AANR Committee Meeting

STANDING COMMITTEE ON ABORIGINAL AFFAIRS, NORTHERN DEVELOPMENT AND NATURAL RESOURCES

COMITÉ PERMANENT DES AFFAIRES AUTOCHTONES, DU DÉVELOPPEMENT DU GRAND NORD ET DES RESSOURCES NATURELLES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 8, 2001

• 1104

[English]

The Vice-Chair (Mr. Maurice Vellacott (Saskatoon—Wanuskewin, CA)): We'll call the meeting to order.

I have a quick housekeeping note. We can operate with the fact that we don't need a quorum when hearing witnesses, and we assume for the sake of our witnesses that, in respect to them, others will be joining us shortly, we hope.

• 1105

There's a quick thing for all of us. We got notes sent to our offices regarding the 1998 Cree-Naskapi Commission report, but if you haven't got a copy or need one, there are some available up at the front here. For the Thursday committee meeting, Terry Henderson will be here, because they weren't satisfied with responses they got to that 1998 report. That's why it's coming up again, although they've already done a 2000 report.

We're going to proceed with our witnesses, and along the way, if I get a sense of who's going to respond once we get into the question phase of things, I always want to be sure that we've acknowledged that person, so that it's on the Hansard record and the public is aware.

So we've got about ten minutes here. Is Peter going to speak first then? This is Peter Brown speaking, and then we'll go from there.

Mr. Peter Brown (Director, Uranium and Radioactive Waste Division, Energy Resource Branch, Department of Natural Resources): Thank you very much, Mr. Chairman.

We have prepared a deck, which I would like to run through very quickly, to give a general overview of the nuclear fuel waste bill that was introduced by the minister on April 25. If I may, Mr. Chairman, I can spend the time just going right through, or, if you wish, you can pose questions—it's your choice.

The Vice-Chair (Mr. Maurice Vellacott): Just proceed, and then once you've given us the basic briefing, we'll have the questions. And thank you to each one of our witnesses for being here today.

Mr. Peter Brown: Thank you very much. I shall try to be as brief as possible.

At the first slide, which is the bill at a glance, the bill fundamentally builds on 25 years of R and D to develop a disposal concept for nuclear fuel waste, and it also builds on the ten-year Seaborn independent environmental assessment review of that disposal concept. What we believe it does is provide a balance between the interest of Canadians and fairness to waste owners. There are about 30 clauses to the bill, and it deals with a $12 billion project over 70 to 100 years. Essentially, what the proposed bill does is ensure that a waste management organization will be set up by waste owners and that money will be set aside for that to be accomplished.

The fundamental policy—this is the second slide—a basis for the proposed bill, is the 1996 policy framework, in which there are three fundamental objectives. One is that the federal government will ensure waste disposal is carried out in a safe, environmentally sound, comprehensive, cost-effective, and integrated manner. The second is that the federal government has the responsibility to develop policy to regulate and to oversee producers and owners. The third is that the waste producers and owners are the ones who are responsible, in accordance with the simple principle of “polluter or producer pays”, for the funding, organization, management, and operation of their disposal facilities.

As I mentioned, there was a ten-year environmental assessment and review process of the deep geologic disposal concept, the Seaborn environmental assessment, and in 1998 Seaborn came forward with recommendations to the federal government. The federal government responded, and on the next slide is the essence of that government response in 1998. It reaffirmed the policy framework that said it is the producers and owners of the nuclear fuel waste who will establish a waste management organization and will establish a fund to fully finance the activities and the operations.

The waste management organization needs, obviously, to report to the Government of Canada, setting out the preferred approach, because, I would emphasize, at this time there is no decision about the proposed approach. When that waste management bill comes forward, it should have a comprehensive public participation plan, an aboriginal participation process, an ethical and social assessment framework, options for long-term management, comparison of risks, costs, and benefits. Finally, and I think importantly from the government's point of view, it is the Government of Canada that will make a decision on the preferred approach.

But in order for the Government of Canada to make that decision, it needs to have some oversight, to make sure the information gets to it, and in 1998 there were a number of policy objectives for that federal oversight.

• 1110

The three important points were that a dedicated fund be established for the long-term management, including disposal of nuclear fuel waste; that a reporting relationship be established between the federal government and the waste management organization; and obviously, if that's going to happen, we need to have a federal review and approval mechanism.

There are basically four main parts to the bill: the waste management organization, financing, reporting and approvals, and audits, offences, and punishments.

As to the waste management organization itself, the basic policy here goes back to that 1996 policy framework, which says it's the producers and owners who are responsible for the funding, organization, management, and operation of the disposal and of facilities. Also in the Government of Canada response it was clear that the producers and owners are the ones who have to establish a waste management organization.

So in the proposed bill, clause 6, it's very clear that it's the nuclear energy corporations that will be required to establish a waste management organization, with the purpose of proposing approaches to the Government of Canada for the long-term nuclear fuel waste management, and to implement that approach once the Government of Canada has chosen the approach. There is a duty on the waste management organization to make sure all nuclear fuel waste owners are in fact part of the organization, so that all nuclear fuel waste will be dealt with by this organization.

Also, it is important that the waste management organization have an advisory council, which will reflect the range of expertise of scientific and technical disciplines covering the engineering aspects, but also, very importantly, the public affairs and social sciences aspects, to make sure the social side of the issues is also dealt with. And once a site is selected, regional governments and aboriginal organizations need to be consulted fully.

In regard to the financing elements, again it is basically the 1996 policy framework, which stated that the waste producers and owners are the ones who are responsible, in accordance with “polluter pays”, for the funding of waste management. This was reiterated in 1998, when it was made clear that the producers and owners of nuclear fuel waste should in fact establish trust funds.

