DIS-11-01 - Canadian Nuclear Safety Commission

Implementation of Financial Guarantees for
Licensees
DIS-11-01
Comments received through the electronic comment
form during from public consultation from March 3
to November 30, 2011. They are posted in the official
language in which they were submitted.
1.
Section
Name/Nom
1.0
N. Cumming
Organization/Affiliation
Mise en œuvre de garanties financières pour les
titulaires de permis
Ces commentaires ont été reçus par le biais du formulaire
de commentaires en ligne dans le cadre du processus de
consultation du 3 mars au 30 novembre 2011. Ils sont publiés
dans la langue officielle dans laquelle ils ont été soumis.
Comment/Commentaire
I have carefully reviewed the discussion paper and find that a number of questions
need to be answered and clarifications provided before I can provide a proper
comment. Accordingly, I have set out the questions below. Please provide your
responses to the email address I have provided.
•
2.
1.0
Rick Scanlan
Eastern Regional
Integrated Health
Authority
3.
1.0
Jack Ramsey
Metso Automation
Canada, Ltd.
The context of the Discussion Paper implies that the decision to impose financial
guarantees has already been made and is irreversible. If this is correct, please
clarify the purpose of this public consultation process.
• It appears that a financial guarantee in the form of cash, letter of credit or bond is
contemplated. Please explain how "CNSC is not imposing a new financial burden
on licensees.
I believe that provincial health care institutions that are publicly funded should be
exempt from the financial guarantees. In the case of a hospital/licensed dept. closure
the transfer/disposal of sealed and stored radioisotopes would occur under the
conditions of the licence and decommissioning regulations.
This has already occured in our legacy organization with the closure of the Grace
General Hospital in 2000 with out incidence or cost to the CNSC and in compliance
with the decommissioning requirements.
The financial burden for the guarantees is significant and these funds would be best
used to help provide services to our patients.
I think that requiring all licensees to provide a financial guarantee in the manner
proposed is too excessive. I understand the logic behind this proposal, but I just don't
think it applies to everyone the same.
Our company handles sealed sources, receiving them new for distribution to clients,
and receiving them for disposal at the end of their lives. We have been doing this for
years and have never had a problem. If we did have a capsule to rupture, we would
certainly be able to clean it up for far less than the required guarantee amount.
Page 1/26
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Name/Nom
Organization/Affiliation
Comment/Commentaire
In addition, the majority of our sources are Kr-85, which, if ruptured, will not result in
a contaminated facility. Therefore, we would be forced to bond hundreds of thousands
of dollars for an event that would never happen.
4.
1.0
Jean Bellefleur
Les Services exp inc.
Finally, if we were to terminate our license and walk away without disposing of our
sources, they are low energy sealed sources with a very low probably of contaminating
the facility. The majority of our solid sources are Fe-55, which is a very low energy
source, in a very robust capsule, and a half-life of only 2.5 years. This would result in
a much cheaper clean-up than many higher energy sources. If a financial guarantee is
going to be required, it should be based on the risk that is posed by the source, both in
terms of the probability that a souce captual will fail, and the potential dose levels that
would result.
Nous comprenons le rôle de la CCSN au niveau de la règlementation afin de protéger
la santé et la sûreté des Canadiens et de l’environnement.
En tant que titulaire de permis responsable, nous sommes également conscient de notre
rôle afin de nous assurer que nos installations et activités nucléaires soient conçues,
construites et exploitées d’une manière protégeant la santé, la sûreté, la sécurité et
l’environnement tout en respectant les obligations internationales du Canada.
Du même coup, nous sommes conscients que chaque firme doit disposer d’un plan et
de fonds nécessaires pour mettre un terme à nos opérations de manière sûre et que les
sites et les activités soient délaissés dans un état sécuritaire.
5.
1.0
Vincent Vincelli
Nondestructive Testing
Management Association
Vous dites ne pas imposer un nouveau fardeau financier aux titulaires de permis.
Nous ne sommes pas en accord avec cet énoncé. Une garantie financière quel que soit
sa forme est un fardeau supplémentaire à prendre en compte.
Negative Impact on Employment of Financial Guarantee Implementation by the
Canadian Nuclear Safety Commission.
I am writing on behalf of the Non-destructive Testing Management Association of
Canada (NDTMA) to express our serious concerns regarding the impact on jobs and
our industry that we predict would result should a proposed “Financial Guarantee”
system be implemented on us by the Canadian Nuclear Safety Commission.
The NDTMA represents over 30 companies with over 3000 employees in the non­
destructive testing (NDT) industry. Our organizations and their respective employees
carry out examination and testing for detrimental defects in components that if left
uncorrected could result in serious failures. We work across Canada in all areas of
industry including oil and gas (onshore and offshore), manufacturing, power
production, air transportation, energy transmission (pipelines) and infrastructure
Page 2/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
including bridges, buildings, rail etc. These examinations insure the required design
and safety standards are met for new fabrication and construction and they are also
used extensively to monitor for defects that may occur through operation and use. Our
work is crucial to the overall long term integrity of many critical components that
make up the infrastructure of these industries.
The NDT industry is at present experiencing a significant shortage of personnel. We
see only a strong and continued demand for our services over at least the next 5 years,
fuelled primarily by the energy sector and are investing heavily to attract, train,
educate and retain employees. Our industry leans to the younger demographic and we
provide long term, permanent and stable careers with significant and proven
opportunities for continued growth along with a solid income base. However, the
implementation of the above mentioned Guarantee will seriously affect our ability to
invest in and implement our employment strategies.
One of the most common techniques we use is radiographic examination and this is
primarily used to examine welding, castings, forgings and a multitude of components
for internal defects. Industrial radiography is very similar in nature to medical x-rays
except we use very small radioactive capsules as the source of radiation rather than an
x-rays tube. Our devices allow safe transportation and contain small, self contained
and double sealed capsules of radioactive material (approximately 3mm in size) that
allow us to work easily in almost any location.
