[Recorded by Electronic Apparatus]
Tuesday, October 1, 1996
.1107 
[English]
The Chairman: Order, please. Today we are continuing with our examination of Bill C-23, an act to establish the Canadian Nuclear Safety Commission and to make consequential amendments to other acts.
We're pleased to have two groups of witnesses with us today: Murray Stewart and Colin Hunt, from the Canadian Nuclear Association, and Mr. Frost and Mr. MacKay, from the from the Cameco Corporation. Welcome, gentlemen.
We'll ask each of you to make your opening presentations and then we will turn it over to the members of the committee for questions.
Mr. Frost, I understand you're going to begin.
Mr. Stan Frost (Vice-President, Environment and Safety, Cameco Corporation):Mr. Chairman and members of the committee, thank you for the opportunity to present our views on the proposed Nuclear Safety Control Act. Mr. MacKay and I are appearing on behalf of three companies, Cameco Corporation, Cogema Resources Inc., and the Cigar Lake Mining Corporation, and the Saskatchewan Mining Association, of which all three companies are members.
Since this is a single presentation in place of two independent ten-minute presentations by the mining companies and the SMA, we trust you will not object to the presentation being extended to fifteen minutes.
Cameco, Cogema, and Cigar Lake, on behalf of the various joint ventures, are the operators of all of the present and proposed uranium mines in Saskatchewan. Our joint venture partners are listed on pages 1 and 2 of our brief.
The producing mines are Key Lake, Rabbit Lake, and Cluff Lake. McLean Lake is under construction, and Cigar Lake and McArthur River are undergoing environmental hearings, with plans to start production in about three years. Cameco and Cogema also conduct operations internationally. They are the two largest uranium producers in the world.
The Saskatchewan uranium mining industry is an important contributor to Canada's economy. The industry accounts for about one-third of the world's uranium production and, with the recent closure of the last Elliot Lake mine, for all of Canada's uranium production. We produce about three times as much uranium as the next leading country.
Saskatchewan's operating uranium mines reflect $2.3 billion in accumulated investment between 1980 and 1995. Almost 2,500 people are employed in the Saskatchewan industry, many of them aboriginal people. At the northern mine sites approximately 44% of the employees are aboriginals.
The new developments, if they proceed, will bring with them more than $1 billion in new investment in the next few years.
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The value of uranium shipments in 1995 exceeded $500 million. Most of these shipments are for export, making uranium an important contributor to Canada's balance of payments.
It is important for the Saskatchewan uranium mining industry for there to be a strong, effective and fair regulatory system in which the public has confidence. Replacing the outmoded Atomic Energy Control Act with a modern statute is therefore considered by the industry to be a good initiative. However, the regulatory system should be characterized by efficiency, certainty, consistency, due process and reasonably delimited administrative powers. In these respects, there are shortcomings in Bill C-23. Our written brief proposes ways in which the bill could be improved.
With respect to efficiency, the need for more efficient regulation is reflected in those portions of the brief that address environmental assessment and regulatory overlap. Assessing the environmental effects of uranium projects is a responsibility that, under the Nuclear Safety and Control Act, will fall squarely within the expanded mandate and specialized competence of the Canadian Nuclear Safety Commission.
Recognizing this fact, and with a view to streamlining regulation at the federal level, the brief proposes that the environmental assessment of uranium projects should occur solely within the framework of the Nuclear Safety and Control Act. This could be accomplished without any dilution in the quality of the environmental assessment process. Such a streamlining would reduce unnecessary regulatory bureaucracy, and through greater efficiency and timeliness would enhance Canada's competitiveness.
As an example of inefficiencies in the environmental assessment area, at Rabbit Lake we presented an environmental impact statement for the development of three new ore bodies in 1987. In 1988 approval was received from both the province and the Atomic Energy Control Board to mine two of these ore bodies and to test new mining methods for the third. However, the downturn in the uranium market did not justify a start on these projects until 1991. At that time the AECB informed us that they felt there was sufficient public concern over the projects that they were referring them to the federal environmental assessment review office for a public hearing before any production mining could take place.
An updated EIS was issued in 1992, and the hearing proceeded in 1993. After the panel recommended proceeding, an application for a production licence was filed with the AECB. We were then informed that the board staff were required to screen our licence application for potential referral to another panel.
Fortunately, a further referral did not occur. However, it is our view that such cases of double and triple jeopardy should be avoided if the new commission has the power to conduct its own hearings and deal with all phases of the licensing process in one hearing. Pages 6 and 7 of the brief offer further comments and suggestions on improving the new act in this area.
The Atomic Energy Control Act, which is to be replaced by the Nuclear Safety and Control Act, has been the main source of the federal regulation of uranium mine developments. However, regulation has also occurred through an array of other legislation, both federal and provincial. This has given rise to inefficient and inconsistent regulation and unnecessary and costly duplication. Bill C-23 provides an opportunity to address these problems. There are provisions in Bill C-23 that move in that direction.
The industry is aware of discussions between the Government of Canada and Province of Saskatchewan to eliminate duplication. Bill C-23 should be drafted so as to enable the federal government to delegate powers to the province to the maximum extent possible if these discussions are successful. The bill as drafted does not do this. Its delegation powers are very narrowly stated. Our brief offers some solutions to these problems on pages 8 and 9.
