Nuclear Sunset:

Canadian Private Sector Nuclear Industry -- 1994
Provincial Distribution of Private Sector Nuclear Industry Companies -- 1994

Organization of CANDU Industries Membership List (as at January 1992)
Provincial Distribution of OCI Membership -- 1992

Table 1 ---- Total Funding to AECL

Table 2 ---- Canadian Nuclear Industry Employment -- Year-end 1992

Table 3 ---- Ernst & Young Estimate of Nuclear Industry Jobs -- 1992

Table 4 ---- Canadian Nuclear Industry Employment -- Year-end 1994

Table 5 ---- Ontario Hydro Nuclear Operations Staff

Table 6 ---- Estimated Retubing Dates for Ontario Hydro Nuclear Reactors

Table 7 ---- Employment at Gentilly-2

Table 8 ---- Employment at Point Lepreau

Table 9 ---- Atomic Energy of Canada Ltd. (AECL) Employment 1979- 1994

Table 10 --- Ontario Hydro Funding of CANDU Owners Group (COG)

Table 11 --- CNA Listing of Canadian-based Private Sector Companies

Table 12 --- Uranium Mine, Mill & General Employment (on- site)

Table 13 --- Uranium Refining and Conversion Employment

Table 14 --- Taxpayer Subsidies for Decommissioning of AECL Nuclear Facilities, 1985-86 to 1994-95 ($million of the year)

The Canadian nuclear industry was created through government intervention, and from the beginning relied on public funding. Now, fifty years later, the nuclear industry continues to depend on significant subsidies from taxpayers.

Despite its failure to become financially self-supporting, the Canadian nuclear industry promotes itself by stressing its supposed contributions to the Canadian economy. The most recent major public relations exercise of this nature was sponsored by Atomic Energy of Canada Ltd. (AECL) and conducted by the consulting firm of Ernst & Young. The resulting report, entitled The Economic Effects of the Canadian Nuclear Industry, released in October 1993, has been uncritically accepted by many federal decision-makers.

The present report, called Nuclear Sunset: The Economic Costs of the Canadian Nuclear Industry is a response to the Ernst & Young report, in the area of "economic benefits" and AECL subsidies (section 2), and also in the area of direct employment (section 3).

Nuclear Sunset also identifies three other areas of concern, where AECL continues to drain the public purse and put the taxpayer in even greater risk of future liability. These areas are AECL's Isotope Business (section 4); AECL's Decommissioning Liability (section 5); and Federal Heavy Water Investments (section 6).

The nuclear industry in Canada is truly a "sunset industry". Activity and employment both peaked around 1980, and have declined steadily since. Foreign sales have largely failed to materialize, and nuclear construction proposals in Canada have been cancelled.

The federal government faces a decision on nuclear subsidies not only for the 1996 budget, but also in connection with the imminent expiry of a seven-year Memorandum of Understanding between the federal government, Ontario, Québec and New Brunswick on funding for AECL (see section 3.4). The MOU was initiated in 1990 by Jake Epp, former Tory Minister of Energy Mines and Resources, and it expires on April 1, 1997. The Province of Ontario has recently cut back its funding of AECL through this program. The federal government and the provinces (mainly Ontario) must soon decide whether to renew their subsidies for the Canadian nuclear industry.

An internal, federal government review of the Canadian nuclear industry and AECL subsidies took place in late 1995. No public participation in this review was permitted, and the proceedings and results have remained secret. With nuclear industry supporters firmly entrenched in the government bureaucracy, there is little doubt that this review will support ongoing (if somewhat reduced) government subsidies for the Canadian nuclear industry.

Many Canadians find it unacceptable that discussion about the disbursement of public funds for the nuclear industry should be conducted behind closed doors in Ottawa. Making this situation worse, is the fact that this secret review is based on the advice of nuclear advocates whose industry colleagues receive the financial benefits.

Particularly at a time when social programs are no longer seen as affordable, funding for Atomic Energy of Canada Ltd. (AECL) should be at the top of the "cutting" list. Government subsidies for the nuclear industry should be ended.

Ernst & Young arrived at their $23 billion estimate of the nuclear industry's contribution to Canada's Gross Domestic Product using fundamentally flawed assumptions and faulty methodology. They assumed that nuclear power was the most cost-effective electrical generating option available. This is simply untrue. Cogeneration plants and many energy efficiency technologies are far cheaper to construct and operate, and offer far higher GDP multipliers than nuclear energy.

Among other methodological errors, Ernst & Young counted the cost over-runs of nuclear stations as "economic benefits". For example, the 1978 "release estimate" for Ontario Hydro's Darlington Nuclear Generating Station was $3.95 billion, whereas the final cost of the station was over $14 billion.

When calculated in real, 1995 dollars, total federal funding to Atomic Energy of Canada Ltd. (AECL) since its creation in 1952 until March 31 1995, has been about $13 billion. Ernst & Young claim that AECL's total funding to fiscal 1993 was $4.8 billion. This figure, however, is deceptive, since it makes no allowance for inflation, and includes several significant errors.

The figure of $13 billion funding to AECL represents a real, cash subsidy, by taxpayers to AECL, and does not include any "opportunity cost", i.e. what the subsidies would be worth if the government had instead invested them in break-even ventures. The opportunity cost for the accumulated subsidies to AECL up to the end of fiscal year 1995 is $120.4 billion. Canada's economy would have been much better off, if the government had simply used the AECL subsidies to reduce the national debt.

Ernst & Young overestimated the number of jobs in the Canadian nuclear industry by about 40%. They claim that there were about 30,000 jobs in the nuclear industry at year-end 1992. A more realistic estimate is about 18,000. There are several possible reasons for AECL's overestimation of employment, including: double counting (for example, several references indicate that uranium industry employees were counted twice); counting total employment levels at companies whose business is only partly nuclear, instead of just counting the nuclear-related jobs; overestimating the number of companies in the nuclear manufacturing private sector; and using biased assumptions for extrapolating employment levels at those companies that were not actually polled.

The most significant overestimate is for employment among "private sector suppliers". Ernst & Young estimate employment in that sector for 1992-93 at 8,500, whereas this study estimates that the actual 1992 figure was about 2,000.

Ontario Hydro has decided to shut down, rather than rebuild part of the Bruce "A" Nuclear Generating Station. It is possible that Ontario Hydro's other nuclear stations will also be phased out early in order to avoid costly retubing or other major rehabilitation work. Staffing levels can be expected to decline proportionally.

It is widely expected that Ontario Hydro's virtual monopoly on electricity generation in Ontario will be broken, making any new nuclear construction virtually unthinkable. A competitive market will inevitably lean towards more efficient supply alternatives with shorter construction lead-times such as natural gas-fired cogeneration and combined cycle plants. The prospects for new nuclear construction in any province outside of Ontario are almost as slim.

Canada is the world's largest producer and exporter of uranium, and Cameco (the privatized former crown corporation in uranium mining and refining) has seen a recent increase in stock price. However, even this sector of the industry is facing a serious challenge over the medium- to long-term. Huge military stockpiles of uranium in the USA and Russia, as well as fuel recovered from nuclear weapons will likely make serious inroads on the market share of the Canadian uranium mining and refining industry.

Long thought to be the one "profitable" division of AECL, the former Radiochemical Company of AECL was privatized in 1991 as "Nordion International Inc.", when it was sold to MDS Health Group   [ hence: MDS/Nordion ]   To secure the sale, AECL was obligated -- under a 23 year contract -- to provide radioisotopes at a fixed price.

Several factors have turned this commercialization into a fiasco.

First, AECL's NRX reactor was forced to shut down in 1993. This has made radioisotope production solely dependent on the NRU reactor, which itself is experiencing technical problems and higher-than-expected operating costs as it approaches the end of its operating life in the year 2000. [Note: this date has since been pushed back to 2005.]

Second, the estimated construction costs of a new production reactor, the MAPLE-X10, have escalated from $23 million in 1989 to an extraordinary $100 million by 1994.

In addition to the $100 million MAPLE-X10, a second reactor will be needed once the NRU reactor is shut down. AECL is also considering construction of the IRF (Irradiation Research Facility) reactor at an estimated cost of $500 million. Investment of public funds in any new radioisotope production reactors is ill-advised, because AECL and Nordion will soon be facing new competition for the sale of their most profitable radioisotope (Molybdenum-99) from radioisotope producers in the US and Europe.

For four years, AECL has defied the Auditor General of Canada by not financially accounting for its decommissioning costs. Decommissioning activities include dismantling radioactive structures such as old reactors; cleaning up radioactively contaminated sites; managing the associated radioactive wastes; disposing of radioactively contaminated equipment; and returning sites to "green field" condition.

According to AECL's current practice for the financing of decommissioning activities, the company will simply send the bill to the taxpayers each year for expenses as they are incurred. This is not an acceptable procedure for proper financial planning or accounting. AECL has made a preliminary and partial estimate of decommissioning costs at about $300 million. However, the Auditor General's office has estimated federal decommissioning costs at $850 million, including AECL's portion. AECL should fully account for those decommissioning liabilities and should create a fund to cover those costs. This study's calculation of total funding to AECL (Table 1) does not include any amount for decommissioning liability.

Heavy water, needed for CANDU reactors, is difficult, expensive, and dangerous to manufacture. Considering the grossly inflated historic expectations for CANDU sales at home and abroad, it is perhaps not surprising that heavy water manufacture represents the single greatest financial and technological fiasco experienced by the Canadian nuclear industry.

Two heavy water plants in Nova Scotia, and one in Québec, as well as most of the Bruce Heavy Water Plant in Ontario have been built and then shut down in the absence of any market for the heavy water. In 1981, the Canadian parliament forgave AECL heavy water plant loans and interest totalling $816.9 million.

In effect, federal taxpayers provided a one billion dollar subsidy for the production of a surplus federal heavy water inventory. Nevertheless, AECL and the federal government have recently agreed to forego a large part of heavy water sales to South Korea and Romania, giving over $300 million worth of business to Ontario Hydro instead. At the same time, the federal government has supplied about $300 million worth of heavy water, free of charge, for a scientific experiment. This failure to obtain a return on the federal heavy water inventory in effect adds dollar for dollar to the federal government budget deficit.

Key decision points on public subsidies for the nuclear industry include the federal budget in 1996, and the expiry of the federal/provincial Memorandum of Understanding (also known as the CANDU Owners Group agreement) on nuclear funding on April 1, 1997. The federal parliament's Standing Committee on Environment and Sustainable Development has already recommended that the government should "terminate its involvement in the CANDU Owners Group". Cabinet should heed that advice.

The secret government review of the nuclear industry conducted in 1995 should be made public. A public consultation process should be launched to consider the phaseout of public support for the nuclear industry, in advance of the expiry of the federal/provincial Memorandum of Understanding.

In keeping with current spirit of fiscal restraint, the federal government should simply end its subsidies to AECL. If the nuclear industry is as promising as it claims, it should be able to provide its own financing and demonstrate that it can survive independently. Otherwise the sun should be allowed to set on the Canadian nuclear industry. Taxpayers have already paid too much.

Despite its failure to become financially self-supporting, the Canadian nuclear industry promotes itself by stressing its supposed contributions to the Canadian economy. The most recent public relations exercise of this nature was sponsored by Atomic Energy of Canada Ltd. (AECL) and conducted by the consulting firm of Ernst & Young. The resulting report, entitled The Economic Effects of the Canadian Nuclear Industry, released in October 1993, has been uncritically accepted by many federal decision-makers.

The present report, called Nuclear Sunset: The Economic Costs of the Canadian Nuclear Industry is a response to the Ernst & Young report, in the area of "economic benefits" and AECL subsidies (section 2), and also in the area of direct employment (section 3).

Nuclear Sunset also identifies three other topical areas of concern, where AECL continues to drain the public purse and put the taxpayer in even greater risk of future liability. These areas are AECL's Isotope Business (section 4); AECL's Decommissioning Liability (section 5); and Federal Heavy Water Investments (section 6).

From its roots in World War II as part of the secret allied effort to build the world's first atomic bombs, the Canadian nuclear industry has been primarily a product of government intervention. The Canadian nuclear effort has required a large investment of public funds -- about $13 billion.

In 1952, the nuclear assets of the National Research Council were transferred to Atomic Energy of Canada Ltd. (AECL), thus keeping the reins of control firmly in the hands of the federal government through this wholly owned crown corporation.

In the early years, AECL sold plutonium produced at Chalk River for use in American nuclear weapons, to help defray the cost of nuclear research in Canada. The military sales were terminated in the mid-1960s, and the focus of the Canadian nuclear effort shifted to nuclear power for electricity generation through the development of the CANDU reactor.

Early efforts were made to encourage the private sector to take a leading role in reactor manufacturing, as had occurred in the United States. However, due to a combination of high cost, high risk, and late entry into the international market, the industry ended up primarily in the public sector. Private sector companies are involved mainly as component manufacturers and consultants -- but overall coordination, design and construction rested largely with AECL and Ontario Hydro.

Even with increasing fiscal pressure on all levels of government in Canada, nuclear industry subsidies have survived for over 40 years. The nuclear industry has regularly promised that commercial success is just around the corner, particularly when decisions on government subsidies are about to be made. The context of current decisions about the ongoing taxpayer subsidization of the nuclear industry is the fiscal restraint now being exercised by governments in many other areas of expenditure.

The federal government faces a decision on nuclear subsidies not only for the 1996 budget, but also in connection with the imminent expiry of a seven-year Memorandum of Understanding between the federal government, Ontario, Québec and New Brunswick on funding for AECL (see section 3.4). The MOU was initiated in 1990 by Jake Epp, former Tory Minister of Energy Mines and Resources, and it expires on April 1, 1997. The Province of Ontario has recently cut back its funding of AECL through this program. The federal government and the provinces (mainly Ontario) must soon decide whether to renew their subsidies for the Canadian nuclear industry.

An internal, federal government review of the Canadian nuclear industry and AECL subsidies took place in late 1995. No public participation in this review was permitted, and the proceedings and results have remained secret. With nuclear industry supporters firmly entrenched in the government bureaucracy, there is little doubt that this review will support ongoing (if somewhat reduced) government subsidies for the Canadian nuclear industry.

Many Canadians find it unacceptable that discussion about the disbursement of public funds for the nuclear industry should be conducted behind closed doors in Ottawa. Making this situation worse, is the fact that this secret review is based on the advice of nuclear advocates whose industry colleagues receive the financial benefits.

Ernst & Young have argued that the "economic benefits" to the Gross Domestic Product (GDP) of Canada from the Canadian nuclear industry total approximately $23 billion for the period 1962 to 1992. In particular, these "benefits" are alleged to derive from two sources: the production of electricity from nuclear power, and exports of CANDU reactors. [1]

Based on a simplistic review of the average cost of nuclear and fossil generation in Ontario, Ernst & Young assumed that nuclear power is the most cost-effective electrical generating option available. [2] Ernst & Young offer no proof that nuclear power is the most cost-effective option beyond this assertion.

In fact, in Ontario, which has most of Canada's nuclear power reactors, Ontario Hydro has revealed that revenue from nuclear power covers only about one third of its total costs, and is heavily subsidized by the utility's hydraulic stations. [3] Furthermore, in 1995, Ontario Hydro wrote down the value of its nuclear assets by $10 billion from $25.4 billion in 1994 to $15.5 billion as of January 1, 1995. [4] This is a formal financial admission that nuclear power is an economic loser. Largely in order to protect its nuclear assets, Ontario Hydro has also resorted to deep discount rates to prevent industry from building cheaper, more efficient cogeneration facilities. [5] Expansion of independent cogeneration facilities in Ontario would leave Ontario Hydro's nuclear stations "stranded", i.e. without customers to purchase their expensive electricity. [6]

In a truly competitive market, many nuclear stations would be shut down, because they are simply not cost effective. Cogeneration plants and many energy efficiency technologies are far cheaper to construct and operate, and offer far higher GDP multipliers than nuclear energy. [7]

Collateral to the mistaken assumption that nuclear power is the cheapest generating option, is Ernst & Young's confused belief that nuclear power's value to the economy is primarily based on the cost of production. This methodological error has the perverse result of attributing benefit to the economy for the waste incurred in the cost over-runs of many nuclear construction projects. For example, the 1978 "release estimate" for the Darlington Nuclear Generating Station was $3.95 billion [8], whereas the final cost of the station was over $14 billion. Ernst & Young count cost over-runs as "economic benefits".

It should be noted that a large portion of the full cost of nuclear power stations resulted from interest charges during construction. In the case of Ontario Hydro's Darlington Nuclear Generating Station, capitalized interest exceeded 42% of the total construction cost of the station. [9] There can be no question that capitalized interest charges should not be included in a GDP output determination model, as Ernst & Young did.

