Vol. 150, No. 10 — May 18, 2016

Registration

SOR/2016-88 May 6, 2016

NUCLEAR LIABILITY AND COMPENSATION ACT

Nuclear Liability and Compensation Regulations

P.C. 2016-306 May 6, 2016

Whereas, pursuant to subsection 7(1) of the Nuclear Liability and Compensation Act (see footnote a), the Minister of Natural Resources has consulted the Canadian Nuclear Safety Commission;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to sections 7, 24 and 78 of the Nuclear Liability and Compensation Act (see footnote b), makes the annexed Nuclear Liability and Compensation Regulations.

Nuclear Liability and Compensation Regulations

Interpretation

Definitions

1 The following definitions apply in these Regulations.

nuclear fuel conversion facility means a facility for the storage or processing of unirradiated enriched uranium. (installation de conversion de combustible nucléaire)

nuclear fuel production facility means a facility for the production of nuclear fuel containing unirradiated enriched uranium. (installation de production de combustible nucléaire)

nuclear fuel waste management facility means a facility for the storage or management of nuclear fuel that has been removed from a nuclear reactor and that has a quantity of fissionable materials that meets any of the following conditions:

nuclear fuel waste processing facility means a facility for the

power reactor means a nuclear reactor with the capacity to produce electricity for commercial purposes. (réacteur de puissance)

radioactive waste management facility means a facility for the storage, management or processing of material that has been made radioactive by exposure to radiation consequential on or incidental to the production or use of nuclear fuel, other than natural uranium or depleted uranium and excluding nuclear fuel that has been removed from a nuclear reactor. (installation de gestion des déchets radioactifs)

reactor of less than 1 MW means a nuclear reactor with the capacity to produce less than 1 MW of thermal output. (réacteur de moins de 1 MW)

reactor of 1 MW to 7 MW means a nuclear reactor with the capacity to produce from 1 MW to 7 MW of thermal output, inclusive. (réacteur de 1 MW à 7 MW)

reactor of over 7 MW means a nuclear reactor, other than a power reactor, with the capacity to produce more than 7 MW of thermal output. (réacteur de plus de 7 MW)

Designation of Nuclear Installations and Operators

Designation of nuclear installations

2 (1) The sites set out in column 1 of the schedule are designated as nuclear installations.

Class

(2) The class set out in column 2 of the schedule indicates the class of the nuclear installation set out in column 1.

Description of site

(3) The sites are described in column 3 of the schedule.

List of facilities

(4) The facilities at each site that are authorized to contain nuclear material are listed in column 4 of the schedule.

Designation of operator

(5) The holder of the licence set out in column 5 of the schedule is designated as the operator of the nuclear installation set out in column 1.

Subsection 2(2) and column 2 of the schedule

3 Subsection 2(2) and column 2 of the schedule do not form part of these Regulations but are included for convenience only.

Risk and Classes of Nuclear Installations

Risk – facilities

4 (1) For the purposes of subsection (2), facilities are ranked from the highest to lowest risk in the following order:

Classes of nuclear installations

(2) For the purposes of paragraph 24(2)(b) of the Act and section 5 of these Regulations, the following classes of nuclear installations are prescribed:

Limit of Liability

Operator’s liability

5 The liability of an operator of a class of nuclear installations for damage resulting from a nuclear incident is limited to

Coming into Force

S.C. 2015, c. 4, s. 120

6 These Regulations come into force on the day on which sections 7, 24 and 78 of the Nuclear Liability and Compensation Act come into force.

SCHEDULE
(Section 2)

Designation of Nuclear Installations and Operators

Item

Column 1

Site

Column 2

Class

Column 3

Description

Column 4

Facilities

Column 5

Operator

1

Bruce Nuclear Generating Stations A and B

Power Reactor

The site is located on Station A and Station B.

Station A is located on the shore of Lake Huron, Ontario, and is more particularly described in instrument numbers 28696 and 168541 registered in the township of Bruce, now the Municipality of Kincardine in the County of Bruce, and also including part of Parcel Water Lot 1, Section HY134 being part of the Bed of Lake Huron in front of Lots 24, 25, 26, 27, 28, 29 and 30, Concession A or Lake Range designated as Parts 108, 109 and 110 on Reference Plan 3R 7352.

