Proceedings of the Standing Senate Committee on
Energy, the
Environment and Natural Resources
Issue 15 - Evidence for March 11, 1997
OTTAWA, Tuesday, March 11, 1997
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C-23, to establish the Canadian Nuclear Safety Commission and to make consequential amendments to other Acts, met this day at 9:05 a.m. to give consideration to the bill.
Senator Ron Ghitter (Chairman) in the Chair.
[English]
The Chairman: Ladies and gentlemen, we have been expecting you for quite a while. Some could say that we have been expecting this legislation for years. Finally, it is before us. We welcome you here today and we look forward to your submissions. Please explain the legislation to us.
Mr. Peter Brown, Director, Radioactive Waste and Radiation, Uranium and Nuclear Branch, Natural Resources Canada:With me today from Natural Resources Canada are Ms Anne-Marie Fortin, Legal Counsel, and Mr. Mark Dallaire, Nuclear Technology Advisor. Also present today from the Atomic Energy Control Board are Dr. Agnes Bishop, President; Mr. Pierre Marchildon, Secretary General; and Ms Audrey Nowack, Legal Counsel.
Thank you for the opportunity to speak to you today. I will take a moment to make some general remarks on Bill C-23, the Nuclear Safety and Control Act, and after Dr. Bishop has made her remarks, I will be pleased to answer any questions you might have.
Canadians realize a number of significant benefits from the Canadian nuclear industry. I should like to take a moment to highlight some of the most important of these.
Nuclear generating stations provide approximately 20 per cent of Canada's electricity. In Ontario, it is over 60 per cent. Not only is nuclear power safe and a secure source of electricity, but high efficiency factors and low unit costs for fuel and operations make nuclear energy an economic source of electricity. Nuclear generating stations also have a significant environmental benefit in that they do not emit greenhouse gases. This is a particularly important aspect as the public concern around global warming and global climate change continues to grow in this country.
Canada is also the world's leading producer of uranium, supplying electrical utilities in a large number of countries throughout the world. We export some 500 million watts of uranium per year to be used for peaceful purposes only.
There are other benefits. Nuclear technologies are used extensively in medicine for both cancer treatment and medical diagnosis. In fact, one in four Canadians who visit a hospital undergo some kind of diagnostic process that involves nuclear technology.
As you might expect, the nuclear industry is a significant source of employment for Canadians. It has been estimated that employment in the Canadian nuclear industry totals in excess of 26,000 people and that another 10,000 people work for suppliers providing non-nuclear components to the industry. Many of these are highly skilled jobs in manufacturing, construction and servicing that stem from orders for CANDU nuclear power plants.
These are some of the main benefits that Canadians realize from the nuclear industry, and Canadians deserve to continue to benefit from them. Bill C-23 will provide Canadians with modern legislation to regulate the Canadian nuclear industry and will ensure that Canadians have a strong, independent regulator for this important industry as the nation moves into the 21st century.
I should like to review some of the key features of the Nuclear Safety and Control Act.
The Atomic Energy Control Act, the existing legislation governing the AECB, was put into force in 1946, over 50 years ago. It was drafted with the memory of nuclear war fresh in people's minds and, as a result, was drafted primarily with national security in mind. Today, however, the AECB's operations and responsibilities go well beyond the issues of national security. The AECB devotes much of its efforts to ensuring that the development and use of nuclear energy does not pose an undue risk to the health and safety of Canadians or the environment.
The Nuclear Safety and Control Act reflects this shift in focus. Bill C-23 provides the nuclear regulator with the explicit mandate to protect the health and safety of workers, the public and the environment. To reflect this changed mandate, the Atomic Energy Control Board will be renamed the Canadian Nuclear Safety Commission.
I wish to assure members of the committee that the commission will continue its role in maintaining national security as it relates to national matters. The commission will have the power to license the import and export of nuclear materials and technology, to control the dissemination of information regarding nuclear technologies, and will implement in Canada measures to which Canada has agreed regarding the international control of nuclear energy, particularly with respect to the non-proliferation of nuclear weapons and nuclear explosive devices.
One of the current government's priorities is a general ongoing commitment to regulatory reform and efficiency. Bill C-23 addresses that concern in that it contains many of the hallmarks of modern legislation for regulatory regimes. It provides for more explicit regulation for the nuclear industry by, among other things, clarifying the licensing powers of the commission, explicitly identifying the extensive regulation-making powers of the commission and explicitly describing the powers of inspectors and designated officers. Bill C-23 also includes appeal provisions both for decisions and orders of designated officers and inspectors and for decisions by the commission.
The commission will also be given the administrative tools to operate a modern regulatory regime. For example, the number of board members will be increased to seven from five. This will allow the commission to broaden its expertise. Members of the commission will be able to sit in panels and make decisions on issues before the panel on behalf of the commission. This flexibility will allow the commission to carry out its duties more efficiently.
Bill C-23 also contains some provisions that address serious deficiencies identified by the Auditor General. You may recall that last fall the Auditor General noted that more than two-thirds of its 1994 recommendations to improve the operation of the AECB were dependent in whole or in part on provisions in this bill. One of the most important provisions is that the commission will have the power to request some form of financial insurance for decommissioning activities as a condition of licence. This will avoid situations where governments become the owner of last resort.
Second, the commission will have the power to charge fees for its services, including licence fees for regulated activities.
Finally, fines for licence infractions will be increased to a maximum of $1 million from the current maximum of $10,000, which I am sure committee members will agree is not much more than a nuisance cost for the large licencees.
This legislation contains provisions to assist the federal and provincial governments to reduce or eliminate regulatory overlap and duplication in the nuclear industry. Specifically, Bill C-23 will allow the government to incorporate provincial regulations as federal legislation and to delegate the administration of these regulations back to the province. In addition, Bill C-23 will allow provincial officials to be appointed as inspectors and designated officers of the commission and permit them to conduct federal responsibilities as agents of the commission.
This legislation has been in preparation for a number of years and both the AECB and the Department of Natural Resources consulted extensively with industry and with the provinces when preparing it. The government has been open to suggestions that would improve the bill and, in fact, has responded to several concerns raised by different parties during review by the House of Commons.
For example, in response to concerns that there was no requirement for board hearings to be public, the bill was amended to make it mandatory that proceedings be public, subject to any restriction noted in regulations. As a second example, in response to concerns about lack of consultation on licence fees, the bill was amended to make it mandatory that any fee regulations be prepublished in The Canada Gazette and that a reasonable opportunity be given to comment on them.
Amendments were also made to section 32 describing the powers of inspectors in order to clarify those powers. As a fourth example, the provisions on delegation of administrative responsibility for federal regulations to a province were amended to ensure that provincial consent was given to avoid a situation of off-loading on the province. Finally, an amendment was made to explicitly provide for a "due diligence" defence for infractions under the NSCA or its regulations, with the exception of offences dealing with terrorism or nuclear weapons.
On a final note, I should like to make some comments about the independence of the AECB and how this legislation strengthens it. By law and by policy, the AECB is an independent regulator. While the Minister of Natural Resources is responsible for providing broad policy directives to the AECB, the minister does not get involved in regulatory matters under the jurisdiction of the AECB. This legislation reinforces the independence of the nuclear regulator in a number of small but, nonetheless, important ways.
First, unlike members of the AECB, members of the commission will not be appointed "at pleasure". They will be appointed for a fixed term but can only be removed for cause. Second, the government's power to set broad policy objectives for the commission will be conferred on the Governor in Council, not on the minister. Finally, broad policy directives to the commission will need to be tabled in Parliament.
Mr. Chairman, as I noted at the outset, the Canadian nuclear industry provides Canadians with many benefits and Canadians deserve to be able to continue to realize those benefits. Having said that, Canadians also need to have confidence that the development and use of nuclear energy is safe. Bill C-23 will establish a strong, independent regulator with the structure and features of a modern regulatory regime that will take the industry into the 21st century.
This legislation is long overdue. It is time for Parliament to provide Canadians with renewed legislation for the regulator of an important Canadian industry.
Thank you for the opportunity to speak to you on the Nuclear Safety and Control Act. I would be pleased to answer any questions you might have after Dr. Bishop's remarks.
