CANADA BUSINESS

Candu Energy Strike: Nearly Eight Hundred Nuclear Workers On Strike After Failed Negotiations

07/09/2012 07:13 EDT | Updated 09/08/2012 05:12 EDT

TORONTO - Candu Energy Inc. enacted a contingency plan Monday after about 800 nuclear scientists, engineers and technologists walked off the job on strike when negotiators failed to reach a deal by the deadline.

But the Society of Professional Engineers and Associates, which represents the workers, said there will be a noticeable effect on operations.

"There's not enough people to replace us, so work will definitely be impacted," union spokeswoman Michelle Duncan said.

Duncan said Candu employees have stopped the ongoing safety analysis that's performed on reactors, and are not available to make any repairs to the reactors.

"These guys have a design expertise," said Duncan. "Imagine how complex a nuclear reactor is. If something is irregular, you want to go back to the designers."

Duncan said the work stoppage may also have a trickle-down effect on companies that manufacture the components for the reactors, if fewer contracts are being carried out.

Candu spokeswoman Katherine Ward said he company does not operate any nuclear power plants so the strike action should have no impact on the day-to-day operations at the plants.

"We've implemented extensive contingency plans to deliver on our customer priorities, and have been talking to our customers almost continually since before the strike began," said Ward.

Candu is owned by Montreal-based engineering giant SNC-Lavalin (TSX:SNC), and its employees design, build and service nuclear reactors that supply nearly half of Ontario's electricity and 16 per cent of Canada's overall electricity requirements.

The company has operations in Ontario, Quebec and New Brunswick. Reactors designed by Candu supply more than 22,000 megawatts of power at sites around the world.

The union has said the main sticking points in the labour dispute involved wages and seniority.

SPEA president Peter White said a key issue is what he calls the company's desire to move away from nuclear industry standards and compensate its employees differently from other workers in the field.

He said a full strike threatens the future of Canada's nuclear industry as it will almost certainly guarantee the loss of technological talent.

Senior engineers with years of expertise are choosing to leave the company, which could cause the design and service capabilities at Candu to decline, he said.

Duncan said the union would like to return to the bargaining table, but will only do so if SNC-Lavalin presents "a fair and competitive deal."

"We need to be competitive if we're going to maintain the expertise," she said.

"Our members can work anywhere in the world, they are employable and they are making their decisions by walking with their feet."

Ward said the deal that Candu has proposed is fair, reasonable and competitive.

"We've been working very hard over the last several months to negotiate a new collective agreement, and we're willing to come back to the table at their convenience," she said.

The federal government agreed last year to sell the Candu reactor division of Atomic Energy of Canada Ltd. to SNC-Lavalin for $15 million plus future royalties.

Under the deal, SNC agreed to protect about 1,200 AECL jobs.

Industry Minister Christian Paradis said he's confident that Candu will be able to resolve the situation through bargaining.

"We sold the Candu sector to SNC Lavalin to make sure that we would keep the sector sustainable in the future, and I'm confident that they will be able to solve their matters with this."

Ontario recently awarded a contract worth more than $600 million to a joint venture between SNC-Lavalin Nuclear Inc. and Aecon Construction Group Inc. (TSX:ARE) to refurbish its Darlington nuclear station near Toronto.

SNC-Lavalin is one of the world's largest engineering and construction firms.

Shares in the company were down 15 cents at $38.06 on the Toronto Stock Exchange on Monday afternoon.