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Nuclear options

The Ottawa Citizen: March 6, 2008

In a globalized economy, "buying local" is supposed to be a virtue. Why buy apples and corn shipped from the United States, for example, when we can get them right here in Ontario from our own farmers?

It makes perfect sense for produce. But does it make sense for nuclear technology? That is the million dollar question facing the Ontario government. Actually, it's a five billion dollar question. That's the amount of economic activity in Canada that nuclear executives say would be generated if Ontario goes ahead and builds two new reactors using made-in-Canada technology.

The executives call themselves Team CANDU, and they're lobbying the Ontario government hard. The stakes are huge for Canada's homegrown nuclear industry, especially for Atomic Energy of Canada Ltd., the Crown corporation that designed and built the original CANDU reactors, which have been sold all over the world.

If Ontario decides to go with foreign technology rather than the AECL's newest CANDU model, the ACR-1000, then the AECL will be in serious trouble. It's unlikely that foreign governments would buy the ACR-1000 if Ontarians themselves don't want it, considering that the AECL is headquartered in Ontario.

However, if Ontario does choose the ACR-1000, it will represent a giant vote of confidence in the new reactor, opening export opportunities worth tens of billions of dollars for the Canadian economy over the next 20 plus years. A lot of this economic activity and job creation would happen in Ontario, at a time when the province's once-thriving manufacturing sector is under considerable strain.

It would seem, then, that it's a no-brainer: the Ontario government should buy local, in the same way that we should buy our apples from Ontario orchards.

There's just one problem. What if Ontario apples were overpriced and vulnerable to worms? What if the apples hadn't even been harvested yet? Does the imperative to buy local mean we should be prepared to assume extra risk, and if so, how much risk?

The fact of the matter is that previous nuclear projects in Ontario have been plagued with cost overruns and delays. The words "Bruce Station" and "Pickering" have become synonyms for mismanagement, and the Ontario government knows this.

In fairness to AECL, the corporation has had great success overseas, where CANDU reactors have been built on schedule and on budget. Ontarians like to disparage the home team, but around the world CANDU is a strong brand, with a reputation for a good product and service.

Still, it's worth noting that the ACR-1000 has not yet been built. With so many tax dollars at stake, the government might well be afraid to invest in a new model that is still in the engineering stage, especially if foreign companies are offering something that is ready to go.

Ontario Energy Minister Gerry Phillips is on record saying that the province will select whichever company -- foreign or local -- is offering the best technology at the right price. In other words, AECL and its Team CANDU partners will have to compete for this business.

If the ACR-1000 is as good as it's supposed to be, its Canadian backers should welcome the opportunity to compete. The "buy local" argument is an important one, and Team CANDU is right to make it, but that can't be the one and only reason to go with the ACR-1000.

The "buy local" imperative does mean, however, that if the Ontario Liberals ultimately go with foreign technology, they will have to give a very detailed and public explanation why.

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