The Province of Saskatchewan takes considerable interest in the uranium business, regulating the industry through surface lease agreements, which commit the mine operators to comply with certain provincial regulations. Thus, both federal and provincial licences are required, and inspections are done by several federal and provincial agencies with overlapping areas of interest. This is clearly inefficient from both the taxpayers and the operators viewpoints.
The need for greater certainty is reflected in that portion of the brief under the heading ``Fair Licensing Regime'', which addresses licensing decisions and appeal processes.
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Under the licensing regime contained in Bill C-23, the potential continues for the redetermination of decisions already made and for licence suspensions, amendments and cancellations, all in circumstances that are left undefined by the bill. Such a system is fraught with uncertainty, which can inhibit investment decisions and business planning.
Subclause 43(3) permits the commission, on its own initiative, to redetermine decisions, orders and licence conditions. Subclause 24(2) invites the argument that a third party could apply to have a licence revoked or amended. These and other problems are pointed out on pages 15 and 16 of the brief, and possible solutions are suggested.
Bill C-23 contains an elaborate system of multilevel decision-making, reports, reviews and appeals. To ensure that the system operates with reasonable expedition, it is essential for time limits to be fixed for these various steps. The bill is currently silent in this respect. This point is further discussed on pages 14 and 15 of the brief.
Although not the subject of specific comment in the brief, the term of licences is a cause of concern for licensees. The AECB has been in the habit of issuing licences for two-year periods. Most of the other significant uranium-producing countries issue licences for the life of the project, or these are renewable for extended periods of time after a short period of demonstration of responsible operation. The failure to renew a licence for a producing mine would have a very serious impact on the operator's business.
At each due diligence exercise before a share offering for Cameco, I have been questioned very closely by counsel for the underwriters, who have expressed concern about the duration of our licences. I have no doubt that this can have a significant effect on our share price and on our ability to finance new developments. With all the powers that the new commission will have under Bill C-23, there is no reason why lifetime project licences cannot be granted.
Considerations of due process and reasonable limitations on administrative powers underlie the submissions contained in the brief with respect to the powers of inspectors and designated officers, which also appears under the heading ``Fair Licensing Regime''.
The proposed Nuclear Safety and Control Act would give inspectors and designated officers enormous powers of intrusion and interrogation. The proposed act would also give them authority to require licensees to take measures to do virtually anything, however arbitrary or inappropriate. These provisions go well beyond the comparable provisions in other federal legislation, and at least in the context of a uranium mine or mill, they are excessive and unacceptable.
These provisions may be the result of an attempt by the drafters of Bill C-23 to invest inspectors and designated officers with one set of powers sufficient for the regulation of all types of nuclear facilities, including those of much greater regulatory concern than a uranium mine or mill. However, whatever the reason, it is important for a more equitable balance to be introduced into the legislation if only to avoid the creation of an unnecessarily harsh climate. Proposals to that end are included on pages 10 to 14 of the brief.
Shortcomings with respect to consistency and reasonableness are evident in those portions of Bill C-23 dealt with in the brief under the heading ``Financial Matters''. Bill C-23, in authorizing the Canadian Nuclear Safety Commission to require a licensee to provide a financial guarantee, places no restrictions on purposes for which a financial guarantee may be required. Indeed, the commission's powers in relation to financial guarantees are not limited in any way by the bill, and could be used to duplicate financial guarantees given to provincial governments.
The position articulated on pages 16 and 17 of the brief is that a financial guarantee in respect of a uranium mine or mill should be directed only to decommissioning obligations. There should be no authority in the commission to require any financial guarantee if one has or will be provided to a provincial government.
Saskatchewan has legislation in place requiring financial assurances for the decommissioning of not just uranium mines, but all mines. Since uranium mining in Saskatchewan is taking place on crown land, which will ultimately revert to the province, a single financial guarantee that will satisfy provincial requirements should be sufficient.
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A system of cost-recovery financing of the regulatory agency is entrenched by Bill C-23.
Under the system the costs of the regulatory activities of the Atomic Energy Control Board have been passed on directly to industry through a fee structure that requires substantial payments upon application for new licences, licence renewals and the like. For example, we would be charged $2.2 million upon application for a new open pit and underground mine with mill and tailings containment area.
The Saskatchewan uranium mining industry does not object to the payment of reasonable fees, but believes that tying the level of fees to the cost of regulatory activities tends to encourage the unnecessary expansion of regulatory operation. Accordingly, the brief proposes on pages 17 and 18 that if the system of cost-recovery financing is to be retained at all, then in order to introduce some measure of discipline to the system, the Nuclear Safety and Control Act should limit the fees that may be set by the commission to no more than one-half the costs of the relevant regulatory activities.
In the context of the Saskatchewan uranium mining industry, this seems a particularly reasonable proposition in light of the fact that the industry voluntarily initiates sound environmental and radiological protection practices, and considers the regulatory system to exist largely to assure the public that the industry is operating responsibly.
There will be strong competition in the decades to come from other jurisdictions that are attempting to develop their uranium mines, including Australia and the United States, which are planning to increase production or develop new uranium mines. For Canada to remain at the forefront, its regulatory environment must be reasonable, fair, and in every respect competitive in international terms. It must also create a climate of public confidence.
Changes to the regulatory system are necessary. Federal-provincial duplication must be eliminated. Overlap among federal departments must be reduced. A fair balance must be struck between regulatory needs, for example with respect to the powers of the new commission and its inspectors, and the needs of the industry for regulatory efficiency, certainty and fairness.
