02/09/2012 02:32 EST | Updated 04/10/2012 05:12 EDT

Atomic Energy Of Canada Labs Sale: Tories Testing The Waters For Selling Research Facilities


OTTAWA - The Conservative government is testing the waters for the sale of Atomic Energy of Canada Ltd.'s nuclear research labs.

Ottawa is now seeking companies to "participate in, invest in and/or manage the laboratories."

"The restructuring is considering how to reduce federal contributions to AECL, notably through enhanced cost-recovery for all services AECL provides to third parties, and/or through partnership or management opportunities as identified through this or other processes," says a document posted on a website that advertises government contracts.

"Nuclear infrastructure is expensive and while some costs have been recovered by the government, there is still significant federal financial support.

"The restructuring needs to determine the activities of interest to those stakeholders willing to invest in AECL, which would enable enhanced sharing of both benefits and risks while strengthening accountability."

The move comes after Ottawa sold the Crown corporation's Candu nuclear reactor business to SNC-Lavalin in October for $15 million.

Since the sale of the reactor business, AECL has focused on its nuclear laboratories division, which has a staff of more than 3,000, mainly in Chalk River, Ont., and Pinawa, Man. The division manages nuclear waste, conducts research and produces medical isotopes.

The document notes AECL's nuclear liabilities are estimated at about $5.4 billion. That includes decommissioning facilities and dealing with a wide variety of buried and stored waste. AECL is also contracted to manage radioactive waste for hospitals, universities and medical isotope producers.

The government pegs the cost of waste management and decommissioning at $325 million in the coming years.

"The government is seeking proposals and/or recommendations from respondents on how to manage these nuclear liabilities in the safest, most cost-effective and timely manner," the document says.

"In particular, one of the options under consideration would be a private-sector contract for the management of legacy radioactive waste and decommissioning obligations, where incentives could be used to reduce this liability in the safest manner possible, while accelerating timelines, thus potentially reducing the overall financial burden on Canadian taxpayers."

Natural Resources Canada bristled at the suggestion the government is trying to sell off AECL's nuclear labs.

"The government is issuing a request for expression of interest ... to understand potential opportunities for partnership models and the relevant experience and capabilities offered," spokesman Paul Duchesne said in an email.

"The information gathered through this process will help inform the restructuring process, a critical step to further strengthen Canada's nuclear industry while reducing taxpayers' exposure to financial risks in this sector."

Duchesne added the government does not expect private-sector interest in the purchase of the entire facility.

The Crown corporation has long been a headache for successive federal governments.

AECL has cost Canadian taxpayers billions of dollars and faced major cost overruns at key projects in recent years while struggling to find a buyer.

In May 2009, the Conservative government announced plans to spin off AECL's commercial reactor business from its research division.

The announcement coincided with what turned into a lengthy shutdown of the company's Chalk River research reactor, which caused a worldwide shortage of the medical isotopes used to detect cancer and heart ailments.

The National Research Universal reactor was down for 15 months. There were times when it looked like the half-century-old reactor might never return to service.

An earlier shutdown in late 2007 also strained the global isotope supply and ended only after Parliament voted to bypass the nuclear safety regulator's closure order.

The Harper government plans to get Canada out of the medical isotope business. But the document posted Thursday says Ottawa will entertain proposals for isotope production under certain circumstances.

"Isotope production constitutes a major, non-research-based activity at the laboratories. As indicated in the government's response to the report of the expert review panel on medical isotope production, the government does not intend to have the NRU produce medical isotopes beyond 2016," the document says.

"The laboratories offer significant infrastructure and expertise in the medical isotope production field. Private-sector proposals for isotope production could be considered if the full costs (capital and operating), liabilities and risks were covered without any further public investment to support such activities."

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