Dr. Agnes J. Bishop, President, Atomic Energy Control Board: Mr. Chairman, honourable senators, I too wish to thank you for this opportunity to address the committee and to answer any questions you may have.
As we approach the end of the 20th century, Canada recognizes nuclear energy as 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 lifesaving 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 necessity of having a credible, strong and independent regulatory organization to help achieve appropriate safety objectives. In addition, members of the general public demand and expect very high standards for the regulation of nuclear activities, higher, in fact, than most other areas of technology. They also expect that the federal regulatory agency is able to look after its interests in the areas of health, safety, security and 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 the maturity of the nuclear industry. The Atomic Energy Control Act was proclaimed just after the end of World War II. Apart from one amendment in 1954 to allow for the creation of the Atomic Energy of Canada Limited, the act has remained basically unaltered for five decades.
The administrative tribunal created by the act -- the Atomic Energy Control Board, or the 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 ACEB has evolved from a regulatory agency chiefly concerned with security to one which 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, in addition to the board itself.
Some of the deficiencies include the lack of formal powers for AECB inspectors, a totally inadequate ceiling of $10,000 in fines, no stated provision for public hearings, lack of explicit power to recover the costs of regulation from the users and an inability to hold polluters financially accountable for their actions or for the ACEB to initiate remedial action.
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 point out that 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 letter removed from the AECB.
In debate, and in previous remarks to this committee, you will have learned of the many advantageous features of this bill. I would like to touch on just a few of these.
Bill C-23 refers directly to the environment as the concern of the nuclear regulator, something which the current statute does not do. 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 the provisions of the Canadian Environmental Assessment Act would and must 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 licencees for decommissioning, eliminating the liability to the taxpayer that currently exists in situation where a licencee 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 powerful tool to ensure that no nuclear orphans will have to be looked after by the state.
The legislation would make responsible parties liable for the costs of decontamination and other corrective measures. It would also allow the commission 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 hundredfold to $1 million, in line with the current penalties in other regulatory statutes.
The new legislation permits 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 provincial laws, for example, and by paying provincial agencies for work done under such arrangements. We have 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 clause dealing with inspectors' powers. Our inspectors are our eyes and ears to verify compliance with the law and the licences we issue. They play a variety of roles from counsellor to investigator and are often our most frequent link with many of our thousands of licencees.
Of the approximately 400 staff at the AECB, 130 are certified inspectors at present. We need to provide them with a more solid legal footing for the tasks that 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 to recognize the rights of those subject to inspection.
In terms of rights, Bill C-23 also makes clear and formal provision for appeals of actions and decisions of the commission and its staff members. We do not often receive requests for reconsideration 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.
Finally, Bill C-23 makes legal provision for the commission to hold public hearings, which 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 near nuclear facilities. Many people have been heard 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. As well, it would be able to conduct a formal hearing where it judges that it is in the public interest to do so.
In order to fulfil the mandate under the new act, a series of regulations must be developed to specify the detailed requirements applicable to the various activities of the nuclear industry. Consultation with the licensed industry and the public will take place to assure the adequacy and fairness of the specific requirements.
The current 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 celebrated its fiftieth anniversary last year. We believe that 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 you may wish to direct to me.
Senator Spivak: As I understand it, at the moment within the Canadian Environmental Assessment Act there are no regulations which control Crown corporations. Will this proposed commission be a Crown corporation?
Regulations can be developed, but there are none now. As a matter of fact, that was why the government claimed that the most recent sale of the CANDU reactor was not subject to environmental assessment. What is the status of that?
Ms Bishop: The Atomic Energy Control Board and the new commission as laid out in this bill must take the Canadian Environmental Assessment Act into account in its decision making.
Senator Spivak: Does that mean that regulations will be developed?
Ms Bishop: Absolutely. Regulations will be developed, plus the CEAA.
Ms Audrey Nowack, Counsel, Legal Services, Atomic Energy Control Board: The commission will be an agent of the Crown, but not a Crown corporation in the sense in which you are thinking, senator. It is not a business type of corporation like the AECL.
You are correct, senator. Currently, corporations such as the AECL, which markets CANDU reactors, are not directly covered by this legislation. However, the AECB and the commission are regulators which are covered by the CEAA right now because the kind of decisions it makes trigger environmental assessments. It is a different kind of organization.
Senator Spivak: You have 130 certified inspectors. Yet, in the newspapers recently, a report cited hundreds of violations of safety regulations in Ontario. You have all read about staff playing computer games, falling asleep and so forth. Will this bill give you better leverage to enforce regulations? Could you comment on those recent revelations which came about through the Access to Information Act?
Ms Bishop: I take it you are talking about Ontario Hydro.
Senator Spivak: I am.
Ms Bishop: You are probably aware that we have staff on site in all nuclear utilities. They work there each day.
If you read our annual report, you would have seen that many of the things which were reported had also been recognized as taking place. In fact, in 1995, as already indicated by Ontario Hydro, they received a very solid wakeup call from the AECB. However, it may not in any way change our type of inspection at those particular utilities.
For our numerous licencees, this new act greatly helps how the inspectors' responsibilities are protected within the law, which they are not at the moment. The answer to your question is yes, one never improves standards simply by law, but you must have those standards backed up by law.
Senator Carney: I want to follow up on two aspects under the Canada Environmental Assessment Act. It has been helpful for you to be here to help explain the difference between the Crown corporation and the commission.
The backup documents we have indicate that, as is current practice, the commission will consider the recommendations of the CEAA review panel as part of its licensing decision process and will regulate all stages in the development, such as construction and the operation of nuclear facilities in cooperation with other regulatory agencies. The use of the word "consider" does not indicate that it is mandatory. Which of the various lists, exclusions or screenings, does the commission come under? Is it subject to the full, rigorous review of the CEAA or is it simply screened out?
Ms Bishop: The commission's decision making is governed by the CEAA in that many of the various decisions the AECB makes pursuant to powers in various of its regulations are listed in what is called the law list regulations under CEAA. Where that occurs, there is a determination of whether the particular activity being regulated is a project as defined by the CEAA and therefore leads to the need for an assessment. The need for that determination will continue.
In cases where something goes to a panel review assessment -- which they do not all do because some are screenings -- then, yes, the provisions of the CEAA, as amended subject subsequently to the initial entry into force of the CEAA, require that panel recommendations and the response to those be sent to the Governor in Council for approval. The resulting decision must be consistent with the Governor in Council approval. If an assessment at a panel review level is done, then yes, the commission will be subject to that process.
Senator Carney: Is it an Order in Council?
Senator Spivak: There is something puzzling about this.
Senator Carney: The concern is the degree of mandatory review. If you have exclusions from the law list, which I think is what Senator Spivak is getting to, or you have an Order in Council ratification, that indicates there are opportunities to avoid the CEAA process. You may wish to comment on that.
My second question relates to the overlap of the provinces. Under the Environmental Assessment Review Act, there is provision for using provincial review systems rather than federal. How is that being received in Quebec, which gave us some problems with this bill when it went through because it challenges the federal government's jurisdiction in this area. How is it being enforced in other provinces under the process you have outlined? Would you like to deal with the mandatory issue first? Is there discretion in the application of the CEAA?
Ms Nowack: Not under this bill or any regulations under it. The CEAA process as it applies to the commission is entirely what is provided for in the CEAA legislation and those regulations. This legislation does nothing to change that.
Senator Carney: On the question of how it is being implemented with provinces such as Ontario and Quebec, have you done anything to clarify how that will be handled?
Ms Nowack: No. The CEAA legislation provides for substitution of hearings of a body such as a commission for a CEAA panel review hearing. It is certainly possible to explore that kind of substitution in the future. A more detailed answer to your question should come from another panel member.
Ms Bishop: In terms of some of the environmental panels -- for instance, uranium mining in Saskatchewan -- joint provincial and federal panels have been held so that both the provincial and the federal aspects have agreed to hold the panel together ahead of time. We have had the same thing occurring in Quebec.
Mr. Pierre Marchildon, Director General Secretariat, Atomic Energy Control Board: Perhaps I could add a few words about what has taken place in Quebec. In the consultation during the past year, following these consultations, Quebec officials have written and said that the legislation did not generate any controversy in Quebec.
