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TORONTO — The Harper government’s fight with its nuclear regulator threatens to throw into turmoil Ontario’s ambitious plans to address the province’s looming electricity shortage by building new reactors, industry sources say.
Demand for electricity in the province is expected to exceed supply by 2015. The McGuinty government plans to build at least two reactors and refurbish existing ones as part of a $60-billion initiative to meet Ontario’s electricity needs over the next 20 years.
But the dispute between the federal government and the Canadian Nuclear Safety Commission, which culminated in the firing of president Linda Keen this week, raises new questions about whether the province can meet that timetable.
“The provincial government is in a really bad place right now on the nuclear file, and it’s all because of what’s going on in Ottawa,” a senior industry official said.
The McGuinty government has not yet decided whether it will buy reactors from Crown-owned Atomic Energy of Canada Ltd. or from an international company. It typically takes 10 years to build a reactor. But the sources said it could take much longer if the province goes with AECL because the company’s latest generation reactor is still on the drawing board and has not been licensed for sale in Canada. But the bigger problem, they said, is that the Harper government’s poisoned relationship with the CNSC could reduce public confidence in the regulatory review of new projects in Ontario.
Another industry official said the dispute is a top concern for Ontario Energy Minister Gerry Phillips.
“They don’t realize the difficulties they’re causing at the provincial level,” he said of the federal government. “They’re making the province’s decisions more difficult in an environment when time is not a luxury.”
Mr. Phillips was not available yesterday. But he addressed the situation between the federal government and the CNSC last month.
“I think whoever we select, people are going to want a great deal of assurance that we’ve made the right decision, that we’ve got the right cost containment on it, we’ve got confidence the proponent can deliver … the electricity,” he told reporters.
The federal government launched a review last November of AECL’s future, including a possible sale. But The Globe reported that the review is on hold because of the feud.
However, the Department of Natural Resources moved quickly yesterday to appoint a visiting executive working in Northern Affairs to head a project team that will do the review. Tom Craig has spent 28 years working in the oil and gas industry in Calgary.
The government had offered the job to Bryne Purchase, a former deputy energy minister in Ontario. But the government then withdrew the offer after someone in Ontario raised objections, sources familiar with the matter said. Dr. Purchase, an economist, has been publicly critical of the McGuinty government’s policy on coal-fired electricity plants since retiring from the government in 2004.
Officials in Natural Resources were told that, “If he’s the person, it will make it very awkward for us to deal with him,” according to one of the sources.
Spokesmen for Mr. Phillips and Premier Dalton McGuinty said no one in their offices raised objections.
Dr. Purchase was not the first person the federal government approached for the job, the sources said. The government initially offered it to James Gillis, another former deputy energy minister in Ontario who is now vice-chairman of investment banking firm Desjardins Securities, the sources said.
Mr. Gillis turned down the job, but he is hoping Ottawa hires his firm as its investment adviser on AECL.
Mr. Gillis declined to comment when reached yesterday.
Natural Resources Minister Gary Lunn would only say yesterday that the government has undertaken to hire someone. “But I’m not going to get into who is selected and who is not and why,” he told reporters in Victoria.
With a report from Murray Langdon in Victoria
The Globe and Mail