Mr. Speaker, I am pleased to speak to Bill at the third reading stage. The Bloc Québécois thinks that this bill is important to protect citizens and not to promote nuclear energy. I want to make that clear.
Before I begin my remarks, I would like to thank the people who worked on this bill: the researchers, the members of the committee and the witnesses, as well as all the legislative staff who helped prepare this bill.
Before I explain why we support this bill and defend the amounts in it, I would like to give an overview of the current nuclear energy situation in Canada.
The recently spoke to the Economic Club of Toronto about the merits of nuclear energy, including a new generation of reactors. By the way, where are those reactors? It is a secret, like all those other things the government keeps secret. Later on in his speech, he mentioned that it would take decades to find a safe disposal site. We agree with him there. It is clear that a site will not be found quickly.
Furthermore, the global partnership launched by Mr. Bush for the reprocessing of irradiated nuclear fuel, which Canada has joined, is light years away from becoming a reality. I would remind the House that, in France, this project was in the works for 15 years before it was abandoned as unworkable. By relying on all the other countries, President Bush thinks it is feasible. So far, no progress has been made on this. Everyone thinks that we will simply be left with nuclear waste to transport and dispose of.
This bill establishes a limit of $650 million in compensation and we think this is a fair amount. In any case, we could not put this system in place and ask for any more than the $650 million requested, because the insurance companies would never agree to it. As it is, reinsurance will be needed to make up the difference.
We do not think that we could have a situation like that of the United States where full responsibility falls to the companies. With a common fund that varies between $9 billion and $11 billion, they share responsibility in the event of an accident. That is not the kind of approach we have taken here. Instead, we decided on an insurance plan that cannot exceed $650 million. We think this represents a marked improvement over previous legislation, which provided for $70 million or $75 million.
This bill, however, has some major gaps. Of course, the government and the entire population should be able to provide all the money needed in the event of an accident. Unfortunately, the calculation of probabilities would suggest that an accident is likely to happen sooner or later, since one occurs every 30 years. Let us hope that it is not in Canada. If, however, that is the case, $650 million will not be enough. It will be the entire population that will have to pay in order to continue compensating the people affected by the disaster, the conflagration—fire is usually the result—or the radiation.
But the law does not provide for compensation by insurance companies in case of war or sabotage, including terrorist acts. We know that right now, terrorist activity is the greatest threat to nuclear power. That is what both Canada and the United States fear most. Since 2001, Canada's budget for protection from terrorism has quadrupled. I will review the numbers shortly. These costs are not included in the price per kilowatt hour.
These costs are not included because they are for protection, for security agencies. Those budgets do not fall within the Department of Natural Resources' purview.
Information about this energy source is utterly contradictory. Our minister insists on telling us that it is clean energy. Yet it generates waste, and there is a significant accident risk. About 60 accidents happen every year in Canada. They are usually minor, but major accidents could happen.
We are told that radiation is not a problem, even with uranium 235 mining. That is not true. As miners work, radon, a colourless, odourless gas, emanates from the mine walls. As a result, the miners are exposed to radiation. Health-wise, that is even more dangerous than asbestos. The inescapable result is cancer. Mines can be ventilated, but as we all know, it is very hard to ventilate tunnels at the very bottom of mines, where there is the most radon. It is dangerous for miners and for those transporting the ore.
Since 2006, the government has had big problems with nuclear energy. I will list them.
In September 2007, the safety report seriously called into question nuclear safety across Canada. That is why we are now trying to change and comply with international safety standards. Because of them, it will cost much more to renovate existing plants.
There was the isotope crisis. The safety of the Chalk River laboratories was called into question. Then there was the firing of Ms. Keen, the president of the Canadian Nuclear Safety Commission, who was highly qualified but annoyed and embarrassed the government. There was the disorganized crisis management on site.
There was also the study on privatizing Atomic Energy of Canada Limited, an issue that still has not been resolved one way or the other. The latest problem was the failure of MAPLE. It was announced on May 16, not long ago, that the MAPLE reactors would not be brought on stream, because they could not be made functional.
There is still the fragility caused by terrorism. I will come back to this, because it is true. Terrorism targets only two types of energy: nuclear energy and liquefied natural gas at liquefied natural gas terminals. Only in these two areas can terrorism really hit hard. Some people do not believe that and think that hydroelectric dams can be terrorist targets. This would be rather surprising, though. During the last war, people had a hard time destroying hydroelectric dams. Rest assured that terrorists will not attack dams.
