Wednesday 29 October 1997
Bruce township; Bruce county; town of Kincardine; town of Port Elgin
Mr Howard Ribey
Mr Ted Mielke
Mr Keith Campbell
Mr Malcolm McIntosh
Mr Charles Mann
Ms Maureen Couture
Mr John Van Bastelaar
Mr Doug Court
Ontario Hydro Employees
Mr Harold Hergott
Mr Ken McGuigan
Mr Tim Morgan
Mr Jake Hunter
Mr Frank Morris
Mr Robert Diamond
SELECT COMMITTEE ON ONTARIO HYDRO NUCLEAR AFFAIRS
Chair / Président
Mr Derwyn Shea (High Park-Swansea PC)
Vice-Chair / Vice-Président
Mr Monte Kwinter (Wilson Heights L)
Mr Sean Conway (Renfrew North / -Nord L)
Mrs Barbara Fisher (Bruce PC)
Mr Doug Galt (Northumberland PC)
Mrs Helen Johns (Huron PC)
Mr Monte Kwinter (Wilson Heights L)
Mr Floyd Laughren (Nickel Belt ND)
Mr John R. O'Toole (Durham East / -Est PC)
Mr Derwyn Shea (High Park-Swansea PC)
Clerk / Greffière
Ms Donna Bryce
Staff / Personnel
Ms Lewis Yeager, research officer, Legislative Research Service
Mr Richard Campbell, consultant
Mr Robert Power, legal counsel
The committee met at 1903 in the Best Western Governor's Inn, Kincardine.
The Chair (Mr Derwyn Shea): Good evening everyone. On behalf of the select committee, I certainly would like to welcome you to the meeting this evening. The select committee will be in order and the purpose of our meeting this evening to hear deputations concerning Ontario Hydro nuclear affairs. I expect many in the room have received and/or read the terms of reference of the select committee and I am very pleased to at least introduce the members of the committee as we move around: Mr Laughren, Mr Conway, Mr Kwinter. My name is Derwyn Shea. I'm Chairman of the select committee. There's Dr Galt, Barb Fisher, Helen Johns, and Mr John O'Toole, who's not here yet, but should be here just momentarily. To my left are Hansard and then our consultants and legal counsel, and to my right Donna Bryce, who is the clerk of the committee, and legislative research.
We are here to hear your views on the issue that is before the select committee at this point, and I would like to pay particular thanks to you, Ms Fisher, for receiving us and making sure that the tour today was well executed. We appreciate the hospitality we've received.
Mrs Barbara Fisher (Bruce): Thank you very much, Mr Shea. I appreciate the opportunity to bring the select committee to the community of Bruce and welcome you all here on behalf of the constituents of Bruce. I'm sure you're going to be even more highly educated after tonight's endeavours.
The Chair: I have no doubt. Thank you for the words. Those of us who have been in municipal politics know exactly what you're saying. That allows me to segue into our opening round of deputations.
I might say, for purposes of Hansard and for those who are in the room this evening, we did have an extensive, and I think a very helpful, tour of the facilities this afternoon. During the course of the tour some members of the committee who are nameless because frankly I don't know who all they were made very favourable comments about some of the T-shirts being worn by some men and women in the control room, if nothing else. Mr O'Toole may be hanging his head in shame and embarrassment as I say this because he was enamoured by it, but there were others.
As I came out from dinner ready to come downstairs to the meeting, I was met by someone I don't know and can't identify who wanted to make sure I was clear that he was approaching me not as a member of the Power Workers or as management, but as a worker in the control room, to say they were so pleased that the select committee (a) was there, (b) seemed to be asking some fairly penetrating and informed questions, and (c) had made such comments about the T-shirts that indeed there is a T-shirt for every member of the committee. I want you to know that.
Mr Conway, you can explore this one later, but they are extra large. Mr Kwinter and I may not be able to wear them too openly all the time, but we will nevertheless have them framed and keep them with great memory. Mr Laughren of course will be able to share his with other members of his family.
I want you to know that on behalf of the committee we receive that with a great deal of pleasure and will look back upon our visit to Bruce with more than great pleasure.
TOWN OF KINCARDINE
TOWN OF PORT ELGIN
The Chair: We'll proceed with the opening deputations. The committee is here not to speak but to listen very carefully and to ask questions. There is a time frame before us. We have an hour and a half for the first block of questions and to be of assistance, particularly to members of municipal council, at least one of whom who I understand has to leave with some dispatch because of an all-candidates' meeting. That is not unimportant.
We will ask the representatives from Bruce township, the county of Bruce, the town of Kincardine and the town of Port Elgin -- there are two deputants in each case -- to please come forward and take chairs at the witness stands.
It is my understanding that Reeve Howard Ribey has to leave to go quickly, so if no one has objections, I will allow us to do questions to him first and allow him to excuse himself. Then we'll carry on with our questioning for all the other witnesses who are at the table. Will that be agreeable to everybody at the witness table? Marvellous. Thank you very much.
We are in your hands. We have an hour and a half, I remind the committee, for presentations. I would ask if members of the municipal delegation can keep their remarks reasonably concise. It will allow more time for members of the committee to ask their questions of you. So if you can keep it very tightly focused, we would appreciate that. Let's begin. Mr Reeve, I suppose you're the one who's beginning. Let me begin with you.
For the purposes of Hansard, it would be helpful if just before you start, Reeve, we could ask each member at the table to identify themselves so that we can make sure it's recorded in the record. Let's begin over here.
Mr Malcolm McIntosh: Malcolm McIntosh, planning director for the county of Bruce.
Mr Keith Campbell: Keith Campbell, warden of Bruce county.
Mr Howard Ribey: Howard Ribey, reeve of Bruce township.
Mr Ted Mielke: Ted Mielke, deputy reeve, Bruce township.
Ms Maureen Couture: Maureen Couture, CAO and clerk, town of Kincardine.
Mr Charles Mann: Charles Mann, mayor, town of Kincardine.
Mr John Van Bastelaar: John Van Bastelaar, mayor of Port Elgin.
Mr Doug Court: Doug Court, chief administrator officer, town of Port Elgin.
The Chair: Thank you very much.
Mrs Fisher: Could I just ask a question before we start? I've been asked whether or not this is actually being televised. I don't know the answer to that. Is this being picked up on the legislative channel as if we were there, or not?
The Chair: I'll ask the clerk to respond.
Clerk of the Committee (Ms Donna Bryce): No. The only location that is televised on the Parliament channel is in Queen's Park, in room 151.
Mrs Fisher: Is it being taped?
Clerk of the Committee: Yes. Hansard is recording it.
Mrs Fisher: Okay. Thank you very much.
The Chair: Then may we begin. Mr Ribey, we're in your hands.
Mr Ribey: Good evening, members of the committee. Bruce township would like to thank you for the opportunity to appear before your committee this evening to make our thoughts known.
The township has two major areas to address today: One is safety and the other is the effects on economic development. While economic development is a high priority to the municipality, we believe public safety has to be a higher concern.
The township is concerned primarily with safety to local residents and workers. While this should be the regulator's job, the elected officials wish to identify this issue to your committee. While the IIPA report identifies safety issues, most of these issues have been known for some time. The IIPA report rates safety and emergency preparedness below standards. This is an area that needs the most urgent attention.
From a municipal point of view, we have concerns for funding, third-party resources and training of municipal officials to be prepared for an emergency. With regard to funding, we feel the province, and particularly the Ministry of the Solicitor General and Emergency Measures Ontario, whose job it is to oversee the preparedness, should be requested to assist with funding adequate to meet their own standards. The funding should provide for all third-party resources required, including police, fire, ambulance, municipal staff etc.
We are told that for a full-scale drill or in a major event more than 50 police officers with full equipment could be required to respond for traffic control. The allocation of these costs should be predetermined in funding agreements which provide for the various parties' costs. There is a need for better training of elected municipal officials, who change periodically. For example, we will have a new council in 1997, 1998 and the year 2000, and the membership of this new council could be dramatically different, but on their first day in office they could be asked to respond to an emergency. There needs to be better training so these elected officials are trained and ready to act when required.
We understand firefighting is now provided by trained volunteers from the different shifts, and we would like serious consideration to having dedicated firefighters on site. We were just made aware since we made this presentation that Ontario Hydro has begun to address that, so we certainly applaud that effort.
We have an emergency planning coordinator on staff, who is out of the country this week, but we would request that he be allotted an hour of your time next week in Toronto to expand on emergency preparedness and safety issues.
We believe there is little argument that the province needs electricity to function efficiently. Locally, we believe nuclear power is a proven, reliable source which has many environmental advantages over fossil fuel sources, and there are limits to other sources of electricity.
The Bruce nuclear power development has a huge, local economic impact. The Bruce nuclear power development is the major employer in the county and it fuels the Bruce Energy Centre. We are asking if the IIPA report has had enough consideration and whether all options and impacts have been considered.
The acceptance of the IIPA seems to have happened very quickly without local consultation, and the local communities which feel the most impact believe they should have had an opportunity to comment on the impacts. Bruce township appreciates the efforts Ontario Hydro has made to help establish the Bruce Energy Centre with low-cost heat energy. Ontario Hydro has an obligation to continue to support the Bruce Energy Centre with low-cost services, including steam and electricity, at prices which make these industries as competitive as first envisioned.
Bruce township and the local community strongly support providing preferred electrical rates to the Bruce Energy Centre customers and urge Ontario Hydro and the province to complete any necessary changes to the Power Corporation Act, and if that is necessary, we encourage the province to quickly complete the required amendments.
We have heard comments that the IIPA report is a step towards privatization of Ontario Hydro. If this is the case, Bruce township would have concerns about the security of radioactive materials. Inventory of material would need very careful scrutiny from a federal agency such as the Atomic Energy Control Board.
The IIPA report focuses on leadership, culture, people, processes, organization and labour relations. Bruce township feels strongly that there needs to be a focused effort by management and staff to cooperate at all levels to improve ratings to the nuclear plants as identified in the IIPA report. For example, we heard a Power Workers' Union presentation recently in Ottawa to the Atomic Energy Control Board where the Power Workers' Union representative in a question-and-answer period said the Power Workers' Union objected to mandatory drug and alcohol testing. We believe this is not an unreasonable requirement and should be implemented to assure the public that competent personnel are fit for duty to complete these very responsible tasks.
If the IIPA recommendation continues as proposed, we would like to see the following addressed.
The training of operational staff: We understand that about 250 trainers are required and that there would be an equal number of trainees being educated at any one time. We encourage that the western training facility at the Bruce Nuclear Power Development be used for this purpose as it would help to reduce the impact on the economy of the area and help to stabilize the real estate market.
The central maintenance service at the Bruce Nuclear Power Development should be utilized by Ontario Hydro for manufacturing and repair of as much Ontario Hydro equipment as possible for its facilities. Mr Andognini has identified this facility as very well equipped and capable of providing the needed services. This would also help to lessen the impacts we are facing.
We would also like to see mitigation of the effects on Bruce Energy Centre; mitigation of local effects, including local employment and the local housing market; continued monitoring and attention to the tritium levels in Lake Huron -- this was started a couple of years ago when there was a study done in conjunction with Bruce township and Ontario Hydro and they found them to be quite acceptable, but we feel that should continue on -- some assurances that the plan to bring Bruce A back into operation by the year 2003 be confirmed.
The impact of job losses as a percentage of total local jobs is much greater with the Bruce A layup in Bruce county than similar impacts of layups at Pickering or Darlington because of the much larger number of jobs in those areas closer to larger urban centres and a lower percentage of local job losses this causes to those areas.
Due to the larger, relative impacts to Bruce county than in other areas, consideration should be given to bringing Bruce A back into operation sooner than the other nuclear plants.
We hope that your committee realizes that the Lake Huron shore area is one of the largest supporters of the nuclear industry in Ontario. The local residents are familiar and comfortable with nuclear power plants as they have some knowledge of nuclear operations and partially because most of the employees live in our area and are neighbours, friends and family members of many of us.
Ontario Hydro has been an excellent corporate partner in the community, and although not always successful, they have attempted to mitigate the concerns of all parties, regardless of their concerns or philosophies. We are very much aware of the economic impact of Ontario Hydro in our area and we support them, but we also believe that the constructive review brought forward by the IIPA of the operations of the corporation is in everyone's best interests.
We applaud the efforts of the select committee on Ontario Hydro Nuclear Affairs and their efforts to obtain local input into the IIPA recommendations. We recognize the need for changes and improvements to the nuclear industry. Bruce township made these same points at a recent Atomic Energy Control Board hearing in Ottawa and continues to focus on safety first and addressing economic impacts.
Thank you for giving us the opportunity to appear before your committee.
The Chair: Thank you, Mr Reeve. Councillor Mielke, I presume you may have to go to the same meeting. Would you like to add any points at all? No? Fine.
The Chair: That'll be some all-candidates' meeting. Can I perhaps pause for a moment, if the other deputants don't mind, because of the reeve's pressing schedule? We'll pause and ask some questions. We'll begin with the government caucus this evening and move around. We'll keep this to five minutes, Ms Fisher.
Mrs Fisher: Thank you, Reeve Ribey, for you presentation. There are a few things that I would ask about. We did, this afternoon on the tour and previously in the public hearings, address the issue of public safety, fire safety and security issues. I think you've raised a very significant point with regard to how the responsibilities interlink between the Ministry of the Solicitor General, the community and Ontario Hydro. You raised a few areas of weakness. I don't want to put words in your mouth, but would you agree with that?
Mr Ribey: Mm-hmm.
Mrs Fisher: Would you think that in the past -- I certainly have had reported to me since I was elected some displeasure with the way in which that wasn't coming together.
Mr Ribey: Yes, Mrs Fisher. I guess the concerns were that things were being mandated by the Solicitor General and Emergency Measures Ontario and that the input we had was minimal. It was putting extra pressure and costs on everybody. In regard to training, although we do agree with training, they were suggesting that we needed one full-scale drill a year. There's a major cost to this when you include social services from the county or elected officials from the three municipalities -- Bruce, Tiverton, Kincardine township at the present time -- the police --
Mrs Fisher: How is that managed right now? Do the individual municipalities from where those people come pay that or contribute to that?
Mr Ribey: They pay for the municipal people. The fire department people are picked up by the municipalities. The policing and social services people are all paid by their respective agencies.
Mrs Fisher: There's no bill back to Ontario Hydro and yet it's something that is very necessary in terms of the safety of the community.
