ARCHIVED - RPP 2006-2007
Canadian Nuclear Safety Commission

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Section I - Overview

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Message from the President and Chief Executive Officer

It is my pleasure to submit to Parliament, the Canadian Nuclear Safety Commission’s Report on Plans and Priorities for the years 2006-2009. This plan outlines priorities in all five strategic areas of the Canadian Nuclear Safety Commission (CNSC) – regulatory framework; licensing and certification; compliance; cooperative undertakings; and stakeholder relations. In addition we are committed to the continuous improvement of our governance and accountability, oversight and administrative processes.

Canadians look to the CNSC to be effective in its oversight of an industry whose scope is arguably the broadest, most wide-ranging and most international in the world. CNSC’s regulatory regime is anchored by what is considered the most modern nuclear legislation in the world, separating the oversight of health and safety from economic and political interests.

The Canadian nuclear industry is experiencing substantial growth in all areas, including power generation, uranium mining and milling, nuclear waste facilities and industrial and medical uses of nuclear substances. This is creating a significant increase in the regulatory workload of the CNSC, which has been working to secure additional long term resources to perform its role. In its 2006 Budget, the Federal Government recognized the need for the CNSC to expand by allocating an increase in funding of over $93 million to enable increased effective regulatory oversight over the next five years, 65% of which is cost recoverable from licensees. This decision recognizes unprecedented confidence in the CNSC. These additional resources will enable the CNSC to address four key priorities, - nuclear power reactor refurbishment projects; expansion of uranium mining, research facilities and waste management; licensing and compliance of the use of nuclear substances including health care facilities and mitigating risks to nuclear security. The CNSC will continue to make required preparations to meet emerging new demands relating to new nuclear power plants and domestic safeguards and non-proliferation regime.

The CNSC is growing to meet regulatory demands imposed by industry growth. The growth will bring an influx of new people into the organization and will require changes in business processes, and ongoing commitment to improvement initiatives based on strong leadership and people management. The CNSC has augmented its already vigorous accountability and governance regime with a new Quality Management System based on established international criteria for nuclear regulators.

It was a personal honour for me to be re-appointed as President and CEO of the Canadian Nuclear Safety Commission for a further five year term. These next years will prove to be challenging times for the CNSC and for the nuclear sector. As we move forward to meet the existing and new regulatory challenges, we will continue to demonstrate to Canadians that Canada has a strong, effective and independent nuclear regulator. The CNSC remains committed to the vision of being one of the best nuclear regulators in the world.

Linda J. Keen, M.Sc.

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Management Representation Statement

I submit for tabling in Parliament, the 2006-2007 Report on Plans and Priorities (RPP) for the Canadian Nuclear Safety Commission.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2006-2007 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

• It adheres to the specific reporting requirements outlined in the TBS guidance;
   
• It is based on CNSC’s approved Program Activity Architecture as reflected in its Management Resources and Results Structure (MRRS);
  
• It presents consistent, comprehensive, balanced and reliable information;
   
• It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
   
• It reports finances based on approved planned spending numbers from the Treasury Board Secretariat.

_____________________________
Linda J. Keen, M.Sc.
President & Chief Executive Officer

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Raison d'Être

Mandate

The Nuclear Safety and Control Act (2000) (NSCA) clearly specifies that nuclear regulatory activities are a federal responsibility. Under the provisions of the NSCA and certain policies and international commitments of the federal government, the CNSC’s mandate is to:

• regulate the development, production and use of nuclear energy, nuclear substances, prescribed equipment, and prescribed information in order to:
  • prevent unreasonable risk to the environment and to the health and safety of persons;
  • prevent unreasonable risk to national security; and
  • achieve conformity with measures of control and international obligations to which Canada has agreed
• disseminate scientific, technical and regulatory information concerning the activities of the CNSC and the effects of the development, production, possession, transport and use of nuclear substances on the environment and on the health and safety of persons.

Mission and Vision

The CNSC’s mission is to regulate the use of nuclear energy and materials to protect health, safety, security, and the environment and to respect Canada’s international commitments on the peaceful use of nuclear energy. In pursuing its mission, the CNSC¹ is working toward its vision of becoming one of the best nuclear regulators in the world.