Station B is located on the shore of Lake Huron, Ontario, and is more particularly described in instrument numbers 27556, 28696, 34839 and 154872 registered in the township of Bruce, now the Municipality of Kincardine in the County of Bruce, and also including Parcel Water Lot 3, Section HY152 being that part of the Bed of Lake Huron in front of Lots 11, 12, 13, 14, 15, 16 and in front of part of Lot 17, Concession A or Lake Range being part of Water Lot Location HY 152 designated as Part 17 on Reference Plan 3R 7351.

Station A

  • 1 Four-unit power reactor
  • 2 Facility for the storage of irradiated fuel

Station B

  • 1 Four-unit power reactor
  • 2 Facility for the storage of irradiated fuel

Holder of the licence for the Station A four-unit power reactor and the Station B four-unit power reactor

2

Darlington Nuclear Generating Station

Power Reactor

The site is located on the shore of Lake Ontario in the Municipality of Clarington, Regional Municipality of Durham, Ontario, and is more particularly described in property identification numbers 26606-0051(LT), 26606-0052(LT), 26606-0053(LT), 26606-0085(LT), 26606-0134(LT) and 26606-0279(LT).
  • 1 Four-unit power reactor
  • 2 Facility for the storage of irradiated fuel

Holder of the licence for the four-unit power reactor

3

Gentilly-2

Nuclear Fuel Waste Management Facility

The site is located in Bécancour, Quebec, on the south shore of the St. Lawrence River, at the mouth of the Gentilly River, on lots 3 294 085, 3 294 086, 3 294 087, 3 294 102, 3 294 103, 3 685 137, and 3 685 155, cadastre of Quebec, registration division of Nicolet, as they existed on March 20, 2015. The survey plans and documents under which the lots were acquired can be consulted in the Land Register of Quebec.
  • 1 Nuclear fuel waste management facility
  • 2 Retired power reactor placed in storage under surveillance

Holder of the licence for the nuclear fuel waste management facility

4

Pickering Nuclear Generating Station

Power Reactor

The site is located on the shore of Lake Ontario, in the city of Pickering, Regional Municipality of Durham, Ontario, and is more particularly described in property identification numbers 26326-0136(LT) (part thereof), 26326-0148(LT) and 26326-0149(LT).
  • 1 Eight-unit power reactor
  • 2 Facilities for the storage of irradiated fuel

Holder of the licence for the eight-unit power reactor

5

Point Lepreau Nuclear Generating Station

Power Reactor

The site is located in New Brunswick on the Lepreau peninsula, 40 km southwest of Saint John on Route 790, and is more particularly described in property identification numbers 00274910, 00276592, 00427138, 00471136, 01231323, 55001911, 55003248, 55010086, 55062640, 55062657, 55062665 and 55094429. Title documents for the subject parcels of land are registered in the Registry Offices for the Counties of Saint John and Charlotte in New Brunswick.
  • 1 Single-unit power reactor
  • 2 Facility for the storage of irradiated fuel

Holder of the licence for the single-unit power reactor

6

Chalk River Laboratories

Reactor of over 7 MW

The site is located near the village of Chalk River in Renfrew County, Ontario, on the south shore of the Ottawa River, approximately 200 km northwest of Ottawa, and is more particularly described in property identification numbers 57074 0021(LT), 57075 0003(LT) and 57076 0049(LT).
  • 1 Single-unit reactor of over 7 MW
  • 2 Nuclear fuel waste processing facilities
  • 3 Retired nuclear reactor structures
  • 4 Facilities for nuclear fuel production and nuclear substance processing
  • 5 Radioactive waste processing and storage facilities

Holder of the licence for the single-unit reactor of over 7 MW

7

McMaster Nuclear Reactor

Reactor of 1 MW to 7 MW

The site is located in the Reactor Building at McMaster University at 1280 Main Street West, Hamilton, Ontario L8S 4K1.
  • 1 Reactor of 1 MW to 7 MW

Holder of the licence for the reactor of 1 MW to 7 MW

8

École Polytechnique: SLOWPOKE 2 Reactor

Reactor of less than 1 MW

The site is located in the Main Pavilion, Room B277.5, principal building, École Polytechnique de Montréal, 2900, Edouard-Montpetit, Montréal, Quebec H3T 1J4.
  • 1 Reactor of less than 1 MW