What the proposed bill indicates is that each nuclear energy corporation and the AECL shall establish a trust fund. They can have one trust fund or they can have a separate trust fund each, one held by OPG, one by Hydro-Québec, the other by New Brunswick Power, and a fourth by AECL. That is their choice. All we're interested in here, in respect of the bill itself, is to say that trust funds shall indeed be established, so that the moneys are put away. The deposits to those funds can be either direct or through a third party. The reason for bringing in the option of a third party is that this project is liable to last 70 to 100 years, it's going to cost $10 million to 12 billion, and we do not know what sorts of arrangements there will be between energy corporations in the future. Therefore, there's a sense of flexibility here.

The initial deposit is going to be $500 million for Ontario Power Generation, $20 million for Hydro-Québec, $20 million for New Brunswick Power, and $10 million for AECL. That initial deposit will be required 10 days after the act comes into force. Following that there will be an annual deposit, which is $100 million, $4 million, $4 million, and $2 million, respectively. These amounts are set in the proposed bill because at this particular point in time there has been no decision about the approach, and only when you have a decision about the approach will you be able to determine how much it is going to cost. Getting those detailed costs will come later. So the amounts are set right up front. Importantly, there will be withdrawals only after implementation of the Governor in Council's selected approach. In other words, no money will come out of the fund until the waste management organization comes forward with the approach and gets a licence from the Nuclear Safety Commission to say, proceed with implementation of this approach.

The next slide, which basically deals with the reporting and approvals, again is based on the policy framework, which said that producers and owners should comply with all real legal requirements, and the 1998 government response indicated that the WMO should report to the government, setting out all options.

• 1115

The options that are to be set out should be all the approaches that have already been discussed through the Seaborn report, which includes deep geologic disposal, storage at the reactor sites, or centralized storage either above or below ground. These were recommended to the government by the Seaborn report and the government picked them up.

Each study should include the detailed technical descriptions plus the economic region for its implementation; the comparison of benefits, risks, and costs, taking into account the ethical, social, and economic considerations—this was a very important point raised by Seaborn in terms of bringing in the social side, rather than just the technical side; and finally, an implementation plan with activities and timetables.

Each of the approaches obviously will cost a different amount; therefore a formula will be required to determine how much money should go into the trust fund to implement each of them.

Importantly, the WMO shall consult with the public and in particular with aboriginal peoples on each of the approaches before coming into government.

On the next slide is the Governor in Council decision, and from the government's point of view it is extremely important. It is again basically based on the policy framework, and also the Government of Canada response to Seaborn, which says the Government of Canada will make a decision on the preferred approach.

So when the reports are developed they will be presented to the minister, the minister will review the report, and if he's not satisfied with it, he will consult. Once he is satisfied with it, he will make a recommendation to the Governor in Council. The Governor in Council, on the recommendation of the minister, shall select one of the approaches for the management of nuclear fuel waste from among those set out in the study. Once that decision has been made it will be published in the Canada Gazette. So the Government of Canada will make that basic decision.

The next slide deals with the detailed reports by the waste management organization. Again, this responds to the policy paradigm set out earlier. There are two kinds of reports. The first is the annual financial report to be submitted to the minister. This will be a public document and will provide the form and amount of guarantees and how much money is going into the fund.

The minister's approval will be required only on the formula for the first annual report after the Governor in Council decision—in other words, how much money is actually going to go into the fund. He needs to determine that formula to be sure the formula is reasonable. Also, once the project is basically nearing completion, once the money starts coming out of the fund, the minister must approve the formula to allow the moneys back out of the fund.

The second type of report is a triennial report that will deal with the program of activities for a five-year time span. That report will need to be commented on by the advisory council so that we get social as well as technical input into it. For both sets of reports, the minister shall issue a public statement and in effect put a spotlight on them.

The next slide addresses the question of whether there should be a change in approach. Obviously for a program that is inevitably, I suspect, going to be somewhat controversial and will last for 70 to 100 years, there is the potential for a change in approach. Should that approach be because of technical difficulties or because there is some brand-new scientific discovery made that completely changes the picture, the waste management organization can come forward and make recommendations to the minister to adopt this new approach. Should the minister agree, he will go to the Governor in Council, and should the Governor in Council agree, then the new approach can be implemented. It will probably cost less; otherwise the waste management organization probably wouldn't come forward with it, so there is the chance here of actually withdrawing funds should the Governor in Council agree.

The final part is the records reporting and auditing offences and punishment. This is pretty much standard material. The records and the books will be kept for six years. The waste management organization and the trust funds will have to have audited accounts to the minister, and the minister is able to hire an auditor to make sure those accounts are in compliance.

• 1120

One thing I do want to mention is that all these reports and the financial statements will be public. The whole intent here is to make sure we have an open, transparent system. There will be punishments for offences, financial punishments ranging from $300,000 per day down to $50,000 per day. There's a two-year limitation period.

Mr. Chairman, in conclusion, I want to say that what we believe the bill does is provide a legal framework needed for the long-term management of nuclear fuel waste. Nuclear energy corporations are required to set up a waste management organization as a separate legal entity to manage the full range of waste management activities. The nuclear energy corporations are to establish trust funds with an independent third-party trust company to finance long-term waste management responsibilities, and the WMO is to submit waste management options to the government.

Finally, and very importantly, it is the Government of Canada that will make the final decision on the approach to be taken at some time in the future.

Thank you, Mr. Chair.

The Vice-Chair (Mr. Maurice Vellacott): Thank you very much, Mr. Brown.

We're going to move to questions now, and I suppose as director, you could play traffic cop in terms of which of your resource people you want it directed to, or it might be a question posed directly to one of our resource people.

Mr. Chatters on the opposition side is going to be starting, then we'll go to Mr. Cardin, and then to Mr. Serré.

Mr. David Chatters (Athabasca, CA): Thank you, Mr. Chairman.

The presentation brings all kinds of questions to mind, probably about what's not in the bill more than what is in the bill. I'll give you some questions on a number of areas and let you answer them.

