Yes, I do, Mr. Chairman. Thank you very much.
Thank you, Mr. Chairman and members of the Standing Committee on Natural Resources.
I am here with our vice-president and general counsel, Allan Hawryluk.
Ladies and gentlemen, I joined AECL in January, on the same day that Glenna Carr was appointed chair of our board. We joined a company with a proud 56-year history of being the stewards of Canada's nuclear platform. We joined a company with a tremendous future as we stand on the cusp of a global nuclear renaissance. I joined the company from outside the nuclear industry, but with experience in both the transportation and technology sectors. In fact, as a former officer of the Canadian Pacific Railway, I feel rather comfortable in the railway committee room today.
AECL has a dual mandate. The first is to be a successful architect and developer of commercial nuclear power reactors around the world, something we do very well and in which we have a tremendous future. The committee is well aware of the strong business and environmental case that exists for nuclear power, and we are determined to be a major player in the global market with our CANDU brand.
The second part of our mandate is to be the platform for Canada's nuclear science and technology. AECL's major research and development efforts take place at the Chalk River laboratories. Our scientists and engineers perform research and product development to support and advance CANDU's nuclear reactor technology. The facility has world-class expertise in physics, metallurgy, chemistry, biology, and engineering. AECL's research and development infrastructure there enables the production of medical isotopes, and we supply those through an exclusive business arrangement with MDS Nordion.
The special examination report of the Auditor General, released in January, highlighted three deficiencies, as they termed it, in the company that needed to be addressed, one being the resolution of issues surrounding the dedicated isotope facility. That report succinctly summarized some of the challenges this project faced. So, as would any incoming business executive, I wanted to undertake a broad-gauge review of the business and the issues.
The first and largest is the technical challenge. The physics of the MAPLE reactors were presenting certain mysteries, most particularly in regard to the PCR coefficient, the power coefficient of reactivity. We made every effort to solve these mysteries, but the answers were eluding the best minds in nuclear science. Furthermore, the costs and timeframes for commissioning and licensing the MAPLEs were increasing in the absence of a technical solution.
A second issue related to the uncertainty of the marketplace. The market for isotopes produced by AECL was changing, and it was clear that new sources of supply were coming onstream around the world. It was also clear that the worldwide movement towards producing isotopes from low-enriched uranium targets, a movement born out of concern for nuclear proliferation, could leave a facility designed on the basis of highly enriched uranium targets—the MAPLEs—obsolete in a matter of a few years, even prior to completion.
Thirdly, we looked at our obligations and options with regard to our contract with MDS Nordion, in particular a deadline to bring MAPLE 1 into production by October of this year. We were very aware of the concerns of the health care community for their patients. It was clear that swift resolution was key and that if the MAPLEs couldn't be the solution, we needed to be mobilizing quickly with another workable plan.
Another consideration, of course, in all of this was for the hundreds of dedicated AECL employees who have devoted the past 12 years to this project. Taken together, it became clear to AECL management and was confirmed with our board that meeting the October 2008 deadline for commissioning MAPLE 1 was improbable.
Throughout the process, we continued our work on solving the technical challenges leading up to a milestone test, as the minister mentioned, on the reactor in mid-April. Once that test was conducted and failed to resolve the PCR issue, there was a tipping point for our decision. The factors we considered—the significant cost, the technical risk, the timeframe, as well as our contractual obligations—were placed in the context of a broad look at the marketplace, and we came to the conclusion that the case for continuing the MAPLE project could not be supported.
This is what got us to where we are today.
Discontinuing the dedicated isotope facility project does not affect the short- or medium-term supply of isotopes. We will continue to supply and continue to produce from the NRU, and our focus now is on making sure this reactor is as reliable as it can possibly be until the end of its current licence period, and taking the steps necessary to extend that licence beyond 2011.
It was a difficult, but necessary, decision.
It was made based on facts and the best available evidence and advice. It was made by looking forward, not back, and made in good faith and with the best interests of the taxpayers of Canada in mind.
Mr. Chairman, that concludes my remarks.
I would be pleased to answer questions from committee members.