Bill C-27: An Act Respecting the Long-Term Management of Nuclear Fuel Waste (LS-405E)

HOUSE OF COMMONS		SENATE
Bill Stage	Date	Bill Stage	Date
First Reading:	25 April 2001	First Reading:	5 March 2002
Second Reading:	2 October 2001	Second Reading:	20 March 2002
Committee Report:	22 November 2001	Committee Report:
Report Stage:	4 December 2001	Report Stage:
Third Reading:	26 February 2002	Third Reading:

Royal Assent: Statutes of Canada N.B. Any substantive changes in this Legislative Summary which have been made since the preceding issue are indicated in bold print.

On 25 April 2001, the Minister of Natural Resources Canada, the Honourable Ralph Goodale, introduced in the House of Commons Bill C-27: An Act respecting the long-term management of nuclear fuel waste. The bill’s aim is to require the owners of this waste to assume full financial responsibility and implement a comprehensive, integrated and economically sound approach for the management of this waste. The bill has three cornerstones:

According to the Department of Natural Resources, the bill reflects the consultations undertaken by the federal government with the public, provinces, nuclear fuel waste owners, and other stakeholders.

In Canada, this waste is generated mainly from the nuclear fuel bundles irradiated in the 22 CANDU reactors, most of which came online in the late 1970s. Ontario Power Generation Inc. operates 20 of these reactors, which produce about 90% of the nuclear waste. Hydro-Québec and New Brunswick Power Corporation each own a reactor, and they produce 3% and 5% of the waste, respectively. Finally, about 2% of the waste is produced by the experimental reactors at Atomic Energy of Canada Limited (AECL); as well, a small quantity comes from other sources, particularly universities.

It is estimated that a total of 1.3 million bundles (18,000 tonnes) of nuclear fuel waste has been generated in Canada to date, an amount that could fill several Olympic-sized swimming pools. This waste is being stored in cooling pools, located at the generating stations, which are designed to store the spent fuel after 15 to 20 years of use. Even though it is safe to store the fuel over long periods of time, the oldest pools in the generating stations are now filled to capacity. Since 1995, some of the fuel that had been stored in water for more than ten years at the Pickering Generating Station was transferred to dry storage containers at the same location. Similar dry storage facilities should open at the Bruce Station in 2002 and Darlington in 2007. However, surface storage does not appear to be a long-term solution to waste management, which is why the federal government and producers decided to suggest a more appropriate solution.

In response to the problem, the federal government established a Nuclear Fuel Waste Management Plan. This Plan, which provides for the permanent storage of waste deep under the Canadian shield, was devised by AECL over a 20-year period. When the plan was ready in 1989, an independent environmental assessment commission – the Seaborn Commission – was struck to examine not only the proposal’s technical merits but also the guidelines for evaluating its safety and acceptability. The Seaborn Commission worked over a ten-year period, during which every facet of long-term storage of nuclear fuel waste was studied in the context of an in-depth environmental assessment.

After dealing with the environmental impact study prepared by AECL, the Seaborn Commission began the public examination of the study and held public hearings from March 1996 to March 1997. The Commission began by studying the broad societal issues relating to the management of nuclear fuel waste. After using a technical approach to examine the safety of the AECL concept, the Commission turned to the public to hear their views on the concept’s safety and acceptability.

Using the 531 oral submissions and 536 written submissions, the Seaborn Commission submitted its recommendations to the federal government on 3 March 1998. It concluded that, from a technical point of view, AECL had demonstrated that the deep underground storage concept warranted a preliminary study, but was not acceptable from a social point of view. Broad public support for the concept had not been demonstrated, which meant that, in its proposed form, it did not enjoy the required degree of acceptability in order to become the Canadian model for nuclear fuel waste management.

In December 1998, in response to the Commission report, the federal government expressed its requirements for the management of nuclear fuel waste:

The federal government would then have the last word as to the approach that would be chosen to manage and dispose of nuclear fuel waste.

