[Recorded by Electronic Apparatus]
Thursday, September 26, 1996
.1104 
[English]
The Vice-Chairman (Mr. Thalheimer): Good morning, ladies and gentlemen.
This morning we have with us Agnes J. Bishop, Pierre Marchildon and John J. McManus, from the Atomic Energy Control Board. Then we will hear from a second group from Atomic Energy of Canada Limited. We propose to give this group an hour, which includes the question and answer session.
.1105
Please limit your opening remarks to about fifteen or twenty minutes so we can ask questions. Carry on.
Dr. Agnes Bishop (President, Atomic Energy Control Board): Thank you, Mr. Chairman.
First of all, let me thank you for this opportunity to address the committee and to answer any questions you may have.
I'm pleased that my first appearance before this committee is to discuss a topic as important to the Atomic Energy Control Board as this proposed new legislation. As we approach the end of the 20th century, Canadians recognize that nuclear energy is a well-established, useful technology in Canada. A significant portion of the economy is dependent on it, either directly or indirectly, and the federal investment in it is sizeable, as is that of several provinces.
The best known peaceful application of nuclear energy, the generation of electricity, is part of the power mix in New Brunswick, Quebec and Ontario. Throughout Canada, nuclear energy applications in science, industry and medicine, many having important safety and life-saving benefits, are today almost taken for granted.
While the nuclear industry itself must always have the primary responsibility for safety, the industry has consistently recognized the importance and the necessity of having a credible, strong and independent regulatory organization to help it achieve its safety objectives.
Members of the general public demand and expect very high standards for the regulation of nuclear activities, higher than those for most other areas of technology. They also expect the federal regulatory agency to look after their interests in the areas of health, safety, security, and the protection of the environment.
However, the high-tech and unquestionably modern nuclear industry in this country is governed by a statute that is half a century old. The present legislation has not kept pace with the growth and maturity of the nuclear industry. To say that it is time for a change is, in the opinion of many, an understatement.
The Atomic Energy Control Act was proclaimed just after the end of World War II, on October 12, 1946. Apart from one amendment in 1954 to allow the creation of Atomic Energy of Canada Limited, this act has remained basically unaltered for five decades.
The administrative tribunal created by this act, the Atomic Energy Control Board, or AECB, is the oldest independent nuclear regulatory agency in the world. Over the years, the AECB has achieved a high measure of success in its work, but there have been marked changes since 1946 in the extent and nature of nuclear activities in Canada and abroad and in society's expectations of government regulation.
The mandate of the AECB has evolved from one chiefly concerned with security to one that also focuses strongly on the control of the health, safety and environmental consequences of nuclear pursuits.
The deficiencies of the Atomic Energy Control Act have been noted by the courts, the news media, special interest groups, the Auditor General and parliamentary committees. Some of the deficiencies include the lack of formal powers for AECB inspectors, a totally inadequate ceiling of $10,000 on fines, no stated provision for public hearings, lack of explicit power to recover the costs of regulation from the users, and inability to hold polluters financially accountable for their actions or for the AECB to initiate remedial action and recover the costs.
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To deal with the problems of an obsolescent statute, the government has introduced to Parliament Bill C-23, the Nuclear Safety and Control Act.
Under this statute, the AECB would be aptly renamed the Canadian Nuclear Safety Commission, which I will henceforth refer to as the commission.
Lest the name change seem a minor thing, I would point out it sends a clear signal that the functions of nuclear promotion and nuclear regulation are completely separate in this country, as they have in fact been since 1954. As the CNSC, the federal regulator could no longer be confused with the national nuclear research and development agency, Atomic Energy of Canada Limited, whose English abbreviation, AECL, is but one typo removed from AECB.
Bill C-23 directly references the environment as the nuclear regulator's concern, something the current statute does not. I should hasten to assure you it is not intended that the commission duplicate the responsibilities of federal and provincial environmental authorities.
Rather, the reference is a reflection of appropriate public and political concern that the environment must be considered, along with people, in the regulatory activities of the commission. Such things as provisions of the Canadian Environmental Assessment Act would continue to be integrated into the commission's decision-making process.
Enacted, Bill C-23 would empower the commission to obtain guaranteed financial assurances from licensees for decommissioning, eliminating the liability to the taxpayer that currently exists in situations where a licensee becomes insolvent or ceases to be a viable entity that may be pursued for action or repayment.
I believe the matter of financial guarantees is a particularly important aspect of this legislation. It provides a very powerful tool to ensure that there will be no nuclear orphans that have to be looked after by the state. It could also have the salient effect of discouraging marginal operations from getting into the nuclear business in the first place. These are both of benefit to the environment as well as to health and safety.
The nuclear regulator would also be able to recover from responsible parties the cost of decontamination and other corrective measures and to order remedial action in hazardous situations. The maximum fine a court could impose for a breach of the act or regulations made under it is increased a hundredfold to $1 million in line with the current penalties in other regulatory statutes.