Mr Ribey: That's correct and I'm not aware -- in all fairness to Ontario Hydro, Ontario Hydro pays for our emergency coordinator, and for maintenance and operational costs of his duties too. They pay for that, no question about that.
Mrs Fisher: You also raised a point of issue with regard to the Bruce Energy Centre. Although it's not a direct Hydro issue, it certainly has something to do with this community. You raised a concern with regard to a competitive or a fair electricity rate. Can you expand on that a little bit?
Mr Ribey: This has been an ongoing issue for years, as you are aware. At the present time, the industries in there are forced to pay rural rates, which are in the neighbourhood of 12 cents --
Mrs Fisher: I think it's seven, actually; seven to 12.
Mr Ribey: In that area, anyway. If they were within an industrial base in an urban area, it would be much less than that, no question.
Mrs Fisher: I'm asking some questions that perhaps I know the answers to but I think in fairness to the rest of the committee, so that we get some of this out, which is part of the intent of bringing the hearings to the backyard of the community that's going to be impacted, I guess in the past there have been representations made to Ontario Hydro on a number of occasions to try and assist the Bruce Energy Centre along in terms of the potential for diversifying the job opportunities in the community. Can you explain what's happened at those?
Mr Ribey: They haven't gone very far. There hasn't been anything productive happen from them, really. For one reason or other, there always seems to be a roadblock or something gets in the way. Nothing has happened in the past number of years.
Mrs Fisher: Are you suggesting that maybe Hydro could have been a little more receptive to understanding the plight of the community?
Mr Ribey: I'm suggesting that Ontario Hydro could be too, but I'm also suggesting that perhaps our provincial government could lend a hand in helping out too.
Mr Sean G. Conway (Renfrew North): Reeve Ribey, just a couple of questions. On the first page of your brief you talk about some of the provincial agencies. One of the questions the committee has been dealing with over the last few days is the role of the provincial fire marshal's office in dealing with a number of issues between municipalities and Hydro and the Atomic Energy Control Board. What kind of experience have you and your colleagues at Bruce township had with the Ontario fire marshal's office over the years, particularly with regard to fire protection issues, emergency planning? Have they been very involved in those issues with you?
Mr Ribey: Our local fire department does not serve the BNPD. They have their own volunteer fire department and consequently there isn't that much involvement between them. Am I correct? Ted's on the committee. He probably knows more about it than I do.
Mr Mielke: The Tiverton fire department provides backup for Ontario Hydro and they have some training in their facilities. Also, a lot of the firemen who serve on the Tiverton fire department are also Hydro employees.
Mr Conway: The question I'm trying to really get to is, over the past number of years, has the fire marshal's office been involved with people at Bruce township just generally talking about emergency preparedness and fire issues of a general kind, particularly with the nuclear power station in the area?
Mr Ribey: I would say not.
Mr Conway: What has been the impact on real estate in Bruce township in the last two months since the announcement of August 13?
Mr Ribey: I think that's too early to say, sir. The full impact of this hasn't really set in, so it's too early to say. I would anticipate, though, that it will have more effect on the housing market than it will on the farming market. The agricultural land in the last year has increased in our area and I would anticipate it wouldn't make too much difference.
Mr Conway: On page 4 of your brief, and I'm quoting now, "We encourage that the western training facility at the Bruce Nuclear Power Development be used for this purpose, as it would help reduce the impact on the economy...and help to stabilize the real estate market." I've got to believe that the announced layoff of, what, 1,700 people at BNPD has had an impact on the real estate market throughout the region. I just want to --
Mr Ribey: I don't think there's any question it certainly will have. How much it has had yet, I don't know. Perhaps some of your other deputations can answer that better than I can.
Mr Conway: We'll raise that with them.
Mr Floyd Laughren (Nickel Belt): Reeve Ribey, welcome to the committee. It's good to see you.
I wanted to ask you about the Bruce Energy Centre. We just had a drive-through of the energy centre. It's certainly the first time I've seen it. I'd heard about it but I had never seen it before. You state in your brief, "Ontario Hydro has an obligation to continue to support Bruce Energy Centre with low-cost services, including steam and electricity, at prices which make these industries as competitive as first envisioned." I understand your pitch in here, but it was also my understanding that they did not have an obligation to do that, even though we might all want them to. They don't have an obligation. They had a contract which was long-term but didn't have the price in it.
Mr Ribey: They have an obligation to provide steam for 25 years. If you're saying a legal obligation, perhaps not; a moral obligation, we believe they do.
Mr Laughren: So it's the moral obligation you're pitching here that they should continue, because people made an investment based on that assumption.
Mr Ribey: That's right.
Mr Laughren: I represent a constituency in a northern part of this province close to Elliot Lake and I remember what happened in Elliot Lake when Hydro stopped buying uranium from Elliot Lake. There was a massive dislocation in that isolated community, more isolated that this community. Ontario Hydro was directed by the provincial government to belly up to the bar and come up with some money. I think, and I stand to be corrected on the money, it was around $150 million.
Mrs Fisher: It was $260 million.
Mr Laughren: At Elliot Lake? Anyway, it was more than small change. It made an enormous difference in Elliot Lake, so I appreciate where you're coming from.
The other point I wanted to ask you about is farming and direct jobs. When you talked about, in your response to Mr Conway or Mrs Fisher, there not being such a direct big impact on farming I didn't understand that, because I thought there were a lot of farming jobs linked to the Bruce Energy Centre.
Mr Ribey: There are certainly a number of people who own farms who work at Ontario Hydro, there's no question about that. But what has happened in the last two, three years is that a number of cash crop farmers have moved up from southern Ontario and are picking up the land at values something less than they were getting for their down farther south. That has stabilized our market.
Mr Laughren: That's unrelated completely to the Bruce Energy Centre. I see. I appreciate that clarification.
When you talk about the province helping out, what did you have in mind?
Mr Ribey: As I suggested, I think some of the things that could happen there are changes to the Power Corporation Act. I don't think that's something that's unreasonable to ask for.
Mr Laughren: To do what?
Mr Ribey: To deal with energy rates or electrical rates.
Mr Laughren: To the Bruce Energy Centre, or are you talking about something totally different?
Mr Ribey: That's been one of the big issues all along, that the reason the cost of electricity couldn't be competitive was because of hiccups in the Power Corporation Act.
Mr Laughren: I'll seek clarification on that from our legal counsel. I don't understand that.
Mr Robert Power: There are a number of issues involved. One issue is that in the rate classification Ontario Hydro uses it has chosen to put the Bruce Energy Centre industries within the rural rate, which is a higher rate than a similar industry would receive if it was located within a municipality. There are additional interpretation questions regarding whether, if the industries could aggregate their load together, they should be able to qualify for an industrial rate. There seem to be interpretation questions around the Power Corporation Act and there seems to be no clarity on it.
The Chair: Thank you, Mr Ribey. I know this is unique. There may be some other member of the panel who is desperate to have one more question of you specifically, although the other witnesses are still staying here to carry the banner. Is there any other member of the --
Mr Doug Galt (Northumberland): If I might, Mr Chair, just quickly. On the third page you're making reference to "security of radioactive material," more concerned about it if it was privatized than if it's run as a public monopoly. Do you feel that the AECB has a bigger job to look after private industry than public? Where I'm coming from is that British Energy came and made a presentation to us a while ago and indicated how safety had improved through privatization. Everything sounded really good. I don't think it's quite as good as they were presenting to us, but I wondered if you'd expand just a little more on your concerns there.
Mr Ribey: It's our philosophy that the nuclear is probably in a better position to be owned by a crown corporation, where there's more than just a management board of people who are interested in profits, controlling it really. Does that answer your question?
Mr Galt: It answers it and it certainly reflects what I'm hearing is the general feeling in Ontario, but we've been getting some other information from other jurisdictions that kind of makes you sit up and take notice. Anyway, thank you very much. You certainly reflect Ontario.
The Chair: From the opposition caucus or the third party, any questions to add? Thank you very much, Mr Reeve and Councillor. I wish you well at the all-candidates meeting.
Mr Ribey: I'm just interested. I am acclaimed, so I don't necessarily have to be there, but I do want to.
The Chair: Reeve Ribey, don't fool an Irishman. I might just bring you back in here under subpoena and give you a whole hour and a half.
Mr Ribey: At any rate, could I ask the possibility that our emergency preparedness coordinator meet with you?
The Chair: Would you be good enough to speak with the clerk? She will be able to advise you what the schedule of the committee will be for next week. You arrange that and she'll tell you what the openings may or may not be.
Mr Ribey: Fine, thank you.
The Chair: I'll leave that in your hands to deal with her. Thank you very much. You are both excused and I appreciate your time for that. Councillor, are you staying?
Mr Mielke: Yes.
The Chair: As we move into the next round, perhaps I'll start over here with Mr Campbell, if you would, for the first time when you present, be good enough for Hansard just to identify your name; as we've done it once, we'll do it one more time, and then we'll proceed from there. Who is going to be making the next presentation?
Mr Campbell: I'm Keith Campbell, the warden of Bruce county. On behalf of the county of Bruce, I'd like to thank the committee for permitting me to make this presentation.
As I said, my name is Keith Campbell, reeve of the village of Mildmay and warden of Bruce county. As you may or may not be aware, Mildmay is known as the gateway to the Bruce, and we are very proud of our heritage as a member of the Bruce community.
I will be making the first of a number of submissions from area municipalities and groups. Well, obviously, I wasn't the first, but that's nothing new. I believe you will find these to be thoughtful and to include expressions of heartfelt concern. I know you will listen closely to our presentations.
As you're well aware by now, the county of Bruce is vitally concerned with the future of station A at the Bruce Nuclear Power Development.
The terms of reference of the select committee include, among other matters, consideration and examination of the costs and environmental impacts of the nuclear recovery statement. Clearly, the intent of this review is to consider much more than the financial impact of the closing of station A on the Bruce community. We believe the committee has an obligation to consider the total community impact of its decision.
I'm here to stress to the committee the importance of the future of the Bruce Nuclear Power Development to the county of Bruce. I will not be going into specific details on the economic impact of the closing. This will be outlined in other companion presentations. I will, however, be focusing on the larger community and human impacts of your decision.
A little bit of history: The county and Ontario Hydro have developed a relationship extending back nearly 30 years. The relationship included the development of a world-class nuclear generating industry in Bruce county, employing many Bruce county residents. It is essential to understand that the relationship was developed to benefit all residents of Ontario.
The residents of Bruce county are proud of their efforts in addressing the energy needs of all Ontario. In spite of the current difficulties, there have been immense benefits to the consumers of goods and services in Ontario and beyond.
As a result, any decision you arrive at needs to consider the long-term commitment that the residents of Bruce county have made to Ontario Hydro and to other Ontarians. Such commitments should never be taken lightly or for granted.
Area impacts: Bruce county is blessed with many natural resources and assets. These naturally occurring resources have enabled Bruce county to become a leader in agricultural production and tourism. Some of our natural features are considered of world significance.
Based upon 1991 statistics, there are approximately 65,000 persons living full-time in the county. During the tourism season, this may grow to in excess of 100,000 persons. Contrary to usual perceptions, Bruce county is not primarily a retirement area. More than half of our population is between the ages of 25 and 54. These are the primary household and family formation age brackets. The availability of employment to this age sector is crucial.
The majority of employment opportunities in Bruce county are small businesses. In 1997, there are slightly more than 2,000 businesses in the county. The large majority of these businesses employ less than six employees. As a result, these small businesses will be highly sensitive to changes in the local economy. As a result, we are vitally concerned about the ripple effect of your decision.
As I referred to earlier, agriculture is a vital element of our economy. In 1991, the value of agricultural gross sales was approximately $225 million. You may be aware that nearly half of all farms in Ontario require off-farm employment. Some of this off-farm employment exists due to the spinoff benefits of the BNPD. We cannot ignore the potential impact of the closing of station A on the economy of the greater area or other sectors of the economy.
I am sure you will be provided with more specific calculations for the lakeshore impact communities. However, I wish to emphasize that the loss of 1,725 direct jobs, and potentially an additional 2,000 indirect jobs, will have serious repercussions for the county economy. At a minimum the loss represents 5.3% of our total employees, and could be as high as 10% of our total employees. This would be a tragic situation. The lakeshore area of the county would suffer the greatest employment loss.
The point I am attempting to press upon the committee is that Bruce county residents have made a significant personal commitment by supporting the nuclear community. We are now asking that the nuclear industry support the residents of Bruce county in a similar manner.
Future implications: I recognize that we are all impacted by the need to restructure our organizations and economies to fit the new world economy. Our concern is that we do not foreclose on our future in achieving short-term objectives.
We are aware of the importance of the international thermonuclear experimental reactor project, called ITER, to ensuring long-term safe energy generation. The viability of this project may possibly be impacted by your decision. Do we wish to send the wrong message to the world community concerning ITER? I hope not.
The county of Bruce has a vision statement which reads "...protect the quality of life of Bruce county while ensuring the growth of sustainable communities based upon diverse economic opportunities which respect the natural environment." What this essentially means is that we do not sacrifice our future based upon the needs of today. I implore you to do the same. Do not give up on Bruce county.
In conclusion, let me reiterate that your decision is much more than one of economics. You need to consider the community and human impacts of your decision. I stress the moral aspect of your decision in light of the long-term commitment of Bruce county to supporting the nuclear industry.
Lastly, it is imperative that we not preclude our future. Change cannot always occur as quickly as we may wish. Often a long-term view, with support, is required to effect positive change.
In closing, I thank you for the opportunity to make this presentation on behalf of Bruce county on such a vital issue. Thank you very much.
The Chair: Thank you, Mr Warden. We appreciate that very much. Why don't we continue with the same pattern? We'll do the five-minute questioning. That will just about bring us around the schedule at any rate, and I'll begin with Mr Kwinter.
Mr Monte Kwinter (Wilson Heights): Mr Campbell, on behalf of the committee, I just wanted to clarify something. When I read your report I got the impression that you and others in the community may feel that this committee is really making the decision as to what happens with Bruce, and that is the not case. What has happened is that Hydro is making that decision. What we are doing is examining how they got to that decision, whether it was the right decision, and we will make recommendations. Certainly the power to change that -- and I hate to use that pun -- is not ours. This is a select committee that is looking into those issues. I just wanted to clarify that so you didn't get the impression your fate was in our hands. We're going to try and help you, but this decision will be made by others, on our recommendation hopefully.
Mr Campbell: Thank you.
