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President’s Message

It is with great pleasure that I present the Canadian Nuclear Safety Commission (CNSC) 2008–09 Departmental Performance Report (DPR). I am proud of the evolution of our organization and the accomplishments of the staff in my first full year as President of the CNSC.

While recent global economic trends have slowed growth in the worldwide demand for energy over the short term, projections indicate that energy needs will increase substantially here in Canada and globally over the long term. In the 2008 Speech from the Throne, the Government of Canada publicly recognized the importance of nuclear energy as a reliable and proven technology for helping to meet people’s increasing need for power. The government stated, “[i]n Canada and around the world, energy authorities are investing in nuclear power to meet both energy security and climate change goals.”

While continuing to meet our day-to-day regulatory responsibilities, the CNSC has indeed been readying for the possibility of new technologies and for the new demands that will inevitably be placed on us as a regulatory agency. To prepare, we have modernized our regulatory framework and, to help promote efficiency, we have increased our engagement with a wide range of government partners. Our management team has also established clear direction and priorities that are based on our 4 C’s: Commitment to on-going improvement; Clarity of requirements; Capacity for action; and Communications. This allowed us to better explain to Canadians our roles and responsibilities with respect to nuclear power, medical and industrial uses of nuclear substances, and nuclear security.

Over a demanding fiscal year, we realized many significant accomplishments that are outlined in this DPR. We held 20 public hearings and meetings, listening to Canadians from across the country. The Commission made 40 licensing decisions concerning Canada’s nuclear facilities, including 13 related to environmental assessments. Also, as part of our day-to-day work in carrying out regulatory oversight of the more than 3,000 nuclear licences in Canada, we conducted nearly 2,000 inspections and assessed many licence applications, renewals and amendments.

In response to the extended shutdown of the National Research Universal (NRU) reactor in December 2007, which resulted in concerns about the supply of radioactive isotopes used for medical diagnostics and treatment, the CNSC and Atomic Energy of Canada Limited (AECL) jointly commissioned consultancy Talisman International, LLC to conduct an external review of the events leading up to the shutdown to learn lessons that would prevent a similar occurrence in the future. The lessons learned from this event were presented in the Talisman Report. As a result, the CNSC created the Harmonized Plan to bring these and other corporate-wide improvement initiatives under one umbrella. I am pleased to confirm that the CNSC completed all Talisman Report recommendations related to the NRU during this fiscal year.

Also this year, we reviewed several new nuclear power plant designs to verify their acceptability against Canadian safety criteria. We completed Phase I of the review for AECL’s ACR-1000 and initiated reviews of Westinghouse’s AP1000 and AREVA’s US-EPR. These reviews will provide vendors with the CNSC’s regulatory expectations for new nuclear power plants.

Since our regulatory scope stretches from nuclear power reactors, uranium mines and mills, fuel fabrication facilities and waste management to nuclear substances, radiation devices and many other facilities and activities in between, the recruitment and retention of skilled staff remained an important priority this year. We were able to attract highly skilled and qualified people to fill positions in key technical areas. Overall, we met our recruitment objectives.

On the international front, we continued to participate vigorously in the activities of the International Atomic Energy Agency and the Nuclear Energy Agency. These fora provide opportunities to share best practices in nuclear safety and strengthen Canada’s commitments to non-proliferation and the peaceful use of nuclear materials.

In 2008–09, three external members were appointed to the CNSC Audit Committee whose role is to ensure that, as President, I have independent, objective advice, guidance and assurance on the adequacy of the CNSC’s control and accountability processes. The Committee reinforces the independence of internal audits. Its oversight responsibilities extend to key areas and processes that include values and ethics, risk management, management control, and accountability reporting. This will be a valuable resource for our organization and I look forward to the Committee’s oversight and advice.

Finally and most importantly, in my role as the CNSC’s President, I can assure Canadians that the use of nuclear materials in nuclear facilities in Canada is safe and secure.