Bill C-23 as currently drafted takes initial steps toward these goals. However, with respect to the issues outlined in this brief, the industry believes that the bill can and should be improved to the benefit of Canada. The Saskatchewan uranium mining industry, through the operators presenting this brief, strongly urges these changes.
The Chairman: Thank you very much, Mr. Frost.
Will Mr. Hunt or Mr. Stewart be presenting?
Mr. Murray J. Stewart (President and Chief Executive Officer, Canadian Nuclear Association): I will.
It's a pleasure being here today to present to you the views of the Canadian Nuclear Association on Bill C-23, and to give you our support and encouragement for a speedy passage of this bill, which is important to our industry.
While some of our member companies and organizations, as you just heard, are also submitting briefs to you, we hopefully are presenting a broader industry perspective on the issues around Bill C-23.
I'm accompanied this morning by Colin Hunt, a staff director of the association, who will be assisting me with some of the overheads. I think most of the overheads I will be showing are in the package that I passed out.
The Canadian Nuclear Association was established in 1960. It's an association composed of many industries and enterprises sharing a common interest in the development and application of nuclear technology for peaceful purposes. Our members, about 100 strong, include all parts of the industry, from manufacturers to uranium mines, academic institutions, unions, electric utilities, banks, financial institutions. We cover the full spectrum of the nuclear industry in Canada.
The CNA has submitted a brief with our detailed comments on Bill C-23, which I believe you also have in front of you. We support this new legislation. Today I want to concentrate more on presenting our rationale for supporting the legislation and why this legislation is critical to our industry.
The Canadian nuclear industry has served Canada well. From a start over fifty years ago with the first nuclear reactor going critical in Chalk River, to its current massive contribution to our economy, we are an industry that all Canadians should be proud of. There are over 30,000 direct jobs and probably 100,000 indirect jobs in the nuclear industry.
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As you just heard from Stan from Cameco, Canada is the world leader in uranium. Our industry is a net exporter of goods and services, approaching one billion dollars per year at this point. Canada is also the world leader in medical purposes of radio-isotope production and export. We currently supply about 80% of the world's cobalt 60.
As an industry, we generate over $700 million in federal personal income tax and sales taxes, and spin-offs from our industry are substantial. Robotics, telecommunications, software, consulting engineers and companies like CAE Electronics are spin-offs from the industry.
In the last fifty years nuclear energy has risen to where it is now supplying over 7% of the world's energy needs. It is interesting to note that the world is still dependent on fossil fuels for over 90% of our energy needs, just to put it in perspective. That's the total energy consumption. If you look at just the electricity generation, nuclear energy supplies about 17% of the global needs, which is similar in value to hydroelectric-generated electricity on a global basis. These facts are about two years old, but nuclear has now surpassed hydroelectric power generation. New nuclear generation capacity of over 40,000 megawatts is in construction in the world as we speak today.
The 17% figure for nuclear power generation is not dissimilar for the overall Canadian dependence on nuclear power as well, although hydroelectric power in Canada is much greater than what is shown on this chart on a global basis.
As with the overall nuclear industry, the power generation industry has also had a significant impact on Canada. As we all know, Canada enjoys one of the lowest-cost electric power rates in the industrialized world, and this is partly due to the contribution of nuclear power.
By having nuclear stations and not burning coal, Canada has not emitted over one billion tonnes of carbon dioxide, eighty million tonnes of ash, and thirty-two million tonnes of sulphur dioxide. This would have happened with conventional sources of power. We believe the nuclear industry also manages waste effectively. And just as one more sales pitch that you might have heard from AECL last week, we do believe we have one of the world's leading nuclear reactor technologies.
Just to further illustrate this, I'll show you one slide. This is a listing of the current 25 leading nuclear reactors around the world based on pure performance - their capability of producing power. Of the top 25, five are the Canadian CANDUs and one, which Colin can point out, is in Korea and it is a Canadian-supplied CANDU as well. With only 5% of the world's nuclear reactors, Canada has over one-quarter of the top 25 reactors in the world. That's truly an achievement.
The development over the past several decades of our industry and regulatory processes has established Canada as a leader in the management of its nuclear industry. Canada is a major supplier to the peaceful nuclear economy of supplies and services. Canada is a world leader in health and safety regulations and requirements and in the performance of its nuclear industry to meet those standards. We in Canada encourage other nations to follow our lead, partly through our insistence on bilateral nuclear cooperation agreements with any country we trade with on a nuclear basis. Bill C-23 must be structured to support this tradition and we believe it does.
Our association believes that the main purpose of Bill C-23 should be established in the legislation of those regulatory practices that were already in effect through regulation. The regulation of the nuclear industry in Canada has generally been one of agreement on fundamental principles between the regulator and the licensee, with decisions reached with the agreement of all parties as to the actions taken or the standards to be applied.
In our view, this process of performance-based regulation should continue, and we believe that Bill C-23 puts that into legislation. Through this legislation Canadians will become more familiar with the extent and quality of the nuclear regulatory process. Through this legislation, the powers granted to the regulated authority will be clear and explicit for all interested parties. Also through this legislation, regulatory authority over the nuclear industry will be brought into agreement with regulatory practice in other industries in accord with other legislation. Thus, we support Bill C-23.
