Carney’s nuclear strategy ‘ambitious,’ but leaves questions about tighter regulatory regime, financing, say experts
Canada’s recently released nuclear energy strategy sets ambitious targets, although it is currently unclear how it will accomplish major streamlining intended to bring the lengthy regulatory process to under two years, which will be integral for success, according to industry experts.
“The two-year cap is a good goal, and the two-year cap gives [original equipment manufacturers], builders, and operators a certain level of certainty. It's also a signal that Canadian nuclear is more open for business than it was,” said Goran Calic, an associate professor of strategy at McMaster University, as well as the entrepreneurship leadership chair. “The criticism would be that the regulator has not yet been specific enough with what they're going to do. So, how, specifically, are we going to change the way that this [Impact Assessment Act] is enforced in order to bring it down to two years?”
Energy Minister Tim Hodgson (Markham-Thornhill, Ont.) unveiled Canada’s first nuclear energy strategy on June 22, which he called a plan for a "new civilian nuclear renaissance." Objectives in the strategy include construction of up to 10 new large nuclear reactors over the next 15 years, as well as a doubling of uranium exports. The strategy also proposes to modernize the CANDU reactor—a Canadian heavy-water natural-uranium reactor system that generates electricity—and export the technology to at least four new international markets by 2040.
Calic told The Hill Times in an emailed statement on June 23 that “the most important thing the federal government can do” under the strategy is modernize the Impact Assessment Act.
To help speed up nuclear energy projects, the strategy proposes a streamlining of impact assessment and the licensing process with a target of completing federal regulatory review within two years.
The strategy also notes that this quicker regulatory review timeline will be accomplished “while upholding Canada’s environmental standards and the Crown's constitutional obligations to Indigenous Peoples.”
In the email, Calic said that doubling down on nuclear power is the right direction for Canada, adding that “if Canada does anything especially well, it’s the nuclear energy industry.”
When asked about possible concerns, he questioned how the regulatory process could be streamlined with a two-year goal in mind. “Time will tell,” he wrote.
“I think coming out of a plan like this, having a list of items that they're going to look at … would have really helped create an assurance of, ‘Okay, look, this really is going to be some kind of change, and not just words on paper,’” he said in a follow-up interview. “We need to applaud the government for putting strategies together—putting something out. Of course, we can be critical of it and we have to wait.”
The timeline for a regulatory review of an energy project can vary based on factors including project size, the technology involved, and the scope of environmental reviews. Law firm Stikeman Elliott estimated in 2019 that the average period for a federal review of an energy project in Canada is between 24 to 36 months, with more significant and controversial reviews lasting more than three and a half years, or in some cases, five years or more. Energy Regulation Quarterly, an online publication, provided an estimate in 2018 that the overall time for conducting federal reviews of major energy projects ranged from 19 to 104 months, and averaged more than four and a half years.
Gary Mar, president and CEO of the Canada West Foundation, told The Hill Times he is “very supportive” of the strategy, although he argued it lacks a clear financing model.
During a background briefing for reporters on June 22, an official with Natural Resources Canada estimated that construction of the reactors outlined in the strategy could cost more than $100-billion.
“They haven't figured out who is going to pay for it and how. Is it going to be the federal government? Is it going to be provincial governments. Is it going to be ratepayers? They're just kicking the can down the road on what is a pretty important question as to who pays for all this,” said Mar.
According to Mar, another concern for him relates to project timelines, referring to the two-year regulatory review target.
“Are they realistic? They want to have a two-year cap on timelines, but that could take a lot of different forms,” he said. “If you had a two-year cap, it would help de-risk projects from a financial point of view, but then [there’s] the question of, what's included in the cap? Is it just active time review, or does the clock have to stop for information requests or Indigenous consultation or design revisions? That two years could then stretch out to be five or six or seven years if you did that.”
Overall, Mar said he considers a two-year target for the review process to be “very good.” Referring to the strategy as a whole, Mar said it sends a clear signal that nuclear power will be central to Canada’s energy future and industrial policy.
“For a long time, [nuclear] was thought of as something that was optional, but I don't think it's optional anymore. I think it is central, and that's because if you look at the demand for energy from electrification of cars to artificial intelligence and economic growth … I think nuclear is essential to being able to double our electrical supply without adding anything to our [greenhouse gas] emissions.”
Jeff Kucharski, a senior fellow at the Macdonald-Laurier Institute and an adjunct professor at Royal Roads University's business school, told The Hill Times that a two-year target for reviews on energy projects would put Canada at the global forefront when it comes to regulatory approvals.