One of the major reasons for the new legislation is to permit more extensive cooperation between the federal regulator and provincial departments and agencies. The Nuclear Safety and Control Act will give the commission new tools to reduce duplication and overlap and to negotiate new joint regulatory programs with the provinces. The act would provide an umbrella under which the commission could cooperate with the provinces not only in spirit but legally, by adopting or prescribing by reference to provincial laws, for example, and by paying provincial agencies for work done under other types of agreements. We've had some experience with these concepts and would like to see the benefits continued on a broader basis founded in law.
A key component of the proposed act is the section dealing with inspectors' powers. Our inspectors are our eyes and ears to verify compliance with the law and the licences we issue. We play a variety of roles from counsellor to investigator, and inspectors are often our most frequent link with many of our thousands of licensees. We have 130 certified inspectors at present and we need to provide them with a more solid legal footing for the tasks they must perform. Bill C-23 has provisions to do this, but it should be noted that along with the defined powers there are constraints on the inspectors, which recognize the rights of those subject to inspection.
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In terms of rights, Bill C-23 also makes a clear and formal provision for appeals of actions and decisions of the commission and its staff members. We do not receive requests to reconsider decisions very often, and have never refused to hear one, but there are currently few legal guarantees in this area for those subject to the regulations and licence conditions.
Some apparently minor provisions of the proposed act are in fact quite important to the regulatory process. For instance, there is a section providing employment-related protection for so-called whistle-blowers who may provide the commission with critical information on actual or potential hazards. One might look at this as multiplying our inspection force a thousand times or more.
Another provision is for an increase in the number of members on the regulatory body, from the current five to seven, but no longer including the president of the National Research Council as an ex officio member. We have been well served by the many distinguished NRC presidents over the years, but for at least two decades there has been no real reason for an automatic linkage between the NRC and the AECB.
A larger membership on the governing board could better represent the geographical areas of the country as well as the specialized subject areas needed for effective nuclear regulation. With the current membership of five and a quorum of three, illness and poor travelling weather sometimes combine to threaten the board's ability to deal on schedule with the decisions before it.
Bill C-23 also makes provision for the use of the larger commission membership in subgroups called panels. These could be of one or more members and would allow the commission to deal with matters efficiently and with fewer time and geographical constraints.
Finally, and in connection with the use of panels, Bill C-23 makes legal provision for the commission to hold public hearings, which in environmental protection and other areas have become the fundamental vehicle for ensuring consultation and public participation in decision-making.
Since 1988 the AECB has made a significant effort to open its meetings to the public and to visit communities that are near nuclear facilities, and many people have been heard from in the process. However, the current board is not empowered to hold hearings in the formal sense. Under the proposed act, with new powers as a court of record, the commission would be required to hold hearings for certain matters. It would also be able to conduct a formal hearing where it judges it is in the public interest to do so.
The Atomic Energy Control Act was created in the shadow of war near the middle of this century to govern a promising but intrinsically hazardous technology. The technology's current state of development and multiple applications for peaceful use would very likely astound even the far-seeing parliamentarians who enacted the original statute.
The proposed legislation will guide Canada's nuclear regulatory agency into the next century, with a much enhanced and up-to-date statutory basis, giving it full power to ensure due regard for the health and safety of workers and the public, national security and protection of the environment.
The AECB celebrates its 50th anniversary this year. We believe the challenges of nuclear safety, waste management and non-proliferation of nuclear weapons that will face Canada and the world in the next 50 years make it important that Parliament continue the strong regulatory influence over this technology that it has exercised for the past five decades.
Thank you, Mr. Chairman. I would be pleased to answer any questions committee members may have.
The Vice-Chairman (Mr. Thalheimer): Thank you, Dr. Bishop.
Mr. Deshaies.
[Translation]
Mr. Deshaies (Abitibi): Good morning, Dr. Bishop.
We can continue from where we left off yesterday. I must say that our minister, who is very skilled at answering questions, left me unsatisfied.
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So 50 years later, one of the effects of the new bill will be to separate the Canadian Nuclear Safety Commission from the Atomic Energy Control Board, which is apparently more closely linked to the industrial sector.
Do you think it would be possible from a structural point of view - since you told me yesterday that these are two quite distinct realities - to have two designated ministers, one responsible for safety, in other words matters affecting the environment, and the other responsible for the Atomic Energy Control Board?
[English]
Dr. Bishop: Thank you. I think that's an important question. The question basically is, do we really have a separation between promotion of the nuclear industry and regulation of the nuclear industry? The answer is yes, and we have had that for some time.
If you look at the process that is involved in terms of the board and its regulatory role, first of all, the decisions that are made by the board from the point of view of licensing cannot be interfered with by whatever minister we happen to be working through to answer to Parliament. So decisions cannot be interfered with.
When we look at regulations, which the board itself or the new commission develops, no single minister can approve those regulations. Those regulations, as you have seen in the act, are to be approved by the Governor in Council.
I think those two things are extremely important to remember. From the point of view of regulations, no single minister gives the approval. In terms of our decisions regarding licensing issues, the minister cannot interfere with those decisions.
Finally, it is possible, however, for the Governor in Council to give us a directive, but such directives must be made public and must be published.
