Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 12 - Evidence
OTTAWA, Thursday, June 1, 2000
The Standing Senate Committee on Energy, the Environment and Natural
Resources met this day at 9:05 a.m. to examine issues relating to energy, the
environment and natural resources generally in Canada (Nuclear Reactor Safety).
Senator Nicholas W. Taylor (Deputy Chairman) in the Chair.
The Deputy Chairman: This morning we have witnesses from Natural Resources
Canada. Please proceed.
Mr. Ric Cameron, Assistant Deputy Minister, Energy Sector, Natural Resources
Canada: Honourable senators, thank you for the opportunity to talk with you
today about the NLA, the Nuclear Liability Act. With me today are Peter Brown,
Dave McCauley and Jacques Hénault.
We have been following with interest the work that your committee is engaged
in, specifically in the area of nuclear reactor safety. You have asked Natural
Resources Canada to provide you with a briefing on the Nuclear Liability Act. In
particular, you are interested in the maximum amount of liability available
under the act and the current status of our review of the legislation. We will
address each of those matters, but first I will provide you with a brief
overview of the NLA.
The NLA is federal legislation that was proclaimed in 1976 for purposes of
compensating victims of a nuclear accident that might occur at a Canadian
facility. The term "nuclear facility" is defined in the act and
includes nuclear reactors, such as nuclear generating stations and research
reactors, as well as facilities that process nuclear material.
The purpose of the NLA is twofold. First, it creates a comprehensive scheme
for liability for third-party injury and damage arising from a nuclear accident
and provides a system under which third-party victims of a nuclear accident
would be compensated. Second, the NLA provides a stable and predictable
liability regime for the nuclear power industry and suppliers.
One of act's main provisions is to establish the absolute liability of the
operator for third-party nuclear damage. Nuclear damage is defined to include
injury, including loss of life, and damage, including loss of property, damage
to property, and damages resulting from loss of property or damage to property.
Absolute liability implies that the operator is liable for third-party nuclear
damage without recourse to the traditional defences that normally would be
available. Another important feature of the act is the exclusive liability of
the operator. This means that contractors and suppliers cannot be sued by the
operator or injured parties for third-party damages.
Together the provisions of absolute liability and exclusive liability
effectively channel all third-party liability to the operator. This is of
benefit to potential victims in that it clearly establishes a single responsible
party who is responsible for dealing with compensation claims. At the same time,
it excludes or indemnifies suppliers and contractors to the facility from
third-party liability claims and thus enables them to participate in an industry
that they would otherwise not participate in due to concerns over third-party
liability in the unlikely event of a nuclear accident.
The NLA also provides that operators must maintain mandatory insurance up to
a specified limit that is currently set at $75 million for nuclear power
generating plants. The insurance is provided by the Nuclear Insurance
Association of Canada. For those damages not covered by NIAC, for example
non-bodily injury and latent illnesses detected after 10 years, the federal
government supplements NIAC's insurance through reinsurance. The operator's
liability is limited to $75 million and claims can be made only against the
operator up to a period of 10 years dating from the occurrence of the accident.
Under the NLA, there is implied federal government compensation beyond the
operator's liability limit in that Parliament may authorize a higher limit.
The NLA also establishes that a nuclear damage claims commission could be
proclaimed by the Governor in Council in the event that the damages from the
accident are likely to exceed the liability limit provided for in the act or if
it is deemed in the public interest to do so. The claims commission would entail
an administrative system to deal with large numbers of claims and would replace
the judicial system. We believe such a system would provide a more efficient and
equitable claims resolution process.
The NLA is administered by the Atomic Energy Control Board, which as of
today, with the coming into effect of the Nuclear Safety and Control Act, is
known as the Canadian Nuclear Safety Commission. The commission is responsible
for designating the facilities that are covered by the act and for establishing
the amount of insurance coverage that operators must maintain.
Before I move on to discuss the review of the NLA, I should like to indicate
that similar legislation is in place in virtually every country with nuclear
facilities. By similar I mean that most domestic legislation internationally
includes the same three basic principles: one, absolute and exclusive liability
of the operator; two, limited liability; and three, mandatory financial
security. Furthermore, there are two international conventions in operation that
contain similar provisions. These are the 1960 Paris Convention on Third Party
Liability in the Field of Nuclear Energy and the 1963 Vienna Convention on Civil
Liability for Nuclear Damage. In 1997, the Vienna convention was revised and
work is underway now to update the Paris convention.
I will now address the review of the NLA. While the basic principles
underlying the NLA remain valid, the act is roughly 25 years old. We recognize
that it needs to be updated to keep pace with international trends and to
address concerns that have become evident over the years.
Indeed, the likelihood that the act would need updating was recognized during
parliamentary committee debate preceding the act's proclamation in 1976. At that
time, a recommendation was made that the NLA should be reviewed five years after
being proclaimed. Thus, in 1982, the president of the AECB appointed an
interdepartmental working group to review the act and make recommendations on
its revision. On March 9, 1984, the IWG issued a discussion paper seeking public
comment on possible revisions to the act. In February 1990, the president of the
AECB forwarded a report containing the IWG's recommendations on revisions to the
Nuclear Liability Act to the Minister of Energy, Mines and Resources. In
submitting the report to the minister, the president of the AECB recommended
that the department continue the review of the act and accept policy
responsibility for it. The Deputy Minister of Energy, Mines and Resources
At that same time, litigation had been launched against the NLA. The
litigation began in 1987 and the department took the lead responsibility for it.
The litigation challenged the constitutionality of the NLA. By 1991, the
litigation process was well underway and it pre-empted the department's review
of the act. The trial began in 1993, and in 1994 the Ontario Court, General
Division, issued its judgment dismissing the action with costs. The subsequent
appeal was withdrawn in 1996.
In 1995, an interdepartmental review committee led by Natural Resources
Canada developed a new set of proposals for revisions to the NLA. Through the
summer and fall of 1996, those proposals were discussed with key stakeholders --
the nuclear utilities, Atomic Energy of Canada Limited or AECL, the governments
of provinces with nuclear power utilities, which are Ontario, Quebec and New
Brunswick, and the nuclear insurers. Following those discussions, the proposals
were refined through interdepartmental consultations and resubmitted to
stakeholders in 1999 for further consultations. Our next step is to make
recommendations for revisions to the act with the minister and to seek his views
on next steps.
Our proposals will focus on four main areas: one, improving victim
compensation; two, clarifying key provisions of the act; three, clarifying the
responsibilities of the federal government; and four, addressing technical
problems with the act.
Improving the compensation scheme provided for under the NLA is one of the
most important goals of the revision. As indicated previously, the NLA limits
the nuclear operators' third-party liability at $75 million, an amount that has
not changed since the act was proclaimed in 1976. That limit has devalued with
inflation and Canada now has the lowest nuclear liability limit of the G-7
countries. Thus, a key element will be the issue of increasing the liability
limit to reflect inflation and international trends.