We are currently already licensed and heavily regulated by the CNSC within the
Nuclear Safety and Control Act and Regulations. The Commission is now proposing
in addition to current license requirements, the mandatory imposition of a “Financial
Guarantee” system for all Industrial Radiography licensees. The stated intent of the
Guarantee is to have funds available on the termination of a licensee’s activities to
facilitate “decommissioning” of a company’s operating location(s) when they cease
activities. This would be a predetermined sum of money directly under the
Commission’s control and inaccessible for any other use except for the Guarantee
mandate. The amount would relate specifically to the number of devices owned by
each company and each fund would be established in full on implementation. While
we understand the Commission’s aim is to insure the integrity of the environment and
the long term safety of the Canadian public the proposed system and method of
implementation is we find unreasonable and will inflict a serious financial burden on
our member companies and disrupt jobs and job creation.
The Commission presents a number of misguided arguments in an attempt to justify
their position:
Page 3/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
A. They state they are not imposing a “new financial burden” on licensees. Effectively
removing large sums of operating capital cash in the amount of hundreds of thousands
of dollars from any organization most definitely imparts a serious financial burden and
translates into multi-millions of dollars of earned income needed to replace the lost
monies.
B. The Commission comments on the use of a Financial Guarantee system in the
Nuclear Power and Uranium Mining industries. There is no relation in any way
between those industries, their activities and potential impact on the environment and
our own and this is a non-relevant argument. This would be akin to arguing for a gas
guzzler tax on both an electric vehicle and a Hummer because they are both cars.
C. They argue the need for the fund to cover decommissioning and clean up costs.
The devices we use leave no contamination as the radioactive material is contained in
double sealed capsules additionally contained within another transportation container
approved by the Commission.
Our radioactive materials are regularly cycled back to the original supplier and
replaced as they decay. Where a cessation of activities occurred those materials would
simply be returned to the original supplier as normal. The transportation devices may
be either transported to a facility such as Chalk River for permanent storage at a
minimal cost or alternately sold to other licensees in Canada or other users
internationally.
D. They have based cost determination they claim on “consultations with contractors
who provide remediation services”. However they do not provide any of the
methodology those contractors were instructed to use or ultimately did use to
determine this cost. This money would ultimately still belong to the originator and
would only be held under the supervision of the Commission. The loose financial
process used with the money of others leaves many unanswered questions.
It is also extremely important to understand that there is no statistical or historical data
or evidence to justify a need for this fund in the “Industrial Radiography” sector.
Implementation of the guarantee in its proposed form would result in a significant
increase in operating costs and we would have no choice but to pass this on to our end
users which would also impact demand and negatively affect growth and employment
opportunities. The Commission’s paper is peppered with bureaucratic self justification
with little or no evidence of any useful need. They have as usual in no way considered
the “Socioeconomic Factors” of their proposal on our industry or our employees and
their families.
The world economic climate is in significant disarray at this time yet we have seen and
continue to see that Canada shows a fragile hope for a return of economic stability and
Page 4/26
Section
6.
1.0
Name/Nom
Andrée Anne Hinse
Organization/Affiliation
Inspec Sol inc.
Comment/Commentaire
growth to the battered Western financial system. Within that fragile hope the NDT
industry provides the opportunity of a solid, growing and fruitful life for many
Canadians. We openly and unashamedly ask for your help and support to ensure that
we can reach the goals of all involved parties but not at the expense of the lives and
hopes of the many hard working Canadians that are part of our NDT family and make
significant contributions to Canada and its economy.
Inspec-Sol est titulaire de permis de substances nucléaires et appareils à rayonnement
depuis près de 35 ans, nous regroupons 23 places d’affaires réparties au Québec, en
Ontario et dans les Maritimes. Nous œuvrons dans le domaine du génie civil (type
d’utilisation 811) et sommes propriétaire de plus de 135 jauges portables servant à
l’évaluation du degré de compacité des matériaux de fondations de route,
d’infrastructures et de chaussées.
Inspec-Sol est en affaires depuis 1972 et supervise depuis des travaux de génie civil.
Notre rôle, dans l’industrie de la construction, est de s’assurer que les travaux sont
réalisés selon les règles de l’art, que les plans, devis et normes de construction soient
respectés et ce afin d’assurer des infrastructures durables et sécuritaire pour le public.
Nous sommes donc en mesure de comprendre vos engagements face aux Canadiens.
7.
1.0
J Richard Robichaud
TISI Canada Inc.
En tant que titulaire de permis responsable ; chose que vous avez pu vérifier lors de
vos inspections de routine et confirmer par votre «Inspection de sécurité physique» du
05 décembre 2007 ou même lors de votre «Inspection de type I» menée du 12 au 14
novembre 2008 ; nous sommes aussi conscient du fait que nous devons disposer d’un
plan et de fonds nécessaires pour mener à termes nos activités et ce de façon
sécuritaire.
Paragraph 4 states that the CNSC is not imposing a new financial burden on the
licensee. This is untrue. By removing cash from a company that would otherwise be
used for day-to-day operations is a financial burden. Consideration for end-of-life
activities, including the disposal of assets and termination of licensed activities does
not require funds to be permanently cashed in the unlikely event of a future
uncontrolled cease in business operations.
Paragraph 5. I disagree with the planned implementation of an expanded financial
guarantee program that includes Industrial Radiography.
Page 5/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
8.
1.0
Jason Gasmo
Clifton Associates Ltd.
9.
1.0
Neal Hewitt
Golder Associates Ltd.
10.
1.0
Anne Scott
Canadian Federation of
Independent Business
11.
1.0
Tom O'Dwyer
C.T. Soil & amp;
Materials Testing Inc.
Background: I represent a 35 year old civil engineering company. We have
approximately 30 gauges located across 4 sites. The use of our gauges employs about
50 people seasonally in quality control of pavement and earthwork construction across
western Canada. Our gauges are used to service the earthwork construction industry
and therefore are used only 5 months of the year, and during that time used maybe
60% of the time in a highly competitive market. Pushing Financial guarantees down
into small to medium enterprises (SME) will have a significant impact on business by
tying up working capital for a guarantee that we are professionally obligated to take
care of ourselves.
