Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 31 - Evidence, June 4, 2002
OTTAWA, Tuesday, June 4, 2002
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C- 10, respecting the national marine conservation areas of Canada; and Bill C-27, respecting the long-term management of nuclear fuel waste, met this day at 5:33 p.m. to give consideration to the bills.
Senator Nicholas W. Taylor (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we will now proceed with our study on Bill C-10, an act respecting the national marine conservation areas of Canada. We have considered this bill for some time, having heard from many different witnesses. We have pretty well hammered out the problems on the marine part of the bill, although today we had some late requests from people living on West Coast islands asking to appear. However, we have already talked about this via video conference with some witnesses from B.C.
One item on which we have not had a complete discussion was the non-derogation clause as far as Aboriginal people are concerned. As a result, we asked Mr. Pryce and Mr. Pentney to appear before us today. They were here at our last hearing, but were forced to adjourn a few minutes into their presentation because of a committee scheduling problem.
Could you proceed today to explain more about this situation? The only member of the committee who has any questions on this matter is Senator Sibbeston.
Mr. William F. Pentney, Deputy Head, Aboriginal Affairs Portfolio, Department of Justice Canada: Mr. Chairman, we do not have an opening statement. The transcript of our previous discussion with you gives the outline of the explanation. I would be just as happy to go to questions, if it pleases the Chair.
Senator Sibbeston: Mr. Chairman, I would like to begin with a statement and then offer what I think is a possible solution. As you know, at our last committee meeting we made available a letter that was provided by the Minister of Justice indicating that he was prepared to look at the matter and try to reach a resolution. That led to my assumption that the Department of Justice officials will engage in a process with those of us who are interested in this issue.
I want to lay the groundwork for what I think would resolve the matter. Officials indicated that the changes in wording of the non-derogation clause results from changes in the law as reflected in cases such as the Supreme Court decision in Sparrow which was rendered in 1990. Somehow, on reading the new wording, although the changes are slight, you would not think in and of itself it would indicate the change in law that the officials talk about. The old standard non-derogation clause was simple and effective and was placed in the legislation after the new Constitution in 1982.
The Firearms Act, the Sechelt Indian Band Self-Government Act, the Canada Petroleum Resources Act, the Canada Wildlife Act, the Canada-Newfoundland Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act all contain the wording of the older non-derogation clause. The wording in these pieces of legislation is just two lines. It is simple. They state, ``For greater certainty, nothing in this Act shall be construed so as to abrogate or derogate from any existing aboriginal or treaty rights...'' This is a clear, simple statement and seemed to have been satisfactory to the government up until 1998.
Since 1998, there have been different or new wordings. One of the wordings is contained in clause 2(2) of the bill before us which provides, in part, ``For greater certainty, nothing in this Act shall be construed so as to abrogate or derogate from the protection provided...
``From the protection provided'' is the new wording to which I refer. Another wording includes the phrase ``from the application of.'' The government has used these new wordings in the past few years. In my view, they create confusion and could add to different interpretations by the courts. Thus, we are concerned.
In 1999, the Social Union Framework Agreement signed by Canada and all the provinces and territories reverted to the words similar to those found in section 25 of the Charter, which is the first simple version that I stated.
In my view, changes in the wording can be very confusing. Aboriginal peoples are concerned that a clause in federal acts — which is there to be a reminder or a flag that Aboriginal rights are not to be abrogated — can now be used as a signal to the courts. Supposedly this change in wording is to reflect the change in law. I am concerned that what had been at one time just a reminder and even a shield, can now be used as an open door — a floodgate for the courts to begin infringing and impinging on Aboriginal rights.
In this way, I feel the justice department has drafted the non-derogation clause to suit its litigation purposes. I would remind the committee and officials that the Supreme Court of Canada, particularly in the Sparrow case, made a number of statements with respect to Aboriginal rights. I had a chance over the weekend to read the Sparrow case. It contains some strong wording by the court to remind Canadians that Aboriginal rights are to be respected. The judgment states:
Our history has shown, unfortunately all too well, that Canada's aboriginal peoples are justified in worrying about government objectives that may be superficially neutral but which constitute de facto threats to the existence of aboriginal rights and interests.
It goes on to say that ``section 35 is to be construed in a purposive way'' and ``that a generous, liberal interpretation of the words is demanded.'' The judgment reiterated a statement that was made by the court in an earlier case: ``...the honour of the Crown is always involved and no appearance of `sharp dealing' should be sanctioned.'' The court tells us to be generous and that the rights of Aboriginal people are real. It further states that ``... s. 35(1) of the Constitution Act, 1982, represents the culmination of a long and difficult struggle in both the political forum and the courts for the constitutional recognition of aboriginal rights.''