Mr Kwinter: One of the concerns I have is the impact of the some 1,700-odd employees who are going to be let go and what a significant portion of your total employees in this area. Have you as a community made representations, other than to this committee, about your concerns?
Mr Campbell: Not that I'm aware of, sir.
Mr Kwinter: One of our criticisms to date -- and we have been querying the board of Hydro and we have been querying the events leading up to the IIPA report -- is that there hasn't been a great deal of consultation with anyone other than within Hydro, that options have not really been considered and that the decision was taken very, very quickly. Did you have any inkling that this was coming?
Mr Campbell: Very little, if any, as far as I'm aware of.
Mr Kwinter: Did the so-called Andognini team meet with any of the local political leaders to indicate what the impact of his report was going to do?
Mr Campbell: We weren't contacted directly by anyone. I'm not aware of any, no.
Mr Kwinter: Is the first you heard about it when you read about it in the press?
Mr Campbell: That's my understanding.
Mr Conway: I want to try and understand the impacts. I really appreciated the data you've provided in your brief on page 4: At a minimum, the announcement of August 13 represents a potential loss of 5.3% of the total workforce in Bruce county. That is a very large number in a community like Bruce. I'd like you to help me, and perhaps my colleagues on the committee, with more specific recommendations around what we could helpfully recommend. Is it your view that the best solution is simply to ensure that BNPD, as it was originally designed, should carry forward into the future? Is that what I understand you to be saying?
Mr Campbell: That would probably be the intent, but what that all involves I'm not certainly not aware of.
Mr Conway: I'll have a chance to talk to your colleagues about this, but just while I've got the county before me, are there other specific measures that you would like this committee to consider and recommend that would help assist the county of Bruce through what may be a difficult few years? If you and your colleagues at county council were writing this report, what specific language, what specific recommendations would you insert for the benefit of the Legislature and the government and the Hydro board?
Mr Campbell: The language I'm not sure of, sir, but nevertheless you'd probably get a variety of suggestions. Being 30 members of county council, you would get 30 suggestions.
Mr Conway: I can certainly understand that. If I can, as a former Prime Minister of Canada, the Right Honourable Joe Clark, once said, I need to understand the "specificity" of your program to a greater extent than I have to date. I don't mean to be bold in saying this, but some concrete suggestions that we might consider.
Mr Campbell: I don't have a concrete answer, but my gut feeling, if I can use that term, is that I think we have to take a long look at this situation. I think we have to look at all the options, and if it's viable and sustainable and can be up and running, it's for the best.
Mr Conway: A last question: I take it that the whole Bruce campus, the BNPD, is quite a substantial taxpayer in the county of Bruce, that you receive a grant in lieu of that must be substantial. Has that grant been affected by the phase-down of the heavy water plant?
Mr Campbell: Yes. It's decreasing over a period of years. There's a decreasing amount in place at this time.
Mr Conway: Looking at the total --
The Chair: Mr Conway, very, very quickly. You're over already.
Mr Conway: -- can you give the committee an idea of how important and large a taxpayer, through the grant in lieu to the county of Bruce, is BNPD?
Mr Campbell: I don't have those figures off the top of my head.
Mr McIntosh: We don't have those specific figures tonight.
The Chair: Just out of consideration to Mr Conway's request, Mr Warden, I'd like you to feel very comfortable, if upon reflection you and any of the other deputants have some specific thoughts that you would like to add and put on paper, please forward them to the committee. We'd be very pleased to receive it; give you a little time to reflect upon some of the questions this evening.
Mr Laughren: Mr Campbell, are you being acclaimed?
Mr Campbell: No, I'm not, sir. Not this time.
Mr Laughren: Because I hate people who get acclaimed; I can't stand it.
Mr Campbell: I've been there.
Mr Laughren: I want to ask you a couple of questions. You make reference to the off-farm employment and you state that some of this off-farm employment exists due to the spinoff benefits of the Bruce Nuclear. Did you mean by that the energy centre? I didn't know what that meant.
Mr Campbell: My understanding of it is that a lot of farm people work off the farm on jobs and some of those jobs are probably created through the spinoff effects of BNPD.
Mr Laughren: I see.
Mr Campbell: If they disappear, then the jobs also disappear. That's my impression.
Mr Laughren: On page 4 you certainly give me credit for knowing a lot more than I do. I'm not speaking for my colleagues on the committee. You say, "We are aware of the importance of the international thermonuclear experimental reactor." I haven't got a clue what that is. Maybe I should, but I don't know what the international thermonuclear reactor experiment project is.
Mr Campbell: The best way I can answer that, sir, is that in my term as warden I've had the opportunity to go to Toronto for three meetings with a local representative who was very familiar with that aspect. It's a project that we're trying to attract to the country, first of all, with a lot of other bidders involved. Then, from there, we'll see where it ends up within this country. The idea is to get the federal government on side to attract that industry to this country.
Mr Laughren: I see. It's a lobbying effort to get more of the industry located here.
Mr Campbell: At this point, yes.
Mrs Fisher: Welcome to the committee, Keith. In reading through this tonight, one of the most impressive statements to me is found on page 2 when you talk about how any decision arrived at by this committee "needs to consider the long-term commitment that the residents of Bruce county have made to Ontario Hydro, and to other Ontarians. Such commitments should never be taken lightly or for granted." Certainly since the announcement in the community, I've heard that time and time again and I think it's never been put in a better context of what in fact the community has done in support of a corporate citizen.
My question comes to the economic impact of that situation. We have before us tonight something that I'm sure is going to be expanded upon tomorrow in more detail, the type of impact that we're talking about here. If I might ask you this, and it might come up again as the other presenters of this grouping tonight present, since you live in Mildmay and you're the warden of where the county seat is in Walkerton, just a little bit removed from the lakeshore communities, from an outside perspective can you describe what you might think you would see if we lost 1,725 jobs now, as compared to how you saw it when we lost 708 in 1993?
Mr Campbell: What's the phrase? It would be a lot worse than it was then. It was bad enough then but a lot worse now. You're talking more than twice as many. There's an awful ripple effect and it just filters through the whole county. No matter where you live, it's going to filter through the whole county, for whatever effect. I'm not sure whether you feel it more when you're closer or farther away, but the point is, there is an effect.
Mrs Fisher: By the chart it shows us that 79.5% of the people who work at Ontario Hydro live in the nine communities that are called the impact area. I happen to remember that about 12% live in the remaining part of Bruce county, and then there's just a little bit of an overflow over that boundary into Grey and Huron with regard to the impact from those job losses. If we're looking at the potential of $47 million of disposable income lost per year, that's a very significant number.
Mr Campbell: Definitely, absolutely.
Mrs Fisher: Do you think we have the same opportunity this time? In the past with Ontario Hydro there was a situation, in 1992 and 1993, where the real estate values in Ontario were high and the market, because of the layoffs at the BNPD, became a very attractive point for retiring seniors to come to our communities. Do you think the same potential is there this time?
Mr Campbell: I guess when people want to go someplace to retire, they look to see what's around, and if anything like this is taking place, it has a downer effect on the community. I think that certainly would be recognized by anybody interested in going there. They may have second thoughts, I'm not sure, but it's got to have some effect. That's my feeling.
Mrs Fisher: Would I be right in saying that in 1992, when the markets were high, it was easier for a senior to sell high in an urban centre like Kitchener, Waterloo or Toronto, Hydro real estate helped the community take care of that problem and in fact come to a community where there was a lower housing cost, where today the housing market of those urban centres is not high and ours is continuing to drop? Would you agree with that scenario?
Mr Campbell: I think that would be a fair statement.
Mrs Fisher: So it might be more difficult this time to handle even a portion of what we're forced to address here.
Mr Campbell: I would agree with that, yes.
Mrs Fisher: There's going to be an opportunity for small businesses in the area shortly to respond to a questionnaire that asks, "How is your business affected by the deployment of Ontario Hydro employees from our community?" If I were to ask you the question, is it very significant, significant, not at all, marginal, where do you think most of them are going to fall into this? I'm just trying to get a feel here for the immediate impact to local small business.
Mr Campbell: I think it's very significant. I don't think in my mind there's any question about that.
Mrs Fisher: How do you think we should address the problems?
Mr Campbell: If I was running a small business, I guess I'd have to certainly --
Mrs Fisher: Very significant.
Mr Campbell: Yes.
The Chair: That will conclude that round. Thank you, Mr Warden, for your time. Please stay at the witness desk, because if we have time we'd like to go round again.
Mayor Mann, if you can saddle up to the table, welcome. On behalf of the committee, I can tell you we're very pleased to be quartered and watered in your municipality. Nice to have you here this evening. We're in your hands.
Mr Conway: On a point of order, Chair: Do these good people know that our Chairman's a man of the cloth as well as being Chairman? I just hope you all know that.
The Chair: I feel moved now for at least a five-minute self-defence thesis. I will reveal more about Mr Conway later in the evening as well.
Mr Mann: I'll try and be brief and precise and give you as much information as I can. I'm going to read my report, which you have in your hands, because I have found that in trying to memorize sometimes you lose a word or two and the intent is lost also.
To the Chair and members of the select committee on Ontario Hydro nuclear affairs:
On behalf of the town of Kincardine, I wish to thank the committee for the opportunity afforded our community to address you today. My name is Charles Mann and I am the mayor of the town of Kincardine. Please indulge me for a few moments while I quickly brief you on my personal background.
One portion that was left out: From 1940 to 1946 was my military service. I was an infantryman and then a paratrooper.
From 1946 to 1960, I was a nuclear operator at Atomic Energy of Canada in Chalk River.
From 1960 to 1987, I was a licensed nuclear operator at Ontario Hydro, Rolphton and Douglas Point.
For 27 years I have been involved in municipal politics, 14 of those years as mayor of the town of Kincardine.
I recently made a presentation to the Atomic Energy Control Board in Ottawa in support of relicensing the Bruce NGS B station.
I wonder if this committee truly understands the size of the shock wave realized by our town when the announcement was released by the Ontario Hydro board of directors to lay up Bruce A and dismantle the Bruce heavy water plant. I believe it is an understatement to say the area was devastated. Since its inception at Douglas Point, the BNPD has been crucial to the economy and wellbeing of this area. It is true that our community has survived changes imposed upon it by Ontario Hydro in the past, but nothing to compare with this most recent announcement.
The facts and figures representing the economic impact of Ontario Hydro's decision have already been given to you. I will not repeat them again, but I do want the committee to fully realize the depth of our community's concern. Kincardine town is the first line on this form that you've been given tonight.
We are a small community. The resulting impact of the announcement on Kincardine's businesses and residents will be profound.
In the past, the town of Kincardine has been required to absorb fluctuating situations at BNPD and most recently to absorb the loss of financial assistance from the province of Ontario. The town of Kincardine has not sat idly by in the past nor will it do nothing in the future. As a community we are attempting to expand our tourism business. We need more industrial and commercial development. We do have some excellent home-grown businesses such as Global Heat, Special Electronics and Presto-Crest.
We have developed a strategic plan for the next 10 years. The people who assisted in developing the strategic plan are citizens of our community. Our town continues to show a real interest in the strategic plan's implementation.
Through various committees and with area communities we have developed common goal initiatives in support of the Ontario Hydro Bruce nuclear stations during the licensing process.
We have supported the return of rail services specifically for the Bruce Energy Centre. We have supported a committee of volunteer private citizens in putting together a plan for development of the general area of Bruce county.
Please allow me to make a few more observations:
(1) Ontario needs electrical energy with minimum environmental impact.
(2) Kincardine needs jobs. Therefore, Bruce A units should be made operational. At least two units at Bruce A can be operational in the immediate future. The other units can be repaired as time and money permit. A taxpayer investment of the magnitude of Bruce A should not be thrown away. We are told we have a people problem. This can be and is being fixed.
(3) The Atomic Energy Control Board has been and will continue to be an excellent watchdog of our nuclear plants.
(4) It would seem to me that a country that can build the Canadarm for space should be capable of building equipment to replace calandria tubes quickly and efficiently.
In the 1970s Ontario Hydro made a 40-year commitment to this community. We responded by expanding our services and infrastructure accordingly to absorb the influx of people who are now an integral part of our community. We built roads, subdivisions, water and sewer facilities, recreation centres, schools and libraries. These facilities were not cheap. We depended upon Hydro's 40-year commitment.
The employees and families who located here do not want to leave. They do not wish their children to leave. These recent decisions have also played havoc with employees and their families. Not knowing from day to day what your status is regarding employment and location is most certainly a drain on family wellbeing.
The 40-year commitment has turned into a 20-year commitment. This is unacceptable and we implore your committee to incorporate into its deliberations and report the enormous consequences of Ontario Hydro's decision, one that was made without considering the social and economic impacts to our community. If Ontario is truly open for business, this devastation cannot be allowed to occur.
This area is, and has proved to be over the years, nuclear-friendly. The community supports nuclear power. Ontario Hydro should be increasing its presence and facilities here, not decreasing them. Nuclear power is environmentally safe. The startup of fossil fuel plants in place of nuclear plants is an ill-conceived plan which will only further alienate Ontario Hydro from the residents of Ontario. We are already the unwilling recipients of pollution from the United States. Further, Canada is already in the unenviable position of not having lived up to its commitment to the United Nations for pollution reduction targets. We need the residents of Ontario to support Ontario Hydro, not criticize it. We in this area are prepared to support Hydro, provided it is prepared to reconsider its decision and look at some of the alternative business plans which we know have been suggested to Ontario Hydro and this committee.
Once again, thank you for listening to the concerns of the town of Kincardine. We are confident that this committee will take seriously our concerns and ensure that the negative impacts of the decisions and actions which have been made will be reconsidered.
Briefly, further to my presentation, I would like to respond to Mr Laughren over here. He was mentioning Elliot Lake, the demise of the mines and the financial arrangements that were made. That's very nice, but I believe you know, sir, that Ontario Hydro hired quite a number of the Denison Mines employees, who are unfortunately now again out of work.
The other item I'd like to mention at this time, if I may, is that I've taken the opportunity to watch you people on television. You look much better in life than you do on TV. The thing that bothered me was that after watching what went on yesterday and the talk with Mr Machon, it sounded to me as though decisions by the Ontario Hydro board are being made very quickly, in my opinion too quickly. Also, it seems to me that some of you people sitting in this room were not getting very satisfactory answers. That is not in my report. This is my observation of your programming. I just wanted to mention that. You asked the warden a few minutes ago his opinion of what to do. Sir, reactivate Bruce A as fast as you can.