To realize its vision, the CNSC is committed to:

• the effectiveness of its regulatory regime;
• operating with a high level of transparency;
• attracting and retaining excellent staff; and
• the efficiency of its regulatory regime.

¹ Note: The Canadian Nuclear Safety Commission is referred to as the “CNSC” when referring to the organization and its staff in general, and as the “Commission” when referring to the tribunal component.

Regulatory Policy and Program Delivery

The CNSC’s Regulatory Fundamentals Policy (P-299) states that those persons and organizations that are subject to the Nuclear Safety and Control Act (NSCA) and regulations are directly responsible for managing regulated activities in a manner that protects health, safety, security, and the environment, while respecting Canada’s international obligations. The CNSC is responsible to the Canadian public, through Parliament, for regulatory policies and programs which assure that these responsibilities are properly discharged.

Under the NSCA, the CNSC regulations apply to all nuclear industries including, but not limited to:

• nuclear power reactors;
• non-power nuclear reactors, including research reactors;
• nuclear substances and radiation devices used in industry, medicine and research;
• nuclear fuel cycle from uranium mining through to waste management; and
• the import and export of controlled nuclear material, dual use material, equipment and technology identified as proliferation risks.

The CNSC also administers the Nuclear Liability Act, conducts environmental assessments under the Canadian Environmental Assessment Act and is mandated to implement Canada’s bilateral agreement with the International Atomic Energy Agency (IAEA) on nuclear safeguards verification.

Governance

As well as a federal regulatory agency, the CNSC Commission is an independent quasi-judicial administrative tribunal, both created in May 2000 when the Nuclear Safety and Control Act (NSCA) came into force. As an independent regulatory body, the CNSC considers it crucial to preserve public confidence and trust in the fairness of the regulatory decision-making process. Maintaining arm’s length relationships to government and industry is a critical element of sustaining that confidence. The CNSC is a departmental corporation under Schedule II of the Financial Administration Act.

The CNSC reports to Parliament through the Minister of Natural Resources (NRCan). The Minister is answerable in general to Parliament for the activities of the agency, but it is the President and Chief Executive Officer (CEO) of the CNSC who is accountable to Parliament and the public for the exercise of her powers. As such, the President and CEO of the CNSC can be called upon to appear before parliamentary committees to account for the performance of the CNSC in achieving its objectives and plans, to answer questions on spending and administrative matters, and to address specific issues.

Financial and operational plans and performance are detailed in a Report on Plans and Priorities, an Annual Report and a Departmental Performance Report that are submitted each year to the Minister for tabling in the House of Commons. The CNSC has initiated fora such as the Cost Recovery Advisory Group, and quarterly meetings with the Canadian Nuclear Association’s Regulatory Affairs Committee, which are appropriate vehicles for industry to comment on the cost recovery program development and the regulatory process, respectively. CNSC is currently exploring other venues to encourage broader dialogue with other stakeholders.

All information held by the CNSC, including information submitted in support of licence applications and compliance-related reports, is available to the public upon request, with the exceptions of security-sensitive, commercially confidential and personnel information. The policy of the CNSC is to be transparent on regulatory matters and, where possible, to not have Canadians use the formal process under the Access to Information Act to obtain CNSC-held information.

The CNSC adheres to the government policy of disclosure on contracts, travel and other expenses for senior management, reclassifications of personnel, grants and contributions, and audit reports by the internal audit and ethics group.

The separation of the Commission (the tribunal), whose members are appointed by the Governor in Council, from the CNSC staff, is an element of the tribunal’s independence in making licensing and related decisions. The Commission sets overall regulatory policy, makes regulations as required, and decides on major licence applications, renewals and related questions. The members participate in training sessions on technical aspects of the nuclear industry and in special seminars on topics such as ethics. Benchmarking of the Commission against twelve other Canadian tribunals across several performance areas indicates that the Commission is in the forefront in many respects.

With respect to public hearings interested stakeholders and interested interveners are invited to make their views known to the Commission either in person or through written submissions. All decisions and the reasons for those decisions are published, generally, within 60 days of the respective hearing. The CNSC’s staff provides advice to the tribunal, implements decisions made by the tribunal, and enforces compliance with regulatory requirements.