First, where did the blueprint for this plan come from? What did you base it on, and is this kind of direction, this plan to deal with nuclear waste, something that's working somewhere else in the world, or is it something you brought up yourself?

Perhaps a second question is, what provision have you made—I can't see anything in what you've presented or in the bill—for the inclusion of new nuclear corporations that might come in the next 70 to 100 years? What do you do with the thousands of users of nuclear technology in non-destructive testing and in medical facilities who have to dispose of waste as well? There doesn't seem to be any indication of what would be a reasonable cost for them.

And how do you get to the starting point? You don't allow anybody to draw money off the trust fund until the plan is in place and the government approves it, but there seems to me to be a requirement of a substantial expenditure to get to that point beforehand. How do you decide who's taking what share of that expense?

That's a whole myriad of questions. I'll let you start with them.

The Vice-Chair (Mr. Maurice Vellacott): There are about three or four that you may want to come back to, Dave.

Mr. Brown.

Mr. Peter Brown: Maybe I could start with the first one and then try to work my way, and we'll see where we go.

In terms of the blueprint, fundamentally there were two areas this came from. First is the Canadian policy we developed in 1996 and the response to the Seaborn environmental assessment and review panel in 1998. From a Canadian perspective, that is clearly what this is based on.

By the same token, what we also did was we went out and looked at what was happening in other countries to see what was a successful model and appeared to be working and what did not. One of the countries where they are making considerable progress is Sweden.

What we found when we went over to discuss with the Swedes their model is that back about 20 years ago the utilities established a separate organization called SKB. The money coming from the utilities was actually flowing into the government coffers, but it was accumulating for waste disposal.

• 1125

It seemed to be a model that was working extremely well. The Swedes have in fact probably made more progress than anyone else. We also looked at other models in other countries. I will say we made as much note of those models not working as those that were working.

We fundamentally had three real options on the table. One was to establish a contractual arrangement between the utilities and the government. It was an approach that was taken in the United Kingdom. It actually does not seem to have worked in the United Kingdom.

Secondly, we could put this responsibility onto the Canadian Nuclear Safety Commission. The view was it would be putting them in conflict. They're regulating as well as making sure it has actually been done and the approach has been taken appropriately.

The third approach was new legislation. Hence, that's why we took this approach and also why it was based, if you like, on the Swedish model. It takes from the Swedish model. It is not absolutely defined by the Swedish model.

We also took note of the American model where the money from the utilities goes straight to government and then government would do the job. They've run into all sorts of lawsuits and issues, although they have moved ahead.

The model we chose was the one that seemed to be working extremely well and actually would probably fit the Canadian context. Hence, this is the basis or the blueprint, if you like. It was home-grown, as well as looking at the international models.

In terms of inclusion of new corporations in the future, the definition of a nuclear energy corporation I think clearly identifies Ontario Power Generation, Quebec, New Brunswick Power, and any other body that owns nuclear fuel waste resulting from the production of electricity by means of a commercial nuclear reactor.

Should somebody in British Columbia, for example, set up and establish a nuclear reactor and start producing fuel, they would be caught by this definition in the proposed act.

Mr. David Chatters: But is there a formula for their contribution to the trust fund?

Mr. Peter Brown: Yes. Depending upon how much fuel and waste they're going to produce, the formula would have to be adjusted to allow for that.

Mr. David Chatters: Okay.

Mr. Peter Brown: There were a number of other questions, but maybe you could refresh my mind. There was a question on the small users?

Mr. David Chatters: Yes.

Mr. Peter Brown: Do you want to take that one, Carmel?

Ms. Carmel Létourneau (Senior Policy Adviser, Uranium and Radioactive Waste Division, Energy Resource Branch, Department of Natural Resources): The smaller users, for instance, Nordion, don't produce electricity per se. If they want to dispose of their nuclear fuel waste bundle, they will go see the Waste Management Organization and ask them to provide a service for disposal. The WMO cannot refuse. All the nuclear waste to be disposed in Canada has to be disposed through the Waste Management Organization.

All the waste, now and in the future, that will be disposed of or managed over the long term in Canada is covered under this act.

Mr. David Chatters: They can't refuse to dispose of the nuclear waste, but it doesn't appear there's any limit on what they can charge small users. I think the small users certainly would have an interest in some kind of formula where they can predetermine the cost of that use.

Ms. Joanne Kellerman (Legal Counsel, Legal Services, Department of Natural Resources): If I could speak to that, Mr. Chairman... My name is Joanne Kellerman. I'm the legal counsel at the Department of Justice who is responsible for this file.

Clause 7 of the proposed legislation states that there's a duty to offer, without discrimination and at a fee that is reasonable, the waste management services. The section is intended to address that concern.

Mr. David Chatters: What is reasonable is a legal question. If there's a dispute, the courts will decide whether it's reasonable or not.

Ms. Joanne Kellerman: I'm not sure I would go so far as to say that. It says “at a fee that is reasonable in relation to its costs of managing the nuclear fuel waste of its members or shareholders”. The fact that the financial records of the WMO will be public means their costs will be transparent and other users will be able to tell them what the costs are. The service should be provided on the basis...

Mr. David Chatters: Yes, okay.

Mr. Peter Brown: Maybe I could just add one point.

• 1130

The Vice-Chair (Mr. Maurice Vellacott): Give your quick response to this, and then we'll go to Mr. Cardin.

Mr. Peter Brown: It's not for profit, so that basically limits what you can do. It's not as if they're going to go and make a tremendous profit in this. It's a not-for-profit concern.

Mr. David Chatters: Thank you very much.

The Vice-Chair (Mr. Maurice Vellacott): Thank you.

[Translation]

Mr. Cardin.

Mr. Serge Cardin (Sherbrooke, BQ): Thank you, Mr. Chairman. Ladies and gentlemen, welcome.

Obviously, whenever we talk about nuclear waste, many questions come to mind - particularly for someone new to the issue like myself. This is not something I have been talking about for long.