While the court says that we ought to interpret Aboriginal rights terms generously, in my view, we now find that the government through its legislation is trying to impede or limit Aboriginal rights. I do not think it is the role of Parliament or any legislature to do that. Let the courts do their jobs and interpret the legislation as they will. However, let us not have the Department of Justice try to take away from the Aboriginal rights of people by including little clauses in new legislation. I see this trend occurring and it disturbs me.
I believe there are a number of solutions, and I will refer to four of them. First, we could revert to the old, standard non-derogation clause. It is simple and effective. Second, the government could enact a bill outlining the government's recognition of Aboriginal rights and treaty rights, which would apply to all federal legislation.
We have considered the matter. I have drafted a bill to enact an Aboriginal bill of rights, which I was considering introducing in the Senate at some point if this matter was not resolved. If this were enacted, it would mean that instead of having non-derogation clauses in every act, we could have one act dealing with Aboriginal rights. This is just a proposal, and I would make it available to senators to review.
The Chairman: Are you happy with the recent letter that the Minister of Justice sent to you, which has been circulated?
Senator Sibbeston: Yes. The letter from the minister is encouraging, and it resolves the matter for the time being without our having to amend the bill at this point. We are satisfied. We take seriously the minister's commitment to review the matter of non-derogation clauses.
The third approach is to insert a section in the Interpretation Act that would provide clarity and certainty of government treatment and approach to the recognition of Aboriginal rights. It is interesting to note that the Saskatchewan legislature has done that in its Interpretation Act. I have a copy of that piece of legislation, if committee members would like to see it.
The final approach is through an Aboriginal rights audit. There are sections in the Department of Justice Act and in the Statutory Instruments Act under which the Minister of Justice, and, in the case of regulation, the Clerk of the Privy Council, review all legislation and regulations to see if they are inconsistent with the Charter. The fourth approach would be to have an Aboriginal rights audit. This would make it possible for the Minister of Indian Affairs or somebody in the government to audit and review all legislation that comes forward with a view to seeing whether Aboriginal rights are being infringed.
They are four possible solutions. I look forward to working with the Minister of Justice and his officials in the next few months. I hope we will have met and resolved the matter by this fall, because it is a serious issue. If the issue is not dealt with, then we will be raising it every time some legislation comes forward containing such provisions. It is a cumbersome situation as it exists, because I think it can delay the swift passage of legislation. If we were able to come to a solution with the Minister of Justice, it would make our work easier.
The Chairman: Do you want to add to that, Senator Watt, before I ask the witnesses whether they have a comment?
Senator Watt: Senator Sibbeston covered every aspect. He ended with the audit process requirement. This would ensure that the commitment of the government of the day remains alive, because from time to time we find out that is not the case. It is important to stress that it would be good to be able to audit what is really happening. As you know, at times relations between the two groups are not that satisfactory. Perhaps this would help to pave the way to more positive relations so they can move forward with the partnership idea.
I am satisfied with the explanation that has been provided by the justice department, although that does not necessarily mean that I agree with everything that has been said. However, I think we are now at the point where we have to start making some decisions.
We are sending a letter to the Minister of Justice and I intend to table a copy of that letter today as a part of the record. The letter contains eight questions that need to be answered by the Department of Justice. I can go through them quickly, if you want me to, but it is not necessary because members will be getting a copy of this letter.
Senator Christensen: Is this relevant to the legislation we are dealing with now or with what Senator Sibbeston has said?
Senator Watt: The letter is relevant to the points that Senator Sibbeston raised.
Senator Spivak: It would be better to have the letter in front of us.
The Chairman: I do not want to have two meetings at the same time.
Senator Sibbeston wanted to put it on record, but he will be voting, I gather, in support of the bill. However, he wanted to say to those of concerned about non-derogation that there are other events unfolding out there, and as one of our past prime ministers once said, ``Things are unfolding as they should.''
Senator Watt: Aboriginal senators got together to come up with a solution to handle this particular bill.
The Chairman: Its sounds so complicated that I am not sure we want to consider that now.
Senator Watt: Instead of holding up the bill and because you have a copy of the letter, there is no need for me to highlight those eight points. Aboriginal senators decided that as long as we have a definite undertaking by the minister to ensure that we will revisit those points in the fall, we have no intention of holding up the bill.
Senator Christensen: Is it the intent that there be an omnibus bill to change the wording?
Senator Watt: That depends on whether it will be one form of proposed legislation encompassing all the pieces or whether we will be amending each one separately. I do not know yet which way that will be done.
The Chairman: Senator Christensen, we will need one or two more meetings with the minister. The minister has written that he is willing to open it up and consider it.
In respect of the discussion we had, the witnesses have every right to say that they have no comment and to move on. The non-derogation clause will be accepted as is. Sometimes you are better off not saying anything, although I am not trying to give you a hint.