Holder of the licence for the reactor of less than 1 MW

9

Royal Military College of Canada: SLOWPOKE 2 Reactor

Reactor of less than 1 MW

The site is located at the Royal Military College of Canada at the Department of Chemistry and Chemical Engineering, Sawyer Building Module 5, 11 General Crerar Crescent, P.O. Box 17000, Stn Forces, Kingston, Ontario K7K 7B4, consisting of Rooms 1500G, 1500H, 1500J, 1500K, 1500M, 1500N, 2507, 2507A, 2507B, 2507C and 2507D.
  • 1 Reactor of less than 1 MW

Holder of the licence for the reactor of less than 1 MW

10

Saskatchewan Research Council: SLOWPOKE 2 Reactor

Reactor of less than 1 MW

The site is located at the Saskatchewan Research Council at 102-422 Downey Road, Saskatoon, Saskatchewan S7N 4N1, in the Environmental Analytical Laboratories building and consisting of the Reactor Room, Uranium Analysis Laboratory, Neutron Activation Analysis Laboratory and Sample Storage Room.
  • 1 Reactor of less than 1 MW

Holder of the licence for the reactor of less than 1 MW

11

University of Alberta: SLOWPOKE 2 Reactor

Reactor of less than 1 MW

The site is located in Room 1099, Dentistry/Pharmacy Building, University of Alberta, Edmonton, Alberta T6G 2N8.
  • 1 Reactor of less than 1 MW

Holder of the licence for the reactor of less than 1 MW

12

Cameco Fuel Manufacturing

Nuclear Fuel Production Facility

The site is located at 200 Dorset Street East, Port Hope, Ontario, and is more particularly described in Parts 1 and 2 of instrument number 89833 deposited in the Land Registry Office, Town of Port Hope.
  • 1 Nuclear fuel production facility

Holder of the licence for the nuclear fuel production facility

13

Port Hope Conversion Facility

Nuclear Fuel Conversion Facility

The site is located at 1 Eldorado Place, Port Hope, and at the corner of Nelson Street and Dorset Street East, Port Hope, in the County of Northumberland, formerly the County of Durham, Ontario, and is more particularly described in instrument numbers N12702 and N19988 deposited in the Land Registry Office, Town of Port Hope.
  • 1 Nuclear fuel conversion facility

Holder of the licence for the nuclear fuel conversion facility

14

Douglas Point Waste Storage Facility

Nuclear Fuel Waste Management Facility

The site is located on the eastern shore of Lake Huron in the Municipality of Kincardine, Ontario, and is more particularly described in property identification number 33285 0178(LT).
  • 1 Nuclear fuel waste management facility
  • 2 Retired prototype nuclear power station placed in storage under surveillance

Holder of the licence for the nuclear fuel waste management facility

15

Gentilly 1 – Waste Storage Facility

Nuclear Fuel Waste Management Facility

The site is located in Bécancour, Quebec, on the south shore of the St. Lawrence River, at the mouth of the Gentilly River, on lots 3 295 171, 3 685 136 and 3 685 138 to 3 685 143, Cadastre of Quebec, registration division of Nicolet, as they existed on March 20, 2015. The survey plans and documents under which the lots were acquired can be consulted in the Land Register of Quebec.
  • 1 Nuclear fuel waste management facility
  • 2 Retired power reactor placed in storage under surveillance

Holder of the licence for the nuclear fuel waste management facility

16

Western Waste Management Facility

Nuclear Fuel Waste Management Facility

The site is located on the shore of Lake Huron in the Municipality of Kincardine, Ontario, and is more particularly described in property identification number 33285 0168(LT) (part thereof).
  • 1 Nuclear fuel waste management facility

Holder of the licence for the nuclear fuel waste management facility

17

Whiteshell Nuclear Research Establishment

Nuclear Fuel Waste Management Facility

The site is located approximately 10 km west of Pinawa, and 100 km northeast of Winnipeg, on the east bank of the Winnipeg River, Manitoba, and is more particularly described in Atomic Energy Control Board Order Number 2/14/74, as published in the Canada Gazette, Part I, on June 8, 1974.
  • 1 Nuclear fuel waste management facilities
  • 2 Retired nuclear reactor structures

Holder of the licence for the nuclear fuel waste management facilities

18

Nuclear Power Demonstration Waste Management Facility

Radioactive Waste Management Facility

The site is located in the town of Laurentian Hills in Renfrew County, Ontario, approximately 200 km northwest of Ottawa and is situated adjacent to the west bank of the Ottawa River, and is more particularly described in property identification number 57047 0003.
  • 1 Radioactive waste management facility

Holder of the licence for the radioactive waste management facility

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations and the Rules.)