We are also looking at providing operators flexibility in providing financial
security for nuclear liability. At this time, operators must guarantee their
coverage with private insurance from an approved insurer. We have investigated
the appropriateness of permitting operators to use alternative forms of
financial security to guarantee their third-party liability coverage.
We are examining the limitation periods under the act. At this time, the
limitation period on claims is 10 years after the nuclear accident. Several
countries have introduced longer limitation periods and we are looking at those
longer limitation periods and the issues they raise in terms of insurance cover
and claims handling.
Despite its age, in our view the NLA is still quite innovative in terms of
claim handling in that it provides for an administrative approach to the
processing of claims rather than leaving the issue to the courts. A number of
countries are now developing similar processes. As part of the review, we are
seeking to clarify and define some of the claims handling processes associated
with the nuclear damage claims commission and to develop the rules and
regulations that would be necessary for its operation.
We are looking at the definitions in the act to ensure that they are clear
and unambiguous, particularly in the area of compensable damages.
We are also examining the financial obligations of the federal government
under the act. We would like to reduce the need for reinsurance by the federal
government and clarify the obligation where it is absolutely necessary. A higher
liability limit on the operators would certainly reduce the federal government's
obligation, but there are other revisions that could be made that would reduce
the amount of reinsurance that the federal government must provide to the
Finally, there are some technical problems with the act that should be
addressed in the review, including updating provisions, and the act would
certainly benefit from a rewrite to improve its comprehension and to eliminate
In conclusion, we acknowledge that the Nuclear Liability Act is in need of
revision. It is roughly 25 years old and has not been updated. Still, the
legislation has stood the test of time well. It is functional and, in some
respects, innovative. Nevertheless, we are moving forward on the revision and
hope to bring proposals to the minister's attention before the end of summer
Senator Christensen: You said that the legislation has stood the test of time
well. Has it ever been used?
Mr. Cameron: There has never been a third-party claim relating to a nuclear
incident in Canada. As to whether the act has been tested, in that respect, no.
However, with regard to the nature of the provisions, the main components in the
legislation still remain current with the way this type of legislation is
handled in other countries. We believe that some of the act's provisions were
ahead of their time, and other countries are looking to move forward in that
Senator Christensen: The amount of insurance that is required to be carried
by the nuclear producers is $75 million. What do you feel would be a more
realistic figure? When dealing with the types of situations that may occur, $75
million is not a lot of money.
Mr. Cameron: Around the world, there is a fair bit of variety in those
figures. If the amount were simply adjusted for inflation it would be up around
Senator Christensen: Some liability limits are around $400 million to $600
Mr. Cameron: The international standards tend to be toward $600 million,
although the regimes are different in terms of how they are set up and
supported. An amount of $600 million would not be unusual in the international
Senator Christensen: Is that something we should be looking at?
Mr. Cameron: It is the type of consideration that is being discussed with the
The Deputy Chairman: Do you know what the range is and in what countries? Who
has the highest liability limit?
Mr. Cameron: We have some comparisons in the form of a table that can provide
a demonstration, if you will permit.
Senator Wilson: I must say I am glad that you are reviewing this. I used to
think the church was slow in making decisions until I got into government.
When you outlined the stakeholders, you mentioned everyone except us -- the
victims. Is there any thought of providing for public input into the review?
When do you anticipate at least a publicly available document for our review?
When do you think a final report could be issued?
Mr. Peter Brown, Director, Uranium and Radioactive Waste Division, Energy
Sector, Natural Resources Canada: In terms of the question on stakeholders, we
have had many discussions with the insurance people, the utilities and AECL to
determine what sorts of revisions would be appropriate. We have discussed what
the insurance capacity could possibly stand, as per the earlier question on
whether it could go up to $600 million.
Senator Wilson: I understand that, but it is people who suffer the damages.
Mr. Brown: At this point, we have not yet taken the discussion to the public,
the NGOs and others. That is one of the elements that we would put to the
minister, once we get all of this together.
Senator Wilson: Do you anticipate when that might happen?
Mr. Brown: We intend to get the report to the minister before the end of this
Senator Wilson: Would the invitation for public input be widely spread?
Mr. Brown: We will put the recommendations to the minister. One of the
decision requirements will be whether he wants to enter into a public
consultation process or whether he wants to proceed in the parliamentary
Senator Wilson: My next question is related to Senator Christensen's. What
level of coverage do you think is appropriate?
Mr. Brown: My colleague, Mr. Cameron, basically answered that question. For
straightforward inflation, you would get up to about $250 million. If you look
at it internationally, you now have that table before you, the value would be
roughly $600 million or $650 million Canadian. There are two countries that go
to unlimited liability, but that unlimited liability basically means that the
state comes in at the end of the day.
Senator Wilson: Since we export nuclear reactors to other countries, does
this act extend to damages that may occur in other countries? I am thinking of
countries such as China and Romania, which are not equipped. With the United
States, it might be a cross-border occurrence. What would happen there?
Mr. Brown: All the countries to which we have sold nuclear reactors have a
similar regime. This specific act is for Canada. We have a reciprocity regime
with the United States, but most other countries have their own liability
regime. Most other national regimes are very similar to this regime.
Senator Christensen: We have no liability or responsibility once the reactor
has been sold and is delivered?
Mr. Brown: The liability regimes of the countries that we sell reactors to
are similar in many respects to our Nuclear Liability Act. Therefore, there is
coverage in those countries, but that coverage is specific to those countries.
Mr. Cameron: The reactors are operated within the licensing and regulatory
regimes of those countries as well. We do not impose our regulatory regime on
other countries, but they are all adherents to the variety of international
conventions and things that determine, in essence, the operating mode for these
Senator Wilson: Is there any discussion with them? I am thinking of Romania,
which is really not well equipped to do this. Does Canada have any program to
assist them in looking at the issues, and to what extent do you assist? Do you
just wash your hands of it after the sale?
Mr. Dave McCauley, Advisor, Uranium and Radioactive Waste Division, Energy
Sector, Natural Resources Canada: The Romanian legislation is modelled after the
Vienna convention, which is similar to Canada's Nuclear Liability Act. They have
insurance regimes similar to the Canadian process.
Senator Wilson: Do they have any money, if something should happen?
Mr. McCauley: Yes, they are insured. The European insurers are insuring the
The Deputy Chairman: As the world progresses, or regresses, there will be
increasing numbers in the Third World that will be looking at nuclear reactors
to supply energy. They did not have the money up to now. The list of reactor
sites that you have shown us is almost a list of the well-to-do countries of the
world. The Third World countries will not have an insurance pool or anything
else. Are we looking at any system that could provide insurance back through us
when Third World countries buy our nuclear reactors?
Mr. McCauley: There are two international conventions: the Vienna convention
under the International Atomic Energy Agency and the Paris convention under the
OECD. The Paris convention pertains to Western European countries, while the
Vienna convention is more global. Many Eastern European countries, such as
Romania, participate in the Vienna convention. To participate in that
convention, there must be a certain minimum amount of liability coverage by the
operator in order to be a signatory. It establishes a kind of common regime
The Deputy Chairman: Would we sell a nuclear reactor to someone who was not a
member of the Vienna convention?