However, in the case of nuclear power, you do not need a huge plane to destroy the small buildings that protect the pools of water used to cool nuclear waste. That can be done very easily. It would also be very easy to blow these buildings to pieces by dropping a bomb on one of them. Hence, the threat of terrorism against nuclear power lurks everywhere. We need only think of the transportation of MOX. Wherever there is radioactivity, there can be terrorism.
Furthermore, waste management poses a problem. The minister told us that it will take decades to resolve. He just appointed a commission, the largest we have ever had: some 70 to 75 people will be involved. It will take years to identify a solution.
I would like to bring up another point pertaining to nuclear power. It is a source of energy and that is a provincial jurisdiction. We believe that nuclear energy must be managed by Quebec.
We accept that the safety standards may be Canadian. We are just as interested in preventing Ontario nuclear power plants from blowing up. Yet, I will reiterate that energy is a provincial jurisdiction. By the way, Hydro-Québec is doing a very good job.
Let us go back to the issue of waste. According to the , Canada is far from finding a location for burying the waste because no community has agreed to have a waste disposal site in its area.
Therefore, we support this bill but with some reservations. The bill must not promote nuclear power. Canadians are not convinced of the future of nuclear power. According to surveys, in spite of all the promotion of nuclear power and all the lobbying, the fact remains that a majority are still against it, particularly in Quebec, where citizens strongly oppose it.
Before we decide to promote nuclear energy, we would have to really consult the public. That includes experts, people knowledgeable about energy and the people who live next to reactors, which is important because they would be the first to be impacted by an accident.
We would also need to consult with the people living along the route where the waste would be transported. We remember the 150 municipalities that were against the transportation of MOX in Quebec. The people living in the province where the waste will be buried should also be consulted.
All of these people need to be consulted, not just the pro-nuclear lobbyists with huge sums of money that often comes from governments. In the United States, Bush invested $18.5 billion in the promotion of nuclear energy.
Given that there are 22 nuclear plants in Canada, it seems reasonable to offer the public insurance that will give them a minimum amount of protection. This should not be used to build other plants, but should protect the ones that already exist.
According to the Canadian Nuclear Safety Commission, Gentilly-2 in Quebec respects and surpasses the regulatory requirements in all of the safety categories. That is great, but it does not mean that there will never be an accident. In fact, there was one recently.
The budgets allocated for nuclear safety may have quadrupled since the September 11 attacks, but authorities believe that there are still flaws in the system that could one day pose a threat to national security. That is not very reassuring.
We know that security measures at Gentilly-2 have been stepped up since 2001, but Hydro-Québec has been reluctant to reveal the costs. We can imagine why, even if this corporation does a good job. Even the authorities admit that there is always a possibility of a terrorist attack at any of the existing plants.
I have here an excerpt from a report issued by the CNSC that shows the possibility of accidents in Canada. Earlier I was saying there are roughly 60 accidents every year. An accident occurred two months ago—and the document from the Canadian Nuclear Safety Commission talks about an “accident”—involving a fueling machine removing fuel from one of the reactor channels in order to access a process tube and replace the spacer blocks. When it was being moved, the back of the fueling machine broke off and pushed the lift truck against a pillar, which shut the machine off.
The fuel clusters were not affected, but they could have been. If that had happened, they would have spilled outside the cooling water, which could have caused a major accident.
It does not take much to cause an accident. A more serious accident could occur at any given time. Nuclear power is still not safe and is still dangerous.
That is why we want to pass Bill , to protect these generating stations. We would not have to pass such a bill for wind energy. There is no risk of anyone being hit on the head by a rotor blade. We would not have to pass such a bill for solar energy because it is not dangerous. The worst that can happen is that a panel or a pipe breaks. With geothermal we can produce large quantities of electricity and we would not have to legislate that energy either. Why? Because there is no risk of catastrophe with geothermal plants. I toured one this winter in New Zealand. It has been there for 50 years. They have to replace a few pipes now and then, but there is no danger. The risk of catastrophe only exists with nuclear energy and natural gas terminals, as I was saying earlier.
Fortunately, no radiation leaked from the nuclear generating station during this accident. And the term “accident” does in fact appear in the document. I am not making it up.