Issues

The Nuclear Liability and Compensation Act (the Act) is intended to replace the current Nuclear Liability Act to provide a stronger legislative framework that will better address the question of liability and compensation after a nuclear incident.

The Act establishes the absolute liability regime for operators of nuclear installations; however, the provisions of the Act may not apply until nuclear installations have been designated, which may only occur by regulations. This is why the Nuclear Liability and Compensation Regulations (the Regulations) need to enter into force at the same time as the Act. The Regulations are required to

In addition, upon entry into force of the Act, another regulation must be made to repeal the existing Canada-United States Nuclear Liability Rules, which implement a reciprocity arrangement between Canada and the United States relating to the compensation for injury or damage arising from a nuclear incident. Canada’s decision to join an international nuclear civil liability convention supersedes the need to maintain the reciprocity arrangement with the United States and the rules implementing this arrangement.

Background

The Act is intended to establish a civil liability regime for the operators of classes of nuclear facilities that contain or utilize “nuclear material.” These facilities are to be designated as “nuclear installations” under the Act.

Nuclear material is material that is capable of a self-sustaining chain process of nuclear fission (criticality), or radioactive material that is produced as a result of that criticality. Nuclear facilities designated as nuclear installations include nuclear power generating plants, research reactors, nuclear material processing plants, as well as facilities used for managing nuclear fuel waste and other radioactive waste produced as a result of the criticality process.

The civil liability regime provided for by the Act differs from a fault-based liability regime, which many other industries are subject to, as it establishes absolute, exclusive and limited liability on the operator for civil damages. It is designed to provide certainty on the treatment of legal liability for nuclear damage resulting from a nuclear incident and to provide prompt compensation with minimal litigation, since the persons who have suffered damage do not have to establish which party or parties were at fault. Under a fault-based regime, a person who suffered damage would have to prove which party or parties were at fault, defendants would have access to a number of defences including the exercise of due diligence, and litigation could take years and claimants could end up with no compensation.

The activities associated with other types of nuclear facilities, such as those involved in mining, milling and the physical concentration of uranium ores, the manufacture or processing of natural uranium, and the storage or transport of natural uranium, do not involve high levels of radioactivity or the risk of criticality; therefore, it is not deemed necessary for these activities to be subject to the provisions of the liability regime of the Act. Civil liability with respect to the activities associated with these types of nuclear facilities is therefore left to the rules of common civil liability law.

The Act sets the absolute liability limit of an operator of a nuclear installation to an amount that will gradually increase to $1 billion over four years after its coming into force. In setting this limit, the following considerations were taken into account: (1) it is sufficient to deal with the consequences of a nuclear incident at a Canadian nuclear power plant involving controlled releases of radiation; (2) it is within the capacity of insurers to provide insurance at this level for reasonable costs; and (3) it is more in line with liability limits in other countries.

Under the current Nuclear Liability Act, designated installations (as defined in the Canadian Nuclear Safety Commission [CNSC] CMD 05-H35 document) and their respective insurance requirements are as follows:

Name of installation

Operator

Required insurance

Bruce "A" Generating Station

Bruce Power Inc.

$75 million

Bruce "B" Generating Station

Bruce Power Inc.

$75 million

Darlington Generating Station

Ontario Power Generation

$75 million

Gentilly-2 Nuclear Power Station

Hydro-Québec

$75 million

Pickering Generating Stations "A" and "B"

Ontario Power Generation

$75 million

Point Lepreau Generating Station

New Brunswick Power Nuclear Corporation

$75 million

Chalk River Nuclear Laboratories

Atomic Energy of Canada Limited (AECL)

0

McMaster Research Reactor

McMaster University

$1.5 million

École Polytechnique: SLOWPOKE Reactor

École Polytechnique, Montréal

$500,000

Royal Military College of Canada: SLOWPOKE Reactor

Royal Military College of Canada

0

Saskatchewan Research Council: SLOWPOKE Reactor

Saskatchewan Research Council

$500,000

University of Alberta: SLOWPOKE Reactor

University of Alberta

$500,000

Cameco Fuel Manufacturing Facility

Cameco Fuel Manufacturing Inc.