Since 1954 there has indeed been a complete separation so that the process does not allow interference between the promoters and the regulators, even though they are under one minister. The board reports to Parliament through a minister.
I don't know if that helps answer your question.
[Translation]
Mr. Deshaies: No, you elaborated on a point that I was already aware of. It is a fact that generally speaking ministers cannot intervene in decisions taken by an independent board or commission.
Let me reformulate my question. Do you not believe that it would be more politically correct for a minister of the Environment to be responsible for the commission, since he would be expected to have a greater interest in ensuring that the commission is up to date and responsive to the public interest?
[English]
Dr. Bishop: As you know, the political decision as to through whom we should report to Parliament is not something I can answer, but the process truly would not make a difference from our perspective and the role we fill.
In answer to your statements about the environment, environmental protection is only one part of the total regulatory picture. There is really no ministry that would cover all of the important safety aspects to both health and environment we have to look after. I think perceptions are different. If you're asking the question about perception, that's a different issue.
[Translation]
Mr. Deshaies: I realize that public perception is very important. The idea is not to remove the minister who indirectly manages our committee or to take away a super department from her but rather to demonstrate the government's concern and interest as shown in this new legislation being adopted 50 years later.
Now for my second question, part of which was answered yesterday. One of the speakers, Mr. Berg, raised the following question: how and where in the bill will it be specified that the public hearings held by the commission may replace but shall not duplicate those held under the Canadian Environmental Assessment Act?
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[English]
Dr. Bishop: Our public hearings will not replace those that are held under the Canadian Environmental Assessment Act. There is no replacement for that in our public hearings. The Canadian Environmental Assessment Act applies to us.
Let me give you an example. If a province decides it wishes to build a new nuclear facility, that automatically triggers a review by the Department of Environment, federally, and in most cases the province would be involved. The Department of Environment would be holding those reviews and panels and the board would have to refer that review to Environment. We would be obliged to do so.
After a decision has been made by that review, by Environment, that it may proceed, that does not end the environmental issues. Environmental protection continues for the total life of the operation of that facility. In fact, environmental monitoring goes on on a daily basis. So the areas covered under the act, the environmental act...environmental protection does not end with that.
You cannot necessarily separate environmental protection from all the other exceedingly important safety issues that go into our regulatory safety process. Where the board becomes involved is in ensuring that the environmental aspects of the regulation are continued throughout the entire operational life of the plant or the facility, and even past decommissioning and managing of wastes.
So CEAA, the environmental act, applies to us, and we are obliged by CEAA to have those initial reviews done.
[Translation]
Mr. Deshaies: I realize it is normal to have a certain amount of duplication of environmental assessments at the beginning and that afterwards your organization will continue to exercise oversight until the end of the project.
But would it not be possible to avoid certain instances of duplication in environmental reviews right from the outset? That was my question. We'll soon find out from experience.
I'll put one last question before giving the floor to the Reform Party.
There was another concern raised about public participation. Under the commission's own regulations, it is able to control public participation. Would it not be wiser to settle this problem in the bill by establishing a requirement to inform the public about the different stages of projects requiring licences as they come up?
[English]
Dr. Bishop: Indeed the referral to things such as the environmental act, which is in the regulations...reference to that act would automatically require those reviews to be under a public review, as an example. The answer to your first question, about duplication of initial reviews between federal and provincial or the board, as an example.... We do not want duplication. There is no benefit to duplication. We strongly support the joint reviews, where they are available, and sometimes we will accept reviews, for instance provincial reviews, as being reviews we would accept. We agree completely, 100%, with you that duplication should not occur.
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[Translation]
Mr. Deshaies: How will you involve the public in your commission? There is a regulatory requirement for public participation. What place do you have for the public in your commission?
[English]
Dr. Bishop: We want to make sure that what we do now is present in law and that it can expand further into having official hearings. At present the public can appear and present briefs to us and to our board meeting over decisions we are making at any time. Secondly, all our documents, all our decisions, are available to the public and are supplied to the public. That exists now. Wherever we can, and as much as we can, we will go to the communities themselves to hold our board meetings on decisions for facilities that are close to those communities.
So we have that now. We are doing that now. But we want to make sure this is also present in law and when we hold hearings...and in the public's mind hearings based in law, and correctly so, have a more significant meaning than hearings that may not be backed by law. Bill C-23 allows us to go forward with panels we cannot legally do at present. We very much involve the public right now, but we're not backed by law.
The Vice-Chairman (Mr. Thalheimer): Mr. Ringma.
Mr. Ringma (Nanaimo - Cowichan): Dr. Bishop, I can carry on in another area, but one that's related, and that's public education.
[Translation]
My colleague mentioned public participation but always with reference to regulations and other such things.
[English]
From my point of view, for openers, if you mention the words ``nuclear'' or ``atomic energy'' or anything of the sort, the public immediately put up blinds and a fear factor comes in. I think over time the public is getting better educated because of the use of radioactive sources in medicine and so on, so there is some softening of that. But overall there is a need, in my opinion, for much more public education in this whole area. But I ask, whose responsibility is this? Since we're going through a routine here of establishing a new commission, perhaps you could give us your thoughts on whether there should be some responsibility for that commission or any other body to take on this, to me, very necessary job of helping the public understand what this is all about.
