The Harper government believes $650 million should cover it off, even in the event of a catastrophic, however improbable, accident at a nuclear plant such as the aging Pickering generating station.
Whether that amount is high enough was the subject of lengthy debate these past two weeks as legislators took a close look at Bill C-20, the Nuclear Liability and Compensation Act.
The bill raises the cap on liability to $650 million from the $75 million limit established in 1976. It represents a nearly nine-fold increase that the federal government calls "reasonable" and in line with international standards, given the extremely low likelihood of a severe accident. But critics of the bill say the government is still low-balling the cost of potential damages and is out of touch with other nuclear-power nations that measure liability in the billions, not millions of dollars.
"Under any scenario of a major nuclear accident happening within Canadian nuclear facilities, you can crack through $650 million without breaking a sweat," said B.C.
MP Nathan Cullen, the New Democrat for Skeena-Bulkley Valley, who's on the parliamentary committee combing through the bill. The difference between a $650 million event and a multibillion-dollar catastrophe, he said, can be determined by the direction and speed of the wind that carries the radiation.
Cullen, speaking later in an interview, said it would be a mistake to dismiss these concerns as fear mongering. "Everybody seems to be so shy of mentioning those words, `nuclear accident.' But we have to imagine it, unfortunately."
He said citizens of Pickering and Toronto should be following the issue more closely, with four reactors at the Pickering B nuclear station soon to reach the end of their safe operating lives. Ontario Power Generation is to decide by year's end whether to refurbish the four to extend their operation to 2060.
Alternatively, OPG may seek a short-term life extension as part of a strategy for "maximizing asset value" similar to the five-year life extension given to Atomic Energy of Canada's NRU isotope-producing reactor in Chalk River.
The NRU reactor was supposed to cease operating by the end of 2005 but its licence was extended to 2011. A heavy water leak forced the reactor to shut down in May 2009 for repairs. Six months later Atomic Energy scientists are still working on a fix.
In the United States, liability for nuclear accidents is set at $10 billion (US), while in Japan the cap will be doubled next year to roughly $1.47 billion (Canadian). In Germany, there is no cap on nuclear liability but an operator must be able to cover at least $4 billion.
Cullen was surprised to learn last week that the liability ceiling in the current bill was determined as far back as 2002 by the previous Liberal government and has not been updated since. In 2003, Natural Resources Canada commissioned Magellan Engineering and International Safety Research to study whether the $650 million limit was appropriate.
The study, submitted May 2003, concluded the proposed cap was sufficient for "design-basis accidents" that is, foreseeable accidents that a nuclear plant is designed to accommodate. But the report, which focused only on Ontario's Darlington station and Quebec's Gentilly-2 station, warned health-cost components are "very sensitive to population density."
It recommended that the Canadian government commission another study to look at "severe accidents" at the Pickering station "to estimate the impact of the much higher population density and land use around the station."
Cullen asked Dave McCauley, director of the uranium and radioactive waste division at the natural resources department, whether the ministry ever commissioned that follow-up study to look more closely at the Pickering plant.
"No we didn't," replied McCauley. "I think that the philosophy was that the limit would be addressing foreseeable risks associated with design-basis accidents as opposed to severe or catastrophic risks."
McCauley went on to explain that the nuclear liability act is meant to cover all kinds of nuclear accidents, but that, when it comes to liability limits, it drew the line on "foreseeable" events. In other testimony, nuclear industry officials explained that the cap keeps the cost of liability insurance affordable.
Albert Sweetnam, executive vice-president of new nuclear builds at Ontario Power Generation, told the committee that containing liability for the nuclear industry is the nature of the beast. "The capacity of utilities and insurance companies are not unlimited so, at some level, all countries provide backstops in some ways."
It's absolutely essential, said Peter Mason, president and chief executive of nuclear supplier GE-Hitachi Nuclear Energy Canada. "If there was not a cap and if there was not suitable legislation insurance in place, then we wouldn't be in the nuclear industry," he explained to the committee.
Research commissioned in 2007 by Defence Research and Development Canada, an arm of the Department of Defence, suggests the cost of a severe nuclear accident, one that releases the radioactive isotope Cesium-137 and results in wide contamination, would be much higher than $650 million.
The research looked at the impact of a relatively small dirty bomb going off in downtown Toronto. It estimated that cleaning up the contamination using the most stringent standards could cost up to $250 billion, and that the economic toll could reach $23.5 billion as anxiety-stricken Torontonians skipped work and flooded medical facilities.
"The amount of radiation assumed for that study is one two-thousandth part of the inventory of the same radioactive isotope in the reactor core of an existing Candu nuclear power plant," Gordon Thompson, executive director of the Institute for Resource and Securities Studies in Cambridge Mass., testified to the committee on November 16.
Michael Binder, president of the Canadian Nuclear Regulatory Commission, called the dirty-bomb scenario in the defence department study "junk science," even though his own agency is cited as a "federal partner" in the research effort and the study's main authors were scientists from prestigious Battelle Memorial Institute in the U.S.
An MP on the committee, Mike Allen, the New Brunswick Conservative for Tobique-Mactaquac, took issue with Cullen's line of questioning. "What Mr. Cullen is talking about is some hairy-fairy idea that is a theoretical concept and it's really not reality, given our 63-year history (of safe nuclear operation)," he said.
Cullen, in an interview, said that is why we have insurance, to cover the cost of something bad happening that has never happened before. "Isn't the nature of accidents that they are sometimes unforeseeable, that they happen in such a way that if they had been foreseen, they wouldn't happen?"