With respect,

[ Original version signed by Michael Binder ]

Michael Binder
President The Canadian Nuclear Safety Commission

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Section I: Departmental Overview

1.1 Summary Information

Raison d’être and Responsibilities

In 1946, Parliament passed the Atomic Energy Control Act (AECA), creating the Atomic Energy Control Board and giving it the power to make regulations for the development and use of atomic energy.

The Nuclear Safety and Control Act (NSCA) came into effect in May 2000 and established the Canadian Nuclear Safety Commission (CNSC) as the Atomic Energy Control Board’s successor.

The CNSC is an independent regulatory agency with powers of a quasi-judicial nature that has jurisdiction over all nuclear-related activities and substances in Canada.

Our vision

To be the best nuclear regulator in the world.

Our mission

To regulate the use of nuclear energy and materials so that the health, safety and security of Canadians and the environment are protected, and to respect Canada’s international commitments on the peaceful use of nuclear energy.

Our mandate

Under the NSCA, the CNSC’s mandate involves four major areas:

• Regulate the development, production and use of nuclear energy in Canada to protect health, safety, security and the environment;
• Regulate the production, possession, use and transport of nuclear substances, and the production, possession and use of prescribed equipment and prescribed information;
• Implement measures respecting international control of the development, production, transport and use of nuclear energy and substances, including measures respecting the non-proliferation of nuclear weapons and nuclear explosive devices; and
• Disseminate objective scientific, technical and regulatory information about the activities of CNSC and about the effects of those activities on the environment and the health and safety of persons, and of the development, production, possession, transport and use of nuclear substances.

The CNSC is also responsible for complying with the Government of Canada’s December 2007 Directive to the Canadian Nuclear Safety Commission Regarding the Health of Canadians. This Directive requires that the CNSC take into account the health of Canadians (who, for medical purposes, depend on nuclear substances produced by nuclear reactors) when regulating the production, possession and use of nuclear substances to prevent unreasonable risk to the health of persons.

The CNSC also administers the Nuclear Liability Act and, as a Responsible Authority under the Canadian Environmental Assessment Act, carries out Environmental Assessments (EAs) for nuclear projects in accordance with this legislation.

Furthermore, the CNSC is Canada’s authority with respect to nuclear safeguards as set out in the Agreement Between the Government of Canada and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty on the Non-Proliferation of Nuclear Weapons.

The Commission has up to seven permanent members, appointed by the Governor in Council and is supported by more than 800 employees. The President of the CNSC is a permanent full-time member, and other members may be appointed to serve full or part-time. Temporary members can also be appointed by the Governor in Council as required. Commission members are chosen based on their credentials and are independent of all political, governmental, special interest group or industry influences.

The Commission makes independent, fair and transparent decisions on the licensing of nuclear-related activities, makes legally binding regulations, and sets regulatory policy direction on matters relating to health, safety, nuclear security and the environment. With respect to licensing matters related to major nuclear facilities, the Commission considers applicant proposals, recommendations of CNSC personnel, and stakeholder views before making its decisions. To promote openness and transparency, the Commission conducts business to the greatest extent possible in public hearings and meetings and, where appropriate, in communities affected by the decision at hand. Commission hearings are conducted in a public forum approximately 10 times per year and decisions are released within 30 business days after the closing of the hearings.

The following organizational chart provides additional details about the CNSC’s structure.

Strategic Outcome(s) and Program Activity Architecture (PAA)

In 2008-09, the CNSC undertook an exercise to change its PAA to better reflect the functions of the organization in terms of Program Activities. However, to remain consistent with information presented in the CNSC’s 2008-09 Report on Plans and Priorities (RPP), the 2008-09 performance information is presented according to that corresponding PAA.

The following chart illustrates the CNSC’s 2008-09 framework of program activities and program sub-activities, which roll up and contribute to the CNSC’s single strategic outcome:

See Section II for further details on the CNSC’s individual Sub-activities.