$2 million

Port Hope Conversion Facility

Cameco Corporation

$4 million

Douglas Point Waste Storage Facility

Atomic Energy of Canada Limited

0

Gentilly-1 — Waste Storage Facility

Atomic Energy of Canada Limited

0

Western Waste Management Facility

Ontario Power Generation

$6 million

Whiteshell Nuclear Research Establishment

Atomic Energy of Canada Limited

0

The Nuclear Liability Act does not require federal government departments or agencies or federal Crown corporations (e.g. AECL) to carry insurance, which is why there are zero dollar amounts for such installations. Under the Nuclear Liability Act framework, the federal government self-insures the risks with respect to any incident associated with one of its departments, agencies or Crown corporations. Under the Nuclear Liability and Compensation Act, federal Crown corporations will be responsible for insuring their risks, whereas federal departments and agencies will continue to be self-insured by the federal government.

Under the Nuclear Liability Act, an operator is only liable for civil injury or damage in Canada. However, the Nuclear Liability Act contains a provision that if the Governor in Council is of the opinion that satisfactory arrangements exist in any country for compensation for injury or damage resulting from a nuclear incident, the Governor in Council may declare that country to be a reciprocating country for the purposes of the Act. The Nuclear Liability Act also provides that the Governor in Council may, with respect to a reciprocating country, make such rules as considered necessary to implement any arrangement between Canada and the reciprocating country relating to compensation for injury or damage.

The only country declared to be a reciprocating country for the purposes of the Nuclear Liability Act is the United States. This arrangement is in the form of a 1975 exchange of notes between the U.S. Ambassador to Canada and the Secretary of State for External Affairs. Through this arrangement, each country assures the other of access to the coverage provided by its nuclear civil liability legislation and of access to its courts. The Canadian component of the arrangement is established through an order, Declaring the United States to be a Reciprocating Country for Purposes of the Act, and by the Canada-United States Nuclear Liability Rules of April 24, 1975. The latter implements the Canadian component of the reciprocity arrangement that exists between Canada and the United States with respect to nuclear liability.

Objectives

The objectives of the Regulations and the Rules are to

  1. designate which nuclear facilities will be subject to the Act;
  2. establish classes or categories of nuclear installations and their respective liability amounts, so that operators are held responsible and accountable to the Canadian public for any incident that may occur at their installations; and
  3. repeal the Canada-United States Nuclear Liability Rules.

Description

Nuclear installations

The “Designation of Nuclear Installations” section of the Regulations prescribes which nuclear facilities are designated as “nuclear installations.” In order for the provisions of the Act — including the provision of a $1 billion liability limit — to apply to nuclear facilities, the Regulations must designate them as “nuclear installations” for the purposes of the Act.

This will ensure that the liability regime provided for by the Act will apply to the operators of nuclear facilities that contain or utilize nuclear material (i.e. nuclear power plants, research reactors, nuclear material processing plants, as well as facilities for managing nuclear fuel waste and other radioactive waste produced as a result of the criticality process).

The Act does not apply to facilities that do not contain or utilize nuclear material (e.g. uranium mines, refineries utilizing natural uranium, hospital nuclear laboratories).

Classes of nuclear installations

The Act provides that operators of nuclear installations will be subject to a $1 billion absolute liability limit (or a higher limit as may be established by future regulations). However, the Act also provides that lower liability limits may be established, through regulations, for operators of certain classes of nuclear installations, depending on the level of risk associated with the nature of their activities. This is to ensure that the level of liability of these operators (and the amount of insurance that they are required to carry) is commensurate with the nature of the activities of their nuclear installations.

For nuclear power plants, the liability limit of the operator will be $1 billion, or a higher limit as may be established by future regulations. For all other nuclear installation classes, such as nuclear research reactors, fuel fabrication facilities and nuclear fuel waste management facilities, the “Classes of Nuclear Installations” section of the Regulations will establish classes of nuclear installations and lower operator liability limits that are commensurate with the respective risk of these classes. In addition to the class of nuclear power plants, eight classes will be established, comprising 14 nuclear installations.

In the absence of the reduced liability amounts provided by the Regulations, these low-risk nuclear installations would be subject to the same level of liability as nuclear power plant operators, and would be required to carry insurance that will gradually increase to $1 billion over four years.