The Chair: In light of that applause, Mr Laughren will not run against you in the upcoming election. I can give you some comfort about whether the committee was always pleased with answers that were forthcoming from witnesses. My experience is that the members of this committee are extremely well prepared and knowledgeable. They simply take the answers as they're given and continue to do their own examinations behind the scenes. I appreciate your comment, but I want you to rest assured of that. I have great confidence in the membership of this committee.
Mr Mann: Thank you, Mr Chair.
The Chair: We will begin the questioning this time around with the distinguished member from Sudbury. We'll go directly to Mr Laughren.
Mr Laughren: Thank you, Mr Mann. I wanted to comment briefly first, before I ask you a question, on your comment on page 8 of your brief, "We...are prepared to support Hydro, provided it is prepared to reconsider its decision and look at some of the alternative business plans which we know have been suggested to Ontario Hydro and this committee." That's true; there were a number of alternative plans laid before the Hydro board on August 12 of this year, as you might know. The Hydro board made a decision on that same day on the plan that they would proceed with, which of course means laying up Bruce A and Pickering A and closing the heavy water plant.
The reason they give, and I just went and dug it out here, that they cannot do what they call the all-at-once scenario -- in others words, just dig in and repair and do what's necessary but keep the systems going, including Bruce A -- is, "The likelihood of success for the all-at-once scenario" -- meaning keeping them all open -- "is nil, due to the following reasons: (1) managerial capability and systems, given size and complexity of the scope" -- in other words, just too big a job -- "(2) the lack of qualified resources; (3) impending material conditions issues; and (4) seriousness and volume of the process deficiencies."
None of us works in Bruce A or Pickering A, so we don't always know exactly what we're being told when we're given information like this, and I'm wondering whether you have reason to doubt that conclusion. You're not a nuclear physicist either, I don't think -- or if you were, you wouldn't have been elected that long in office -- but I'm wondering if you have reason to doubt, given what you know -- I'm not an expert either, so I'm not trying to put you on the spot that way -- that conclusion the Hydro board came to.
Mr Mann: Having just heard this tonight, I have a concern that they're being too hard, if I might use that word. As far as I understand it, Bruce A units 3 and 4 probably need some minor repairs. Bruce A unit 1 probably needs more major repairs, as I understand it. Number 2 is a sick duck and needs major, major repairs. But it's my understanding that with a little effort 3 and 4 could be back in service reasonably soon, and while they're running why couldn't we go back and fix 1?
Mr Laughren: I asked the people who are expert in this area why they couldn't just close one reactor at a time and fix it, and they claim no, they can't do that. I can't remember the technical words they used, but that just wouldn't work, it didn't make sense. I have no comeback because I just don't know enough to respond to it.
Mr Mann: I find I'm in the same boat that you're in for this.
Mr Laughren: You don't want to be in the same boat as I am.
Ms Couture: I understand they want to deploy the staff from Bruce A to Bruce B to make Bruce B operate to the efficiency level that is desired, and they can't afford to just hire these extra 3,000 people who will be needed to do both plants at once. The town of Kincardine's position has been, and we've written to the board of directors of Hydro as well, and everyone else in Ontario it seems, to open Bruce A first. We understand that maybe it has to close for a while. It's being closed up wet; it needs new tubes.
Mr Mann: Bruce A is dry.
Ms Couture: Dry; sorry. But when the time comes to reopen, and this is what our concern is, we don't know if that's ever going to happen.
Mr Laughren: We don't either.
Ms Couture: We can wait three years. We can suffer through three years. We can't suffer through 30.
Mr Laughren: Hydro will be very honest with you and tell you that they don't know that either because it will have to meet business plan criteria, if that's the right language, at that point, that it's the best solution for the new supply of energy that's required other than, for example, gas turbines and so forth that the private sector will be chomping at to supply energy with.
Ms Couture: But we don't believe that the social and economic impacts of that decision have been included in the business plan, and that's of great concern.
Mr Laughren: I understand that. I think you're right.
Ms Couture: It's part of the equation.
Mr John O'Toole (Durham East): Thank you very much, your worship, for your presentation. Just to introduce myself, I'm from Durham, where they have the Darlington/Pickering plant and it's somewhat of a different kind of environment, I might say. I commend your very passionate presentation and the support of your community, many of whom work at Ontario Hydro, obviously.
I can tell you that Ms Fisher has made the case very strongly from her perspective and perhaps reflecting much of the discussion to Mr Andognini as well as the current board chair. In fact, I can recount, if you look at the record, that she asked Mr Farlinger directly if that very question of the social and economic implications was part of his consideration. I would let her speak to that a little bit later, but just to reassure you, your concerns have been presented I think very fairly and very forcefully as well.
I have a couple of questions. They're not meant to be critical, but they're meant to be from the perspective of being a visitor here. It is a lovely area. I was quite impressed with the site, really, and the recovery seems to be, in mind, if nothing else, under way. From what I heard from the leadership today, they seem to have a cultural kind of way of going through. But I see this as a kind of host community, more of a hostage community really, and it's a symbiotic kind of thing. There was always a window. That's a terrible kind of way to look at it, but there was this window that was going to close some day, whether it's 25 years or 30 years.
The big issue I see is that all of the best scientists in the world -- and even if you look at the financial statements of Ontario Hydro, the depreciation of capital was over 40 years -- now are coming up with these factors that are questioning the aging calculations, the technical calculations. I don't think it's any kind of a conspiracy theory, despite the stranded assets of people here. I just wonder, is there that kind of sentiment here from the municipal planning side to realize that it's kind of like a mining community: When the gold is gone, the town's gone. I'm not trying to be malicious. Do you know what I'm saying? How do you deal with that kind of less-than-permanent existence?
Mr Mann: If I could attempt to answer that for you, the first thing I would like to mention is that we do support something called an energy centre out there. We have looked at that energy centre as a spinoff from the nuclear plants. If the energy centre proceeds, as it has been planned many years to proceed, I think the employment would at least be stable, if not go up.
Mr O'Toole: The last brief portion of our tour was through that and some material was given to us with respect to some of the issues. We were briefed by our staff with respect to rates and rate issues, and I suspect those are ongoing, as I understand it, even the supply and alternatives. We've been reassured, if you've been watching the discussions, that those discussions are under way now, with whom I'm not sure.
I just want to return to our mandate. Basically it had to deal with two factors. One was to assure the people of Ontario, in the very broadest perspective, of some certainty of safety. I'm sure everyone here at this table would agree that's an important mandate that should not be embellished in sentimental concerns, not to diminish the importance of those concerns. Safety is what I understand to be a factor of risk and that's what this Andognini report's about. It attributes some of that to some human resource issues. Whether there's a cultural kind of apathy -- I'm not sure how you describe it -- I sense that's in the language in these reports. So I've got something around the safety and the cultural thing.
But the other part of our mandate really is the debt. If people were to say to me this crown corporation was properly managed for the last perhaps 15 to 22 years, somewhere in the Darlington startup phase, each one of us shares in that cost. We're all sort of shareholders, and I'm not for throwing another $8 billion in. Initially, my response is to say, "Well, they've had so many recovery plans it would make someone tired carrying them around; none of which have been delivered."
The Chair: Thank you, Mr O'Toole.
Mr O'Toole: I'd like to comment on that, if I could.
The Chair: Very quickly.
Mr O'Toole: Do you think they can deliver on a recovery plan, or is there so much depth of cultural kinds of impediments that it's impossible?
Mr Mann: I believe they could deliver, yes. I believe they honestly could deliver if they had the --
Mr O'Toole: Do they you need an American team here to lead it?
Mr Mann: That's a leading question, sir.
Mr Kwinter: Mayor Mann, I want to talk to you as the mayor but also as someone who spent 41 years in the nuclear industry. Of all the experts that have appeared before us, not one of them has questioned the safety of any of the nuclear reactors. They have questioned the poor technical maintenance that may lead to safety problems. That's what they're trying to address, and the AECB has identified that over a number of years, but no one has said that anybody is at risk because of the units that are now there.
As someone who has spent all this time in the industry -- we have a situation where there are no brownouts or blackouts in Ontario, so the combination of the nuclear energy and those other hydro-electric generators that are churning out electricity are delivering power to the province right now. The base load is relatively stable. I agree -- I'd like to get your comment because you have been in the industry -- and it would seem to me that there should be every possibility of phasing in the retubing, or whatever it requires, of the facilities that are having problems, and still continue to deliver the kind of power we're getting now. Do you feel that, as someone who has been in the industry?
Mr Mann: Yes, I do feel that. I feel, and I've already mentioned it once this evening, that I just don't understand the report Mr Laughren was reading where they say they can't do it. I believe they can probably run 3 and 4, fix 1, fix 3, fix 4, and then the last one, which is the toughie, would have to be fixed last. In my experience, for what it's worth, in a much different type of unit, the reactor calandria of the NRX reactor at Chalk River were completely replaced and the plant back in service in 14 months. If they could do that with the antique equipment of those days, surely with modern equipment retubing should be a snap.
I have been told that even with Pickering, when they were retubing Pickering, the first unit that was retubed took a fair length of time. I can understand that and I'm sure you can. You're dealing with a lot of unknowns, strange equipment, what have you. But I've also been told that the fourth unit retubed was done very much more quickly. So I'm saying to you, sir, that the expertise, I believe, is still available and the time could be minimal.
Mr Kwinter: Are you familiar with the letter the chairman of Ontario Hydro wrote which appeared in the Globe and Mail today?
Mr Mann: No, I'm sorry.
Mr Kwinter: Can I just quote something for you and get your comment on it? In it, he's responding to an article written by Terry Corcoran, who is a columnist for the Globe and Mail and who was commenting on what was happening. He said: "The bulk of the costs are for replacement power over the next five years. We expect it to cost more than $2.5 billion to replace the electricity that would have been generated by the seven laid-up nuclear units and this figure will continue to grow if any of these nuclear units are not returned to service. This cost alone underscores the importance for Ontario Hydro's nuclear recovery plan." Then he goes on to say: "It may also be necessary to write off the laid-up nuclear facilities (book value of $3 billion) bringing the total cost of the recovery program to $8 billion." Then, in closing, he says, "It was only after a careful consideration of the options available, that the board concluded that the nuclear asset optimization plan offered the best path forward for Hydro to return to world-class standards in its nuclear operations."
In your opinion, do you think that he is stating the facts, that after they examined all of the options they made a decision to go ahead with their particular plan?
Mr Mann: Not having all the background, I would say that to rebuild and put them back in service is the way to go and it should be done as quickly as possible.
Mr Conway: Hydro, at all senior management levels, tells us that they just don't have the people to do that. You live up here. This is a pretty big nuclear community. What do you have to say to Hydro senior executives who say, "We can't do it because we just don't have the people"?
Mr Mann: There are two ways I would look at it, and I'm just a politician like yourself. I would suggest maybe contracting out could handle it. Also, I would suggest that there is a possibility that there are enough people if they are used properly. Of course, I don't know what the staffing is any more. I'm sorry I can't respond to that.
The Chair: Thank you very much, your worship. I appreciate your time. Please stay at this table. There will likely be some more questions if we have some time, but let me move now to the --
Mr Conway: Is nobody going to ask the mayor if he's going been acclaimed?
The Chair: I didn't think Mr Laughren wanted to go there. Let me move by there very quickly, since we've all been pinned back for being politicians.
Let me move on to the town of Port Elgin. Mr Mayor, we are in your hands.
Mr Van Bastelaar: I can say one thing: It's very difficult as a politician to sit to the very last and not be able to say anything. It's not an easy thing to do. I would like to thank the committee for attending this evening and coming to Bruce county, one of the finest areas in Ontario. On behalf of Port Elgin, I'd just like to thank you for coming.
Port Elgin, as a community, is a town of 7,000 people which grows to roughly 10,000 to 15,000 people in the summertime with tourists. About one third of that workforce is either directly or indirectly involved with the BNPD site. With that type of involvement, and you can see the type of support we have in this area, we have a lot of members from our chamber of commerce, our business people, citizens from outside of Ontario Hydro that are here this evening to watch and to listen to what's being said this evening, to show their support in this area and also to support this committee and their mandate and their presentation.
I'm sorry I haven't got a handout for you this evening. I can get a copy to you if you wish. One thing about being the last to speak is that a lot of the questions have covered a lot of the material I was going to speak on this evening, so I'm going to try to go through it quickly.
We are very similar to Kincardine. We are both residence headquarters of the BNPD site, which meant that employees were geared to move to that area; that's why the high percentage of workers in that area. I may say from the community that I think we are all aware of change that has to happen in the industry. Needless to say, we have experienced a lot of change within the municipalities, with Who Does What and all that. We are experiencing change and we can deal with it. We can understand why Ontario Hydro has to go through change.
If I could just talk a little bit about Ontario Hydro and some of the things that are happening with that and the way we see it as a community, I've looked through your terms of reference and we've worked together to try to give you a presentation. We tried to stress your terms of reference.
The first thing I would like to highlight at the very beginning is the safety of our Candu system. We are highly supportive up here of the safety of the Candu system. It was referred to in the IIPA as a "robust operation." I think we have proved with our workers that Bruce A has been a real workhorse for Ontario Hydro. I don't know if everybody knows -- I know it hasn't been said this evening -- that unit 2, which just came down, actually ran for 360 days of continuous service before it was shut down. That is a proven track record that this system does work and does lead to the standard of living we now have in Ontario. A lot of our reactors have been in the top 10 performers in the world. I believe, and the community believes, that this is an asset worth saving for this province and its residents.
One thing that has not been mentioned this evening also is the heavy water plant. When the Bruce heavy water plant first opened in 1973, D2O, heavy water, was a very scarce commodity. After a short learning curve, that plant and its employees at Ontario Hydro put that plant together and it became the world leader in production of heavy water. We are known to make the best quality and highest purity of heavy water in the world. It was sought not just for the Candu system but for scientific and research facilities also. So I believe that Bruce A heavy water has worked hard over the years to contribute to a certain standard of living in Ontario.
Also tied in with Bruce A is the energy centre. There is low-cost steam that is supplied to this development and previous governments have contributed to this in the way of sewer, water and steam to the industries. Previous governments in our local area have seen the benefits of this, not just for our area and the jobs it creates but for the environment. People could see that we had waste heat. That waste heat could be used and it could be used productively to help as renewable energy. That type of support was there, and that was supported by Bruce A.
Bruce A, the heavy water and the energy park were all interconnected over the years. I think that should be highlighted, that they were interconnected. It was the family that was put together to try and build an area into a viable option for Ontario.