I always remember a friend of mine from a time when ladies used to buy wigs, about 30 or 40 years ago. She owned a wig shop and a particular lady came in one day and bought an expensive one, about $200. She paid for the wig and the salesperson thought she would guild the lily and said, ``Your husband will love it,'' to which the woman replied, ``My husband will kill me.'' The wig was not sold in the end. The lesson is that once the thing is sold, you leave it alone.
You have sold the clause that is here, but do you want to comment?
Mr. Pentney: Taking your wise advice, I would simply say that the minister has written a letter to indicate that he is prepared to examine the issue and that he welcomes the views of the senators. We look forward to a productive discussion.
The Chairman: Thank you for that information. I am sorry you returned to our committee for only for 30 seconds, but it is probably the most successful 30 seconds you have spent this past month.
Mr. Pentney: It was an honour to appear.
Senator Watt: We want some assurance from the committee members that, when we revisit this matter, you will support us.
The Chairman: We might not support you in what you want done, but we will support you in —
Senator Watt: Are you changing your mind already?
The Chairman: As an old trader, I do not know what you have offered to do. Certainly, we will support you in opening the issue and pursuing it.
Senator Sibbeston: A joint ministerial advisory committee has been advising Mr. Nault with respect to the First Nations Governance Act. Apparently they have recommended that they go back to the pre-1996 wording based on section 25. Therefore, the feeling is not just ours. There are other people examining the issue who feel the same way.
Senator Watt: Otherwise, there will be many problems.
The Chairman: Today, we were presented with letters from Senators Carney and Comeau. I believe Senator Spivak wanted this on the agenda. Just so the record will show, Senator Spivak, we began debate on March 7 in the Senate on this bill. It was in the House of Commons for four to six months prior to that.
After we received it March 8, we circulated it to as many people as we could. We took in 11 requests in total: 10 from the B.C. Coast and one from an Aboriginal group. The person representing the B.C. Aboriginal Fisheries Commission came to Ottawa. We did not know how to handle the response and so we put on a video conference and eight of them appeared.
I am trying to say that there is no evidence from the hearings in the 24-hour approach, that anything that they wanted to say that has not already been said. They just said that, as a coastal community of B.C, they would like to speak their two bits' worth. I just wanted you to know that. I am prepared to take Senator Carney's slings and arrows when I return.
Senator Spivak: These are Gulf Islands. Did you have a representative of the Gulf Islands?
The Chairman: No, we had the Charlottes and North Vancouver Island represented.
Senator Spivak: I wonder if I could convey her concern to you. She said that there are concerns being voiced and that she is alarmed that the committee has not heard from the Southern Gulf Islands because this area is part of the Pacific Marine Heritage Legacy and one of the regions under consideration for a marine conservation area designation. She believes that representation from the Gulf Islands is imperative.
The Chairman: Thank you for giving us that message. I appreciate her point. There are about 1,500 islands between the Puget Sound and the Juan de Fuca Strait. Each person figures his or her island is more important than the others. We listened to 10 islanders plus the Aboriginal people scattered throughout the area. They seemed to be all right with that approach.
Senator Spivak: Is it this committee's view that sufficient witnesses have been heard?
The Chairman: Yes, that is right.
Senator Spivak: Thank you for that response.
The Chairman: I can write to her to let her know.
I do not want to proceed with the clause-by-clause until Senator Kenny arrives, which should be soon. Perhaps we could hear from our witnesses on Bill C-27 in the interim. From Natural Resources Canada, we have with us, Mr. Peter Brown, Ms Carmel Letourneau and Ms Joanne Kellerman.
Mr. Brown, Senator Spivak, the deputy chair of the committee, has a recent news release on how France is handling its nuclear waste. There are two types of machines. If you do not want to comment on it, do not.
I will begin questioning because the nuclear issue has bothered me. First, why is importing and exporting of waste not mentioned in the bill at all? There is a fairly valid worry by many people that once we get a good system operating we might want to import from other countries, particularly if we are trying to sell them a reactor.
Mr. Peter Brown, Director, Uranium and Radioactive Waste Division, Natural Resources Canada: As the minister clearly indicated in his testimony before this committee, the bill is silent on the importation or export of nuclear fuel waste as there is no intent to do so. The minister was very clear on that perspective, and that question is already covered in other acts such as the Canadian Environmental Assessment Act, the Nuclear Safety and Control Act, the Imports and Export Act, and the Transportation of Dangerous Goods Act. All these other acts cover the issue of importation and exportation and this bill therefore remains silent on that. The minister was clear on that perspective.
The Chairman: If that is left blank and later on, if the public needs more reassurance, there can be a resolution of Parliament. This bill does not touch the issue. You do not think it should, because the minister has already said it should be that way — like the export of water.