The liability amounts prescribed by the Regulations reflect the respective risk of the classes of nuclear installations. The classes of nuclear installations and limits were developed by the Department of Natural Resources, and are based on a relative risk assessment (relative to the risk of nuclear power plants) undertaken by the CNSC. This is a technical assessment that evaluates the nature of the nuclear installation and the nuclear material contained in it. For example, a nuclear power plant contains a large nuclear reactor (or multiple nuclear reactors) containing over 100 t of nuclear material (nuclear fuel). Each nuclear reactor is capable of producing large amounts of energy (hundreds of millions of watts). By contrast, a typical university research reactor contains 1 to 5 kg of nuclear material (nuclear fuel) and produces 20 000 W of energy. Similarly, a nuclear fuel waste management facility may contain hundreds of tonnes of used nuclear fuel, but this nuclear fuel is in safe storage mode. These facilities are subject to inspection by the CNSC and are not capable of producing large amounts of energy.

The designated installations under the Regulations and their respective liability amounts are as follows:

Name of installation

Class

Operator

Liability amount

Bruce Nuclear Generating Stations A and B

Power Reactor

Bruce Power

$650 million, increasing to $1 billion over 4 years

Darlington Nuclear Generating Station

Power Reactor

Ontario Power Generation

$650 million, increasing to $1 billion over 4 years

Pickering Nuclear Generating Station

Power Reactor

Ontario Power Generation

$650 million, increasing to $1 billion over 4 years

Point Lepreau Nuclear Generating Station

Power Reactor

New Brunswick Power Nuclear Corporation

$650 million, increasing to $1 billion over 4 years

Chalk River Laboratories

Reactor Over 7 MW

Canadian Nuclear Laboratories

$180 million

McMaster Nuclear Reactor

Reactor 1 MW to 7 MW

McMaster University

$1.3 million

École Polytechnique: SLOWPOKE reactor

Reactor Less Than 1 MW

École Polytechnique de Montréal

$0.5 million

Royal Military College of Canada: SLOWPOKE reactor

Reactor Less Than 1 MW

Royal Military College of Canada

$0.5 million

Saskatchewan Research Council: SLOWPOKE reactor

Reactor Less Than 1 MW

Saskatchewan Research Council

$0.5 million

University of Alberta: SLOWPOKE reactor

Reactor Less Than 1 MW

University of Alberta

$0.5 million

Cameco Fuel Manufacturing

Nuclear Fuel Production Facility

Cameco Fuel Manufacturing Inc.

$2.3 million

Port Hope Conversion Facility

Nuclear Fuel Conversion Facility

Cameco Corporation

$3.3 million

Douglas Point Waste Storage Facility

Nuclear Fuel Waste Management Facility

Canadian Nuclear Laboratories

$13 million

Gentilly-1 — Nuclear Waste Storage Facility

Nuclear Fuel Waste Management Facility

Canadian Nuclear Laboratories

$13 million

Gentilly-2

Nuclear Fuel Waste Management Facility

Hydro-Québec

$13 million

Western Waste Management Facility

Nuclear Fuel Waste Management Facility

Ontario Power Generation

$13 million

Whiteshell Nuclear Research Establishment

Nuclear Fuel Waste Management Facility

Canadian Nuclear Laboratories

$13 million

Nuclear Power Demonstration Waste Management Facility

Management of Radioactive Waste other than Nuclear Fuel Waste

Canadian Nuclear Laboratories

$1 million
Role of the CNSC

Currently, the CNSC, the independent federal agency that is responsible for regulating and licensing nuclear activities in Canada, determines which nuclear facilities are designated as nuclear installations under the current Nuclear Liability Act. It sets insurance requirements for the designated installations, and it ensures that operators maintain the appropriate insurance coverage through its licensing process.

The CNSC’s mandate is to regulate the use of nuclear energy and materials to protect health, safety, security and the environment; implement Canada’s international commitments on the peaceful use of nuclear energy; and disseminate objective scientific, technical and regulatory information to the public.

The level of insurance a nuclear installation is required to carry is outside the scope of this mandate and is more appropriately set out in regulation.

The CNSC will continue to act in an advisory role to the Minister of Natural Resources on the development of the Regulations. However, the Minister of Natural Resources will be responsible for all issues related to the financial responsibility of the operators pursuant to the Act.

Convention on Supplementary Compensation for Nuclear Damage

The Act will also implement the provisions of the International Atomic Energy Agency’s Convention on Supplementary Compensation for Nuclear Damage (the Convention), permitting Canada to become a party to the Convention. This Convention is an international agreement to address nuclear civil liability among signatory countries in the event of a nuclear incident, including nuclear incidents that involve transboundary damage or take place during the transportation of nuclear material.

