Pull the plug on nuclear subsidies

The $970 million just announced by federal natural resources minister Jonathan Wilkinson to build a new reactor at the Darlington nuclear site near Toronto is just the latest nuclear industry assault on the public purse.

This is the largest sum ever provided by the Canada Infrastructure Bank (CIB) for an energy project. Minister Wilkinson characterized it as a low-interest loan, but refused to provide any details on the interest rate or terms of repayment.

Judging by the performance of other nuclear projects, Canadian taxpayers could wait a long time to see any return on their “investment.” As noted in the 2022 World Nuclear Industry Status Report, “experience shows that simply having an order for a reactor, or even having a nuclear plant at an advanced stage of construction, is no guarantee of ultimate grid connection and power production.”

Asked about nuclear subsidies at last year’s Glasgow climate summit, federal environment minister Stephen Guillbeault said “It’s not up to the government to decide which of these technologies will thrive. It’s going to be up to the market.”

At that time, Conservative MP Dan Albas said Guilbeault should be a much more ardent backer of nuclear technology. Now the Conservatives and Liberals are singing from the same song sheet: When it comes to nuclear power, money is no object.

The $970 million is going to Ontario Power Generation (OPG), a provincial crown corporation devoted to large, expensive, over-budget nuclear engineering projects. OPG’s bloated bureaucracy, with over 10,000 employees receiving average salaries in excess of $100,000 per year, is a huge drain on Ontario — and now federal — taxpayers.

Ontario taxpayers subsidize provincial electricity rates – already much higher than those in neighbouring Quebec and Manitoba — to the tune of $6 billion per year. Much of this subsidy benefits OPG, which otherwise would not be able to maintain and “refurbish” its existing reactor fleet.

Rather than cutting its losses, OPG is doubling down on nuclear.

An OPG media release provides few details other than referring to “Canada’s first small modular reactor (SMR),” with a power rating of 300 megawatts. SMRs are the nuclear industry’s effort to dust off old, failed nuclear technologies and recast them as “innovative” or “next generation”.

OPG is not the only crown corporation with its hands in taxpayers’ pockets.

New Brunswick Power, despite being awash in debt, is also promoting two “next generation” SMRs at its Point Lepreau reactor site. Both the provincial and federal governments have provided multi-million-dollar grants, ignoring warnings that these SMR designs, which would be fuelled by plutonium, have been riddled with technical problems in the past and would create serious risks of nuclear weapons proliferation.

The linchpin of nuclear corporate welfare in Canada is Atomic Energy of Canada Limited (AECL). Created in 1952 as a federal crown corporation, AECL now has fewer than 50 employees, but receives over a billion dollars of federal money each year.

How, one wonders, can so few people spend so much money? The answer is hidden away in the semi-wilderness of the upper Ottawa Valley. The Chalk River Laboratories, Canada’s largest federal research facility, are a playpen for companies from around the world seeking to keep their fading nuclear dreams alive.

Chalk River is home to Canadian Nuclear Laboratories (CNL). In 2015 the Harper Government transferred ownership of CNL, at that time an AECL subsidiary, to a consortium of private corporations. Current owners are two Texas-based firms, Fluor and Jacobs, and Canada’s own SNC-Lavalin. All have investments in SMRs. AECL hands over most of its annual billion-dollar federal subsidy to the private consortium under a 10-year contract.

The majority of the directors of the consortium, cleverly called the “Canadian National Energy Alliance,” are Americans. They appoint CNL’s revolving door of American senior managers, who come to Chalk River for brief stints and draw salaries averaging over $700,000 per year.

Just as the terms of the $970 million CIB “investment” in OPG are a secret, financial details of AECL’s contract with the consortium have never been made public. The nuclear industry cannot stand transparency.

Chalk River is the location of Canada’s largest-ever single energy research expenditure, an $800-900 million Advanced Nuclear Materials Research Centre (ANMRC). Over a dozen contracts have been issued for its construction. It is intended to “enable post-irradiation examination of small modular reactor (SMR) and next-generation nuclear fuels.”

The ANMRC ground-breaking ceremony took place on September 7, attended by Chief Science Advisor of Canada, Dr. Mona Nemer, and Liberal MP Jenna Sudds, Parliamentary Secretary to the Minister for Women and Gender Equality and Youth.

Given that there are no SMRs at present, and noting the urgency to deal with the climate crisis, research on SMR fuels does not seem a prudent public investment.

Despite an AECL/CNL invitation for companies to come to Chalk River and build SMRs, the only taker so far has been OPG. In partnership with a U.S. company, Ultra Safe Nuclear Corporation, OPG has applied for Canadian Nuclear Safety Commission (CNSC) approval to build a $100 million, 5-megawatt SMR. The CNSC approval process, which began in July 2019 and includes an environmental assessment, is now more than two years behind schedule.

In August 2019 the Trudeau Government moved to speed up construction of SMRs by exempting them from its new impact assessment regulations. The CNSC has pre-approved new nuclear reactors at the Darlington site, providing more assistance to OPG’s proposed SMR. CNSC president Rumina Velshi, formerly responsible for “new build” at OPG, promises that OPG’s project will be North America’s first operating SMR.

Although CNSC has not approved the actual design of the Darlington SMR, OPG is already lining up contracts with other companies. This strategy, similar to that used for the ANMRC, may help build support for the project, but creates risks of greater complexity, higher cost, and long delays.

Despite the enthusiasm of Liberal and Conservative politicians for SMRs, they represent a costly and dangerous distraction from the real action required to address the climate crisis. Nuclear power remains a dying industry rooted in hyper-consumption and waste.

Nuclear subsidies for crown corporations and their private sector corporate allies are crowding out investments in energy conservation and renewable technologies, fuelling inflation, and making electricity less affordable.

It’s time to pull the plug on corporate welfare for the nuclear industry.

Ole Hendrickson is an ecologist, a former federal research scientist, and chair of the Sierra Club Canada Foundation’s national conservation committee.

This article was originally published on Rabble.