Mr. McCauley: We have sold reactors to countries that are not members of the
Vienna convention. China and Korea, for example, are not members of the Vienna
convention, nor are they members of the Paris convention.
You would have to ask Atomic Energy of Canada Limited, but as I understand
their policy, they require the purchaser, or the country purchasing the reactor,
to subscribe to the international liability requirements.
Mr. Brown: I would add also that we are not members of the Vienna convention
or the Paris convention either.
Senator Banks: We are not signatory to those international conventions that
you have described. However, in answer to Senator Wilson's question, you said
that we have a reciprocal arrangement with the United States. What is the nature
of that reciprocal arrangement? I did not quite understand the response to
Senator Wilson's question. Assume, God forbid, that we have a nuclear accident
and that demonstrable damage is done in Michigan and Ohio. What is our exposure?
Is it limited?
Mr. McCauley: It is limited by our legislation, and American victims would be
able to make claims to the Canadian regime, because of the reciprocity
Senator Banks: Is our liability, in regard to a claim that would be made by a
damaged United States party against us, limited to our amount of liability or to
the Americans' amount of liability?
Mr. McCauley: No, it would be limited to our amount of liability. Under our
legislation, the limit is $75 million, unless Parliament provides additional
Mr. Brown: And vice versa.
Senator Banks: I do not want to get into arcane international law, but that
seems weird to me.
I also note that by this table, as you noted, we are really behind the game.
I would ask you to fill us in later about these other two tiers of insured
As an aside, I note that this revision began in 1982, and we are now saying
we may get it to the ministers by the end of the year. I am new here so I am
finding a lot of things that are quite amazing. That is only one among them.
Senator Cristensen asked this question but, again, I did not quite understand
the answer. Have any claims been made under the NLA so far?
Mr. Cameron: No.
Senator Banks: Thus, there has been no demonstrable damage caused by nuclear
operations in Canada to date?
Mr. Cameron: There have been no claims under the NLA, which provides for
third-party off-site claims for damages. There have been no instances of that in
Senator Banks: There have been no instances of going outside against a third
party, I understand that, because they are protected by the legislation. Have
there been any claims under the NLA? Has any insurer paid out any money to
anybody for any damage in Canada caused by a nuclear operation?
Mr. Brown: No, not under the NLA.
Senator Banks: Has that happened otherwise?
Mr. McCauley: There is nuclear property damage insurance related to fairly
standard property issues and, of course, the nuclear operators have insurance
with the nuclear insurers, but it is not under the Nuclear Liability Act. It is
basically property damage insurance -- standard property insurance.
Senator Banks: That has nothing to do with a nuclear accident.
Mr. McCauley: No, it has nothing to do with nuclear accidents.
Senator Kelleher: I refer to page one of Mr. Cameron's notes. The last main
paragraph on that page states: "Another important feature of the act is the
exclusive liability of the operator. This means that contractors and suppliers
cannot be sued by the operator or injured parties for third-party damages."
I am having a little trouble with that. I do not see why, if the contractors or
suppliers are the ones responsible for the damage, particularly in the case of
gross negligence, the operator -- meaning we -- should be excluded from suing
the contractors or suppliers that might be guilty of gross negligence. That is
what this says, as I interpret it. That, frankly, does not make much sense to
me. Maybe you could explain it.
Mr. Cameron: I will ask Mr. Brown to go into a little more detail, but what
it says is "for third-party damages."
Senator Kelleher: I understand, but usually in a court action, as I am sure
you know, the operator, under normal circumstances, would claim over. I do not
see why we -- the government, the owners, the taxpayers -- should be stopped
from suing those contractors or suppliers if they caused the damage.
Mr. Brown: It is Ontario Power Generation, Hydro-Québec and New Brunswick
Power who are the operators of the reactors. They would be liable under this
exclusive liability provision. If it could be shown that there was criminal
intent on the part of the supplier, then they would have the ability to sue that
supplier. If there was no criminal intent, then no. Basically, the whole intent
of the NLA is for the operator to be exclusively liable, so that third-party
compensation can be paid out. Therefore, victims do not have to go to the
courts, as in the case, for example, of the chemical plant in Bhopal, India. The
victims went through the courts and it took eight or ten years before people
actually got compensation. The whole intent is that you know that it is the
operator who has the liability and, therefore, it is the operator you can go
Senator Kelleher: With the greatest respect, that does not answer the
question. I am not talking about the third-party claims of the people. Certainly
I agree that, as between the operator and the victims, there should be absolute
liability. I am not quarrelling with that. However, I am asking why we preclude
the operator from going after suppliers or contractors for gross negligence.
I am not talking about criminal intent, as that sets up an impossible
barrier. I do not think that any supplier or subcontractor would have criminal
intent to cause injury or damage. I do not know why we should protect those
people from a claim made by the operator, who has had to pay out all kinds of
damages for victims. I do not understand why, if they had nothing to do with it,
for example, they should be precluded from suing the contractors and suppliers?
I should like you to give me a reason why that appears to be so.
Mr. Jacques Hénault, Analyst, Nuclear Liability and Emergency Preparedness,
Uranium and Radioactive Waste Division, Energy Sector, Natural Resources Canada:
One aspect of this is that in the case of a nuclear accident, it would be very
difficult to prove who was negligent. It could end up in a legal tangle for
years, to the detriment of the victims.
Senator Kelleher: Please wait a minute, now. You are missing the point. I am
not in any way trying to preclude payment to victims and I do not care whether
it is difficult to prove or not, because that is up to the court and the
"legal beagles" for the operator. I do not know why I cannot get an
Mr. Cameron: My understanding, senator, is that it relates in large part to
the structure of the industry. It relates, as well, to the debate that we are
having about why $75 million is not an appropriate limit and that, potentially,
limits should be significantly higher than that. Many contractors and
subcontractors in this do not have big operations; for them, this is not the
core of their business. If they were moved into an area where they had to obtain
insurance or they were exposed to a potential liability of the magnitude of
this, then the issue is whether or not they would, in fact, contract in or be
subcontractors. That is my understanding of why it was structured in this
fashion to begin with and why this tends to be the model for it internationally.
In essence, it relates to the nature of what you are dealing with and the
realities of the risk. In that kind of industry then, what is the relationship
with the contractor and would people put themselves into that scenario?
Senator Kelleher: I would certainly suggest or hope that you take a look at
that, because I have been very careful to say "gross negligence." I
have been very careful in using that phrase. There are many large contractors.
I do not consider General Electric, for example, to be a poor, improvident
company. I grant you that it is different if a small plumbing company goes in
and does a minor plumbing job, but most of the contractors in this business are
huge international conglomerates. Therefore, I am having a little trouble with
Mr. Brown: When the act was set up, it did two fundamental things and it was
a balance. One was to allow that nuclear power could, in fact, be developed. It
provided for this exclusive liability so that all of these suppliers, large and
small, would feel confident in providing the parts to the nuclear operator.
