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SECTION I: OVERVIEW

Message from the President

I am pleased to submit to Parliament the Canadian Nuclear Safety Commission’s (CNSC) 2007–2008 Departmental Performance Report.

The nuclear sector is experiencing significant growth as a result of the continuing rise in global demand for energy and the need to reduce greenhouse gas emissions. Combined with the increasing use of nuclear technology in industry, research and medicine, this nuclear renaissance is bringing about a considerable increase in the need for regulatory oversight – especially in areas such as licensing for nuclear fuel mining and processing facilities.

The increase in Canadian energy requirements is occurring at a time when the country’s fleet of existing nuclear power plants is aging. As a result, CNSC is receiving a significant number of applications to refurbish and extend the life of existing nuclear power plants and to build new nuclear power plants to meet energy demands. To ensure that CNSC can perform its regulatory licensing and compliance responsibilities associated with this growth, we refocused efforts to respond to these developments and the proposed plans for new uranium mining and processing, while ensuring safety and security of existing facilities. In its Industry Report overview, CNSC personnel concluded that the nuclear power plant industry operated safely throughout 2007. The vast majority of safety areas and programs met CNSC expectations, and we are committed to maintaining and improving this good safety and security record.

The CNSC achieved significant results during Fiscal Year 2007-2008. We improved relationships with our stakeholders; reallocated resources to address the growing interest in new nuclear power plants; streamlined and strengthened the regulatory framework; established a foundation to improve Aboriginal consultations; and invested in our employees who are key to the success of the organization. These are just a few examples of the excellent work CNSC has undertaken over the past year to enhance the health, safety and security of Canadians and the environment.

In late 2007, the extended shutdown of the National Research Universal (NRU) reactor in Chalk River resulted in concerns about the supply of isotopes that are used for medical diagnostics and treatments. As a result, the government issued a directive to CNSC to ensure that the health of Canadians is taken into account in CNSC licensing decisions. This incident led CNSC and Atomic Energy of Canada Limited to jointly commission a review by an independent third party. The review will identify a number of critical lessons and resulting action plans, and provide recommendations for improvement, which will be reviewed and implemented by CNSC during the 2008-2009 Fiscal Year.

CNSC actively works with our international partners to share best practices in nuclear safety and to strengthen Canada’s commitments to non-proliferation and the peaceful use of nuclear materials. Our organization continues to actively participate in the activities of the International Atomic Energy Agency and the Nuclear Energy Agency.

In the short time since my arrival, I have been impressed by the expertise and dedication of CNSC’s workforce. Going forward, the recruitment and retention of skilled staff will remain an important priority for CNSC. We will be strengthening our staffing efforts in a highly competitive market to respond to industry growth.

I am committed to assuring Parliament and Canadians that the use of nuclear materials in nuclear facilities is safe and secure.

With respect,

 

Michael Binder
President

 

Management Representation Statement

I submit for tabling in Parliament, the 2007-2008 Departmental Performance Report for The Canadian Nuclear Safety Commission.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007-2008 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

• It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;
• It is based on the department’s approved Strategic Outcome(s) and Program Activity Architecture that were approved by the Treasury Board;
• It presents consistent, comprehensive, balanced and reliable information; 
• It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
• It reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.

 

Michael Binder
President, Canadian Nuclear Safety Commission

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Summary Information

Canadian Nuclear Safety Commission’s Mandate

CNSC regulates nuclear energy and substances in Canada. Through its licensing, certification and compliance processes, CNSC ensures that nuclear activities are carried out safely, in order to protect people, their health and their environment. CNSC also works to ensure that Canadians and Canadian companies respect Canada’s international commitments on the peaceful use of nuclear energy.