The Ernst & Young study was also methodologically incorrect in its attempt to compare the relative cost of nuclear and fossil generation. [10] Since it is used for baseload generation (i.e. running as much of the time as possible), nuclear stations have a much higher average capacity factor, compared to fossil stations, which are used for intermediate and peaking generation (i.e. just used for periods of higher demand). [11] If fossil stations were run as much as nuclear stations, their total cost would be lower. An accurate cost comparison would account for this difference, as well as considering a range of other technology options.

When calculated in real 1995 dollars, total federal funding to Atomic Energy of Canada Ltd. (AECL) since its creation in 1952 until March 31 1995, has been about $13 billion (see Table 1). Ernst & Young claim that AECL's total funding to fiscal 1993 was $4.8 billion. This figure, however, is deceptive, since it makes no allowance for inflation, and includes several significant errors.

The figure of $13 billion funding to AECL represents a real cash subsidy by taxpayers to AECL, and does not include any "opportunity cost", i.e. what the subsidies would be worth if the government had instead invested them in profitable ventures. George Lermer, now the Dean of the Faculty of Management at the University of Lethbridge, undertook a study of AECL for the Economic Council of Canada in 1987. [12] Recently he updated that study, and concluded that using a real social discount rate of 7.5%, federally funded nuclear research and development expenditures alone represented a real opportunity cost of about $73 billion up to 1995. [13]

By contrast, Nuclear Sunset looks at a wider range of federal government subsidies to AECL. In addition to research and development, it also includes various expenditures for reactors and heavy water support. Based on total subsidies to AECL from 1952 to the end of fiscal year 1995, this study concludes that the real opportunity cost is $120.444 billion. This figure corresponds roughly to the Lermer estimate, if he had included the wider range of subsidies. Nuclear Sunset uses a higher real discount rate of 9.7%, which is equivalent to a nominal [14] discount rate of 15.0% over the 1952-1995 time frame. This is the rate Ontario Hydro is now using for its analysis of capital investments. [15]

Ernst & Young arrived at its $23 billion estimate of the nuclear industry's contribution to Canada's Gross Domestic Product using fundamentally flawed assumptions and faulty methodology. However, even if this number were assumed to be accurate, it does not come close to compensating for the opportunity cost of total subsidies to AECL. The opportunity cost of $120.444 billion is an important measure of the breakeven economic return that would need to be recovered in order to match the before-tax rate-of-return of a private company. Canada's economy would have been much better off, if the government had simply used the AECL subsidies to reduce the national debt.

[1] Includes non-cash contribution of $124.1 million respecting accrued interest on loans used to finance the prototype nuclear power reactors.

[2] Ernst & Young assume an "offset expenditures" principle concerning the Pickering payback agreement from 1977 to 1983 which totals $195.6 million. In other words, Ernst & Young assume that these payments from Ontario Hydro offset Federal Government funding that would have been available, if not for the Pickering payback agreement. This is not an appropriate assumption. In 1993, Ontario Hydro wrote off $410 million in amounts owed under this agreement from AECL and the Government of Ontario. This negative payback was accrued as a result of the poor performance of Pickering Units 1 and 2, particularly between 1984 and 1987.

[3] Ernst & Young combined LaPrade Heavy Water Plant (HWP) Maintenance with HWP Closures and Decommissioning under the column "Plant Closure/Safekeeping". Ernst & Young also placed decommissioning figures from 1986 and 1987 under "NPR/Funding". This study has listed figures separately for Reactor Decommissioning, LaPrade Maintenance, and HWP Closures -- as they have been reported annually by AECL.

[4] Lower figures were included in the Ernst & Young report, although figures used in this table are clearly identified in AECL annual reports.

[5] Due to the inadequacy of future sales of heavy water, Parliament forgave HWP loans and interest effective April 1, 1980 for the LaPrade, Glace Bay and Port Hawkesbury HWPs, in the amount of $816.948 million. Ernst & Young reported costs of $672.2 million directly and non-cash costs of $157.4 million.

[6] This study's review of AECL annual reports notes that Ernst & Young missed a taxpayer contribution of $9.3 million in fiscal year 1980-81.

[7] Ernst & Young overstate the value of "Loans Payment Support" from fiscal year 1989-90 to fiscal year 1992-93. These values are corrected for the actual amounts included in AECL annual reports.

[8] Ernst & Young assume an "offset expenditures" principle concerning Heavy Water Production support. This is not an appropriate assumption. The valuation of the heavy water inventory as having a book value of $522.5 million at the end of fiscal year 1993 assumes that the federal government could actually realize this value. This assumption is not supportable. A non-cash contribution for the interest accruing on AECL production support should be calculated in order to fully describe taxpayer costs, and would likely exceed $50 million per year, but would require further information to confirm. In order not to overstate the taxpayer costs, this study assumes that these costs are zero.

[9] In 1988, AECL sold Nordion International Inc. (formerly the AECL division known as the Radiochemical Company) to the Canada Development Investment Corporation (CDIC) for eventual privatization. In 1991, CDIC sold Nordion to MDS Health Group Ltd. for $165 million, and it was reported that AECL received $150.5 million from CDIC, and that this, "together with interest earned thereon between the dates of receipt and disbursement, has been distributed to the shareholder by way of dividends" (AECL 1991-92 Annual Report). Ernst & Young note a $152.5 million dividend in 1992 from the Nordion sale. Even if these funds were advanced to the Receiver General, this amount should not be reported as a return to taxpayers, since the sale is currently a matter of litigation by MDS and Nordion, with AECL, CDIC and the Attorney General of Canada named as liable parties.

The Ernst & Young study, The Economic Effects of the Canadian Nuclear Industry, released by AECL in 1993, claimed that there were about 30,000 "jobs" in the Canadian nuclear industry in the period 1992-1993 (see Table 3). [16] That claim contrasts dramatically with this study's estimate of 17,965 full-time employees at year-end 1992 (see Table 2). The Ernst & Young figure is a 40% overestimate of actual full-time permanent employment. Since 1992, this study estimates that there has been a marginal increase in nuclear industry employment primarily because of an employment increase at Ontario Hydro Nuclear -- 1994 year-end employment is estimated to be 18,640 (see Table 4).

Some of the discrepancy is obviously accounted for. For example, since 1992-93, construction has ended at the Darlington Nuclear Generating Station in Clarington, Ontario, eliminating 870 jobs counted by Ernst & Young in the 1992-93 period. While construction employment is relevant, it is by its nature temporary, and should be kept separate from general nuclear industry employment. This study has also not counted any jobs in "Public Sector Administration" (Ernst & Young counted 350 jobs in that category). It is simply not appropriate to count civil service jobs, paid for in whole or part by the taxpayer as being part of employment in the "nuclear industry". Ernst & Young also included a category of "other" (with no explanation) totalling 350 jobs. This study has not included that category.

For Ontario Hydro in 1992, Ernst & Young cited 12,000 jobs. They did note that this did "not reflect the recent layoffs at Ontario Hydro". [17] However, jobs in the nuclear division at Ontario Hydro -- now known as "Ontario Hydro Nuclear" (OHN) -- have been carefully tracked for many years. The actual employment at OHN at year-end 1992 was 8,790, rising to 9,396 in 1994 (see Table 5 below).

	Nuclear Industry Sector		       Employment

	Ontario Hydro Nuclear			 8,790
	Hydro Québec				   634
	New Brunswick Power			   451
	AECL (Atomic Energy of Canada Ltd.)	 4,503
	Private Sector Suppliers		 2,000
	Uranium Mining & Milling		 1,310
	Uranium Refining & Conversion		   277
						======
	Total					17,965

Ernst & Young reported employment of 4,500 at AECL (Atomic Energy of Canada Ltd.) in 1992. It is worth noting that 4,503 was the employment level at AECL at the beginning of the year. By 1993 it had fallen to 4,431, by 1994 to 4,287 and by January 1995, to 3,972 (see Table 9).

Ernst & Young placed total uranium industry employment in 1992 at 2,200. By contrast, this study has separated mine, mill and general workers, since employment figures have been carefully tracked in this category by the Department of Energy Mines and Resources (EMR)/Natural Resources Canada (NRCan) for some years. As reported by NRCan, the 1992 employment for mine, mill and general workers (i.e. on-site staff) was 1,310 (see Table 12).

Another general segment of the uranium industry in Canada is uranium refining and conversion, conducted by Cameco, which had employment of 277 in 1992 (see Table 13). Even allowing an additional 10% for head office staff, this indicates a total of 1,746 staff in these segments of the Canadian uranium industry in 1992. So the Ernst & Young total contains an extra 450 jobs. It is possible that Ernst & Young have included contract staff, in addition to permanent staff on payroll. It is also possible that Ernst & Young have included jobs at Canadian General Electric and at Zircatec in Port Hope, Ontario. CGE makes uranium fuel pellets in Toronto, and fabricates fuel bundles in Peterborough. Zircatec also makes fuel bundles. If Ernst & Young have included these jobs in the "uranium" sector, it is possible that they have also double-counted them under the "private sector suppliers" total.

The Ernst & Young estimate of employment by "private sector suppliers" in 1992-93 is 8,500, whereas this study puts the 1992 figure at 2,000 (see section 3.5. below). This figure is consistent with an estimate by the Canadian Nuclear Association of 1,500 for private sector suppliers as at December 31, 1989, [18] and allowing for an increment due to the Wolsung-2 sale, announced in December 1990. This study estimates that the employment figure for 1994 has risen to about 2,500, accounting for the employment effects of the Wolsung-3 and -4 sales (announced in the fall of 1992).

How then, could Ernst & Young make such a gross overestimate of employment among private sector suppliers? There are several possibilities, including:

• double counting (several references indicate for example that uranium industry employees were double counted -- see section 3.5.1 below);
• counting total employee levels at some or all companies, instead of just the nuclear-related employment [19] ;
• overestimating the number of companies in the nuclear manufacturing private sector; and
• using overly optimistic assumptions for the extrapolation of employment among the estimated number of companies.

	Nuclear Industry Sector		       Employment

	Ontario Hydro				12,000
	Hydro Québec				   650
	New Brunswick Power			   450
	AECL (Atomic Energy of Canada Ltd.)	 4,500
	Private Sector Suppliers		 8,500
	Uranium					 2,200
	Public Sector Administration		   350
	Construction at Darlington		   870
	Other					   350
						======
	Total					29,520

	Nuclear Industry Sector		       Employment

	Ontario Hydro Nuclear			 9,396
	Hydro Québec				   633
	New Brunswick Power			   443
	AECL (Atomic Energy of Canada Ltd.)	 4,009
	Private Sector Suppliers		 2,500
	Uranium Mining				 1,370
	Uranium Refining and Conversion		   289
						======
	Total					18,640

Ernst & Young place nuclear employment at Ontario Hydro in 1992 at 12,000, using as a source for this figure an "Interview with Ontario Hydro, 1992/1993". [20] This number is inconsistent with an employment level of 8,790 in 1992 for nuclear operations staff reported by Ontario Hydro before the Ontario Energy Board. [21] Table 5 provides nuclear operations staff at Ontario Hydro for the period 1983 to 1994. The lower figure also corresponds with the figures cited by Langille. [22] All of Ontario Hydro's nuclear stations saw an increase in staff levels in 1993 to a all-time high of 9,340. [23] Ontario Hydro has suggested that nuclear staff levels in 1995 and 1996 will be similar to those in 1994. However, in 1995, Ontario Hydro initiated another round of layoffs for which nuclear workers were eligible. [24]

Based on the precedent established by Ontario Hydro at the Bruce "A" station, it is possible that Ontario Hydro's other nuclear stations will also be phased out at times corresponding to the estimated need dates for retubing. Pickering "A" has already been retubed, so the expected shutdown date for those reactors will be at the end of their estimated 40-year lifespans. Staff levels can thus be expected to decline proportionally. In March 1993, Ontario Hydro announced that it did not intend to retube the four 848 MW reactors at Bruce "A". [25] The shutdown of Bruce "A" reactor #2 was advanced to September 1995, and the reactor was actually shut down in October 1995. Reactor #1 at Bruce "A" will likely be shut down when retubing is required in the year 2000. [26] Reactor #3 is expected to require retubing in 2008, and reactor #4 in 2006. [27] It should be noted that Ontario Hydro Nuclear is presently spending a huge amount on capital modifications over and above retubing - $530 million in 1994. [28]

It is widely conceded that Ontario Hydro is heading towards an increasing degree of competition in generation, [29] making new nuclear construction increasingly unlikely. A competitive market will inevitably lean towards conservation/efficiency programs and cheaper, more efficient supply alternatives with shorter construction lead-times such as natural gas-fired cogeneration and combined cycle plants.

Year	PNGS	DNGS	BA NGS	BB NGS	Stations   Other	Total

1983	1489	  22	 797	 640	  2948	    2731	 5679
1984	1498	  74	 805	 704	  3081	    2627	 5708
1985	1514	 343	 769	 757	  3383	    2402	 5785
1986	1497	 579	 748	 772	  3596	    2522	 6118
1987	1538	 780	 754	 757	  3829	    2463	 6292
1988	1666	 930	 799	 728	  4123	    2454	 6577
1989	1656	 925	 904	 705	  4190	    3024	 7214
1990	1841	1086	1033	 766	  4726	    3403	 8129
1991	1949	1169	1138	 824	  5080	    3516	 8596
1992	1981	1228	1229	 811	  5249	    3541	 8790
1993	2254	1548	1784	1141	  6727	    2613	 9340
1994	2374	1605	1737	1311	  7027	    2369	 9396

Nuclear Reactor	   Retubing Date	Nuclear Reactor	   Retubing Date

     Bruce 1		2000		  Pickering 5	     June 2009
     Bruce 2	 shutdown Oct/1995	  Pickering 6	     June 2011
     Bruce 3	     April 2008		  Pickering 7	    March 2013
     Bruce 4	     April 2006		  Pickering 8	   December 2014
     Bruce 5	   February 2011	 Darlington 1	  September 2016
     Bruce 6	      May 2013		 Darlington 2	   December 2018
     Bruce 7	      May 2015		 Darlington 3	   December 2020
     Bruce 8	      May 2017		 Darlington 4	   December 2022

Source: CANDU Owners Group Annual Report [1988 to 1993-94]

"The CANDU Owners Group is dedicated to establishing a framework for co-operation, mutual assistance and exchange of information for the successful support, development, operation, maintenance and economics of CANDU technology." [52]

In principle, this was an attempt to reunify the AECL and Ontario Hydro nuclear research efforts. In reality, Energy Minister Jake Epp could only justify continuation of the federal subsidy to AECL if Ontario provided much more money. The interests of Ontario Hydro and AECL were clearly still at odds. AECL's primary hope for financial solvency was through overseas reactor sales, and developing new reactor designs that would assist that sales program. However, Ontario Hydro's interest was primarily in maintenance and refurbishment of existing reactors. In 1990, this historic divergence of interest was of less concern given the release in December 1989 of Ontario Hydro's Demand/Supply Plan, which proposed a massive nuclear expansion of up to 15 reactors. This expansion would have provided enough work for both AECL and Ontario Hydro's nuclear division. However, by February 1993, Ontario Hydro's grandiose nuclear expansion plans had completely collapsed.

Perhaps under threat of AECL staff reductions in Ontario [53] , Ontario, then under the Liberal government of David Peterson in early 1990, acceded to the federal power play for more funding from Ontario Hydro. This action may also have been motivated by a desire to keep federal subsidies flowing to nuclear research and development at a time when Ontario was anticipating a major nuclear expansion. Indeed, Ontario Hydro had already been increasing its funding to AECL. In 1988, four years after the creation of COG, Ontario Hydro paid them $55.929 million (see Table 10), most of which went to AECL (although this subsidy dropped to $46.734 million in 1989). However, with the advent of the 1990 Memorandum of Understanding, Ontario Hydro funding of AECL jumped by over $33 million to $79.786 million -- more than a 40% increase. This was on top of a guarantee of at least $20 million per year of engineering business to AECL's CANDU Operations. [54] By 1993, the Ontario Hydro funding to COG had risen to $93.344 million.

Despite its nuclear moratorium policy announced shortly after taking power in Ontario in September 1990, the New Democratic Party government of Premier Bob Rae did not order any roll-back of the COG/AECL funding agreement. The moratorium policy was interpreted however, to mean that Ontario Hydro funding could not be applied to new nuclear development. While this was largely a bookkeeping problem for AECL, the Ontario Hydro ban on new nuclear development apparently put an end to the Advanced CANDU Design project in 1991. [55]

However, with the complete collapse of Ontario Hydro's nuclear expansion plans in 1992-93, the key rationale for the reunification of Canadian nuclear design and engineering activities had been removed. Even long-term prospects for nuclear expansion in Ontario do not look good. It is expected that competition will come to electricity generation in the near future, favouring cheaper, cleaner alternatives with shorter construction lead times. Once again, Ontario Hydro has no objective interest in funding new nuclear designs, and expensive reactor sales efforts. Ontario Hydro rates were severely impacted by the $15 billion Darlington Nuclear Generating Station. Darlington had pushed the utility's debt to $35 billion, and it was inevitable that Ontario Hydro would again question its massive subsidy to AECL, at a time when it was encouraging the voluntary retirement of many of its own nuclear engineering staff.

