CANADIAN POLITICS:

SELLING THE GRAVY,KEEPING THE BONES:

Molly has blogged about the underlying issue here before, the possible sale of portions of Atomic Energy of Canada Limited to the private sector. The following article from the Public Values website points out exactly what this will mean in the current situation in Ottawa. Yes, as expected those parts that stand a chance of making a profit will be portioned out, very likely to entities that have some shady connections to the Conservative Party. After all, if it could never make a profit why buy it, unless, of course Ottawa decides to subsidize the profit by becoming the main customer. One wonders how this could be mistaken for saving taxpayers' money. Same expenses as before, except that now an additional layer of profit has to be tacked on.

As I have averred here before AECL would actually be a great candidate for privatization...providing, of course, that everything was on the table. Not just the potentially profitable sections of AECL but also its liabilities. Following the Conservative plan the liabilities will still be held by the Canadian public while the potentially offsetting revenue from profitable portions of the enterprise will be replaced by additional expenditures. I have no great and overbearing attachment to state ownership in itself, but neither do I have a touching faith in so-called "private enterprise" (which is a joke if the only customers are public institutions). Anyways, here's a thorough discussion of what the Harper plan for AECL actually means.

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AECL's viable assets to be sold:
Taxpayers will be on hook for liabilities and toxic assets.
by Ish Theilheimer
OTTAWA, June 1, 2009, PublicValues.ca, with YouTube videos(Please go to the Public Values website to see the videos-Molly) — The Harper government has announced its intention to sell of the most profitable and successful parts of Atomic Energy of Canada Limited (AECL) at "fire sale" prices while retaining control of the Crown corporation's toxic assets and liabilities.

The government plans to divide the company in two. Chalk River Nuclear Laboratory, which currently employs 2,900 people, will be managed privately with no requirement that it continue manufacturing medical isotopes at the site. Currently, isotope production has stopped due to repeated problems at the plant.

Reporters and critics questioned the timing of the announcement, amidst alarm over the sudden cut-off of isotope production. In December, 2007, when the Canadian Nuclear Safety Commission ordered the Chalk River reactor that produces the isotopes be shut down for repairs, the government recalled Parliament, citing the life-and-death nature of the situation. Stephen Harper even fried the Commission's chair, Linda Keen, over this.

On Thursday, at the privatization announcement, NDP natural resources critic Nathan Cullen pointed to the government's efforts to pass legislation shielding the nuclear industry from liability in case of accidents as proof of its intention to sell off the industry. He said it is poor management to sell off the company's best assets and proprietary research in a poor market while keeping the most risky assets in the public domain.

"They've just had a budget where we've seen a bunch of sales of Crown assets they weren't going to name. Now we're seeing what's going to be sold off. And to sell it off when prices are incredibly low is not sound fiscal management. Mr Flaherty's credibility with Canadians for managing the economy through this recession is out the window, and the growing concern is 'What next? What else is up for sale?'"

He said Canadian taxpayers will be "on the hook for the majority of costs in the event of a nuclear accident," because of proposed legislation "to limit liability in Canada in the event of a nuclear accident." In the US, he said, nuclear companies have to pay into a $10 billion pool for liabilities.

Natural resources minister Lisa Raitt said the newly-privatized company would be regulated by the Canadian Nuclear Safety Commission, "which does have an independent view of the entire nuclear industry in Canada and will be managing it regardless of the restructuring here."

When asked by Straight Goods News "Can you call it independent when you're able to politically fire and hire chairs of the Commission, as happened in the case of Linda Keen?," Raitt said, "The CNSC absolutely has its own mandate and it continues to regulate the industry for its health, safety and security of Canadians."

The political meddling that kept the old reactor going, and periodically leaking heavy water, since the crisis, concerned reporters and critics. "Sixteen months ago, your government took pretty extraordinary steps, fired the nuclear safety regulator and ordered the startup of the NRU because, in the words of your government, 'people will die'," said Greg Weston of Sun Media. "Now we have a situation where the NRU is going to be shut down for months. Some are saying it will never come back online and we can't even find your Health Minister. What has changed? And was the government exaggerating the last time or does it just not care this time?"

Raitt downplayed the danger of the current isotope shortage. She was repeatedly grilled over apparent lack of government action to secure isotope supply in the 18 months since the 2007 crisis.

"What have they been doing, what have they been thinking?" asked Liberal natural resources critic David McGuinty. "There have been three unscheduled shutdowns. There have been four heavy water leaks, contained or otherwise, and we have no final knowledge of what the status of those containments are. We don't know if there are other leaks."