I imagine that, today, there are already ways to store nuclear waste. When you formulated the long-term management of nuclear fuel waste bill, you probably made projections. So today, there is X amount of nuclear waste, and in your bill, you probably projected by how much nuclear fuel waste production would increase over time. Now with all that in the background, can we expect a sharp increase in the number of nuclear fuel users, with the result that a significant or substantial increase of nuclear fuel waste can be projected for the future?

[English]

Mr. Peter Brown: We didn't actually make any predictions of the amount of nuclear fuel waste that was going to be produced. We felt in putting the onus on the owners of the nuclear fuel waste that they will be able to determine how much nuclear fuel waste they will be generating and how much electricity they will be generating. They are the ones who are best placed to determine how best to manage their waste and to present the government with an approach and a formula as to how much it's going to cost. Basically, it's their responsibility—“polluter pays”—to determine what they wish to do, and it's the government's role to determine whether or not we believe what they've presented. So we've made no predictions.

[Translation]

Mr. Serge Cardin: We shouldn't think that there is no limit to nuclear fuel waste production if we have ways of managing them, or if possible even eliminating them. Does the production of nuclear waste precede the means of managing, storing or destroying it, or at some point will we face a situation where we will have to find means to manage an unmanageable quantity of waste?

[English]

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Basically, the wastes are being stored safely at this time at the nuclear reactor stations. They are regulated by the Canadian Nuclear Safety Commission. What this proposed bill does is say that in the long term all of the waste that is being produced at this time has to be dealt with, and dealt with appropriately.

As to the quantities of waste, there will be a lot if we have a lot of reactors. There will be relatively little increase in the waste if we have relatively few additional reactors, if any. AECL several years ago made a number of projections concerning potential future nuclear reactors, future amounts of waste, and the entire intent in this proposal is to make sure that we can deal effectively with all the Canadian waste generated by reactors now or in the future.

I'm not sure if that answers your question.

[Translation]

Mr. Serge Cardin: Yes. That is my most important question. We are not setting any restrictions on nuclear waste production. We are simply trying to establish ways to manage the waste. However, at some point - since Canada says that nuclear energy is green energy, as does the US - we begin to use nuclear energy more and more. If we can perform sufficiently well in managing and destroying nuclear waste, that would be great. It would be great if we could deal with what we have, but if we become so good at it, then given the way our society is structured and the way in which nuclear waste is managed and destroyed, can we expect to find ourselves importing nuclear waste for treatment or management?

• 1135

[English]

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Let me first address the question of the volumes. One of the advantages of the nuclear reactor option is that the volume of waste is exceedingly small in relation to the amount of energy that is produced. Since 1972 the amount of nuclear fuel waste that's been generated would roughly fill two hockey rinks or two Olympic-sized pools. So it's a very small volume. It has to be dealt with effectively, but it's an extremely small volume in relation to the amount of energy that is produced. So even if there are more reactors in the future, the volumes that will have to be dealt with are still relatively small volumes. It's not as if we're going to have mountains of the material.

With regard to importation of nuclear fuel waste, the policy of the government at this time is very much that we are dealing specifically with our own wastes here. There is no intent to import wastes.

The Vice-Chair (Mr. Maurice Vellacott): Did any of the other witnesses want to respond to that? Ms. Létourneau.

[Translation]

Ms. Carmel Létourneau: I should add that this bill does not cover energy choice issues. It is intended solely to manage existing fuels. There is nothing in this bill to promote the use of nuclear energy as opposed to hydro-electric power. We will deal with energy choice issues, but separately. The scope of this bill does not extend to those issues. The government of Canada will deal with those issues separately. Here, we're talking solely about an operational framework to manage waste generated in Canada.

[English]

The Vice-Chair (Mr. Maurice Vellacott): Okay. I guess time has expired there, so we'll move over to Mr. Serré.

[Translation]

Mr. Benoît Serré (Timiskaming—Cochrane, Lib.): Thank you, Mr. Chairman.

[English]

I hope I don't sound like an Alliance member here, but I will talk about auditing and liabilities.

I know the minister has the prerogative to assign an auditor to verify compliance. I know it would be subject to a normal audit by the organization, but does the minister have the authority to appoint somebody to audit their financial statements? Will the Auditor General have an automatic right to audit compliance and financial statements?

On the liability side, in light of what happened at Westray, will the directors of the waste producers, OPG or whatever, be personally liable for non-compliance?

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Thank you, Mr. Chairman. I'd like Joanne Kellerman to answer those questions.

Ms. Joanne Kellerman: The first question is whether the minister has the authority to appoint an auditor. The answer to that question is yes. The minister's audit authority would extend to the trust company holding the fund, to the waste management organization, and to the nuclear energy corporations with respect to those matters that relate to the act. So, for example, the quantities of wastes they are producing could be audited by the government.

The second question had to do with the role of the Auditor General. This legislation draft does not set out a role for the Auditor General.

The third question you posed had to do with directors and officers and whether they could be liable personally. For that I will look at what the legislation says. There are some offences in here that are established as being offences if they are carried out by a nuclear energy corporation or AECL. So those are offences where directors and officers would not be personally liable. The intent is that the responsibility to deposit moneys into the trust fund is that of the Nuclear Energy Corporation. It's the corporation or AECL that would be charged if they did not make a deposit. There are provisions in here that do apply to any person. The duty to assist an auditor applies to anyone. There is a general statement at the end that any person who contravenes any other provision in the act, apart from the specified offences, is guilty of an offence.

• 1140

I'm not sure the concern you have about the Westray situation is completely answered by what I've said. I don't know the details of that situation, so it's a bit difficult for me to respond.

Mr. Benoît Serré: I believe myself that directors of any corporation should be personally liable when they don't respect provisions of the law, especially when the security of the country's at risk or the health of Canadians is at risk. I was wondering if the bill addresses that and if some consideration has been given to that.