Thus it is not surprising that in 1993, Ontario Hydro's Task Force on Sustainable Energy Development recommended that steps should be taken to "... renegotiate the COG agreement with AECL and the other partners with a view to decreasing Hydro's contribution." [56] In March 1995, Ontario Hydro revealed that COG funding for 1994 had been reduced to $74 million from a budgeted $95 million, and that 1995-1997 would see a reduction to $55 million (from a budgeted $95 million) in each year. [57] Ontario Hydro Nuclear simply stated,

"OHN has committed funding for the COG program through a memorandum of understanding with AECL, which expires in 1997. The funding under this agreement is difficult to sustain under current financial conditions. For the Period 1995-1997, our strategy is to maintain support for high priority programs, while seeking modified arrangements with AECL. This plan reduces spending to $55 million per year from $74 million in 1994." [58]

This recent cutback puts Ontario Hydro funding of COG/AECL back to the level of 1988. The decision brings into question the future of Ontario/federal cooperation on nuclear R&D, and certainly puts into question the renewal of COG Memorandum of Understanding, which expires on April 1, 1997.

The failure of nuclear expansion plans in Ontario in 1992-93 was not AECL's only domestic disappointment. When the 1990 Memorandum of Understanding was announced, one of the key assumptions was that New Brunswick would become host for a CANDU-3 [59] -- a new 450 MW CANDU design. This plan has never materialized. Similar plans for construction of a reactor in Saskatchewan have failed to bear fruit.

Ernst & Young have suggested that there are "... over 154 [private sector] companies who supply products and/or services to the nuclear industry in Canada." [60] This figure, however, is itself an estimate based on a survey that was sent out to 186 companies -- names obtained from the 1993 Canadian Nuclear Association Yearbook, and the 1992 Directory of Companies in the Energy Sector (EMR). [61] Out of the 186 companies that received a survey mailing, 12 no longer existed and 20 did not conduct any nuclear business -- giving a total of 154. However, of this 154, 42 did not respond; 12 declined to participate; and 23 said they did not have time to participate. So only 77 companies actually completed a survey response. [62] Out of the 77 companies responding, only 66 provided nuclear-related staff levels. [63] It is worth noting that Ernst & Young have not provided a list of the respondents.

There is good reason to think that there are significantly less than 154 companies in the nuclear private sector. The Canadian Nuclear Association's 1993 Yearbook contains a list of suppliers which that industry association has been compiling on an annual basis for about 20 years. [64] The CNA's 1993 Yearbook lists 108 Canadian-based companies, excluding public sector crown corporations and entities at educational institutions (see Appendix A for a list of the company names). Of this total, 73% were located in Ontario, followed by Québec with 14%. The CNA's 1994 Yearbook lists 107 Canadian-based private sector companies (see Appendix B for a list of the company names). [65] Of this total, 74% were located in Ontario, with the next greatest concentration of 13% in Québec. The number of Canadian-based companies listed in the CNA Yearbooks has declined dramatically over the last 20 years. Looking at alternating years, Table 11 shows the number of Canadian-based companies listed by the CNA from 1977 to 1994. The number of companies peaked in 1983 at 274, declining to 107 in 1994 -- about a 60% decline.

The membership of the Organization of CANDU Industries (OCI) also indicates that the size of the private-sector Canadian nuclear industry is smaller than Ernst & Young have suggested. OCI describes itself as representing "...companies in the Canadian private sector engaged in the supply of goods and services for CANDU power plants in export markets... OCI member companies provide the majority of the engineering services and major manufactured components for a CANDU plant." [66] The OCI has a 1995 membership of 35 companies (see Appendix C for a 1992 membership list), a level that has remained the same for the last five years. [67] The vast majority of these companies are located in Ontario (83%), with the second largest concentration in Québec (9%).

	Year	# Companies		Year	# Companies

	1977	     143		1987	     238
	1979	     192		1989	     152
	1981	     189		1991	     125
	1983	     274		1993	     108
	1985	     199		1994	     107

Ernst & Young estimated that "private sector suppliers" accounted for 8,500 jobs in 1992, citing their own survey of 1993. [68] This estimate was extrapolated from the survey responses of just 66 companies. [69] The alleged total of "jobs" reported by the 66 respondents is 5,206. However, this does not represent full-time equivalent (FTE) jobs -- Ernst & Young assume that 10% of the "jobs" are part time. [70]

It is not clear how Ernst & Young extrapolated from the alleged 5,206 "jobs" to a total of 8,500. As noted above, Ernst & Young's estimate of 154 nuclear industry private sector companies is not based on a complete survey (only 66 companies provided staff levels). So, their extrapolation somehow created 3,294 "jobs". No intelligible explanation was offered as to how this extrapolation was performed -- it was certainly not performed on the basis of an average each company that is supposed to exist. [71]

Ernst & Young's estimate of the number of jobs in the nuclear industry private sector is inconsistent with an estimate made by the Canadian Nuclear Association (CNA) in 1991 of 1,500 full-time equivalent jobs. [72] The CNA estimate of about 1,500 jobs in the manufacturing sector was confirmed by Langille, who made a detailed study of employment trends in 22 private sector companies. [73] This estimate also seems consistent with a steady decline in employment from the late 1970s. Leonard and Partners (working for the CNA) estimated that manufacturing employment was about 6,000 in 1977. [74] The CNA estimated that manufacturing employment was 5,400 in 1980, and 4,700 in 1981. [75]

The late 1970s would have been a peak for nuclear industry employment since at that time there were no less than 20 reactors in various stages of construction. The failure of new orders for reactors in Canada has meant a steady decline for the nuclear manufacturing sector throughout the 1980s as earlier nuclear projects (mostly in Ontario) were completed. This process culminated with the final reactor at the Darlington Nuclear Generating Station being brought into service in 1993. This trend has been somewhat offset by the overseas sales to Romania and the Republic of Korea.

Nominally, five reactors have been sold to Romania, but because of that country's financial incapacity, only one reactor has been fully constructed (with Canadian financing), and is expected to be brought into service in 1996. Discussions are currently underway to obtain Canadian financing to complete work on a second reactor at Cernavoda. One 700 MW reactor was sold to South Korea in 1990 (Wolsung-2) and two more in 1992 (Wolsung 3 & 4). Construction for Wolsung-2 began in 1992, and is expected to be completed in 1997. [76] At the time of the announcement in 1990, the federal government claimed that the Wolsung-2 deal (one 700 MW reactor) would result in 2,000 direct jobs in Canada over a four year period [77] -- in other words, about 8,000 person years of employment. Wolsung-3 & -4 are expected to be completed in 1998 and 1999 respectively. At the time of the announcement of the Wolsung-2 & -3 deal (two 700 MW reactors), AECL claimed that 2,000 direct jobs would be created "for up to seven years". [78] Since the Koreans plan to complete both reactors in 6 years -- according to AECL's claim, the contracts would result in about 12,000 person-years of employment. A large percentage of the person years (30-50%) would go to AECL itself. It should also be stressed that the "jobs" from the Korean sales are not likely to be new or incremental positions -- in fact probably not, since the Darlington, Romanian and Korean contracts would have been handled sequentially in most cases by most suppliers of both equipment and services, including AECL.

It is important to note that the same number of jobs are expected from the sale of two reactors in 1992, as were expected from the sale of one reactor in 1990. The reason is that Koreans themselves are performing a greater amount of the engineering, project management, and manufacturing functions, due to an increased amount of "technology transfer" -- something for which the Koreans have negotiated strongly (and successfully). Although AECL refuses to disclose the conditions of sale, it has been reported that AECL received about $600 million of contracts for the $1.2 billion Wolsung-2 reactor in 1990. $200 million of the AECL contracts reportedly went to Korean subcontractors; about another $200 million going to Canadian manufacturers; and the remaining $200 million being split for engineering services between Nuclear Project Managers Canada Inc. (NPM) of Mississauga, Canatom Inc. of Montreal, and AECL CANDU in Mississauga and Montreal. [79] At a rough estimate, perhaps $300 million found its way to the private sector in Canada from this one-reactor deal. [80]

About two years later, AECL signed another deal for two reactors. AECL contracts amounted to $950 million, of which $450 million reportedly went to Korean subcontractors, with about $500 million coming to AECL and Canadian suppliers. [81] In other words, as compared to the Wolsung-2 deal two years earlier, the percentage of Canadian content (in dollar terms) of the Wolsung-3 & -4 deal was about 40% less. The dollar amount of contracts finding their way to the private sector may have been about $300 million. In order to achieve short-term sales, AECL has given South Korea the knowledge and skills to build their own CANDU reactors. If future CANDU deals are even considered, Korea will certainly negotiate for lower Canadian content.

At the time of the last CNA estimate of nuclear industry employment in 1991, manufacturers were winding down contracts for Darlington. It does not therefore seem likely that overall employment levels would have changed much, despite the advent of the South Korean sales. In other words, as Darlington contracts were being completed, the industry would have phased into Korean contracts (three 700 MW reactors), and to a lesser extent, Romanian contracts (one 600 MW reactor).

It is illogical to suggest, as Ernst & Young have done, that there is more employment in the manufacturing sector now (when 3 reactors are under construction in South Korea) than there was in the late 1970s when as many as 20 reactors were under construction (18 of them in Canada, and only 2 of them overseas). [82] By a crude estimate, one would expect that present employment would be about one quarter of (or less than) the 1977 level of 6,000 estimated by Leonard & Partners in 1978 -- in other words about 1,500. This is precisely the number of manufacturing jobs estimated by the Canadian Nuclear Association in 1991.

Thus, making a generous allowance, and in the absence of any verifiable survey results to the contrary, it can be estimated that in 1994-95, there are about 2,500 jobs in the private nuclear manufacturing sector, rather than the 8,500 jobs claimed by Ernst & Young. Ernst & Young have estimated that "direct employment would rise by an additional 1,000 direct jobs for each export reactor sold abroad", based on the Wolsung-3 and -4 contracts. [83] However, the use of the word "job" is largely meaningless in this context, since it is a question of the number of person-years of employment. No new "jobs" will be created if for example, the reactor contracts are handled consecutively. The other key factor in determining the "jobs" derived from reactor sales is the degree of technology transfer, which also means the transfer of employment. It is clear that recent sales of Wolsung-3 and -4 have seen a much greater degree of transfer.

Some of Ernst & Young's error may be a result of double-counting uranium industry employees. Their report suggests that "uranium companies" were included in the private sector tally...

"We extrapolated survey numbers separately for separate sub-populations and then added the numbers. For example, we treated uranium companies and all other manufacturing and service companies as two distinct sub-populations." [84]

We note also that in Ernst & Young's Exhibits 5.4 and 5.5, which provide data from the survey, reference is made respectively to "Mining and Refining of Uranium" and "Resource Products" [85] , reinforcing the suspicion that uranium sector jobs are being double-counted. This alone may have added 2,200 jobs onto the "private sector suppliers" total, which are also counted under the "uranium" section. [86] Ernst & Young may also have padded the private manufacturing numbers by including public enterprises such as University groups; and utilities and/or their subsidiaries. The latter would also have been double counted, since they have their own sectoral category in the list of total industry jobs. If any credence is to be given to the Ernst & Young claim for nuclear industry employment in the private sector, it is incumbent upon them to produce their detailed survey results for verification.

Representatives of the nuclear industry have always been frank about the under-utilization of nuclear manufacturing capacity, and the necessity of additional CANDU sales at home and abroad to maintain the industry. Writing in 1978, during the all-time peak of nuclear industry activity in Canada, Leonard & Partners stated in a study for the Canadian Nuclear Association that...

"Manufacturing is currently operating at only 55% capacity, and some companies are seriously considering withdrawal from the industry... In the extreme case of no further NPS being ordered after Darlington at all, or say, for even a three-year period, it seems probable that little nuclear manufacturing capability would be left within Canadian industry." [87]

Leonard & Partners stated that "in order to retain at least some of the nuclear supply industry's capability...", Hydro Québec would have to proceed with a third reactor at Gentilly and Ontario Hydro would have to expand its nuclear generating capacity (in addition to Darlington) by over 15,000 MW between 1988 and 2000. [88] This would have been about 17 additional Darlington-sized reactors in Ontario. Leonard & Partners stated categorically that "Without new orders, there will be no manufacturing work at all by 1988, and reductions in the work force (some 6,000 persons in 1977) will occur from at least 1980 onwards." [89] In fact, there was only one 600 MW reactor sale confirmed in 1979 after these statements were made (the Cernavoda reactor in Romania). There has never been another domestic reactor built after Darlington, and it would be 1990 before the next reactor export (Wolsung-2) would materialize.

In August 1982, the federal Department of Energy, Mines & Resources released a major internal review of the nuclear industry in Canada. [90] The review posed this question among others: "will the Canadian nuclear industry survive into the 1990's to build new reactors in addition to current domestic and foreign requirements?". [91] To answer this question, EMR commissioned a survey by Woods Gordon of 15 major firms in the nuclear industry. The survey asked for a response to "three sales scenarios ranging from quite pessimistic (scenarios 1 and 2) to moderately optimistic (scenario 3)". [92] Scenario one, the most pessimistic, assumed that there would be no more reactor sales (either domestic or foreign). The scenario did not include any of the Romanian "sales". Scenario two, assumed one reactor order in 1981, and another in 1982, but no more in the 1980s. Scenario three, the most optimistic, assumed one reactor ordered was in 1981; one ordered in 1982; and one ordered each year beginning in 1985. [93]

Under Scenario one, the Woods Gordon study reported that "As early as 1985, all but one of the suppliers surveyed (other than Ontario Hydro) will be operating at levels below those acceptable for the maintenance of nuclear skills", and scenario two would only "assist in the maintaining utilization of capacity... in the early 1980s". [94] The report concludes that under scenarios one and two, by 1983 or 1984, "almost all" of the companies survey would face the question of whether or not to remain in the nuclear business, and "all firms in the sample exit from the industry by the late 1980's". [95] Under the first scenario, the Woods Gordon survey showed that employment among the 15 firms surveyed would decline from almost 3,000 in 1980, to nearly zero in 1988. [96]

EMR identified the cost of the demise of the Canadian nuclear industry as follows:

"...most critical for future industry capability would be the loss of experienced staff knowledgeable in nuclear design, nuclear product fabrication and testing, and nuclear project direction. Also important would be the loss of continuity in product development; loss of facilities both general and specialized, through conversion to other uses; and loss of capabilities in Canada as a result of possible transfer to foreign-based plants also involved in nuclear work." [97]

EMR's bottom line conclusion was as follows: "Only under scenario 3 would a significant proportion of suppliers be able to maintain their nuclear capabilities into the 1990's but even here the industry will eventually move from a two-supplier to a one-supplier industry.". [98]

This 'down-the-tube' analysis was confirmed more recently by Mr. Ted Thexton, in 1988, when he appeared as a witness before the Ontario Legislature's Select Committee on Energy. At that time, Mr. Thexton (a former AECL employee) was an Adviser in the Nuclear Energy Branch of the federal Department of Energy, Mines and Resources. Mr. Thexton is now Director of the Nuclear Energy Branch of Natural Resources Canada. In 1988, Mr. Thexton stated that

"...in a country like the United States which has about 100 reactors in operation, they should be able to keep their technology alive on the basis of refurbishing their existing plants, and operating maintenance, etc. [however, with a nuclear program] the size of the German program or the size of the Canadian program, they probably cannot. If they go through a stagnant era with no orders in their country for very many years, they should probably end up losing their indigenous capability." [99]

Mr. Thexton went on to say,

"My view is that if Ontario Hydro were to launch a new nuclear program within the next few years, that would keep the industry hanging in there... those orders would start to hit the shops sometime in, let's say, 1993, 1994, 1995, maybe even a little later than that; it depends when Ontario makes the decision to proceed... It may very well be that New Brunswick will order a Candu 3 before that, and that will keep things going a bit." [100]

As we know, Ontario Hydro's proposed nuclear expansion program of up to 15 Darlington-sized reactors (881 MW each) was completely cancelled, and a CANDU 3 was never built in New Brunswick. The only sales have been three 700 MW reactors to South Korea. Thus, by Mr. Thexton's 1988 judgement the nuclear industry has experienced a near complete collapse.

Mr. Thexton's 1988 opinion on the collapse of the nuclear industry was dramatically inconsistent with a presentation he made in 1994 with Assistant Deputy Minister of Natural Resources Canada's Energy Branch, David Oulton, describing the Ernst & Young study, The Economic Effects of the Canadian Nuclear Industry, as a "useful reference". As part of their presentation to the Task Force on Economic Instruments and Disincentives to Sound Environmental Practices in October 1994, Thexton and Oulton supported the Ernst & Young contention that the nuclear industry has made a massive contribution to the Canadian economy. [101] Both men were defending the ongoing subsidization of AECL.