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The Chairman: Could you hold on just a second? We have a problem with translation.
We will take a short break while we work on the translation.
Oh, we have it back. Please continue, Mr. Stewart, with my apologies.
Mr. Stewart: In our written brief, however, we itemize a number of points we would ask you to consider in either the final bill editing or the enabling regulations.
From our point of view there seems to be a need to include a final item in clause 32 to indicate that inspectors are allowed to take only reasonable actions in accordance with accepted commission standards. It is not apparent that the commission is liable in any way for damages in the event that orders by an inspector turn out, upon appeal, to have been incorrect. We would also like assurance that these powers of search and seizure are in accord with other Canadian federal legislation and do not set any precedents.
The inclusion of a clearly delineated appeal process is certainly welcomed by us. We would, however, like to see established time periods in which the appeal process would take place. In addition, it is not indicated who is or can claim to be a directly affected party. Lacking a clear definition, the appeal process leaves licensees vulnerable to nuisance appeals. We therefore recommend that the appeal process define clearly who is entitled to appeal a commission decision, what the burdens of proof are, and who is responsible for costs.
The bill does not reassure licensees that if they are in compliance with the commission requirements their licences will be granted or renewed. It equally does not reassure licensees that the licences will not be revoked while in complete compliance with the regulations.
Given the wide range of disciplinary tools at their disposal and given the reporting function required by licensees, it is not clear why licensees should be restricted to two-year licence renewals as has been the past practice. For example, in Germany licences are granted indefinitely and remain in force as long as the licensee can demonstrate compliance.
The CNA agrees that there is a strong need for both a public environmental assessment process and a strong effective licensing and regulatory regime for nuclear facilities. We believe that in the interests of time, efficiency and cost, the requirements of both the licensing of new facilities and the environmental assessment process for a new facility must be combined into one hearing.
The CNA understands that the commission is empowered to take other acts, including the Canadian Environmental Assessment Act, into account in its licensing activity. We would therefore like assurance that the bill contains all of the powers necessary for the commission to conduct an environmental assessment hearing as part of the licensing of a new facility. This should include provincial and other federal departments...to statutory requirements as well.
The CNA would like to state to this committee that it does not fully support the principle behind cost recovery of regulation from licensees. The federal government has established a policy of recovering costs of regulation from licensees on the grounds that those who benefit should pay. We don't disagree with that; however, the assumption that only the licensee benefits from regulation is not right, we believe. Through the activities of the licensee, jobs are created; people are employed; federal, provincial and municipal revenues are created; exports are generated; and spin-off benefits are generated, as I mentioned before, frequently larger than the licensed activity itself. Clearly the range of benefactors from a nuclear licence is much wider than just the licensee.
Notwithstanding these comments, should cost recovery continue, the bill should be amended to ensure that licensees have a forum to challenge the basis of costs and their allocations. Throughout legislation, the commission should not be allowed to ratchet up regulatory requirements or increase any staffing or overheads with the expense wholly borne by the licensees.
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The CNA would feel more comfortable with the bill if the commission were required to perform cost-benefit analyses for new regulatory recommendations or to consult with a properly constituted advisory committee as a precursor to the introduction of new regulations.
It would be of most help if the committee would indicate the degree to which Canadians are to be protected by the new regulations from the potential consequences of nuclear industry activities. This could provide the commission with clear guidelines for the formation of new regulations. The CNA encourages this committee to recommend that a commission cost-benefit policy be in place prior to the implementation of this legislation.
In conclusion, the CNA believes the proposed Nuclear Safety and Control Act is fundamentally sound. We believe the bill provides a useful and necessary updating of the Atomic Energy Control Act. We believe the bill does not need amendment with respect to any of its fundamental principles. We encourage the committee to review the bill thoroughly and Parliament to pass it expeditiously.
Thank you for your attention, and I welcome questions for Colin and myself.
The Chairman: Thank you very much, Mr. Stewart. We'll begin the questioning withMr. Canuel, from the Bloc, for ten minutes, please.
[Translation]
Mr. Canuel (Matapédia - Matane): You have expressed several concerns and your recommendations are quite to the point. You find in me a sympathetic listener.
I would like to come back to the first brief that you submitted. In passing, thank you for having submitted it in French and in English. I have in hand a copy of the French version. On page 7 of this version, you speak of regulatory overlap. In the next paragraph, you speak of federal-provincial coordination and you give a few examples. Could you provide me with other examples of overlap? Would it be premature to say that the provinces could very well take on full responsibility? You spoke of your province. I know that there are also discussions under way in Quebec and that some would like the province to assume full responsibility. Furthermore, a commitment was made in the Speech from the Throne to turn over mining and forestry entirely to the provinces.
Here are my two questions: could you give me some examples of overlap and shouldn't full responsibility in these areas be given to the provinces? If some provinces are not able to assume full responsibility for coordination, I would understand that but I think that several provinces would be quite able to do so. Why wouldn't we transfer that responsibility? Thank you.
[English]
Mr. Frost: I think your last sentence stated our position very well. Where the province is competent and interested in doing the work, the legislation should allow them to do so.
As far as examples of overlap go, you could consider inspections. The Atomic Energy Control Board inspectors come into our sites every month. We also have the Saskatchewan Department of Environment coming in every month. The Saskatchewan Department of Labour mine inspectors come in probably about every six weeks.