Golder has reviewed the proposed policy and has a number of concerns which are set
out in our comments. This policy has the stated goal of protecting the public from
costs associated with the disposal of nuclear devices where licensees fail to satisfy
their obligations. However, to date we are unaware of the CNSC being faced with
such liability. The introduction of financial guarantees imposes a significant burden
on licensees. These financial guarantees substantially reduce the capital that licensees
have at their disposal to fund future growth, growth which benefits the Canadian
public through job creation.
The CNSC states that it is not imposing a new financial burden on licensees. It is our
view that they are. Clearly setting aside what was working capital in a segregated
financial guarantee, where it is unavailable to continue to build an enterprise at the
time of start up or for all currently operating businesses over the phase in period, rather
than providing the capital required for proper and safe decommissioning at the time of
that decommissioning is a new financial burden. To declare otherwise demonstrates a
lack of understanding of the financial operation of an enterprise.
It escapes me as to the driving mechanism to include all sectors of the industry. In my
specific sector, using protable nuclear gauges for msoisture and density testing, these
guages are generally considered an asset except for the very old gauges which are
often traded in to the manufacturer for newer gauges.
I would be very interested to know the CNSC experience in the last 10 years or 15
years for engineering companies defaulting on their moral or financial obligation to
dispose of portable gauges in a proper manner. Has CNSC experienced a cost to
assume the disposal of such gauges? Has the CNSC expended personnel time to crack
down on errant licencees intending to abandon or otherwise improperly dispose of the
portable units?
Would it not be better to impose on, perhaps, an organization that represents licencees
such as the Canadian Council of Independent Laboratories (CCIL) to carry insurance
Page 6/26
Section
Name/Nom
Organization/Affiliation
12.
2.0
N. Cumming
13.
2.0
J Richard Robichaud
TISI Canada Inc.
14.
2.0
Andrée Anne Hinse
Inspec-Sol inc
15.
2.0
Jean Bellefleur
Les Services exp inc.
Comment/Commentaire
on behalf of theit members or commit to direct the portable gauges to a licensed
member. If you have licencees not a memebr of CCIL, then impose the assurance
requirements on them.
• Please advise whether a typical industry standard Comprehensive General Liability
insurance policy will be acceptable as a financial guarantee.
• Please explain the activities contemplated by "activities required to remediate the
licensed location, including decommissioning costs and the costs associated with the
disposal of any associated nuclear substances."
• Please provide details of all instances over the past ten years in which CNSC has
incurred unrecovered costs associated with such activities. In particular, please
advise how many such instances have occurred and the range of costs incurred for
each one.
• Please clarify the costs of disposal contemplated by CNSC. Has the fact that there is
a market for sale of many instruments been considered?
Paragraph 4 states that there are unreasonable risks to the health and safety of persons
and the environment associated with a licensee who is unable to complete termination
of the licensed activity. This is untrue. In the event of a termination in an industrial
radiography business operation, the regulated devices are assets with value, and would
be disposed of accordingly.
• The licensee would be motivated to dispose of the devices in the
event of a business wrap-up.
• With respect to safety; the devices would remain in their secured storage location.
• There are other methods to dispose of the assets of a defunct business operation.
The former directors of the company would have responsibility to dispose of the
assets in a safe and legal manner.
Les jauges portables telles que celles que nous avons en notre possession contiennent
des sources scellées. Ces sources scellées sont conçues pour offrir une résistance
suffisante afin d’éviter la dispersion des substances nucléaires en cas d’accident. La
comparaison de ce type d’équipement à des installations nucléaires majeures nous
apparaît difficile.
Nous possédons un permis radio-isotope depuis plus de 24 ans et nous avons compris
depuis longtemps que la CCSN a le pouvoir de nous exiger le respect de la
règlementation et des lois incluant, dans un futur prochain, les garanties financières
afin d’assurer la restauration sécuritaire et l’évacuation de toutes substances
nucléaires.
Pour les installations nucléaires majeures, mines d’uranium et usines de concentration
d’uranium au Canada, la CCSN veille à ce que le niveau de risque pour la santé et la
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Name/Nom
Organization/Affiliation
Comment/Commentaire
sécurité des personnes et de l’environnement demeure acceptable à l’égard du risque
associé à l’incapacité d’un titulaire de permis de mener à terme l’activité autorisé.
Vous voulez élargir ce système à l’ensemble des titulaires de permis, soit les 2500
titulaires de permis qui ne sont pas assujettis aux garanties financières.
Nous ne comprenons pas le lien que vous établissez entre les risques associés à des
usines d’uranium versus l’utilisation les jauges portatives. Ces jauges sont des sources
scellées conçues pour les allées et venues journaliers sur les chantiers de construction.
Elles existent depuis plusieurs dizaines d’années et l’historique et les statistiques
confirment que ce sont des instruments robustes et sécuritaires.
Nous voulons, par le présent commentaire, vous proposer des procédures fiables et
raisonnables afin de répondre aux conditions de permis et aux exigences des lois et de
la règlementation qui soient en proportion avec les risques réels reliés à ce genre
d’appareil. Risque qui, nous croyons, est de loin inférieur à une usine d'uranium ou
autres installations majeures.
16.
3.0
Fred Moroz
17.
3.0
N. Cumming
BFL Canada Insurance
Services Inc
18.
3.0
Tom O'Dwyer
C.T. Soil & amp;
Materials Testing Inc.
19.
3.0
Jean Bellefleur
Les Services exp inc.
20.
3.0
Andrée Anne Hinse
Inspec-Sol inc
I am a surety bond broker and I would like to help companies provide these financial
guarantees in the best way for these companies and the CNSC. Does the CNSC accept
surety bonds as an acceptable form of financial guarantee?