A robust governance framework, including an effective organizational structure, is in place to guide staff, and includes:

• a clear vision with well-articulated outcomes;
• a focused mission and mandate which sets direction for the CNSC’s Strategic Plan;
• an initiative to implement an internationally established Quality Management System; and
• an effective and professional corporate services component that provides information and internal systems that ensure the effective stewardship of resources.

At the staff level, regulatory activities are reviewed quarterly, and bi-annual corporate reviews of results achieved against plans are conducted, with resources reallocated as necessary to the highest priorities. Performance management contracts are in place with all managers. These contracts are specific, results-based and identify accountabilities.

An independent internal audit and evaluation program is in place, reporting to the President. With respect to its internal audit program, the CNSC is in the process of adopting Treasury Board’s new Audit Policy and has appointed an external member to its Internal Audit Committee.

A Values and Ethics Strategy tailored specifically to the CNSC was launched in 2005 and will be fully implemented in 2006-07. The Strategy advocates personal commitment and engagement by all leaders and employees and includes practical tools and techniques for building and maintaining ethical actions and habits.

The CNSC also has a Code of Conduct and Ethical Behaviour, and a Conflict of Interest Code. In 2005, the CNSC put in place a formal process for the Internal Disclosure of Wrongdoing, to allow staff to disclose wrongdoing in a safe and constructive manner, and to protect staff against any reprisals when they raise an issue or disclose wrongdoing in good faith.

In recent years the CNSC implemented significant management improvements under its “Modern Management” agenda. In 2005, CNSC formally committed to the establishment of a corporate-wide Quality Management System (QMS) that is being developed in accordance with the requirements and guidance in the IAEA Safety Standard GS-R-1 and accompanying safety guides, which includes the international standard for nuclear regulatory bodies. This QMS is consistent with the Treasury Board’s Management Accountability Framework (MAF) to which the CNSC is accountable.

The Quality Management System (QMS) will capitalize on, and integrate the numerous improvement initiatives currently underway within the CNSC facilitating the development, implementation and continuous improvement of its business processes and practices. In addition, the QMS will include clear performance measurement and benchmarking of CNSC’s practices and performance against its international peers. Ultimately, the QMS will enable sustainable measured improvements toward our vision of being one of the best nuclear regulators in the world.

Funding of CNSC Operations

The CNSC’s operations are funded through an annual appropriation from Parliament. The CNSC’s workload and therefore its resource requirements are largely driven by the level of demand for licensing and regulatory oversight, and by the nature of Canada’s international commitments. When its workload increases, the CNSC applies to Treasury Board for permission to increase its cost recoverable expenditures and related fee revenues accordingly and/or to receive new program funding.

Most costs incurred for the CNSC’s regulatory activities are recovered by the federal government from licensees in accordance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations (2003). Fees are collected by the CNSC and deposited to the Consolidated Revenue Fund and are not a source of revenue for the CNSC. Some licensees, such as hospitals and universities, are exempted from paying fees.

Fees are not charged for activities that result from CNSC obligations that do not provide a direct benefit to identifiable licensees. This includes activities with respect to Canada’s international obligations, including the non-proliferation of nuclear weapons, public responsibilities such as emergency management and public information programs, and maintenance of the NSCA and associated regulations.

Additional Funding Resources for FY 2006-2007

As a result of growing activity in all areas of the nuclear sector in the past several years, the CNSC has experienced a substantial increase in its workload in most areas of responsibility. The workload is forecast to continue to increase over the planning period. In order to fulfil its mandate, the CNSC received approval from Treasury Board in 2005 for additional short term monies, specifically, $6.5 million in 2005-06 and $14.5 million in 2006-07 to address immediate resource shortfalls. In its 2006 Budget, the Federal Government recognized the need for the CNSC to expand by allocating an increase in funding of over $93 million to enable increased effective regulatory oversight over the next five years. This approval represents approximately 74% of the funding that the CNSC requires to address current pressures. The additional resources will enable the CNSC to address four key priorities for health and safety, nuclear power reactor refurbishment projects, expansion of uranium mining, research facilities and waste management, licensing and compliance of the use of nuclear substances including health care facilities and mitigating risk to nuclear security. The CNSC will continue its efforts to secure required resources to meet emerging new demands relating to both new nuclear power plants and for domestic safeguards and non-proliferation support in accordance with Canada's international commitments.