I heard my colleague say earlier that if facilities were built underground, it would be less dangerous. That does not solve all the problems. It does not solve the problems with transporting MOX; or with mining and transporting uranium 235; or with safely disposing of spent radioactive materials; or with the use of cooling water and the possibility of leaks after an earthquake. It also does not solve the problem of potential terrorist attacks, or the risks of sabotage, even if facilities are built underground. So it does not solve all the problems. That is why a nuclear power plant, underground or above ground, is a time bomb.
Earlier I spoke about the transportation of MOX. There are 150 municipalities that have spoken out against this type of transportation because they say it is very dangerous. There is currently an international movement on the quality of safety, called the Integrated Safety Review, which is a cut above what we have now. Yes, safety is a good thing, but the problem with this type of safety review is that it increases the cost of facilities by two or three times the estimated amount, especially for facilities in need of repair.
I will use the example of a facility I know, the Gentilly facility. The cost of renovating this facility had been estimated at $1.5 billion. Aggel and Baly, people whose job it is to assess the cost of work to be done on nuclear facilities, estimated that if the new standards were applied, the cost would rise to $2 billion, a significant increase. They also say that this price could very likely go up to $3 billion, double the original estimate.
However, all that is for a very limited length of time, because that is the problem. I had a graph that I would like to show the House. A nuclear facility produces electricity at peak capacity for only a brief period of time. Looking at the table, we can see that the first nuclear reactors came on line in 1970 and reached peak production in 1995. Since then, they have been declining steadily. They are less and less efficient. Even if they are renovated, they will not last much longer.
Mr. Speaker, I see that I have only a minute left, but I could have talked about nuclear energy all afternoon, as it is an extremely important issue.
At present, safety is not what it should be. The newspapers recently reported that an additional $93 million was needed for safety.
I would like the money spent on nuclear safety to be invested in green energy sources such as wind and geothermal energy. The government would see that other types of projects cost far less and are much safer. We are pro-safety. If the government is really pro-safety, it should not be building any more nuclear facilities.
Mr. Speaker, this is a challenging topic for the House. One of the things I have heard in this discussion about Bill , an act respecting civil liability and compensation for damage in case of a nuclear incident, is that we should support the new limits proposed in this bill because they are better than the old ones. It seems to me that argument, in itself, is fundamentally flawed because it is like saying half a loaf is better than no loaf at all.
We have seen other pieces of legislation proposed in the House of Commons that we subsequently had to go in and fix because they were inadequate. One of them was the voter identification piece of legislation, which disenfranchised over a million rural voters. Because the House did not perform its due diligence, we passed a piece of legislation that was deeply flawed.
In addition, we are being asked to say that we have trust and confidence in the current Conservative government to manage this particular file. Of course, the whole shemozzle around Chalk River was such that I would argue that Canadians do not have confidence in the government to deal with this in a fair and reasonable manner.
New Democrats have been raising issues and concerns around this piece of legislation. In particular, I want to talk about the very good work that the member for has done. He proposed many amendments to try to improve this piece of legislation and, unfortunately, they were not supported by members of the House.
In addition, I know that the members for and have also raised concerns around some of the challenges in this piece of legislation.
I want to talk a bit about where this bill came from. In order to facilitate the development of the nuclear industry in Canada, the federal government has developed legislation to limit the amount of damages a nuclear plant operator would have to pay out should there be an accident causing radiological contamination to property outside the plant area itself. Such legislation is necessary as private insurers refuse to compensate for damage due to a nuclear accident or incident.
The current legislation dates from the 1970s and is woefully inadequate with a liability limit of $75 million. By comparison, a new mine usually has to post an environmental bond of approximately $50 million. This low level of liability is creating an impediment for foreign, particularly American, private industry for purchasing Canadian nuclear industries.
Under American law, a foreign victim of an accident caused by an American headquartered company can sue for damages under American law if the foreign law is insufficient by international standards. These changes bring the legislation in line with minimum international standards. It is important to note that.
We look to Canada often to become a leader in any number of areas and, sadly, what we have seen over this last two years in particular is an erosion of Canada's leadership on many files, such as international human rights obligations.
We have certainly seen the government abandon our leadership role around the UN Declaration on the Rights of Indigenous Peoples by refusing to sign on to it, one of only three countries left. Australia reversed its position.