Then, on the other side of the equation, it basically provided for third-party
damages, eliminating the need to go to court. The act provided the balance
between the two and it provided a good compensation regime for victims in the
event of an accident. At the same time, it allowed that nuclear reactors could
be built effectively. Of course, it is always the operator who has that
Senator Kelleher: I do not have any quarrel with that. The people I am
concerned about here, aside from the victims, who have to be number one on the
list, are the poor benighted taxpayers, because we are the ones who really own
this. I do not know why we, as taxpayers, should preclude a lawsuit against
General Electric if there has been gross negligence on their part.
Mr. Cameron: That is a good point, senator. We are talking in the context of
third-party liability. There are also provisions that a contractor could be sued
for other aspects. There are other aspects of commercial law and situations
where there may well be remedies that could be sought outside the context of the
Nuclear Liability Act. However, this is specific to third-party claims arising
from a nuclear accident.
Senator Kelleher: I will not belabour that point further.
As another point, Mr. Chairman, I should like to echo the comments of
Senators Wilson and Banks. I am not going to be quite as diplomatic as they
were. Frankly, I am I not at all impressed with the speed with which your
department has been moving. It is all very well to say that you will get at it,
but it has been 25 years. I think that that is dreadful. I really do. As I say,
the others were a little diplomatic. I am not that diplomatic. I think it is
terrible. You said in your opening remarks that you "hope" to bring
proposals to the minister -- that is a very weak commitment.
Senator Wilson: Mr. Brown did say "by end of the year." We will
hold him to that.
Senator Kelleher: Big deal. Who knows how long it could take from there. Mr.
Chairman, I should like it noted on the record that when it comes time for our
recommendations this committee should put forward some very strong proposals and
recommendations for making amendments here. I think it is terrible that nothing
has happened here.
The Deputy Chairman: That is, of course, why we are sitting. I might mention,
being a geologist and engineer, as some of our witnesses may be, that we measure
things in millions of years. Perhaps they have got their politics and geology
Senator Buchanan: What Senator Kelleher is discussing is interesting. Let us
say that there is an accident in New Brunswick. Under the act, the third-party
claim is against New Brunswick Power. Through whatever mechanism you have here,
New Brunswick Power and its insurer must pay the third-party claims. However,
New Brunswick Power is not guilty of any negligence at all. It is the
contractor's fault. Therefore, you are saying that New Brunswick Power would
make the payments, but because of this act it would not be able then to go after
the contractor. Is that correct?
Senator Kelleher: Yes.
Senator Buchanan: Then this act, obviously, must override a provincial
jurisdiction. How does this act have the authority to override a provincial
jurisdiction where an operator has a right to sue a contractor for negligence
against a third party?
Mr. McCauley: The authority is based on the federal government's authority to
legislate in the area of nuclear matters.
Senator Buchanan: Where do they get that authority?
Mr. McCauley: The authority is in the Constitution Act, which basically
indicates that activities for the general advantage of Canada shall be deemed to
be under the authority of the federal government. The Atomic Energy Control Act,
now the Nuclear Safety and Control Act --
Senator Buchanan: Let me follow that through. Which Constitution Act are you
talking about, 1867 or 1982?
Mr. McCauley: I am referring to 1982.
Senator Kelleher: Senator Buchanan, you were part of that.
Senator Buchanan: Yes, I should remember, but I do not.
The Deputy Chairman: You signed away the farm, Senator Buchanan.
Senator Kelleher: You signed away the fishery.
Mr. Cameron: Senator, this was part of the court case to which I referred
previously. There was a challenge on constitutional jurisdictional grounds, as
well as on a range of charter issues. The court found that this was a valid
In regards to what you are saying, though, again, the utility would have no
right to sue the contractor for recovery of the third-party liabilities.
However, if there were damage to its facilities or loss of income, if the
facility had to be shut down, for example, then there would be avenues for
recourse on that.
Senator Buchanan: Is this basically the same as in the United States?
Mr. McCauley: The key principles -- absolute liability, exclusive liability
and limited liability -- are basically the same. They do a different type of
channelling in the United States, but for all intents and purposes it is
basically the same. The legal principles are the same.
Senator Banks: I want to be sure that I understand an answer. This is a
question of clarification. Mr. Cameron, you have just said that the operator
could not sue a supplier for gross negligence in respect of recourse for
recovery of the $75 million but could in the case of other demonstrable damages
enter into a lawsuit. Is that correct?
Mr. Cameron: Yes, the NLA deals with third-party damages arising off-site.
Senator Banks: You also said that the reason the supplier is protected is
inducement to come in and actually do this business. We were afraid at some time
that if we did not give them that protection they would not enter this business.
I am confused about that. If I am a supplier of concrete, for example, to
someone building a hotel, the builder will require me to have insurance before
he will even start talking price with me. If I am not insured, he will not even
talk to me. Structural steel suppliers will act the same way. When I am a
supplier of structural steel or structural concrete or whatever else goes into
nuclear plants, I will enter the same kind of risk, perhaps not the in same
amount, in the event that I am grossly negligent. The operator of the hotel or
the contractor or someone will be able to sue me. They will ensure that they can
sue me before they do business with me.
Along the lines of Senator Kelleher's question, can you tell me which
contractors we thought, or now think, might be disinclined to become suppliers
in the building or operation of a nuclear plant because they are afraid of the
liability? Are there any such people left?
Mr. McCauley: I suppose that generally it is the suppliers to the nuclear
industry. I cannot identify specific names, but this is the position that has
been taken worldwide. The requirement is to put the entire liability on the
operator and exclude the suppliers and contractors.
Senator Banks: It is a very nice business.
The Deputy Chairman: The contractor cannot be sued by a third party for
damages, but the contractor can be sued for a poor job by the operator. I do not
think it sounds as bad as it may at first seem.
Senator Banks: Not to recover the $75 million.
Senator Kelleher: The big damages here are the third-party claims, the claims
of the victims.
The Deputy Chairman: I am attempting to clarify in my mind this topic of
third-party damages. The way I read it, the third party cannot sue the
subcontractor. If one sues, within that $75 million range, and collects, the
nuclear authority can sue the subcontractor for a bad job.
Senator Banks: But not to recover the $75 million.
The Deputy Chairman: I thought that there were two different lines, third
party versus the subcontractor. Do you mean that they cannot sue the
subcontractor at any time?
Mr. Cameron: They can sue the subcontractor for property damage to their
property and for loss of revenue, for example if they have to shut down the
reactor, but they cannot sue for third-party damages, for which they are
The Deputy Chairman: That was my point. They can be sued for a bad job but
only for damages to the project, not for third-party damages.
Senator Buchanan: The case you are talking about is in the presentation. It
is the litigation that challenged the constitutionality of the NLA. I should
like to read that case.
Mr. McCauley: The case was Energy Probe, the City of Toronto and Dr. Rosalie
Bertel v. the Attorney General of Canada and the decision was 1994.
Senator Buchanan: Was that appealed to the Supreme Court of Canada?