Raitt dodged repeated questions about whether lives are in danger now, saying repeatedly the government plans to hire outside experts to help find answers both to the isotope and privatization questions, but not naming any of the experts she plans to hire.

Ish Theilheimer has been Publisher of the leading, and oldest, independent Canadian online newsmagazine, StraightGoods.ca, since founding it in September 1999. He is also Managing Editor of PublicValues.ca.
Posted: May 31, 2009
Public Values (PublicValues.ca) is a project of the Golden Lake Institute and the online publication StraightGoods.ca

CANADIAN POLITICS:

CHALK RIVER REACTOR "CRISIS", A PRELIMINARY TO PRIVATIZATION:

The Chalk River nuclear isotope production plant is back in production now, and the sound and fury of the Conservatives and Liberals denouncing each other over whose political appointees are to blame is gradually dieing down. The watch dog on all things Harper, the Harper Index, has an interesting recent article opining that the "crisis" was largely manufactured by the Harper government in response to pressure from MDS Nordion, the contracted distributor of the isotopes produced at Chalk River (see http://www.harperindex.ca/View/Article.cfm?Ref=00126 ). Seems that the uncertainty produced by the shutdown reduced MDS' profits for the 4th quarter by two thirds. The article says that the isotope shortages were isolated and manageable, something that may or may not be true, but it also states that AECL and the Canadian Nuclear Safety Commission were well on their way to settling their dispute and that Harper's grandstanding by presenting a start-up order for parliamentary consent was unnecessary. That part is very likely.

The Harper Index article goes on to expose one of the hidden underbellies of the whole matter. While AECL is in the dirty and unprofitable business of actually producing the materials MDS handles the clean and profitable gravy train of sales and distribution, with a cheap product heavily subsidized by the Canadian taxpayer. Once more this is an example of how government owned business is often set up for the convenience of private firms, rather than for the benefit of the general population. In the area of regulation this service-providing aspect of the supposed watchdog function of government is often even more glaring.

The Harper Index article goes on to speculate that Harper's move was a preliminary to plans to privatize AECL. Here Molly has to call a time-out and refer to sources beyond the article in question. An article from the CBC News gives a backgrounder on Glenna Carr, Harper's new appointee as Chairwoman of AECL. After a career as an Ontario bureaucrat for governments of all political stripes she left the public employ to set up a consulting firm specializing the issues of corporate governance and private-public partnerships. Nobody more suitable to oversee the sell off of AECL could be chosen, and if her function is to be one of dismantling then the actions of the Harper government towards their last political appointee, Michael Burns, as Chair of AECL. Harper appears eager to make Burns a scapegoat, and Burns, in turn, has accused Harper of "political opportunism" for delaying news of his resignation until the Chalk River "crisis" blew up in public. If Carr's position will be more of a term one then she might ignore the obvious treachery of her employer towards his underlings.

Not that privatizing AECL would be such a bad idea. Most lefties reaction with horror to the idea that the government should get out of anything, and often they are right. AECL will be offered on a silver platter to whomever wishes to take it over. Profits will be made. Friendships that will result in lucrative positions at the least (or maybe huge sums of undeclared cash handed over in restaurants ????) will be forged. Whoever buys AECL will benefit from decades of public subsidy, but that may be irrelevant. AECL is the classic money sucker. An editorial in last Saturday's Globe and Mail ('AECL served a purpose, now it's time to sell it' by Derek Decloet) makes the case for privatization very well. Yes, many people in both government and business will benefit undeservedly from the sale of AECL, but the corporation has been a boondoggle from day one. Since the 1950s the Canadian taxpayer has funnelled $21 billion into the AECL maw, adding $71 billion to the National Debt. This money-pit will never close up. It will continue to provide cheap product for the likes of MDS Nordion, as well as innumerable contractors for its other enterprises. Whether it serves an essential public service role is doubtful in the extreme. It may be time for the Canadian taxpayers to cut their losses and run.

Many privatization schemes of the government result in a lower level of public service, but it's doubtful that the privatization of AECL would do this. As an anarchist Molly often opposes such schemes because of this, while saying that a different form of "privatization", the turning over of such enterprises as say Canada Post to producers; cooperatives run by the workers in them would be the optimal solution. From government enterprise to cooperative enterprise- not to the corporations. The structure of Canada's nuclear industry, however, makes this sort of solution almost impossible. It was set up as a subsidy to business, and would remain so under whatever self-management scheme might be proposed. In other words it would forever be financially dependent upon the government and therefore never truly independent. All this is not even entering into the question of whether nuclear energy is a good idea in the first place. Sell the bugger off. At least then it would become somebody else's problem.