Mr. Brown: Again, the minister was clear that would be a decision for any future government.
The Chairman: Is this the new minister, or the one who worked on the bill?
Mr. Brown: This was Minister Dhaliwal, who made that statement in front of you.
Senator Spivak: The only trouble I have is that it is all very well for one minister to give a commitment, but that is not the same thing as having very strong legislation, which then has to be overturned. As a policy matter, if the government is committed to not allowing the importation of nuclear waste, then I would think that the best route for that is through legislation.
You are saying this is covered in other acts, and, in your opinion, is that a strong enough guarantee? Is there a strong enough guarantee in other pieces of legislation such that one could not import nuclear waste, and one would be breaking the law to import any nuclear waste into Canada?
Mr. Brown: I will go back to the minister's statement. He was clear that this is covered in other acts. It is the policy of the Government of Canada that there is no intent to import or export nuclear fuel waste, and that is precisely what the minister stated and that is my statement.
Senator Spivak: I am asking you a particular question. In those other pieces of legislation, wherever they are forbidding the import of nuclear waste, are they strong enough so that someone would be breaking the law? Are there any criminal sanctions? What is the status of those guarantees in other pieces of legislation?
Mr. Brown: If you were to import or export, I think that there is nothing in those other pieces of legislation that say it is against the law. Rather all these other pieces of legislation allow that and due process should occur.
Senator Spivak: Why am I not comforted by that comment? I do not understand what you mean. If you are going to import nuclear waste, that is a serious issue, it is not like importing Coca-Cola or something like that, it seems to me that if it is the policy of the government not to allow it then that ought to be properly ensconced in legislation.
Mr. Brown: It is not the policy of the Government of Canada that this should happen at all. If it were to happen, and if some future government were to make a decision either to import or export then due process would indeed follow.
Senator Spivak: Which means what?
Mr. Brown: There would be public reviews, the Canadian nuclear safety commission would ensure that what is done is done safely, and the Transportation of Dangerous Goods Act would apply, as would the Import Export Act. I do not know the details of those acts which would be triggered, but all I can say is they would be certainly triggered should this occur.
Senator Spivak: Thank you for your comments. Mr. Chairman, I think if that is an issue of some importance then we should get that information in detail.
The Chairman: I do not think it applies particularly to this bill, but we will get it anyway.
Senator Spivak: I think you should.
The Chairman: I do not think there is any legislation forbidding the export or import. It is a policy like water.
Senator Spivak: It is some nebulous thing.
The Chairman: I agree. If there was a possibility of a change in political leadership in this country, I would insist too.
Senator Spivak: We are into a legislative process here and we have been given assurances that the reason it is not in this bill is because it is in other bills. If we have been given that assurance we ought to have the evidence.
The Chairman: We will be meeting Thursday morning.
Mr. Brown: It is fundamentally not within the purview of this bill because this bill deals with Canadian nuclear fuel waste in Canada. That is specific.
Senator Spivak: That is fine.
The Chairman: This is strictly an add-on. Maybe I should not have brought it up. I will bring up another one out of left field for you.
Part of our reputation as peacekeepers and so on is taking weapon-grade fissionable material, plutonium, from atomic weapons in Russia and the U.S. and using it as fuel in our reactors. This bill does not seem to take into account the possibility that we will be importing plutonium as part of our agreement with the United Nations or the disarmament people. Have you thought about this at all?
Mr. Brown: The importation of mixed oxide fuel, MOX, which started about a year ago, involved several grams of the material, and it was used in Canada purely for an experiment to determine whether the MOX, which contains plutonium, could be burnt to produce electricity in a CANDU reactor. Those experiments are on-going at this time. It is purely and simply an experiment.
The Chairman: Then you do not think this is an issue, like importing and exporting, is it a political issue that can come up from time to time?
Mr. Brown: It is also if the experiment works. It is on-going at this time. It is fuel for reactors, and you are turning swords into ploughshares. As such, it would not be covered and it would be beyond this bill because it would be fuel rather than waste.
The Chairman: I was thinking of mixing the fuel and the waste together.
Senator Spivak: It is waste.
Mr. Brown: It is from weapons, and it is used in experiments.
Senator Spivak: It is called waste, is it not spent fuel from weapons?
Mr. Brown: It is actually weapons-grade material. You dismantle the weapon, take the material, blend it down, and the experiment is to see whether you can burn that material.
Senator Spivak: It is like reading a newspaper and putting it in the recycling bin. The newspaper is now something else. It is the same thing. it is not being used for weapons any more, therefore what comes out of there is waste.
The Chairman: It is not quite the same. You are draining the oil out of the old car; you are draining the plutonium out of the weapons. You could go back and burn it. This stuff can be used again. It is good fuel.
Senator Spivak: You could burn newspapers, also, but they are still waste.
