Federal funding for Atomic Energy of Canada Ltd. has tripled since the Conservative government of Stephen Harper came to power in 2006. Figures provided to The Canadian Press by Natural Resources Canada show that taxpayers will pour more than Can$1.2 billion into the Crown corporation during the fiscal year just ending and the one set to begin April 1. The total includes $658 million in 2008-09 and another Can$574 million for 2009-10.
Atomic Energy of Canada Limited (AECL) is the federal crown corporation that designs and markets CANDU reactors. In 2002, on AECL’s 50th anniversary President Robert Van Adel ranted in the propaganda style of the 1950s about the “unending promise of nuclear power”. Fact is that AECL is a financial basket case that in 2002 had received Can$17.5 billion in subsidies already. (1 Can$ is 0.79 USD and 0.60 Euro).
Since the Conservatives came to power in January 2006, the annual government stipend for AECL has averaged out to Can$433 million a year. In the seven preceding years under former Liberal governments, taxpayer subsidies to AECL averaged Can$158 million a year. Adjusting for inflation, AECL subsidies are now back up to where they were when they last peaked in the mid 1980s.
Some of the funding increase relates to the production of medical isotopes and AECL's aging research reactor at Chalk River. Some is for decommissioning of the failed MAPLE reactors at Chalk River and still more is for environmental cleanup. Natural Resources Minister Lisa Raitt acknowledged that a significant part of the increased funding is targeted to help AECL develop its next-generation reactor, the ACR 1000. Ottawa provided more than Can$100 million last year and another Can$135 million for 2009-10 as AECL races to complete the design that it hopes to sell to the Ontario government. "It is the vehicle on which we're bidding in the Ontario procurement competition that's going on right now," said the minister. If Ontario should choose a rival reactor design, that taxpayer investment "would have been wasted," says Bryne Purchase, a former Ontario deputy energy minister.
But Ottawa appears to be betting the ACR 1000 can win the Ontario bid and then be sold to other provincial jurisdictions, including Alberta and Saskatchewan, and possibly abroad. In that case, the conservatives think, not only will AECL's market value have been enhanced but also the industrial spin-off benefits to Canada will be significant. "We've a very good history in Canada with respect to nuclear power," said Raitt. But skeptics point to AECL's recent fiasco over the MAPLE reactors and say increasing subsidies for another untried reactor are "ridiculous and outrageous."
The Conservative government is also sitting on a study it commissioned that reportedly recommends selling off a majority stake in AECL's commercial reactor and refurbishment business to the private sector. Critics say the Conservatives are spending good money after bad, considering AECL's uncertain future. "Life support can be expensive, but if you're about to put the bullet in the head of the organization you have to ask yourself: Why are we doing this?" said Shawn Patrick Stensil, energy campaigner for Greenpeace Canada. Stensil and others say Ottawa is pumping up the commercial value of AECL in order to sell off the profitable parts. "I don't know if I take it as a criticism," countered Raitt.
But some industry watchers believe AECL required a cash infusion, whatever its future: "It's necessary whether they privatize it or if they don't." But Greenpeace reacts: "There's more money down the black hole, when we could actually be building energy sources that could lower greenhouse gas emissions and create jobs in the here and now."
Sources: The Canadian Press, 10 March 2009 / "Canadian Nuclear Subsidies, Fifty Years of Futile Funding" by David Martin, Campaign for Nuclear Phase out, available at: http://www.cnp.ca/resources/nuclear-subsidies-at-50.pdf
In May 2008, AECL suffered an embarrassing setback when it scrapped the development of two 10 MW Maple isotope-producing reactors after pouring hundreds of millions of dollars (about Can$ 600 million) into the project. The federal crown corporation conducted tests on the reactors during the spring of 2008 and could not find a solution to a design flaw that would make the reactors more prone to a meltdown. The Maple reactors (construction started in 1992) were meant to secure Canada's dominant position in the market for medical isotopes. In the three years before the decision alone, AECL spent more than Can$200-million as it sought an answer to a vexing problem known as a positive power coefficient of reactivity (PCR). The reactor is supposed to have a negative coefficient of reactivity, meaning the nuclear reaction would slow down if the power in the core increased. Instead, the nuclear reaction increased with additional power, heightening the chances of a meltdown.
Globe and Mail (Can.), 16 May 2008