Dr. Bishop: There's no question the public has a great fear of the word ``nuclear'', and it is understandable why that is so. The event at Chernobyl has even increased that fear. Part of the reason for the fear is of course how catastrophic a large nuclear accident can be. I couldn't agree more that education is exceedingly important.
From a regulator's point of view, we do indeed try to do some education and information concerning some of the regulatory process. For instance, we publish a publication called Reporter, which I believe has about 100,000 circulation.
A witness: About 5,000.
Dr. Bishop: But over the year....
What we do, for instance, and this may seem simple to you, is in each of the areas where there are facilities we will say, in graphic terms, not in scientific terms, here is how much was released from Point Lepreau generating station; compare that with what an ordinary chest X-ray would give you and compare that with what the natural background is.
These are the types of issues we attempt to do on a regular basis. We will, of course, participate in any request we have from any organization in terms of educational input.
.1135
Finally, I believe the industry has to take on a great responsibility for educating individuals about their industry. We have a responsibility for educating about the regulatory efforts.
Mr. John J. McManus (Special Adviser to the Director of the Secretariat, Atomic Energy Control Board): One of the important features of the bill is to ensure that we have this mandate to educate people, but only about the hazards of nuclear processes and nuclear materials and about the regulatory process, informing them that they have access to it, for example. We must be careful not to get back into the promotion business. But we have had a very difficult time seeking money in this area, because it's not in our present mandate to educate in this area. That's clearly in this bill.
Perhaps, Dr. Bishop, the climate will be a little warmer when we come back in the spring with the estimates on this.
Dr. Bishop: I do want to underline what John has just said. The regulator must not be a promoter of the industry, so our education programs must be based on the regulatory programs.
Mr. Ringma: Well, maybe there's a place for this committee to explore that education aspect a little further, to see if perhaps it's desirable for us to move in that direction.
Just to pursue it, part two of my question would be to ask you to explore the difference between responsibility between AECB or the new commission and the Department of National Defence. I'll cite as an example that contiguous to my riding there's a DND facility called CF METR. That's Canadian Forces Maritime Experimental and Test Ranges. It brings in U.S. Navy ships as well as Canadian ships to do survey and range requirements, anti-gaussing and all that.
When American ships come in, they can be nuclear propelled or have nuclear weapons, or both. The situation there is that National Defence, in conjunction with the U.S. military, say they have this totally under control - and I believe they have. I think the safety requirements and everything imposed by the military are very, very good. But the military is there and they say, well, no, you leave that to us. In a sense they put a bit of a block up against public inquiry. I know from yesterday's testimony here it was said they're on their own and in a sense you do not have a responsibility for any weapons system.
So we have a sort of superior authority, in a sense, with this new commission having a responsibility, but you cannot get into that defence area. I wonder if there can be a softening of the edges or something to.... I'd like to see a little more willingness on the part of the military to dialogue with the public and tell them - again, this is on the aspect of public education - what's going on. I know there are good reasons for military secrets, but sometimes they are used as an excuse.
Dr. Bishop: From a regulator's point of view, and in relation to visiting foreign vessels that may be nuclear powered or have nuclear capability, the prerogative of cabinet to invite foreign visiting vessels must be retained. For that reason the board does not have the right to interfere with that.
Secondly, on the non-military aspects, the non-weapon aspects, we do indeed regulate the non-weapon aspects of DND. There is also, I should tell you, close collaboration between DND and AECB on what their safety programs are like. So consultation does occur.
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Once again, public education is always important, and how much DND may wish to educate the public over these types of vessels is a problem that DND must look at. The regulator can't enforce that.
Mr. Ringma: To finish it off, Mr. Chairman, the problem there again - and I'm citing this CF METR facility - is that the public has a sometimes wrong impression of what's going on, and certainly a wrong impression of the very good, very stringent safety regulations that are in place.
Well, I'm addressing it in the wrong area. You've told me clearly enough that it's not AECB or the new commission that should be involved but that we should direct this at National Defence.
Dr. Bishop: Yes, thank you.
The Vice-Chairman (Mr. Thalheimer): Mr. Reed.
Mr. Reed (Halton - Peel): Thank you, Mr. Chairman.
I would like to begin by adding my endorsement to the comments of Mr. Ringma in terms of the need for unbiased education of the public. The promoters of nuclear power really can't do it. As much as they may attempt to be credible, they are indeed promoting this sales job, if you like. In the long-term interests of the future of nuclear power and the benefits that will accrue, I do believe the education portion takes on a new importance, and I commend it to you.
You mentioned in your opening statement, Dr. Bishop, about financial commitments being made ahead of time for things like decommissioning and so on. I suppose we would include in that the long-term management of high-level waste. Would that be part of the requirement?
Dr. Bishop: Yes.