Predictions of the demise of the nuclear industry by the Canadian Nuclear Association, Energy, Mines & Resources, and Mr. Thexton, have been born out in the one study since that time that has looked in detail at a number of the main private sector manufacturers in the nuclear industry. In 1992, the Coalition of Environmental Groups released a study by David Langille entitled, The Nuclear Industry in Canada: Ownership and Employment Trends -- Restructuring and Adjustment in the Face of Declining Demand. The paper included detailed case studies of 27 firms in the nuclear industry, most of which had been examined in 1978 by Leonard & Partners for the Canadian Nuclear Association. Langille noted that, "Many companies have withdrawn from the nuclear industry because there has not been sufficient demand to justify the high costs of maintaining the necessary quality assurance standards, specialized machinery and skilled labour." [] Amongst the firms that Langille surveyed, nuclear-related employment fell by 66%, from 3,469 in 1978, to 1,169 in 1992. During the same years, overall manufacturing employment in Canada fell by only 8.2%. [103]

Langille also noted that foreign ownership of firms is a key factor in its failure...

"the nuclear industry continues to be dominated by foreign-owned companies... Canadian governments end up subsidizing an outflow of investment capital rather than developing an indigenous industry. Instead of sustaining Canadian enterprises and Canadian employment, the benefits of government subsidies leak out of the country. This helps to explain why the industry cannot sustain itself or compete in international markets without ongoing infusions of public funds." [104]

Langille concludes that even with the Korean contracts, nuclear power holds no hope for the future...

"The Canadian government's investment in the CANDU program has not proven viable as an industrial strategy. It has ended up subsidizing the profits of foreign corporations rather than developing an indigenous high technology industry capable of sustaining technological innovation and offering secure and stable employment". [105]

Employment in 1993 for uranium mining in Canada (mine, mill and general) was 1,320, [106] and 1,370 in 1994 (see Table 12). Employment in the uranium industry has declined dramatically since it peaked at 6,000 in 1980. [107] As reported by Natural Resources Canada, the 1992 employment for mine, mill and general workers (i.e. on-site staff) was 1,310 (see Table 12). [108] As can be seen from Table 13, uranium refining and conversion employment was 277. Even allowing an additional 10% for head office staff, this indicates a total of 1,746 staff in the entire Canadian uranium industry in 1992. It should be noted that Ernst & Young placed uranium industry employment in 1992 at 2,200 [109] , which overstates actual employment by at least 21%.

	Year	Employment		Year	Employment

	1979	   5721			1987	   4825
	1980	   6068			1988	   4730
	1981	   4838			1989	   4280
	1982	   4827			1990	   2495
	1983	   5845			1991	   2220
	1984	   5811			1992	   1310
	1985	   5333			1993	   1320
	1986	   5080			1994	   1370*

Sources: Canadian Minerals Yearbook [1981-89];
Canadian Uranium Industry Factsheet [1990-1994], EMR/NRCan;
Uranium in Canada: Assessment of Supply and Requirements [1979-1991], EMR/NRCan.

Canada is the world's largest producer and exporter of uranium, with about 30% of world output, but the outlook for the uranium industry is not good -- the market is not expected to grow in the next ten to fifteen years. [114] There was a modest rally in uranium prices later in 1994, and in early 1995. Cameco has seen an increase in the value of its stock, however this should not be seen as part of a longer term trend, but rather in relation to some uncertainty about trade from the "Newly Independent States" (NIS) of the former Soviet Union, and the financial collapse of the US uranium trading company, Nuexco [115] , which opened up some new marketing opportunities. However, world mine production is expected to fall from a current level of about 150 million pounds per year to about 130 million lb/yr by 2005. [116] Demand for mined uranium is expected to fall because of: plutonium and uranium reprocessing in Europe and Japan; because of the availability of fuel from Russian and American high enriched uranium (HEU); and because of large uranium stockpiles in the NIS.

The most unsettling factor in the uranium market is the availability of an estimated 1 billion pounds (over 450 million kilograms) of uranium equivalent in the military stockpiles of the USA and the NIS (mostly Russia). [117] The Soviet Union began to market uranium in the west, prior to its collapse in 1991. Domestic requirements in the former Soviet Union are now being filled by large stockpiles, in addition to current production which is available for export. In November 1991, US uranium companies filed a petition alleging that the NIS were dumping uranium in the US. In October 1992, the US Department of Commerce announced suspension agreements with the six uranium-producing republics of the former Soviet Union [118] for price-tied quotas.

However, the USA made a ten-year deal with Russia in March 1994, [119] and with Kazakhstan in 1995 which allows their uranium into the USA at low prices (negotiations are continuing with Uzbekistan, the only other remaining producer for export). "Matched sales" provisions in the agreements allow American utilities to purchase up to limits averaging 4.3 million pounds per year of uranium over the next decade, but only if they buy US uranium at higher-than-world price. This effectively subsidizes higher-cost American uranium, resulting in roughly world price for the utilities on average.

In 1994, the US Department of Commerce confirmed 14 natural uranium US-Russia matching arrangements totalling 4.8 million pounds of yellowcake. [120] This is likely to have a serious impact on Canadian producers, since the US is by far the largest export market for Canadian uranium. In fear of a further drop in price, and being squeezed out of the market, Canada challenged the agreement under the terms of the North American Free Trade Agreement (NAFTA). Free access for the Canadian uranium industry to the American market was considered a major victory of the free trade negotiations in 1987. Canada dropped the challenge however, following an exchange of diplomatic letters in February 1995 that included some assurances from the US. The assurances offered by the US do little to affect the main impact of the amended suspension agreement. [121]

Further heightening uncertainty in the uranium industry have been several agreements between the US, Russia, and Ukraine to use highly enriched uranium (HEU) and plutonium from dismantled Russian and Ukrainian nuclear weapons to mix with virgin uranium to make reactor-grade fuel. In 1992, the US began negotiations to purchase low enriched uranium (LEU) derived from 500 tonnes of high enriched uranium (HEU) from nuclear weapons of the former Soviet Union. Despite a 20 year agreement signed in January 1994, the first deliveries of LEU did not take place until June 1995. It was expected that LEU from about 6 tonnes of HEU (the equivalent of about 5 million pounds of yellowcake) would be received by the United States Enrichment Corporation (USEC) in 1995. The long-term agreement calls for delivery of about 15,000 tonnes of yellowcake equivalent over a 20 year period, but negotiations have been difficult, particularly over the method of payment. Although arrangements have been settled for 1995 and possibly for 1996, negotiations are still proceeding for subsequent years.

Purchase of Russian and US HEU could make the United States Enrichment Corp. (USEC) the world's largest uranium "producer" with a capacity of over 40 million pounds per year, overtaking Cameco. [122] , [123] Provisions have been written into the USEC Privatization Act, currently before the US Congress, for the controlled introduction of this uranium into the market. Cameco has put a brave face on these developments [124] , but there is no question that there will be increased pressure on the market share of all Canadian primary producers.

Despite possible Canadian objections under NAFTA, it has been suggested that the suspension agreement may be waived in order to raise money to pay Russia. It should be noted that the US itself has declared that 200 tonnes of uranium and plutonium are "excess to [military] need". [125] Together, US and Russian HEU could supply 15-20% of possible future world civilian uranium requirements, thus significantly impacting primary Canadian production.

US utilities have been bypassing restrictions on CIS uranium imports to the US by having the uranium enriched in Europe. Under US trade regulations, the uranium is then deemed to have undergone substantial transformation and is considered to be a product of the enriching country. Cameco has stated that this practice "...violates the spirit of the trade agreements and reduces the availability of the US market." [126] , [127] The Kazakhstan suspension agreement of March 1995 disallowed "enrichment bypass", and the US Department of Commerce is currently negotiating similar arrangements with Russia and Uzbekistan, but as in the case of Kazakhstan, increased quotas are likely to be the quid pro quo. [128]

Canada is attempting to negotiate some safeguards for the Canadian uranium industry. However, the general trend seems to be for a further lowering of the uranium prices, and an increasing exclusion of Canada from the large US market. Over the next 25 years the domestic Canadian market for uranium of about 1,900 tonnes per year can be expected to decline steadily as existing domestic nuclear plants in Ontario are phased out (see comments on Ontario Hydro).

Ernst & Young did not break out the staff levels for the refining and conversion of uranium -- presumably these figures were included under the "Uranium" category. Refining and conversion is carried out in Canada by Cameco. Cameco (formerly Eldorado Nuclear) is Canada's largest uranium mining company, as well as being the sole Canadian company to refine and convert uranium. Eldorado/Cameco was a crown corporation prior to a privatization process which began in 1991. At the end of 1993, 51.6% of Cameco was owned by private shareholders, 38.8% by the Saskatchewan Government, and 9.6% by the federal government. [129] In early 1995, the federal government sold its remaining shares in Cameco and the Province of Saskatchewan reduced its holdings as well. As of February 9, 1995, 70% of Cameco was in private hands and 30% was held by the province of Saskatchewan. [130]

From the uranium mine/mills, uranium concentrate (U3O8), known as yellowcake, is shipped to the Cameco refinery in Blind River, Ontario, where it is refined into an intermediate product known as uranium trioxide (UO3). The uranium trioxide is subsequently converted at Cameco's Port Hope, Ontario facility into either uranium hexafluoride (UF6) for export, or into ceramic-grade uranium dioxide (UO2) powder for use as CANDU fuel. Most of Cameco's output is exported as uranium hexafluoride.

Table 13 shows that at year-end, Cameco staff level at Blind River was 79.5, and at Port Hope was 209.4, for a total of 289. Five years earlier, the total was 405, representing a 29% decline since 1989.

     Year	  1989	   1990	   1991	   1992	   1993	   1994

     Blind River  125.0	  100.0	   87.5	   79.0	   80.5	   79.5
     Port Hope	  280.0	  280.0	  232.0	  198.0	  195.0	  
209.4
     Total	  405.0	  380.0	  319.5	  277.0	  275.5	  
288.9

AECL has experienced a major crisis in its radioisotope business that has revolved around its plans to build a new isotope production reactor known as the MAPLE-X10 (Multipurpose Applied Physics Lattice Experimental - 10 MW). The MAPLE-X10 was intended to take over the main work of isotope production from the aging NRU reactor, allowing the NRU to play a back-up and research role for the few remaining years of its life. The NRU (National Research Universal) is a heavy water moderated and cooled 135 MWt reactor which first began operation in 1957.

Following a two-year review and assessment of the future of the NRU initiated in 1989, AECL Research eventually decided in 1991 that a replacement reactor would be built, and that operation of the NRU would be extended to about the year 2000. [131] Even this short-term lifetime extension for operation of the NRU required a refurbishment that was expected to take place in the 1995/96 fiscal year at a cost of about $30 million. The refurbishment plan included upgrading containment, emergency core cooling and emergency water and power supplies; adding a second shutdown system; and adding a qualified reactor control room capable of withstanding earthquakes and other external events. [132] Atomic Energy Control Board staff reviewed the refurbishment proposal and "were not satisfied that AECL had demonstrated that these [upgrades] were the most beneficial changes". [133]

However, the NRU had a serious accident on January 12, 1991. A break in a weld on the cooling system resulted in 18,000 litres of tritium-contaminated heavy water leaking into the reactor building. Considerable amounts of tritium were vented to air over the following two weeks, resulting in tritium levels in snow at least 100 times above background in an area of a few hundred square kilometres, mostly on the Québec side of the Ottawa River. [134] The NRU remained shut down for repairs until mid-December, necessitating the use of the older, and more polluting NRX (National Research Experimental) reactor for isotope production. If anything had gone wrong with the NRX reactor, there would not have been any back-up for radioisotope sales.

In fact, the NRX reactor was outdated, and had been kept operating despite safety problems in order to meet commercial obligations. [135] Shortly after the NRU was back in operation, the NRX was shut down for maintenance and repairs in January 1992, after it had operated continuously for most of 1991. AECL initially decided that the reactor would be shut down permanently in 1995, and that until that time, it would continue to provide back-up isotope production for the NRU for periods of ten weeks per year. [136] However, by March 1993 AECL had decided that the reactor would not be restarted, based on a re-evaluation of its condition and age; the expected radiation doses to staff; and expected emissions of radioactive contaminants. [137]

AECL's original plan had been to keep the NRX running as back-up for the NRU until the MAPLE-X10 was in operation. The 40-year-old NRU has been an ongoing problem, experiencing numerous leaks and power losses. Former AECL Research President Terry Rummery described it in 1993 as AECL's "biggest financial headache". [138]

The urgency over the MAPLE-X10 construction, and the reason for the eventual cancellation came about because of a contractual obligation to Nordion International Inc.. In March 1988, the federal government had announced its plan to privatize AECL's Radiochemical Company and its Medical Products Division. The former was incorporated under the name of Nordion International Inc., and the latter as Theratronics International Ltd.. In September 1988, AECL "sold" Nordion and Theratronics to Canada Development Investment Corporation (CDIC -- a federal crown corporation) for eventual transfer to private ownership. On November 1, 1991, CDIC sold Nordion for $165 million to MDS Health Group. $150.5 million from the sale was transferred on paper to the federal government. [139] AECL also entered into a 23-year contract for the exclusive supply of radioisotopes to Nordion. At the time, AECL noted that "The nature of the business requires the corporation [AECL] to make significant investments in production and waste handling facilities." [140] AECL has not acknowledged these costs in its accounting...

"There is no evidence that a provision has been made in the financial statements for these costs. This is yet another contingency cost liability that is not accounted for by AECL in the financial statements." [141]

Some time after the sale to Nordion, it became obvious to AECL that it had drastically underestimated both the cost of operating the NRU reactor, and the capital cost of the new MAPLE-X10 reactor. However, MDS/Nordion, having already entered into a contract on the basis of lower costs, was understandably reluctant to pay more for their isotopes in order to compensate for AECL's incompetence. MDS went to court, claiming that AECL was obligated to complete the MAPLE-X10 to back up production at the NRU. Failing that, MDS argued that the 1991 sales contract should be rescinded, and that AECL should return the $165 million purchase price of Nordion, plus $300 million in damages. As a result of the legal action, AECL halted construction of the MAPLE-X10 in November 1993. [142] The case eventually went to arbitration.

Due to the legal dispute in progress with MDS/Nordion, the MAPLE-X10 was delayed. AECL has continued to operate the NRU despite clear evidence that refurbishment is urgently needed to reduce worker exposure; radioactive emissions to the environment; and the risk of another serious accident. The Atomic Energy Control Board bears some degree of responsibility in this situation, since it allowed AECL to proceed with the initial stages of construction for the MAPLE-X10 reactor without having approved the final design or safety analysis for the reactor. The MAPLE-X10 reactor was to have been a 10 MW light-water cooled and moderated pool-type reactor to be built at AECL's Chalk River Nuclear Laboratories. The reactor building was designed to filter and vent radioactivity, rather than contain it. The main purpose of the reactor was to produce short-lived radioisotopes for medical purposes. AECL describes the reactor as being fuelled with "low enriched uranium" (LEU), meaning that the amount of U-235 in the fuel is relatively low. However, the LEU typically used in light water reactors is 2-4% U-235, whereas the MAPLE-X10 fuel would be 19.7% [143]

Construction on the MAPLE-X10 reactor building began in mid-1990. By August 1991, AECL's safety analysis showed that design changes would be required to meet AECB safety standards and all construction was halted. The AECB noted that "...identification of these design deficiencies at this late stage illustrates significant deficiencies exist in AECL's organization of reactor design function". [144]

Design alterations on the MAPLE-X10 were not completed until 1993. The changes included the addition of another shutdown system, and an emergency core cooling system. However, AECL decided to cancel the project in November 1993, eventually writing off $75.351 million in 1993-94. [145] AECL had spent $40 million on just the design and construction of the reactor building, without even starting construction of the reactor itself. The original estimated total cost of the reactor in 1989 was $23 million, but AECL allowed this to escalate dramatically to $100 million. In 1994, Nordion Vice-President Ian Mumford stated, "The $100 million figure blows our mind. We ask how this could happen but they won't show us how they get to such numbers." [146] MDS/Nordion had apparently contributed $20 million of the $40 million spent on the reactor up to that point.