It was stated that Bruce A will be laid up, with heavy water as a casualty. I'd like to stress to the decision-makers, through your committee, hopefully, that the whole package must be considered before any final direction is made for our future. We cannot make rash, quick decisions on this type of situation. It took us many years to put this package together as a viable energy area. We can't squash it in six months and say it's not viable. I think the decision-makers have to look at the whole picture, the economic and social involvement up here.
I can understand why we have to be competitive. This is a world of change and we are opening to a major market, so change does have to happen. We do have to produce a product that generates revenue, there's no doubt about that -- that's been brought in front of your committee -- and we do have to improve to world excellence. I believe nuclear power is competitive and I believe our community believes that to be so. The people in this province relay the power and there is an open market that will surface on the horizon.
I believe we have to look at it from a business perspective, but it is imperative that we look at the social impact on the area also. Look at the whole picture. I know the business case of Bruce A is probably not as good as Pickering if you're looking strictly for dollars. If you look at the Pickering situation, there are eight nuclear reactors built right in a city of 200,000 to 300,000 people. They are now asking for an environmental assessment if we reissue or restart any of those reactors. This could have a major impact on the future of Ontario and it's residents. We have to consider all these things. I'm just trying to highlight all the things that have to be considered before we make the decisions.
I think we have a viable option in Bruce county. We've talked about it before, and maybe quickly I'll go through this. If we can run units 3 and 4 at Bruce A in a way that is safe -- and I have no doubt they will be run safely -- we can protect the environment. There will be less purchase of external power. It's cheap power. The place has been paid for. It's a sure supply. As was mentioned here, we do not have any brownouts or blackouts in this province. Because of our track record to date, we don't have this.
I believe the staff here are dedicated. I've seen them; I work out there. They are dedicated to bringing this area, these units to top level. It's been mentioned before, do we have the staff? If we double up the staff on two units and fix up two units, will that not be enough staff to get two units going? We need people at Bruce B. Bring some people from Bruce A over to Bruce B. Why can we not balance on site to maintain this type of reliable service? I believe we can.
I'm going to run away a little bit from my presentation, but this evening we were talking about an $8-billion recovery. We've increased our efficiency in retubing so it takes 50% less time. From what I'm hearing, we can retube for $2 billion to $3 billion. I'm not that knowledgeable on the numbers, but $2 billion. Does it not make good business sense to invest your money in an asset that can be retubed and rebuilt and could last for 30 to 40 years, instead of laying it up? I would equate that to, let's say, if I'm a landlord and I own a house and my roof starts to leak, do I walk away from the house and say it's not worth renting any more? As a landlord, I would replace the roof and I would rent it again, and maybe ask for a little bit more rent because I've improved it.
I think it's important. This is an asset that has been paid for by the province. Why would we want to put it away? I think we have to look at the whole picture. I think this community is really dedicated to that and wants to do that, and I believe the employees want to stay up here and do that type of improvement for our province.
I believe the committee can bring some of these considerations to the government and to the board of directors. I have not watched a great deal of your committee. It seems to be a busy time of year, between elections and changes within our municipality, but I believe this committee can bring recommendations. The IIPA has identified needs, but I believe all aspects must be looked at to come up with a complete picture. The province has thrived on cheap, reliable power. That still needs to be maintained, but also with consideration for the environment and society as a whole.
At the beginning, I stated that the system is robust. The Candu reactor has inherent systems in place to protect the community and the environment. I have no doubt of that. Workers work here and they bring up their families here. If you bring up your family here, then you do feel this place is safe. They are concerned about safety for themselves and the local area. That's why they work here. The entire system is safe and will continue to be safe. Some of the process, I admit, will probably need reviewing, and we are doing that at the present time. We're going to streamline and ensure that this safety is maintained into the future. Management and workers are committed to safety and I'm certain that standards will be improved and will be maintained at world levels if given the opportunity.
Next, I'd like to bring in just quickly the two other riders that were talked about in the last couple of years. I'm not sure if you're aware of them. First of all was the ITER. That is actually a fusion process. It's the opposite to ours, where we're talking about fission. We have an abundance of D2O, we have an abundance of power, we have a large land mass and area with the right amount of people, and we have transportation and communications. We have all the necessary components to support an ITER project. If we start shutting down and not looking at this for our future, it could also hinder the whole of Ontario. This is a huge project. The federal government has been involved in certain aspects, the provincial government has been involved, and Ontario Hydro. We should not lose that fact and that should also be taken into consideration.
There has also been the MOX fuel, which is uranium-mixed oxide, dealing with plutonium. Canada has an opportunity to turn a nuclear-grade weapon into something that's useful until it's removed from the environment. We should not lose that. Bruce A has been a big part of this whole endeavour, so we should not lose that initiative.
These are all things we've talked about together. Since I was last, there were some questions that came up that I would like to address. There was one question on housing. There's no doubt that housing is going be a major impact on this area. Losing 1,700 jobs, it's very difficult to be able to sustain viable housing and not have a major impact on our area. Like my fellow mayor here, Charlie Mann, we've put in infrastructure and we've supported Ontario Hydro through this. We've put in the water treatment plants, the sewer treatment plants and the municipal affairs requirement for 20% development land. These are all things that have to be considered. These are things that are an impact on our area. We need to work with it.
One question too -- I'm looking through my notes -- was the impact on Hydro and our taxes. We have an impact grant, and for Port Elgin alone it's $285,000. Out of our operating budget alone that's 10% of our tax base. These are all things that impact us as a community. I'm appreciative that you've come up to listen to us on these issues. I think it's important. I think people want to stay at the BNPD site. They support it and I think it's the best thing for Ontario.
The Chair: Thank you, your worship. Another announcement: Mr Laughren will not be running against you either. We appreciate your comments. Feel free if you have any other notes that you want to add on. This applies to all of the municipal representatives. If you have other notes that you want to add on, please get them to us, if you can, within the week. We would welcome receiving that.
I'm conscious of the time. I know we have another group of panellists that wishes to get at us, as well they should. We'll begin the questioning here with Mrs Fisher.
Mrs Fisher: Thank you very much, John, for being here tonight and describing the situation, as we've been trying over the number of weeks to do so.
I would like to lay out a scenario for you, if you will, and see if in the end I'm off the wall or I'm on the right track. I think it's something Mayor Mann referred to tonight. When I came in, he held me aside and said he saw the version of this yesterday and felt perhaps I wasn't getting -- I think he used the word -- "truthful" answers.
Mr Mann: I said I didn't think you were getting the answers you were looking for.
Mrs Fisher: Let me lay out the scenario like this: We're pretty aware of the fact that in 1993 this community got what's known as the golden handshake, a strategic planning layoff of employees at Ontario Hydro. It impacted our community to the tune of 708 workers. Over the course of the hearings we've established that it really wasn't strategically planned, those who should have been selected for the right reasons, be it coming retirement and being offered the opportunity to say yes or no, be it for other reasons that they might have been considered. I think the general feeling when the panel from the 19th floor of Ontario Hydro was here was that it wasn't strategically planned. Mr Strong presented himself before the committee and did not deny that.
I think there's an opportunity there to hire back some of these people. I can name three people on my street, for example, who I think would be very happy to have that opportunity. Starting with that, I believe there's a market of Ontario workers here who could be hired back. I want to go through things, I don't want to belabour it, but would you agree with that?
Mr Van Bastelaar: Very much so. We need resources, we need to plan. I totally agree that we did not plan in 1993. As an industry right now, our average age is approaching 40 to 45 years old, which is a dying industry. We need to look at resources and I know that Canadians are resourceful enough and there are intelligent people around that we could look at.
Mrs Fisher: Let's start at home first. I think there's a market there. Yesterday I challenged the presenter to bring forward that list and see who was available. The IIPA dwells specifically with regard to a human resource management issue. I personally believe there's a backyard of them.
Taking it from there, I am aware of a study that was done locally by site management right up through the senior site manager and promoted to Ontario Hydro corporate offices in 1996 that talked about equity participation by private sector, not in an ownership mode and not in a takeover of operation mode, but money introduced to the system to help offset the need for capital repair.
I put a proposal yesterday: We were presented with some statistics financially that talked about the recovery cost; $2.1 billion of the report is designated to replacement fuel costs. I know that the retube costs of Bruce A are $1.2 billion. I also know that on the pressure tube refurbishing we run in the range of $600 million per unit. If we accept the fact that unit 2 is not going to come easily and somewhere down the road, and if we know that one third of the cost has already been expensed, then we're left with about $1.2 billion on the retube issue. Our total refurbishing package of Bruce A would be $2.4 billion.
When I raised to the gentleman the prospect of, instead of purchasing $2.1 billion of replacement fuel, as the mayor has suggested as well, chronologically going through and revisiting each of the units -- unit 1 is in a shutdown state today, not quite to a permanent layup. If the work was done in units 1, and 3 and 4, which have been designated as safely operating units today by AECB, the question was, why wouldn't we revisit the consideration for operation of A, instead of investing not only the $2.1 billion and the additional scrubber fees for thermal burn, which is not acceptable in our backyard? Can you agree that might be something that as a community we could work together on as a proposal for Ontario Hydro's consideration?
Mr Van Bastelaar: Most definitely. As a municipality right now, we are looking at partnerships in our own organization for anything from water treatment plants to recreational facilities. If I get you correctly, partnerships are a viable option for us.
Let's look at it from a purely business point of view. If I'm a private investor and I'm allowed to get a certain return on my money, then I'm willing to invest. When you look at a nuclear plant or an energy-generating plant, it's a guaranteed market. What comes out of the end of that reactor is guaranteed. People need that. I think we can offer that guarantee and work with partners. That's a possibility. There are all sorts of possibilities.
But the bottom line is economics. If we're talking about replacement energy, we do need the energy. This province is growing at the present time. If we're talking brownouts and blackouts, that's not going to attract any type of industry to our province. We need to make sure we can replace it with the best type of energy costs.
Mrs Fisher: I just want to ask one more question.
The Chair: Very briefly, Mrs Fisher.
Mrs Fisher: It refers back to one of the points Ms Couture made and relates to the issue of appropriate timing. I think we all understand and accept the fact that we may have to go through a marginal shift here. We understand we have to bring nuclear excellence back to B and it's going to require some human resource assistance to do that. I think there's an opportunity here to work them through together. If we can make the point -- Mr Farlinger made it at the public process, and Mr Andognini made it at the public process and again confirmed it to me today -- that if we can come with a business proposal to meet the needs of the electricity demand and the refurbishing, it would be in the best interests of this community as well to see that happen.
Mr Van Bastelaar: Very quickly, in municipalities the mandate for a councillor is to look into the future and plan five and 10 years down the road. Hydro needs to do the same thing for us.
Let's look at the average employee out there. If that individual knew they were going to be able to retube or Bruce A was in the cards, we would have a dip but we would come right back up again. People can make decisions in their lives. Let's look at the social impact we have here. If they know they can make a decision on their lives, their homes, their lifestyle, and our businesses can make a decision, we need to know that now. We don't need to know five years from now. The cost of moving people around and the cost to individuals is tremendous. We need to know a little bit more now.
Mr Conway: Mr Mayor, you said that it's the duty of a municipal leader to look into the future and I think that's very good counsel. One of the major realities just on the horizon is, by all accounts, the advent of a competitive market for the generation of electricity. The Ontario press yesterday reported that the government is soon to release a white paper, which this committee is very much looking forward to, on electricity reform that, according to authoritative sources in the government, is going to break apart generation from transmission at Ontario Hydro. That will be the recommendation. I have in front of me the Macdonald commission on electricity reform which was released a year ago.
There seems to be a developing consensus that we ought to have a competitive market for the generation of electricity. I'm just wondering whether you and any of your colleagues on the municipal panel have given any thought as to what that might mean for the intermediate and longer-term future of particularly the rehabilitation of Bruce A.
Mr Van Bastelaar: I really believe in our system and I think that if we work together as an organization we can generate electricity from Bruce A at a very competitive cost. If we look at the open market and try and predict in the future what that open market will mean -- when you look at the eastern seaboard, they're paying seven to eight cents a kilowatt-hour for power. If we can generate it for two to three cents, any businessman can see that's a profit we can make. I believe that with our Candu system, with its proven track record, and with the employees we have and the resources we have, we could certainly become very competitive in the open market.
Mr Conway: Are you not concerned that -- I think it was your colleague the mayor of Kincardine who said that Hydro made a 40-year commitment to BNPD and now it appears to be a 20-year commitment. Part of that appears to be that there have been some difficulties with the ongoing operation of the facilities. For reasons that I think we're all familiar with, the plants just have not, whether it's Bruce or Pickering for that matter, performed to the level that was advertised 15 or 20 years ago. If those performance standards don't improve and the domestic competition is going to be gas-fired electric, that competitive marketplace may put some very real pressures on not just Bruce but everyone else in the marketplace.
Mr Van Bastelaar: That's very true, but I believe we could produce just as competitively. I've seen the workers out there and I know we can turn it around. This means commitment and work on part, but if we retube and refurbish Bruce A and possibly even the heavy water plant coming back up again, which should be considered also, we could be competitive. I have no doubt that we could be.
Mr Conway: Do you have any advice to the committee? One of the things that we're going to have to consider as we make our recommendations is this new policy framework. The context in which electricity is going to be developed and delivered over the next few years is going to be a different environment than we've seen for much of the postwar period. There is going to be a white paper on electricity reform. It's certainly going to have a major impact on the province and on what this committee is going to be recommending, I think. As the mayor of Port Elgin, particularly thinking about the situation at BNPD, what if any comments would you have to the committee about provincial policy around reforming electricity policy, changing electricity policy?
Mr Van Bastelaar: We have to change and definitely the electricity policy within North America is changing. If I could talk about this community, let's make that 20-year commitment back into the 40-year commitment and let's do that for the sake of the area. I believe this area has human resources, we have natural resources, we have communications, we have transportation, we have all that here. We have to be prepared for the new market. I guess Ontario Hydro is going to look at it more as a whole. We bought and paid for this facility out there and I think we can use that facility for the benefit of our province and for the residents if we turn around and we make that a class project, and I think we are moving in the right direction. That's what the IIPA is saying. I think we can do that but I think a better business case is to do it up here.