1.2 Summary of Performance

2008-09 Financial Resources ($thousands)

Planned Spending	Total Authorities	Actual Spending
103,427	120,516	118,023

 

2008-09 Human Resources (FTEs)

Planned	Actual	Difference
817	758	59

Performance Summary

The CNSC’s Program Activity Architecture is aligned with the management resources and results structure prescribed by the Treasury Board for government-wide planning and resource management. The CNSC works to achieve its strategic outcome through a single operational program activity: nuclear regulation. This program activity is sub-divided into five key programs or sub-activities.

Strategic Outcome: Safe and secure nuclear installations and processes used solely for peaceful purposes; and public confidence in the nuclear regulatory regime’s effectiveness.

Performance Indicators	Targets	2008-09 Performance
Compliance rating of licensees	B or better1	Met The CNSC has produced a 2008 CNSC Staff Integrated Safety Assessment of Canadian Nuclear Power Plants, formerly titled the Annual CNSC Staff Report on the Safety Performance of the Canadian Nuclear Power Industry, and abbreviated to the “NPP Report”, in which Nuclear Power Plants were rated. All Plants obtained a Satisfactory or Fully Satisfactory rating, using the new rating system.
# of radiation exposures over the allowable limits	Zero (0) reported cases	Mostly met In December 2008, a licensee reported that an incident occurred in which the improper transport of a radioactive substance may have resulted in two transport workers receiving a dose in excess of the regulatory public dose limit of 1 millisievert (mSv) per year (a millisievert is a unit of radiation dose). CNSC staff verified and confirmed the results of the dose calculations provided by the licensee who received the package. Based on the most conservative assumptions, it was determined that these individuals may have received 1.36 mSv from the event. The workers have been informed of the potential doses they may have received and have been advised that there are no known health effects from exposures at this level. An investigation is on-going to determine the causes of the incident and what corrective measures can be introduced to ensure that similar incidents do not happen in the future.
Positive IAEA Safeguard Conclusion	Positive Annual Attestation of Safeguards	Met In 2008, the IAEA drew what is called a positive safeguards conclusion for Canada, ensuring through international oversight that all nuclear materials and facilities were used for peaceful purposes, once again granting the country its highest safeguards rating for an IAEA Member State.2

 

Performance Summary by Program Activity

($ thousands)	Program Sub-activity	2007-08 Actual Spending	2008-09 Main Estimates	2008-09 Planned Spending	2008-09 Total Authorities	2008-09 Actual Spending	Alignment to Government of Canada Outcomes
Program Activity: Nuclear Regulation Expected Results: Low frequency of incidents, accidents and precursors; International transfers of nuclear materials and technology are solely for peaceful purposes.	Regulatory Framework	12,583	11,560	11,583	13,543	11,743	Social Affairs: A Safe and Secure Canada
	Licensing and Certification	22,670	21,420	34,458	42,279	41,460
	Compliance	36,176	33,232	33,355	38,284	37,494
	Cooperative Undertakings	18,644	16,617	16,655	18,304	17,899
	Stakeholder Relations	9,772	7,351	7,376	8,106	9,427
Total		99,845	90,180	103,427	120,516	118,023

¹ The 2008 Nuclear Power Plant Report has undergone some changes aimed at making it clearer and the underlying assessment more process-based. This new approach better integrates all the findings over the year and introduces an integrated plant rating. This will allow the CNSC to better identify and monitor Nuclear Power Plant performance trends over time.

² Note: IAEA conclusions are based on calendar years and therefore cover a slightly different period than the CNSC’s fiscal year.

This table provides a summary of resource levels for the last two years as well as the evolution of the 2008-09 resources. The increase in authorities for 2008-09 is primarily a result of the implementation of phase one of a two-phase revenue spending authority. The CNSC also received funding to address workload growth associated with fee exempt licensees as well as funding to support additional office accommodation and system infrastructure. The variance between authorities and actuals is mainly the result of funding for initiatives released late in the fiscal year; therefore actual expenditures reflect only a partial year’s worth of activities and costs.