Ms. Joanne Kellerman: There was some consideration given to the structure of the offence provisions in this legislation, and it does contain a due diligence provision, so that it's a defence to a charge under the proposed legislation that a person has exercised due diligence to prevent an offence being committed. That would certainly be a defence available to any person who is charged. So if a director or officer were personally charged, the defence of due diligence would be available to them, to demonstrate that they had done everything within their role and responsibilities as a director or officer to prevent the offence from taking place.

The Vice-Chair (Mr. Maurice Vellacott): Susan McLaughlin, go ahead.

Ms. Susan McLaughlin (Financial Adviser, Uranium and Radioactive Waste Division, Energy Resources Branch, Department of Natural Resources): I would just like to expand on Joanne's answer with respect to the Auditor General. There is no public money going into the trust funds. This fund will all be supplied by the nuclear energy corporations. For that reason the Auditor General should not be involved in auditing.

The Vice-Chair (Mr. Maurice Vellacott): Okay.

Mr. Cardin, do you want to go around again before I come back this way?

[Translation]

Mr. Serge Cardin: You say there are corporations that generate waste. Perhaps you can give me that information. I believe that in most cases they are already public corporations. There are no private corporations in there. We hear that funding does not come from government, but is provided indirectly by the various governments that manage their own corporations.

In the section entitled Inspection of Records and Books, you state: “The Minister may designate [...] an auditor for the purposes of this Act”. I imagine that any corporation which has money in trust could be prosecuted if it fails to comply with the act. I wonder how that will work. There will have to be auditors - inspectors, I should say - in all corporations that generate nuclear waste. That means there will have to be a team. Who will that team report to? Is there a systematic audit system in place, with regular or ongoing inspections?

[English]

Ms. Joanne Kellerman: I'll speak to the first part of the answer.

I'm not sure I understand your question with respect to whether the trust company could be sued and the trust fund be taken into court. A trust is a legal instrument that's set up for a specified purpose. The money in the trust fund can only be used for the purpose that's set up. So it is legally protected from a court order or a court judgment.

• 1145

The purpose of establishing the trust fund, under the statute, is to ring fence that money, so that it is available only for the purpose of management of nuclear fuel waste and at the point when the legislation would say that the Waste Management Organization can access the money.

It would be up to the minister to decide how systematic the auditing would be. My understanding is that the intention is the auditing would be quite frequent and rigorous.

The Vice-Chair (Mr. Maurice Vellacott): Ms. Carmel Létourneau.

[Translation]

Ms. Carmel Létourneau: I will answer your question on who the auditors are, where they come from, and how frequently inspections are conducted.

Since our minister is the minister designated in this bill, within his department he will have a team responsible for ensuring the application of this legislation. The team will be comprised of people responsible for ensuring that inspections are conducted at appropriate intervals, either by government employees or under contract. That is within the department. Every year, there will also be an inspection of all public services involved in the bill, including the corporations.

[English]

The Vice-Chair (Mr. Maurice Vellacott): Mr. Finlay.

Mr. John Finlay (Oxford, Lib.): Thank you, Mr. Chairman.

On slide 6, when we were talking about the Waste Management Organization Advisory Council, I just want to check on something I thought you said. Once a site has been chosen, then the regional governments and aboriginal organizations would be approached. That's what I heard.

It would seem to me we should have some representation from regional government and/or aboriginal organizations on that council, if possible. I'm not sure what numbers you're talking about, but we often run into difficulty if we wait until somebody has made some sort of a decision before the people are educated as to what the purposes are. You might comment on that.

Mr. Chairman, my second question, on slide 8, has to do with cost, as Mr. Cardin was talking about. The Waste Management Organization is charged with submitting, within three years, a plan or plans—various approaches—to manage nuclear waste. I take it they are going to have to pay for the research and investigation and so on that goes into those approaches. How are we going to be assured that the approach they end up with recommending is the best one? Is there a chance that it could be the cheapest one?

I find those wordings a little difficult, Mr. Brown. Storage at reactor sites—that's what we're doing now. It seems to me, for some reason, we don't want to do that. We want something centralized and, as you say, above or below. If it's below, then it's deep disposal of some kind. I'm just a little confused about these approaches.

It seems to me you were suggesting at least four: deep disposal, storage at sites, centralized storage, above or below—and that means decentralized storage back to storage at reactor sites. So I'm a little confused about where we're going here. We must have a game plan.

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: To answer the first question about the regional governments and aboriginal organizations, the minister has in fact already written to the five aboriginal organizations indicating that we want to consult them—that he wants to consult on this issue. So, in effect, we want to move early on that.

In terms of the regional governments, should there be the approach that's put forward to the Government of Canada, let's say for storage at Bruce, then the regional government involved in particular at that time would want to make sure that regional government was, in fact, on the advisory council. But as this process evolves prior to the government having to make a decision as to what sort of approach, then there is a requirement that the Waste Management Organization will consult with the public and consult at large. So the sense is that they will indeed be consulting, but once things start to focus down, then there will be certain requirements that they have to have people on the Waste Management Organization Advisory Council, specifically from the regional governments involved and also from the aboriginal organizations in the vicinity of whatever site happens to be on the table. So it's going from a broad consultation process down into a focused one, when that focus actually starts to take place.

• 1150

The Vice-Chair (Mr. Maurice Vellacott): Could you respond quickly to the second part of his question with respect to the different ways of disposing? Then we'll move on from there.

Mr. Peter Brown: Yes. Those three options were put on the table very clearly by Seaborn and his recommendations. The Seaborn report basically said they could not approve of the deep disposal concept developed by AECL because they did not think at this time it had sufficient public confidence in it. On balance, technically it was okay, but fundamentally there was an issue in terms of the public.

So they put forward three proposals. One was the deep disposal concept proposed by AECL, and they wanted to see whatever modifications to it... in terms of the issues that had been raised with that panel.

Second, they felt that storage at reactor sites needed to be brought forward to the government.