Mr Laughren: I appreciated your presentation. I'm going to tread into some very dangerous water here and I hope that you and all the people who applauded for you won't string me up at the end of the evening. I think you're doing the right thing, by the way, fighting for what you're fighting for on Bruce A. But as Mr Conway indicated, there's a very strong sense out there in the province that it's a new world in the energy world and if, after three years, the competitive bids coming in to supply energy are such that it makes the reopening of Bruce A extremely difficult -- if -- then I would ask you to think -- you made the comment about thinking ahead and being responsible; I agree with that too -- that at some point there's going to have to be, it seems to me, an obligation to communities such as this that, if there are new sources of energy, this would be where they should be located. Do you follow me? Because the grid's here and so forth. I don't want to imply that I'm encouraging you to give up the fight now -- that's why this is dangerous water for me to be in here -- but rather, if at the end of the day, you have your folks thinking ahead about if that day comes, which I know you don't want, but that you be in place ahead of anybody else to be part of that new world of gas-fired generators, if you will.
That's the only comment I wanted to make because I think most of us are aware; we all represent communities and we know what it's like. I live up near Sudbury and we had the hell kicked out of us about 15 years ago. It is truly brutal in a community, what it does to families. It really is awful. I think there's an appreciation of that by most members on the committee who understand that. I would conclude by just wishing you well.
Mr Van Bastelaar: If I could just comment, I totally agree with you and I thank you for your honesty. I would like to make a simple comment. Give us a try. Let us give it a try. I believe the management and the workers are committed to this, and we will turn it around. I've seen the change and I think that change, if given a chance and planned for, will work.
If you want to take it to the further scenario, if it isn't a good business case, then I still think we do have the human resources in the area and the land and the transmission lines that the government -- they haven't made a commitment to the energy part. If that doesn't work in the future for long-range planning, then please look at our area for other possibilities. I really would like to stress that our area is important. Businessmen have made a commitment to this area, as have private citizens, along with Ontario Hydro. Please remember us when we go through this, because, you're right, it is a tremendous impact on our area and we cannot leave the social aspect out of it.
The Chair: Your worship, I thank you very much for your presentation. Mayor Mann, you were trying to get my attention?
Mr Mann: Yes, I was, Mr Chair. A few minutes ago somebody said something about the 20-year, 40-year commitment from Ontario Hydro. I noticed yesterday on the program that there was a discussion with regard to power factors or capacity factors. I think you people all know what that means now; I'm not going to explain it. I was amazed to hear them talking of 85%. Gentlemen, I can remember plants at BNPD running at 98%, 97% on a continuous basis. Quite rightly now, I would suggest they were probably overdriven, but I think we've inherited what we've sown.
The other thing that I wanted to mention briefly was to agree with Mrs Fisher that the people who retired here with the golden handshake or whatever you want to call it are still here. They live in Kincardine and they live in Port Elgin. Perhaps Mrs Fisher has an idea that should be looked at for manpower.
Interjection: Mr Chair.
The Chair: I'm going to just very quickly let you respond if you need to. I do want to make an appointment to the councillor, who was trying to get my attention as well. Go ahead.
Mr Mielke: The IIPA report stresses that Mr Andognini just hasn't got the manpower to refurbish Bruce A and also Pickering. Not too long ago Ontario Hydro construction forces completed Darlington. They also completed the retubing of Pickering A, and it was a complete retube job on Pickering A. I am sure some of those people who were working at Pickering and at Darlington are still looking for employment right now. I am sure they would be more than willing to come back up here to the Bruce and retube units 1 and 2 as required and do it in parallel, as units 3 and 4 are still operating and producing power at a lot cheaper rate than what Ontario has to purchase.
The Chair: Councillor, thank you. Would you pass along to the reeve -- we've done a very quick check here -- regarding the request that your emergency response coordinator have a chance to speak to the committee, that I've been able to determine that there is a window of opportunity next Tuesday at 2 pm, and if you'll make sure that your reeve checks that out with our clerk, we'll try to make that happen. That's Tuesday at 2 pm. That's just how quickly this committee works.
Mr Mielke: Excuse me, does he know where it is?
The Chair: Please, just speak with Donna. She'll be very happy to give you the directions, or follow the bread crumbs all the way to the room.
Mr Conway: It's a big pink building in downtown Toronto.
The Chair: Mr Kwinter, very quickly. I'll allow other members a very quick response to anything else here while we have the mayors at table, but keep this in mind: We're eating into the panel of Ontario Hydro employees.
Mr Kwinter: I just wanted to reply to Mayor Mann and give you an explanation that we got today at the Bruce nuclear centre. There's no doubt that the reactors can get up into the 90% range, but the net capacity, because of planned outages and sometimes unplanned outages, averages out, they're calculating, somewhere in the 80 range. That doesn't mean that the reactors themselves aren't operating, when they are operating, up in the 90-plus range. It's when you calculate in the outages that it averages out at that range.
Mrs Helen Johns (Huron): Can I ask you if this sheet was derived from someone in this group? I know that this is probably too long a question so I'll just kind of figure it. Can you tell me how you calculated gross primary income lost? I don't have my glasses on, I'm sorry. I think it's $68,000 by the number, the population decrease.
Ms Couture: This sheet came from the Bruce Community Development Corp, Lauri Cunningham. I believe she's addressing the committee tomorrow. I'm sure she'll be bringing this. She gave this to us to show us some impacts and I'm sure she can explain it very fully.
Mrs Johns: If she's not addressing this, could you get us the background on how she calculated these numbers or how these numbers were derived, please?
The Chair: What you might do is give her a call tonight to let her know --
Interjection: She's here herself.
The Chair: Good. Then she's made a note that Ms Johns will be watching tomorrow. I see the fingers pointing. Give her a break, she's on deck tomorrow. Ms Johns will be ready to ask that question tomorrow. Thank you very kindly.
On behalf of the committee, I appreciate the time and the interest taken by each and every one of you. We're most appreciative of the thoughtfulness you've put into your preparations. I can assure this committee will give it all the consideration we can. I appreciate your time tonight. You're excused. Thank you so much.
ONTARIO HYDRO EMPLOYEES
The Chair: I ask the panel of Ontario Hydro employees to please come forward and take your places at the witness stand. That's Harold Hergott, Robert Diamond, Tim Morgan, Ken McGuigan, Jake Hunter and Frank Morris, six members, and we have slightly less than an hour now to deal with this. The one thing I would ask as you're preparing yourselves for presentations is that we have written documentation from some. You don't have to read it all. Feel very free to truncate, collapse and go directly to the essential points, and be assured that members will be reading the deputations. Otherwise feel free to cut directly to the quintessential issues, and then we can get on to questioning, which you may find every bit as profitable.
Mr Galt: On a point of order, Mr Chair: Can we have all three presentations right off and then do the questioning afterwards?
The Chair: We can have all those who wish to present, yes. I have six at the table, Mr Galt, so I will ask. Are all six presenting or will there only be three presentations? How many presentations will I have? That's six. Thank you so much.
I will run a very tight ship now in terms of timing. That's not to be discourteous but just so that we can get through this into the question period and give you more time for answers. For the purposes of Hansard, let's start identifying yourselves.
Mr Harold Hergott: Good evening. My name is Harold Hergott. I'm an authorized nuclear operator with Ontario Hydro.
Mr Ken McGuigan: Good evening. My name is Ken McGuigan. I am an authorized nuclear operator at Bruce A.
Mr Tim Morgan: I am Tim Morgan. I am an operator at Bruce A.
Mr Jake Hunter: Jake Hunter. I'm with maintenance at the heavy water plant.
Mr Frank Morris: I'm Frank Morris. I'm a supervising nuclear operator at Bruce A.
Mr Robert Diamond: I'm Robert Diamond. I'm a planning tech at Bruce A.
The Chair: Thank you very much. Can we begin? Try if you can to keep yourselves within three or four minutes, and then we can move on to questions.
Mr Hergott: Thank you, Mr Shea. I observed a couple days of your sittings last week, so I'm going to key on three basic areas that I think I can help the panel with and leave it to you to ask me questions on them.
When you did the plant tour today, if I had been on the duty shift you would have seen me in the control room. That is my normal job, to monitor and operate a reactor panel. I think you're aware of the licensing program we have through the Atomic Energy Control Board. That's my background. I have 17 years of sitting in the control room doing that job, and another eight with Ontario Hydro, getting there.
I'm here for three reasons. With all the talk about Ontario Hydro and what's going on, and the cults and the people, I thought you should meet a person who runs a reactor and have a chance to ask me any questions you want. I'll answer anything I can openly; nothing is sacred.
The second area where I think I can help you is to share some more insight into the viability of PWU's plan to recover all the units that they presented to you early last week.
The third area is, as a recipient of this bad labour-management relationship, as an employee out there on the receiving end of it, I think I can shed light into that relationship right now and what I'm seeing in the workplace.
Those are three areas where I think I can help you. I leave it to you to key on them as you wish. Thank you.
Mr McGuigan: Good evening, Mr Chair, ladies and gentlemen of this committee. I've been an authorized nuclear operator for three years now. I am an elected authorized nuclear operator representative for Bruce A. I need to stress that that representation is outside of the PW. This is not a PW-elected position that I hold. I've had that position for two years. I represent the ANOs on positions that deal with authorizations issues, conduct of operations in the control room. I sometimes liaise with the PW if they need information regarding staff as well as management.
The purpose for which I'm here on behalf of the ANOs tonight is to give you some firsthand insight, if you care to ask questions, on the safety culture that's at Bruce A; the forward movement towards nuclear excellence that has existed and continues to exist within OHN, specifically Bruce A; the ongoing positive position the ANOs have taken to making improvements alongside management; and finally, our participation and our cooperation with the IIPA and our concerns with the results.
Mr Morgan: Good evening. I'm a nuclear operator at Bruce A and I want to get right to the point. I have four recommendations for this committee and I'm going to read them here from my notes.
I would suggest that to gain a true and accurate understanding of the state of Ontario Hydro Nuclear is beyond the scope of this committee. That's not an aspersion on anyone here but it's just too big a task. You don't have enough time. For this reason and others, I would recommend that an auditor general for Ontario Hydro be established, an independent auditor with a substantial budget and staff of experts. To investigate the operations of Ontario Hydro, it's desperately needed. The fiscal mismanagement of Ontario Hydro is so large that it is difficult to comprehend. It needs a bright light to illuminate what is really going on here. Something must be done to make Ontario Hydro accountable for how it misuses its resources.
My second recommendation would be to set up an independent review panel to monitor any restructuring of Ontario Hydro's power generation and transmission system. This would help ensure that any restructuring would be beneficial to the people of Ontario, would be financially feasible and sustainable, and would safeguard against abuses which could occur during the chaos of restructuring the system.
Third, please don't believe that the nuclear asset optimization plan is a plan to improve the operations of Ontario Hydro's nuclear stations. It could be more accurately described as a $5-billion taxpayer subsidy to eliminate nuclear's market share in the electricity market and a plan to fix up fossil generating stations for privatization and to purchase power from neighbouring utilities and independent power producers.
My fourth and final recommendation would be to give Bruce A the green light to arrange a public-private partnership to redevelop its generating facilities. The employees are eager to make it happen. Major construction companies, boiler manufacturers and US power marketers are lined up out the door waiting to invest in Ontario and Bruce A. However, the Ontario Legislature is in the way. Please get out of the way.
Mr Hunter: Good evening. I work at the heavy water plant. I have worked there for almost 25 years and the bulk of the time I've spent there working on maintenance. My presentation is very brief. The future of the heavy water plant is directly tied to Bruce A. We need Bruce A for the steam. But the reason I came here is that if the committee here has any questions regarding the heavy water plant, I'd be happy to answer them.
Mr Morris: I came here from the Hearn generating station. It had eight gas-fired units, and when it closed down I was offered a job to come to nuclear. I was told that it was closed because it cost too much and because of the environment. Now they're bringing out a plan and this board of directors has accepted the plan. The cost is way more, billions of dollars, and the second thing is that they've doubled the pollution going into the atmosphere. Global greenhouse gases have doubled. In 1995 our emissions were 15.5 teragrams. One teragram is a million tonnes. That's 15.5 million tonnes. In 1997 we went up to 20 teragrams -- 20 million tonnes.
With this plan, it's expected to go 50% higher -- no one's disputed that -- which brings us to 30 teragrams, or 30 million tonnes, doubling our global greenhouse gases. That's not acceptable to me and it shouldn't be acceptable to you or the people in Ontario. I'd ask for an independent environmental review.
Mr Diamond: I have a brief talk as well. There is very little I can add to what has been said already, but I'd like to emphasize that I work in Bruce A. I produce plans. I have produced a strategic plan which is a longer-term plan. I have produced the daily plan for the operational maintenance and I've produced plans for the outage maintenance at Bruce A. But the bulk of my work is the daily operational planning.
I also agree with what's been proposed earlier by our representative in the union, the plan A to support the full nuclear recovery. I think this provides the best value and the best health and safety to the public.
Further to the staffing concern, I have a strong belief that we have enough ambition in our staff now to help out any new people coming in, whether they're from England or from the States or otherwise, to get them on stream. With the training required and with the new advances in technology, computer-based training and so forth, we can bring some of these people on line much faster. An example in point is the simulator training we have now. A lot of this is done on computer, and with our planning process we use a product called Primavera P3. It's a pretty complex scheduling or planning package. There are people out there in Ontario and other places who are familiar with some other products that can be converted over to this higher top-end product. That's my category that I'm familiar with. I think in that aspect of the staffing we can bring some people on line much faster than is perceived. That's all I have to add.
The Chair: Mr Diamond, thank you very much, and can I say to the deputants, thank you for cutting right to the chase and allowing us to get on with our questioning. That's been very helpful. Let me begin the questioning with Mr Conway.
Mr Conway: Thank you, gentlemen. I was really happy to have the benefit of your testimony tonight. I want to cut to the quick, as they say. There are six of you there. You've all been working around nuclear power plants, I take it, for some time. I have a few questions.
First of all, how did you feel on 13 August when you watched the nightly news and the report out of Toronto that presented to the public of Ontario the assessment of what was wrong and the so-called recovery plan, and in that context the reference the Hydro chairman made that part of the problem with the management culture that had developed was that there was some kind of nuclear cult? If he said it once, he said it a half-dozen times. You're part of that cult, presumably, so tell me, what did it feel like?
Mr Hergott: I resemble that.
Mr Conway: Where I come from, Ralph Lauren is thought to be something of a cult.