Mr. McCauley: It was the Ontario Court, General Division. There was an appeal
but it was subsequently withdrawn by the plaintiffs in 1996.
Senator Buchanan: The Supreme Court of Canada has not ruled on this matter,
Mr. McCauley: No, it has not.
Senator Adams: Mr. Cameron, how many uranium mines do we have right now
Mr. Cameron: The only uranium mines we have right now are in Saskatchewan. A
couple of them have just come on stream.
Mr. Brown: We used to have many uranium mines in Canada. In the early 1950s
and 1960s there were mines at Elliot Lake and also in Bancroft. The mines in
Bancroft shut down in the 1960s and the last one in Elliot Lake closed down in
1996. The only remaining mines that we have that are operational at this
particular junction are in northern Saskatchewan. There were also older mines in
the Northwest Territories that were closed down many years ago.
Senator Adams: That liability figure was $75 million. Does that include
miners or just the operators? How does that work?
Mr. Brown: The Nuclear Liability Act does not apply to those uranium mines.
Senator Adams: There are between 50 and 100 people operating in a mine. Are
they just ordinary miners or are they still working for the nuclear industry?
Are they ordinary miners who have nothing to do with nuclear liability? It is a
little different if you are mining gold or diamonds, but what about in the
future -- is there something that might affect other people or the miners? How
do the mining companies have their insurance set up?
Mr. Brown: Let me say that the mining companies that mine uranium look after
their workers extremely well and they have strict health physics requirements in
terms of the amount of radiation that the miners receive, and so on. There are
very strict controls. Those controls are much more than you would find in a
normal mine. The conditions are in fact much better than in a normal mine. The
workers are looked after extremely well. In terms of insurance, they would get
that in the same way that a normal mining company would get insurance.
Senator Adams: Do you have any problem with the miners who have been there
for many years? Given that some of those mines have been closed since 1950 and
that the policy was not made for the government until 25 years ago, what happens
to those people who were affected 50 years ago and who may be dying now as a
result of their mining work?
Mr. Brown: Senator, I think it is fair to say that the whole nuclear industry
and the prospective on health physics is a science of this century. Very
significant advances have been made. In the very early days, it was not just
uranium mining, but also mining in fluorspar and other kinds of mines. The
problem was largely radon gas in the actual air and the miners would inhale
that. This is not specific to a uranium mine; it occurred in many mines. A
simple solution was found and that was ventilation.
In the past 20 to 50 years there has been a tremendous advancement in the
science. Now the conditions in the modern uranium mines are extremely good,
extremely clean and the workers are looked after very well.
You may wish to go up to northern Saskatchewan to view the new mines that are
in operation there. If you do, I think you will be very impressed with the
quality of the mining. The old view of a dim, dark, wet mine is no longer there.
These are very modern facilities.
Senator Adams: Does the Minister of Energy, Mines and Resources have
responsibility for mining and so on in the northern areas, especially in the
Territories and Nunavut?
Mr. Cameron: North of 60, it is the Minister of Indian and Northern Affairs
who has responsibility for issues such as petroleum, mining, et cetera. Our
minister does not have authority north of 60.
Senator Christensen: One of the views that witnesses before us have expressed
is that the Nuclear Liability Act compromises safety, actually, because it
limits the liability and the responsibility of the operators to $75 million.
What are your thoughts on that?
Mr. Cameron: We do not believe that the insurance regime is or should be the
major determinant of the safety of the industry. We have a very strong
regulatory regime. We also believe that we have nuclear operators who are fully
aware of their responsibilities. There are other things beyond liability. Most
of these facilities are managed as businesses, and if you want to stay in
business, particularly in anything relating to nuclear, there are strict health
and safety standards that have to be maintained. You are under an ongoing watch
from a very attentive regulator.
As I said, I do not believe that one way or the other a different insurance
regime would impact safety. I think a different insurance regime moves the
liability more readily from governments in backstopping some of these to the
actual operators. We were talking about the differences between $75 million and
some other figure. There is provision in the act that Parliament could determine
that the Canadian taxpayer steps in to fill that gap were there an unfortunate
incident requiring it.
I do not believe that the level of insurance is a significant factor or
element in the safety of the operations. I think safety must remain with the
regulator, with the regulatory regime that is strict and well observed, and with
an industry that is trained, attentive, responsive and that really wants to stay
in business. Their incentive is to stay in business and, for the most part now,
to compete in an increasingly open and competitive electricity market. I have
heard the argument as well, senator, but personally I do not believe that the
insurance regime is a significant factor in the safety dimension.
The Deputy Chairman: I think that I asked the Nuclear Insurance Association
whether premiums are set aside in a fund to build up, and they claim that that
is not so. They have asked you, but you absorb the premiums, so we do not have,
as would occur in the normal insurance industry, a fund of premiums that builds
up to an adequate level. The insurers are waiting for an answer to whether or
not you can pool or set aside a separate pool for their premiums. What is your
answer to that?
Mr. McCauley: We have not received a request from the insurers to do that. We
have been in discussions with them on different financial regimes and how the
insurance might be provided, but they have not made a request like that to us,
that they would like such a provision included in the nuclear liability regime.
If they made a request to us, we would consider that.
The Deputy Chairman: I may have misunderstood it, because I was the one who
asked the question a couple of meetings ago. I thought that they said they are
in the process of requesting something like that. We will double-check our
figures and our evidence on that.
Senator Banks: I am referring to this graph that you distributed. As I said
before, I think we ought to be embarrassed by it. Would you please talk a bit
about the tier 2 and tier 3 amounts that are shown on here, in regards to other
countries. Would you relate them to our current discussion? For example, I
gather that the green part on this form represents commitments by governments to
top up the overall liability. Do they also have legislated ceilings on them in
most of these cases? Please describe what the pooled third tier is. Have we
considered either of these second tiers as a part of the Canadian insurance
Mr. McCauley: Yes, senator, I think that you have caught basically the thrust
of the second tier. These countries have joined together into the Paris
convention and the Brussels supplementary convention. They are, for the most
part, Western European countries that would have to share compensation among one
another in the event of a nuclear accident within one of those states. The red
tier is the amount of private insurance that is required in each of the
countries. Basically, they would say that no less than x amount of private
insurance or other such financial security would be required of the operator.
They would limit the national liability to third-party victims to a somewhat
higher amount. That gap between the operator insurance or financial security and
the national limit would be the amount that would be provided by the federal
The third tier results from them joining into this Brussels supplementary
convention, which would require all states party to the convention to pool funds
to provide additional compensation for the victims. Their tax or the amount that
they would be required to provide would be based on their nuclear capacity as
well as their GDP. That is basically how the system works.
We have considered this. Certainly we have considered a federal tier that
might include additional public funding up to a certain limit. As Mr. Cameron
mentioned, under the current legislation Parliament can consider providing
additional funds in the event that the $75 million is going to be lapsed.
As for joining into an international pool, because of our geography we would
be less inclined to join something like the Brussels supplementary convention
with the Western European countries. We will have to consider that as the next
step as we move forward on the review of the act.