On the environment, we have certainly seen the government stonewall in every way possible with the Kyoto protocol and trying to demonstrate it is a leader as it is actually rejoining the age of the dinosaurs, I would suggest.
Bill limits the total liability of a nuclear operator to $650 million, which is the bottom of the international average. For amounts above that number, a special tribunal would be set up by the and further funds would come out of the public purse. This basically means that a nuclear operator would only have to pay out a maximum of $650 million while the public would be on the hook for millions, possibly billions, of dollars in case of an accident.
I mentioned the fact that the member for put forward 35 amendments and I am going to talk a bit about those amendments. One of the clauses he proposed was in relation to the removal of the $650 million international bottom line standard and actually having the full gamut available.
In that context, I want to quote from the speech given by the member for :
One of the key amendments that we are looking for is to take out any limit on nuclear liability. Unlimited amounts would probably be the preferred method to deal with it, just as Germany does. It has an unlimited liability on nuclear facilities. That means that whatever the costs are, when there is an accident those who are responsible for the plant will need to pay those costs.
The $650 million limit set in this bill pales next to that of our major trading partner, the United States of America, which has an $8 billion to $10 billion liability ceiling on its nuclear facilities. Most of our nuclear facilities are located in highly populated areas in southern Canada, areas similar to where the nuclear facilities are located in the United States.
The Conservative members often tout U.S. policies on things, so surely they would want to be in line with one of our major trading partners on this very serious issue of nuclear liability. If, after examining the issue, the United States has determined that $8 billion to $10 billion is a reasonable amount for nuclear liability, that would seem something Canada should also seriously examine, although, as the member for has proposed, there should not be a limit on the nuclear liability.
I want to put this in the context of where this came from. The Vienna Convention on Civil Liability for Nuclear Damage tried to address some of the very serious concerns around civil liability around the world. This is a bit of background on what was happening:
In September 1997, the government took a significant step forward in improving the liability régime for nuclear damage. At a diplomatic conference at IAEA [International Atomic Energy Agency] Headquarters in Vienna, 8-12 September 1997, delegates from over 80 States adopted a Protocol to Amend the 1963 Convention on Civil Liability for Nuclear Damage and also adopted a Convention on Supplementary Compensation for Nuclear Damage.The Protocol sets the possible limits of the operator's liability at not less than 300 million Special Drawing Rights (SDRs) (roughly equivalent to 400 million US dollars). The Convention on Supplementary Compensation defines additional amounts to be provided through contributions by States Parties on the basis of installed nuclear capacity and UN rate of assessment.The Convention is an instrument to which all States may adhere regardless of whether they are parties to any existing nuclear liability conventions or have nuclear installations on their territories. The Protocol contains inter alia a better definition of nuclear damage (now also addressing the concept of environmental damage and preventive measures), extends the geographical scope of the Vienna Convention, and extends the period during which claims may be brought for loss of life and personal injury. It also provides for jurisdiction of coastal states over actions incurring nuclear damage during transport. Taken together, the two instruments should substantially enhance the global framework for compensation well beyond that foreseen by existing Conventions. Before the action in September 1997, the international liability regime was embodied primarily in two instruments, i.e. the Vienna Convention on Civil liability for Nuclear Damage of 1963 and the Paris Convention on Third Party Liability in the Field of Nuclear Energy of 1960 linked by the Joint Protocol adopted in 1988. The Paris Convention was later built up by the 1963 Brussels Supplementary Convention. These Conventions are based on the civil law concept and share the following main principles:
There are a number of principles outlined in these conventions, but I just want to talk about a couple of them.
One is that the liability is channelled exclusively to the operators of the nuclear installations. Another is that the liability of the operator is absolute; for example, the operator is held liable irrespective of fault. Another is that the operator must maintain insurance of other financial security for an amount corresponding to his liability. If such security is insufficient, the installation state is obliged to make up the difference up to the limit of the operator's liability.
It is on this last point where we are very concerned that Canadian taxpayers may be on the hook for the difference between the $650 million and the millions and millions over and above that amount which could be incurred in a nuclear incident.
We often hear Conservative members talk about being concerned about the taxpayers' purse and accountability. I would suggest they make sure to bring in legislation that actually does protect taxpayers from being on the hook for a potential incident.
