October 22, 2009
Loss likely in any AECL sale
David Akin
Canwest News Service
No matter what the federal government decides to do with Atomic Energy of Canada Ltd., taxpayers are unlikely to get back the billions sunk into the Crown corporation over the years, MPs conceded Wednesday.
Ottawa has been looking for a private-sector partner to which it can sell all or part of AECL. But MPs from all parties are resigned to recouping only a small fraction of the more than $8 billion the federal government has given AECL over the 60 years of its existence.
“I think the chances of Canadian taxpayers making money on this deal or even getting their money back are almost zero,” said NDP MP Nathan Cullen.
AECL is likely going to continue to consume increasingly scarce tax dollars. Last year alone, it received about $650 million in federal subsidies. And the bill so far for repairing the broken-down reactor at Chalk River, Ont., that produces isotopes used in medical imaging around the world has already eclipsed $70 million, most of which will be picked up by the federal taxpayer.
Industry sources say AECL’s nuclear power reactor business — the group that designs and builds the Candu reactors — might be worth about $300 million if sold.
That amount would not even cover AECL’s financial losses last year. For the 12-month period ending March 31, AECL received $642 million in taxpayer funds, earned $401 million in revenue and still managed to lose $413 million.
While some MPs wondered if it were a good idea to sell such a poorly performing business in the middle of a recession, a House of Commons committee was told that the government must quickly find new private-sector partners who can help AECL win new contracts if AECL is to continue to exist.
“(AECL) is lacking venture capital and entrepreneurship and skills when it comes to the critical mass for marketing,” Serge Dupont, a deputy minister in the Privy Council Office, told a Commons committee Wednesday. “From the government’s standpoint, this is the right time to (restructure). Things won’t be much better for AECL in five years if we don’t make decisions today.”
Dupont, who is also a special adviser on nuclear energy policy to Natural Resources Minister Lisa Raitt, said AECL believes its growth opportunities include building new power reactors in Alberta, Saskatchewan and Nova Scotia.
Last spring, Raitt said she wanted to break up AECL into two parts: The Candu business which builds and sells power reactors and the research and development function, which includes the isotope-producing function.
Raitt hired investment bankers to see if part or all of the Candu business could be sold. Those investment bankers, Rothschild and Sons, gave Raitt their report Monday, though the government refused to release its contents or recommendations, citing commercial confidentiality.
The research and development business — which includes the Chalk River Laboratory and the isotope-producing function — would remain under public ownership, although the government plans to hire a private firm to better manage the R&D business.