Through Bill C-27, the federal government seeks to formalize and implement this comprehensive approach, which is a follow-up to its 1998 response and is directly related to its nuclear fuel waste management strategy.

The government believes that this bill complements the Nuclear Safety and Control Act, which ensures that any activity related to the nuclear industry must be carried out in a safe and environmentally sound manner. The proposed Nuclear Fuel Waste Act is deemed necessary to fulfil other obligations relating to federal government policies in this area, namely to ensure a comprehensive, complete and cost-effective approach to all activities that are undertaken. This bill will formalize an approach that may end up costing more than $12 billion over a 70- to 100-year period.

Apart from the section relating to the title, definitions, purpose and application of the Act, Bill C-27 consists of five main parts:

The first clause of the bill states that the Act may be cited as the Nuclear Fuel Waste Act.

Clause 3 deals with the Act’s specific purpose, i.e., the decision-making process by the Governor in Council as proposed by the waste management organization concerning the management of nuclear waste based on a comprehensive, integrated and economically sound approach. Clause 4 states that the Act is binding on Her Majesty in right of Canada or a province, while clause 5 states that the Act applies to a nuclear energy corporation and to AECL if they are the owners of nuclear fuel waste.

Clause 6 provides for nuclear energy corporations (defined in clause 2) to establish a management organization, the purpose of which is to propose approaches to the Government of Canada for managing nuclear fuel waste and implement the approach selected in accordance with the Act. It stipulates that all nuclear energy corporations would have to become members of the waste management organization and that the organization would not be an agent of Her Majesty in right of Canada.

Under clause 7, the waste management organization must offer its nuclear fuel waste management services provided for in the approach selected by the Governor in Council to AECL and all owners of nuclear fuel waste produced in Canada that were neither members nor shareholders of the organization. These services must be offered without discrimination and at a fee that is reasonable in relation to the organization’s costs of managing the nuclear fuel waste of its members or shareholders.

The waste management organization must create an Advisory Council to examine the proposed approaches and the reports referred to in clause 18 and give written comments on them to the waste management organization (subclause 8(1)). The members of the Advisory Council will be appointed by the governing body of the waste management organization and selected in such a way as to reflect a balanced representation of: scientific and technical disciplines related to the management of nuclear fuel waste; expertise in public affairs in matters of nuclear energy and public administration; and aboriginal organizations, where their economic region was specified in the approach selected by the Governor in Council (subclause 8(2)). The House of Commons Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources added “expertise in traditional aboriginal knowledge” to the criteria for appointing board members.

One of the cornerstones of Bill C-27 is the establishment, by the nuclear energy corporations and AECL, of a trust fund with a financial institution that would maintain in Canada all documents relating to the trust fund (clause 9). The initial deposit to be provided by each body no later than ten days after the coming into force of the Act is as follows (clause 10):

Each body would subsequently deposit one-fifth of the initial amount ($100 million, $4 million, $4 million and $2 million, respectively) each year until the Minister approves the amounts of the deposit under subclause 16(3). Interest calculated at the prime rate plus 2% is applied to any amount of the deposit not paid and would have to be provided to the fund, along with the deposit, within 30 days after the date of the Governor in Council’s decision concerning nuclear fuel waste management (subclauses 10(4) and (5)).

Under clause 11, only the waste management organization may withdraw moneys from a trust fund. Withdrawals are to be made only for the purpose of implementing the approach selected by the Governor in Council, including measures to avoid or minimize socio-economic effects on a community’s way of life or on its social, cultural or economic aspirations. The first withdrawal may be used only for an activity regarding construction or an operating licence issued after the date of the Governor in Council’s decision under section 24 of the Nuclear Safety and Control Act.(1) The Minister may require prior approval for any future withdrawal from a trust fund if the conditions set out in subclauses 11(2) and 11(3) are not met. Clause 21 provides that the Governor in Council may, on the recommendation of the Minister, authorize a beneficiary of the trust fund to withdraw all or part of the moneys if the balance exceeds the estimated total cost of implementing the selected approach or if implementation of the approach was complete.