The CNSC has established the following order of priority for allocation of its resources:

1. Deliver an effective regulatory program for existing facilities
2. Effectively manage growth of the regulatory program
3. Implement improvement initiatives

In 2006-2007, the CNSC’s planned expenditures will be approximately $86.4 million. Expected fees will be approximately $61.6 million.

The CNSC Protects Canadians

The Treasury Board of Canada’s annual report, Canada’s Performance 2005, provides a government-wide statement of Canada’s Performance in three policy areas:

• Sustainable economy, one of the Government of Canada’s specific measure of which includes a “clean and healthy environment”;
• Canada's social foundations, which includes health care and safe and secure communities; and
• Canada's place in the world, which recognizes the international dimension of government activity needed to advance national aspirations.

The CNSC is a key contributor to the Government of Canada’s performance in each of these areas.

Summary Planning Information

CNSC Priorities

The CNSC's ultimate or strategic outcome is:

The CNSC uses an established strategic framework, based on a logic model (Section IV) for developing its plans and priorities. The model includes intermediate as well as immediate outcomes. The strategic outcome is not entirely within the CNSC’s control nor is it solely the CNSC’s responsibility. The level of direct impact resulting from the CNSC’s activities is greatest on the immediate outcomes.

The five immediate outcomes which represent the CNSC’s five strategic priorities are:

1. A clear and pragmatic regulatory framework
2. Individuals and organizations that operate safely and conform to safeguards and non-proliferation requirements
3. High levels of compliance with the regulatory framework
4. CNSC cooperates and integrates its activities in national/international nuclear fora
5. Stakeholders’ understanding of the regulatory program

Underlying the CNSC’s strategic framework is its management and enabling infrastructure. This infrastructure consists of management, internal audit, legal services, human resources, finance, information services and infrastructure processes and programs that enable the CNSC to perform the activities required and to meet the requirements of good governance with a high level of accountability.

This CNSC strategic framework is consistent with the CNSC Program Activity Architecture that complies with the Treasury Board’s common reporting requirements.

Financial Resources ($ thousands)

2006-2007	2007-2008	2008-2009
86,499	93,488	93,488

Human Resources

2006-2007	2007-2008	2008-2009
651	684	682

Departmental Priorities by Strategic Outcome

		Planned Spending
		2006-2007	2007-2008	2008-2009
Outcome #1	Clear and pragmatic regulatory framework	6,432	6,952	6,952
Outcome #2	Individuals and organizations that operate safely and conform to safeguards and non-proliferation requirements	20,033	21,651	21,651
Outcome #3	High levels of compliance with the regulatory framework	35,803	38,696	38,696
Outcome #4	CNSC cooperates and integrates its activities in national/international nuclear fora	17,784	19,221	19,221
Outcome #5	Stakeholders' understanding of the regulatory program	6,447	6,967	6,967
TOTAL		86,499	93,488	93,488

Strategic Challenges and Risks

In 2005, the CNSC updated its annual, comprehensive review of pressures and risks it will have to address over the course of the next 10 years. Licensees contributed to this review on a commercially confidential basis. The review confirmed that the Canadian nuclear industry is experiencing significant growth in all segments of the nuclear cycle and in virtually all areas where nuclear substances are used in industry, medicine and research. The CNSC continues to monitor change in its operating context to ensure an ongoing effective and timely regulatory regime.

a. Life-extension of nuclear reactors

Canada has 22 nuclear power reactors, many of which are approaching the end of their designed operating lives. Two units at Ontario Power Generation’s Pickering A nuclear power station in Ontario have been permanently shut down. With respect to the remaining 20 reactors, licensees and applicable governments are either embarking on refurbishment projects or are conducting feasibility studies for life extensions. In June 2006, New Brunswick Power was authorized to proceed with the refurbishment of its Point Lepreau nuclear power plant. Hydro-Quebec has also applied to the CNSC for authorization to refurbish its Gentilly-2 power plant. The environmental assessment for this project will be heard by the Commission in the fall of 2006. Bruce Power, having entered into an agreement with the Province of Ontario, has applied to refurbish two units at Bruce A that are currently shut down.