Contribution of Priorities to Strategic Outcome

With renewed focus on nuclear power, medical and industrial uses and nuclear security, the CNSC has had to adapt its operations to regulate, license, and ensure compliance with requirements in a simple, clear, and timely fashion to protect the health, safety and security of persons, national security and the environment, and to assure that measures required to meet Canada’s international obligations are implemented. This need for adaptability required the CNSC to strengthen how it operates in the fiscal year; ensure licensees understand requirements; enhance the CNSC’s capacity; and communicate with various stakeholders. Thus, our program and management priorities were recast to fall under the four pillars that support progress towards the CNSC’s strategic outcome. In 2008-09, we have clearly communicated these priorities and continue to reinforce with staff and stakeholders, our priorities for Commitments to ongoing improvements; Clarity of requirements; Capacity for action; and Communications. These four pillars and their associated priorities supported progress towards the CNSC’s strategic outcome.

Commitments to Ongoing Improvements
(Ongoing, Successfully Met)

In addition to conducting core licensing and compliance activities, this pillar includes prioritizing and completing outstanding improvement initiatives, plans, and commitments, particularly those resulting from the Talisman Report of 2008. It also includes findings of other audits and evaluations, and ensuring that the health of Canadians and the safety of facilities are central considerations in all licensing and compliance activities through initiatives such as isotope contingency planning and dealing with environmental concerns. (This pillar now covers the Delivery of an effective regulatory program for existing facilities, Strengthening governance, and Integrated Improvement Initiatives Program (I3P) operational and management priorities described in the CNSC’s 2008-09 Report on Plans and Priorities).

Summary of achievements against 2008-09 priorities:

• The CNSC developed a Harmonized Plan of improvement initiatives. This plan responds to lessons learned from NRU shutdown in December 2007 and other relevant audit findings. It harmonizes improvement initiatives under a single umbrella. All NRU-specific actions were closed in 2008-09.
• Worked with interdepartmental partners during the medical isotope shortages in November and December 2008 and led discussions on isotope supply with international regulators.

Clarity of Our Requirements
(Ongoing, Successfully Met)

This pillar includes creating broad awareness among proponents of the CNSC’s requirements stemming from the NSCA, licensees and vendors of technology related to the CNSC’s requirements, particularly in terms of the initial phases of new builds (for example, design reviews, review guides, joint review panels); revitalizing the CNSC’s regulatory framework; clarifying regulatory documents and guidance, including specific attention to guidance for licence applications and EAs; engaging government partners through the Major Projects Management Office; and continuing the implementation of an improved protocol for NRU licence renewal. (This pillar now covers Effectively manage growth of the regulatory program and Implement improvement initiatives operational priorities described in the CNSC’s 2008-09 RPP).

Summary of achievements against 2008-09 priorities:

• The CNSC regulatory framework was strengthened to clarify regulatory requirements, particularly with respect to the environmental assessments, siting and design of new nuclear power plants and uranium mines. New regulatory documents related to the siting and design of new nuclear power plants were published, and staff review guides for the review of licence applications and environmental assessments have been prepared to ensure consistent reviews for all applications.
• The CNSC published nine key regulatory documents (three were published for consultation and six were produced in the final format). A full list of regulatory documents can be found on our Web site: nuclearsafety.gc.ca.
• The Nuclear Substances and Radiation Devices Regulations and the Class II Nuclear Facilities and Prescribed Equipment Regulations were amended to correct a number of regulatory deficiencies and to adopt the latest relevant international standards.
• The CNSC engaged government partners through the Major Projects Management Office to clarify requirements and improve efficiency in regulating new nuclear projects for:
  • Bruce Power’s New Nuclear Power Plant Project in Tiverton, Ontario
  • Bruce Power’s New Nuclear Power Plant Project in Nanticoke, Ontario
  • Ontario Power Generation’s Darlington New Nuclear Power Plant Project in Bowmanville, Ontario
  • Ontario Power Generation’s proposed Deep Geologic Repository Project in Tiverton, Ontario
• The CNSC continued to implement an improved protocol that will enable Atomic Energy of Canada Ltd. (AECL) and all Canadians to know clearly and in advance what the CNSC will require to extend the Chalk River National Research Universal (NRU) reactor’s operating licence in 2011.
• Provided pre-project vendor design reviews to verify whether, at a high level, the acceptability of a nuclear power plant design would respect Canadian safety principles and criteria. In 2008–09, Phase I (Review Process and Focus Areas) for the ACR-1000 design review was completed. The CNSC also began to review designs being considered for new build projects in Canada—namely, Westinghouse’s AP1000 and AREVA US-EPR.
• Completed the Port Hope Area Initiative licensing protocol as lead to licensing.