In the Spring of 1994, Natural Resources Minister Anne McLellan hired Toronto lawyer Stephen Goudge as a "fact-finder" in the dispute between MDS/Nordion and AECL. In October 1994, McLellan ordered AECL to resume discussions with MDS/Nordion, and the two parties suspended arbitration proceedings in favour of "facilitated discussions". On October 11, 1994, Goudge stated that the conflict would be resolved within six to eight weeks. [147] In December 1994, Nordion Vice-President Ian Mumford stated that he expected the dispute to be resolved within two weeks. [148] One year later, in December 1995, Mumford stated that he expected a resolution of the dispute "within a couple of months". [149] In late 1995, MDS/Nordion reportedly made a $140 million proposal to build two reactors and a reprocessing facility at AECL's Chalk River Nuclear Laboratories. It is not clear how much taxpayers will be expected to pay, and how much MDS/Nordion will ultimately pay. Any investment of public funds is highly risky at best, and will leave taxpayers with a lasting legacy of deadly radioactive waste -- particularly from the production of Molybdenum-99 (known as Moly-99).

In the production process for Moly-99, highly enriched uranium is irradiated, then dissolved in acid to extract the Moly-99. This results in an acidic high level liquid waste of the same type created by plutonium extraction in nuclear weapons programs. The waste has the potential to go critical (i.e. undergo fission chain reactions leading to a nuclear explosion). This waste is currently kept in a single 24,000 litre Fissile Solution Storage Tank (FISST), which is estimated to contain about 1 million terabecquerels (TBq) of fission products. Moly-99, with a half-life of about sixty-six hours, decays into technetium-99m, which is considered ideal for medical diagnostic purposes because it has a half-life of only six hours, and thus poses less risk to patients. The technetium-99m is used to 'label' chemical compounds which migrate to various organs, allowing an image to be detected from the gamma rays emitted. AECL currently produces most of the world's Moly-99, and the $50 million a year sales [150] represent about one half of Nordion's business.

If it wishes to stay in the radioisotope business, AECL needs to build at least two new reactors, since the NRU is scheduled to be shut down in the year 2000, and a second reactor is needed for back-up. Yet it is unlikely that AECL and Nordion will be able to compete with low-cost production from existing reactors in the US and Europe. At the same time, if the government decides to cut its losses and get out of the radioisotope business, it must compensate MDS/Nordion.

Investment in new radioisotope production reactors is ill-advised because new producers are set to enter the Moly-99 market to compete with AECL and Nordion. The US Department of Energy plans to produce enough Moly-99 for 70% of the US market by making an $11 million upgrade on a 4-MW reactor at the Sandia National Laboratories. [151] In addition, the Mallinckrodt Medical pharmaceutical company has been licensed to upgrade a 45 MW reactor in the Netherlands in order to meet about 25% of world demand for Moly-99. [152] Mallinckrodt is presently one of Nordion's largest customers, and in about two years, it will become a competitor. [153] AECL and federal taxpayers are in a no-win situation.

In addition to the construction of a MAPLE-X10 reactor, AECL is also considering an even more expensive proposal -- the Irradiation Research Facility (IRF) was estimated to cost about $500 million. [154] Thus the cost of the new radioisotope reactors will be at least $600 million. The government seems set to approve a resolution of the MDS/Nordion dispute with AECL in which taxpayers will again have to subsidize new reactors. It seems likely that MDS/Nordion -- a private corporation -- will be at least a partial beneficiary of this subsidy.

Nordion has suggested that it will pay for a share of the construction costs through a 40% increase in the price of the Moly-99 that it sells. [155] However, this move would be risky, as it will be facing sales competition, for Moly-99 in the near future. In the long-term, Canadian taxpayers will again be left with the high cost of managing the radioactive high level liquid waste from the production process, as well as a greater share of reactor construction costs, if MDS/Nordion's revenues from Moly-99 decline.

In AECL annual reports for 1991-92, 1992-93, 1993-94, and 1994-95 the Auditor General of Canada has strongly criticized Atomic Energy of Canada Ltd. for failing to account properly for the cost of "decommissioning". Decommissioning activities include dismantling radioactive structures such as old reactors; cleaning up radioactively contaminated sites; managing the associated radioactive wastes; disposing of radioactively contaminated equipment; and returning sites to "green field" condition.

AECL's past and current practice for the financing of decommissioning costs has simply been to send the bill to the taxpayers each year for expenses as they are incurred. As the Auditor General has pointed out, this is not a proper financial planning or accounting process. In his report to the Minister of Energy Mines and Resources in the AECL 1991-1992 Annual Report, Auditor General Denis Desautels stated,

"I wish to draw to your attention that... the corporation [AECL] is facing significant decommissioning and site remediation expenditures which, under current funding arrangements, are financed mainly through parliamentary appropriations. These costs will continue to be incurred over the long term and their magnitude is such that there may be a significantly increased demand on government resources." [156] [emphasis added]

It is worthwhile quoting the Auditor General in detail from the AECL 1992-1993 Annual Report, since at that time he registered a more serious concern than in the previous year...

"[AECL] has not recorded any liability for these [decommissioning] costs because historically decommissioning activities have been financed mainly through parliamentary appropriations. Also, the corporation intends to continue to record these costs as funding becomes available either from government or from commercial activities and cost-shared work. This practice is contrary to generally accepted accounting principles which require that the liability be recognized for decommissioning and site remediation costs in a rational and systematic manner over the useful lives of the corresponding facilities. Management has prepared a broad plan of activities related to decommissioning and site remediation costs and determined a range of $200 million to $300 million as the likely costs related to a portion of the total activities in the plan and I was not able to determine the magnitude of the adjustment that is necessary to the expenses, the liabilities and the deficit of the corporation." [157] [emphasis added]

In other words, the "broad plan" conducted by AECL with estimated costs of $200 to $300 million was considered to be only a preliminary and partial estimate of costs -- and AECL "...has not determined the likely cost of the most significant portion of these activities". [158] The Auditor General noted, "In future, the corporation [AECL] intends to provide an allowance for the costs of decommissioning and site remediation only to the extent that funding from external sources is realized." [159]

In the AECL 1994-1995 Annual Report, the Auditor General again raised the decommissioning question, only to be directly rebuffed by Reid Morden, President & CEO of AECL. Morden stated,

"In the case of decommissioning costs, the corporation has chosen, in the interest of what it considers to be a fairer overall presentation, to continue its established policy of expensing such costs as decommissioning activities take place." [160]

AECL has thus continued to defy the nation's Auditor, while neither parliament nor the Minister of Natural Resources have seen fit to discipline the recalcitrant crown corporation. Even annually expensed decommissioning subsidies provided by the federal government are substantial. These subsidies have only been reported separately since the 1985-86 fiscal year. [161] Table 14 shows decommissioning expenses from 1985-86 to 1994-95 -- the total is about $127 million (dollars of the year). The following facilities are currently undergoing decommissioning:

• the NPD reactor at Rolphton, Ontario;
• the Douglas Point reactor at the Bruce Nuclear Power Development, Ontario;
• the Gentilly I reactor in Québec;
• the defunct heavy water plants at Glace Bay and Port Hawkesbury in Nova Scotia and at LaPrade in Québec; and
• the former isotope processing facilities of the Radiochemical Company at Tunney's Pasture in Ottawa.

AECL has prepared a ten-year plan to address its decommissioning activities, at a preliminary estimated cost of $300 million, and has said that "a significant portion of this $300 million" will be incurred over the next decade. [162] The May 1995 Report of the Auditor General noted that over the next 70 years, $10 billion will be needed to deal with various types of radioactive waste in Canada. The federal portion of this, including AECL's own high-level and low-level radioactive waste was estimated at $850 million. [163] This figure is likely a very low estimate however, as at least one critic of AECL has suggested that the clean-up of AECL's Chalk River site alone would cost over $1 billion. [164]

YEAR  85-86  86-87  87-88  88-89  89-90  90-91  91-92  92-93  93-94  94-95   Total
 M$   18.33  11.85  20.34  10.31  12.02  11.37  11.92  10.85  9.766  10.50  127.27

Source: AECL Annual Reports [1985-86 to 1994-95]

N.B.

• 1984-85 was the last year in which AECL reported expenditures on "Prototype Reactor Operations".
• From 1985-86 to 1987-88, AECL reported amounts for "Discontinued Operations -- Prototype Reactors" (noted above), which we have assumed is simply a proxy for "decommissioning".
• From 1988-89 until the present, AECL has reported amounts for "Decommissioning activities" (noted above).
• The 1987-1988 AECL Annual Report reported a decommissioning figure of $15.223 M, but this was changed to $20.342 M in the 1988-1989 AECL Annual Report -- we have used the updated figure.

---

At Ontario Hydro the question of proper accounting for decommissioning costs has also been a matter of some debate. In 1982, Ontario Hydro began making financial provision for "fixed asset removal" (decommissioning) and high level radioactive waste (spent fuel) management. This was typically described as the "Decommissioning Fund", however this description was a misnomer...

"...the "fund" is, in reality, an accounting provision for these future expenditures. The money received from ratepayers is not set aside as a "fund". Rather, it is used by Hydro in lieu of borrowings and is set up in the Balance Sheet as a future liability. The assumption is that, when the money is needed (as it surely will be needed), it can then be borrowed." [165]

In response to this criticism, in June 1994 Ontario Hydro approved in principle the establishment of a segregated Decommissioning Fund. [166] In the case of Ontario Hydro, environmentalists have argued that there should be prepayment of total estimated decommissioning costs, since nuclear accident or financial difficulties could jeopardize the utility's ability to pay. [167] A similar argument could certainly be made for AECL.

In addition to the facilities noted above that are currently undergoing decommissioning, there are a number of other facilities located at AECL's Chalk River Nuclear Laboratories (CRNL) and the Whiteshell Nuclear Research Establishment (WNRE) in Manitoba. These decommissioning problems are of huge magnitude. CRNL is a 3,700 hectare property 30 km north of Pembroke, Ontario, on the Ottawa River. It has been in operation for over 50 years since its establishment in 1944. There are five research/production reactors at Chalk River that are either in various stages of decommissioning, or operating. Other equipment, such as a variety of particle accelerators, and shielded "hot cells" are used for research and commercial purposes. Nuclear fuel production and reprocessing facilities are also housed at CRNL.

Perhaps of most concern, radioactive waste handling practices of the past have left a deadly legacy of radioactive contamination at Chalk River in at least 10 radioactive dump areas occupying about 20 hectares of the Chalk River site. [168] Of significant concern is an underground "tank farm" of liquid high level waste in Area "E" left over from plutonium production for the American weapons program. The long-term goal is to glassify these wastes, but the work has not begun. Other high level liquid wastes were simply dumped into the earth, and plumes of radioactive contamination are spreading. Chalk River also continues to accept radioactive wastes from other industrial and commercial sources. Generally, only about one quarter of the wastes currently being handled at Chalk River are generated by AECL. Some wastes are compacted before being stored or disposed of. A filtration and reverse osmosis system for low-level radioactive liquid wastes was added, with treated effluent being sent to the Ottawa River. The liquid waste treatment system has reduced AECL's direct dumping of liquid wastes into the ground, but direct dumping does still occur when the filtration system fails. [169]

AECL's Whiteshell Nuclear Research Establishment (WNRE), near Pinawa, Manitoba, on the Winnipeg River, also has a serious contamination and decommissioning problem with two shutdown reactors (including the WR-1 organic cooled reactor), various other equipment and laboratories and a radioactive waste dump.

The importance of dealing with the cost of decommissioning immediately and properly can be appreciated by looking at the gigantic dilemma faced by the United States in the decommissioning and site remediation of nuclear weapons facilities operated by the Department of Energy (DOE). The General Accounting Office in the US has estimated that the cost of cleaning up DOE weapons facilities range from $35 billion to $65 billion, with another $3 billion to $9 billion needed to bring DOE facility operation into full compliance with environmental laws. [170] Although the quantitative scale of the Canadian environmental problem is less than in the US, the qualitative severity is certainly comparable.

6. Federal Heavy Water Investments

Since its beginning, the Canadian nuclear program has concentrated on reactors that are cooled and moderated by heavy water (deuterium oxide, D2O). Heavy water is extremely effective at slowing down neutrons in order to maintain a chain reaction in the uranium fuel, and it allows the use of less enriched, "natural" uranium fuel. This is in contrast to most other power reactors, such as those in the USA and France, which use ordinary, or "light" water for both coolant and moderator, but require enriched uranium as fuel. Uranium enrichment is an extremely expensive and energy-intensive process, carried out by only a few countries in the world -- notably those countries that have a nuclear weapons capability.

However, heavy water is also difficult and expensive to manufacture. Heavy water plants have a very high capital cost, and high operating costs due to the need for large amounts of process steam as well as electricity. The heavy water manufacturing process raises serious safety considerations as well, because of the use of large quantities of hydrogen sulphide, a highly toxic gas.

During the 1950s and 1960s, Canada purchased its heavy water from the US. However, because of inflated expectations for the rapid growth of domestic and export markets for the CANDU, there was an ill-considered scramble to produce large amounts of heavy water domestically. Heavy water manufacture represents the single greatest financial and technological fiasco experienced by the Canadian nuclear industry. Two heavy water plants in Nova Scotia, and one in Québec, as well as most of the Bruce Heavy Water Plant in Ontario have been built and then shut down, in the absence of any market for the heavy water. The Glace Bay, Port Hawkesbury, and LaPrade Heavy Water Plants (HWPs) had an original gross cost of $803 million. [171] In 1980, parliament forgave heavy water plant loans and interest totalling $816.9 million. [172]

6.1. Glace Bay Heavy Water Plant

In 1963, the federal government gave a contract to Deuterium Canada Ltd. (DCL -- a private company) and a Nova Scotia crown corporation, Industrial Estates Ltd. (IEL), which were jointly responsible for the estimated $30 million cost of the Glace Bay Heavy Water Plant (HWP), of which DCL had to raise $18 million from private sources. AECL guaranteed to purchase the output for the first five years at a fixed price of $20.50/lb. (originally 200 tonnes of heavy water per year). [173]

In 1966, the proposed capacity of the plant was doubled, and when DCL could not raise the money, the province took over the project. The plant, which was originally scheduled to start production in 1966, was plagued by major technological problems due to extensive corrosion caused by the use of sea water as feedstock. In October 1971, AECL took over management of the project and undertook to reconstruct the plant [174] for $30 million, in exchange for the heavy water production. However, AECL underestimated the repair costs by $158.5 million. In 1978, AECL bought out the plant for annual instalments of $3.3 million per year over 20 years. It was not until 1979 that the Glace Bay HWP reached full production. [175] When CANDU sales failed to materialize in the late seventies and early eighties, huge quantities of heavy water had to be stockpiled, and finally, in March 1985 AECL shut down the Glace Bay HWP.

6.2. Port Hawkesbury Heavy Water Plant

In the meantime, Ontario Hydro decided to proceed with the Pickering Nuclear Generating Station in 1964. The federal government decided to underwrite the construction of another heavy water plant to meet that demand, and gave a contract to Canadian General Electric (CGE) in 1966 for a 400 tonne/year plant in Port Hawkesbury, Nova Scotia. The government gave a commitment to buy 5,000 tonnes of heavy water at set prices over a 12.5 year period. The plant was completed in 1971, but operated at only 60% capacity due to technical problems. Under its contract, CGE could not pass on the costs of the problems, and after a lengthy negotiation, AECL bought out CGE for about $68 million in 1974. [176] Port Hawkesbury was shut down in March 1985, along with the Glace Bay plant -- AECL was awash in surplus heavy water.

6.3. Bruce Heavy Water Plants

In 1968, Ontario Hydro announced plans for the four Bruce "A" reactors, and in that same year, AECL entered into two agreements with Ontario Hydro to ensure the utility's heavy water supply. Faced with a temporary shortage caused by the problems with the Nova Scotia plants. AECL sought a short-term solution to the heavy water crisis with the 1971 Heavy Water Pool Agreement. Under this agreement AECL coordinated heavy water production, and guaranteed a higher priority for Ontario Hydro's Pickering "A" and Bruce "A" stations before AECL demands for either domestic or export sales. AECL was forced to buy heavy water off-shore at premium prices, and to transfer heavy water from one reactor to another. [177] At the same time, under the Bruce Heavy Water Plant Agreement, a more permanent solution was sought -- AECL financed and built an 800 ton/year HWP at the Bruce site, using steam and electricity from the Bruce "A" reactors. The Bruce HWP began operation in 1973, and despite delays, it functioned better than the earlier plants in Nova Scotia. [178]

Ontario Hydro had received provincial approval in 1973 for construction of 12 more reactors (Pickering "B", Bruce "B", and Darlington). In 1975, Ontario Hydro tried to extend its priority treatment under the Heavy Water Pool Agreement to these new plants, but was rebuffed by AECL. To guarantee its heavy water supply, Ontario Hydro therefore exercised its option to buy the Bruce HWP from AECL for $253 million, and made plans for a further expansion of heavy water production. Hydro planned three more 800 tonne/year HWPs for Bruce within five years. However, as reactor sales dried up, the heavy water surplus began to grow. Bruce HWP "C" was cancelled, and construction of HWP "D" was stopped half-way in 1979 and mothballed (dismantling began in 1991). The current history of the Bruce HWP is continued below under section 6.7.