We also have recently started to have inspections from Labour Canada. Some of the environmental agencies, like Fisheries and Oceans and Environment Canada, also come in occasionally. We have a situation where four different agencies are looking at environmental issues at our sites and three different agencies are looking at occupational health and safety matters. None of these agencies is unique in what it looks at, but all of them have overlapping interests. We find that our site environmental and safety personnel are occupied for a major part of their time in conducting visiting inspectors around the sites.
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We have licences from both the province and the AECB. In some cases, the licences have different renewal dates. They usually have different terms or periods during which they're in effect. They have occasionally put different requirements upon us.
As an example, in the effluent discharge limits shown in some of our site licences the requirements are overlapping but not identical, which does complicate our lives somewhat with respect to monitoring and control of effluent discharges.
There are a lot of areas of overlap.
[Translation]
Mr. Canuel: Mr. Chairman, I would like to add something. If I understood correctly, financial losses are considerable and those people have slightly different positions on the question. I understand now. Thank you.
[English]
The Chairman: Mr. Ringma.
Mr. Ringma (Nanaimo - Cowichan): Thank you for your presentation.
In listening to testimony today and the two previous days, I've put myself in the role of someone responsible for getting Bill C-23 on its way at all. I asked myself what I would do about this. And of course I think the first thing I would do is consult the existing AECB and suchlike, which I presume has been done. I'd go out to industry. I would ask industry what it has to say about this. In other words, I would consult everyone who had some role to play in this.
My question to you, which I suppose I could almost as well put to this committee, is this: to what extent have you been consulted so far on the details of Bill C-23? I hear from both sets of witnesses that it's going in the right direction. I think we all agree, but when I look at the detail of the regulatory powers, the inspectors and all that.... And particularly in your presentation, Mr. Frost, which I read before, I see a lot of influence in those details. It seems almost excessive on the part of inspectors having had a say in what should go into Bill C-23.
I'll just come back again after that long preamble and ask both of you the basic question. To what extent have you been consulted on the make-up of Bill C-23 up to this point?
I either asked the right question or the wrong question.
The Chairman: Who would like to field that?
Mr. Stewart: Maybe I could let Mr. Hunt respond first. He's been involved in the evolution of this process with the CNA, the AECB and many other people for a number of years.
Mr. Colin Hunt (Director of Publications, Canadian Nuclear Association): Perhaps there is no such thing as a level of consultation sufficient to appease everybody. But that caveat aside, there has been some AECB consultation. They consult with the industry quite extensively before they pass down major rulings or significant rulings. They're certainly aware of the industry concerns.
In general, my feel for this issue is that the AECB is in many cases more responsive to the views of stakeholders - and I include industry, but also a large number of other groups in that word ``stakeholder'' - than are many other regulatory bodies elsewhere in the world. Some take very little of the industry viewpoint into account. Others take very little of the views of stakeholders - other than the industry - into account. In general, I would say the AECB's record is on balance pretty good here.
Mr. Ringma: I take it from your answer that you consider this legislation a child of the AECB more than it is a child of the Department of Natural Resources.
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Mr. Stewart: How should I respond to that question? I think in effect what we have in the legislation is embodying what has really evolved for many years through cooperation between all of those parties. As I mentioned before, it's putting into legislation what has been working. I think the Canadian system is working extremely well. It's a showpiece in the world, so this embodies a lot of it. We have a few issues and that sort of thing, but overall it embodies what really is happening and working.
Mr. Hunt: Perhaps I could just add briefly to that. We are a regulated industry in the sense that just about every aspect of our industry is covered by regulation as a part of federal legislation. Therefore, for our industry to function at all, we need an effective regulator, we need a powerful regulator, and we need a regulator that has the confidence and trust of both policy-makers, such as yourselves, and the Canadian public generally. So in that sense, I think it's only to be expected that this piece of legislation would in large measure reflect the concerns and interests of the regulator.
Mr. Ringma: I'm sure we all have the same aim here, which is to make sure that Bill C-23 is as good as we can get it and that it covers everyone's interests, the public and the industry as well as everyone who's involved in it. That's where I'm headed for in my line of questioning; I want to be sure that after this is all over we're all reasonably relaxed in saying we've done the best we can to take everyone's concerns into consideration.
Thanks; that opens things up.
The Chairman: Thank you very much, Mr. Ringma.
Julian.
Mr. Reed (Halton - Peel): Thank you, Mr. Chairman.
Mr. Stewart, I was looking through these handouts and at the overheads projected, and they don't seem to be all here. Are they supposed to be?
Mr. Stewart: I didn't show a couple that are in that package.
Mr. Reed: But you did show a couple that aren't in the package. That's what I'm getting at.
Mr. Stewart: That was unintentional if I did. Perhaps the one I didn't have there, which I think is a separate sheet, is the one with all the flags.
Mr. Reed: Yes.
Mr. Stewart: We will get you copies of the one with all the flags.
Mr. Reed: That's great.
Just in reference to that, I was wondering if you had a track record of all of the units that are operating in Canada, not just the four best ones. I realize the sales effort here, and you're outstanding, as the association has always been. It's sort of like saying unit three at Niagara Falls has been putting in its 8,000 hours every year for the last 85 years and therefore is perhaps the top generator in the world. Could we maybe get a more balanced perspective on the performance of those units?