Mr Hergott: The employees I saw felt much the same as I did. It was almost a disbelief. We cooperated with the IIPA report. We knew we had to improve performance. The results of the report are quite objective. They're findings and they're things that union people have been on teams and told management about. I've been part of those teams for years. Some of the findings were, verbatim, what we had recommended before needed to be done. What put the dissonance for people was, how could a board of directors make a decision like this with this consequence in that short a time frame? What options were looked at and were the consequences of choosing this really looked at? That's where employees had total disbelief that that could happen in that time frame.
Mr Conway: All right. Let me just stop you there and back it up a bit, because what I want to know, and this is an open question for all six of you -- I've been around this Hydro debate a long time; I never thought I would see the day that I would hear Hydro people say what was said on 13 August. But it's very clear to this committee that over many years a lot of very good people with a lot of very good intentions tried to deal with some growing problems about the management culture, the operational problems around the nuclear power plants. For whatever reason, it just didn't work. We had the former president of the organization, Al Kupcis, who's someone I've known for a long time, say to the committee, "We tried but we just couldn't make it work." Why in the past could the problems not be fixed, from your point of view?
Mr Hergott: Our understanding at our level in the organization was that the layer of management above us was trying to address the issues and basically we were harvesting an asset. When I worked at Bruce A on unit 3 in the early years, we put number 1s up on the wall year after year -- you might have seen them today -- the best performing reactor in the world, but we didn't put any money back in. Then we went through a downsizing where we took people away. Our understanding at our level of the organization, as we howled relentlessly that things were going bad, was that the level above us was passing it on but to no avail. That's my understanding.
Mr McGuigan: Along with what Harold commented there, I don't know how far back you're going. Are you going into the 1980s?
Mr Conway: I go back to 1975. I first started to pay attention to this when I was elected 22 years ago.
Mr McGuigan: Then you're going into the heavy-production-oriented way of life, okay? It's a new car. Unfortunately, it's tended to be driven without driving it to the garage once in a while, if you'll let me say that. It wasn't for the lack of the people and the workers in Ontario Hydro. Those reports are available, and I strongly urge this committee to ask Ontario Hydro for those reports. Authorized staff issues teams have made recommendations that would have staffed the control room to the numbers such that we would not be in that problem today. Those numbers, unfortunately, got involved and mixed up in 1992 when they were agreed to by management committees and authorized staff committees together. We came into this misperception that we needed to downsize. I would suggest that misdriving of these reactors was not at the local management level but higher up on that level where all of a sudden it was deemed that we didn't need to put the money into those reactors when the people knew we did.
Mr Conway: But if we look at the documentation the committees received from the Atomic Energy Control Board, the federal regulator, starting about 1986 when money is being applied -- somebody at the staff level might help me. We had a former chief executive officer of Hydro say that in the late 1980s that we were pouring money into it -- what was the phrase?
Mr O'Toole: Faster than we can drink it from a fire hose.
Mr Conway: I think that was the expression. From 1986 through to, say, 1991-92 the resources were going in, but according to the federal regulator -- and we've got lots of very interesting documentation -- it just wasn't getting any better. It didn't appear that it was just a financial resource question. Some people have said it was an engineering and design company that was really good at building these plants but there was just not a good operational ethic taking root in this company.
Mr Hunter: If I may say, from my experience, because I've been through all that time with Hydro since 1973, I believe in that period when they did put a lot of money into Ontario Hydro, they tried to put it into a lot of things at once rather than focus on certain projects and finish them. I think they were putting money in, but they weren't focusing on major projects and doing them one at a time and working their way through; rather they were trying to do a whole lot at once. During that time I was on a number of committees to do with maintenance, and we tended to have hundreds and hundreds of initiatives rather than, say, a few that we would try to focus on. I believe that's one of the problems they may have made during that period while they were spending more money but not getting results.
Mr Laughren: I appreciated the brief comments you made. There are two areas where I actually agree with you. One is that I think there should have been an independent inquiry into this whole thing, quite frankly, as opposed to this committee to look at Hydro's restructuring. Secondly, the environmental stuff: There's no doubt that if Hydro proceeds with their plan it's going to increase environmental pollution. Hydro made a presentation to us the other day -- was it just yesterday?
Mr Conway: Yes. It's all right, Dad.
Mr Laughren: I knew it would happen sooner or later.
They said they will meet all the environmental standards that are laid out by law or that they have voluntarily agreed to with the Minister of Environment. I just wanted to make those comments. But I have a couple of questions.
I think it was the third gentleman -- I lost track of the names; sorry -- who talked about the massive misuse of funds by Ontario Hydro.
Mrs Johns: Tim Morgan.
Mr Morgan: That's me.
Mr Laughren: Tim Morgan, okay.
The Chair: That's one, two, three, four.
Mr Conway: We won't tell them that you're a former finance minister.
The Chair: Some of us are very much aware of that.
Mr Laughren: I don't feel sorry for you, because the abuse never ends on me.
Seriously, about the misuse of funds, one of the reasons some people -- more than one or two, the same people who got Hydro into trouble are now saying they can save us, right? That includes the reopening of Bruce A and Pickering A. Do you see the possible ramifications of what you're saying when you say that?
Mr Morgan: I have two points. Ontario Hydro nuclear stations in particular are bought and paid for.
Mr Laughren: Well --
Mr Morgan: Or they're bought, not paid for. So what are you going to do? The asset is worth about $30 billion? I'm not sure. Are you just going to walk away from it because people have misused the funds in the past? You can't. It's not an option. It's not realistic. But that seems to be what's going ahead. We're going to shut down seven of 19 units; we're going to walk away from a third of it. It doesn't make sense.
My second point relates to what Mr Conway was talking about earlier. Has any upper-level management person, anybody off the board of directors, ever been either fired or kicked off the board for incompetence or mismanagement of funds? I don't think you'll ever find that. That's the problem with Ontario Hydro: There's no accountability; there's no one peering over its shoulder except on safety issues, not on fiscal or financial issues, pointing to exact projects, capital projects, that are a waste of money, projects that should be coming in under budget instead of double the budget. No one is doing that and no one has done that. That's what needs to happen.
Mr Laughren: One of you mentioned also the downsizing issue, being taken out of the workforce. That happened in the early 1990s. I was part of a government at that point. I can recall the outrage of people when Hydro rates were going up 10% a year for three years in a row, as I recall. That was a 30% increase in rates, and people were outraged at us, including opposition parties in the Legislature, I might add.
Mr Conway: Agreed.
Mr Laughren: The reason they went up 30%, of course, was largely because Darlington came on stream. Under the system in Ontario, when the plant gets on stream, that's when it starts getting reflected in rates, not before. Before that it's capitalized. At that time there was also a moratorium on any future nuclear development. I was convinced, and I want you to tell me whether I was led down a garden path here or not, that the reason you could now downsize Hydro was because there were no more plants being built and you could get rid of the construction and design people in Hydro, which would be in itself a major downsizing. That's what I was led to believe when that was happening. Was I misled?
Mr Hunter: Yes.
Mr Laughren: I want an explanation of that, if I might.
The Chair: Well, you asked for an answer.
Mr Hunter: It was spread across everybody; it wasn't just construction and design people who were offered packages. Every group was offered them. In nuclear alone we lost 4,000 people. Oddly enough, from the IIPA report, I think that's what they say they're short.
Mr Laughren: Yes, that's exactly right.
Mr McGuigan: If I may make a comment as well to the comments made about Darlington coming on line at the same time, and going back maybe a little bit to the other question of why it wasn't happening coming up to this whole period of time around the downsizing issue, at that time, throughout the late 1970s and early 1980s, the United States did not have nuclear excellence either. It wasn't until after Three Mile Island that INPO was formed. They started having their conferences at that time. Their conferences were coming out with papers -- papers the NRC directed those stations to act upon. Unfortunately, it was some six to eight years later before our industry in Canada got involved with these kinds of initiatives that were in the States. That's part of the problem of why it didn't gel.
As for the payment out of Darlington not being paid down on rates, I believe that was done through the Power Corporation Act. I believe that legislation was made somewhere back in the 1930s. It's surprising to me that wasn't relegislated prior to building Darlington.
Mr Galt: I'd just love to spend the whole evening with Mr Morgan and explore some of his philosophies, but we don't have time. But some of the things you were coming forward with are intriguing. The question I'd like answered, and it can be any member of the panel, reflects back to the Macdonald commission report talking about competition. Whether we like it or not, we're competing in the international market today, free trade in North America, and certainly to be able to compete there we're going to have to similarly compete with electricity. I think that's the logical direction. Anyway, I predict that's where we're headed down the road, into competition with electricity.
How do you see the Power Workers cooperating on, say, Bruce A or Bruce B, whatever? As we move in that direction, looking at competition, we're going to have to have a very different workplace. We've seen that kind of thing in car companies. How do you picture the Power Workers' Union working with management or the Ontario government, whatever, once competition comes in? Who would like to fly?
Mr Hunter: I'll speak to it first, if you wish, because I'm an elected rep. From the early 1990s, late 1989 and early 1990, we embarked with Ontario Hydro on a number of joint initiatives to improve the workplace. There was a quality improvement and business improvement process. Since then, we've always offered to do those things. As employees, we've always tried to offer anything we can do to improve how the plants operate, both in safety and the mechanical side of the plants. I think we would do anything we can to try to make the plants run better. That's how we will win in a competitive market.
Mr Galt: So you're all set to work hard to make competition work, to be the best and to make sure you can produce electricity in a competitive way, and you're comfortable, with the plants here, A and B, that you can compete in that international market, considering the debt and everything and the cost of these plants?
Mr Hunter: And given that the corporation is willing to continue to put money into the plants to keep them running, though.
Mr Galt: It all goes into the competition. Whether it's putting money in, that has to be reflected in the rates afterwards.
Mr Hunter: Certainly it does, but in order to keep the plants running you have to keep them fixed. That's some of the things we're paying for right now.
Mrs Fisher: I'm trying to frame how I might start this. We had the Macdonald committee presented to us a while back and the white paper seems to be forthcoming now, which I'm pleased to have before us, whatever it looks like in the end. Yesterday there seemed to be some type of forerunner to it, talking about continued public ownership of two parts of Ontario Hydro, if you will, but I think listening specifically to the generation staying intact.
I want to pre-empt it by saying that I remember working at Ontario Hydro when nuclear excellence was existent and I personally believe we can recover that situation today. I firmly believe that.
I want to start by saying that we had a presentation by the British people, British Energy, at our committee just mid-week last week. John Murphy attended after and we had some discussion. He attended at that time in his capacity as a director of the board of Ontario Hydro. I asked the question and I pre-empted it by keeping the public ownership scenario in mind. I pre-empted it by saying, number one, had he seen the report? I will ask some easy questions here and then there's one at the end that I think makes the whole difference on the whole recovery plan here. Has everybody seen the British proposal?
Mr McGuigan: No, I haven't. I watched part of it, but I haven't read it.
Mrs Fisher: I think it's something that every Ontarian should see, because I personally believe there's a solution there that we can strike for and reach. The British proposal goes something like this: Over a period of time they decided to privatize all but nuclear, then looked at nuclear. I'm not talking privatization; I'm talking about a way to get to nuclear excellence again at Bruce and at Pickering. If in fact the proposal generated these types of results: reduced electricity costs -- and I might suggest that in the beginning maybe the rate was propped by government to make it work, but given that and assuming that we have a $15-billion phased debt right now, that may be what has to happen.
I don't know the answer here, but let's look at the results: increased safety performance, lower electricity rates, union workers who stayed in the same unions and moved over to whomever they moved over to, though that would not necessarily have to be the case. There was a reward system in terms of merit increment. There was a share offered to the workers. In general it resulted in the recovery of what was turning out to be no different from ours, a situation of running-down units to upgraded units.
My question is this: The IIPA thoroughly investigated poor management decision-making in the past. Living in this backyard, I think that has reflected negatively on the workers and their ability to bring their brain to work and let it work. I ask you this: Do you think that given those rewards in the end to the consumers of Ontario and to the workers, management and union can make that happen?
Mr Hergott: Barb, I'd like a shot at that because I'd really like to challenge this media attention and this spectre being raised of the big, bad union.
Mrs Fisher: That's not what I'm suggesting.
Mr Hergott: All right, but I believe that is a barrier to them working together. There must be a little dissonance within this committee, as there is with the employees. Constantly being raised here as an excuse for the poor performance of Candu are labour relations and a collective agreement. That's one of the prime things. Our CNO, Andognini, is in Seoul, Korea, and he is talking about that, saying labour relations is one of the problems with Candu. It's robust technology. But there's a dissonance with the employees because they see a union offering to lay up a heavy water plant -- volunteer labour -- they see putting money into nitrogen blanketing, and there's something just not adding up. That doesn't seem like the big, bad union. I believe there have been letters made available to this committee that show that the offerings have been made but to no avail. They're not getting a response from Hydro.
Mr McGuigan: Can I make one comment on that?
The Chair: Of course.
Mr McGuigan: I do believe too that the British power system -- I believe the question was asked quite a few times here before they actually got an answer, which I'm not sure was clear enough, but British Energy made it very, very clear that an intricate part of making that happen was the cohesiveness between the management and the union. I work for Ontario Hydro and I have to go to work tomorrow. I dare say that at this point, as a worker at Ontario Hydro, I feel us going a little bit in the opposite direction at this time, which concerns me, because if we do get into the situation that you're talking about at this time, where we are told we can't communicate, when we get into the situation where we can't communicate, that is a situation where maybe you will start seeing big, bad unions because we're getting punched around. I believe the British power workers made that very clear and I think that point should be taken heartfelt at this time by this committee. That is an important part of that initiative.
Mr Hunter: There's one other example, Barb, that I think we can use. As you're aware, when the heavy water plant had to go to a single unit, it was a joint effort. We sat and went through all the facts and figures and whatever to try and keep us competitive in the world market. It was a joint effort and we managed to do that. With the closing of the heavy water plant, we were simply caught in the crossfire of all these IIPA recommendations. It was nothing to do with how the heavy water plant was being run. I think that's an example where we can work together well.
Mr Morgan: May I add a point on that?
The Chair: Absolutely.
Mr Morgan: You were asking about incentives. There's a huge incentive for the people in this community. There are about 1,700 people who are going to be asked to move out of the area, both management and PWU. People are going to take a bath on their houses. People are going to lose a lot of money on that. This community is going to have a potential for Elliot Lake-type effects. There's a huge incentive for union and management to get along here. All we need is the government to give us a green light, an open window and say: "There's something to go for. Go for it. You can keep Bruce A alive if you can come to some kind of arrangement." I think it's highly possible.
The Chair: A chance for one more question per caucus as we move around, please.
