had been able to finance its own operations because the responsibilities or dangers associated with certain specific areas under municipal or other jurisdictions were ostensibly fewer. Financial institutions had no qualms about investing. However, if the environment or the public is at risk, financial institutions will see that they also face some risk, from a strictly monetary standpoint. Aside from the financial risks, however, no one has ever considered whether or not to debate the merits of nuclear energy.

    The government, however, is prepared to move forward and to let the private sector purchase Atomic Energy of Canada's new reactors which are apparently more efficient, cheaper and safer. Therefore, as I see it, the government is overstepping its mandate and, with all of the lobbying being done by the Canadian Nuclear Association and by the private sector, is promoting nuclear energy and in the process, countermanding the will of Canadians.

    Thank you, Mr. Chairman.

    The Chair: Thank you.

[English]

    Are there any other comments?

[Translation]

    Mr. Serge Cardin: Mr. Chairman, you're going rather fast and the interpreters can't keep up. I would like you to call a recorded vote on clause 1.

    The Chair: You have a valid point. We will proceed with a recorded vote.

    (Clause 1 carried: Yeas: 8, Nays: 3)

[English]

    The Chair: Shall the title carry?

    Some hon. members: Agreed.

    Some hon. members: No.

    The Chair: Carried.

    Shall the bill carry?

    Some hon. members: Agreed.

    Some hon. members: No.

    The Chair: Carried.

    Shall I report the bill to the House?

    Some hon. members: Agreed.

    The Chair: Carried.

    Thank you very much. We are adjourned.