I want to turn for a moment to the economics of nuclear power. One of the things that is important in this consideration is the age and the state of nuclear facilities, and the kind of investment that is made for future nuclear stations, if that is the direction the government should choose to go in. However, I know that many members in the House and certainly many of my constituents do not support nuclear power as a viable option.
In its paper “The Economics of Nuclear Power”, Greenpeace provided an analysis of a variety of elements that go into building and maintaining nuclear power stations. I am not going to deal in depth with a number of them, but the executive summary states:
The civilian nuclear power industry has been in operation for over fifty years. During such a long period, it would be usual for technological improvements and experience to result in learning and subsequently enhancements in economic efficiency. However, the nuclear industry has not followed this pattern.
It provided an analysis on the rising construction costs, rising construction times, falling construction demand and untested technology. It talks about generation III and III+ reactors and the fact that this is untested technology for the longer term.
Of course, when we are talking about liability, we want to understand a variety of factors in terms of the condition of the nuclear industry in Canada. In talking about an unfavourable marketplace, it states:
The economics of nuclear power have always been questionable. The fact that consumers or governments have traditionally borne the risk of investment in nuclear power plants meant that utilities were insulated from these risks and were able to borrow money at rates reflecting the reduced risk to investors and lenders.
Again, it comes back to insurance. The taxpayers could be on the hook. They are in a position where the industry itself is not bearing the true cost of what it takes to maintain and operate a nuclear power plant. In this case I would argue once again that the limit to liability should be removed. It is the nuclear industry itself that should have the full responsibility for insurance around operating these plants.
This paper, “The Economics of Nuclear Power”, goes on to talk about a nuclear renaissance. It states:
The much touted “nuclear renaissance” assumes that new plants will be built cheaper than the alternatives, on time and to cost, that they will operate reliably and that the cost of dealing with long-term liabilities such as waste disposal and decommissioning will stabilize. However, wishing for an outcome is not sufficient to make it fact. Until nuclear power actually meets all these criteria on a sustained basis, the additional risks of nuclear investment will be large.
It goes on to talk about the fact that the nuclear industry only survives because of significant subsidies. It states:
It is now 29 years since the last order for a new nuclear power plant in the U.S. and 34 years since the last order for a plant that was actually completed. Utilities suffered heavy losses in the 1980s as economic regulators became increasingly unwilling to pass huge cost overruns from nuclear projects on to consumers, forcing utilities to bear the extra costs. The introduction of power markets has meant that plant owners are now fully exposed not just to the risk of cost overruns but also to plant unreliability.
Again it is all of these factors that have to be considered when we are talking about potential risk to the taxpayer in Canada.
I want to talk a bit about decommissioning. Decommissioning of these plants is a long and complicated process. Many times the costs for decommissioning are passed on decades into the future for future generations. Of course, when the costs for decommissioning at today's current rates are considered, they are often completely out of line with what the eventual decommissioning costs will be.
With respect to funding long term liabilities, the Greenpeace paper, “The Economics of Nuclear Power”, states:
There is a moral imperative for the “polluters” to take all reasonable measures to ensure that those that have to perform the cleanup are given sufficient money to do the job. This imperative has three main dimensions:
Estimates of the expected cost should be conservative or pessimistic, especially where the cost is not well established so that funds are not inadequate because the cost is greater than expected;
Funds collected from consumers should be placed in very low risk investments to minimize the risk that the funds will be lost. Such investments inevitably yield a low interest rate;
Funds should not be accessible by the company that owns the plant other than for decommissioning purposes.
The Greenpeace paper refers to the experience of the United Kingdom:
The experience of the United Kingdom in dealing with long term liabilities is salutary, with costs consistently underestimated and provisions not adequately safeguarded.
There is certainly experience throughout the world which says that the true cost and liabilities for operating these plants are not borne by the plant operators. Costs are often underestimated, in the construction phase and subsequently in the decommissioning phase and at some point taxpayers are on the hook for this. That does not seem to be a responsible way to proceed with this.
In a conversation about nuclear power and nuclear liability, one of the other things that has to come up is whether or not this is the best use of taxpayers' money and whether or not we should actually be investing our time and our energy in alternative energy strategies. The document, “The Economics of Nuclear Power”, talks about energy efficiency and renewable electricity sources:
Energy efficiency must be the cornerstone of future energy policies. The potential for energy efficiency is huge. According to the French Ministry of Economy, changes in the production, transmission and use of energy (including transport) could result in a halving of global energy consumption--from the business as usual scenario--resulting in the saving of 9,000 million tonnes of oil equivalent...per year by 2050.