Mr. Stewart: I don't have it with me, but we do have the numbers for every one of them and I can assure you they're all essentially in the top 50%, no question about it. There may be the odd one below that because of certain things, but there are 21 stations in Canada and they're all performing very well over a lifetime basis. They have their perturbations and they have shutdowns on a yearly basis for maintenance or re-tubing and this sort of thing. I gave you the very pure numbers here; this is a lifetime basis. I could also be accused of cherry-picking the best year and last year and this sort of thing.
Mr. Reed: Yes, it's like going into the Bible: you get what you want to get.
Mr. Stewart: I've made it as pure as possible, although you do see AECL on the top of the page.
Mr. Reed: Well, that would be most appreciated because it would help us to get a balanced view.
Mr. Stewart: I will provide that to you. I'll give you them all.
Mr. Reed: I can also say that I appreciate your comment on the offsets - if we had to do it with coal, for instance, what we would be doing with carbon dioxide and ash, as you point out, and sulphur dioxide.
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This gets me to the more thorny question of the high-level waste that is building up as a product of the reactions. Back in 1978, I think, in my former incarnation on the Ontario Hydro Select Committee, I was taken out to Whiteshell and shown the research for long-term storage or disposal of high-level waste. It was apparently quite well developed at that time. We were told that they were within about two years of actually undertaking this, and a rush went on. You're much younger than I am, but I remember when the rush was on, with Ontario Hydro and AECL scrutinizing pitons in northern Ontario, and they ended up in Mount Moriah, I think, at Madoc, and created a groundswell of political opposition.
What I'm getting at is that this technology is supposed to have been with us for some time now, yet it has not been developed or utilized. As a result the high-level waste continues to build, albeit in safe storage -
Mr. Stewart: Thank you.
Mr. Reed: - as long as the storage remains safe and some kook doesn't throw a hand grenade into one of the swimming pools.
When is this going to happen, in your view? Will we ever get to the point where we can say that we can move this material into permanent storage?
Mr. Stewart: The easy answer is that we look forward to a very positive outcome from the current high-level waste hearings that are going on as we speak, and there is one more week coming up in November. Hopefully that will go well. Then they go into the siting process, phase three, early next year. I think it's January or February. We are doing as much as we possibly can to expedite that process, realizing that it has been fifteen years in the engineering development of that option. It looks like that is a viable option, and all going well, long-term storage should result from it.
But I agree with you - currently it's all safely stored at the nuclear power plants and elsewhere, and in some cases it could stay there for years. The approach New Brunswick Power has taken is to have long-term, not permanent, dry storage.
Mr. Reed: We're making a horrible assumption, though, and the assumption is that we're doing this in the midst of a stable society. Not all societies in the world are as stable as Canada, and even in Canada we've learned to our horror that there are always a few individuals whose mental state is such that they can do bad things. So far, I think we've been fortunate. As this waste proliferates, it means the potential for a problem proliferates.
I have no quarrel with the way it's being held, the storage or anything else. I don't like to come down as anti-nuclear, because I'm not, but I have certain questions about the premises on which things are done. In my view it should be a cause for concern. Yes, we have a technology that fully protects the public - unless somebody disturbs it.
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Mr. Stewart: Colin may want to comment as well, but I certainly think this is one of the advantages of the current high-level waste proposal. It does put it safely underground. It's sealed in what is in effect an inaccessible tomb. It uses that type of approach, which is part of the rationale for going to the deep geological storage.
Mr. Reed: Can we press for this ourselves, as a committee or as a government? Is there any way in which we can bring this process into reality?
Mr. Stewart: I think it is a reality. I would hope it comes through. There may be one concern that we do have, and that is a hope that it does come down on a very definitive approach, that there is a definitive decision from the panel that it is valid and should go to siting. If it doesn't, hopefully it will say that this, this and this should be resolved and it should then go to siting.
I agree with you that it has gone on probably as long as we would like for it to go. It is the final brick in the whole nuclear fuel cycle, and we want it to be ultimately resolved as much as you do.
Mr. Hunt: There are a couple of other things that apply to the issue you raised.
With respect to the disposal of waste, it should be clearly recognized that nuclear energy is the only thermal technology that assumes responsibility for all of its waste products. I want that very clearly borne in mind, because there is in fact a larger body of radionuclides emitted freely into the environment from the world's consumption of fossil fuels - coal is the most particular source, but all fossil fuels share them to some extent - than is used and produced by the nuclear industry. In the case of the nuclear industry, the nuclear industry is made responsible for all of its radionuclides as a condition of having a licence at all.
We have to assume responsibility for all of that radioactive waste material and must establish proper methods for storing it. We also have to make provisions for paying for its complete and absolute disposal. To answer the issue you raised, it has been accepted and well recognized for a number of decades now that disposal means that this material will be disposed of in such a fashion that it will not require a stable society or any other ongoing political structure to maintain and look after it. In fact, that's at the very heart of the waste disposal concept that AECL developed and is now under review.
So my response to your question would be that I agree that those are all issues. I would suggest that the nuclear industry would serve as a model for all other industries to observe when it comes to the responsibility for and managing of all of their waste products.
The Chairman: Thank you.
Mrs. Cowling.
Mrs. Cowling (Dauphin - Swan River): I want to thank all of the witnesses for their presentations.
As you know, our government is committed to economic growth and to creating the climate for jobs, so I want to go to one of the overheads. You indicate here that the nuclear industry has served Canada well, with 30,000 direct jobs in high technology.