6.4. LaPrade Heavy Water Plant

In 1972, AECL had begun negotiations for construction of the 600 MW Gentilly-2 plant, and in 1973, it began construction on the 800 tonne/year LaPrade HWP adjacent to the Gentilly reactors near Trois Rivi�res, Québec. Construction of the estimated $443 million plant seemed justified by Hydro Québec's plans for a third reactor (never built); as well as Ontario Hydro's expansion plans; AECL sales of two reactors to Korea and Argentina; and the possible sale of a reactor to New Brunswick. [179] In the mid-seventies, Hydro Québec was seriously considering building up to thirty nuclear reactors along the St. Lawrence River, and had even begun site selection.

The LaPrade HWP was originally scheduled for completion in 1978, but by 1975, with anticipated demand for nuclear power slowing down, completion had stretched to 1981. Although a cost-sharing arrangement was worked out with Hydro Québec, the Québec government announced a nuclear moratorium in November 1977, [] and in August 1978, the federal government announced that it would mothball the LaPrade plant. The plant was mothballed for another decade and then shut down for good. It had not operated for even one day. LaPrade originally cost $443 million, and the Province of Québec reportedly demanded, and received, a further $200 million in compensation for the cancellation -- resulting in a total cost of $643 million. [181] In a final epitaph for the LaPrade HWP, AECL announced in the fall of 1995 that the 250 acre site was up for sale. [182]

6.5. The Heavy Water Inventory & the Korean Sale

Out of the debacle of AECL's involvement in the heavy water business, the crown corporation was left with a huge debt and an enormous surplus of heavy water, estimated at about 2,200 tonnes. It was therefore surprising that when AECL announced a sale of heavy water to the Korean Electric Power Corporation in December 1993, it turned out that 75% (900 tonnes) of the 1,200 tonne sale was given to Ontario Hydro, and AECL sold only 300 tonnes of its own heavy water. The deal in total was worth about $340 million (CDN) (the sale was announced as being worth $270 million US), or about $283 (CDN) per kilogram, so AECL gave away about $255 million worth of business to Ontario Hydro for no apparent reason. [183] Natural Resources Minister Anne McLellan has even stated that the decision to share the heavy water sale with Ontario Hydro "was taken in full consultation with the Treasury Board". [184] Official endorsement of this transaction by the Treasury Board makes it even more difficult to comprehend.

The accounting treatment of AECL's heavy water inventory has been radically altered in recent years. In 1991-92, the federal government released AECL from its obligation to repay $97 million of its heavy water appropriations. This $97 million was then listed as an asset on the AECL Balance Sheet for 1991-1992. In that same year, the heavy water inventory was listed as an asset of $7.885 million on the Balance Sheet (this figure being the estimated value of the heavy water inventory ($536.494 million) less parliamentary appropriations of $528.609 million. [185] However, the following year in the AECL 1992-1993 Annual Report, the heavy water inventory was listed as an asset of $529.602 million on the Balance Sheet. [186] AECL explains this adroit accounting manoeuvre as follows:

"As a result of a change in accounting policy, repayable parliamentary appropriations for heavy water are now treated as contributed capital rather than netted against the cost of heavy water as previously reported. Due to this change the stated value of heavy water inventory at March 31, 1993 has been increased by $425.5 million..." [187]

The 1992 decision to allow AECL to forego repaying $97 million of the heavy water appropriations may have been taken in anticipation of the sale of 300 tonnes of AECL's heavy water inventory to South Korea in 1993. At about $300 per kilogram, this sale was worth $90 million. The federal government may have wanted to provide AECL with another $97 million subsidy, without making it obvious to parliament and the public. Otherwise, AECL would have had to put the heavy water revenues back into the public purse.

6.6. Heavy Water for Romania

In September 1994, Ontario Hydro reported its "disappointment" that the Romanian electrical utility RENEL had decided to purchase the heavy water for the Cernavoda reactor from the India's Department of Atomic Energy (DAE). The Cernavoda reactor will require about 500 tonnes of heavy water. Ontario Hydro stated that it had been in negotiations for the sale, but "RENEL objected to the legal terms Hydro required in order to cover the risks involved in the proposed contract". [188] By November 1994, however, Romania had reconsidered the deal and Ontario Hydro reported that it would lease the heavy water for the reactor "with an option to purchase" [189] -- much like a consumer without enough cash would buy a car 'on time'.

As in the sale of heavy water to South Korea, both Ontario Hydro and AECL have roles in the deal, valued at "up to $110 million" for 350 tonnes of heavy water, but no information has been disclosed on the terms of the deal. [190] Romania may supply the balance of the heavy water itself from a plant at Halinga, 200 km west of Bucharest. AECL, despite having its own stockpile of heavy water, has again given a large percentage of the potential heavy water sale for Cernavoda to Ontario Hydro. In this case also, revenues from any heavy water sale could have been used by AECL to compensate for the billions of dollars of subsidies provided by Canadian taxpayers.

6.7. Current Heavy Water Production

As part of former Ontario Hydro Chairman Maurice Strong's efforts in 1993 to reduce costs at Ontario Hydro, it was concluded that the utility would not have to produce any more heavy water for its own use at its Bruce HWP beyond the end of 1993. [191] This conclusion took a number of factors into consideration. First, the early shutdown of one or more reactors at the Bruce "A" Nuclear Generating Station would free up 650 tonnes of heavy water from each reactor. Second, at the end of 1993, Ontario Hydro had already accumulated 1,800 tonnes of heavy water in its "Future Use Inventory", as well as 300 tonnes in its "Operating [emergency] Reserve". Third, Ontario Hydro's own demand for heavy water is estimated at 120 tonnes per year for loss replacement at its five nuclear power stations.

Thus in December 1993, production at Ontario Hydro's single remaining heavy water plant (Bruce HWP "B") was cut in half from 700 to 350 tonnes per annum, and production from January 1, 1994 was dedicated to export. However, the export sale for the Wolsung reactors will be filled in the 1996-98 period, and there are no confirmed prospects for further sales. In early 1995, production at the Bruce HWP was cut again to 35% capacity, or 280 tonnes per year. This is apparently the minimum level of production to which the plant can be reduced without possible damage -- it allegedly cannot be mothballed without permanent damage. [192]

With the federal government given only 25% of the heavy water sale to South Korea, and probably a similar percentage of the Romanian contract, the federal inventory was reportedly at a level of 1,500 tonnes in 1995. Of this amount, 1,000 tonnes was expected to be "loaned" to the National Research Council for use in the neutrino observatory in Sudbury, Ontario. [193] With federal taxpayers having paid a billion-dollar subsidy to produce the federal heavy water inventory, it is scandalous that the federal government has taken such a minor part of overseas sales. It is furthermore incredible that the federal government should provide 1,000 tonnes of heavy water (worth $300 million [194] ) free-of-charge for the Sudbury experiment. By doing so, AECL and the federal government are effectively subsidizing Ontario Hydro to keep its heavy water plant open. Once again, federal taxpayers are bailing out the nuclear industry.

7. Conclusion

Taxpayer subsidization of AECL has totalled about $13 billion since 1952. Despite recurrent promises that the nuclear industry will become profitable through domestic and export reactor sales, it continues to be a drain on the public purse. After more than forty years of consistent financial failure, it is safe to presume that this trend has become destiny -- a turn-around should not be expected.

The Nuclear Sunset study has found that AECL and its consultant Ernst & Young overestimate the economic "benefits" of the nuclear industry by minimizing subsidies, and by exaggerating the number of jobs created. Nuclear power is not the most cost-effective form of electricity generation. Cogeneration and many energy efficiency technologies are cheaper and more beneficial to the economy.

Ernst & Young arrived at their $23 billion estimate of the nuclear industry's contribution to Canada's Gross Domestic Product using fundamentally flawed assumptions and faulty methodology. However, even if this number were assumed to be accurate, it does not come close to compensating for the opportunity cost of total subsidies to AECL. The opportunity cost of $120.444 billion is an important measure of the breakeven economic return that would need to be recovered in order to match the before-tax rate-of-return of a private company. Canada's economy would have been much better off, if the government had simply used the AECL subsidies to reduce the national debt.

In the one area where the nuclear industry was ostensibly "profitable" enough to justify privatization (MDS/Nordion), it now appears that this is likely to lead to yet another taxpayer subsidy of the nuclear industry. Construction of new reactors so that AECL can continue to produce radioisotopes for Nordion could cost taxpayers a half billion dollars or more.

AECL's unfunded liability for future decommissioning and radioactive waste management costs is a ticking time bomb. It represents a large liability that future taxpayers will have to pay. AECL has repeatedly ignored the recommendations of the Auditor General of Canada, who has demanded proper accounting for AECL's decommissioning liability. The federal government has failed to back up the Auditor General, and the books of the recalcitrant crown corporation remain uncorrected. AECL should fully account for decommissioning liabilities and should create a fund to cover those costs. This study's $13 billion calculation of total funding to AECL does not include any amount for decommissioning liability.

From the beginning, heavy water production in Canada has been plagued by technological mishaps and incorrect market forecasts. Historically, it has been the most heavily subsidized sector of the nuclear industry. Yet AECL and the federal government have failed to recoup these losses by pursuing recent sales of heavy water to South Korea and Romania; instead AECL has given most of these sales to Ontario Hydro.

Despite this long history of subsidization of the Canadian nuclear industry, or perhaps because of it, both Liberal and Conservative federal Cabinets have failed to significantly reduce nuclear subsidies. There can be no doubt that the bulk of the historic investment will never be recouped. But what is the justification for on-going subsidies?

Nuclear advocates argue that the industry can become self-supporting if effort is focused on CANDU sales. A realistic analysis however, does not support such a claim. The domestic reactor market will not likely expand without even greater subsidies, since increasing competition in the electricity sector will rule out the expensive and risky nuclear option.

The global market for nuclear reactors has shrunk dramatically in recent years. AECL can hope to capture, at best, only a small share of the remaining foreign reactor market. Even this dubious scenario would require ongoing government subsidies to keep the Canadian nuclear industry afloat, as well as government financing of overseas sales, as in the case of China.

Key decision points on public subsidies for the nuclear industry include the federal budget in 1996, and the expiry of the federal/provincial Memorandum of Understanding (also known as the CANDU Owners Group agreement) on nuclear funding on April 1, 1997. The secret government review of the nuclear industry conducted in 1995 should be made public. A public consultation process should be launched to consider the phaseout of public support for the nuclear industry, in advance of the expiry of the federal/provincial Memorandum of Understanding.

The federal parliament's Standing Committee on Environment and Sustainable Development has already stated a clear position in its recommendations for the 1996 budget...

"Recommendation 5: That the federal government announce in the 1996 budget that it will terminate its involvement in the CANDU Owners Group agreement as of 31 March 1996, thereby significantly reducing its contribution in support of commercial application of nuclear power. At a minimum, the federal government should discontinue support for commercial nuclear research by the end of the 1997-98 fiscal year." [195]

In keeping with current spirit of fiscal restraint, the federal government should simply end its subsidies to AECL. If the nuclear industry is as promising as it claims, it should be able to provide its own financing and demonstrate that it can survive independently. Otherwise the sun should be allowed to set on the Canadian nuclear industry. Taxpayers have already paid too much.

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Appendix A
Canadian Private Sector Nuclear Industry -- 1993*

* includes foreign-owned subsidiaries

-- from the Canadian Nuclear Association Suppliers List,
Nuclear Canada Yearbook 1993, pp. 60-67

1. Acres International Ltd. (ON)
2. Ainsworth Electric Co. Ltd. (ON)
3. Alfa-Laval Thermal (ON)
4. American Air Filter Canada (PQ)
5. Amersham Canada Ltd. (ON)
6. Associated Tube Industries (ON)
7. Atlantic Nuclear Services Ltd. (NB)
8. Babcock & Wilcox (ON)
9. B.C. Instruments (ON)
10. Bechtel Canada Ltd. (ON)
11. Bently Nevada Canada Ltd. (AB)
12. Bestobell Canada Ltd. (ON)
13. Biron Engineering Ltd. (NB)
14. C. Boulay Consultant Inc. (PQ)
15. Braunkohle Transport Canada Inc. (SK)
16. Brent Packaging Ltd. (ON)
17. C.B. Non-destructive Testing Ltd. (ON)
18. CAE Electronics Ltd. (PQ)
19. Cameco Corp. (SK)
20. Canada Alloy Castings Ltd. (ON)
21. Canada Forgings Inc. (ON)
22. Canadian Institute for Radiation Safety (ON)
23. Canadian Nuclear Association/Canadian Nuclear Society (ON)
24. Canadian Standards Association (ON)
25. Canatom Inc. (PQ/ON)
26. CANTECH International (ON)
27. Cluff Mining (SK)
28. Cogema Canada Ltd. (SK)
29. Control Data Systems Canada Ltd. (ON)
30. Cooperheat of Canada Ltd. (ON)
31. Crosby Valve Ltd. (ON)
32. Donlee Precision (ON)
33. Drager Canada Ltd. (ON)
34. Dresser Canada Inc., Valve Controls Canadian Oper. (ON)
35. EG&G LABSERCO (ON)
36. Electro-Kleen Alloy Polishing Ltd. (ON)
37. E.P.M. (Canada Inc.) (ON)
38. Erico Canada Inc. (ON)
39. Ezeflow Canada Inc. (PQ)
40. Fischer & Porter (Canada) Ltd. (ON)
41. Foster Wheeler Ltd. (ON)
42. Foundation Company of Canada Ltd. (ON)
43. GBF Forging Specialists Inc. (ON)
44. GEC ALSTHOM Electromecanique (PQ)
45. GEC Alsthom International Canada Inc. (ON)
46. General Electric Canada Inc. (ON)
47. Hayward Tyler Canada Inc. (ON)
48. Hitachi (Canadian) Ltd. (ON)
49. Honeywell Ltd. (ON)
50. Idemitsu Uranium Exploration Canada Ltd. (AB)
51. Industrial Screws and Forge (PQ)
52. Inspectech A Division of Inspectech Analygas Group (ON)
53. Invar Manufacturing Ltd. (ON)
54. Isomedix Corp. (ON)
55. IST Canada Inc. (ON)
56. ITT Barton Instruments (AB)
57. ITT Cannon (ON)
58. John Crane Canada Inc. (ON)
59. Justram Equipment Inc. (ON)
60. Koch Engineering Co. Ltd. (ON)
61. Kubota Metal Corporation - Fahramet Division (ON)
62. Lefebvre Fr�res Limitée (PQ)
63. MEC Ltd. (ON)
64. Monserco Ltd. (ON)
65. NEI Parsons Canada (ON)
66. Neles-Jamesbury Ltd. (ON)
67. Newman Hattersley Ltd. (ON)
68. Nordion International Inc. (ON)
69. Nova Magnetics Ltd. (NS)
70. NPM Nuclear Project Managers Canada Inc. (ON)
71. Nuclear Construction Managers (ON)
72. Nuclear Shielding & Service of Canada Ltd. (PQ)
73. Numet Engineering Ltd. (ON)
73. NU-TECH Precision Metals Inc. (ON)
74. Organization of CANDU Industries (ON)
75. P.F.P. Installations (NB)
76. Pall (Canada) Ltd. (ON)
77. Parker-Hannifin (Canada) Inc. (ON)
78. Pirelli Cables Inc. (PQ)
79. PNC Exploration (Canada) Co. Ltd. (BC)
80. Pylon Electronic Inc. (ON)
81. Qualprotech Inc. (ON)
82. R/D Tech (Tecrad) Technology (PQ)
83. Ralfor Plus Inc. (PQ)
84. Reliance Electric Ltd. (ON)
85. Rio Algom Ltd. (ON)
86. Ritepro Inc. (PQ)
87. Robert Mitchell Inc. (PQ)
88. Rosemount Instruments Ltd. (ON)
89. RPC (NB)
90. RSI Research Ltd. (BC)
91. SAIC Canada (ON)
92. Scintrex Ltd. (ON)
93. Serdula Systems Ltd. (ON)
94. Shawflex Inc. (ON)
95. Sherex Industries Ltd. (ON)
96. SIHI Pumps Ltd. (ON)97. Spar Aerospace Ltd. (ON)
98. Spectrum Engineering Corp. Ltd. (ON)
99. Stern Laboratories Inc. (ON)
100. Stone & Webster Canada Ltd. (ON)
101. Sulzer Canada Inc. (ON)
102. Taylor Forge Canada Inc. (ON)
103. UNECAN News (ON)
104. Uranerz Exploration and Mining Ltd. (SK)
105. Urangesellschaft Canada Ltd. (ON)
106. Velan Inc. (PQ)
107. Wardrop Engineering Inc. (MB/ON)
108. Zircatec Precision Industries Inc. (ON)

Provincial Distribution of Private Sector
Nuclear Industry Companies -- 1993

N.B. Two companies, Canatom and Wardrop, have two offices, each in different provinces. Both locations have been counted in the provincial distribution.