Mr. Brown: The definition of waste, senator, is a moot point because it depends on the nuclear fuel cycle. In France, for example, where they do reprocess the used fuel they do not use the term ``used fuel'' as a waste because they reprocess, whereas we have no intentions whatsoever of reprocessing, so we consider it waste.
Senator Spivak: Can I speak about France at this point?
The Chairman: Not quite. Give me a chance to go through it. You just learned one man's fuel is another man's waste. That is a twentieth century pun.
The major part of the bill that bothers me is clause 8, which notes, ``the waste management organization shall create an Advisory Council.'' There is no doubt from the submissions that we have had from witnesses that there is a feeling that the government has let the waste organization management fall exclusively with the fuel makers. They want to have a window.
As another geologist, you know that around the world there is usually a government organization peering over your shoulder to make sure that the caribou have a chance to have calves or that grass grows — and well they should, because history has shown that leaving the control of the environment entirely to those that are spoiling it might not be that wise.
This committee has played with amendments like the clause 8(1) be amended to read that an advisory council shall be created with the waste management organization appointing a majority of the members and the minister appointing a minority of the members.
Does that shake the trees around you? Do you feel that the waste management people would still have control because they would have the majority of the money? However, the public feels that they cannot go taking off on their own. The minority of board is appointed by the minister of the day.
Does that sound all right to you? I know that you cannot make any agreements for the minister. However, it must not come as a surprise to you because, as you know, any complaints we have had have been to the effect that we are sending Colonel Saunders to look after the chickens.
Mr. Brown: I will go back to the government policy of 1996. That policy of the Government of Canada provides that the federal government will develop policy in the nuclear area. It will also oversee what is happening in the nuclear area, and it will regulate. The other element of that government policy is that it is the owners of the waste who basically will organize, fund and implement the decisions that the Government of Canada makes.
That policy very clearly provides daylight between the people who will carry out the work — the implementers, if you like — and the government that makes the decision. This bill follows that policy. It provides that there is daylight between the owners who have got to set up that organization, fund its operations and implement the government decision and the government.
The government, on the other hand, is quite separate. It will oversee and make those decisions. That is very clear. If you are asking for members on the board or the advisory council, you are muddying the waters. You would lose that clear separation between the implementers and the decision-makers.
The result of that effectively would be to say that the Government of Canada is nominating someone on to the board. That board would be making some recommendations back to the Government of Canada, and then the Government of Canada would be making a decision. We would be very clearly seen to be in conflict of interest.
This entire bill clearly reflects that policy statement that allows for space between the waste management organization, which is going to implement, and the Government of Canada, which is going to make the decisions. It is not a good idea to mix them.
The Chairman: You hit the nail on the head when you said ``conflict of interest.'' We exactly intend that the board would have within itself a conflict of interest. In other words, a board that has only one interest has not had any conflict. We are just trying to put conflict on the board.
In clause 15 you say:
Governor in Council, on the recommendation of the Minister, shall'' — not may — ``select one of the approaches for the management of nuclear fuel waste from among those set out in the study, and the decision of the Governor in Council shall be published...''
You are not giving the government a choice for another type of solution than the one selected by the WMO, which is 100 per cent controlled by utility companies. That seems to me that you are riding high, wide and handsome here.
Mr. Brown: The earlier part of the bill is very clear on the recommendation made by Blair Seaborn of the Seaborn panel that the waste management organization look at three options. They must look at on-surface storage at the reactor sites; centralized storage either on-surface or below ground; and deep geologic disposal.
This bill requires that, at a minimum, the waste management organization come in with all three options. It can come in with more but, as an absolute minimum, it has to come in with those three. Therefore the government will be making a choice between the three options that must be presented by the waste management organization.
The Chairman: I am not what argument do you make that the government should change the shall to may just in case the government does not want to accept any of the three recommendations by the WMO?
Mr. Brown: This is very strong that the government shall make that decision.
The Chairman: We should change ``shall'' to ``may'' in case the government does not want to accept one of the approaches suggested by the WMO.
Mr. Brown: The bill states strongly that the government shall make that decision.
The Chairman: It says not say that the government shall reach a decision. It says that the government ``shall select one of the approaches for the management of nuclear fuel waste from among those set out.''
The government has no leeway at all according to this. It seems to me that either you must agree to have a minority of your board appointed by government to have conflict take place there, or you must change the Governor in Council's right to a ``may.'' In other words the government can ignore the WMO.
Mr. Brown: Could I comment on that? The waste management organization is a utility organization. It is the owners of the waste. It is fundamentally that the ``polluter pays principle'' applies. These people have generated the waste as part of production of electricity. It is their responsibility, based on polluter pays, just as every other industry does, to deal with their waste. That is what we intend to happen. That is the policy of the Government of Canada.