Looking forward, the CNSC anticipates requests for approval to proceed with other life extension projects. For example, the Ontario government has instructed Ontario Power Generation (OPG) to examine the feasibility of refurbishing the four units at the Pickering B nuclear power plant, as part of its response to the Ontario Power Authority’s (OPA) December 2005 recommendations on the long-term electricity supply mix. Requests to approve the life extension of the four units at OPG’s Darlington power plant, and the four units at Bruce B are also expected over the course of the next several years, subject to feasibility studies by their operators and agreement by the government of Ontario.

In May 2005, the CNSC released draft regulatory guide G-360, entitled “Life Extension of Nuclear Power Plants”. Subject to Commission approval, G-360 sets out the CNSC’s expectations of licensees with respect to the steps and phases to consider when undertaking a proposal to extend the life of a nuclear power plant.

In addition, CNSC is reviewing an application by Atomic Energy of Canada Limited requesting to be permitted to continue operation of the National Research Universal (NRU) reactor at the Chalk River Laboratories until 2012.

b. Plans for building new power reactors

There has been a significant shift in the outlook of governments and nuclear operators in 2005-2006 with respect to the prospects for the construction of new power reactors in Canada. As part of its response to the recommendations of the Ontario Power Authority, the government of Ontario instructed the OPA to include 14,000 MW of nuclear power in its long-term, Integrated Power Supply Plan. Given the loss of supply due to the decision to not refurbish two units at Pickering A, on June 13, 2006, Ontario instructed OPG to begin planning for approximately 1,000 MW of replacement power from new nuclear plants, starting with an environmental assessment at an existing site.

To clarify the licensing process for licensees, governments and the public, in February 2006 the CNSC published Information Document 0756, entitled “Licensing Process for New Nuclear Plants in Canada”. The CNSC will also need to develop a modern, up-to-date regulatory framework for the design, construction, commissioning and operation of new nuclear power plants. This work is not planned within current financial envelope. This framework will take into account modern international standards to the extent practicable. The CNSC is neutral with respect to the choice of technology to be used to generate nuclear power; that is the responsibility of the proponents. However, any newly built reactors would require extensive environmental assessment and licensing reviews before the Commission could proceed with licensing of site preparation, construction and operation.

c. Nuclear medicine, radiation therapy, nuclear substances and radiation devices

Licensing and compliance activities associated with the regulation of nuclear substances, radiation devices, prescribed equipment and Class II nuclear facilities (where prescribed equipment is used for medical, industrial and research purposes) have increased substantially. The number of licences issued for Class II nuclear facilities (principally cancer treatment facilities) has grown 86%, from 153 to 285, from 2000 to 2005. The number of such licensed facilities is forecasted to total at least 500 by the year 2015. In addition to the licensing and compliance work associated with the construction of new cancer facilities, the CNSC needs to license the refurbishment of existing cancer treatment facilities.

d. Uranium mines, mills and processing facilities

Increased demand for uranium has been triggered by the construction of new nuclear power plants in Asia, improved reactor operations throughout the world, and the extension of the operating lives of reactors. Canada produces 30% of the world’s uranium, of which 80% is exported. To meet demand, licensees are accelerating production from existing mines, developing currently known smaller deposits of ore and exploring for new sources of uranium throughout Canada. Any new mining will involve CNSC approvals, amendments and/or the issuance of new licences by the Commission and, depending on the scope of the proposal, some projects may require environmental assessments.

e. Nuclear waste management

Both industry and governments are moving forward with a number of initiatives to address nuclear waste management issues to ensure that nuclear waste is handled effectively and expeditiously. There are several initiatives underway by both federal and provincial governments to deal with legacy waste issues in several provinces and territories. In addition, the nuclear power industry is moving forward with projects to expand its waste storage facilities to accommodate the increased volumes of nuclear waste associated with on-going operations as well as waste arising from reactor life-extension projects.