Senator Banks: Let us return to the hypothetical event that I described about
a nuclear accident in Canada causing demonstrable damage in the United States,
let us say, because that is the most logical place. I am sure that this question
has been studied. Is it absolutely the case that an aggrieved third party in the
U.S. suing for demonstrable damages, which in the event of that kind of thing
could be huge, would be bound by our internal Canadian legislated limits? Would
they have recourse to international law and be able to seek damages beyond that?
We are signatory to certain international conventions. We are international
players. It is all very well for a country to say that no matter what we do, we
have legislation that protects us and our liability is limited to $3.75, no
matter where you sue or how much you sue for. Can we really rely upon that limit
Mr. Brown: Under the existing system, if the damages get above $75 million,
the expectation is that the federal government would step in.
Mr. McCauley: The issue is whether the American victim would be satisfied
with the compensation from the Canadian court. That would have to be judged at
Senator Kelleher: We have a number of acts in force in Canada, as I am sure
you gentlemen know. The Reciprocal Enforcement of Judgments Act allows Americans
to enforce their judgments in Canada. One would have to look at those acts, but
there are quite a few pieces of legislation that permit it.
The Deputy Chairman: Thank you, witnesses. Our committee is continuing, but
we will be talking about tobacco, which is probably a bigger threat to people
than nuclear issues right now. Thank you again.
We have a problem in that the steering committee needs some direction,
although I do not think Senator Kenny thinks we need any direction. As
background, the chairman wrote to the chief executive officers of Rothmans,
Benson and Hedges, RJR-Macdonald and Imperial Tobacco. I will ask Senator Kenny
to fill us in.
Senator Kenny: We have hearings coming up starting next Tuesday on Bill S-20,
the tobacco bill. The committee has passed a motion already setting aside time
to hear witnesses. We have a list of witnesses who have agreed to come.
The only witnesses of concern to the steering committee who have not agreed
to come are the presidents of the three major tobacco companies. Mr. Bob Bexon
is the president and CEO of Imperial Tobacco. I have three letters to Mr. Bexon
here. Mr. John Barnett is the president and CEO of Rothmans, Benson & Hedges
and Mr. Michel Poirier is the president and CEO of RJR-Macdonald Corp. All three
have declined to appear as witnesses.
This committee delegated authority to the steering committee to select
witnesses. The steering committee, on your behalf, met on May 16, 2000, and
agreed to a witness list. On May 17, 2000, the clerk proceeded to issue written
invitations to people to attend. Responses that have come back from the
presidents have been, I think it is best to say, vague. Perhaps I will let our
clerk characterize the nature of the responses that he has received from those
However, before I ask him to do that, I should like to draw to the attention
of the committee the seriousness of this. This committee has a reference from
the Senate to study this matter. This committee has the power and the inherent
privilege of a house of Parliament to ensure that witnesses it wishes to hear
appear before it. The power to compel attendance is granted by the Rules of the
Senate of Canada, in this case rule 90.
The process is that the committee directs the clerk to invite the relevant
witnesses in order for the committee to accomplish the matter referred to it by
the Senate, which is the reference we have by the Senate. If a witness refuses
or fails to answer an invitation to appear, a reasonable approach would be that,
before summoning the witness, a second invitation is sent. The request should
inform the witnesses of the power that a parliamentary committee holds. If
cooperation still is not forthcoming, one of the members of the committee would
have to file a certificate attesting to the relevancy of the witnesses'
testimony. The committee would then pass a motion summoning the individuals in
question before it. Once the motion is adopted, a summons outlining the time,
place and date at which the attendance is required would be served on the
Should the witnesses then appear, there is no problem. The problem has been
resolved. They have been officially and formally invited. If the witnesses do
not appear and do not comply with the order, the committee, through the Chair,
could report their conduct to the chamber. Upon presentation of such a report,
it would be an issue for the chamber to resolve. There are a variety of
recourses that the chamber could undertake to deal with the witnesses. I am
trying to inform you that this committee has the power to issue a subpoena to
these individuals to come.
I will explain the relevance of the testimony of the senior officers of these
tobacco companies. In the past, they have tended to use a spokesperson, Mr. Rob
Parker, who has attended and spoken on their behalf. The senior officers have
avoided actually coming themselves and answering the questions that
parliamentarians put to them. Mr. Parker is a well known lobbyist in Ottawa. He
represented other companies before them, and he has been the spokesman for the
tobacco companies for some time. To my knowledge, in the last 10 years, no
tobacco executive has testified before a Senate committee, nor, I believe,
before a parliamentary committee. It would appear that this is part of their
strategy to avoid addressing some of the issues that are important.
I have an article, which some of you may have seen, that appeared in The
Globe and Mail this week. It talks about Imasco's Purdy Crawford targeting young
smokers. Imasco has since been sold, and there are new owners. I can say that
Mr. Crawford is no longer the president of that company.
Senator Buchanan: He never smoked in his life, either.
Senator Kenny: It seems to me that the committee is entitled to hear from the
people who actually run these companies. Mr. Parker has come forward and told
us, presumably truthfully, that these companies have no interest in targeting
young people. This bill deals only with young people. Once again, it would seem
that Mr. Parker has indicated that he would like to come. The presidents of the
companies are asking for more time. The history of the tobacco companies has
been to play for time. Whatever can be put off until tomorrow is a win as far as
they are concerned. The longer they can delay coming and dealing with our
questions, the happier they are. I, for one, cannot see any reason why
presidents of corporations of this sort would not want to come and clear the
air, particularly when articles are appearing in The Globe and Mail. I do not
understand why they would not be prepared to come and tell us, if they do not
agree with this, just what the truth of the matter is.
Senator Adams: What day did that article appear?
Senator Kenny: It was last Monday, May 29, 2000, in The Globe and Mail. I
would be happy to circulate it, if the Chair agrees.
The Chairman: We should emphasize the timing. The first letter went to them
May 17, 2000. It is important to note the date in the matter of buying time. I
agree that they use that strategy, but May 17, 2000, was not very long ago.
Senator Kenny: In fairness, though, that was the time that all witnesses got
their first letter.
The Chairman: When did they answer?
Senator Kenny: We have not received a written answer from them as yet. They
got a subsequent letter on May 26, 2000, from the clerk.
The Chairman: Nine days later.
Senator Kenny: After that, they were sent a letter from Senator Spivak, our
chairman, which reads as follows:
On May 17 and May 26, 2000, the Standing Senate Committee on Energy, the
Environment and Natural Resources wrote to you expressing its wish to hear
testimony from you on June 8, 2000, at 10:00 a.m. regarding Bill S-20, An Act to
enable and assist the Canadian tobacco industry in attaining its objective of
preventing the use of tobacco products by young persons in Canada.
We have not yet received a response concerning the committee's request that
For your information, I am enclosing a copy of a paper on the Powers of
Parliamentary Committees by the then general counsel of the House of Commons
which was published in the spring 1995 issue of Canadian Parliamentary Review.