Third, they were looking at centralized storage, which could be at a reactor site, either on surface or, say, a hundred meters below surface. Those were proposal brought forward by the Seaborn panel.

What this proposal does here—this proposed bill—is to say the Waste Management Organization has to come forward with at least those options. It can come forward with others if it so desires, but we want to see at least those three, which have been identified by Seaborn and to which the government agreed in 1998 being brought forward in detail. But there can be others put on the table as well. That is the WMO's choice.

The Vice-Chair (Mr. Maurice Vellacott): We'll move to the next questioner. Mr. Finlay may want to come back to explore that more.

Dave Chatters. These are three-minute rounds.

Mr. David Chatters: Thanks again. I apologize if I repeat what I missed when I had to slip out for a minute.

It seems to me that the government, through this bill, is asking the industry in a sense to achieve results that the government never could, that is, to reach a consensus on how we're going to dispose of nuclear waste. I included that in my first round. But all of the work reaching that consensus has to take place before they bring the plan to the minister for his approval, because quite frankly it looks to me as if—having read the Seaborn report and listened to the controversy around it—the real practical solution is deep disposal in the Canadian Shield. The Seaborn report admitted there was no public consensus to do that, but that was the best proposal they could see.

So how are you going to decide? How are you going to come to an agreement with the groups involved in setting up this waste management plan and the huge costs that seem to be there upfront, before you get to the point where you can draw on the trust fund for the disposal? It looks to me as if that's a huge job—to reach that consensus on which way to go—if all that money has to be spent before they can touch the billions of dollars that are in the trust fund.

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Basically, in terms of what the government has done in the past and what we now expect the owners of nuclear fuel waste to do, I think it's important to distinguish that what the government did through AECL—and also Ontario Hydro to some degree—was to develop a concept for disposal. That was considered to be the way forward. Some $700 million was spent on developing that concept. It went through a 10-year environmental assessment and review process.

I think what came out of the Seaborn panel, in terms of the recommendations, was probably less definitive than what a lot of people had in fact hoped for. Nonetheless, that's what the Seaborn review panel came forward with. It said, look, this is not just a technical issue; this is also a social issue, and you need to address those social components. Most of the concept developed by AECL was largely dealing with the technical elements.

• 1155

With what the government did in its 1996 policy, it was very clear that the producer- or polluter-based principle applied. Therefore, if you're generating money with the electricity you're selling but you're also producing waste, then fundamentally you're the ones who should be finding a solution for that.

Mr. David Chatters: To get back to the issue of the hundreds or thousands of small producers of nuclear waste... Ontario Hydro is essentially the main player in this. They're going to shoulder the greatest cost, not only in the trust fund, but they're going to be expected to shoulder the cost of coming up with the proposal, the plan. You say the small producers are going to be allowed in based on costs, but there are huge costs involved in coming to a consensus on the plan. Again, going back to the small producers, when they're finally brought in because the plan is there and it's approved, some of that cost of developing that position will be included in the costs that are passed on to the small producers.

It's also nebulous, indefinite. If I were a small producer, I'd be darned worried about where this thing is going, about what my costs are going to be down the road.

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: In terms of the number of small producers, we are talking here about nuclear fuel waste. You have a reactor—and we're specifically talking about the nuclear energy corporations, so most of them are generating electricity. Most of them are generating a lot of money from that electricity. All that is really being required here is that they be the ones who fundamentally should fund and develop this solution, come forward with that solution, and also implement it.

The small producers will in fact get a reasonable deal because there is a clause in there that says it's a not-for-profit objective. What we have tried to avoid is a situation where the small producers will in effect be gouged. That's exactly why we have that not-for-profit clause, so the real cost should be reflected there.

The Vice-Chair (Mr. Maurice Vellacott): Is there somebody on the government side? Mr. Finlay, do you have a question?

Mr. John Finlay: No, I'm all right, thank you.

The Vice-Chair (Mr. Maurice Vellacott): Jean-Guy or Rodger? No?

I have a couple. Then we're going to have some latitude here for others to come back, maybe Dave and Mr. Cardin again.

It stems from slide 12 here, and it relates to the issues concerning records and books being kept for six years and then there being a two-year limitation period. I just wondered if this is fairly standard. Also, in view of the fact that sometimes you don't find out the damage or the repercussions until later, much later, I'm wondering about this kind of thing in terms of the impact on the public and so on. Should there be any consideration of extending that a bit since some of this comes out much later in terms of the negative impact?

I guess the question would probably be for the legal counsel, Ms. Kellerman.

Ms. Joanne Kellerman: The length of time for keeping records and books here was set up to be the same length of time they're required to be kept under the income tax legislation, which is six years. So yes, that's a standard period of time.

The limitation period was extended in the draft legislation. All these sentences that are set up are summary conviction offences, and the limitation period would normally be six months. We thought this would not be appropriate because auditors would be going in after a fiscal year was completed and financial statements had been received. That would not provide sufficient time for review of financial records and for the auditor's reports, events that might lead to a charge being laid if there had been some offence committed under the act.

The Vice-Chair (Mr. Maurice Vellacott): Okay.

Ms. Joanne Kellerman: I'm not sure I completely understand your concerns about public protection.

The Vice-Chair (Mr. Maurice Vellacott): I was asking about the two-year limitation period.

• 1200

Getting back to what I think were some good questions from a colleague, Mr. Serré, does this mean that if an action is filed for liability against those directors, whatever that board, it has to be done within two years of the offence? If they don't, does it mean they're out of luck and there's nothing they can do to pursue it from there?

Ms. Joanne Kellerman: No. We've given ourselves a bit more latitude than that. Again, this is something that applies to some but not all federal offences. It provides that the time limit is no later than two years after when the subject matter of the proceedings arose or two years after the minister became aware of the subject matter of the proceedings. The rather more elastic part of that limitation period comes into play when the minister becomes aware of the cause that would have given rise to the offence. There's a period of two years from when the minister becomes aware of that.