Mr. Reed: Can you give me an idea of what the situation is at the present time? What happens when a nuclear plant is built? What does the utility do to make provision for the storage of high-level waste and the ultimate decommissioning? Is that included in its financial business plan?
Dr. Bishop: As you know, this bill will bind the Crown, both provincial and federal. We do not have a utility reactor that is privately owned; they are all provincial. So whether they report it in terms of their liabilities at the present time or not, someone will have to tell me. But certainly Bill C-23 would indicate that they would have to have the degree of liability for decommissioning stated. I don't know whether they state their liability now or not.
I will come back to the other part of your question. That is, how do we look after the present high-level waste?
John, do you have a further statement on the cost end?
Mr. McManus: Yes, Dr. Bishop. The three utilities have each made some provision within their own financial structures for disposition of the high-level waste in the long run. However, the bill will require them to have concrete plans and financial backing for those plans. That's the concept in the bill.
Dr. Bishop: What do we do with the waste now from spent fuel? The interim management of waste - this is not necessarily disposal; it's management - is now primarily based on what we call the silo where the spent waste is taken originally in the pools within the reactors. After a few years it is taken out and stored in an above-ground type of silo. That is the most accepted intermediate form of waste storage of that type, not just in Canada, but most countries are now turning to that. So that is the primary way in which the spent fuel is being handled at the present time.
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All sites certainly have ample room for this storage for some time to come. That storage takes place on the site, not off-site.
Mr. Reed: The reason I bring it up is that this question of high-level, long-term storage is something we wrestled with 15 years ago. I remember being taken to Whiteshell and shown the future that would emerge within two years, in about 1978. It would appear that those concepts have not been put into place.
There was great political upheaval, as you will remember, when the AECL and Ontario Hydro were searching for a pluton, I think they call it - impervious rock - to fulfil this long-term storage. Yet it hasn't happened. I express the concern because the kind of interim storage we have at the present time depends on our country remaining stable.
I don't know what countries that suffer from certain instability do and how they perceive the safety of this material. I've been through some nuclear plants and so on, and I realize that if somebody really wanted to, it wouldn't be too hard to blow a hole in the side of those swimming pools and drain them.
I'm saying we're dependent on the civilization we have to keep that safe. So I wonder where we are in the long-term permanent disposal.
Dr. Bishop: On the long-term permanent disposal versus ongoing management, this is, of course, going to have to be a government policy decision as to which route they wish to go for the high-level waste.
Once that decision is made, the board's responsibility would be to look at any proposal for that to make sure it is done in a manner that is safe and protects both the environment and health. While the board cannot make the decision in terms of policy - that's a government decision - I can tell you that every country is undergoing this very question of what they should be doing with the long-term disposal.
In Canada, as you know, part of what is being looked at at the present time is the disposal in the granite shield. Other countries will be looking at deep burial but in clay. That is a government policy decision.
I suspect I could say there is no immediate urgency to make that decision, but we have to keep in mind that it will take at least 25 years. If the decision was made today, it would take at least 25 years.
I want to stress that it is not the board's decision to make that policy decision. It is our responsibility to see that the waste is safely managed or is safely deposited in the long run.
Mr. Reed: Thank you.
The Vice-Chairman (Mr. Thalheimer): Is there anyone else?
Reg?
Mr. Bélair (Cochrane - Superior): No. The docket is so good, and the minister made such a good presentation yesterday and our panel this morning.
This is a major modernizing of the law, of course. I think this bill answers quite adequately the government's position in terms of regulating our nuclear energy.
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As a last comment, Mr. Chairman, it will be most interesting to hear some of the witnesses who may have, of course, a different view, and who may explain to us also how the bill could be improved. I guess we'll take it from there.
The Vice-Chairman (Mr. Thalheimer): Any other comments?
[Translation]
Mr. Deshaies: A short question, Dr. Bishop.
The commission members will be increased from 3 to 5. There are some groups that are naturally rather fearful about nuclear energy. This bill gives the commission powers and stipulates that it can take decisions, profit from a considerable share of the revenue from regulatory fees and may force people back to work. There is a long list of such powers. Would it not be advisable to have one of the five commission members chosen from the public?
[English]
Dr. Bishop: The difficulty is that a regulatory decision-making body such as the AECB...which is a technical and scientific licensing decision, must make sure its members do not have obvious biases one way or the other. So we would say to you that whether or not it's a member of the general public who does not have any relationship to the scientific areas we're involved with...that would represent, if you like, the non-technical end, which is not at all restricted by this bill. There is no restriction on that being fulfilled through here.
All the members of our board are members of the general public. We do not have any members of the board who are part of the industry itself. But there is no restriction in this bill about who should or who shouldn't be part of the board. And it goes from five to seven.
[Translation]
Mr. Deshaies: The members of the commission are appointed indirectly by the government.
The bill could provide for a member who does not have any links with industry but is from the general public. This could be a representative of an environmental protection organization. Of the five committee members, this person would focus on the more delicate issues. At the beginning he might be a minority among the five members but this could change over time since the four other members might also be won over entirely to the environmental cause. Would it not be advisable to have a certain amount of transparency?