This is in terms of the conservation end of it and using more efficient appliances, more efficient automobiles, more efficient home heating, and more efficient building and retrofitting of housing and commercial and industrial buildings. We need to pay full attention and put our resources toward improving energy efficiency in this country.
The other piece is renewable electricity sources. In the context of a global study, it was found that hydroelectricity and wind energy are expected to deliver the biggest increases in electricity production by 2020. In the context of renewable energy sources, Canada is lagging behind the rest of the world.
My province of British Columbia is fortunate because a significant portion of its electricity comes from hydroelectric sources. The dams were built many years ago so the environmental damage has already been done. British Columbia is in a fortunate position because it has a fairly clean energy source.
Many of the provinces in Canada, such as Ontario, have been under pressure to build new nuclear facilities because they have not invested in some of the other more environmentally friendly, cleaner, renewable energy sources. That is why this bill is an important piece of legislation. If people are starting to propose the addition of new nuclear facilities, it is important that the plant owners bear the true cost of building those plants.
Canada does not have a comprehensive strategy from coast to coast to coast to look at the needs of Canadians in terms of electricity sources. Recently, a newspaper story stated that the government of Nunavut is spending 25% of its budget on diesel because it has not had the support of the federal government to develop alternative energy strategies. As fuel prices climb in this country communities are going to be increasingly marginalized because they do not have access to other tools and resources that we should have been developing over the last 20 years.
The member for proposed a number of amendments in order that the bill would better suit the needs of the Canadian public. Because those amendments were not supported, the NDP is not in a position to support this piece of legislation.
Mr. Speaker, we are debating Bill today at third reading, which is quite an important bill in the scheme of things.
The need for the bill was generated over a number of years. Suffice to say that the nuclear power option and the use of nuclear power plants for energy production began here after the second world war and was highly regulated under a statute that stayed pretty much the same for most of those years, and, as in so many other areas, an update or a modernization is required. This particular bill addresses, for the most part, the liability component of the envelope.
The area is highly regulated. No matter what we do involving the nuclear industry, it is always highly regulated. Some people in Canada do not believe we should be as reliant on nuclear energy as we are. The fact is that in Ontario, Quebec and New Brunswick, there is substantial reliance. I think in Ontario, one-third of the current power needs are generated by nuclear energy. I am saying that to indicate that the nuclear generation option is not going away. We will continue to rely on it for many years and some of our provinces have made that decision.
To be sure, there are other sources of energy. We are capable of improving our production of hydroelectric energy. We continue to generate electrical energy from gas. We may be using coal in some parts of Canada. Our neighbour to the south is certainly using it in some parts the country. Wind and solar options are there too but nuclear will remain.
Is it efficient? Is it cost effective? Is it clean? Is it safe? Is it renewable? All those questions are there and are part of the continuing debate.
The bill does not alter any of those but it does recognize that there have been a lot of changes in Canadian society, in the world, in the financial world, in the insurance world and in our perspectives on nuclear energy and the risks associated with it that caused us to modernize the statute that governs this very regulated industry.
If people wanted to produce some solar energy, some wind energy in a particular province, they would call it co-generation and plug it into the electricity grid, and they could probably do it without much regulation. However, if they were to try to do some nuclear generation, they could not move without a licence in their back pockets or maybe a dozen licences.
I should also say that Canadians, whether or not they know it, are actually quite reliant on some radioactive processes, both for health care and for some industrial processes. Radioactivity and radioactive isotopes are found in many of our communities. They are closely controlled and serve us all very well, whether we actually know it or not.
To be sure, there are some background radiation sources with low level radiation. They are found in various places across the country, including where uranium is mined or has been mined and where there are tailings. We generally manage those things fairly well and the Government of Canada is quite involved in that. Wherever it is higher than background level of radiation, the Government of Canada believes it has a jurisdiction and it acts.
The bill itself re-establishes a revised liability scheme for civil liability and compensation for this envelope of activity. It is worth pointing out that the previous statute had a maximum liability for an operator of a paltry $75 million.