The Vice-Chair (Mr. Maurice Vellacott): Okay. Thank you.

Mr. Cardin.

[Translation]

Mr. Serge Cardin: Thank you.

We talked about financing, funds in trust for nuclear energy corporations. In section 10, trust fund deposits are established for Ontario Power Generation, Hydro-Québec, New Brunswick Power Corporation, and Atomic Energy of Canada. Are we to understand that only those corporations currently generate nuclear waste in Canada? Is that right? Have the deposit amounts been established on the basis of nuclear waste quantity, or the corporation profits or revenues?

If I wanted to establish a new nuclear power plant tomorrow—of course, I would have to talk to my bank manager first—would I have to contribute to the trust fund immediately? It could cost me quite a lot of money. Could this not be a disincentive for new players in the nuclear arena?

[English]

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Let me take the first point in terms of the percentages or the values. Basically, it's based on the percentage of nuclear fuel waste each of those corporations has. In effect, 90% of the nuclear fuel waste in Canada comes from Ontario Power Generation, roughly 4% is from Hydro-Québec, 4% is from New Brunswick Power, and 2% is sort of a relic from the development of nuclear power with AECL. We've got 90%, 4%, 4%, and 2%.

When we discussed with the nuclear utilities what was a reasonable way of approaching it, just as a ballpark figure to start with, basically those percentages came to the fore. They're fundamentally based on the percentage of nuclear fuel waste.

The second question concerned a situation where you were going to operate a nuclear reactor tomorrow. If you had it built right now and it could go into service tomorrow, then you would be starting to generate a certain amount of nuclear fuel waste. Yes, you would then be contributing to that fund within the percentage terms as this exists right now. But there's a considerable lead time in actually getting a nuclear reactor up and running, so that would be factored into the costs of actually doing business. You would never be the major contributor, I wouldn't think. OPG will for a considerable period of time probably be the big contributor because that's where most of the nuclear fuel waste is.

If you were to build another 10 or 15 reactors, then yes, you would become the major producer. There's past waste to consider as well as present and future waste. You would obviously come into that large picture, and then the percentages would be changed accordingly. So it would be part of doing business, and that goes back to the fundamental premise that the producer pays. It is part of that operation.

• 1205

The Vice-Chair (Mr. Maurice Vellacott): We'll see if there are any Liberals who want to ask questions, and then we'll come back, Mr. Cardin.

Is there anybody over here...

Mr. Cardin, do you have a follow-up? You finish your train of thought and we'll come back.

Mr. Chatters.

Mr. David Chatters: That's okay.

[Translation]

Mr. Serge Cardin: I would like to ask a last brief question.

Since at this point the bill involves four important players in nuclear energy, I would imagine that there is consensus, or that most of those players agree on the thrust of the bill.

[English]

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Yes, that is correct, on specifically the amounts of moneys that needed to be put up. Those are the four major players, and I think there are about ten licensees all told among those players. There are about 3,000 licensees who are not affected by this proposed bill at all. It's just the major players who have operations in terms of a nuclear reactor that are in fact implicated here.

[Translation]

Mr. Serge Cardin: You say that there are 3,000...

[English]

Mr. Peter Brown: It is 3,000 licensees who are not implicated.

[Translation]

Mr. Serge Cardin: Right. That means that, tomorrow morning, there could be 3,000 additional nuclear players. Isn't that what you mean?

[English]

Mr. Peter Brown: No, there are about 3,000 licensees out there dealing with all sorts of things, such as radioisotopes, the mining of uranium, and all sorts of other things. They're not implicated in this proposed bill at all.

There are only about ten licensees who are really implicated here, and that is the major players with the nuclear fuel waste.

[Translation]

Mr. Serge Cardin: That includes everyone involved with nuclear energy, even if their involvement is minimal. Is that right?

[English]

The Vice-Chair (Mr. Maurice Vellacott): A response from Mr. Brown, and then we'll go to Mr. Chatters.

Mr. Peter Brown: Yes, it could be anything, such as radioisotopes. They need actually a licence from the Canadian Nuclear Safety Commission.

The Vice-Chair (Mr. Maurice Vellacott): Carmel Létourneau, go ahead.

[Translation]

Ms. Carmel Létourneau: Could I add a minor detail? When Dr. Brown talks about licence holders, these are holders of licences under another statute, the Atomic Energy Control Act. Only a small portion of those 3,000 licence holders would be subject to this legislation.

Mr. Serge Cardin: The consultation...

[English]

The Vice-Chair (Mr. Maurice Vellacott): We'll go to Mr. Chatters, and then we'll come back again on that to follow it up.

Mr. David Chatters: I'm more confused the further we go.

I don't foresee any problem once you get to the point where you've created the waste management organization and you go from there, but I foresee the possibility of getting bogged down way ahead of where this act kind of kicks in. You did suggest that the major players involved affected by this are supporting the concept and the dollars you're putting in.

Have you already reached a consensus among those players on how they're going to create this and who's going to bear the cost for creation of the waste management organization? It seems to me there's a tremendous amount of work that has to take place before you get to where this bill actually kicks into force, and there is the possibility of this thing being mired down for a substantial length of time.

You say you only have three years. Well, you are the government official who's responsible for ensuring that it happens in three years. How do you propose to marshal that process if you can't reach that consensus, if you can't reach that agreement from those major players?

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: Basically, the major players—OPG, Hydro-Québec, New Brunswick Power, and also in part, AECL—have been holding discussions themselves for a considerable period of time. They are aware, as of the 1996 government policy, that they are the ones who are responsible to organize, to fund, to manage their wastes, and to develop the long-term management solution for their wastes. That policy was basically reiterated in 1998 and has been reiterated again, somewhat more formally, here. So they have known for at least five years that this is coming. And there have been many discussions even prior to 1996, prior to that government policy. They knew the government's position was in fact producer pays.