CNSC was established in 2000 under the Nuclear Safety and Control Act (NSCA), and reports to Parliament through the Minister of Natural Resources. The agency was created as a successor to the former Atomic Energy Control Board, which was founded in 1946. CNSC’s mandate, responsibilities and powers are set out in the NSCA and are elaborated in the Canadian Nuclear Safety Commission Rules of Procedure and the Canadian Nuclear Safety Commission By-laws. Through the NSCA, regulations, associated regulatory documents, licences and licence conditions, CNSC regulates the entire Canadian nuclear cycle and all aspects of nuclear safety.

CNSC regulates:

• nuclear power plants
• uranium mines and mills
• uranium processing and fuel fabrication facilities
• nuclear research and test facilities and non-power reactors
• nuclear substance processing facilities
• radioactive waste and waste management facilities
• hospitals and cancer treatment centres
• heavy water production plants

The organization is also responsible for:

• regulating the use of nuclear substances and radiation devices, the packaging and transport of nuclear substances, and the import and export of nuclear substances and equipment;
• certifying personnel who hold key safety-related jobs at nuclear facilities; and
• ensuring security at licensed nuclear facilities.

CNSC also has certain functions under the Nuclear Liability Act and conducts environmental assessments under the Canadian Environmental Assessment Act (CEAA).

CNSC’s Commission Tribunal has up to seven permanent members, appointed by the Governor in Council. The President of CNSC is a permanent full-time member, and other members may be appointed to serve full or part time. Commission Tribunal members are chosen based on their credentials and are independent of all political, governmental, special interest group or industry influences.

The Commission Tribunal sets regulatory policy direction for the Canadian nuclear sector, makes legally binding regulations, and renders licensing decisions for nuclear facilities and uses. For licensing matters, the Commission Tribunal considers applicant proposals, recommendations of CNSC personnel, and stakeholder views before making its decisions. For major facilities, these licensing matters are considered through public hearings. To promote openness and transparency, the Commission Tribunal conducts business to the greatest extent possible in public hearings and meetings and, where feasible, in communities affected by the decision at hand. Proceedings are available live on the Internet and online proceedings are archived, with a three month retention period, on CNSC’s Web site, providing access to people across the country and around the world.

Funding of CNSC Operations

CNSC's operations are currently funded through an annual appropriation from Parliament. Its requirements are largely driven by the level of demand for licensing and regulatory oversight and by Canada's international commitments. When its workload increases, CNSC applies to the Treasury Board Secretariat to increase its cost-recoverable expenditures and related fee revenues or to receive new program funding.

The Government of Canada recovers most costs associated with CNSC's regulatory activities from licensees, in accordance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations (2003). CNSC collects fees and deposits them to the Consolidated Revenue Fund. Some licensees, such as hospitals and universities, are exempt from paying fees. In addition, fees are not charged for activities that result from CNSC obligations that do not provide a direct benefit to identifiable licensees. These include activities with respect to Canada's international obligations (including the non-proliferation of nuclear weapons), public responsibilities such as emergency management and public information programs, and updating of the NSCA and associated regulations as appropriate.

Recently, due to growth in the nuclear sector, CNSC has experienced rapidly increasing demand for its licensing, licensee certification and pre-project power plant design review activities, and consequently explored alternate funding mechanisms to meet future resource requirements. In 2007-2008, CNSC received approval from Treasury Board for revenue spending authority commencing in 2008-2009. This authority is being phased in over a two-year period, with full implementation of revenue spending authority for all cost-recoverable activities effective for 2009-2010. The authority will enable CNSC to address growth within the nuclear sector.

Additional Funding Received for 2007-2008 

For 2007-2008, CNSC's actual expenditures were $99.8 million. Fees received were approximately $72.6 million. As a result of growing activity in all areas of the nuclear sector over the past several years, CNSC has experienced a substantial increase in its workload in most areas of its responsibility.

In its 2006 budget, the Government of Canada recognized CNSC's need to expand and allocated it additional funds of more than $93 million, the majority of which is recoverable from licensees, to improve regulatory oversight over a five-year period. Of this funding, $23.9 million was allocated to the plan for 2007-2008. These additional resources enabled CNSC to fund the growth of its regulatory program, including overseeing nuclear power reactor refurbishment projects, expansion of uranium mining, research facilities, waste management, the use of nuclear substances, (including healthcare facilities), and addressing risks to security of nuclear facilities, while implementing a range of improvement initiatives.