These days, when it comes to potential liability for anything, whether we have some bad peanut butter, or drive a car, or a truck, or a train or fly an aircraft, $75 million is not a lot of coverage for potential liability. That has been recognized now for some time. The bill would correct that by increasing the limit up to $650 million.
Some may say that is not a lot either. However, the bill was reviewed by the standing committee of the House of Commons and that limit was selected after looking at the basic principles of nuclear liability.
I will reiterate the four principles for the record. First, the operator is the party that is liable, nobody else. Second, the operator of the nuclear facility is exclusively liable for damages if there is an accident. Third, the operator must carry insurance. Fourth, the liability is by statute limited. There are time limitations and dollar limitations, in this case running up to $650 million. This is important. Those who supply materials to the nuclear operator do not face liability for second and third party liability. They can safely deliver the commodity or service to the nuclear operator and they do not have to deal with the potential liability if there is an accident.
Fortunately we have not had any serious accidents in Canada. There have been accidents in two, three or four in various places around the world. The one most people will recall is Chernobyl. The implications of that have been experienced right around the world for all these years.
The factors involved in picking this number include the foreseeable risk. That means the amount chosen was based on what an operator might anticipate as a risk and not from a catastrophic unforeseen event. Our nuclear reactors all have second and third backup fail-safe systems.
This legislation would bring Canada up to par and to the same level as most of the other countries that produce nuclear energy, certainly the western countries. We would get to the $650 million limit not in one slice, but in several years of phase-in, which would be done by regulation.
Under the bill, the government and Parliament will be able to review this every five years. Things may change some more in the coming years.
The statute takes account of what are actually huge changes in the insurance industry. The insurance will have to be obtained only through an approved insurer. The government and the House have recognized that there are other ways of insuring these days, which perhaps were not available 50 years ago. They include government guarantees, letters of credit, some types of self-insurance and the big one of reinsurance.
In some cases some carriers of insurance will not insure unless they have the ability to reinsure, and that means spreading out the risk to shareholders and investors in different parts of the jurisdiction or even around the world. A lot of major insurance contracts now are reinsured to spread the risk around the world. The reinsurance mechanism, which is now an industry standard, can be used here where an approved insurer will not insure without the reinsurance piece.
The insurance and civil liability also cover the movement of radioactive materials, either the uranium coming in if it is above the level and the spent uranium in the fuel rods or whatever else might be radioactive and transported. There have not been any accidents that I am aware of right now, but there can be with these things and people can be harmed, so we are insuring against those too.
It is notable that since the nuclear industry began, we have realized that sometimes the harm associated with an exposure to radiation will not be seen for many years. Therefore, the time limitation on a claim for bodily injury from exposure to radiation is now pushed out to 30 years. The other limitation for property damage is 10 years, but for bodily injury and death there is a 30 year limitation period.
In the event that a nuclear accident crossed a provincial boundary, if we did not have this legislation, we would probably have litigation going on in two separate provincial court systems. There is a provision in the bill that where there is a boundary straddling circumstance, the claim may be made in the Federal Court.
The last thing I want to say about that is in the event of a major accident, the government may establish a nuclear claims tribunal, in other words, to take it out of the courts and establish a special tribunal to deal with actual liability claims and any awards that will have to be made.
What the government has provided for in the bill and what the House has approved is a certain amount of free market interplay with the insurance and reinsurance scheme. In theory, that should keep the insurance costs down or at least competitive and the nuclear station power operators will have the benefit of having improved accessibility to insurance and improved cost efficiencies.
The proposed bill also provides for a reciprocating arrangement with other countries. There is always the risk that a nuclear operator is a corporation that straddles international boundaries or the nuclear operation may be close to a boundary. For example, in my riding of Scarborough—Rouge River, the very east end of the city of Toronto, is only 10 or 20 kilometres from the Pickering Nuclear Generating Station. The generating station is on the shore of Lake Ontario and that itself is only a few kilometres from the boundary of the United States of America.
There is the ability under this statute for the Government of Canada to enter into an agreement with another country to deal with the possibility of nuclear accidents and liabilities in a reciprocating agreement where it would accept our procedures and we might accept its. The ability is there and in the increasingly global environment, that is probably a good thing.
I commend the committee that looked at the bill. I cannot assume anything about third reading, but my party certainly will support it. My hope is that we will get to third reading fairly soon.