Senator Spivak: The polluter can pay without having a monopoly on what the method should be. It seems to me there is a lot of daylight here between the utilities or whoever is generating the waste and the people of Canada, the public interest. It is clear it is not just the issue of polluter pays, which I agree with entirely. It is also a question of the decision that is to be made. The government is the representative of the people. If you limit the government's choice to just these three options, you are certainly limiting the extent of the manoeuvrability of the government in the ability to make a choice.
In France, they have something called ``transmutation.'' Why could that not be an option? Why are we limiting it just to deep geological disposal, on-site storage and centralized above or below ground? I notice the Planetary Association for Clean Energy suggested to the committee that low energy transmutation be considered as part of the global resolution of long-term management of nuclear fuel waste.
Ms Carmel Letourneau, Senior Policy Advisor, Uranium and Radioactive Waste Division, Natural Resources Canada: First, transmutation is not a waste disposal method; it is a waste treatment method. Transmutation is not the panacea that every one thinks it is; it is a waste treatment. It is at the research level right now. It will take many decades to make it commercial. It will take billions of dollars. In the United States, a 1996 National Council Research Report concluded that it is promising on the horizon if all countries get together and spend billions of dollars to develop this processing treatment method.
I want to clarify that transmutation is not a waste disposal method. The article by France is a major achievement, but whether you use transmutation or not, in the United States they have concluded that they still need a repository because it is a waste deposal mechanism.
Senator Spivak: Why can we not say ``or other methods that may develop''? I would hope this legislation is not just for the next five years.
Ms Letourneau: The bill already says that under section 20.
Mr. Brown: It provides for a change in approach, and it allows that if there are major breakthroughs in the future, then those would be considered.
The Chairman: It does not say that. Clause 20 says:
If the waste management organization is unable, for technical reasons beyond its control, to implement the approach that was selected by the Governor in Council ... shall so report...
Here you have the waste management organization that has no minority representative, suddenly coming up to the minister and saying, ``We cannot do it.'' I do not see how that can be controlled by just changing the ``shall'' select one other approach to ``may'' select the approach.
Mr. Brown: It is clause 20(2), on the next page:
If a new technological method is developed that has been the subject of a scientific and technical review by experts from international governmental organizations that deal with nuclear matters and has received their support, the waste management organization may propose, in its triennial report, a new approach for the management of nuclear fuel waste that is based on that new method.
The Chairman: The mays and shalls are all mixed up. You have all the mays on the side of the WMO and all the shalls on the side of the government. It says that they ``may'' propose it. If you said that they ``shall'' propose it that would be different.
I think it can easily be solved under clause 15 by changing ``shall'' to ``may.'' I think that eliminates your minority board representation along with the question of whether or not the government has been railroaded by the WMO. It is a very small word. Anyway, it is not your position to give in.
Mr. Brown: It is very clear that the intent in the bill is that the government shall make that decision. In clause 20(2), if the WMO wants to come forward with this new method, then it may do so. If they feel the new method is more expensive, not as appropriate, does not have any many safety measure, et cetera, they do not have to come forward with it. That is why it is ``may'' there rather than ``shall.'' If it were ``shall,'' every single time any new technology were proposed by anyone, it would require the WMO to submit that.
The Chairman: We are only talking about the ``shall'' changing. We are talking about changing ``shall'' to ``may.'' We can live with the rest of the thing. I am talking about clause 15, the second line. That allows the government the latitude to move back and forth.
Mr. Brown: If you go to ``may,'' senator, it allows the government not to make a decision, and we need a ``shall,'' which is the government shall make a decision.
The Chairman: Okay. There is no use arguing. We are saying we want the government to have the last turn.
Before we leave this, there is one other small ``shall,'' and it will only take a minute. Clause 25 reads, ``The Minister may designate as an auditor for the purposes of this Act any person that the Minister considers to be qualified.'' In view of Enron and Anderson, we would rather see the word ``shall.'' We do not think the WMO, without any minority government representation and doing what they want, should be picking their own auditor.
Mr. Brown: This is the minister 's auditor.
The Chairman: No, the auditor in this act is one that keeps track of your money.
Mr. Brown: That is the government's role. The government will oversee.
The Chairman: Somewhere else in here it says the WMO shall appoint an auditor. Section 23 says:
The waste management organization shall provide the Minister, within three months after the end of each fiscal year of the organization, with financial statements, audited at its own expense by an independent auditor.
All auditors are independent. There is no such thing as a dependent auditor. It is like a square circle or a pretty graveyard. It just does not exist.
Senator Kenny: I think they are differentiating from internal auditors. I told you I was on their side.
The Chairman: We are just a little suspect. We would like it to be ``may'' designate instead of ``shall'' designate an auditor.
