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U.S. corporations profiting from major Canadian nuclear liability

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Chalk River Laboratories, run by Atomic Energy of Canada Limited, near Chalk River, Ontario. Image: Ryan Padraic/Wikimedia Commons

The nearly 70-year history of the federal crown corporation Atomic Energy of Canada Limited (AECL) has left a $16-billion toxic legacy of shuttered reactors, polluted lakes and groundwater, contaminated soils, and hundreds of thousands of cubic metres of radioactive waste. 

AECL's 2018 annual report estimates its undiscounted waste and decommissioning liability at $15.9 billion as of March 31, 2018. Table 5.7 in Canada's 2019 public accounts estimates AECL's environmental liabilities at $1.05 billion and "asset retirement obligations" at $6.6 billion. 

This $7.7-billion estimate of AECL's total nuclear liability is heavily discounted. The accounting firm Deloitte does not recommend discounting for environmental liabilities and asset retirement obligations unless the amount of the liability and the amount and timing of cash payments are "reliably determinable." As explained in a detailed report, neither is true for AECL's liability.

Prime Minister Stephen Harper thought that the private sector might do a better job of addressing this massive liability than AECL itself. Just before losing power to the Liberals in the 2015 election, his government contracted an American-controlled consortium (creatively called the "Canadian National Energy Alliance") to manage federal nuclear facilities and reduce the waste liability quickly and cheaply.   

According to the main estimates, AECL's expenditures grew from $326 million in 2014-15 (before the consortium assumed control) to $491 million in 2015-16, $784 million in 2016-17, $827 million in 2017-18 and $829 million in 2018-19. The 2020-21 main estimates for AECL are $1.2 billion.   

AECL hands most of this money over to the consortium, whose current members are Texas-based Fluor and Jacobs, and SNC-Lavalin. AECL retains ownership of the waste. A 2017 special examination report of the Auditor General of Canada to AECL's board of directors says that "approximately $866 million for contractual expenses was paid or payable by the Corporation in the 2016-17 fiscal year."

Is this "government-owned, contractor-operated" (GoCo) arrangement providing value for money?

The GoCo contract was supposed to have been reviewed after an initial six-year period. However, AECL -- whose president is an American with past ties to consortium members -- extended it to a full 10-year period in April 2020, 18 months before its September 2021 renewal date.  

The centrepiece of the consortium's approach -- a million-cubic-metre radioactive waste mound on a hillside draining into the Ottawa River – was revealed in May 2016, shortly after the ink dried on the contract. Neither the public, nor Algonquin peoples on whose unceded territory this facility would be built, were consulted.

Technical problems and public opposition have put the "near surface disposal facility" -- to be built at AECL's Chalk River laboratories -- years behind schedule. AECL waste management experts who left when the consortium took over have been highly critical, pointing out that an above-ground mound would not contain and isolate the types of radioactive waste that the consortium planned to put in it.

Chalk River, the focal point of Canadian nuclear research since the late 1940s, is where most of AECL's radioactive waste legacy is found. But AECL also built reactors at four other sites in Manitoba, Ontario and Quebec. All have been shut down for decades -- radioactive hulks, yet to be fully decommissioned.  

AECL and its American-led consortium have announced quick and cheap plans for Manitoba and Ontario reactors: fill them up with blast furnace slag and concrete, and abandon them in place. Critics say these proposals are seriously flawed, noting that the International Atomic Energy Agency (IAEA) says that "entombment" should only be considered in the event of a serious reactor accident.  

Critics say that these substandard schemes would pollute major Canadian waterways and could expose workers and future generations to dangerous radiation levels.  

The consortium is trying to salvage its Chalk River mound proposal with a promise to reduce the amount of radiation in the wastes it would house. Less radiation would leak into the Ottawa River. 

However, management practices during Chalk River's early years were poor, accidents were frequent and records were lost in a fire. Trying to separate out lower-activity from higher-activity wastes would involve considerable expense and high worker radiation exposures. And if strict limits on the mound's radioactivity were adhered to, much of the federal waste liability would likely remain unaddressed.  

Management of Canada's radioactive waste by for-profit corporations, combined with a lack of government oversight, creates risks of delays, excessive radiation exposures to workers and the public, and squandering of tax dollars. Critics of AECL's GoCo contract are asking the federal government to establish a publicly acceptable strategy for addressing its nuclear liability.  

In a mission to Canada in late 2019, IAEA reviewers found virtually "no evidence … of a governmental policy or strategy related to radioactive waste management." The government agreed to their recommendation that this gap be filled, assigning the task to Natural Resources Canada.

But Natural Resources Minister Seamus O’Regan seems preoccupied with promotion of a new generation of mass-produced, "modular" nuclear reactors. Two consortium members -- Fluor and SNC-Lavalin -- are heavily invested in their own reactor designs. There are plans to build three new demonstration reactors at Chalk River, and talk of building as many as eight. One proposal has already reached the environmental assessment stage.

If the Liberal government caves into industry pressure to fund the building of these new reactors -- instead of dealing responsibly with its existing waste liability -- AECL's $16 billion radioactive burden on Canadian taxpayers -- and risks to workers and the public -- will just keep growing.

Ole Hendrickson is a retired forest ecologist and a founding member of the Ottawa River Institute, a non-profit charitable organization based in the Ottawa Valley.

Image: Ryan Padraic/Wikimedia Commons

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