[English]
Dr. Bishop: Again, by increasing by two members - that is, from five to seven - the bill does not restrict in any way who should be represented. How government makes those appointments or who should make the appointments - again, that's a policy that is not part of the board's responsibility. I will say, however, that the board deals constantly...the present members are exceedingly interested in environment and the board members deal constantly with issues beyond the scientific and technical end. So it would be misleading for anyone to think either the present or we hope future members are not interested in those aspects.
The Vice-Chairman (Mr. Thalheimer): I have one question. Our time is up.
When we sell a CANDU reactor to a foreign country, someone outside of Canada, how do you control the decommissioning of that?
Dr. Bishop: I didn't hear the question.
The Vice-Chairman (Mr. Thalheimer): When we sell a CANDU reactor to Romania, for example, how do you control the decommissioning of that reactor? What provisions are made? Do you sell it and that's it, goodbye?
Dr. Bishop: First of all, the board does not sell anything.
The Vice-Chairman (Mr. Thalheimer): No, but what control do you have over it?
Dr. Bishop: What control does the board have?
The Vice-Chairman (Mr. Thalheimer): Yes.
.1155
Dr. Bishop: We do not have any control in terms of whether a CANDU is sold to a certain country or not, except we do have responsibilities under the national policies for what may or may not be sold or exported to certain countries. So it's the Canadian policy that we look at. From that point of view the regulator has some say.
However, our role.... I know it was said yesterday, but perhaps it's worth repeating. Regulatory affairs in the nuclear field are no longer just national. There is a great deal of regulatory discussion on an international basis. We work very closely with each other.
The countries that are buying CANDUs, and most countries that are buying any reactor, will not purchase such equipment unless the regulator from the country that is selling the product will tell them it would be licensable in Canada. In other words, with a new design, a new stage of CANDU, such as the CANDU 9 in Korea, Korea would want to know whether that particular CANDU would be licensable in Canada before they would consider purchasing it for Korea. So sometimes we as the regulators will do some work in that end. We also do a lot of training of foreign regulators, not just those who are involved with CANDUs.
Otherwise we have no control.
Mr. McManus: The question was asked in another sense yesterday, sir, about how we assure safety, and we pointed out that we have no jurisdiction in Romania or any other country but that we are working extensively towards an international convention on nuclear safety. We are well ahead on that and it will come into effect very soon.
The same is happening with waste management. International work is extensively under way now, and we're participating in that, to achieve international consensus on the standards that should be applied to the management of waste in all developed countries. We hope to continue the pursuit of that convention. We hope to participate in it and to encourage participation by all members that have any form of developed nuclear activity.
The Vice-Chairman (Mr. Thalheimer): That gives us 12 noon. Thank you for attending here this morning and enlightening us.
We'll go on now to the next panel, from Atomic Energy of Canada Limited. We have with us William Hancox, the vice-president of strategic development. David Torgerson is vice-president of research and project development.
Again, gentlemen, we've allotted one hour for presentation and questions. If you'd make your presentation about fifteen or twenty minutes long, it would be greatly appreciated.
Dr. William Hancox (Vice-President, Strategic Development, Atomic Energy of Canada Limited): Thank you, Mr. Chairman. We appreciate this opportunity to address the committee on this important matter and to give you our perspectives.
I have a brief presentation. I believe hard copies of some charts have been passed around. I will refer to them.
First, let me deal with AECL's interest in this matter.
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As Dr. Bishop has pointed out this morning, both AECL and AECB are today under the Atomic Energy Control Act, and as she has quite graphically pointed out, this has led to confusion between the role of the regulator and the role of the developer. As she also pointed out, the similarity in the organization names also has added to this confusion. So we certainly welcome the change this bill would bring in that respect.
As everyone knows, AECL is the designer of CANDU power plants and research reactors and leader of the Canadian nuclear industry. The major industry thrust today is maintaining the high performance of the domestic nuclear plants and sales of new plants, mainly in the export market. In the next decade we expect to make up to ten CANDU sales, most of them in the Asia-Pacific region, which will contribute somewhere between $4 billion and $5 billion to the Canadian economy.
As was pointed out earlier, licensability of these new plants in Canada is a requirement for these foreign sales. Of course this means Canadian regulations must be in line with international practice, so at least in this regard we can retain a position competitive with that of other international nuclear vendors. That's our first commercial interest, if you like.
AECL is also the operator of licensed nuclear facilities, for example the Chalk River nuclear laboratory, which provides vital information to support continuing safe operation of Canada's 22 CANDU power plants and the development of new CANDU designs. I should add that the plants we sell abroad also come under this umbrella.
Today licensing costs are a significant and increasing component of our annual operating costs, so they are a factor that has to be considered.
About the current situation, during the past decade AECL and I think other members of the nuclear industry have faced a somewhat uncertain and increasingly demanding - and I might add costly - regulatory environment. This is seen in the introduction of cost-recovery charges recently, the increased scope and sophistication of licensing submissions, and the inclusion of provincial regulations into the AECB's operations.