Capacity for Action
(Ongoing, Successfully Met)

This pillar includes maintaining and renewing the CNSC’s workforce to ensure sufficient knowledge and skills to fulfill our mandate. This means continuing efforts to make the CNSC an employer of choice through renewal, retention and recruitment initiatives; fully implementing the new Revenue Spending Authority (RSA) as the CNSC’s primary funding mechanism; strengthening planning and operational processes; and renewing critical infrastructure (for example, information technology and accommodations). (This pillar now covers the Strengthening capacity management priority described in CNSC’s 2008-09 RPP).

Summary of achievements against 2008-09 priorities:

• Instituted Phase I of its conversion to the RSA, a more sustainable funding regime to facilitate the CNSC growth in response to growth in the nuclear sector.
• Continued its successful recruitment efforts by attracting new employees in a competitive industry. The organization’s employee headcount grew by 17.3 percent.
• Undertook research and support to help acquire and maintain critical knowledge on existing and emerging science and advanced technology.
• Leased approximately an additional 6,000 square metres of office space to accommodate the growth in new staff associated with anticipated growth in the nuclear industry.

Communications
(Ongoing, Successfully Met)

This pillar includes work to strengthen communications with the CNSC’s licensees, stakeholders, Aboriginal peoples, international counterparts, other government departments and central agencies. (This pillar now covers the Enhance external engagement – outreach operational priority described in the CNSC’s 2008-09 RPP.)

Summary of achievements against 2008-09 priorities:

• The CNSC revamped its Web site, nuclearsafety.gc.ca, to provide licensees, stakeholders and the public with convenient access to information.
• Twenty public hearings and meetings were held with 260 intervenors participating. Several of the hearings were held in directly affected communities. The Commission made 40 decisions, including 13 related to environmental assessment and two CNSC orders, concerning Canada’s nuclear facilities.
• The CNSC collaborated with Indian and Northern Affairs Canada to facilitate training for CNSC operational staff on the legal duty to consult Aboriginal peoples. Aboriginal consultation plans were drafted for the new nuclear power plants proposed for the Bruce Power New Nuclear Power Plant Projects in Tiverton, Ontario and Nanticoke, Ontario and the Ontario Power Generation Darlington New Nuclear Power Plant Project in Bowmanville, Ontario.
• Outreach initiatives were held throughout communities such as Port Hope, Bowmanville, Pickering, Kincardine, Point Lepreau, Gentilly/Bécancour and in various communities in Saskatchewan. These activities touched on issues such as performance of nuclear power plants, radiation protection requirements, uranium exploration and mining and environmental assessments.

Risk Analysis

In response to recommendations from the 2006 Management Accountability Framework (MAF) Assessment, the CNSC developed a draft Enterprise Risk Profile to serve as a basis for senior management discussions regarding organizational risk, and to inform organizational planning and, in particular, Management Committee strategic planning. Moving forward, the CNSC’s newly established Audit Committee (composed of individuals who are both external and internal to the CNSC) will review the risk profile and provide its assessment of mitigation strategies.

It should be noted that in the past few years, as the CNSC anticipated increases in the number of major nuclear projects advancing in Canada, the organization was at risk of not having sufficient staff: an impediment to the realization of certain projects. To mitigate this risk, the CNSC developed and implemented an aggressive recruitment strategy, and successfully met its recruitment targets.