Hydro-Québec has also been consulted and is in agreement with the legislation. Some of the issues raised with Hydro-Québec included the question of conformity with the Canadian and the Quebec Charter of Rights and Freedoms. They raised the questions of cost-benefit analysis and also the question of financial guarantees and the regulatory burden. All of these questions have been addressed to the satisfaction of provincial officials and Hydro-Quebéc.
Ms Bishop: However, the specific question was over the environment.
Senator Carney: I am quite satisfied with the answer.
Ms Bishop: Another example where we have worked closely with provincial as well as federal governments was over Gentilly, where the provincial environmental rules kicked in that there should be a review panel. The federal laws would have said no, but the board would address provincial considerations. There is a lot of cooperation.
Senator Carney: I am not familiar with this aspect of the bill, but how does it improve the waste management regulation over what we have had? It is amazing that we have had 50 years of legislation in this area, considering it has developed so much in that period. Where do you feel this bill will better address waste management?
Ms Bishop: The first area of important improvement is that in this bill, which we do not have now, the licencees must provide funding for decommissioning right up front. That is exceedingly important in terms of whether we are dealing with mines or other aspects of the industry. Decommissioning includes waste aspects. That is number one and that is essential if we are to handle the waste of the future in an appropriate way.
Number two, the board does not decide, for instance, whether we will have high-level waste buried in the Canadian Shield. We do not decide that, but once the appropriate governments decide how they wish to handle that, the board would then decide whether the methods chosen were safe.
With respect to the cost of decommissioning, the Crown is also bound by this act in terms of having to provide funds for decommissioning. That is also important.
The provision of money for decommissioning helps in waste management. Again, our inspecting powers are very important in terms of compliance within waste management facilities. I do not know if that answers your question. Perhaps Mr. Brown would like to add something.
Mr. Brown: Basically, the government is taking a two-pronged approach in terms of dealing with radioactive wastes. As Dr. Bishop pointed out, the new act will require that funds are put aside for decommissioning and the long-term care and maintenance of these wastes.
Senator Carney: Does that include current production?
Mr. Brown: Yes. If they are producing the wastes, then they should be putting money away to dispose of those wastes. That has not been the case in general in the past, and that problem was recognized by the government.
On July 10 of last year, the Minister of Natural Resources put forward a policy for radioactive waste disposal in Canada. The policy had three major elements to it. The first element was that the government should ensure that waste disposal is carried out in Canada in a safe, environmentally sound, effective, efficient and comprehensive manner. The second principle is that the federal government has the responsibility to regulate, to develop policy, and also to oversee that the waste producers are in fact carrying out their activities appropriately. The third element of the policy is that the waste producers themselves have the responsibility, first, to ensure that the financial assurances are put away and, second, to ensure that the institutional arrangements are in place to look after the wastes and dispose of them.
Clearly the direction taken in Canada has been that those who own the wastes will have the responsibility to deal with them in the future and that we are looking for moneys and institutions to be put in place so that we, the taxpayers, do not end up paying the bill at the end of the day. This bill will provide the legal requirement that the moneys be put away.
The Chairman: As a supplementary, when you have been issuing your licences up to this point in time, what has been the term of the licence?
Ms Bishop: This will vary from licencee to licencee. For instance, for most nuclear reactors, it is a two-year licence. On the other hand, if you are licensing a medical accelerator, they will be longer, depending on the type of accelerator. For the vast majority of licencees, the period is two years.
The Chairman: Under the new legislation, with the guarantees we are discussing and the financial support relative to the disposition of the waste management aspect, how do you then come to your licencees if you wish additional financial securities once the licence has been issued? Do you have an overall power to come forward and demand more in the way of security?
Ms Bishop: The funds that we agree will be required for a licencee's particular activity will be reviewed on a regular basis so that changes in the moneys required will be taken into account in terms of the finances they must put away.
The Chairman: How far does your reach extend? Does it extend to licencees in hospitals or is that a provincial matter?
Ms Bishop: Right now, hospitals and universities do not have to pay costs. We do not have cost recovery for those. On the other hand, if the licencees are provincial or Crown corporations, the Crown is also bound to have funding for cleanup and waste disposal.
The Chairman: When it comes to the disposition of the waste, I am sure we all want to avoid scenes as we saw last week in Germany where they were picketing. They were all rather exercised about the nuclear waste being deposited in that particular region. These are very controversial matters. What control do you have as to where the waste will be located? Is that a provincial matter or will that be part of your jurisdiction?
Ms Bishop: First, you must recognize that there are three different levels of waste: low, intermediate and high. The commission does not decide where it will be located. However, where the federal government or any other proponent has a proposal for a waste management or waste disposal centre, the commission must decide whether it is licensable. However, we do not decide where it will be. Mr. Brown may wish to add to that.
Mr. Brown: Basically, for high level waste -- nuclear fuel -- at the moment there is an environmental assessment review panel studying a concept for disposal of that waste 500 to 1,000 meters down within the crystalline rock of the Canadian Shield. That panel will finish its hearings in March of this year. When it completes its hearings, it will report to the Ministers of Natural Resources and the Environment presumably sometime in September. Then the government will decide as to whether to proceed with this disposal concept. Is it safe? Is it acceptable?
Once that decision has been made, then we will get into the implementing stage. We also must decide who will be the implementer.
Allowing that it is implemented, then you must find a site. Once you find a site, the site must be proved out. Once it has been proved out, that is the point at which the regulator must answer the question: Is it safe and acceptable from a regulatory perspective? That is what is happening in terms of high level waste.
In terms of uranium mine tailings, we presently have some tailings which are just being decommissioned. An environmental assessment panel has just reported, and the government response will be coming out fairly soon.
The decommissioning occurs in three stages. The first stage is that the tailings are put behind dams and contained. That must be done appropriately and properly. The second stage is that monitoring of those dams will occur over the long term to ensure that everything is operating as it should over the long term. The final stage is when everything is operating properly, there will come a point when the operator can walk away and governments will take over. There is, in fact, a memorandum of agreement between the province of Ontario and the federal government which allows for a sharing of responsibilities in the longer term.
The Chairman: Mr. Brown, what if the province, or even a municipality, should disagree with the site selection process? Do you have the ultimate say in that regard or what is the process that you go through?
Mr. Brown: The process varies depending upon the waste. For the uranium mine tailings, we are dealing with very large volumes, and they will be dealt with in situ. Low-level radioactive wastes can be moved. You can site them where you want to site them. In fact, the government has had a siting task force for the past eight years trying to find a site for low-level radioactive waste in Canada, specifically in Ontario. As you may be aware, the community of Deep River has decided that it may wish to accept some of these wastes. These are the Port Hope area wastes. Whether that succeeds or not, only time will tell, but there is an open, cooperative process in play to find a site.
We would expect that if the concept for disposal of the used nuclear fuel deep within the crystalline rock of the Canadian Shield is found to be safe and acceptable, then an open, cooperative siting process will be initiated by the implementing agency, but that is in the future.
The Chairman: Do you have the ultimate power to impose if you do not get cooperation?
Mr. Brown: The idea is to have an open, cooperative process. At one point in time, a process was in place called "decide, announce and defend". That was a dismal failure. The government has moved far beyond "decide, announce and defend". It is basically seeing whether communities are willing to accept these wastes. In Ontario to date, we have one community and one solution.
The Chairman: You saying you would not impose.
Mr. Brown: Under the present regime, I would not see following a process which imposes a solution.
Senator Spivak: Mr. Brown, is it not a fact that the question of whether to bury or to burn or what to do with high-, medium- or low-level waste is extremely controversial from the point of view of not only the public but also scientifically in that there is no consensus as to what is the best method? Look at the United States. I do not know how you can say that we will proceed in a cooperative manner when the truth is that you simply do not have the knowledge to tell us that, for example, if you bury it the crystalline shield, that is a safe place and a safe disposal. You cannot say that with any certainty.
Mr. Brown: One of the reasons the panel was set up was to review the safety and acceptability of the disposal concept. They will come forward with their recommendations. I certainly would not want to prejudge what their recommendations will be. I do, however, know of a considerable number of national and international studies which clearly demonstrate that there is in fact a consensus for deep geologic disposal of used nuclear fuel as being a safe and acceptable way to go. That is from a scientific point of view. I agree with you that it is not necessarily from a social-political perspective, but from a scientific point of view, there is a general consensus.