First and foremost, of course, there has to be a strong and independent regulator. This is essential. However, the nuclear industry needs a predictable modern regulatory regime, incorporating appropriate checks and balances for both the regulator and the regulated.
In this regard we favour the incorporation of cost-benefit considerations as one method of assessing the effectiveness and extent of new regulations. I might add that AECL and other industry members are currently working with the AECB to study how such considerations could be incorporated into the regulatory framework. We certainly look forward to having a successful conclusion to these discussions.
On Bill C-23 itself, it is certainly clear to us that this bill separates clearly the roles of regulator and developer. We see this as a very important step forward.
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The Nuclear Safety and Control Act creates the Nuclear Safety Commission and clearly defines its role. I would add that the change in name will also greatly help remove any confusion there is between AECB and AECL. AECL itself remains under the Atomic Energy Control Act, where its role is also clearly defined.
About the benefits of the bill, we believe Bill C-23 will modernize the Canadian nuclear regulatory regime and it should create a more certain and predictable environment as we move into the future. By providing a clear definition of the commission's role, the proposed new act should help everyone's understanding of the regulatory process and establish its independence.
The structural changes to increase the membership on the board and to create panels, as was pointed out this morning, should help improve the effectiveness of the regulatory process. However, we add just a small note of caution. Panels could have the same powers as the commission yet comprise a narrower membership. There appears to be no explicit appeal mechanism for panel decisions.
While in many ways the bill appears to reflect and incorporate the current regulatory practice, it's clear that it also greatly increases the regulator's power. The real impacts, of course, will be determined by the regulations themselves, which are still to be developed.
There are some factors that we believe require some consideration. It's fair to say the Canadian nuclear industry has had an excellent safety record. A large measure of this is due to the way the regulations were set up in the early days of the AECB, focusing on requirements and accountability, and by recognizing that the highest level of overall safety would result from drawing the best from designers, operators, and regulators. We believe these principles should continue to be the basis for ensuring safety. This is best accomplished, in our view, by tempering the current direction towards adopting a prescriptive approach to regulation; that is, replacing requirements by specific directions on how the requirements are to be met. Such an approach would increasingly put the regulator in the role of designer and operator.
We think it is most important to keep in mind that the responsibilities for safe design and safe operation should remain with the designer and the owner-operator of the nuclear facility. Regulators should continue to set the rules by which the designers and the owner-operators accomplish this. We believe the balance between the requirement and prescriptive approaches is best maintained by an effective process of consultation and an effective arbitration process.
We believe there is also a need to assign appropriate accountability for fees charged, inspectors' actions, and the protection of commercial information, particularly from our international competitors.
Those are just some of the factors we think should be considered.
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To summarize, I would say that the act in many ways reflects the current practice and brings it into a modern framework. The regulations that are yet to be developed will determine the future direction, and an appropriate arbitration process, we believe, is needed to balance these new powers.
Those are the remarks we'd like to make. We'd be happy to answer any questions you have.
The Vice-Chairman (Mr. Thalheimer): Thank you, Mr. Hancox.
Mr. Deshaies.
[Translation]
Mr. Deshaies: Thank you.
Dr. Hancox, generally speaking how would you describe the safety level here in Canada and our requirements compared to those in other countries? In your opinion, which country is the safest?
[English]
Dr. Hancox: As far as we can see, there is a high level of consistency between the level of security and safety in Canada and in other nuclear nations; there's not a marked degree of difference, I don't think. There are certainly differences of approach in how this is accomplished. As I indicated in my remarks, the AECB has had a requirements-based approach to regulation that we believe has been very effective. On the other hand, in the United States there has been a very prescriptive approach to safety. It's not clear to us that there are any observable differences in safety between the two approaches.
[Translation]
Mr. Deshaies: Still we have information about eastern European countries, the USSR especially or Romania, and we can compare their facilities with Canadian facilities, which also experience problems sometimes. Isn't is possible to place Canada on a certain scale?
[English]
Dr. Hancox: If you speak about the former Soviet Union, yes, it's clear that there was a very different approach adopted there, both in the way they approached the design of their facilities and the way they operated them. I believe they are making moves to adopt more of the western approach to safety. That is an exception.
In Romania, where the first CANDU plant is entering operation and will shortly be at 100% power, we have provided a plant, as Dr. Bishop indicated earlier, that would be licensed in Canada. Romania has done a great deal of work to put into place a competent regulatory authority and has spent a good deal of effort in working with the AECB to ensure that they have a very competent and well-based regulatory regime. So I think it's an exception in the former Soviet world.
[Translation]
Mr. Deshaies: It is your impression that the new bill will make you less competitive? What is your assessment of this bill? You say that you may require some flexibility. What type of flexibility would be necessary for you to be competitive?
[English]
Dr. Hancox: As we see the situation today, we don't feel that regulations make us uncompetitive. As Dr. Bishop indicated, there is a very strong international movement to harmonize regulations as best as possible. It's more a caution for the future than for the present situation; it's more the evolution of the regulatory regime and how it moves relative to other regimes. We believe that if there is a good strong consultative process - which we've had in the past and hope would continue into the future - and if there is some mechanism for arbitration, there should be adequate means to deal with these matters.