Ms Joanne Kellerman, Legal Counsel, Legal Services, Natural Resources Canada: Clause 22 deals with the requirement to maintain records on the part of the waste management organization, and then there is a requirement, in clause 23, that they be provided to the government, and that is an independent outside auditor.
There could be no possible confusion that the waste management organization gets to rely on someone who is not an independent, arm's length, and properly qualified auditor. The financial statements that they then provide to the minister and that are made available to the public meet appropriate professional standards. The minister's auditor in clause 25 that you referred to is another person again. The intention there — as is the case in other parallel statutes — is that the minister can choose to appoint perhaps a public servant, perhaps an independent auditor, as circumstances may require from time to time.
The Chairman: One of the problems we are seeing is the same one that the stock exchanges and security commissions have been fighting out since the Enron deal. Whether you are Esso or Imperial Oil or Nick Taylor's Hamburger Stand, you have the right to appoint your own auditor. The public is starting to get suspicious of that. Arthur Anderson was the be-all and end-all when they were on top, and it shows they were pushed and moved. I must confess that with a number of public companies that I have been public director of, I have always been bothered by the fact that we named the auditors, the same ones that sent us a bottle of whiskey at Christmas and took us out to dinner. We were always fighting with them to massage the figures in such a way that we would not be hanged by the thumbs when the report came out. Therefore, I believe that auditors should be appointed outside the organization.
When you get the WMO with up to $350 million, any auditor would give his eyeteeth to audit those books. I do not see that you should have the right to pick your auditor.
Mr. Brown: There are two layers of audit. One layer, which is clause 24, deals with the auditor of the WMO and they can audit as they wish to audit. Clause 25 allows that the minister will or may designate a separate auditor to provide a second layer of audit. The two are quite different.
The Chairman: Let us suppose you are right and you probably are. We are discussing an organization that responsible to the public of Canada to dispose of something as important as nuclear waste. If this organization does not have any government representation on it, and if it says that the government is forced to take one of their recommendations unless something new arises, should not the government appoint your auditor rather than yourself?
Mr. Brown: The government retains those audit rights and the ability to make those decisions. The government will make those decisions. That is an extremely important part of this bill: that the government fundamentally makes those decisions and will continue to monitor those decisions. This is separate from health and safety, with the Nuclear Safety Commission. This fundamentally looks at all of the socio-economic and financial aspects to review how they are proceeding in a fundamental way.
One of the primary purposes of the bill is to enable to Governor in Council to make, from the proposals of the waste management organization, a decision on the management of nuclear fuel waste. It is extremely important that the Government of Canada clearly provide that direction. That is why that is addressed in clause 15.
Senator Kenny: I thought I understood it, but now I am confused. There are two auditors; one is for the minister. Presumably, if the minister sees something troublesome, the second auditor is not necessarily there, but would be appointed in the event that he or she smells a rat.
Mr. Brown: The WMO would appoint its auditor. We want to see the results of that audit.
The WMO has its own auditor, as any company would. It produces a statement that says, ``I have audited the books and this is what it looks like.'' That statement comes to government, it becomes a public statement; it is on the record. The minister may appoint a separate auditor, who says, ``I will take a look anyway. I may be happy, but I will look anyway.'' The minister's auditor looks at all of the books to ensure that everything is fine and then makes statement.
Ms Kellerman: In regard to the scope of the audit, the authority of the auditor in clause 25 goes beyond just the waste management organization. That auditor can reach into the trust company that holds the trust funds; it can reach into the Nuclear Energy Corporation on matters that the Nuclear Energy Corporation is reporting to the government on through the waste management organization. This is a broad, sweeping set of audit powers.
Senator Kenny: It sounds like the first auditor is appointed in the way that most corporations appoint auditors. The second auditor is appointed by the government to audit the work of the first auditor. I would be curious to know how many organizations have an auditor who audits another auditor, which appears to be the case here.
I share your concern about Enron, as does everyone. However, I would suggest that is beyond the scope of this committee. In reality, until the Canada Business Corporations Act, or whatever the governing legislation is, is changed in terms of how audits are done, it would be appropriate for us to follow the same format as to who appoints the first auditor. The Banking Committee, or some other body, would comment on how people audit and whether relations between auditors are too cozy.
We have all seen circumstances where auditors have held back or we thought they might have held back because they did not want to lose the account. That could happen.
Having said that, there are not many corporations I can think of that have another auditor who is not responsible to the shareholders of the first corporation and who is auditing the work of the first auditor. What I am hearing is like suggesting the use of belts and suspenders.
If there is a consensus that we are wearing belts and suspenders, then I think the public interest is covered.
Senator Christensen: Clause 24 is a requirement for the auditor and clause 25 is a fail-safe. If the government feels there is a need, then it may, if it so wishes, go ahead and have the audit; if it is happy with what it gets, it need not.