Mr Kwinter: As employees and insiders, I'd like to get your reaction to the sequence of events that led up to the August 12 board decision. First of all, Mr McGuigan has acknowledged that the problems that were identified in the IIPA were well known, and I think most of the workers agreed with him, and had been reported to the Atomic Energy Control Board for a number of years. There was an interim report given to the board on April 17. Mr Farlinger, when he appeared before us, stated that it was no big deal, they get reports all the time. But certainly the issue was known in the interim report, a lot of it. It wasn't fleshed out as it was in the final report, but that happened.
We then have the August 12 meeting where it was supposed to be an information item only. You get to the meeting and suddenly the recovery plan is presented for the first time. It changes from an information item to a decision item. It's voted on and approved at that meeting. From your perspective, was there anything happening in the operation of the nuclear facilities that would precipitate that incredibly quick decision, and what changed from the report that they received on April 17, which outlined basically the problem? Mr Kupcis said that everybody knew the problem. All he wanted Andognini to do was to quantify it. He needed some experts to come in. It was, "How extensive is this so we can address it?" And suddenly they make this commitment to spend this $8 billion, to lay up these reactors, all of it done, in my opinion, without any consultation with the people who are going to be impacted by it, without any options examined. You're the guys who are running these things. Do you have any insight from your perspective as to what would precipitate that?
Mr Hunter: I believe one of the things that forced it was that they wanted it almost like a surprise attack. The quicker they reacted to it, the less chance you would have to put up arguments to stop it. I believe if they had just gone forward and said, "I think this is what we might have to do and we'll let you know in a month or two," that would have given more time for some of the concerns you've heard over the last while to be raised. I think once the decision was made to do it they wanted to do it in a very fast manner.
Mr Laughren: Someone invited questions on the heavy water plant; I can't remember who. I asked the question today at Bruce about the heavy water plant because I remember the Power Workers' Union came before the committee and indicated that they would help resolve the problem there, prevent it from freezing and so forth. We were told that the heavy water plant was a dodo bird, that it wasn't needed any more and never would be, and would be completely dismantled. As a matter of fact, you can see that some of it has happened already, I guess. It's quite an awe-inspiring sight. Think of all of that being dismantled. They will not need it. If they did need it, they wouldn't need it until the year 2015 or something like that, and even then there is new technology now, so that's history. Was that a surprise to you and can you shed any light on that?
Mr Hunter: I believe when they told you that, they were speaking about Ontario Hydro's own inventory. We basically produced the last of Ontario Hydro's inventory late in 1993-94. Since then we've tried to sell internationally with AECL. The technology we have -- I agree there are new technologies out. The difference with ours is that it is bought and paid for. It produces at a competitive rate because we manage to sell it on the world market. As stated before, I think by Mr Van Bastelaar, the product we produce is world --
Mr Laughren: They said they couldn't produce enough to make the plant operate efficiently at all and that it simply -- I can't remember the numbers now -- made no sense whatsoever; they couldn't operate with the level that they could sell.
Mr Hunter: They can produce --
Mr O'Toole: Ten times what they need. That's the problem.
Mr Hunter: -- right now, I think, on average about 350 megs a year, if that's what was there. We've also figured out ways to operate to produce less but to keep the cost down, and that's in fact what we were doing with the AECL contract. AECL offered us a contract to keep us open and the reason they did is for their own future Candu sales. I think it makes sense to have a domestic source of heavy water to try and sell reactors.
They have new technologies but I want to point out that all those new technologies come with a pricetag. I don't believe those new technologies would instantly be able to produce heavy water as cheaply as we can produce it. I think that's why it makes sense when you have a plant there that runs well -- in the 25 years that the heavy water plant has operated, we have always met our production targets, we have operated safely and we have always been within budget. To be quite honest, I'm sure you've heard from other places in Ontario Hydro that that's quite a thing to say, for a department that has managed to do that all those years.
Mr O'Toole: We've sort of heard the whole thing on this Andognini thing, and I'm looking at your own particular site report here. There was kind of a turnaround in management. A kind of SWAT team comes in and just assembles all the data. What they told us was that all the data were already there, seven and eight years old. It was by the peer reviews and the AECB and all those people. What those reviews said was that the work wasn't getting done, for money or whatever reason. That's basically what it said. All the plans were still in the book.
That worries me. I go back to the cultural thing. How do you say, "Look, it's all over here," and start from a clean sheet? That's the whole issue. Are these true? It concerns me. I'm under the 4.0 and this is red, which means it is minimally acceptable. I didn't write this, but we are responsible to inquire into its authenticity. You said you commented on it. "Human performance errors are a major cause of operation events and a general lack of clear, definitive procedural compliance contributes to this problem." That's kind of cultural. That's an "aw" kind of attitude. I've worked for 34 years in major industry.
You need to really have a cultural awakening -- huge. By the way, this is called a major significant event. That's how you get people to change. You create a major event so that you have turnaround behaviour. I don't blame union or management; it takes both. At the end of the day they are both still there in whatever environment. Is it possible to recover? One suggestion of how that could take place: You've got a whole parade of Americans coming in here with this real instant know-how stuff, a lot of cultural things. How are we going to get started here? We had a tour of the plant today.
Mr McGuigan: Can I answer that?
Mr O'Toole: Sure, anything.
Mr McGuigan: Then Harold will have something to say. As far as the IIPA report goes, during a period of time -- I may be going back to what Mr Kwinter was asking -- back in April 1996, and it is in my written submission to you, a workshop was formed. It was control room people. That workshop was entitled Presentations on Safety, Culture, Professionalism, Teamwork, a presentation from INPO on the development of it, what it's there for, how they can support us. We took that very seriously. This was in April 1996. These were control room people, all stripes in the control room. We're talking about the fuel handlers, the authorized nuclear operators etc.
We began to develop standards. The first thing we did was set forth the guiding principles for nuclear control rooms for ourselves. I suggest you ask for those and read the education document that went with it that was written by control room personnel and supported by local managements and operations throughout OHN.
There were some six standards, and one of them was procedural compliance, by the way: logging, turnover, communication, a self-check policy, panel monitoring and the use of our supervised control panel operator, who is a person who would monitor the panel for an authorized person while he went to the washroom or had a quick break. These standards were ready to go. We were looking for someone to issue them. At that time, in the spring of 1997, we were convinced that we had them nailed down. The IIPA report says: "Several initiatives are under way to improve performance. However, some newly developed standards are not consistent with good industry practice and managers and supervisors will reinforce these new standards in the field." These standards were developed from INPO. The number one INPO-rated stations in the States is where we got our information to develop these standards.
In April 1997, all the teams were stopped. A directive came down that there would be no more teams unless approved. Our workshop teams submitted our terms of reference. We had also planned another workshop, knowing the value. We had a roller coaster going here. We had talked it up in the control room to the point where people were on board. They wanted to get involved. Our own local workshop team at Bruce A had 12 individuals on it. Some of them worked at home to create these standards.
This is the picture of the way things happened: The team stops. The standards go nowhere. Our hands our tied. I will say that recently, in the last week and a half, these very same standards are at the top of the limelight. In fact, next week I am going down to Toronto to talk about them with another individual; not as a team member. This has been a problem for us. Every time we come out of a peer, we evaluate the peer. We make together plans. Yes, as I stated in my thing, we didn't implement things as fast as we wanted to. There's a very fine line in the safety culture when you're trying to make a safety culture grow between taking speed of implementation, developing stress to the point where you eventually collapse the current safety culture you have.
If I can use the analogy of a used car, we are driving a used car. We have to go up a big hill. The distance from here to here is high. However, for a used car you don't want to go up a steep hill. You need to go gradually. Also, however, if you slow that car down and it stalls and it hasn't been serviced and the bearings are bad, it comes to a halt pretty darn quickly, and frustration sets in. I would suggest to you that it's not the people, that we didn't have the initiative in that safety culture to grow on. Our hands were somewhat cuffed over the period of time of the IIPA. We couldn't do anything about them. Now we are doing something about them.
The reason for all those stalls? I don't know. Perhaps, as I've stated to you, the IIPA wanted a static picture of Ontario Hydro. Well, that static picture ended in June.
Mr O'Toole: Just one comment.
The Chair: No, Mr O'Toole, thank you.
Mr O'Toole: Thank you very much. You've been very tolerant.
The Chair: I have indeed, far beyond that. Let me move on. I had a request for a question of the deputants from our legal counsel.
Mr Power: I just wanted to follow up on the suggestion that was made earlier that you would be open to public-private types of arrangements. Is that consistent for each of you at the table? Is that fair to say? Yes.
Just by way of background, the PWU, as you may know, made a proposal to the committee some time ago, which we are looking at, in terms of all the units. That proposal was forwarded to the chairman of Ontario Hydro and a request was asked of the chairman. We have the chairman's response back and it's been sent to Mr Murphy. The chairman basically said he is uncertain, given the human resources problems, whether Ontario Hydro could pull it off but he left the door open expressly to what you said -- some sort of a public-private offer opportunity.
He indicated there are a couple of limitations, though, one of which was the history of the collective agreements and how they might fit into a new relationship. I guess what I throw out to you -- I wouldn't imagine that you'd have a position on that yet, but if you're serious about this, in pursuing that particular option, we'd be quite open to hearing from you as to what you think the issues are as raised in that letter from Mr Farlinger, how it could work. If you're happy with the British Energy model, you might want to have a look at how they've dealt with these issues and see if it fits with the way you'd like to work. If it does, you might have a model there worth bringing back. I don't know if you have any comments more specifically, but it has been raised with us.
Mr Morgan: Isn't it kind of getting the cart before the horse? Instead of asking us if we're willing to amend our collective agreement, shouldn't we be given the opportunity that the possibility of a public-private partnership exists currently? We can't do that under the Power Corporation Act, as I understand it. It's not in the cards.
If the Minister of Energy, Norm Sterling, or possibly even the Chair of this committee, were to say, "Yes, it's a possibility, if the union and management at Ontario Hydro would sit down and explore it with interested investors," then who knows? The people at Bruce A are obviously motivated to keep Bruce A going.
Mrs Fisher: On a point of order, Mr Chair: I would suggest that it might be wise to review the terms of reference of the select committee here. In fact, those allow us to discuss these types of options without any requirement for any approval from anybody. It says look at all options, consider all options as it relates to the IIPA review, and then it goes on to the secondary side of it with regard to the safety requirements by AECB. I just wanted to raise that as --
The Chair: Thank you, Mrs Fisher. While not a point of order, it's worth being reminded of our terms of reference and I appreciate that. Mr Hunter, you were trying to get my attention, and then Mr McGuigan.
Mr Hunter: I believe right from the start John Murphy did write letters to Mr Farlinger to say that we were open to look at other things. I believe as a union we're willing to meet with anybody. As pointed out, we would have to know who we have to meet with first before we actually say what we can do and what we can't do. We're open to anything to keep the stations open and keep our people working here.
Mr McGuigan: It's along the same lines as what I wanted to comment on. In a situation like that and a question like that, as a PWU member, my answer to that would have to be that my PWU elected council will make decisions that I trust. That's why I have elected them.
A question like that, perhaps, I would say, in this forum, may put myself, as a member only, to answer and put forth suggestions to you that are possible in privatization, are possible in partnerships, are fine. But yes, the PWU members are willing to do virtually anything to discuss possibilities. I do know that. However, I would say that my elected council in PWU are the people who should be responding to that with more detail.
Mr Power: If I may, I understand exactly what you're saying and I presume they're going to respond back. The only reason why I throw it open to you is that the letter we just received from Ontario Hydro late last week was the first suggestion that this possibility was on the table. I didn't know whether you'd seen or heard of the letter, but given that you seem to be saying the same thing that we heard from Ontario Hydro -- and just coincidentally, British Energy was at the table saying this is a model that might work -- it's obviously caught some interest here. I just leave it with you to ponder about, I guess, and think if something can be done there.
The Chair: Thank you very kindly. I appreciate the generosity of your time. That will conclude the questioning this evening. I've imposed upon your time. We've gone well past the hour we were to adjourn. It's almost 2200 hours, or 10 o'clock, for Mr Conway.
Mr Conway: Trust me, in Bruce county it'll be 10 o'clock.
The Chair: Or maybe 9:55. I do appreciate your time to be with us and we appreciate your testimony. One point I might ask: If there are other items that arise as a result of this evening, please feel free to get a written communication to us as quickly as possible. We'd be very happy to receive that. You were trying to get my attention, Mr McGuigan.
Mr McGuigan: Just perhaps before you do close, on behalf of the authorized nuclear operators I represent at Bruce A -- in a non-PWU fashion; again, I'll steer you in that direction -- thank you very much for our opportunity to speak to you. However, we have left you with written documentation. If there is anything that you need clarified at any time, we are more than willing to assist the select committee to clarify those or do whatever we can to try to clarify the culture. I would suggest it's a nuclear culture and not a nuclear cult that exists.
The Chair: Thank you. You've been very helpful and I personally appreciate the testimony that's been given by both groups this evening. We will be prepared to receive more deputations tomorrow morning. Again, we thank Mrs Fisher for her courtesies of hosting us here and Mrs Johns, whose riding is almost immediately on top of us. We thank them both for their generosity and we thank you all for this evening.
Mrs Fisher: Before we adjourn, if you don't mind, I don't know what it's called but I don't think it's a point of order --
The Chair: Make a point; I'll let you know what it is.
Mrs Fisher: A point: Prior to coming into this session here tonight, as you know, we could have had a whole pile more of people who had an interest in making submissions and I did warn the committee that there was a possibility that the invite was out to receive anything in written text, which I do have too, that I would like to present to the committee on behalf of these people. One is Charlie Hunter and the other is Brian Hallatt. I do want these presented and included in the deliveries.
The Chair: I'll be pleased to receive them and we'll table them with the committee.
Mrs Fisher: The other request that I have been asked to make of the committee, as a research piece back to Ontario Hydro, is to ask them to develop a schedule, a comparative table, that shows the AECB requirements per unit and per site -- so Bruce A and Bruce B and Pickering A and Pickering B and Darlington -- the AECB requirements in terms of the workforce in each of the categories as compared to those that are projected in the NAOP report, as compared against those that are there today.
The Chair: Legislative research heard that, along with our consultants, and I'm sure will respond to that. I would normally say we'd try to have it ready by 8 am. It may take a little longer than that, but we'll do it as quickly as we can, happy to table that. Is there any other business? If not, then this committee will stand adjourned until 0900 tomorrow.
The committee adjourned at 2158.