In the 2007-2008 Supplementary Estimates “B”, CNSC requested $0.96 million from Treasury Board to carry out a specific Commission Tribunal Order. These resources were required for the seizure and disposition of nuclear substances and prescribed equipment held by a licensee.

In addition, after the receipt of two applications for site licensing for construction of new power reactors in Canada, CNSC requested and received approval for incremental funding in 2006-2007 that included funding of $5.6 million for 2007-2008 to process these site licensing applications. These funds are also required to modernize CNSC’s regulatory framework for the construction of new power plants in Canada. CNSC will continue to prepare to meet new demands with respect to new nuclear power plants and its responsibilities for domestic safeguards and non-proliferation as it shifts to a revenue-spending regime.

Program Activities and Key Expected Results

The CNSC works to achieve its strategic outcome through a single operational program activity: nuclear regulation. This program activity is sub-divided into five key programs or sub-activities that support CNSC’s above-mentioned priorities.

The following table outlines the CNSC’s status on performance through its program activity architecture:

2007-2008 Status on Performance
Strategic Outcome: Safe and secure nuclear installations and processes solely for peaceful purposes; and public confidence in the nuclear regulatory regime’s effectiveness.
Program Activity	Program Sub-Activity	Expected Results	Performance Status	Planned Spending	Authorities	Actual Spending	Link to CNSC Priorities and GoC Outcomes
Nuclear Regulation: To regulate the use of nuclear energy and materials to protect health, safety, security and the environment and to respect Canada’s international commitments on the peaceful use of nuclear energy	Regulatory Framework	A clear and pragmatic regulatory framework	successfully met1	10,531	11,422	12,583	CNSC Priorities: 1,2 and 3 GoC Outcome: Social Affairs – Safe and Secure Communities
	Licensing and Certification	Individuals and organizations that operate safely and conform to safeguards and non-proliferation requirements	successfully met	22,752	24,677	22,670
	Compliance	High levels of compliance with the regulatory framework	successfully met	35,811	39,781	36,176
	Cooperative Undertakings	Cooperation and integration of CNSC’s activities in national/international nuclear fora.	successfully met	18,155	19,691	18,644
	Stakeholder Relations	Stakeholders’ understanding of the regulatory program	successfully met	7,306	7,924	9,772
Total Financial Resources ($ thousands)				94,555	103,495	99,845
				Planned	Actual	Difference
Total Human Resources (Full-Time Equivalent)				730	639	91

 

 

Nuclear Sector Overview

The Canadian nuclear sector is experiencing rapid expansion driven by three key global trends:

Rising worldwide energy demand

Projections indicate that global energy demand will continue to grow, with forecasts of a 50 percent increase by 2030. Electricity generation is also projected to nearly double by then, with concentration on renewable and alternative energy sources. Canadian electricity demand is expected to rise 1.3 percent annually until 2020, leading to a need for sustainable, clean energy sources, including projected increases in nuclear energy. By the year 2030, it is expected that 55 countries will operate more than 600 nuclear power plants. In turn, this will lead to greater global demand for uranium and a need for uranium mining and development. As the world’s largest producer of uranium, Canada will be a key player in meeting the demand for nuclear energy.²

Increasing concern about climate change

At the same time, climate change is becoming an increasing concern and there is emerging international pressure for low-carbon economies and reduced greenhouse gas emissions. The Government of Canada has indicated that it will do its part by investing in electricity sources that include nuclear power.

Growing use of medical isotopes

There is a trend towards greater use of nuclear radioisotopes, particularly in medical imaging. Radioisotopes and radiation therapy equipment are also required for cancer treatments, for which the need is increasing, with Canada’s aging population and an expected growth in cancer rates. Canada’s number of Class II nuclear facilities, mainly cancer treatment centres, has doubled over the past five years. On December 10, 2007, the Government of Canada issued a Directive to CNSC regarding the health of Canadians, instructing the organization to take into account the health of Canadians in regulating the production, possession and use of nuclear substances.