Senator Spivak: I was speaking from the scientific point of view.
Mr. Brown: There is that consensus.
The Chairman: Senator Spivak, I am interested in your comments about demanding scientific points of view with respect to what we went through on MMT.
Senator Spivak: This is exactly the precautionary principle.
The Chairman: We will discuss it at some later date.
Ms Bishop: I think the controversy is not whether it is scientifically viable. Different types of technology or different types of deep burial must be used. That gives cause for confusion. For example, what is fine for the Canadian Shield might not be appropriate for deep clay burial. As well, internationally, the concept of disposal versus management is controversial at the moment.
Senator Taylor: You touched on management versus disposal. Through the years in mining -- and I guess you can go back prior to the King Solomon's mines -- people have gone back to work so-called "waste" over and over again to get more use out of it. Gold is a classic example. Some gold tailings and deposits are only 40 years old and are being reworked.
In the disposal of uranium waste, is that thought kept in mind at all, namely, that you may want to mine your own waste again? It happens with everything else, for example, lead and zinc. Waste is not disposed of; rather, it is stored in case the technology may exist down the road to allow the waste to be used, much to the satisfaction of people such as Senator Spivak, who would like to see it used again so that it does not exist any more.
Mr. Brown: In terms of used nuclear fuel, yes, there is a tremendous amount of energy still there. It could be reprocessed and used again many times.
The concept we have in Canada is that we will not reprocess. We will dispose of that used nuclear fuel. That does not preclude, at some time in the future, someone going back into that mine, opening it up again, taking the fuel out and reusing it. However, the intent and the concept that we have at this point in time is that we will dispose of those radioactive wastes. We want to avoid the situation of perpetual monitoring and care. We want to dispose of the waste, recognizing that any modern or advanced technology will be able to take out what it wishes to take out.
Senator Taylor: The whole concept of the new commission is to separate nuclear control and nuclear promotion. If that were the case, was there any consideration to giving it to two separate ministers? Is that not the best way? Why would nuclear control not be given to the Minister of the Environment? It seems to me that the separation of ministers might be a logical step in this whole process.
Ms Bishop: The nuclear industry has been clearly separated from regulation since 1954.
Senator Taylor: This act recognizes that. Perhaps I am trying to get a jump on the next century.
Ms Bishop: It is important to remember that the industry and the regulator have been clearly separated since 1954 when the amendment to the present act created the AECL.
In regards to the minister -- and it is important to remember that this involves reporting to Parliament through a minister -- from the functional point of view of a commission, it does not matter what minister we fall under. The minister cannot interfere with our decision-making process in regards to our licensing, et cetera. Any policies of a general nature or directives given to the board must come through the Governor in Council and must be published. From a functional point of view, we would operate the same under any minister. As an independent agency, the amount of discretion that a particular minister has is virtually zero in our decision-making process.
Senator Taylor: That leads into my next question.
The Chairman: In international matters, you say it is within your total autonomy. Mr. Brown referred to that in his remarks. When we proceed to sell a reactor or something of that nature internationally, what is your input? The government decides and then you come into play. Is that how it works?
Ms Bishop: When the AECL, for instance, sells reactors to China or Romania, up to this point in time, China, Romania and others have requested of the regulatory board that we train their regulators in the regulatory requirements for the CANDU reactors. For example, I just came back from China where I signed an agreement of a special arrangement between their regulators and the board. At the present time, there are eight Chinese regulators here being trained at the board. Our responsibility is to respond to the regulators of the particular country to which we are selling.
Senator Spivak: That is the issue. There are no regulations that apply through the Canadian Environmental Assessment Act for export of nuclear technology. Although there was provision under the act to develop those regulations, they have not been developed. It was totally at the discretion of the government. Your question is correct. That is exactly where the conflict of interest comes in, namely, with the single minister.
Ms Bishop: I will only comment from a regulator's point of view; Mr. Brown will comment from the government policy point of view. It is virtually impossible for the regulator of one nation to do a site-specific, in-depth environmental review on another nation from those national perspectives unless there are agreements at a much higher level than the regulator groups themselves. As the world exists today, I think it is very difficult to do that unless international agreements are developed between nations.
The Chairman: Do we not have those agreements with China, for example, at this time?
Ms Bishop: There is no agreement with China that we would do a detailed, on-site inspection with regard to the environment from the regulator's point of view.
Mr. Brown: I should like to go back to the original question of whether there should be a separation between the minister responsible for development of nuclear power and the minister dealing with the regulator.
Our view is that the Minister of Natural Resources Canada is responsible for energy and natural resources, where the federal government has a role, and is therefore responsible for the safe development of that energy. It is, therefore, appropriate that regulatory matters be part of that portfolio in order that the development of the overall energy portfolio be done in a safe and effective manner.
As to whether another minister would provide for a better separation between regulation and promotion is very much a moot point. As Dr. Bishop pointed out, the AECB is indeed an independent regulator, and it fiercely maintains that independence. It is cabinet's prerogative to make decisions on broad policy matters. If broad policy matters are brought in by two ministers rather than only one minister, it is still a cabinet decision. Therefore, in the view of this government, there is no need to change the separation of the promotion from the regulation through one minister. We believe it works exceedingly well at this time.
Ms Bishop: I should point out that the act does allow for another minister to be appointed or named. It does not restrict it to Natural Resources Canada.
The Chairman: If I may return to the previous point, do I understand correctly that when a reactor leaves Canada, we have no control whatsoever over what happens to it or how it is used, other than philosophical persuasion or whatever one might call it? Is that a fair comment?
Ms Bishop: It is fair to say that the new commission has no authority in other countries.
Senator Taylor: Do we not still have a certain amount of control once we sell a CANDU reactor in that we will still supply the fuel for it?
Ms Bishop: There are two different issues here.
Senator Taylor: I was thinking in a political sense because the reactor cannot operate without fuel, and it used to be that fuel was only available here.
Ms Bishop: Perhaps we could separate the two issues -- the regulatory issue and the commercial and construction issue.
Senator Spivak: In terms of the regulatory issue, the preamble of the Canadian Environmental Assessment Act indicates that there must be an environmental review. The problem is that there were no regulations developed, even though a task force looked at the issue, made recommendations and attempted to deal with the very difficult questions you are talking of in international terms.
It is not an open and shut case that we can do nothing about the environmental assessment of technology we export. One of the reasons this is done is that nuclear policy is global. You cannot isolate. Things that may happen in China could certainly affect us. Certainly the policy intention was there. It was clearly stated. It has not been carried out.
Ms Bishop: There are two other issues. One is international controls. Our safeguards on the non-proliferation treaty allow international safeguards to occur. That is an important control system in terms of materials produced from the reactors.
Second, we must also remember that Canada not only played a lead role but last year ratified the International Nuclear Safety Convention which specifically deals with reactors that generate electricity. That will kick in for inspection by the IAEA coming this following year. That becomes important in terms of international standards for nuclear safety as well. Over 60 countries have now signed that.
Senator Taylor: What initiates public hearings? It would appear to be almost entirely in the hands of the regulatory body to decide whether to have public hearings. Have you thought of including in the act the ability of the minister to request a public hearing or some political way of initiating a public hearing on some of the regulatory actions? You say that there will be provision for public hearings, but it looks as if it is entirely up to the regulator to decide whether to call public hearings.
Ms Bishop: Regulations will be developed to guide public hearings.
Senator Taylor: Yes, but how will they be initiated?
Ms Bishop: All board meetings are open to public presentations. In addition, there will be panel hearings, some formal and some informal.
When we develop the regulations with regard to the proceedings for formal hearings, they will be put to the public for comment and must finally be approved by the Governor in Council.
I am loathe to support a recommendation that would take away the independence of the regulatory body in its function. It is exceedingly important to the public, as well as others, to ensure that the agency itself or the commission itself is not unduly influenced by a political decision as to whether it will or will not have a hearing. We must be careful of that. On the other hand, it is exceedingly important that we develop regulations which are quite clearly seen as appropriate for when we would and would not hold formal hearings.