Please explain the rationale for not paying interest on the financial guarantee. Please
explain how this is consistent with the earlier statement that "the CNSC is not
imposing a new financial burden on licensees."
The policy appears to be based on the assumption that eventually each and every
licensee will default on its obligations with respect to termination costs. Please
explain the rationale for this assumption
Are the proposed disposal costs related to disposing of the source at the Chalk River
Facility? Has there been any consideration in that disposal could mean selling the
Portable Gauge unit (resulting in a recovered cost rather than a cost)?
Nous croyons que l’évacuation sûre de toutes substances nucléaires en fin de vie de la
firme peut être préparée et organisée avec des procédures efficaces en prévoyant des
réserves financières réalistes à la hauteur du risque réel relié aux jauges portatives.
En tant que titulaire de permis responsable, nous croyons pouvoir organiser
l’évacuation sécuritaire des jauges portatives restantes lors de la fin de nos activités
autorisées et ce sans pour autant être assujetti des garanties financières. De plus, nous
pouvons vous assurer qu’il y a un important marché de revente pour le type de jauge
portative que nous utilisons.
Page 8/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
21.
3.0
Jason Gasmo
Clifton Associates Ltd.
22.
3.0
Neal Hewitt
Golder Associates Ltd.
23.
3.0
Anne Scott
Canadian Federation of
Independent Business
We have recently decommissioned one site in Edmonton and in our experience, it
required 1 hour of an inspectors time, and 1 day of our management time. The cost to
remove the gauge was negligible as vendors were very interested to buy back the
equipment for use as rental equipment. This is the level of efficiency and economy
needed to maintain the margins in our highly competitive market. How were the
amounts of the financial guarantee determined? We feel the amount per gauge for our
industry is extremely high, and would recommend a much lower amount such as $500
to $1000.
Section 3(c) states: “The intention of implementing this policy is to ensure that the
CNSC – and by extension the public – is protected from significant costs following the
termination of a licensed activity by any licensee.” The implication from this
statement is that the CNSC has previously been faced with such “significant costs”.
However, we are unaware of such a situation. Can the CNSC provide details of such
“significant costs” that have previously arisen?
Providing the CNSC with financial guarantees imposes a serious financial burden on
Licensees. Whether these guarantees are in the form of cash or letters of credit, they
reduce the capital that Licensees have at their disposal, thereby reducing their ability to
further invest in their businesses. In light of today’s difficult economic climate, such a
financial burden is not in the best interest of the Canadian public. How does the
CNSC reconcile this potential harm to the Canadian public with its stated intention to
protect the public?
The CNSC has not contemplated any opportunity for licensees including our members
to establish a pooled fund similar to insurance by risk sector as in government run
worker’s compensation plans or access private insurance options. In addition, the
CNSC is recommending that it be the administrator of many business individual
financial guarantees while accepting no financial management responsibilities for the
monies. In fact the CNSC could hold the licensees monies for more than 50 years
without even a requirement to pay simple interest if the monies are to be refunded to
the former licensee. This has the appearance of an income generation vehicle for
CNSC and a significant administrative requirement lying out of the key operating
talents of the CNSC.
The CNSC has made no attempt to determine how this guarantee would be
administered through the sale of a business. While this would not be an issue for a
large business or a publicly held organization, this issue may have significant impact
on small and start up businesses.
Page 9/26
Section
Name/Nom
24.
4.0
N. Cumming
25.
4.0
Gary Eaton
Organization/Affiliation
Comment/Commentaire
•
Golder Associates Ltd
Please explain the basis for the conclusion that "private companies using sealed
sources or radiation devices represent the highest overall risk."
•
Please explain the perceived risk associated with "private companies using sealed
sources or radiation devices."
•
The formula-based approach to assessing financial guarantees appears to be based
on the assumption that it would be too much work to for CNSC to review and
assess each licensee. Please explain the level of effort anticipated by CNSC in
relation to such individual assessments.
•
Please explain how the cost of remediation ($4000 per room or laboratory),
disposal ($3000 per instrument) and the $10,000 administrative fee were
calculated.
•
When a licensee is in possession of only sealed sources, please explain how CNSC
could incur remediation costs for the room or laboratory in which they are stored.
•
Please explain the rationale for the $75,000 threshold below which a specific form
of financial guarantee would not be required.
•
Please explain how a non-profit organization is different than a private
organization with respect to their ability to pay costs
Whilst we propose to challenge this financial guarantee can you please clarify the
'Item count' requirement. We have 111 portable gauges. Does this quantity of gauges
attract twice the amount of cost because each gauge contains two sources or is the
'Item count' for a portable gauge classed as one?
Page 10/26
26.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Dave Duncan
Baker Hughes Canada
Company
I understand that the CNSC has done extensive research and consultation to come up
with the suggested formula for determining the level of Financial Guarantee required
for most licensees but I am having a very hard time rationalizing why my calculation
of what our company’s Financial Guarantee requirement would be relative to what our
parent company’s guarantee to the NRC in the US is currently at.
Currently our parent company has about 5 times the number of sealed well logging
sources at field operations locations that we have in Canada and yet my calculation
indicates our commitment would be about twice that of our US operations
commitment to NRC.
At the information session in Calgary on October 6th, I submitted a question as to
whether or not the rate should be somewhat dependent on the activity of each sealed
source but was informed that the cleanup and disposal cost was relatively the same for
a Category 2 source and a Category 5 source.
27.
4.0
Roger Press
28.
4.0
Brian Barter
U. S. Steel Canada
Would you have any suggestions as to what would be causing such a disparity in the
level of the guarantee?
We are in the steel industry. We own several nuclear gauges.
These are large devices which contain a sealed source.
Does this type of equipment get classified as a radiation device and a sealed source. Is
the item count 2 per unit for this type of device?
When these devices are not in use for extended periods of time only the sealed source
is removed and placed in a storage room.
Does the building where the gauge device resides count as a room?