Mr. Brown: If everything appears to be above-board and being handled appropriately and there is a high level of comfort, you do not have to. However, the minister would probably in the first few years want to do that any way, just to ensure that everything is above-board.
Senator Finnerty: Returning to clause 14(2), I understand that that means the government is not required to accept the WMO plan. They could send them back to the drawing board if they wish; is that correct?
Mr. Brown: That is correct, provided that the requirements of clauses 12 and 13 as stated in 14(2) are not met. If those clause 12 and 13 requirements are not met, they are told to go back to the drawing board.
Senator Spivak: I do not understand why we could not include, in clause 2, the definitions section, a more specific definition of ``nuclear fuel waste.'' We could say ```domestic' irradiated fuel bundles removed from ...'' That would solve that problem easily. I do not think that would not hurt anyone's feelings.
We should not leave that ``shall'' in there. This is a great cover for the government, because no one wants the waste where they are. The government will say, ``There was this group that made the decision and they gave us three options.'' We are treading on risky ground. I do not know why it is important for the government to make a fast decision. Maybe if they do not make a decision for another 10 years, there might be new technology.
We should make haste slowly here. I am asking you, Mr. Chairman, whether you are going to contemplate putting those caveats in this bill.
The Chairman: My intention is that, after debating and informing ourselves, we should meet on Thursday morning at 9:00 to see what amendments we could make and possibly move to clause-by-clause then.
Senator Spivak: I am sorry, Mr. Chairman, I thought we were dealing with this tonight.
The Chairman: Before we leave, there is some worry about the advisory council being set up by the WMO. How do you answer the complaint that an advisory council can vary from five to 50 and that it can be appointed at the leisure of the WMO for one month, six months or six years — in other words, it is an airy-fairy thing. What would your argument be for doing that?
Mr. Brown: It falls back on the fundamental policy which is that it is up to the waste owners to organize, to fund and to deal with their wastes under the principle of polluter pays. It is the role of the federal government to make a decision. There needs to be light between the two of them.
That reminds me of the presentation by Brennain Lloyd from Northwatch. She suggested that there was the potential for the Minister of Natural Resources having a conflict of interest by being responsible for the Nuclear Fuel Waste Act as well as being responsible for the nuclear industry. Can you imagine what she would say if the Government of Canada were to appoint people into the Waste Management Organization? That would be a blatant conflict of interest.
It is entirely up to these waste owners to deal with their waste. The federal government is clearly the decision-making body here. We want to preserve ourselves whole in order to be able to make those decisions. If owners of a paint factory established an organization to deal with their waste paint, the government would say, ``Fine, deal with your waste paint, but we will make sure through a regulatory and oversight function that you will do the job properly.'' That is exactly the principle here. It is polluter pays. We want to ensure — so that we do not get into a conflict of interest or be seen to be in a conflict of interest — that there is daylight between that Waste Management Organization and the federal government and its ability to make those decisions.
The Chairman: You think that having an advisory council would help them in the evidence that they give to the government.
Mr. Brown: That is correct. If I could make one additional point in terms of the advisory council: All the comments that the advisory council make will be in a public document and will come to the minister. If they are only appointed for a month and they are friends of OPG, et cetera, then that is transparent. The minister will see it and highlight the problem. The minister may consult if he sees that sort of thing.
The Chairman: Thank you, Ms Letourneau, Mr. Brown and Ms Kellerman. I hope that by Thursday you will know whether you have the whole baby or one with an arm missing.
Mr. Brown: Thank you, senator. I always look for a whole baby.
The Chairman: We will not get back to the clause-by-clause consideration of Bill C-10. I have already notified the clerk that I have a conflict of interest in that my business is developing resources underneath the sea in different parts of the world. Consequently, I am turning the chair over the Senator Spivak.
The Deputy Chairman: Is it agreed that the committee move to clause-by-clause consideration of Bill C-10?
Hon. Senators: Agreed.
The Deputy Chairman: Shall the title stand postponed?
Hon. Senators: Agreed.
The Deputy Chairman: Shall the preamble stand postponed?
Hon. Senators: Agreed.
The Deputy Chairman: Shall clause 1 stand postponed?
Hon. Senators: Agreed.
The Deputy Chairman: Shall clauses 2 to 17 carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall clauses 18 to 23 carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall clauses 24 to 29 carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall clauses 30 to 41 carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall schedules 1 and 2 carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall clause 1 carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall the preamble carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Shall the title carry?
Hon. Senators: Agreed.
The Deputy Chairman: Carried. Is it agreed that this bill be adopted without amendment?
Hon. Senators: Agreed.
The Deputy Chairman: Is it agreed that the bill be reported to the Senate?
Hon. Senators: Agreed.
The committee is adjourned.