I have just been reminded that clause 40(5) states:
The Commission shall, subject to any bylaws made under section 15 and any regulations made under section 44...
As such, we will have no choice on some of the formal hearings.
Senator Taylor: In these regulations, would "costs" cover the status and costs of intervenors?
Ms Bishop: At the present time, the board does not have funding for intervenors. We, of course, try to make it as easy as possible for the intervenors to make presentations. As well, we have made a commitment to hold our meetings in the communities of major facilities.
The board itself should not be making decisions about who should have funding for intervening and who should not. From our perspective, anyone who wishes to intervene should have the right to intervene. We do not want to become the decision maker with regard to who receives money or who does not in order to make that intervention.
Senator Taylor: Cost recovery is running rampant through western society now; it is the new buzzword. Consultative bodies are something else. In agriculture, and other areas, cost recovery mechanisms are put in place. Indeed, not only how the costs are portioned out can be questioned, but sometimes their necessity is also questioned. In other words, putting in regulations could be one of the great employment boondoggles of the 21st century. People will have to be hired to look after them.
Is there any input in the process here whereby mining companies, the so-called exploiters or developers, can question these cost recovery mechanisms?
Ms Bishop: Yes, they do already. Cost recovery regulations will also be involved. Yes, they have the ability to do that. As well, we publish our cost recovery regulations. Right now, we publish our cost recovery areas. There is the full ability to comment on them.
Ms Nowack: That provision is found in clause 44 of the bill.
Mr. Marchildon: After the cost recovery regulations were introduced in 1990, mining companies, as one sector of the nuclear industry, came to us and asked more questions about how we set the fees. If you talk to the mining companies, you will hear that we did spend the time needed with them to explain how the fees were set, how we calculated the fees, et cetera. We were prepared to do that, and we are still prepared to do it.
As Dr. Bishop said, when the fees are changed, such changes are published in The Canada Gazette for a consultation period.
Senator Adams: Has a storage site been decided upon now that Bill C-29 has been introduced by the government? I saw a documentary about the government finding a place for the storage of nuclear waste. Has this matter been settled now?
Mr. Brown: If I understand the question properly, there are basically three types of wastes. There is high-level waste, low-level waste and uranium mine tailings. At the present moment, all of those wastes are in storage.
In 1995, the Auditor General reviewed the radioactive waste disposal practices in Canada and came to the conclusion that we had the expertise to move toward disposal from storage and recommended strongly that we do so. That was one of the reasons the Minister of Natural Resources came forward with a policy to deal with radioactive wastes.
At this point in time, the wastes are in storage, but they need to be moved into disposal. We have two things moving us forward to disposal from the present storage situation. The different wastes will be in different time frames. Some uranium mine tailings are already starting to be disposed of. Much of the low-level waste is now in storage, but we are looking for disposal sites.
These are voluntary, cooperative processes. We are hopeful that we will get a community willing to host a disposal facility in the not too distant future.
With regard to the used nuclear fuel, at this point in time, the CEAA panel hearings are not yet complete. It will be this time next year before the government will be in a position to respond to the panel recommendations to determine whether the concept is safe and acceptable, and, if we are to implement it, who will implement it and from where will the money come.
Again, that is a process moving toward disposal. In the last two years, we have clearly recognized in Canada that we have been storing our wastes for the last 40 to 50 years and it is time now to move toward disposal. That is not done instantly. However, there is a strong indication that we are on that road. This legislation clearly provides that moneys can be put forward to ensure that that disposal takes place.
I hope that answers the question, senator.
Senator Adams: Yes.
When the Prime Minister was on tour in Russia, he was asked about storage facilities in Canada and whether we would bring in waste from other countries, such as the United States. Are these facilities only for Canada?
Mr. Brown: I imagine he was talking about the high-level waste. Our policy is that we are not importing used nuclear fuel into Canada at this point in time.
Senator Adams: I do not know how long the French and the Russians have been dumping their nuclear waste at sea in the high Arctic. Is there now technology to get that waste out, or will it be there forever?
Mr. Brown: In the future, I imagine it would be a combination of both, but that is pure speculation. I know a little about it, but not a lot. Regardless of all the stories we hear, there appears to be very little contamination in the surrounding sediments and in the fish and the wildlife in that area. Whatever contamination is there is fairly localized, as I understand it.
Obviously, the situation in the future may, as required, be cleared up. In the former Soviet Union, a number of major sites need to be cleaned up in the near future. Unlike us, they have sites which definitely require care and maintenance at this point in time.
I want to stress that all our wastes are, in fact, safely managed at this point in time.
The Chairman: I would like to thank the panel for being with us today. This is very important legislation. Obviously, there is a lot of wisdom within it. I wonder why we did not have it sooner; however, it is now here. I know members of my committee will be supportive of it.
Senators, our next witness is Mr. Murray Stewart from the Canadian Nuclear Association.
Mr. Murray Stewart, President, Canadian Nuclear Association: It is certainly a pleasure being here this morning to represent the Canadian Nuclear Association and to give you some comments on Bill C-23. Basically, the bottom line is I want to give you our support and encourage a speedy passage of this bill. It is very important to the overall nuclear industry in Canada.
My name is Murray Stewart. I am president and CEO of the Canadian Nuclear Association. Although we have submitted a written brief to you, my comments this morning will be somewhat different from the submitted brief. I will go through some slides to give you a better perspective of why this bill is important to us.
I am also joined this morning by Mr. Stan Frost of the Cameco Corporation. He will be assisting me with the slides. After my remarks, Mr. Frost will give you a presentation specific to Bill C-23.
Let me begin by making a couple of comments on the Canadian Nuclear Association. It was established in 1960. It is an association composed of most of the industries and enterprises sharing a common interest in the development and application of nuclear technology for peaceful purposes. Member organizations cover the full breadth and depth of the nuclear industry in Canada, all the way from manufacturers, uranium producers, utilities, major unions involved in the nuclear industry, academic institutions, isotope suppliers, as well as banks and financial institutions. It is a broad-based member organization/association.
To clarify, the Canadian Nuclear Association should not to be confused with the Canadian Nuclear Society, which you might say is the learned society side of the individual member associations. Our members are corporations and organizations. Our mission is simply to support our members in achieving their goals for nuclear technology-related activities. Our goal is to have a strong, vibrant and expanding nuclear-based industry benefiting our members and all Canadians from an economic point of view.
The CNA has submitted to you a brief of our detailed comments. We support this legislation, especially the amendments that resulted from the House of Commons Standing Committee on Natural Resources. Today I want to summarize our rationale for supporting the legislation and explain why the legislation is critical to our industry.
Peter Brown covered some of these points this morning, but certainly nuclear technology is much more than nuclear or electric generation from the Pickerings, Darlingtons and Point Lepreaus. It is a great benefit to the medical community. One-third to a quarter of everyone who enters a hospital receives a direct benefit from nuclear technology. Food preservation, pest control and agriculture are all directly affected. There are a multitude of industrial applications, measurements and inspections. Bill C-23 must address the full breadth and depth of all of these industries.
The Canadian nuclear industry is important to Canada. From its start over 50 years ago when the first nuclear reactor was put in place in Chalk River, to its current $6-billion contribution to the Canadian economy, it is an industry of which I am certainly proud, as I trust are all Canadians.
Over 150 major corporations in Canada have major nuclear aspects to their business. As you heard this morning as well, Canada is a leading exporter of uranium. We have exports exceeding $0.5 billion to $1 billion per year. We are a world leader in a number of isotopes for medical purposes. There is significant tax generation. There are also many spin-offs in the industry, companies such as CAE and their simulators for 747s. The roots of that go back to the nuclear generator simulators that still exist today. There are other companies such as Spar Aerospace. You hear about the Canadarm, but that goes back to CANDU-fuelling machines.
When you look at the last 50 years, the nuclear industry has risen to where it now supplies 7 per cent of the world's energy needs. When you look at the total energy consumption in the world, 90 per cent is still from fossil fuels. Right now, nuclear supplies approximately 17 per cent of the global electricity generation, which is similar to what Canada produces as well. This is equivalent to what is also produced by hydro-electric.