Clause 12 stipulates that the waste management organization would have a maximum of three years after the coming into force of the Act to submit a study to the Minister containing its proposed approaches for the management of nuclear fuel waste, along with the Advisory Council’s comments. The study would also give the organization’s recommendation as to which of its proposed approaches should be adopted, on the basis of careful examination of three possible approaches:

The study must include a detailed technical description of each proposed approach, indicate an economic region for its implementation, and provide a comparison of the benefits, risks and costs as well as the ethical, social and economic considerations associated with that approach. In addition, each proposed approach is to describe the nuclear fuel waste management services to be offered by the waste management organization under clause 7 and include an implementation plan setting out a description of the activities, a timetable, a program for public consultation and the means that the waste management organization planned to use to avoid or minimize socio-economic effects. The general public, and in particular aboriginal peoples, must be consulted and a summary of the comments provided.

For each proposed approach, the study must set out a formula to calculate the annual amount required to finance implementation, the respective percentage of the estimated total cost of waste management activities to be paid by each nuclear corporation and AECL, as well as the form and amount of any financial guarantees provided by the corporations and AECL under the Nuclear Safety and Control Act for the management of nuclear fuel waste (clause 13). If it was considered necessary, the Minister may engage in consultations with the general public and direct the waste management organization to revise, within the period specified by the Minister, the relevant portions of the study that failed to meet the requirements of clauses 12 and 13 (clause 14). At the end of the process, the Minister recommends to the Governor in Council one of the approaches for managing nuclear fuel waste from among those set out in the study, and the decision is published in the Canada Gazette (clause 15).

Clause 16 and the following clauses set out a series of obligations that the waste management organization must meet. Under clause 16, the waste management organization shall:

The nuclear energy corporations and AECL shall provide their respective deposits within 30 days after the annual report was submitted or, if the Minister’s approval is required, within 30 days after that approval. However, a nuclear energy corporation may be authorized to defer by one year all or part of its required deposit if the public interest requires that the moneys be used instead to repair the damage caused by an event that is not attributable to the corporation and that is extraordinary, unforeseen and irresistible (clause 17).

Every three years after the Governor in Council’s decision, the organization’s annual report must include:

The House of Commons Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources proposed an amendment to clause 19 that requires the Minister to issue a public statement on each report submitted within 90 days of receiving the report. The Committee also proposed that the Minister be required to table each report before each House of Parliament.

Clause 20 deals with proposals for approaches other than the one selected by the Governor in Council. A new approach may be proposed if the waste management organization shows in its triennial report that it is unable, for technical reasons beyond its control, to implement the approach selected or if a new technological method is developed that makes a different approach for the management of nuclear fuel waste preferable. This new approach must have been the subject of a scientific and technical review by experts from international governmental organizations that deal with nuclear matters and have received their support. It must comply with clauses 12 to 14.

Clause 21 authorizes withdrawals from the trust fund by the beneficiary, as described earlier, under clause 11. Clause 22 stipulates how records and books would have to be kept by the waste management organization, the nuclear energy corporations, AECL and the financial institutions. Clause 23 requires the waste management organization and the financial institution administering the trust fund to provide the Minister, within three months after the end of each fiscal year, with financial statements audited by an independent auditor. Under clause 24, as amended by the House of Commons Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources, the waste management organization is required to make public all studies, reports and financial statements that it is required to submit to the Minister. The waste management organization is also required to make public all financial statements from the institution responsible for administering the trust fund.

Clauses 25 and 26 indicate the requirements for designating auditors, the powers of the auditors, and the duties of the auditors and the organizations subject to the audit.