These trends are all shaping an increased demand for nuclear energy and materials, and CNSC is responding to meet the challenges associated with regulating an expanding nuclear industry. As Canada’s nuclear regulator, CNSC is committed to ensuring that nuclear activities are conducted safely and securely, and that the health of Canadians and their environment are protected.

 

 

Status on CNSC’s Performance

CNSC Program Priorities for 2007-2008

Manage growth of the regulatory program

CNSC is addressing the growing interest in building new nuclear power plants in Canada as existing nuclear reactors age. As part of its increased focus on new nuclear power plants, CNSC has begun modernizing its regulatory framework to bring it in line with current international standards and to apply these standards to projects for building new nuclear plants.

CNSC is clarifying regulatory expectations, particularly for potential new nuclear power plants, by establishing clear licence requirements and creating guidelines to help licensees meet them. Key regulatory documents RD-337, Design Requirements for New Nuclear Power Plants and RD-346, Site Evaluation for New Nuclear Power Plants, were completed over the past year and will be presented for final Commission Tribunal approval in early 2008-2009.

CNSC has been working with the Government of Canada to secure additional long-term resources. In 2007-2008, CNSC received approval to change the mechanism of funding cost-recoverable activities from the annual Parliamentary appropriation to a new revenue spending authority regime. This regime, with full implementation effective for 2009-2010, will enable CNSC to face current and future workload pressures associated with the growing number and needs of licensees.

In the face of considerable nuclear sector expansion, CNSC requires sufficient staff to continue delivering its mandate. Through aggressive, innovative approaches to recruitment and retention, CNSC worked during 2007-2008 to secure highly qualified employees in a competitive labour market.

Deliver an effective regulatory program for existing facilities

CNSC is committed to assuring Canadians of the safety and security of current nuclear activities in Canada, and its day-to-day operations focus on delivering an effective regulatory program for existing facilities.

In response to the nuclear industry’s plans to refurbish existing nuclear reactors, in order to meet growing energy demands, CNSC has devoted significant time and effort to clarify the regulatory expectations related to nuclear power plants and provide strong regulatory oversight for refurbishment activities currently in progress. For all the Canadian nuclear power plants undergoing refurbishment (Point Lepreau Generating Station, Bruce A Nuclear Generating Station and Pickering B Nuclear Generating Station), CNSC required integrated safety reviews (ISRs)³, prepared and submitted by licensees in accordance with the IAEA’s Periodic Safety Review of Nuclear Power Plants – Safety Guide.

In its sustained commitment to stringent oversight of existing facilities, CNSC reviewed applications to renew or amend existing licences, to verify that licensees would continue to operate safely and in accordance with regulations and licence conditions. Based on these reviews, the Commission Tribunal renewed and amended licences for existing facilities, which included nuclear power plants, uranium mines and waste management facilities.

Through inspections, reviews and assessments, CNSC staff concluded that the nuclear power industry operated safely during 2007. The evaluation of safety areas and programs, as presented in its annual CNSC Staff Report on the Safety Performance of the Canadian Nuclear Power Industry, showed that overall, licensees made adequate provision for the protection of the environment, health and safety of persons, and undertook all the measures required to implement Canada’s international obligations. No worker at any nuclear power station or member of the public received a radiation dose in excess of regulatory limits, and emissions from all plants were well below regulatory limits. This finding is consistent with those of previous years.

For information on the National Research Universal (NRU) Reactor, please see the Highlight at the end of this section.