When one looks at the overall nuclear benefits for Canada, there are many. We believe that nuclear energy is cost-competitive. Canada enjoys one of the lowest cost electricity prices in the world, and a big part of that is due to our nuclear generation in Canada. It also has a major environmental impact. To quote one number, the nuclear reactors in Ontario have avoided over a billion tonnes of carbon dioxide being released into the atmosphere.
In terms of the CANDUs, we certainly acknowledge there have been technical problems and management concerns with our Canadian reactors, but it is important to keep these in perspective. The power utilities are addressing these with definitive and bold action and with the support of the complete nuclear industry in Canada.
The satisfaction of not only the regulator but of the general public is one of the our main measurement criteria. It is important to note that the openness of our industry guarantees that the public is fully informed and has many opportunities to fully participate. The goal post of our nuclear industry is perfection, and I do not think that can be said of many industries in Canada or around the world.
Let me digress for one moment. If you would look at the overall global situation with respect to nuclear power generation, Canada is not currently building new nuclear generating facilities. Basically, Canada does not need new generating capacity and, therefore, we are not building new reactors. The world currently has 40,000 megawatts of new nuclear stations under construction. This is equivalent to more than twice the installed base of nuclear reactors in Canada.
We hear much about no new facilities in North America and closing facilities in Europe. However, countries with high economic growth rates and the appetite for power that Canada had in the 1950s, 1960s and 1970s are opting for the nuclear option. This is the reason for CANDU technology being exported. We are globally competitive, and CANDU is a major base-load power generation source.
The reason for the high level of interest and perhaps our detail-specific comments on the bill is because of the all the issues that must be addressed by the bill. I will not go through the listing here, but there are a host of issues. There is the relicensing issue and the new initiatives. We heard this morning about high level, low level, and intermediate waste, as well as the export of CANDUs to China.
Honourable senators would not have seen it, but there are a number of private members' bills currently before the house, and some have been defeated. They attack the fringes of the whole nuclear industry because bills such as C-23 are not up to date and in place. Bill C-23 was a private member's bill to ban the importation of nuclear waste in Canada.
The other aspect is changing institutions. You heard about the financial and institutional arrangements from the NRCan policy. The whole industry is restructuring with open access, which impacts on places such as Ontario Hydro, Hydro-Quebec, and N.B. Power. We have the change in capabilities in Canada, cost recovery, regulatory changes, the whole CEAA and harmonization. Even on intervenor funding, there is a private member's bill currently before the House.
Longer term, there are issues of MOx, which is the burning of weapons-grade plutonium. There is fusion which is a longer-term solution. Other advanced CANDU reactor technologies are coming along which the regulator must address.
In our written brief, we itemize a number of points which we ask you to consider either in the final bill editing or assurance for consideration in the enabling regulations. I will not go through these today but will be pleased to answer your questions. The brief has more details.
In conclusion, the Canadian Nuclear Association believes that the proposed Nuclear Safety Control Act is fundamentally sound. We believe that 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 certainly consider our detailed suggestions and for the Senate to pass it expeditiously so we can move on to the regulatory aspects that are critical to the orderly progress of our industries and to the well being of all Canadians.
The Chairman: What is the meaning of the word "dosimetry?" It is in the legislation.
Mr. Stewart: That is a measurement of radiation that an individual would receive. It is a radiation dose. A key part to the regulation is how much radiation an individual is allowed to accumulate either on a point part or on an accumulated basis over his lifetime.
Senator Taylor: What is MOx?
Mr. Stewart: MOx stands for mixed oxide fuel. It takes the weapons-grade plutonium and turns it into what I will call normal CANDU or other nuclear reactor fuel and uses it as a feedstock. Our industry is full of acronyms.
Mr. Stan E. Frost, Vice-President, Cameco Corporation: We presented our views on the bill before the House of Commons Standing Committee on Natural Resources last October. During the clause-by-clause examination, a number of changes were made which have improved the bill. However, our principal areas of concern still remain. For that reason, I shall leave a copy of our original brief with you.
That brief was presented on behalf of three companies, Cameco Corporation, Cogema Resources Inc. and Cigar Lake Mining Corporation and the Saskatchewan Mining Association. Cameco, Cogema and Cigar Lake, on behalf of various joint ventures, are the operators of all the present and proposed uranium mines in Saskatchewan.
The Saskatchewan uranium mining industry is an important contributor to Canada's economy. The industry accounts for all of Canada's and about one-third of the world'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. We have another $1 billion planned in the next few years. Almost 2,500 people are employed in the Saskatchewan industry, many of them aboriginal people. At our northern mine sites, approximately 44 per cent of the employees are aboriginal. The value of uranium shipments in 1995 exceeded $500 million. Most were for export, making uranium an important contributor to Canada's balance of payments.
It is important for the Saskatchewan uranium mining industry that there be a strong, effective and fair regulatory system in which the public has confidence. Replacing the Atomic Energy Control Act with a modern statute is therefore considered by the industry to be a good initiative. However, that regulatory system should be characterized by efficiency, certainty, consistency, due process and reasonably limited administrative powers.
An example of current inefficiencies is a situation which arose at our Rabbit Lake operation a few years ago. After going through an environmental assessment with a public hearing and after the panel recommended proceeding, an application for a production licence was filed with the Atomic Energy Control Board. We were informed that the board staff was required to screen our licence application for potential referral to another panel. Fortunately, a further referral and hearing did not occur. However, it is our view that such cases of double jeopardy could 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.
With respect to regulatory overlap, the province of Saskatchewan takes considerable interest in the uranium business. It regulates the industry through surface lease agreements which commit the mine operators to compliance with certain provincial regulations. Thus both federal and provincial licences are required. 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.
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 that time limits be fixed for these various steps. We were relieved to see a reference to prescribed periods of time in the redrafted bill, and we look forward to clearer definitions of these in the regulations.
Although not the subject of specific comment in our brief, the term of licences is cause for concern for licensees. The AECB has been in the habit of issuing licences for two-year periods. Most of other significant uranium-producing countries issue licences for the life of the project or 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 project-lifetime licences cannot be granted.
Considerations of due process and reasonable limitations on administrative powers underlie the submissions in the brief with respect to the powers of inspectors in designated offices.
Our position regarding financial assurances 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 where one has been or will be provided to a provincial government. Saskatchewan has legislation in place requiring financial assurances for 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.
The Saskatchewan uranium mining industry does not object to the payment of reasonable fees but believes that setting fees equal to the full cost of regulatory activities tends to encourage unnecessary expansion of regulatory operation. Accordingly, in order to introduce some measure of discipline into the system, the 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.
There will be strong competition in the decades to come from other jurisdictions which are developing their uranium mines, in particular, Australia and the United States. 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, in respect of 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 presently drafted, takes initial steps towards these goals. The industry proposed a number of changes to improve the bill to the benefit of Canada. Although few of our proposals actually resulted in change before the bill reached the Senate, the resulting dialogue between the industry and officials of the Department of Natural Resources and the Atomic Energy Control Board has clarified thinking about these issues and should be of assistance when the regulations under the act are drafted.
The Chairman: I take it from your recommendations that it is more a matter of what is in the regulations and the cooperation between the effective governments that you are really looking at. You are not making recommendations as to actual changes within the bill itself, are you?
Mr. Frost: If you have time to read our detailed brief, you will see that we are recommending some changes in the bill itself specifically related to transfer of responsibility for regulation to the provinces. We would like to see some further clarification there. With respect to fees with limits on what financial assurances may be demanded, we should like to know the instances in which you must supply financial assurances.
With respect to hearings, we do not want to find ourselves in the situation where we could be subjected to multiple hearings. In recent years, the AECB has operated on the basis of screening every decision they have to make for potential referral to a public hearing. If we already must go through a public hearing under the CEAA or a parallel process under the new commission, we would want to avoid a second hearing for the same project in order to get a production licence. We would like to see the power to hold hearings consolidated in one agency.
The Chairman: I doubt that is a matter within federal jurisdiction to tell the provinces how and when they shall have hearings, if they so determine.
Mr. Frost: We have been fortunate recently that Saskatchewan and Canada agreed on a joint federal-provincial panel to review the latest group of uranium mines which are under development. We would support anything that can be done to further that cooperation in the future.