My question is to Mr. Frost. As the world's leading exporter of uranium, at a level of $1 billion, what number of jobs does that generate?
Mr. Frost: I think I indicated in our brief that the Saskatchewan uranium mining industry has about 2,500 jobs, but we also create a number of indirect jobs. A lot of Saskatchewan suppliers of goods and services are very dependent on our industry.
We have also endeavoured to develop aboriginal owned and operated businesses in northern Saskatchewan. A classic example of that is Northern Resource Trucking Ltd., a company for which we were the midwife, I guess. We got an Indian band and a trucking company together and agreed that if they could set up a working organization we would contract our trucking services to them. We don't like to have businesses set up that are wholly dependent on us. We like to have a business that will be stable and will continue after our mines are gone. We've managed that in a number of cases; and, as I say, Northern Resource Trucking is a classic one.
So there are a lot of spin-off jobs created as a result of our industry.
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Mrs. Cowling: That's great.
One of your overheads covers the appeal process, and it indicates the issues you would like to see addressed. You mentioned time periods. I'm wondering what you would recommend with respect to time periods.
As for my other question, with respect to the appeal process, I think you raised the issue of who is available or who is responsible. Or maybe that's the question I'm raising for you: Who should be available and who should be responsible when we look at that appeal process? Could you expand on that as well?
Mr. Hunt: In the second part of your question, were you asking about who should be allowed to launch an appeal?
Mrs. Cowling: Yes.
Mr. Hunt: The industry would obviously have a biased opinion on this, whereas you may be required to take a somewhat larger one from a public policy perspective. I would suggest, however, that many of these problems could be resolved if there is a clear definition of some of the terms in this act. One of the terms that needs clear definition is ``persons who are directly affected''. We could have a clear definition of that in terms of whether it is geographic or whether it is work-related or whatever, because with environment-related issues, for example, it's not uncommon for people hundreds of miles away to claim they're directly affected by some possibly existent or possibly non-existent phenomenon. Much of the question over the appeal process would therefore disappear with that.
Compared to this issue, the problem of time limits is relatively smaller. Since we are not lawyers and are not experts in the operation of government regulation in its minutiae, we can't recommend specific time periods. We would, however, ask that some consideration be given to the idea that they be established.
Mr. Harold MacKay (Cameco Corporation): From our perspective, I think the time period question is important, but it can probably be best handled by having the act simply say that these various appeal procedures - of which there are several - will each be taken within a time to be prescribed by regulation. That would at least make it clear that there would be regulations that would necessarily describe time periods. I think it may be too much to ask to spell out in the act time periods that would survive through time - fifteen or thirty or sixty days. But it's the absence of a precise statement that appeals must be taken within time prescribed by regulation that is the fundamental reason for our concern, and that would be the solution.
Mrs. Cowling: Thank you.
The Chairman: Thank you, Mrs. Cowling.
As chairman, I'd now like to put some questions of my own.
There was some concern expressed about the issue of guarantees and the fact that they can extend beyond just the decommissioning. Also, as I went further into the brief, there was some concern that it could duplicate what the provinces are asking for.
I have a couple of questions on that last point. Would you think it appropriate for the federal government to maintain the authority to impose something beyond what the province has suggested if it believed that the province had not asked for a sufficient guarantee or for sufficient security to clean up or to decommission a particular mine?
Secondly - and I think I saw this in the brief, but I might not be reading it correctly - there was a suggestion that although some facilities may require guarantees beyond just the eventual decommissioning, it wouldn't necessarily apply to a uranium mine. I'm thinking, however, of a situation in which you might have a tailings pond that would fail in the middle of the life of the operation and you would end up with contamination downstream, etc. I'm not sure you would necessarily do this, but as part of a licence you might want to ensure that a company has the financial wherewithal to address the failing of such a facility in mid-life.
Maybe you could comment on those two points.
Mr. Frost: With respect to the second point, I think a company generally would avoid that sort of problem by properly designing the facility, and through proper placement of the facility. You don't place a tailings facility in an area where a single failure is going to result in downstream pollution.
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I can speak for all the companies in northern Saskatchewan, and our operations are all on fairly big surface leases. You select an appropriate area within that surface lease for the tailings repository and it is sited and constructed with regulatory approval. I think all of us, the regulatory agencies and the companies, are conscious of that sort of problem, and we design to avoid it.
As far as clean-up during the operation goes, if you do have a tailings incident, it involves materials that you're dealing with every day in the industry. It's not new technology. One of the fortunate things about radioactive materials is that they're very easy to detect with instrumentation, and that makes them easy to find and clean up. So I don't see that as a major problem.
On the financial assurances side, certainly for the uranium mining industry the concern of governments and of regulatory agencies is post-operational, concerning decommissioning and abandonment. In the past there have been examples of companies that have abandoned sites without properly cleaning them up, but under current legislation that simply is not going to happen. I mentioned earlier that Saskatchewan has decommissioning requirements for all mining operations, and that includes potash, coal, uranium, gold, and others. So it's not unique to the uranium mining industry.
I can speak on this from experience in Saskatchewan. I think they do a competent, realistic job of assessing decommissioning requirements, hence the financial assurances. My feeling is that if the province that will become the ultimate holder of the land is satisfied with the decommissioning plan and the financial assurances for it, that there is no need for the AECB to be further involved in it.