One suggestion which might facilitate orderly decommissioning is to require all
licencees using rented or leased premises to always negotiate a 3 month period of
termination notice from their landlord in their lease, so as to provide adequate
timelines for termination of licenced activities. Upon the landlord or the licensee
giving notice to terminate, the licensee should be required to notify the CNSC in
writing. This would allow adequate time for the wind-down of licenced activities.
Page 11/26
29.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Sandu Sonoc
University of Toronto
•
Replace $3000 for sealed sources and devices with a formula based on activity:
$100 for sealed sources under EQ
$500 for sealed sources between 1EQ to 100 EQ $5000 for sealed sources between
100EQ to 10,000EQ $50,000 for sealed sources more than 10,000 EQ
•
30.
4.0
Cory Mullen
Tulloch Engineering
To avoid the need to revisit the financial guarantee too often, flexibility should be
given in the spirit of G 206 (Appendix I) allowing for different grades A, B or C
depending on the level of accuracy
As stated by the Association of Consulting Engineering Companies, Canada (ACEC);
"The size of the proposed financial guarantees is completely out of proportion to the
risk. CSNC has never had a single case of incurring costs associated with the disposal
of a portable gauge, due to insolvency. In fact, there is rarely a need to dispose of a
working gauge, as the market for the resale of these units make them assets. Further,
the proposed financial guarantee presumes that all firms with such equipment would
cease operations simultaneously."
We fundamentally disagree with the principle of this proposal, due primarily to the
reasons noted in the ACEC quote above. As a medium-sized Consulting Engineering
firm, we would at least encourage the threshold value to remain at $75,000 or above,
to avoid significant extra costs to taxpayers directly from the administration of the
guarantees and indirectly from the financial burden on small and medium-sized
companies, which will be reflected in higher bid prices for municipal, provincial and
federal government work, ultimately adding an increased and unnecessary financial
burden to taxpayers.
Page 12/26
31.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Leona Page
University of Manitoba
Fiscal responsibility is important and estimating the cost to decommission provides
insight regarding the accountability of public sector institutions. Although the
discussion paper is a good start, I have some concerns related to interpretation.
Comments for consideration:
• Specify what kinds of 'sealed sources' should be included in the formula-is the
intention to include only all licensable (i.e. above EQ or above 10 EQ inside a
Radiation Device), or what about calibration sources or limit to trackable sources.
$3000 per source seems high if the licensee has several similar sources that are
small volume (size of a loonie).
• Define 'laboratory' or rooms - would a suite of rooms at the same address or bays
of an open area lab cost $4000 each to decom? We report each room number or bay
number separately on our internal permits to clearly delineate where the radioactive
materials may be used, however, they would not cost $4000 to decommission each
room/bay at the same street address.
• Consider reducing the $4000 per lab or room if the longest lived half life is less
than a day (or a week).
• What would be the process for changes (increases or decreases) in the financial
guarantee? Currently we are estimated at $498 000, so one more sealed source or
one more room and would require an actual financial guarantee instead of an
acknowledgement. (If I am interpreting the document correctly.)
• 5. During the information session, the presenters indicated a form could be used for
the financial acknowledgment - consider attaching an example as an appendix
Page 13/26
32.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Patrick Harder
University of Calgary
Costs associated with remediation The actual remediation cost for short-lived materials
is definitely not on the order of $4000 per room.
The option of securing the area to allow for decay has to be available as a method of
remediation.
Suggestion that those areas and sources that use radioactive materials with a half life
of less than 15 or even 30 days be excluded from requiring a financial guarantee.
e. Recognition of public sector institutions and agencies:
ONE FORM does not fit ALL public sector institutions across Canada, just like on
application form does not fit every Licencee.
The actual form that is proposed MUST be sent out for comment to the potentially
affected institutions.
Most of the institutions that fall into this medium risk group have very complex
reporting structures and to get the acknowledgement of the applicant authority is not
the only individual or group (budget committee) that needs to acknowledge that
financial liability.
Most if not all Universities and hospital applicant authority personnel report indirectly
to a Board that directs the mandate for the institution.
f. Flexibility:
There are known costs for disposal of specific items (small sealed check sources - do
not cost $3000 per unit to dispose some institutions have hundreds of this type of
source [the radiological risk is extremely low, the financial is low], the disposal cost
for a typical density gauges are known). Adjustments to the formula for the financial
guarantee must be able to be made or considered when the actual disposal costs are
known.
Adjustments also need to be made (longer term) for changes in disposal costs in the
future.
This section on the estimated disposal costs needs to be reviewed at least every ten
years.
Page 14/26
33.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Mark Sevcik
Healthcare/Medical
Diagnostic Imaging
Facility
Please see below in bullet point form my rationale for a significant reduction or
eradication of the fee of $4000/laboratory in a healthcare medical diagnostic imaging
facility. I have also included the clean-up/decontamination protocol that we follow in
the event of an incident so that you may see what a simple, inexpensive process it is
when dealing with the isotopes that we use in routine medical diagnostic imaging
examinations. For my purposes I am defining laboratory as any area where open
sources are handled which does include the exam rooms themselves and dose
preparation areas, but does NOT include the hot lab. The $4000 fee for a hot lab
decommissioning is not being challenged, but $4000 for a $20 clean-up is extreme.
I present the following facts for consideration during your Financial Guarantee
deliberations.
Private Clinic Medical Diagnostic Imaging Isotope Facts:
• Technetium 99m: main isotope used in all 4 clinics; 100% of the tests
o Half Life: 6 hours
o Maximum activity in a syringe: 800 MBq
• Thallium 201: rarely ordered isotope. Used when Moly generator supply is
compromised
o Half Life: 73 hours
o Maximum activity in a syringe: 111 MBq
• Bag all hot garbage and any contaminated clothing and store in a lead lined container
for minimum of 72 hours.
Material Cost for exam room decontamination:
• Supplies used for decontamination would include absorbent blue pads, gloves,
garbage bags and Radcon decontamination spray. Cost for all these items would be
inconsequential (less than $20)
• Bag all hot garbage and any contaminated clothing and store in a lead lined container
for minimum of 72 hours.