Do you want to add anything to that, Dave?
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[Translation]
Mr. Deshaies: Would you agree that for the sake of transparency, at least one board member should come from industry and another from the public?
[English]
Dr. Hancox: I think our experience over the many decades has indicated that the AECB has worked well and effectively. I don't see that there is a need, particularly, to have industry representation on the commission.
The Vice-Chairman (Mr. Thalheimer): Mr. Ringma.
Mr. Ringma: Dr. Hancox, please forgive a simple question; I'm new to this committee. To what extent was AECL consulted in the drafting of C-23?
Dr. Hancox: There was a process of consulting various government departments during the early stages of preparation of the new act, and we were invited to be part of that consultative process.
Mr. Ringma: Were you satisfied generally with the amount of consultation that went on?
Dr. Hancox: Yes, I think it was adequate.
Mr. Ringma: Do you now feel that the act as it's probably going to go forward is quite satisfactory?
Dr. Hancox: Perfection is always hard to achieve, of course.
Mr. Ringma: Yes, naturally. What would your reservations be? Did I hear you say something about the arbitration process and the like?
Dr. Hancox: These are really matters that will be important as we move forward with the act, and the effectiveness will be very much influenced by the degree of ongoing consultation there will be as new regulations are put into place. The establishment of an effective arbitration process we believe is going to be very important. It remains to be seen. We would hope that strong consideration would be given to these matters as we move forward.
Mr. Ringma: That's fine, thank you.
Dr. Hancox: Just one more comment from my colleague.
Mr. David Torgerson (Vice President, Research and Product Development, Atomic Energy of Canada Limited): One thing of course that is provided for here that we have to consider is the cost of regulation, since it's a user-pay principle, in a sense. Usually the buyer is setting the price, but in this case the seller is setting the price - the cost of regulation - so we would obviously like to see a consultative process with the new agency, with the commission, with respect to setting of fees and an opportunity to ensure that that fee structure is cost-effective.
The Vice-Chairman (Mr. Thalheimer): Mr. Reed, is there anything you wanted to say?
Mr. Reed: Thank you, Mr. Chairman.
You mentioned new cost-recovery charges that you're dealing with. Could you enlighten us as to how significant they are and what areas they're in?
Dr. Hancox: There are two components to the cost of regulation. One is in the actual fees that are imposed for licensing facilities - that's an additional cost that we didn't have to bear in the past. The second part of the cost, which is much harder to come to grips with or to quantify, is the cost of regulation itself - the cost of answering the questions, of providing the submissions, the day-to-day kind of contact that goes on between the inspectors, the regulator itself. Certainly we've noticed a very significant increase over the last several years in the cost of licensing our various facilities.
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Mr. Reed: Some years back there was an identified design flaw in the calandria of the CANDU with the expansion of the tubes. Sagging is the way it showed up in Pickering, and Pickering A had to be re-tubed at a very substantial cost. Subsequent to that, in my former incarnation on a select committee of Ontario Hydro, we were told that the design problem had been beaten, and Bruce A went ahead. It appears that the tubes didn't sag at Bruce A; they just expanded end-wise.
The question is this. You've probably gone through more generations of CANDUs since that time, and perhaps you could let us know whether you have this problem beaten.
Dr. Hancox: Perhaps I could pass the ball to my colleague, who is the expert in these matters.
Mr. Torgerson: Yes, indeed. The earliest tubes that were put into Pickering I and II were of a different alloy than the alloy that is being used today. The alloy we use today is much tougher and much more corrosion resistant and will last a lot longer. This improved alloy has come out of our research programs. In Pickering I and II the old alloy was replaced by the new alloy when we re-tubed those reactors, so we're very confident now that we have a very robust pressure tube composition and design. We're very confident these tubes we've put into reactors today will last for 30 years.
Mr. Reed: I have one other question, Mr. Chairman. Ontario Hydro has stated - and I don't know whether they're still adhering to it - that as the licences expire for individual reactors at Bruce they are not contemplating renewing the licences. In other words, those plants will be gradually phased out. Do you have any comment to make about that?
Dr. Hancox: I think there is only one particular unit that has shut down at Bruce, unit II of the first station that was built.
Mr. Reed: Yes.
Dr. Hancox: That's the only station I'm aware of that's in question.
There, during maintenance several years ago, a lead blanket was left in a steam generator. This led to corrosion and cracking of some of the steam generator tubes. For that reactor to go into service again, those boilers or steam generators would have to be replaced. Ontario Hydro has not made the decision to do that yet.
That's the only reactor I'm aware of where that question has been raised, about whether they'd be replaced or not replaced.
Mr. Reed: Thank you, Mr. Chairman.
The Vice-Chairman (Mr. Thalheimer): Are there any others? No.
Thank you, gentlemen, for attending and enlightening us.
Dr. Hancox: Thank you.
The Vice-Chairman (Mr. Thalheimer): This meeting is adjourned until next Tuesday at 11 a.m.