The Chairman: In a second area, we talked about the issue of delegation or overlap between the province and the federal government. As we're all aware, the proposed legislation addresses that through a delegation clause, subclauses 44(6) through 44(11). This clause would seem to address many of those concerns in that the federal government is able to delegate the carrying out of many aspects through that part of the act.
You still seem to have some concerns with it, and I was wondering if you could enunciate what those remaining concerns are in a very straightforward manner.
Mr. MacKay: Perhaps I could speak to that, Mr. Chairman. Our comments on that are in broad form on pages 8 and 9 of our brief.
To summarize those concerns, it is true that we believe there are two quite narrowly stated provisions in the bill that will permit delegation. The one case is a circumstance in which the commission may incorporate provincial laws or rules into its regulations. In a case in which the commission does incorporate a provincial rule, it can then delegate the administration of that back to the province, as stated in clause 44. The second case is that it permits the delegation of inspection powers.
Our suggestion is that there are many other things that might come into the discussion between the levels of government from time to time. In fact, we think they are in the discussion. For instance, there is the double licensing example that Mr. Frost mentioned, where both the federal government and the provincial government, through their respective agencies, are seeking separate licences for the same project through separate procedures.
Our suggestion is that in the future it might be decided by the federal government or the commission that this is something that should be delegated to the province. The bill as drafted does not permit that.
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Our suggestion is there be a broad section effectively saying that to the extent permitted by the constitution, the federal government or the commission may delegate - I don't know whether you would lodge it with the Governor in Council or with the commission - that any and all powers that could be delegated may be delegated subject to intergovernmental agreements.
We think the bill at present is being touted as something much more than it is. We read the minister's statement, which kind of stated that this problem of delegation would be handled fully here, but I think that somewhat overstates the matter. Delegation is only possible in the two specific areas. We can't see why there would be any objection to having an enabling position that would permit wider delegation if there is intergovernmental agreement at a point in the future.
The Chairman: I don't think I would characterize the fact that we can incorporate provincial law and then delegate it back as being narrow. I would characterize that as being pretty broad, but that's a point of debate.
Mr. MacKay: That's not an insignificant power, but if you take the licensing example, which is a classic example of duplication and costly overlap, this bill doesn't have that power, and we think it should.
The Chairman: I know where you're coming from, and I can appreciate that.
I have two other quick points. Inspection powers - I don't want to get into the details of that legally, I just want to ask a question. The inspectors out there right now and the manner in which they operate - you've expressed concerns about barging down the door and raids in the middle of the night and all of that kind of stuff. That isn't what's actually happening in the field, is it?
Mr. Frost: Our experience at our mine sites has been relatively good. I should point out that our sites are pretty remote, so most of the time people travel to and from our sites by aircraft. They have to land at our landing strip and they have to seek clearance to do that, so it's hard to surprise us. But occasionally we do get a surprise visit when an inspector decides he's going to spend 14 hours driving over rough roads to get to our site. But as I say, generally our experience has been good. What we don't like is legislation that depends upon the reasonableness of the inspector. So we would like some curbs on the inspectors' powers.
There is other legislation that deals with imminent danger, if that is a concern. Both provincial and federal labour laws deal with that issue, so there is no need for an AECB or nuclear safety commission inspector to have further powers to stop work because of that. As I say, we don't like to see legislation that depends upon the reasonableness of the inspector.
The Chairman: I understand your concern, but I'm trying to get my hands on what is a theoretical rather than a practical concern, in the sense that you're finding examples of abuse of inspection powers taking place right now.
Mr. Frost: I can recall an incident where operations were incorrectly shut down in one of our underground mines by an inspector. If I recall correctly, we got back to the AECB office in Ottawa and sorted it out. The thing is that he should not have shut us down in that incident, but he did. I think it was probably a less experienced inspector, but these things can and occasionally do happen.
The Chairman: Finally, on the issue of cost, we're on a cost-recovery system right now. You're suggesting that general tax revenue pick up half the cost of the regulatory regime, which if I'm not mistaken would create a significant financial...I could use the word ``windfall''. It would certainly increase your return on investment at the expense of the general taxpayer. Is that accurate?
Mr. Frost: Until about six years ago I think the taxpayer was carrying the full burden of AECB's operation.
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The issue is that as it stands, the board or the new commission can argue that they need to expand their staff in some regulatory area and that there will be no cost involved, because they'll just get the cost back from the licensee. This doesn't really put much of a restraint on regulatory growth, and we feel there should be some restraint.
The Chairman: Your concern isn't primarily on the cost side. Your concern is that we make sure that the regulations that are developed are in fact accomplishing a legitimate objective. The cost part isn't your primary concern, if I understand it correctly. You want to make sure that if there are 432 regulations that govern your operation, they're all necessary. You don't want to put a regime in place that would encourage somebody to put another 100 there, just for the sake of building an empire with more staff, etc.
It's the legitimacy of the regulation as opposed to the cost you're concerned with, if I understand you correctly.
Mr. Frost: I think that's our major concern. We are spending several million dollars a year on licensing fees, and that's not an insignificant cost.
The Chairman: Thank you very much, gentlemen. I appreciate the time you've taken and the forthrightness of your presentations and answers. We will certainly take that into consideration as we examine Bill C-23. Thank you very much.
The meeting is adjourned.