Under Bill C-27, fines of $300,000 will be imposed for each day on which an offence is committed or continued with respect to:

The court may also order the body to deposit to its trust fund, on or before the date fixed by the court, the amount that it failed to deposit as required, plus interest on that amount at the prime rate plus 2% calculated from the day on which the amount was required to be deposited. If a body fails to comply with such an order, it is liable to a fine of 20% of the total amount specified in the order. If the waste management organization acts without the Minister’s approval or fails to comply with a direction of the Minister concerning revision of its proposals or submission of a report on its activities, it is liable to a fine of $100,000 per day. A $50,000 fine will be imposed if the organization does not comply with a direction by the Minister regarding the content of its activity report or the formula for calculating the amount required to finance the waste management activities.

Anyone failing to give assistance or making a false or misleading statement to an auditor is subject to a maximum fine of $100,000. Finally, anyone who contravenes any other provision of the Act could receive a fine of up to $50,000. Under clause 29, it is not necessary to identify or prosecute the employee or agent who commits the offence, but merely to establish that the offence was committed by an employee or agent of the accused. However, a person shall not be found guilty if it is established that he or she had exercised all due diligence to prevent the offence (clause 30). Proceedings have to be instituted not later than two years after the offence (clause 31).

The Act would come into force on a day to be determined by order of the Governor in Council (clause 32).

Bill C-27, the Nuclear Fuel Waste Act, is very much in keeping with the Government of Canada’s policy on radioactive waste. Its aim is to provide the necessary framework, within three years of its adoption, for choosing a long-term management method for all nuclear fuel waste accumulated to date at production sites. Under the Act, the public nuclear energy corporations must begin by creating an organization and establishing an independent fund to finance nuclear waste management activities. There would also be a federal review and approval mechanism to provide oversight and access to the funds.

Ontario Power Generation Inc. (OPG) is the energy producer most affected by this federal initiative because it produces approximately 90% of the nuclear waste. In its own document on nuclear waste management,(2) OPG outlines the need for the approach taken in Bill C-27, in particular the creation of an arm’s-length nuclear waste management organization and a fund to finance waste management activities. The document indicates that OPG currently sets aside $430 million a year for the long-term management of nuclear waste and the eventual dismantling of reactors. According to the Minister of Natural Resources and the officials in his department, the other two provincial nuclear producers (Hydro-Québec and New Brunswick Power Corporation), as well as AECL, share OPG’s views on this. Moreover, the new nuclear waste management organization would be required to provide long-term management services at a reasonable cost to small-scale waste owners.

Strong opposition to the measures proposed in Bill C-27 is unlikely, especially regarding the creation of the nuclear waste management organization and the trust fund. However, discussion and opposition may arise concerning the various options for long-term management of nuclear waste. As stipulated in subclause 12(2), three options (deep geological disposal, storage at nuclear reactor sites, and long-term centralized storage) must be studied thoroughly and on a priority basis before one method is recommended to the minister responsible. The management organization may also propose a different method. It is very possible that a number of individuals and organizations will wish to express their views when the bill comes before the committee. Moreover, other approaches to the management of nuclear waste may be proposed; for example, at second reading, one MP wondered whether it was possible to extract more energy from the fuel rods before long-term storage or underground disposal. It would also not be surprising to see a number of witnesses use this opportunity to debate the whole issue of nuclear energy in Canada and the world.

* Notice: For clarity of exposition, the legislative proposals set out in the bill described in this Legislative Summary are stated as if they had already been adopted or were in force. It is important to note, however, that bills may be amended during their consideration by the House of Commons and Senate, and have no force or effect unless they are passed by both Houses of Parliament, receive Royal Assent, and come into force.

(1) Section 24 of the Nuclear Safety and Control Act deals with licences, including the application of the proceeds of financial guarantees.

(2) Ontario Power Generation, Nuclear Waste Management: Managing Ontario Power Generation’s Nuclear Waste Safely and Responsibly, 2000; this document can be consulted on the corporation’s website at http://www.opg.com/ops/nuclearPub/NWM2000.pdf.