Can deregulation, privatization and subsidies revive Canada's nuclear industry?

Aerial view of Chalk River nuclear plant. Photo: Canadian Nuclear Laboratories/flickr

Corporate dominance of public institutions and the public purse was on full display during a licence hearing for the federal government's nuclear research and waste facilities at Chalk River, Ontario, on January 23-25. The hearing was largely a love-in between the Canadian Nuclear Safety Commission (CNSC) -- the federal regulator -- and the Canadian Nuclear Laboratories (CNL), owned by a consortium of U.S., U.K. and Canadian companies.

Non-industry intervenors, who were in the majority at the hearing, were highly critical of CNSC's intent to award CNL a watered-down 10-year licence for the Chalk River site. But CNSC President Michael Binder kept them on a short leash, occasionally lashing out and asking why they had bothered to attend. 

CNSC wants to replace the current 285-page Chalk River Laboratories licence handbook (which contains detailed criteria for safe site operations) with a much shorter 61-page handbook that merely lists nuclear industry-prepared standards, CNSC guidance documents, and internal CNL documents not available to the public.  

Canadian Environmental Law Association lawyer Joseph Castrilli warned that watering down the licence and its accompanying handbook would make them unenforceable. CNSC defended its deregulation initiative using terms such as "standardization," "licence improvements" and "removal of repetition." 

Long-time Renfrew County resident Jean Brereton was prevented from showing a 36-metre-long scroll of licence and handbook deletions during her presentation. She remarked, "President Binder acted like a defence lawyer trying to destroy the credibility of a hostile witness."

The Chalk River site is on unceded Algonquin territory. The Algonquins of Ontario, in their intervention, said that they were never consulted about, or compensated for, the loss of their land. They strongly objected to CNSC's contention that it has no "duty to consult" on the new 10-year licence for CNL. Deputy Grand Council Chief Glen Hare of the Anishinabek Nation forcefully opposed the licensing of nuclear waste transport through Anishinabek Territory and storage of nuclear waste near water bodies such as the Ottawa River. Several Indigenous intervenors offered prayers in the Algonquin language.

Privatizing nuclear energy management

The U.S., U.K. and Canada created the Chalk River facility during the Second World War  to learn how to make plutonium for atomic bombs. For decades Chalk River was a publicly run facility of the Crown corporation Atomic Energy of Canada Limited (AECL). Just before the fall 2015 federal election, the Harper government shrank AECL to 40 staff, handing CNL and its  approximately 2,800 employees over to a multinational consortium, led by U.S.-based company CH2M

Although the consortium calls itself the "Canadian National Energy Alliance," four of its five members are foreign-owned. One intervenor noted that lead consortium member CH2M had criminally conspired to defraud the U.S. government at the Hanford Nuclear Site, and the Canadian member, SNC-Lavalin, was debarred by the World Bank for 10 years in April 2013 following an investigation into bribery schemes in Bangladesh. In September 2018, SNC Lavalin will face federal corruption and fraud charges related to its activities in Libya. The intervenor asked if companies might be ineligible for contracts under the federal Integrity Regime.

Under contract to AECL, the consortium operates all of the federal government's nuclear sites. However, the lands, buildings and $8 billion worth of environmental liabilities at these sites are still "owned" by AECL, and the federal government remains responsible for them.

In June 2017 the Auditor General reported that the government paid out $969 million to AECL in the 2016-17 fiscal year. In turn, AECL gave "approximately $866 million for contractual expenses" to the consortium. The Auditor General identified four areas of "weakness" in AECL's corporate governance, including that its corporate plan "did not demonstrate how the Corporation would measure the overall objectives of restructuring, which were to enhance efficiency and effectiveness, and to contain and reduce costs and risks for Canadians over time."

In 2016-17, $530 million of AECL's federal budget appropriation was earmarked for addressing environmental liabilities. These liabilities include shut-down reactors, leaking nuclear waste storage facilities, and over 100 radioactive buildings, most dating back to the Cold War era. CNL's controversial plan to reduce these liabilities is to permanently dispose of them in a giant mound one kilometre from the Ottawa River. CNL is also shipping radioactive waste from the Whiteshell Laboratories in Pinawa, Manitoba to Chalk River for disposal.

Concerns about proposals for Chalk River

Before the hearing CNSC told hearing participants that it would not accept any submissions related to CNL's proposed giant waste mound. CNSC also said that CNL's plan to construct and test experimental "small modular reactors" would be "out of scope" of the licence consideration. Intervenors spoke against these two proposals anyway, arguing that the mound was intended to free up space for new reactors, and that both proposals should be rejected owing to unacceptable risks to health, safety and the environment.

Intervenors also criticized the proposed 10-year licence term. The longest previous licence for Chalk River had a five-year term. CNL defended a 10-year licence as being good for business. CNL and AECL annually update a 10-year plan that is tabled in Cabinet by the Minister of Natural Resources as a basis for AECL's budget appropriations. 

A June 2017 report by the House of Commons Standing Committee on Natural Resources, The Nuclear Sector at a Crossroads, noted that the federal government committed in 2014-15 to a 10-year, $1.2-billion investment in "revitalization" of the Chalk River site. The Committee, chaired by Liberal MP James Maloney, called for continuing nuclear subsidies and recommended that the federal government "support the development of small modular reactors." In October 2017 the Trudeau government agreed with all of the recommendations in the report.

In his appended minority opinion, the lone NDP Committee member, MP Richard Cannings  noted the absence of information in the report "about the balance between investment in new nuclear technologies and clean, renewable technologies such as solar." He added, "the current government promised to clean up government, make it more transparent and open, and to bring 'sunny ways' to our country. Unfortunately, recent controversy with the leadership of the CNSC is casting a cloud that is contrary to the government's commitments. The Minister must stop avoiding his responsibilities and address the issues affecting public trust in Canada's nuclear regulator."

Given the Trudeau government's support for continued nuclear subsidies, and the CNSC's dismissive attitude towards public intervenors, CNL will get its stripped-down licence, probably for a 10-year term. It remains to be seen whether the Liberals will pay a price for putting the wishes of the powerful nuclear lobby and multinational corporations ahead of public interests. The risks are significant, given the large sums of public funding involved and the potential consequences of a nuclear accident.

Ole Hendrickson is a retired forest ecologist and a founding member of the Ottawa River Institute, a non-profit charitable organization based in the Ottawa Valley. A version of this article was first posted on Sierra Club Canada's blog.

Photo: Canadian Nuclear Laboratories/flickr

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