Material Cost for exam room decontamination:
• Supplies used for decontamination would include absorbent blue pads, gloves,
garbage bags and Radcon decontamination spray.
Cost for all these items would be inconsequential (less than $20)
Page 15/26
34.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Trevor Beniston
Stuart Hunt &
Associates Ltd.
Re: Risk-Informed Principle
Can more detail be provided regarding the parameters used to establish the risk levels
used to establish the need for guarantees? How was the risk assessment matrix
actually derived? Was there a level of risk (ie: probability of occurrence) that was used
to determine if a guarantee As it is presented in the discussion paper, the ranking of
high -medium-low risk seems very arbitrary.
Re: Costs
How was the $3000/device calculated? As a company that provides remediation and
disposal services, the value seems high. It is understood that the value includes the
labour, expenses, final disposal costs and interim storage. With respect to NSCA 34,
what was the typical time frame used to estimate the interim storage?
It is assumed that the value per device will increase over the years to account for
inflation. How will this be addressed and what sort of time frame will licensees have
to adjust to the new pricing? It is understood that if the guarantee is a licence
condition then meeting the requirements of the guarantee is mandatory, but practically
speaking there must be some time period to allow for change.
Re: Flexibility
Who will be assessing a decommissioning plan submitted by a licencee?
35.
4.0
Jack Ramsey
Metso Automation
Canada, Ltd
Re: Monitoring
Will monitoring and assessment of the guarantee be considered a recoverable activity
with respect to the Cost Recovery Regulations? Will there be an impact on a new
licence application fee and the annual fee?
I agree that industrial users pose the highest threat of going bankrupt and not cleaning
up their facilities, however I disagree that they necessarily pose the highest risk of
leaving an expensive cleanup behind. Industrial sources are robust by design, and do
not fail very often, and the fact that a company walks away leaving a number of
sources behind does not translate into an expensive cleanup.
If I calculate the cost of a financial guarantee for my operation right now, based on the
formula provided by the CNSC, I would have enough money to dispose of almost
5,000 sources. Accumulating 50 sources per year, this would represent 100 years of
operations. I believe that for the sources we use in our business, $3,000 per source is
extravagant, especially when we might have 50 to 60 sources in inventory staging for a
disposal.
Page 16/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
36.
4.0
R. Chris Williams
Trent University
37.
4.0
Neal Hewitt
Golder Associates Ltd.
The question of the definition of sealed sources for determining the cost of the
financial guarantees needs to be defined better. What size and type of sealed sources
are to be included. Electron capture detectors (with Ni 63), small sealed check
sources, This needs to be defined as universities may have large numbers of small
sealed sources and certainly $ 3000 disposal / source is vastly overpriced.
In addition with reference to permitted labs, I sincerely doubt that a basic lab using
short lived open sources would require clean up to the extent discussed in the
document. Perhaps the labs should be classified based on the isotopes in use in that
space as well.
The CNSC proposes that the unit disposal costs for radiation devices
is $3,000 per device. However, in our experience the price is much lower. Has the
CNSC conducted a thorough investigation into these costs and will evidence
substantiating these costs be provided to licensees? And does this price take into
account the value of such radiation devices as these devices are considered a tangible
asset?
The CNSC has proposed a fixed administrative fee of $10,000. This is in addition to
the current administration fee that licensees pay and raises the question as to what
additional administration activities are required in order to justify such a large fee.
The threshold value is set at $75,000, below which licensees only have to
acknowledge their obligations and assure the CNSC that they have sufficient financial
resources available. This appears to be contrary to the CNSC’s risk approach as it is
these smaller organizations that would appear to have the greatest risk of not being in a
position to provide for such remediation costs. In addition, the $75,000 threshold does
not differentiate between high risk and low risk nuclear materials and devices. It also
raises the question as to whether these licensees that fall below the threshold will be
required to provide evidence of such financial resources.
Section 4(e) provides that “the CNSC recognizes that the financial risk is different
with government-based, non-profit or other public institutions, because they are likely
to be able to pay a significant portion, if not all, of the costs.” Would this same
reasoning not apply to large, financially strong private companies? And further, aren’t
these “government-based, non-profit or other public institutions” using public money
to pay for these costs, thereby NOT protecting the Canadian public from incurring
these costs?
Page 17/26
38.
39.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Jason Gasmo
Clifton Associates Ltd.
The civil engineering industry is a non commodity, low margin, highly competitive
market and requiring SME to permanently withdraw more than one hundred thousand
dollars of working capital is a business killer and an employment killer, and those
people being affected are recent young graduates of engineering colleges and
technology programs. Existing inspection fees are more than adequate to ensure
public safety. The extraction of additional fees is unwarranted. What costs have been
assumed by the public to date, specifically from failed engineering companies? We
have no knowledge of any orphaned or abandoned gauges resulting from failed
businesses.
4.0
Chris Workman
Thurber Engineering Ltd.
Your report classifies our use of portable gauges as the High-risk group, and it unfairly
lumps Civil Engineering companies together with industrial radiography uses, that
continue year round in a high margin industry. There is a severe lack of transparency
in the in developing the risk profiles. More information is required to explain how the
risk matrix was developed. We request that you publish the risk assessment studies
including the peer reviews of these studies. You are taking millions of dollars in
public registry and these results just do not ring true in the civil engineering industry.
What are the details of the risk assessment studies? What analyses were behind the
risk profiles?
Our company, Thurber Engineering Ltd., is a private consulting company specializing
in geotechnical engineering. As part of our practice we have over 60 portable nuclear
density gauges, in 5 main offices, used for field soil density testing. Our volume of
equipment will clearly put us over the proposed threshold value, and hence a financial
guarantee would be required.
While we would clearly prefer not to have to provide the financial guarantee, as this
will be an additional hard cost on our business, our primary objection is the provision
of the threshold value, where smaller companies will not be subject to the same costs.