Province	No. of Companies     % of Total [] 

Ontario			80		73%
Québec			15		14%
Saskatchewan		 5		 4%
New Brunswick		 4		 4%
Alberta			 3		 3%
British Columbia	 1		 2%
Manitoba		 1		 1%
Nova Scotia		 1		 1%

* Note: Total does not add to 100% due to rounding.

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Appendix B
Canadian Private Sector Nuclear Industry -- 1994 []

* includes foreign-owned subsidiaries

-- from the Canadian Nuclear Association Suppliers List,
Nuclear Canada Yearbook 1994, pp. 50-57

1. Acres International Ltd. (ON)
2. Allan Crawford Associates (ON)
3. American Air Filter Canada (PQ)
4. Amersham Canada Ltd. (ON)
5. Asea Brown Boveri Inc. (ON)
6. Associated Tube Industries (ON)
7. Atlantic Nuclear Services Ltd. (NB)
8. Babcock & Wilcox (ON)
9. B.C. Instruments (ON)
10. Bechtel Canada Ltd. (ON)
11. Bently Nevada Canada Ltd. (AB)
12. Bestobell Canada Ltd. (ON)
13. Biron Engineering Ltd. (NB)
14. BIW Cable Systems Ltd. (ON)
15. Braunkohle Transport Canada Inc. (SK)
16. Brent Packaging Ltd. (ON)
17. C&S Valve Canada Ltd. (ON)
18. C.B. Non-destructive Testing Ltd. (ON)
19. CAE Electronics Ltd. (PQ)
20. CAIRS - Canadian Institute for Radiation Safety (ON)
21. Cameco Corp. (SK)
22. Canada Alloy Castings Ltd. (ON)
23. Canada Forgings Inc. (ON)
24. Canadian Nuclear Association/Canadian Nuclear Society (ON)
25. Canatom Inc. (PQ/ON)
26. Cancoppas Ltd. (ON)
27. Cogema Canada Ltd. (SK)
28. Control Data Systems Canada Ltd. (ON)
29. Cooperheat of Canada Ltd. (ON)
30. Crosby Valve Ltd. (ON)
31. Donlee Precision (ON)
32. Drager Canada Ltd. (ON)
33. Dresser Canada Inc., Valve Controls Canadian Oper. (ON)
34. E.P. Electronics International Inc. (ON)
35. Ecodyne Ltd. (ON)
36. EG&G Nuclear Instruments (ON)
37. EG&G Nuclear Labserco (ON)
38. Erico Canada Inc. (ON)
39. Ezeflow Canada Inc. (PQ)
40. Fischer & Porter (Canada) Ltd. (ON)
41. Flexitallic Canada Ltd. (Hydratight Div.) (ON)
42. Foster Wheeler Ltd. (ON)
43. Foundation Nuclear Managers Inc. (ON)
44. GBF Forging Specialists Inc. (ON)
45. GEC ALSTHOM Electromecanique (GAEM) (PQ)
46. GEC Alsthom International Canada Inc. (ON)
47. General Electric Canada Inc. (ON)
48. Hayward Tyler Canada Inc. (ON)
49. Hitachi (Canadian) Ltd. (ON)
50. IDEA Research (ON)
51. Idemitsu Uranium Exploration Canada Ltd. (AB)
52. Indal Technologies Ltd. (ON)
53. Industrial Screws and Forge (PQ)
54. Ingersoll-Dresser Pumps (ON)
55. Inspectech A Division of Inspectech Analygas Group (ON)
56. Intera Information Technologies Ltd. (ON)
57. Invar Manufacturing Ltd. (ON)
58. IRD MEachanalysis Ltd. (ON)
59. Isomedix Corp. (ON)
60. IST Canada Inc. (ON)
61. ITT Barton Instruments (AB)
62. John Crane Canada Inc. (ON)
63. Johnson & Higgins Ltd. (ON)
64. Justram Equipment Inc. (ON)
65. Lefebvre Fr�res Limitée (PQ)
66. MEC Ltd. (ON)
67. MIL Davie Inc. (PQ)
68. Monserco Ltd. (ON)
69. Newman Hattersley Ltd. (ON)
70. Nordion International Inc. (ON)
71. Nova Magnetics Ltd. (NS)
72. NPM Nuclear Project Managers Canada Inc. (ON)
73. NU-TECH Precision Metals Inc. (ON)
74. Nuclear Shielding & Service of Canada Ltd. (PQ)
75. Numet Engineering Ltd. (ON)
76. Organization of CANDU Industries (ON)
77. Ortech (ON)
78. Parsons Turbine Generators Canada Ltd. (ON)
79. Pirelli Cables Inc. (PQ)
80. PNC Exploration (Canada) Co. Ltd. (BC)
81. Pylon Electronic Inc. (ON)
82. Qualprotech Inc. (ON)
83. R/D Tech (Tecrad) Technology (PQ)
84. Reliance Electric Ltd. (ON)
85. Rio Algom Ltd. (ON)
86. Ritepro Inc. (PQ)
87. Robert Mitchell Inc. (PQ)
88. Rosemount Instruments Ltd. (ON)
89. RPC (NB)
90. RSI Research Ltd. (BC)
91. Scintrex Ltd. (ON)
92. Sentinel Associates Ltd. (ON)
93. Serdula Systems Ltd. (ON)
94. Sherex Industries Ltd. (ON)
95. SIHI Pumps Ltd. (ON)
96. Spar Aerospace Ltd. (ON)
97. Spectrum Engineering Corp. Ltd. (ON)
98. Stern Laboratories Inc. (ON)
99. Sulzer Bingham Pumps Inc. (ON)
100. Taylor Forge Canada Inc. (ON)
101. UNECAN News (ON)
102. Uranerz Exploration and Mining Ltd.(SK)
103. Urangesellschaft Canada Ltd. (ON)
104. Velan Inc. (PQ)
105. Willer Engineering Ltd. (ON)
106. Wardrop Engineering Inc. (MB/ON)
107. Zircatec Precision Industries Inc. (ON)

Notes:

• Two companies, Canatom and Wardrop, have two offices, each in different provinces. Both locations have been counted in the provincial distribution.


• This list is strictly private sector, and does not include crown corporations or their subsidiaries, or university organizations.


• The list does not include foreign companies typically listed in the CNA "suppliers" list, or "representatives" of foreign companies. However, the list does include all subsidiaries of foreign multi-national corporations that are based in Canada.


• The 1994 CNA "suppliers" list added 18 new Canadian companies to the 1993 list, however 19 dropped off, for a net loss of one company.

Provincial Distribution of Private Sector
Nuclear Industry Companies -- 1994

	Province	No. of Companies     % of Total [] 

	Ontario			81		74%
	Québec			14		13%
	Saskatchewan		4		4%
	New Brunswick		3		3%
	Alberta			3		3%
	British Columbia	2		2%
	Manitoba		1		1%
	Nova Scotia		1		1%

[] Note: Total does not add to 100% due to rounding.

---

1. Alfa-Laval (ON)
2. Ascoelectric Ltd. (ON)
3. Atlantic Nuclear Services Ltd. (NB)
4. Babcock & Wilcox (ON)
5. Blenkhorn & Sawle Ltd. (ON)
6. CAE Electronics (PQ)
7. Canada Alloy Castings Ltd. (ON)
8. Canatom Inc. (ON)
9. Crosby Valve Ltd. (ON)
10. Dresser Canada Inc. (ON)
11. Ezeflow/Moline Co. (PQ)
12. FAG Bearings Ltd. (ON)
13. Fisher Controls Inc. (ON)
14. GBF Forging Specialists Inc. (ON)
15. General Electric Canada (ON)
16. GEC Alsthom Electromecanique Inc. (PQ)
17. Hoke Controls Ltd. (ON)
18. Imaging & Sensing Technology Canada Inc. (ON)
19. ITT Barton Instruments (AB)
20. Inver Manufacturing Ltd. (ON)
21. Koch Engineering Company Ltd.(ON)
22. Monserco Ltd. (ON)
23. NEI Clarke Chapman Canada (ON)
24. Neles-Jamesbury Ltd. (ON)
25. Newman Hattersley Ltd. (ON)
26. Romatec (ON)
27. Romcan Exports Inc. (ON)
28. Ruddy International (ON)
29. Sandvik Canada Inc. (ON)
30. Spar Aerospace (ON)
31. Sulzer Bingham Pumps Inc. (BC)
32. Thermo Electric (Canada) Ltd. (ON)
33. 3L Filters Ltd. (ON)
34. Velan Engineering Ltd. (ON)
35. Zircatec Precision Industries Inc. (ON)

Note: OCI Administrator Lois March confirmed that OCI 1995 membership remains at 35, and has not changed in the last five years (interview, March 10, 1995)

Provincial Distribution of OCI Membership -- 1992

Province	No. of Companies     % of Total [] 

Ontario			29		83%
Québec			 3		 9%
New Brunswick		 1		 3%
Alberta			 1		 3%
British Columbia	 1		 3%

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[ Nuclear Industry Sub-Directory ] [ COMPLETE DIRECTORY ]

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REFERENCES

1. Ernst & Young, The Economic Effects of the Canadian Nuclear Industry, sponsored by Atomic Energy of Canada Ltd., October 1993, p. 47.

2. Ernst & Young, Ibid., p. 55.

3. Ontario Hydro, "Statement of Operations", Ontario Hydro Nuclear Business Plan 1994-1996, p. 18.

4. Compare Ontario Hydro Nuclear Business Plan 1994-1996, p. 18 to Ontario Hydro Nuclear Business Plan 1995-1997, p. 29.

5. Cogeneration plants have two simultaneous energy outputs, usually electricity and heat, resulting in much greater efficiency than conventional nuclear or fossil generating stations.

6. "Ontario Hydro launches direct attack on self-generation", IPPSO FACTO, Magazine of the Independent Power Producers' Society of Ontario, December 1995, p. 1.

7. See:

1. John Plunkett et al., Correcting the Imbalance of Power: Integrated Resource Planning for Ontario Hydro, Volume 1, Analysis Findings, Conclusions and Recommendations, Coalition of Environmental Groups, December 1992, Exhibit 958, Ontario Hydro Demand/Supply Plan Hearing;
2. Steven Diener & Associates Ltd., The Potential for Non-Utility Generation in the Province of Ontario, Independent Power Producers' Society of Ontario (IPPSO), January 1993, Exhibit 952, Ontario Hydro Demand/Supply Plan Hearing; and
3. Leonard S. Rodberg, Employment Impact of Alternative Energy Demand/Supply Options, Coalition of Environmental Groups, December 1992, Exhibit 991, Ontario Hydro Demand/Supply Plan Hearing.

8. Ontario Hydro, Response to Interrogatory 9.7.62 from the Coalition of Environmental Groups, Demand Supply Plan Hearing, Ontario Environmental Assessment Board, 1991, p. 1.

9. Ontario Hydro, Darlington GS 4 X 950MW Units History Summary, March 1992, Exhibit 539, Ontario Hydro Demand/Supply Plan Hearing, p. 1.

10. Ernst & Young, Ibid..

11. In 1992, the average capacity factor for nuclear generation at Ontario Hydro was 61.3%, whereas the capacity factor for fossil generation was 27.8%. See: Ontario Hydro, Ontario Hydro Statistical Yearbook 1992, p. 6.

12. George Lermer, Atomic Energy of Canada Limited: The Crown Corporation as Strategist in an Entrepreneurial, Global-Scale Industry, Economic Council of Canada, 1987.

13. Paul Kaihla, "A troubled nuclear family", Maclean's, August 7, 1995, p. 25.

14. Including inflation.

15. Ontario Hydro, Business Case Analysis Guideline, March 1994, Executive Summary.

16. Like the Ernst & Young study for AECL, this study defines the "nuclear industry" simply as all activities relating to nuclear power, including the front end of the nuclear fuel chain, uranium mining, milling, refining and conversion. The various medical, industrial/commercial, and research applications of nuclear technology are not addressed.

17. Ernst & Young, Ibid., FN 2, p. iv.

18. Canadian Nuclear Association, Canadian Nuclear Industry Employment Survey � 1990, Economic Development Committee, CNA, May 6, 1991.

19. Overall nuclear-related sales (and therefore employment) represents a very small proportion of the business of most private sector nuclear suppliers � typically 10% or less. See: Competing in the New Global Economy: Report of the Premier's Council Industry Studies Volume II, 1988, p. 224.

20. Ernst & Young, Ibid., p. 83.

21. Ontario Hydro, Response to Interrogatory 4c.15.19 from the Green Energy Coalition, May 20, 1994, Ontario Energy Board Hearing HR 22.

22. David Langille, The Nuclear Industry in Canada: Ownership and Employment Trends, Coalition of Environmental Groups, 1993, p. 70.

23. Ibid..

24. "See you later! 935 so far take Hydro buy-out", Toronto Star, February 21, 1995, p. A11.

25. Ontario Hydro, Statement from Chairman Maurice Strong, March 9, 1993, p. 2... "As part of this program of cost reductions no commitment will be made at this time to retube the Bruce A nuclear reactors, which will continue to be maintained and operated as long as safety requirements permit."

26. Ontario Hydro, Response to Interrogatory 4c.8.29 from Energy Probe, May 19, 1994, Ontario Energy Board Hearing HR 22.

27. Ontario Hydro, Response to Interrogatory 4c.15.15. from the Green Energy Coalition, May 19, 1994, Ontario Energy Board Hearing HR 22.

28. Ontario Hydro, Response to Interrogatory 4c.15.17 from the Green Energy Coalition, May 19, 1994, Ontario Energy Board Hearing HR 22.

29. Martin Mittelstaedt, "New Hydro head braces for competition", Globe and Mail, January 18, 1995, p. A5.

30. Atomic Energy of Canada Ltd. Annual Report 1976-1977, p. F-10, Note 6.

31. In 1976-77, AECL received a parliamentary appropriation of $85.5 million to cover accrued interest to March 31, 1977 on loans for both Douglas Point and Gentilly-1. See: Atomic Energy of Canada Ltd. Annual Report 1976-77, Note 6, p. F10

32. Atomic Energy of Canada Ltd. Annual Report 1977-78, p. F13.

33. Energy, Mines and Resources Canada, Nuclear Policy Review Background Papers, "An Overview of Federal Government Financial Involvement in the Canadian Nuclear Program", Report No. ER81-2E, 1981, p. 310.

34. Ernst & Young, Ibid., p. 83.

35. Government of Canada Environmental Assessment Review, Environmental Assessment Panel Report to the Minister of the Environment: Point Lepreau New Brunswick Nuclear Generation Station, May 1975, p. 1.

36. MNR, Ibid., p. 310.

37. MNR, Ibid., p. 310.

38. Chris Wood, "New forecasts cloud N.B. nuclear future", Globe & Mail, October 21, 1981.

39. Robin Cantor, An Analysis of Public Costs and Risks in the Canadian Nuclear Industry, PhD Dissertation, Department of Economics, Duke University, p. 74.

40. Chris Wood, "New forecasts cloud N.B. nuclear future", Globe & Mail, October 21, 1981.

41. Robin Cantor, Ibid., p. 111.

42. Robin Cantor, Ibid., p. 75.

43. Robin Cantor, Ibid., p. 113.

44. Province of New Brunswick & Government of Canada, Second Nuclear Reactor Point Lepreau, New Brunswick, 1985, p. 3.

45. Christie McLaren, "N.B. discussing 2nd nuclear plant", Globe & Mail, June 18, 1987, p. A3.

46. Canadian Press, "Lepreau II Talks Slated", Telegraph Journal, March 31, 1990, p. 1.

47. Shawn McCarthy, "Candu reactor targeted for N.B.", Toronto Star, September 12, 1990, p. B1.

48. Canadian Press, "N.B. ponders second reactor", Globe & Mail, October 15, 1990, p. B6.

49. Canadian Press, "N.B. Power plans job cuts, rate increases", Globe & Mail, September 11, 1992, p. B11.

50. Ernst & Young, Ibid., p. 83.

51. David Langille, The Nuclear Industry in Canada: Ownership and Employment Trends, Coalition of Environmental Groups, 1992, p. 26.

52. CANDU Owners Group 1993/1994 Annual Report, p. 2.

53. The clear majority of AECL jobs are located in Ontario, with the corporate offices in Ottawa, the Chalk River Nuclear Laboratories in the Ottawa Valley, and the AECL CANDU offices at Sheridan Park in Mississauga.

54. This was apparently little change, since Ontario Hydro had already been spending $13 to $40 million annually with AECL CANDU Ops. See: Ray Silver, "Ontario, Canada Agree to Fund AECL for Next Seven Years", Nucleonics Week, April 6, 1990, p. 4.

