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Even before the damning Auditor-General’s report, and even before the shutdown of the Chalk River nuclear reactor slashed North America’s supply of medical isotopes, evidence abounded Atomic Energy of Canada Ltd. (AECL) was floundering.
Warnings in speeches and reports date back more than a decade. The Crown corporation has not sold one of its Candu nuclear reactors in nearly eight years and no government—either Conservative or Liberal—has been willing to offer the subsidies that AECL now requires.
The end result is that a business that produces 60% of the world’s medical isotopes went ignored and underfunded. To informed observers, the reason for the neglect is obvious: Backing nuclear power can hurt a politician, while supporting scientific research for its own sake is hardly a vote winner.
“It is an easy industry to attack and it’s got all sorts of detractors,” said Steve Aplin, an Ottawa-based energy consultant. “The upshot is that AECL is a federal asset that people would love if it started making money again, but until then it has to rely on subsidies—and those aren’t popular.”
Mr. Aplin noted that until the isotope crisis occurred in December, AECL was largely known as the maker of the Candu reactor. With everything from the Chernobyl meltdown to cost overruns for Ontario plants affecting public opinion on nuclear energy, AECL’s own reputation has suffered.
“The federal government hasn’t been throwing money at AECL because the opposition would start asking questions in the House of Commons like, ‘Why are you throwing money at these lemons?’ It’s so political that no government has wanted to start dealing with it,” Mr. Aplin said.
While media reports this week focused on a recent Auditor-General’s report warning of problems at the Chalk River, Ont., facility, that was not the first time the alarm was raised. The signs have ranged from subtle to blatantly obvious over the past 15 years.
Indeed, the Auditor-General’s annual reports have been littered with concerns about AECL. In 1998, Denis Desautels, the then auditor-general, urged AECL and the federal government to resolve a number of disputes, including a fight over the disposal of nuclear waste.
“Corporate plans have not been approved and corporate plan summaries have not been tabled in Parliament for over three years,” Mr. Desautels said in a statement. “This is an unprecedented situation for Crown corporations and should not continue.”
The situation did continue. The government failed to approve AECL’s five-year corporate plan for eight years in a row beginning in 1994, a clear violation of federal legislation. A long-term strategy was finally passed in 2002, but the Auditor-General remained concerned.
“There is no consensus between the corporation and the government on how best to manage [AECL’s] activities,” the 2002 annual report said. “While commercial activities will assist in funding these activities, it is by no means certain that its contribution will provide all of the funding required.”
Issues surrounding AECL extended beyond money problems. In 2002, there was a public outcry when it was revealed the company had been dumping a mixture of radioactive material and human sewage into the ground. A spokesman at the time defended the practice, noting AECL could have legally spread the sludge on farmers’ fields without violating its licence. Nonetheless, the company agreed to start storing the sludge in approved containers.
The Auditor-General’s report released this week drew new attention to AECL’s problems. It noted that a new facility to make medical isotopes, first promised in 1996, still had not opened. If the dedicated isotope facility had been completed, there would have been no interruption in the supply when the Chalk River reactor was forced to close in November. Moreover, the Chalk River facility itself needs $850-million in refurbishment over the next 10 years to extend its life, according to Auditor-General Sheila Fraser. While the government has provided $34-million over the past five years to address “urgent health, safety, security and environmental issues,” no money has been offered to cover the “other significant costs.”
One reason three consecutive governments have not provided funding is that Chalk River is regarded as a research and development facility, despite producing enough isotopes for 16 million cancer treatments and five million medical scans each year.
Funding science for science’s sake simply is not the priority for any government, according to one frustrated industry insider.
“Government has very short-term thinking when it comes to research and development,” the insider said. “Canada’s commitment to scientific research has gone down in comparison to other countries and that’s all part of the issue.”
Also limiting AECL is the fact that as a Crown corporation it has limited ability to borrow money or seek alternative financing for its projects. “It can’t run itself like a regular business,” said the insider. “They used to run on a year-by-year basis, so that by the time they got approval for their plan, it was time to start writing another one. Who can run a business like that? No one.”
It is an open secret in Ottawa that the Conservatives’ preferred solution to AECL’s dilemma is privatization. Doing so would allow the company more latitude in financing while unburdening the government of a troublesome file. Other former Crown corporations have been successfully privatized, including MDS Nordion, the company that distributes the isotopes produced at Chalk River.
Stephen Harper, the Prime Minister, this week hinted at major changes to come, noting that AECL suffered from financial and managerial challenges.
“These are very serious problems that have developed over a very long period of time. There are no short-term solutions,” he said.
But some question whether a privatized AECL would be able to survive without an increase in its core business.
“What will solve their problems is reactor sales,” Mr. Aplin said, noting help may be on the way if the Ontario government purchases new Candus. “The federal government wouldn’t have to fork over all this money and they could solve their problems that way.”
jcowan@nationalpost.com
The National Post