As we compete against these companies, this cost difference will create an uneven
playing field. Further we would also suggest that the smaller companies present a
large risk of default than the larger, more established companies.
Essentially we believe that the threshold value should not exist and the same
provisions should apply to all licenses. Requiring smaller companies to have no
additional costs is not equitable and is inconsistent with the stated "risk based
approach" of the proposed policy.
Page 18/26
40.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Anne Scott
Canadian Federation of
Independent Business
To the best of our understanding, the CNSC has made no data available on the risk or
the history of bankruptcies for different use-types It appears that the CNSC has not
established a prima facie case for establishing financial guarantees as a solution to a
problem it has not demonstrated exists.
The CNSC has established three risk groups, but has chosen to treat all of these groups
with the same high administration cost financial guarantee citing administrative
difficulties in assessment. Then how were these three risk groups identified and why
would the same costs be assigned to each?
While we appreciate that the threshold value was set so that small operations would be
exempted from this onerous financial requirement, it will establish an artificial
business growth inhibitor where once the business grows past this limit there is a new
immediate financial burden of $75,000 which will likely stifle growth at that level.
The CNSC is holding to its own jurisdiction the power to increase the amount of the
guarantee at any time, with no accountability to the license holders that it is managing
in a way to reduce or make more effective its administrative costs and/or processes,
merely the ability to download any choice in increasing those costs to the licensees.
We recommend that these costs be reviewed and approved by a joint CNSC and
business member advisory group with the ability to report to the licensees on a regular
basis and be audited by an outside and independent audit body so that license holders
are assured that they are receiving value for dollars.
Page 19/26
41.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Andrée Anne Hinse
Inspec Sol inc.
Principe de connaissance du risque
Les jauges portables telles que celles que nous possédons offrent des risques
opérationnels presque nuls (sources scellées), des risques commerciaux plutôt faibles
considérant que la plupart des jauges pourront être transférées à d’autres titulaires de
permis œuvrant en génie civil et des risques financiers plutôt faibles car il n’y aura pas
de frais associés au nettoyage du site et la disposition des jauges non transférées coûte
entre $500 et $700.
Il est certain que l’activité des sources scellées contenues dans nos jauges portables
peut différer de celles contenues dans d’autres types de jauges portables et que les
coûts de disposition associés peuvent variés. Il serait donc envisageable que vous
soyez plus spécifiques dans l’évaluation des coûts reliés à la disposition des jauges et
ce afin de refléter la réalité.
Méthode fondée sur une formule
Des frais administratifs fixes de 10,000$ qui visent à couvrir les coûts qu’engage la
CCSN pour déclasser le site et clore le dossier nous semblent exagérés. Nous
défrayons annuellement un important montant pour obtenir un permis de substances
nucléaires et appareils à rayonnement, qui selon nous devrait être suffisant pour
couvrir les frais administratifs encourus en fin d’activité.
Page 20/26
42.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
J Richard Robichaud
TISI Canada Inc.
b. The risk informed principal
Operational risk has no correlation to the risk of a business ceasing operations in an
unplanned manner. Stating operational issues, mobility of device, etc. as a reason to
apply financial guarantees is flawed.
Commercial risk is used out of context in this discussion paper. The history of
bankruptcy among industrial radiography companies leaving orphaned nuclear
substances for the CNSC to dispose of is zero.
Financial risk is also a flawed argument. As stated above, there are no instances of
industrial radiography licensees abandoning nuclear substances. Based on this
industry performance, there is little to no financial risk to the CNSC.
I submit that the risk-informed principal is incorrectly applied in this context and
should be dismissed from the rational in establishing financial guarantees for industrial
radiography licensees.
c. Formula-based system
The formula system assumes that every licensee in Canada will cease operation at the
same time and that external disposal of the nuclear substances will be required. This is
an unreasonable hypothesis and the result for this discussion paper is that industry is
required to guarantee with financial instruments far more money than should be
considered reasonable.
The costs associated with remediation are grossly overstated in this discussion paper.
A sealed source and device that is used in industrial radiography activities can be
disposed of for $1000 or less.
I submit that the requirement to guarantee $3000 per device is inflated and unfair, and
should be removed from this discussion.
Similarly, the fixed administrative fee for industrial radiography licensees is grossly
inflated and unfair. If the devices have been disposed of, the CNSC can quickly verify
this by review of the documentation similar to that used in the current sealed source
tracking system. The effort required to conduct a paper audit verification of a device
disposal would cost a fraction of the $10,000 stated in the discussion paper.
Page 21/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
I further submit that this verification would fall under the normal day-to-day
regulatory activities of the CNSC, and would cost $0 additional regulatory effort for
compliance verification. This fixed administration fee should be removed from this
discussion.
d. Threshold value
Potential risk of an unplanned cease in licensed activities is greater in small companies
than in larger companies. In addition to having greater financial resources, large
companies are more diversified in location, services offered, etc., and are less affected
by regional economic volatility than smaller single service industrial radiography
companies.
Applying the threshold to smaller companies is counter intuitive when risk is stated as
the reason for implementing financial guarantees in the first place.
By having a two tiered system where smaller companies need only acknowledge their
financial obligations (as stated in paragraph 3), and larger companies must have in
place a financial instrument, the CNSC is unfairly giving cost advantage to a group of
licensees over another.
I submit that by applying thresholds in this manner, the CNSC is unfairly penalizing
large companies and are in fact applying a competitive cost advantage to smaller
companies. This is unfair practice and should not be applied.
Suggestions for the Implementation of Financial Guarantees for Licensees:
1. Apply the threshold rational to all licensees. All licensees would only have to
acknowledge their financial obligations and assure the CNSC by letter that sufficient
funds would be available, if needed, to fund site remediation activities.
2. Gave the Officers and Directors of each company acknowledge personal
responsibility for the disposal of nuclear substances in the event of a termination in
business and licensee activities. This would be similar to the Officers and Directors
personal obligation to the Canada Revenue Agency in the event of a cease in business
activities.
Page 22/26
43.