Implement improvement initiatives

Initiatives are underway to coordinate the environmental assessment process for new major projects. CNSC worked with the Canadian Environmental Assessment Agency to develop the framework for the conduct of joint review panels for major nuclear projects. A joint review panel integrates environmental assessments and licensing requirements into a single, concurrent process. The panel is established as a single body to make appropriate decisions at different stages for the environmental assessment and first licence application for a project, while offering significant opportunities for public participation and exchange of views. In early Spring 2008, consultations will be launched for the proposed joint review panel agreements and environmental impact statement guidelines concerning the proposed Bruce Power New Build project and Ontario Power Generation Inc.’s Deep Geologic Repository.

To address industry growth in Canada, CNSC is creating a new Directorate of Regulatory Improvement and Major Projects Management. The Directorate, expected to be established early in the 2008-2009 fiscal year, will be a single point of contact for all new build activities, consolidates the skills and expertise required to address major projects like new reactor design reviews and applications for new uranium mines and new power reactors.

The Major Projects Management Office (MPMO), established by the Government of Canada’s Regulatory Improvement Initiative in late 2007, aims to improve regulatory co-ordination by providing licence applicants with a single, efficient point of entry into the federal regulatory process. The MPMO was established to enhance transparency, predictability, timeliness and accountability of the regulatory review and Aboriginal consultation processes for major natural resource projects, while maintaining existing regulatory responsibilities. CNSC is committed to working with the MPMO to share best practices and project plans for the regulation of major nuclear projects.

Enhance external engagement and outreach

While not explicitly a program priority, CNSC is expanding its communications and outreach activities to fully engage Canadians, hear their concerns and respond to them. During 2007-2008, CNSC visited and consulted with communities throughout Canada to share information and gather public input on environmental assessments and licensing decisions, the performance of the nuclear power industry, and proposed changes to regulatory documents.

In line with its commitment to outreach, CNSC is improving accessibility to the public and licensees, with a special focus on Aboriginal consultations. CNSC is making greater use of the Web to inform all Canadians about the nuclear sector and nuclear safety, gather public feedback, respond to concerns, increase transparency, and offer online licensee services.

These four key priorities drive all CNSC activities, which are discussed in Section II of the DPR and are underscored by the guiding principles of safety, simplification of processes, clarification of requirements and expectations, timeliness, and transparency.

CNSC Management Priorities for 2007-2008

For this timeframe, management priorities focus on improving management practices and controls, and enabling the necessary infrastructure to ensure an effective delivery of the regulatory program.

Quality Management Systems

During the reporting period, CNSC developed and released its Management System Manual, which identifies high-level principles and processes by which the organization achieves its goals and objectives. The manual provides a framework for more detailed processes and procedures, and is a key document for all CNSC employees.

CNSC developed a standard for the consistent application of its licensing and compliance activities across the organization.

Detailed technical assessment processes and review guides were initiated, to support applications for new power reactors.

An electronic document and records management system was introduced in 2007-2008.

CNSC made strides towards developing information systems and processes which increase compliance with federal security standards for communications networks, electronic document handling technologies and appropriate administrative procedures.

Federal Accountability Act

CNSC created a Contract Review Committee, to ensure that contractual activities are conducted fairly and openly, and undertook initiatives to strengthen internal control and policy management.

Implementation of a First Collective Agreement

After signing a first collective agreement in 2006, CNSC consulted regularly with the employee union on labour relations. The agreement, which took effect in late 2006, covered the period from June 14, 2004 to March 31, 2008, and will be renegotiated for the upcoming year.

CNSC has also worked to maintain a productive working relationship, through consultations with the bargaining agent and with employees that are not represented.

¹ While some targets were not met, much work was done throughout the fiscal year and completed shortly into April 2008.

² Sources: International Energy Agency, World Energy Outlook 2006; Energy Information Administration, International Energy Outlook 2007; Ux Consulting, Nuclear Power Outlook, October 2007.

³ When considering a life extension project for a nuclear power plant, the licensee must also undertake an integrated safety review (ISR), which is a comprehensive assessment of nuclear power plant design and operation. The ISR evaluates the plant’s current state, operations and performance, in order to determine how well the plant conforms to modern standards and practices, and to identify any factors that would limit safe long-term operation.

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