If you could please advise the Clerk of the Committee of your intentions
regarding your appearance before 5:00 p.m. on Wednesday, May 31, 2000.
That was last night. Perhaps, with your permission, Mr. Deputy Chairman, I
would ask the clerk to describe the nature of the communications that he has
heard back from the tobacco companies.
Mr. Michel Patrice, Clerk of the Committee: Yesterday, I received two phone
calls from Mr. Parker from the Canadian Tobacco Manufacturers Council. He said
that they were looking into the matter and were trying to reach the CEOs. He
said that they would get back to me. The first call was at 11:30 a.m. At that
time Mr. Parker thought he could get back to me before 5:00 p.m. I received a
second call later that day during which he informed me that one of the CEOs was
unreachable and that they would get back to me on Thursday. I have no indication
as to their willingness to appear or not.
Senator Kenny: Have you had any communications from any of the companies
Mr. Patrice: I had communications with the companies. On May 23, 2000, I
followed up with phone calls to the different CEOs to verify that they had
received the letter and understood the request of the committee. I spoke with
two of them directly. They said that they would look into it and that they would
talk with their industry association and get back to me. I spoke with the
assistant of the third CEO. She said that she would give the message to the CEO
and that they would get back to me.
Senator Kenny: What date was that, please?
Mr. Patrice: That was May 23, more than two weeks ago, I guess.
Senator Kenny: That was two weeks ago and, again, their spokesman said that
they have not had time to arrive at a position.
The Deputy Chairman: They did phone me last night, because they could not get
hold of the chairman. Mr. Parker asked for more time because they thought that
the three of them wanted to talk together but one of the executives was still
abroad. They felt that he would be back in the next day or so, but in view of
that new letter, which I think helps focus their minds a little bit on the
powers of the committee, they wanted time, a day or two, to get back to us. They
also wanted to talk to their own legal counsel to evaluate this. That is giving
you all the input.
Senator Kenny: That gives us more information, but I should point out that a
subpoena to them is no problem if they come. If they come, that is the end of
it, they will have done their duty and there will be no problem. On the other
hand, it is only an issue and you only have to consult legal counsel if you are
not going to come and you are going to fight the issue. In my view, we have
exceeded our requirements of two letters. We have sent three letters and we have
had a phone call with them. I am not sure why the three companies need to get
together to talk amongst themselves. We did not ask them to come as a threesome;
rather, we asked them to come as individuals representing their own companies.
The very fact that they want to get together makes one wonder a little bit.
I have prepared the necessary documentation that is required for this to
happen -- a motion by this committee. If it is adopted, it would simply mean
that these individuals would be served and if they come, that is terrific and
that is the end of the problem. If they do not come, then the whole chamber has
to deal with the issue.
The Deputy Chairman: That is what bothers me a bit, knowing that the whole
chamber has to be involved. Let's consider plan B. Plan A is fine -- they come,
no problem. Plan B is that they do not come and decide to fight this. That means
we have to go to the Senate chamber. Is the committee happy that we have enough
evidence put together to convince the chamber to back up our subpoena? I think
that is the key to this thing. The only other extra would be if we give them a
couple more days. That would show that we bent over backwards to give them every
opportunity before we served them.
Senator Kenny: I agree that we not only have to be fair, we have to appear to
be fair. However, we discussed this in the steering committee and we not only
had the clerk send the two letters that were required, but we also sent a third
letter and also pointed out the law to them. We also had the clerk call them
personally and draw it to their attention. Now, as to convincing the chamber of
the value of this, that is another matter.
The first issue that the chamber will be curious about is why any witness
would not want to come and discuss something that the chamber has put before one
of its committees. The chamber voted without dissent to refer this issue to this
committee. We have an instruction from the chamber to discuss this matter.
Second, a newspaper that refers to itself as Canada's national newspaper
suggests that these individuals are targeting young people; at the same time, we
are looking at a piece of legislation that relates to statements that their
representative has made concerning young people, and this proposed legislation
deals with young people. The question that leaps to mind immediately, of course,
is this: Has the representative been accurately reflecting the views of those
companies? Without hearing from the companies directly, none of us knows the
answer to that.
The very fact that they are not prepared to come and answer our questions is
a pretty compelling issue for the chamber. Also, there is the fact that we are
seeing reports in the press on a regular basis relating to the behaviour of
those companies. For example, we have seen their pattern of obstructing, pushing
back and holding off. As well, we have heard that they want to meet together in
a group. In fact, they advised us that they want to meet collectively to find a
response for us even though we have asked them for individual responses on
behalf of each company. Does anyone else have any doubts about this?
Senator Buchanan: As usual, I will have very little to say about this, but
what are the precedents?
Senator Kenny: There are substantial precedents for it. Perhaps the clerk
will recite the precedents for us.
Mr. Patrice: There were precedents in 1995 with the Special Committee on
Pearson Airport Agreements. Two lawyers were summoned from the Department of
Senator Buchanan: Were they subpoenaed?
Mr. Patrice: Yes, and they complied. In 1999, the Agriculture Committee
summoned a witness, who complied. Before that, it occurred in the early 1900s.
Senator Buchanan: There were three in the last eight or nine years?
Mr. Patrice: Yes, there were three. The only time I found that someone failed
to comply with a summons was in 1891.
Senator Buchanan: In the 24 years that I was in the Nova Scotia legislature,
I cannot recall that at any time we issued a subpoena in the committee that was
not immediately responded to and the people came. Actually, I cannot remember
any time that we had to issue a subpoena.
Senator Kenny: That is because it is such a no-brainer. People would normally
say, "If you want to hear from us, of course, we will come."
Senator Buchanan: What if the three of them come back and say, "Yes, we
will appear together"?
Senator Kenny: That is what we are asking.
Senator Buchanan: I thought you were saying that we require them
Senator Kenny: We do require them to come individually but they will be
sitting one, two, three.
Senator Adams: I am not a member of the steering committee but I am here as a
member of the committee. I think we have a rule about the steering committee.
The Deputy Chairman: Yes, we have a rule.
Senator Adams: The chairman of the committee was introduced and would make
reference to the issue for study. What was the motion for the committee?
Senator Kenny: Describe the reference.
Mr. Patrice: The reference is the reference of the bill, after second
reading, that Bill S-20 be referred to this committee.
Senator Adams: Therefore, that reference came from the chairman in the
Mr. Patrice: No, in terms of the request for the witnesses, the chairman does
not have to go to the chamber, just to the committee.
Mr. Patrice: The committee has the power by the Rules of the Senate to issue
Senator Adams: Senator Kenny, you are concerned only about the three
Senator Kenny: There are three witnesses in total. Everyone else we were
looking for has agreed to come.
Mr. Patrice: A letter similar to the one that was distributed to you, with
basically the same text, was addressed to the other two CEOs.
Senator Finnerty: I think their arrogance is unbelievable. We should subpoena
them and get on with it. I think the public wants us to get on with it. I want
my letters to stop. We need to deal with this. It is in the public mind right
now. I live next door to a high school and I see it every time I am home. I want
to move with this as fast as possible.