• 1210

So it's not as if this is coming out of the blue at them. They know it's coming, and they have had numerous discussions. But clearly what the government is saying is that it is up to the producers to get organized themselves and actually form an organization, put moneys away, do the work that is required, and come into government.

Mr. David Chatters: And the three or four major players are committed to doing that now?

Mr. Peter Brown: They have been discussing amongst themselves for a considerable period of time.

Mr. David Chatters: That isn't what I asked. I said, are they committed to doing that?

Mr. Peter Brown: To the best of my knowledge, they appear to be committed to doing it, yes.

Mr. David Chatters: What are the costs and who is bearing the costs? Who is looking after it? How are the costs distributed, not only for the major players but for the 3,000 licensees? Who are they paying to dispose of their nuclear waste?

Mr. Peter Brown: The major players are in fact paying for it right now. They are supporting programs and they're spending millions of dollars supporting programs on an annual basis, basically in a holding pattern prior to this proposed legislation coming forward. So they are in fact looking to the future to deal with their wastes.

With regard specifically to the number of licensees, this bill addresses specifically the nuclear fuel waste from reactors. We're dealing with the electric power reactors, electric energy corporations. There are about ten licensees who will be affected by this. The 3,000 or so other licensees of the Canadian Nuclear Safety Commission deal with all sorts of other topics, but all nuclear, to one degree or other, and radioisotopes and other things. This bill has no impact on them whatsoever. If there is a licensee out there who is developing, let's say, molybdenum sources, this bill does not capture them at all. This is only for the used nuclear fuel from the energy corporations.

Mr. David Chatters: What's happening to the nuclear waste from medical isotopes from non-destructive testing, those people who you say aren't affected by this bill? It was my impression that this organization you're setting up will be required to dispose of their waste. In fact it does have an impact on them, does it not?

Mr. Peter Brown: Those wastes are different types of wastes. Those are what are termed low-level radioactive wastes. The characteristic with low-level radioactive wastes is that they have various half-lives, but they tend to be relatively short-lived. They tend to be able to be managed on surface, and there are a number of ways of managing them. This proposed bill does not deal with that low-level radioactive waste, nor does it deal with the uranium mine tailings. It only deals specifically with the used fuel bundles coming out of the reactors.

Mr. David Chatters: So they'll do what they're currently doing with their waste?

Mr. Peter Brown: Yes, and it's completely separate.

Mr. David Chatters: Okay.

The Vice-Chair (Mr. Maurice Vellacott): We're at three-minute rounds now, allowing a bit of latitude.

Mr. Serré.

Mr. Benoît Serré: Just a quick comment, Mr. Chairman, to enforce what Mr. Brown was saying about Mr. Chatters' concern with the commitment of the Ontario Power Corporation. I don't know about Hydro-Québec—I haven't met with them—but I had a fairly long meeting some four months ago with OPC. They knew this legislation was coming. They are in agreement with the objectives of the legislation. I think they've had some substantial consultation with the departments at every level. They might come up with some minor concerns at the end of the day, but I think that overall they're committed to working closely with us to implement this legislation. They know of the need and the reason behind it, and I don't see any problem there.

• 1215

The Vice-Chair (Mr. Maurice Vellacott): Mr. Cardin, do you have any more questions?

[Translation]

Mr. Serge Cardin: I apologize to the witness, but I have just heard what Mr. Serré said. He was talking about consultation, while at the same time indicating that Hydro-Québec was not necessarily consulted.

Mr. Benoît Serré: No, I was talking about myself personally. I apologize.

Mr. Serge Cardin: I see. So, with respect to the process...

Mr. Benoît Serré: Yes. I met with the OPG people, at their request. I did not initiate the meeting. We did not meet with Hydro Quebec, probably because OPG is a far larger player than Hydro Quebec.

Mr. Serge Cardin: But they were still associated with...

Mr. Benoît Serré: Oh, yes.

[English]

The Vice-Chair (Mr. Maurice Vellacott): Are there any other questions, Mr. Cardin?

[Translation]

Mr. Serge Cardin: No, that's fine.

[English]

The Vice-Chair (Mr. Maurice Vellacott): We'll go to Mr. Brown for a response.

Mr. Peter Brown: I'd just like to make one comment, and that is that the reaction we've received to the proposed bill from the three utilities was very favourable.

The Vice-Chair (Mr. Maurice Vellacott): Mr. Chatters.

Mr. David Chatters: The other area of concern, a long-time concern, that I've heard—and I think it's a valid concern—is the issue of the cost of decommissioning. That doesn't appear to be addressed at all here—no connection. Is it the intention of your department somewhere down the road to address that concern? I think that's a valid concern out there.

The Vice-Chair (Mr. Maurice Vellacott): Mr. Brown.

Mr. Peter Brown: This specific piece here does not deal with that decommissioning. The Canadian Nuclear Safety Commission does deal with the decommissioning issue and in fact either has or will be asking for financial assurances to make sure the reactors can be decommissioned appropriately. What we're looking at here is once that decommissioning takes place, or even before that decommissioning takes place, what the heck are you going to do with the nuclear fuel waste? So, no, it does not deal with the entire problem, but it deals with the long-term nuclear fuel waste issue, which is a shorter-term issue of decommissioning the reactors, but the Nuclear Safety Commission is dealing with that.

Mr. David Chatters: Another topic for another day, I guess.

The Vice-Chair (Mr. Maurice Vellacott): Yes, extensive.

Are there any other...

I guess that brings to a close our time with our witnesses here. I want to thank our witnesses.

Do any of the witnesses have a final comment? No.

I want to thank Ms. Kellerman, Dr. Brown, Carmel Létourneau, and Susan McLaughlin. Thank you for being here. I'm sure it has generated a whole lot of thought for us and probably some other questions we'll have at future points as well.

With that, we do applaud your being here, and we'll probably individually be in touch with some of you at future points.

We'll adjourn our meeting until Thursday, and we have Terry Henderson coming in on Thursday.