“We would be the fastest regime in the world, as far as I know,” he said. “That would give us a significant advantage, in terms of deployment of new technologies here in Canada … and also puts our regulatory bodies, which already have a very good reputation internationally, in a stronger position, because then countries that are new to nuclear power will be coming to us, and looking for help and assistance with developing their own nuclear regulatory frameworks.”
Kucharski said the strategy puts clear emphasis on the large-scale CANDU reactor. However, Kucharski pointed out it will be up to the provinces and territories what technology they choose to adopt for electricity generation.
“As the strategy states, technology choice is a provincial responsibility because the provinces have the role in electricity generation, so there's no guarantee the ambitious CANDU bill targets that they included in this strategy can be met,” he said. “They put a number of incentives and financing and de-risking and other strategies in there to promote [the CANDU] adoption, but it'll be, ultimately, up to the provinces to decide on what technology they want, and to date they've mostly been interested in [small modular reactors], not in CANDU reactors. So that's one concern.”
Rudiger Tscherning, an associate professor at the Faculty of Law and a member of the Canadian Institute of Resources Law at the University of Calgary, told The Hill Times that, when it comes to the nuclear strategy, “the timing could not be better.” He referred to the COP28 UN climate change summit in Dubai in December 2023, where more than 20 countries pledged to triple global nuclear power capacity by 2050 as a way to achieve net-zero emissions.
“I think [the strategy] has made the really smart connection between Canada's role, both domestically and internationally, with regard to commitments on climate change, so it has really anchored nuclear as a climate solution,” said Tscherning. “It's also, in my opinion, an economic strategy. It's not just an energy strategy; it's an energy and economic strategy.”
In regard to the proposal to streamline the regulatory review process, Tscherning emphasized that is only a target, and not a hard cap on how long a review should take.
“I firmly believe that no nuclear regulator, in particular, one as respected as the Canadian Nuclear Safety Commission, is going to be in any way inclined to push something through for the sake of meeting a target,” he said. “I would like to see more details to come, and I would also like to see how each of the provinces that are looking at new nuclear … how they also view this strategy, and what their response will be with regard to working with the federal government on developing nuclear, because it's a Team Canada approach.”
Jacquie Hoornweg, a fellow at the Canadian Global Affairs Institute, told The Hill Times that the Liberal government “got it” with this strategy, in terms of recognizing “the things that need to be done.”
“It's not just, here's something that's nice for the industry or good for jobs … but they seem to be recognizing in the strategy the value of nuclear goes beyond just jobs or just filling a place on the electricity grid; that there are several strategic advantages for Canada from nuclear,” said Hoornweg, who is also president and managing partner of Querencia Partners, an Ontario-based communications and public policy firm that works primarily in the energy and urban infrastructure sectors
Hoornweg said the strategy is a start, and that next, Canada will need a plan.
“Okay, but what are you going to do in terms of that commitment, what is the federal government going to bring, so that we can have that certainty to de-risk capital investment? What does that actually look like?” she said. “Certainly nuclear energy is not a normal commercial good, right? You have to have state-to-state agreements [and] you need financing, there's diplomacy, there's safety assurances. It requires a willingness to make long-term political commitments, and so, how is the government actually going to act on that?”
Not everyone is supportive of the Liberal government’s desire to increase the number of nuclear energy projects.
M.V. Ramana, a professor and Simons Chair in Disarmament, Global and Human Security at the University of British Columbia, told The Hill Times that the idea that nuclear energy is necessary is a narrative being pushed by the nuclear industry. Ramana argued that building more nuclear reactors can lead to project cost overruns, as well as other concerns such as nuclear waste management.
The Darlington New Nuclear Project—an initiative to build four small modular reactors at the existing Darlington nuclear site in Clarington, Ont.— has a target cost of $6.1-billion to construct the first 300-megawatt nuclear reactor, which Ramana called “eye-popping.”
“These costs are probably going to go up as the construction proceeds, because that's been the history of nuclear power in Canada and elsewhere … [and] at the same time, building large nuclear reactors brings with it a different challenge, which is how do you come up with the enormous upfront capital cost?” he said. “I think it's a waste of money, essentially, and it's emphasizing yesteryear's technology that I think we know is going to be expensive, it's going to be slow to build, and comes with all kinds of problems, [such as] risks of accidents, the difficulty of dealing with radioactive waste—all of those things that we know quite well.”
Ramana argued Canada should focus on phasing out nuclear power in favour of renewable sources, including solar and wind, supplemented with batteries and other storage technologies.
jcnockaert@hilltimes.com
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