The Chairman: I want to explore for a moment the area with the underwriters and your desire for lifetime licences, as you call them. I do not quite understand that issue. I would assume that even if you had a "lifetime licence" -- whatever that means -- there would be so many conditions attached to that licence that your underwriters would still be nervous. I do not know how that resolves your problem.
Mr. Frost: It would help our situation in other countries. Through the International Atomic Energy Agency, I have had to deal with a number of other countries which are in the uranium business. Most have project-lifetime licences.
When we deal with underwriters in the United States where they are used to this type of licensing and they see that we have a licence for one of our principle operations that will expire 15 months from now, they are very concerned about recommending to their customers that they buy our shares. They want some reassurance that that licence will be renewed in the future. All we can tell them is that we are obeying the laws and the conditions of licence, and when the time comes, we will have to apply and keep our fingers crossed that the AECB will see fit to renew the licence.
The AECB and the new commission would have so much power that there would be no problem with issuing a project-lifetime licence because they have the power written into the act to demand almost anything of the licencee. Certainly if they were investigating some incident that ran counter to a condition of licence, they could, for instance, suspend our operation until they satisfied themselves that we corrected the situation.
The Chairman: I am sure no matter where your underwriters are doing business that those same conditions apply in any jurisdiction. It seems to be more a matter of communications than changing it.
Mr. Frost: I have been surprised. They seem to have attached a considerable amount of significance to this.
Mr. Stewart: I do not know if any of you followed some of the recent nuclear reactor relicensing processes, but for an investor in a corporation who sees that process occurring, the observation is that, in appearance, they are becoming much more an environmental assessment. There are a lot of intervenors, which is fine with the public. However, the intervenors are questioning the existence of the facility as opposed to the relicensing process, which is basically a technical evaluation. Is the facility meeting its licensing requirements? There is a trend here that we have some concern about when you put it against Bill C-23.
The Chairman: It is a significant issue if it means that you are not able to raise the moneys required to do your work and investment in Canada. Are you saying that to us, Mr. Frost? Are you suggesting that companies like your own are unable to raise the necessary capital in the marketplace because of this?
Mr. Frost: It has not prevented us from doing what we need to do, but it certainly has caused considerable questioning of me personally by underwriters at the time share offerings are made. Obviously it is a concern in the financial community.
Senator Taylor: Is that licence granted for two years, or is it a licence for two years but it is renewable for another two? Is it like an oil and gas lease which is only for one year but is renewable as long as there is production?
Many years ago, I had trouble raising money. When the Americans first saw things like that, they got pretty jumpy. Do you have a two-year lease that ends or a two-year lease that is renewable?
Mr. Frost: They are not automatically renewable. We have to apply. The board staff recommends that we apply at least six months in advance to the expiry of a licence in order to begin the process of obtaining a new licence. It is certainly not automatic. A considerable amount of effort goes into renewing the licence.
Senator Taylor: I asked about the hearing or input into cost recovery. You touched on cost recovery here. The previous panel stated that it will be very open and that your companies will have a chance to debate, explore and analyze any new cost recovery fees put in there. Were you satisfied with the answer you heard given to me?
Mr. Frost: We expressed our views on cost recovery when it first came up about seven years ago and, I think, on each occasion since then when the cost recovery regulations have been changed to increase the fees.
We disagree with the concept that we are the sole customer. Organizations such as the AECB and the proposed new commission exist in part to reassure the Canadian public that business is being conducted in a responsible manner. I would like to think that our company would conduct itself in an environmentally and safety responsible manner even without the existence of the AECB. Our employees live in the communities where we operate. We make use of the environments in which we operate.
I think the Canadian public is getting some benefit from the existence of regulatory agencies and those regulations. I think they should share in the costs.
Senator Adams: Mr. Frost, in your brief, I was surprised that 44 per cent of your employees are aboriginal people. Is that operation part of the reserve or part of Saskatchewan? By the way, you did a good job locally.
Mr. Frost: Those numbers refer to the mining operations in northern Saskatchewan. It is not only Cameco; it is also Cogema and Cigar Lake. Slightly more than half of our employees at the northern mine sites are residents of Saskatchewan's north. There are some non-natives living in Saskatchewan's north, but about 85 per cent of our northern employees are aboriginal.
Senator Adams: Do they live in the area where you mine?
Mr. Frost: Yes. The closest community to any of the operating mine sites is 35 kilometres away. All of the sites operate fly-in camps. We fly in people from about 20 communities in northern Saskatchewan. They work one week on and one week off.
Senator Adams: Do those people belong to unions?
Mr. Frost: Of our two current producing uranium operations, one is unionized and the other is not. I am not sure that there is much difference in performance between the two sites.
We have generally found that the aboriginal people in northern communities have far poorer educational opportunities than the southerners. Consequently, they are not as well prepared for a wage economy. In the cross-section of our employees, the majority of the people in the equipment operator class are from the north. As you move up through professional careers and management people, you find fewer and fewer northerners. We have had to put a lot of effort into recruiting and educating people for these jobs.
We got one concession from the United Steel Workers at Key Lake to waive the union's seniority requirement for alternate applicants for the apprenticeship program. This allows aboriginal people from northern Saskatchewan who are not qualified under the union rules to get into the apprenticeship program and learn a trade. We are getting some cooperation from the union as well in these educational endeavours.
Senator Adams: Does the Government of Canada provide any benefit for the training of those people? You mentioned labourers and heavy equipment operators.
Mr. Frost: There are some fairly significant training programs ongoing. There is a major $10.5 million, five-year training program which is cost shared equally by the federal government, the provincial government and the industry. We have a number of activities like this. Our company and the industry in general put a lot of money into training.
The Chairman: Thank you Mr. Frost and Mr. Stewart. We very much appreciate your comments.
Senators, Senator Carney has had a number of interesting experiences she wants to share with us on the record. Following that, we will go in camera to deal with our Banff report.
Senator Carney, you have the floor.
Senator Carney: Last week I was in Inuvik and Yellowknife at the request of the government of the N.W.T. to discuss our Senate report on protected areas which we completed last year. You may recall that I was asked to present the findings of our report in September at Camrose to the deputy ministers of parks and the environment. As a result of that, the government of the N.W.T. asked for a presentation of the report at an Inuvik workshop because that government is in the process of designing its own protected areas strategy.
We have now distributed more than 9,000 copies of that report, so it is definitely a best seller. That shows the degree of interest that exists in this issue.
I wish to thank Ms Myers for the very good standup speech she prepared. I listened to their sessions on the issues, and I responded to them on the basis of our report.
The overwhelming issue I wish to bring forward is the fear that because of the land claims and the new territory, they will try to develop a whole different range of protected area strategies. In the N.W.T., as Senator Adams is aware, everyone is very protective of their own land claim. I was able to make the point that the animals do not care who has control over the land. Their migration patterns cross over many areas. I used the example of the trail of the grizzly bear, which we found in Southern Canada, on which two countries, two states and two provinces are cooperating.
The report was very well received and there is a lot of interest in it.
Second, the government and the people of the N.W.T. are worried about the endangered species bill which is now in the House of Commons and will be coming to us shortly. The part they find offensive is that after 35 years of having territorial management of protected areas, the new legislation will put it back under Ottawa's control. Since it has worked well, it is argued that it should be left in the control of the territorial people. They do not understand why Ottawa wants to intrude in the management of endangered species. That is a point we may wish to watch if the bill is not amended in the House.
The third issue is that in Inuvik, which is quite depressed, there is much concern about the possible sale of Molikpaq, the drilling platform used extensively by Gulf in the Beaufort Sea. The concern among the Inuvialuit and other people in Inuvik is that Gulf is seeking to sell this drilling rig offshore. It has so notified the government. If the platform moves, it will mean the end of drilling in the Beaufort. The concern is that the taxpayers paid for this drilling platform. It was essentially paid for from PIP grants that a former government -- not the Conservatives -- adopted. If this huge drilling platform is removed from the Beaufort, there will be no possible basis for future activity.