For the provisions of the Act to apply, nuclear installations need to be designated. This is why the Regulations are necessary. Once the Act is in force, the provisions of the Convention would be implemented. The Regulations would be in compliance with Article 4.2 of the Convention Annex.

The Canada-United States Nuclear Liability Rules

Canada becoming a party to the Convention will result in the creation of treaty relations between Canada and the United States, which is already a party to the Convention. This supersedes the need to maintain the existing reciprocity arrangement with the United States and the rules implementing this arrangement. Accordingly, the Rules Repealing the Canada-United States Nuclear Liability Rules will take effect on the day that Canada becomes party to the Convention.

“One-for-One” Rule

The Regulations and the Rules will only (i) prescribe which nuclear facilities will be subject to the Act, (ii) prescribe classes of nuclear installations and their corresponding liability limits, and (iii) repeal the Canada-United States Nuclear Liability Rules. There are no reporting requirements associated with these prescriptions. Given that the Regulations do not impose an administrative burden on business, the “One-for-One” Rule does not apply.

Small business lens

The Regulations would only affect medium to large businesses. Therefore, the small business lens does not apply.

Consultation

Consultations on modernizing the Nuclear Liability Act occurred in two phases. The first phase was during the period from 1996 to 2005 to hold discussions with stakeholders and refine policy proposals prior to developing draft legislation. Following this first phase of consultations, four bills were introduced between 2007 and 2011 to revise the Nuclear Liability Act, but were all unsuccessful as a result of the prorogation or dissolution of Parliament. The second phase of consultations was during the period from 2012 to 2014, and served to re-examine earlier proposals in light of issues that were raised by parliamentarians and stakeholders when the bills were before Parliament, namely (i) what constitutes an appropriate operator liability limit, (ii) concerns of municipal and provincial governments about emergency services costs, (iii) concerns of research reactor operators with respect to their financial security against the liability imposed on them by the Act, and (iv) consideration of Canadian compliance with a nuclear civil liability international convention to address liability and compensation for damages arising from trans-boundary and transportation nuclear incidents.

First phase of consultations

The first phase of consultations began in 1996 with the release of a discussion paper for comment on preliminary proposals for revisions to the legislation based on an extensive review by the Department of Natural Resources. Consultations were held with the operators of nuclear installations, provincial governments of nuclear power generating provinces (i.e. Ontario, New Brunswick and Quebec), and the nuclear insurers. Based on the comments received from these stakeholders, the proposals were refined through interdepartmental consultations and resubmitted to stakeholders for further consultations.

Provincial government officials consulted in Ontario, Quebec and New Brunswick supported the proposals as presented. However, Quebec and New Brunswick officials expressed concern that increased operator liability would result in greater insurance premium costs at a time when additional costs were being imposed on nuclear power generation (e.g. enhanced security measures to address the risks associated with terrorism, new CNSC cost-recovery measures, and reserve funds for nuclear fuel waste management). While these concerns were initially raised by Quebec and New Brunswick officials, they expressed support for the efforts made thereafter to reduce the impact of the increases to insurance premiums for operators (i.e. phasing in liability amounts and allowing alternative forms of financial security).

While nuclear operators were concerned about the impact the new legislation would have on their insurance premiums as a result of the increased mandatory insurance they would have to carry, they were generally supportive of the changes.

During this phase, consultations were also held with the operators of nuclear installations — other than nuclear power plants — on the levels of reduced liability amounts that would be prescribed under the Regulations. At the time, stakeholders were aware of and accepted these amounts, which were increased from the current amounts prescribed under the existing Nuclear Liability Act to levels calculated relative to the amount for nuclear power plants.

Concerns were raised by the operators of SLOWPOKE university research reactors, who indicated that any significant increase in the insurance premiums they pay could jeopardize the continued existence of their facilities. Accordingly, their liability limit under the Regulations will remain at the level prescribed in the current Nuclear Liability Act (i.e. $500,000). The operators of the other low-risk nuclear installations did not raise any concerns.

Second phase of consultations

In 2012, the Department of Natural Resources returned to key stakeholders (i.e. the operators of all nuclear installations, provincial governments of nuclear power generating provinces — Ontario, New Brunswick and Quebec — and the nuclear insurers) to obtain written comments on a consultation document that was released in advance of the steps taken by the Government of Canada to move forward on new proposals to revise the Nuclear Liability Act. In particular, the consultation document sought comments on what constitutes an appropriate liability limit for nuclear power operators under new legislation, on what constitutes an appropriate financial security amount for research reactor operators to cover their liability, and on the possibility of canadian compliance with the Convention on Supplementary Compensation for Nuclear Damage.