As part of its ongoing risk management for the organization, the CNSC must recognize the inherent risks in the shift to a re-spendable funding regime (in which the organization recovers fees from licensees), particularly in the event of delayed or cancelled projects, when the CNSC would be required to operate with reduced revenues.

Expenditure Profile – Funding of Operations

The CNSC’s workload, and therefore its resource requirements, is largely driven by the demand for licensing and regulatory oversight of Canada’s nuclear industry and by Canada’s international commitments respecting nuclear safety, security and non-proliferation.

The CNSC has traditionally been funded exclusively through an annual appropriation from Parliament. However, the Government of Canada recovers most costs associated with CNSC’s regulatory activities from licensees, in accordance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations (2003), and they are credited directly to the Consolidated Revenue Fund. The regulations also provide for some licensees, such as hospitals and universities, to be exempt from paying fees for the public good. In addition, fees are not charged for activities that result from certain CNSC obligations, such as those with respect to Canada’s international obligations (including the non-proliferation of nuclear weapons), emergency management, public information programs, updating of the NSCA and associated regulations as appropriate.

In 2007-08 the CNSC received approval from Treasury Board for the phasing-in of a Revenue Spending Authority commencing in 2008-09, with full implementation in 2009-10. In 2008-09, the Revenue Spending Authority was applied to cost recovered activities involving specifically defined new licence applications, and including applications for new nuclear power plants already received by the CNSC.

Effective 2009-10, the CNSC’s cost recovered activities will no longer be funded through an appropriation but rather will be funded through re-spendable revenues authorized by the Revenue Spending Authority. This will provide a sustainable and timely funding regime to address regulatory oversight workload requirements associated with Canadian nuclear industry growth.

Additional Funding Resources Received for 2008–09

For 2008–09, CNSC’s actual expenditures were $118.0 million. Fees received were $87.0 million of which $19.1 million were from CNSC revenue spending authority. In addition to the Main Estimates level of $90.2 million, the CSNC sources of funds were further increased by a total of $30.3 million during the course of the year through the approval of the revenue spending authority, Supplementary Estimates and transfers from Treasury Board. The $30.3 million increase to the CNSC’s funding relates mainly to the following initiatives: $15.5 million for regulatory licensing activities and pre-licensing design reviews of new nuclear power plants and uranium mines under the revenue spending authority; $3.2 million for operating budget carry forward from 2007-2008; $3.8 million for repayable funding for priority investments in office accommodation and system infrastructure to support CNSC growth; $3.7 million to address workload pressures associated with fee-exempt licensees; and $2.6 million for various compensation items.

The CNSC’s cost of operations includes actual expenditures as identified above as well as services received without charge, depreciation and increase to severance and vacation liability for a total cost of operations of  $131.9M.

The following graph shows the financial spending trend for planned and actual spending as well as total authorities over time:

As presented above, the CNSC’s overall authority, planned and actual spending has been increasing over the last few fiscal years. This is mainly due to the following approvals: resources provided in the 2006 Budget to meet existing demands and forecasted increases in the regulatory workload associated with industry growth; resources to deal with workload pressures associated with fee-exempt licensees; funding from the Management Reserve for priority investments in office accommodation and systems infrastructure to support CNSC growth; and collective agreement funding.

 

Voted and Statutory Items
($ thousands)

Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2006-07 Actual Spending	2007-08 Actual Spending	2008-09 Main Estimates	2008-09 Actual Spending
15	Operating expenditures	76,841	88,875	79,295	89,971
15	Grants and contributions	239	995	845	1,030
(S)	Contributions to employee benefit plans	8,181	9,975	10,040	11,533
(S)	Expenditures pursuant to paragraph 29.1(1) of the Financial Administration Act	-	-	-	15,488
Total		85,262	99,845	90,180	118,023

Note: numbers may not add due to rounding

This table presents resources that have been voted to the CNSC by Parliament. It should be noted that Parliament approves the voted funding whereas the statutory information is provided for information purposes. Explanation of variance in resource levels can be found in the table "Performance Summary by Program Activity".

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