I had the opportunity of travelling with Frank Hansen, an Inuit engineer, down the Mackenzie River on the ice road to the Reindeer Hills to see a drilling operation which is testing the possibility of supplying Inuvik with natural gas. This is a shallow Gulf well. There is a little service rig on it up in the tundra. They were hoping to be able to begin a five-day test on it on Friday. They know roughly what the reserves are because Gulf tested it for 45 minutes in the past. However, they were not looking for natural gas, so they abandoned the test.
The hope is that there will be enough natural gas in this area to supply Inuvik. It is being operated by the Inuvialuit Petroleum Association. It is the only activity I could see related to oil and gas in the Beaufort Sea. Whether or not we can do anything, we should be aware of the fact that this taxpayer-financed drilling rig could be moving offshore. They would, however, be able to use the mobile drilling rigs.
Mr. Chairman, I have been unable to find out the results of the test. This is not a secret in that area because everyone knows that Gulf found natural gas at 1,123 meters. It would be interesting to see if this could go ahead.
The Chairman: On that point, what could we do? If they are not drilling in the Beaufort and the ownership is in Gulf, what could we do?
Senator Carney: I asked what the people of Inuvik would like to see. This was done on the basis of informal conversations, as having the rig turned over to the Inuvialuit petroleum company and stored or moored in the Beaufort Sea until such time as activity resumes.
This is a private transaction between Gulf and the offshore buyer. However, because it was financed by the taxpayer, there is some suggestion that it could be turned over to the Inuvialuit. I do not know if that is feasible. However, it is certainly something I wanted to share with you.
I do not see anyone else lining up to spend $20 million on an offshore drilling platform for the Beaufort. The power costs are so great in Inuvik that the Inuvialuit hospital board which runs the hospital is shipping their laundry over the Dempster to Whitehorse, where it is done and shipped back. This is done rather than using the Inuvik laundry which is boarded up, closed down and which is one block away from the hospital. I am told the reason for that is power costs. There is an element of this which is a matter of federal jurisdiction.
My fourth point deals with Saskatchewan and the flying in of workers in the Yellowknife area. There is a lot of mining development and diamond drilling and development in Yellowknife. Several new mines are being talked about with various degrees of optimism and pessimism. There is a lot of concern in Yellowknife about the flying in of construction workers which eliminates the need for aboriginal workers or northerners at the sites. They are flying people from Inuvik down to Rainbow and back because of the lack of activity in the Beaufort. You should be aware that there is concern in the Yellowknife area that the flying in of workers means that little of this money is rubbing off on Yellowknife, which is also facing government downsizing and, of course, the transfer of government to Nunavut.
Mr. Chairman, I also met Captain Peter Foreman of the Canadian Airline Pilots Association who thanked the committee through me for our work in making the AWOS moratorium stick, which were his words. He wanted to know when we would take another look at the issue which, as you know, we have asked you to do. On your behalf, Mr. Chairman, I have asked him to send us an update on how the pilots of Canadian Airlines view the issue, with the view to helping us prepare for a look at what is happening to the moratorium, if there are any problems and have any been resolved.
We had agreed already that we would issue an interim report. I think Senators Ghitter and Kenny suggested that we would not have a final report, but that we would keep looking at the issue until it is resolved. I have asked for that information and I will send it to the clerk.
The Chairman: That would be useful. We can bring them back again to see what progress has been made.
Senator Carney: That is my report from the territories, Mr. Chairman.
Senator Adams: You mentioned the rig and keeping it. Do you know anything about the costs involved?
Senator Carney: I have no idea, Senator Adams.
Senator Adams: My concern is whether a small corporation such as this one could handle it. I think right now they have a partnership with Gulf or Esso.
Senator Carney: There is no indication that they have ownership of the rig. I am not suggesting that as the solution. I am saying that is what the people in Inuvik, including members of the Inuvialuit corporation, passed on to me. The concern is that if they move out the drilling platform, there will not be the capacity in the Beaufort to resume.
Senator Adams: The one that is there right now is mobile.
Senator Carney: Yes, the one up in Reindeer Hills is on rubber tires.
Senator Taylor: The Inuvialuit have used that area as a springboard. They have made some good acquisitions down in Saskatchewan. They are an oil company which is spread out.
Senator Carney: They are buying real estate in Vancouver, so they must have money.
Senator Taylor: Did you talk to any of them? I am wondering whether they need the government or why they would not buy it themselves. Mind you, I do not know how the income tax laws would affect an oil company owned by the First Nations, but I think they would be pretty nice. Even tax laws affecting a foreign oil company are pretty good. I was wondering why they would not buy it themselves.
Senator Carney: It might not have been offered to them. I do not know.
Senator Taylor: They are trying to sell it. I received something from Gulf about it. They are hoping to sell it in Russia.
Senator Carney: Yes, it would go to Russia.
Senator Taylor: The Russians do not have a lot of money.
Senator Carney: It is a job-related issue in the delta and Yellowknife. In spite of land claims, there are still some areas which fall under federal jurisdiction.
Senator Adams: You mentioned flying some workers into the mines. Is that the deal right now? I thought there was some agreement between local chiefs about companies hiring so many local people and aboriginal people.
Senator Carney: They have been flying into Polaris for years, which is the concern. While I am told that this flying in of crews applies to the construction phase and that there are agreements in place for the operational phase, the fact is they are worried that that will not happen. Canadian has just signed a deal to fly in workers to the new camp, which is about 300 miles outside Yellowknife.
A concern to the local economy is that they will be shut out of northern development. This is to let you know what is happening in the northern part of our country.
The Chairman: For the record, and before we continue in camera, Senator Kenny and I have agreed, subject to the approval of the committee, that once we finish our work on endangered species, assuming no new legislation comes forward and assuming we are not into an election, we would move into an examination of the Sable Island situation. You may know that there is a motion by Senator Forrestall presently before the Senate with respect to an examination of the issues there. We have agreed with Senator Forrestall, again subject to the approval of this committee, that we would not be required to debate his motion and that we would merely take it up. This committee would spend time examining the aspects of the Sable Island situation.
Senator Carney: Will that allow a look at the AWOS before this session of Parliament is prorogued?
The Chairman: Yes. Once we receive the memorandum you mentioned, we will endeavour to do that.
Senator Carney: The AWOS situation affects airports all over the country.
The Chairman: I am happy that we follow that up. Whether we can fit it in before an election is called is another matter. If not, then we will properly look at it in the fall.
Senator Taylor: Will that not be duplicating the work of the National Energy Board? Will we be wasting our time on a side show? There will be hearings on the Sable Island question. I am a new senator, but should we be investigating something that is coming before a hearing?
Senator Adams: Sable Island is on the agenda of the Transport subcommittee. Senator Buchanan is on that committee.
The Chairman: I do not know anything about the Transport Committee. There seems to be a great interest in the subject. I am sure where matters are before other boards does not disallow us from having the opportunity to look at it. We may have a much broader perspective. I am sure that the National Energy Board will deal with it as they will; but, I might add that our Prime Minister seems to have his own views, notwithstanding what the board is doing, judging from comments we have heard in the media.
Senator Carney: Since some of us are not as familiar as are other members, rather than commit to it right now, could we address it at another meeting when we are looking at endangered species to see how the time line flows?
The Chairman: We do not have the time at this point to look into the issue because we have the endangered species issue before us. That will probably take us the month of April.
Senator Hays: We should defer to the Transport committee. It would not be good to have two committees looking at the same issue.
The Chairman: We will do that, Senator Hays. The likelihood of this committee dealing with it before an election is highly unlikely. As a result, it is one of those things that would not come over until the fall in any event.
Senator Carney: Mr. Chairman, have we received much material on the endangered species issue? I understand very much depends on whether the house committee amends it.
The Chairman: I understand the amendments have been moved and are before the house now. We anticipate receiving it shortly, but that can always change.
Senator Carney: At this point in time, we do not know the depth of concern about the bill as amended, do we? We do not know whether we will spend a month or a week on it, do we?
The Chairman: No.
Senator Hays: I have been approached by the Canadian Cattlemen's Association with respect to concerns about some of the amendments. They prefer the bill unamended rather than amended.
The Chairman: Let us go in camera for just a moment to deal with our Banff draft report.
The committee continued in camera.