While the operators of nuclear power plants expressed concern with the higher cost of insurance premiums needed to cover a $1 billion liability amount, they recognized the need to modernize the legislation and that they have benefited financially from not being required to carry higher amounts of financial security for civil liability since the enactment of the Nuclear Liability Act in 1976.

In October 2014, preliminary consultations on the substance of the Regulations were undertaken with all nuclear installation operators (i.e. the nuclear power plant operators and the operators of other nuclear installations). The operators were invited to comment on the designations, the nuclear installation classes, and the liability limits. There were no major issues identified as a result of these consultations. Only three operators provided comments. One operator sought clarification on the implications of the designation of its nuclear installations. One operator suggested that the nuclear installation class “reactors 1 MW to 7 MW” be modified to “reactors 1 MW to 10 MW” to provide it with the flexibility to increase the power of its reactor in the future. One operator expressed concern over the classification of Gentilly-2 as a nuclear power reactor, given that it is in safe-shutdown mode. In order to address these concerns, the Department of Natural Resources, in consultation with the CNSC, engaged these operators further during the development of the Regulations. No additional concerns have been raised since that time.

Prepublication in the Canada Gazette, Part I

These Regulations were prepublished in the Canada Gazette, Part I, on June 27, 2015, followed by a 30-day comment period to provide interested persons with the opportunity to make comments. One comment was received from Bruce Power Inc. seeking that its Bruce “A” Generating Station and Bruce “B” Generating Station be designated as a single nuclear installation under the Regulations. Apart from the Bruce Power Inc. comment, no other comments were received.

The Department of Natural Resources, following consultation with the CNSC pursuant to subsection 7(1) of the Act, reviewed Bruce Power’s request and found it reasonable and falling within the authority of the new Act’s provisions concerning the designation of nuclear installations. The recommendation is therefore made that the Regulations should be amended such that the Bruce A and Bruce B facilities are designated as a single nuclear installation.

Rationale

The Act establishes the absolute liability regime for operators of nuclear installations; however, the provisions of the Act may not apply until nuclear installations have been designated, which may only occur by regulation. This is why the Regulations are required. The Regulations designate which nuclear facilities will be subject to the Act, and establish categories of nuclear installations so that liability limits are commensurate with the risk the installations represent. This ensures operators are held responsible and accountable to the Canadian public for civil damages resulting from any radiation release resulting from their nuclear installation or from transport of nuclear materials to or from their nuclear installation.

The Regulations provide greater flexibility to prescribe and/or amend liability limits for different classes of nuclear installations, when necessary.

The Regulations support public well-being as they require operators of nuclear installations to carry enhanced financial security for the compensation of civil damage. Prescribing reduced liability levels for certain classes of nuclear installations is beneficial to the operators of these classes, because the financial security that they will be required to carry will be commensurate with the nature of the activities associated with these classes.

Nonetheless, the operators of nuclear installations — other than nuclear power plants — will carry increased costs as a result of the liability limits imposed by the Regulations. The incremental costs to these operators stem from increases to the insurance premiums they will be required to pay for commercial insurance needed to cover their prescribed liability amounts as required by the Act. The total incremental aggregate cost for the affected operators of the 13 low-risk nuclear installations is approximately $180,000 annually. The bulk of this increase — $130,000 — will be borne by Canadian Nuclear Laboratories for insurance on its nuclear installations that it — as a federal Crown corporation — was not required to carry under the existing Nuclear Liability Act.

Lastly, Canada becoming a party to the Convention renders the Canada-United States Nuclear Liability Rules obsolete, so they will be repealed.

Implementation, enforcement and service standards

The Regulations will come into force on the date that the Act comes into force.

The Department of Natural Resources will oversee the enforcement of the Regulations, and the CNSC, prior to granting a licence to operators, will ensure that they have the required financial security in place to cover their respective liability amount, as established by the Act and the Regulations.

Section 77 of the Act provides for a fine of not more than $300,000 for each day on which an operator fails to maintain financial security in the form and manner required by the Act or the Regulations.

Contact

Dave McCauley
Director
Uranium and Radioactive Waste Division
Natural Resources Canada
580 Booth Street, 17th Floor, Room C2-4
Ottawa, Ontario
K1A 0E4
Telephone: 343-292-6192
Email: dave.mccauley@canada.ca