OPG and the Municipality of Kincardine, Ontario recently entered into a “hosting agreement” for the permanent disposal of low and intermediate radioactive waste in a deep geological waste repository on the Bruce Power’s “Bruce A” nuclear site. The CNSC has received notice from OPG of its intent to file an application with the Commission to license this permanent radioactive waste disposal site. In addition, the Nuclear Waste Management Organization (NWMO) submitted a report to the Minister of Natural Resources on options and recommendations with respect to the long-term storage or disposal of spent nuclear fuel. The CNSC will be responsible for regulating any facilities designed and constructed for long-term spent fuel storage or disposal.

f. Nuclear Security and Emergency Management

National security and emergency management remain priorities. The CNSC continuously verifies, through its regulatory compliance program, that licensees are maintaining the enhanced security measures that have been implemented following September 2001. CNSC will be enhancing security oversight in specific areas. Nuclear security programs include policies that regulate the physical security of nuclear power plants, nuclear facilities licensed to process nuclear substances, e.g. research facilities, and the security of high risk nuclear substances and materials, performance testing and personnel security clearance of the armed response forces and participation in international nuclear security initiatives. The CNSC is working closely with officials of other agencies in Canada, the United States and the international community to be an effective partner in intelligence gathering and analysis, and in maintaining the world-wide nuclear security network and appropriate emergency management plans to deal with unexpected events.

One of the critical nuclear security issues is protection against the diversion of nuclear material and radioactive sources for unauthorized or malicious acts. International expectations in this area are set out in the new IAEA Code of Conduct on the Safety and Security of Radioactive Sources (the Code) which Canada has committed to implement. CNSC will implement this commitment over the next two years.

g. International Safeguards

In recent years, new demands have been placed on Canada and therefore on the CNSC to increase the scope of the nuclear materials and facilities that must be declared to the IAEA and the IAEA has significantly increased its verification efforts. The CNSC is responsible for implementing the safeguards agreements between Canada and the IAEA. As a follow-up to the conclusion received from the IAEA in September 2005, the CNSC will be working with the appropriate Government departments and agencies to design the policy framework and obtain resources necessary to ensure that Canada’s new national safeguards program is effective and responsive to the needs of Canadians and the international community.

h. Public hearings and stakeholder consultation

As governments and licensees make decisions related to nuclear power plant life-extensions, investments in new nuclear plants, and waste management, the CNSC expects heightened public interest in nuclear matters. The expansion in all regulated sectors of the nuclear industry is driving the need for more frequent Commission hearings. In addition, citizens are requesting that more hearings be conducted in the communities most affected by the licensing decision. There are also requests for easier and faster access to information related to matters before the Commission.

i. Staffing requirements to meet the increased workload

One of the CNSC’s most critical challenges is to ensure it has an adequate number of staff, with the appropriate mix of scientific, technical and other professional knowledge, skills and experience. With the growth in nuclear sector activity creating an increase in industry demand for the same skilled resources, the CNSC is facing increasing challenges to attract and retain the required expertise.

Planning Assumptions

The strategic plan for 2006-2007 to 2008-2009 is based on a number of planning assumptions. As changes in the CNSC’s operating environment occur, these assumptions are reviewed and the plans are adjusted accordingly. The planning assumptions are as follows:

1. Resource levels currently approved for the CNSC will continue. This includes the addition of $14.5 million approved by Treasury Board for 2006-07 as well as the additional funding allocated to the CNSC in the Government of Canada’s Budget 2006 ($4.5 million for 2006-07 and $22.5 million for each of 2007-08 and 2008-09).
2. No changes in the structure of the cost recovery program with respect to exemptions from fees and with respect to activities related to international obligations.
3. The CNSC has the ability to attract and retain knowledgeable and skilled staff and is able to absorb the impact of losing knowledge through retirement. This also assumes that the existing compensation levels are adequate to meet this requirement.
4. The Commission Tribunal structure and functions remain as currently established, but the number of hearings are expected to increase.
5. Resources allocated to infrastructure activities related to human resource management, information technology, finance and administration, and communications will increase to reflect the added support required.

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