Senator Wilson: I agree. Could it be done this afternoon? Otherwise, it will
Senator Kenny: If we moved the motion now, the letter would go out today. We
would have to wait until the date they are called for, which is June 8, 2000, to
see whether or not they appear.
Senator Wilson: The sooner we move, the better.
Senator Christensen: I agree that we should move soon, but I am concerned
that we have no written documentation to indicate what they have done to date. I
presume that we send these letters by registered mail so that we have some paper
trail and documentation.
The Deputy Chairman: Would the clerk explain what steps he has taken?
Mr. Patrice: The letters were sent by fax, and I have the confirmation. When
I did the first follow-up calls, I checked to see that they had received the
first letter. They acknowledged receipt of the letter. I did a second follow-up
call to determine their intentions prior to sending a second letter to all three
of them again. The receipt of the letters was always acknowledged, either by
their offices or by Rob Parker, who was my contact. At a certain point I had no
more contact with the CEOs, and Rob Parker was answering on their behalf.
Senator Christensen: I am concerned that we do not have a paper trail. We
only have phone calls.
Senator Kenny: We have a paper trail because when the fax is received, you
get a paper back indicating that the fax was received.
Mr. Patrice: We have the confirmation of receipt for each of those letters.
The Deputy Chairman: I would feel better if we did not send a letter out
until Monday. Would Monday be too late?
Senator Kenny: In my view, it is too late, because they are expected to
appear next Thursday.
Senator Banks: Are we sending a letter or a subpoena?
Senator Kenny: We would direct a subpoena to be served.
Senator Buchanan: Does that not have to be approved by the Senate?
Senator Kenny: No, it only goes to the Senate if they do not comply, if they
choose not to come.
Senator Buchanan: You are not issuing the subpoena today.
Senator Kenny: Yes, we could.
Senator Buchanan: I understood that the procedure was for the Senate --
Senator Kenny: No, the Senate deals with it only in the event that they
refuse to appear.
The Deputy Chairman: I know the committee has the authority and that we are
doing everything right, but I am concerned. This will be a high profile case.
Should we being checking with the leadership on both sides?
Senator Kenny: I would speak to that. The history of the tobacco industry is
to frustrate and thwart folks by going to leadership and by endeavouring to get
them to divert us. I am sure that our leadership would not be swayed by tobacco
company blandishments. However, there is much suspicion out there that tobacco
companies have influence with people in high places. We are sitting here as a
duly constituted committee, and my sense is that a majority of the committee is
in favour of doing this. I should like to test that, if we may, Chair. Senator
Finnerty indicated that she was prepared to move a motion.
The Deputy Chairman: I am a bit leery of moving into these waters without
making sure that my party is behind me. Senator Wilson has checked with her
party and has no problem.
Senator Wilson: Yes, my party is all in favour.
The Deputy Chairman: I know you have been at this a long time and you have
been frustrated time and again. You are a little bit like the vulture sitting in
a tree that has tired of waiting for its prey to die and wants to go out and
Senator Kenny: I take offence at that. I think that is untoward and I ask you
to retract that.
The Deputy Chairman: I am just saying that you are in a hurry.
Senator Kenny: The vulture comment is absolutely unacceptable. I have gone
out of my way from the start to say that this not only has to be done in a fair
way, it has to appear to be done in a fair way. We were required to write two
letters: we wrote three. We have had numerous telephone conversations with these
individuals. They say that they are still not able to contact one of the group
to decide what they are going to do.
I think that it is important that this be done right. I think that our clerk
has written a document on it. My understanding is that our clerk is the resident
expert in the Senate on how to do this matter. He has laid out the procedure for
us, and we have followed it to the letter. We have exceeded requirements. If we
had not exceeded it, if we were just sort of skimming by, I would be worried.
Senator Buchanan: Senator Finnerty, are you moving this?
Senator Finnerty: I am prepared to move it, yes.
Senator Buchanan: I would not mind seconding the motion subject to one thing.
It should be subject to discussing it with John Lynch-Staunton and perhaps two
others to make sure that I am on fairly firm ground with them. I think that I
The Deputy Chairman: When does our committee meet again?
Senator Kenny: Our committee meets again on Tuesday, June 6, 2000. In the
event that there is a no, you will put Senator Lynch-Staunton in the position of
looking like he is in their pocket.
Senator Buchanan: That is true.
Senator Kenny: I am not sure that you want to put him in that situation. That
is why I asked that this meeting be open and not secret. It is being televised.
You are suggesting that there will be some private meeting somewhere where
people will decide whether or not these people should come.
Senator Buchanan: We cannot do that.
The Deputy Chairman: You made a point.
Senator Banks: I have two questions. First, are we sure that we want the
three CEOs to appear together, at the same time? That is my first question. I am
wondering whether that is the wisest thing to do. I certainly defer to Senator
Kenny's judgment on that respect. This matter is yours.
Second, and regardless of the first matter, the Chair does have a point.
These people are the CEOs of large organizations, and, while I do not believe
for a second that there is one of them that cannot be reached, I am wondering if
we might not -- unless you think that there is a reason not to <#0107> in
order to give the appearance of being very fair, which we must be concerned
about, issue a subpoena now, for Tuesday, June 13, 2000, first, in order to be
very clear about the requirement, if that is the right word, that they appear
here and, second, in order to be seen to have given time, which they seem to
have asked for. I ask that as a question to Senator Kenny.
Senator Kenny: Thank you, Senator Banks. The reasonableness of having them
appear as a group is that the committee set aside a certain amount of time. We
are clustering together other groups who have similar interests. We are giving
them a second crack at it, where their association also has had an opportunity
to appear. Altering the sequence of the hearings would mean us putting off other
people who have agreed to appear.
Senator Banks: Fine. What would be the date?
Senator Kenny: The only dates that we have available, because we are
approaching the end of the session, are Tuesday evenings and Thursday mornings.
We have set aside a Thursday morning for them and two other panels. The Thursday
scheduled is one week from today.
It should be remembered that they first heard about this on May 17 in writing
and with a follow-up phone call. Between May 17 and now they have had lots of
time to decide whether or not they could come.
The Deputy Chairman: There is the possibility that even if they get a
subpoena they can come back and request a move to another date. It does not
close any doors for them to arrange a better time. I think we have had enough
Senator Finnerty: I want to ask whether Senator Spivak knows about the
possibility of taking this approach.
The Deputy Chairman: Yes.
Senator Finnerty: I move:
That Bob Bexon, Michel Poirier and John Barnett be summoned to appear and
testify before the Standing Senate Committee on Energy, the Environment and
Natural Resources on Thursday, June 8, 2000, at 10:00 a.m. in Committee Room
505, Victoria Building, 140 Wellington, Ottawa, and that the Deputy Chairman be
authorized to follow such procedures as may be necessary to communicate this
Senator Kenny: No seconder is required.
The Deputy Chairman: Are all agreed, honourable senators?