According to a report in today’s Globe and Mail, Atomic Energy of Canada Ltd (AECL) and SNC-Lavalin are asking for billions in loan guarantees so they have a chance at winning a contract to build the prototype Advanced Candu Reactor (ACR) in Ontario.
No surprise here. Fully aware that its AECL's only plausible hope for selling an ACR, Ontario has said that it will require federal backing to buy it. AECL, meanwhile, has been struggling to finish the ACR design to meet Ontario’s timelines for reactor construction (despite starting way back in 2001).
The federal government should say ‘no’ to any further subsidy for Ontario’s nuclear program or the ACR.
It’s already given several hundred million dollars towards the development of the ACR. We shouldn’t have to pay people to buy it.
AECL will respond saying a sale to Ontario will mean it'll sell many reactors oversees, creating jobs for Canadians. Indeed, I just read over AECL recently released five-year corporate plan and it claims AECL can sell 25 reactors over the next 25 years!
But we’ve heard this before, though. AECL said in 1996 that its goal was to sell “ ten CANDU sales over the next ten years” (thus lots of jobs to rationalize ongoing subsidies). It only managed to sell three - two to China (with the help of $ 1.5 billion in financing from the federal government), and one to Romania (which was originally order back in the 1980s).
The Globe article also notes that AECL is asking the federal government to also cover the risk of potential cost over-runs. In reality, the federal government – and the taxpayer – are already backstopping the risks from cost over-runs and delays at other AECL projects – specifically, life-extension projects in Ontario and New Brunswick.
If you read closely AECL’s 2008 financial report, you’ll see that AECL already has $500 million in “off balance sheet” (!) liabilities for performance guarantees, such as the life-extension of the Point Lepreau nuclear station in New Brunswick. This a backdoor subsidy for nuclear projects in Canada and because AECL is a crown corporation its backstopped by the tax-payer. Now AECL wants to make this 'off balance sheet' liability bigger.
The Harper government is studying whether they privatize AECL. They should and stop the hundreds of millions we waste annually subsdizing AECL.
The McGuinty government, on the other hand, claimed in 2005 that nuclear was the cheapest option for providing electricity future. Ongoing reports like this are showing otherwise. Renewables and conservation are looking more competitive everyday.