44.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
4.0
Carolin CattoiDemkiw
University of Lethbridge
The University of Lethbridge acknowledges the proposed Financial Guarantees for
Licensees by the CNSC and has reviewed the material that has been submitted for the
licensee’s review and commentary. It is understood that the licensee is financially
responsible for any costs in respect of obtaining, handling and disposal of radioactive
materials. It is further confirmed that the CNSC “recognizes that the financial risk for
Universities as a public institution is different because they are likely to be able to pay
a significant portion if not all, of the costs. “ The CNSC in their document states that
Universities are in the medium risk category and represent a lower financial risk given
their government backing and the nature of the use of radioactive materials within
their institutions.
4.0
Ron Andreychuk
Nanaimo Forest Products
Ltd.
Clarification is required in two areas:
1. The calculation formula as it relates to the size of the sealed sources.
2. The requirement for Universities to provide a “formal guarantee”. The CNSC
responded during the webinar of November 24th, 2011 that it does not require
Universities to provide a “formal guarantee” by way of a trust fund, bond, letter of
credit or any combination thereof.
Does the 10K admin fee calculate as part of the threshold value?
We are part of the Pulp and Paper Industry in BC, I can appreciate there may be users
that don't have retained value ( Assets ) to support proper disposal. However industry
such as ours do have those assets. I believe the acknowledge of financial obligations
is a better approach. In all cases with our industry receivers are appointed by the
courts, these types of issues are on the top of the list to be dealt with.
Page 23/26
45.
Section
Name/Nom
4.0
Bruce Walgren
Organization/Affiliation
Comment/Commentaire
I am a sole proprietor with a portable nuclear gauge. Would I be considered High risk
or low risk?
Your formula does not take into account how much an instrument is used.
Asking for a $17,000 dollar guarantee is a lot of money for a Sole proprietor to put
out.
Does this have to be paid up front?
I would bet that most sole proprietors do not even come close to making that in a year
from the use of the instrument.
Is the Cost a one time fee?
46.
5.0
N. Cumming
47.
5.0
Greg Goth
EBA Engineering
Consultants Ltd
The sealed sources, would I have to pay $3,000 for the Cs-137 and the Am/Be 241
separately or would they be counted as one source?
This would pretty much wipe out small business use of the instruments.
• Given that the decision to implement a financial guarantee policy appears to have
already been made, please explain the purpose of "a communication and
consultation program with licensees and other stakeholders to identify concerns
related to the implementation of the financial guarantees policy".
• Given that the decision to implement a financial guarantee policy appears to have
already been made, please explain what CNSC has in mind "to ensure that the
implementation of the policy and framework is fair, open and transparent and meets
the needs of all stakeholders".
• Please explain how a policy decision such as this can be made if "additional
documentation to support the implementation of financial guarantees for all
licensees" is not yet available. Please provide this documentation or advise when it
will be available.
• Please advise the minimum sealed source size currently contemplated by CNSC for
inclusion in the financial guarantees formula.
As a Portable gauge user, I would suggest the following as a reasonable alternative. As
a member of ACEC, like many of the portable gauge users, ACEC could administer a
"group insurance fund" supplied by its members, to handle the disposal of any
company that goes bankrupt.
Page 24/26
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
48.
5.0
Jean Bellefleur
Les Services exp inc.
49.
5.0
Andrée Anne Hinse
Inspec-Sol inc
Nous croyons que des dispositions de fin de vie sont nécessaires et nous sommes
d'accord avec le principe de s'assurer que les éléments radioactifs, entre autre les
jauges portatives, soient disposées de façon adéquate advenant le cas d'un arrêt des
activités de la firme détenteur du permis, toutefois, nous croyons qu'il est important de
revoir le niveau de risque s'applicant aux activités reliés aux jauges portatives.
Il doit y avoir des critères plus spécifiques afin de distinguer les différents titulaires de
permis. La taille des sources (ou leur activité) et leur nature pourraient être des
facteurs déterminant l’obligation ou l’exemption aux garanties financières sans
compter les besoins du marché pour des jauges portatives scellées.
En conclusion
Nous sommes d’avis que les activités d’Inspec-Sol ne peuvent être comparées à celle
d’une installation nucléaire majeure. Avant de mettre en œuvre des garanties
financières, certains critères d’évaluation autres que le principe de connaissance du
risque devront être étudiés (par exemple : type de source, activité de la source, coût
réel relié à la disposition etc.).
Selon nous, le principe de connaissance du risque n’est pas réaliste compte tenu de la
nature de nos activités.
1.
Aucun frais pour la restauration des sites d’entreposage
2.
Frais d’au maximum $700 par appareil restant
3.
Aucun frais administratifs fixes
Nous croyons qu’il serait raisonnable de demander aux titulaires de permis un plan
détaillé d’actions de fin de ses activités autorisées, sans pour autant avoir l’obligation
de mettre des fonds en garantie. Nous vous demandons donc de revoir le risque et de
faire de nos activités de titulaire de permis à risque faible et de nous soustraire à
l’obligation des garanties financières.
Page 25/26
50.
Section
Name/Nom
Organization/Affiliation
Comment/Commentaire
5.0
Anne Scott
Canadian Federation of
Independent Business
In summary we do not believe that the CNSC has demonstrated a need to establish
financial guarantees for individual licensees as identified in this document. Our
members are small business owners who live in the communities in which they
operate. Their customers, employees and neighbours are people they work with and
who live next door. They care deeply about a safe, secure and environmentally sound
community and take their responsibility to that community very seriously. We
believe that other financial means of a licensee funded insurance program or private
insurance program or other lower cost methods with lower administrative costs have
not been explored and may meet the objectives in a far better manner than the one
outlined here. In the absence of any alternate solution, we feel that with the
recommended solution there is little or no financial oversight of a significant amount
of money over an unspecified timeframe with no assessment of value for money
provided by the CNSC. We recommend that this program be thought through more
carefully prior to any implementation. We do not believe that this policy
recommendation is required.
Page 26/26