55. CANDU Owners Group, COG CANDU Owners Group Annual Report 1990, p. 16.

56. Jim MacNeill & David Runnalls, A Strategy for Sustainable Energy Development and Use for Ontario Hydro: Report of the Task Force on Sustainable Energy Development, October 18, 1993, Recommendation 8.2, p. 102.

57. Ontario Hydro Nuclear, Business Plan 1995-1997, February 1995, p. 28. For budgeted amounts see: Ontario Hydro, Response to Interrogatory 4c.15.12 from the Green Energy Coalition, May 19, 1994, Ontario Energy Board Hearing HR 22.

58. Ontario Hydro Nuclear, Business Plan 1995-1997, February 1995, pp. 16-17.

59. Notes for a presentation by Dr. Stanley Hatcher, Acting President and CEO of AECL, April 1990, pp. 2-3.

60. Ernst & Young, Ibid., p. 81.

61. Ernst & Young, Ibid., p. 79.

62. Ernst & Young, Ibid., Ex. 5.1, p. 80.

63. Ernst & Young, Ibid., p. 82.

64. Canadian Nuclear Association, Nuclear Canada Yearbook 1993: Annual Review and Buyers Guide, pp. 60-67.

65. Canadian Nuclear Association, Nuclear Canada Yearbook 1994: Annual Review and Buyers Guide, pp. 50-57.

66. OCI: Organization of CANDU Industries [promotional brochure], received 1992.

67. Interview with OCI Administrator Lois Marsh, March 10, 1995.

68. Ernst & Young, Ibid., p. 83.

69. Ernst & Young, Ibid., p. 82.

70. Ernst & Young, Ibid..

71. Since 66 companies allegedly reported 5,206 jobs, the average is about 79 jobs per company. If this average were to hold, then 154 companies should have 12,166 employees.

72. Canadian Nuclear Association Economic Development Committee, Canadian Nuclear Industry Employment Survey � 1990, May 6, 1991, Executive Summary. The CNA is a trade association of the nuclear industry in Canada.

73. David Langille, The Nuclear Industry in Canada: Ownership and Employment Trends, Coalition of Environmental Groups, 1992, p. 97.

74. Leonard & Partners, Economic Impact of Nuclear Energy Industry in Canada, Executive Summary, Canadian Nuclear Association, August 1978, p. 14.

75. Canadian Nuclear Association, Nuclear Canada Yearbook 1983, p. 15.

76. Ray Silver, "AECL Signs Agreement to Build Second 680 MW CANDU at Wolsong", Nucleonics Week, January 3, 1991, p. 1.

77. Ibid..

78. Atomic Energy of Canada Ltd., AECL Information: Media Questions & Answers, September 1992, Q&A #1.

79. Ray Silver, "AECL Signs Agreement to Build Second 680 MW CANDU at Wolsong", Nucleonics Week, January 3, 1991, p. 9.

80. The split of contacts between AECL and various private sector companies is considered to be commercially confidential information (interview with Ted Thexton, EMR Electricity Branch, October 2, 1992).

81. Atomic Energy of Canada Ltd., AECL Information: Media Questions & Answers, 1992, Q&A #2.

82. In 1979, construction was winding up on Gentilly-2; Point Lepreau; the four reactors at Bruce "A"; and the four reactors at Pickering "B". Construction was beginning on the four reactors at Darlington, and had started in 1976 on the four reactors at Bruce "B". In addition, construction had started in 1974 on the Cordoba reactor in Argentina, and in 1977 on Wolsung-1 in Korea.

83. Ernst & Young, Ibid., p. 48.

84. Ernst & Young, Ibid., FN 82, p. 83.

85. Ernst & Young, Ibid., pp. 86-87.

86. Ernst & Young, Ibid., see the table on p. 83.

87. Leonard & Partners Ltd., Economic Impact of the Nuclear Energy Industry in Canada � Detail Report, Canadian Nuclear Association, August 1978, p. II-12.

88. Leonard & Partners, Ibid., p. II-10.

89. Leonard & Partners, Ibid..

90. Energy, Mines & Resources, Nuclear Industry Review: Problems and Prospects 1981-2000, 1982.

91. EMR, Ibid., 1982, p. 35.

92. EMR, Ibid., 1982.

93. EMR, Ibid., 1982.

94. EMR, Ibid., 1982.

95. EMR, Ibid., 1982, p. 36.

96. EMR, Ibid., 1982, p. 39.

97. EMR, Ibid., 1982.

98. EMR, Ibid., 1982, p. 37.

99. Hansard Official Report of Debates: Legislative Assembly of Ontario, Select Committee on Energy, Electricity Demand and Supply, No. N-21, September 27, 1988, p. N-946.

100. Hansard, Ibid., p. N-948.

101. Mr. Thexton and Mr. Oulton made a presentation to the Task Force on October 5, 1994, and Mr. Oulton subsequently wrote to the Chairperson of the Task Force in an undated letter referring to his October 5 presentation.

102. David Langille, Ibid., p. i.

103. David Langille, Ibid., p. ii.

104. David Langille, Ibid., p. i.

105. David Langille, Ibid., p. iii.

106. Uranium in Canada 1994: Assessment of Supply and Requirements, Uranium Division, Electricity Branch, Natural Resources Canada, November 1994.

107. David Langille, Ibid., p. 99, Fig 5.1.

108. This was a precipitous drop from 2,195 in 1991, due to closure of mines in Elliot Lake, Ontario and a shift of production to mines with higher grade ores in Saskatchewan. The last remaining Elliot Lake mine will be shut down in 1997.

109. Ernst & Young, Ibid., p. 83.

110. Canadian Uranium Industry Fact Sheet, Energy Mines and Resources, November 12, 1992.

111. Ibid., Uranium in Canada 1994.

112. Ibid., Uranium in Canada 1994.

113. Cameco Corporation 1994 Annual Report, p. 7.

114. Julian Steyn, "The uranium market: where is it going?", Nuclear Engineering International, September 1994, pp. 14-15.

115. Brent Jang, "Cameco benefits from uncertain uranium market", Globe & Mail, March 31, 1995, p. B1.

116. Julian Steyn, "What Next? For the World Uranium Market", Nuclear Engineering International, September 1995, p. 22.

117. Julian Steyn, Ibid., 1994, p. 14. 118 118. Russia, Ukraine, Kazakhstan, Uzbekistan, Kyrghyzstan, and Tadjikistan.

119. The deal between the US Department of Commerce and Russia's Ministry of Atomic Energy amends a 1993 agreement which restricted access for Russian/CIS uranium to the US.

120. Julian Steyn, Ibid., 1995, p. 23.

121. The US has assured Canada that there will be no increase in the Russian matching quotas; that the "natural feed" component of Russian HEU cannot be sold in the US until the termination of the suspension agreement; and that there will be no further matching agreements with other CIS countries. See: Cameco, Report to Shareholders, First Quarter 1995, p. 2.

122. Julian Steyn, Ibid., 1994, p. 15.

123. USEC was established by the US Department of Energy in July 1993, comprised of the DOE enrichment facilities. The government is in the process of privatizing the corporation.

124. "Cameco remains of the view that uranium from the dismantling of nuclear weapons can be integrated into the market without a major disruption." Cameco, Report to the Shareholder, Third Quarter 1995, p. 3.

125. William J. Broad, "US Sent Ton Plutonium to 39 Countries", New York Times, February 6, 1996, p. A10.

126. Cameco Corporation 1994 Annual Report, p. 11.

127. However, on March 25, 1995 Kazakhstan agreed that if its uranium were enriched in another country, it would no longer be considered to have undergone "substantial transformation". See: Cameco, Report to Shareholders, First Quarter 1995, p. 2.

128. Julian Steyn, Ibid., 1995, p. 23.

129. Cameco Corporation 1993 Annual Report, p. 7.

130. Cameco Corporation 1994 Annual Report, pp. 4-5.

131. J.R. Walker et al., "Upgrading the NRU Research Reactor", Nuclear Engineering International, December 1993, p. 43.

132. Ibid..

133. Atomic Energy Control Bard Staff Annual Report on Chalk River Laboratories and Whiteshell Laboratories, AECB BMD 93-123, p. 11.

134. AECB Staff Annual Report on Chalk River Laboratories and Whiteshell Laboratories, 1991, Atomic Energy Control Board, May 26, 1992, Appendix A � Significant Events in 1991; 1991 Annual Report of Radiological Monitoring Results for the Chalk River and Whiteshell Laboratories Sites, Volume 2 � Effluent Monitoring, and Volume 3 � Environmental Monitoring, Atomic Energy of Canada Ltd.; AECB BMD 91-196, p. 4.

135. The NRX design used Ottawa River water directly as coolant, resulting in much higher emissions of radioactive contaminants than reactors with secondary cooling loops.

136. Atomic Energy Control Board, AECB Staff Annual Report on Chalk River Laboratories and Whiteshell Laboratories, BMD 93-123, May 25, 1993, p. 7.

137. Atomic Energy Control Board, AECB Staff Annual Report on Chalk River Laboratories and Whiteshell Laboratories, BMD 94-107, June 7, 1994, pp. 6-7.

138. Ray Silver, "Battle Over Isotope Production Costs Threatens AECL's MAPLE-X10", Nucleonics Week, November 18, 1993, p. 8.

139. Atomic Energy of Canada Ltd., AECL 1991-1992 Annual Report, p. 12. CDIC had "expenses" of $4.5 million, and $10 million was held back until November 1993.

140. Ibid..

141. David Argue, AECL Financial Statement Analysis, 1988 to 1993, Nuclear Awareness Project, May 1994, p. 4.

142. Ray Silver, "Battle Over Isotope Production Costs Threatens AECL's MAPLE-X10", Nucleonics Week, November 18, 1993, p. 8.

143. K.D. Cotnam, Safety Assessment of the MAPLE-X10 Reactor, AECL, International Symposium on Research Reactor Safety, operations and Modifications, October 1989, IAEA-SM-310, p. 4.

144. Atomic Energy Control Board, Site Licences for AECL Research, AECB BMD 91-196, p. 4.

145. Atomic Energy of Canada Ltd., AECL Annual Report 1993-1994, p. 23. AECL also notes, "The isotope production facilities write-off of $75.4 million for the year mainly represents the write-off of in-progress capital costs and the estimated operating losses to continue to supply isotopes for the next several years. Although the estimated operating losses include some elements of waste-related costs, the total amount of decommissioning costs related to the production of isotopes have not been provided for." (pp. 25-26). In other words, AECL continues to refuse to account for clean-up and decommissioning costs � assuming that taxpayers will pick up the tab at the end of the day.

146. Ray Silver, "New Research, Test Facilities are Dropped from AECL Plans", Nucleonics Week, March 10, 1994, p. 5.

147. Ray Silver, "Negotiations Set that could Resurrect AECL's MAPLE-X Project", Nucleonics Week, October 13, 1994, p. 4.

148. Ray Silver, "AECL, Nordion Near Agreement on Reactor for Medical Isotopes", Nucleonics Week, December 15, 1994, p. 14.

149. Ray Silver, "Nordion proposes construction of isotope-producing reactors", Nucleonics Week, December 14, 1995, p. 15.

150. Ibid..

151. Ibid..

152. Ibid..

153. Kim Honey, "Firm fears move on its corner of market", Globe and Mail, November 24, 1995, p. A12.

154. Ray Silver, "AECL, Nordion Near Agreement on Reactor for Medical Isotopes", Nucleonics Week, December 15, 1994, p. 14.

155. Kim Honey, Ibid..

156. L. Denis Desautels, Auditor General of Canada, "Auditor's Report to the Minister of Energy Mines and Resources", in: Atomic Energy of Canada Ltd., AECL Annual Report 1991-1992, p. 6.

157. L. Denis Desautels, Auditor General of Canada, "Auditor's Report to the Minister of Energy Mines and Resources", in: Atomic Energy of Canada Ltd., AECL Annual Report 1992-1993, p. 18.

158. Report of the Auditor General of Canada to the House of Commons 1993, "Other Audit Observations", p. 80.

159. Auditor General of Canada, Ibid., 1993, p. 81.

160. Atomic Energy of Canada Ltd., AECL Annual Report 1994-1995, p. 29.

161. AECL's reporting of "decommissioning" expenses may be somewhat arbitrary � see the note under "Source" to Table 14.

162. AECL, AECL Annual Report 1994-1995, pp. 18 & 27.

163. Chapter 3, "Federal Radioactive Waste Management", Report of the Auditor General of Canada to the House of Commons, May 1995, paragraph 3.136, p. 3-32. AECL is not responsible for the entire $850 million, but the Auditor General has not disclosed AECL's portion for reasons of confidentiality and because some of the elements of the costing are subject to negotiation. The figure includes AECL facilities and AECL high level and low level radioactive waste; as well as (non-AECL) historic waste from Port Hope and elsewhere, and some amount for uranium tailings clean-up. The amount included for Port Hope in the $850 million total is $185 million, so it is probable that most of the remaining $665 M is the Auditor General's estimate of AECL's responsibility.

164. Art Milnes, "AECL fights with groups on cleanup", Pembroke Observer, August 27, 1994. The article cites Irene Kock of Nuclear Awareness Project.

165. Jim MacNeill & David Runnalls, A Strategy for Sustainable Energy Development and Use for Ontario Hydro: Report of the Task Force on Sustainable Energy Development, October 18, 1993, p. 48.

166. Ontario Energy Board Hearing HR 22, Transcript Undertaking, 2.3.5, May 30, 1994.

167. Green Energy Coalition, Argument of the Green Energy Coalition � The New Hydro: Right Mission, Wrong Priorities, Ontario Energy Board Hearing HR 22, July 11, 1994, pp. 101-102.

168. Irene Kock, Nuclear Hazard Report 1991-1992: Waste Contamination and Safety at Ontario's Nuclear Facilities, Nuclear Awareness Project, 1994, pp. 38-39 & pp. 50-53.

169. Ibid..

170. Keith O. Fultz, Environmental Problems in the Nuclear Weapons Complex, United States General Accounting Office, GAO/T-RCED-89-18, April 7, 1989, pp. 1-2.

171. Atomic Energy of Canada Ltd., AECL Annual Report 1990-1991, p. 25.

172. David Argue, AECL Financial Statement Analysis, 1988 to 1993, Nuclear Awareness Project, May 1994, p. 4.

173. Gordon Sims, The Evolution of AECL, MA Thesis, Carleton University, August 1979, p. 155.

174. Atomic Energy of Canada Ltd., AECL Annual Report 1971-1972, p. 7.

175. Robin Cantor, An Analysis of Public costs and Risks in the Canadian Nuclear Industry, PhD dissertation, Department of Economics, Duke University, 1985.

176. For a good synopsis of these events, see: Robin Cantor, Ibid., pp. 86-86.

177. Sims, Ibid., p. 194.

178. Sims, Ibid., pp. 86-89.

179. Sims, Ibid., p. 195.

180. Sims, Ibid., p. 203.

181. Ray Silver, "AECL wants to sell $643 million heavy water white elephant" Nucleonics Week, September 7, 1995, p. 8.

182. Ibid..

183. Both AECL and Ontario Hydro issued news releases about the sale on December 13, 1993. However, the details of the quantity of heavy water and the split of the sale between AECL and Ontario Hydro were kept secret. The information was subsequently leaked, but was confirmed by the General Manager of Ontario Hydro Nuclear, Don Anderson in testimony before the Ontario Energy Board. See: OEB Hearing HR 22, June 7, 1994, Vol. 16, pp. 3087 & 3081.

184. Letter from Natural Resources Minister Anne McLellan to David H. Martin, Nuclear Awareness Project, December 23, 1994.

185. Atomic Energy of Canada Ltd., AECL 1991-1992 Annual Report, pp. 9 & 13.

186. Atomic Energy of Canada Ltd., AECL 1992-1993 Annual Report, p. 9.

187. Atomic Energy of Canada Ltd., AECL 1992-1993 Annual Report, p. 13.

188. "HWD Disappointment", Ontario Hydro Nuclear: Nuclear Business Review, September 1994, p. 8.

189. "OHN Heavy Water Deal with Romania", Ontario Hydro Nuclear: Nuclear Business Review, November 1994, p. 1.

190. See also "Romanian Shipments Wrap Up", Ontario Hydro Nuclear: Nuclear Business Review, December 1994, p. 4.

191. Ontario Hydro Nuclear, Business Plan 1994-1996, February 1994, p. 12.

192. Ray Silver, "Bruce heavy water plant reduced to minimum capacity to stay open", Nucleonics Week, May 25, 1995, p. 16.

193. Ibid..

194. Joseph Hall, "Mine may yield sun's secrets", Toronto Star, February 5, 1996, pp. A1 & A8.

195. Report of the Standing Committee on Environment and Sustainable Development, Keeping a Promise: Towards a Sustainable Budget, December 1995, p. 12.

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