Canadian Nuclear Safety Commission: 2016 Innovation award winner

The Canadian Nuclear Safety Commission was honoured with an Innovation award for implementation of a financial guarantee program for licensees.

The Canadian Nuclear Safety Commission (CNSC) was nominated in the Innovation category for its new Financial Guarantee Program (FGP) that was implemented to reduce financial risk for the Canadian public. Success of the program hinged on finding a model that would protect Canadian taxpayers and be financially feasible for industry while eliminating the administrative burden of complying with such requirements.

FGP requires all licensees for radiation devices, nuclear substances and Class II nuclear facilities to have sufficient funds to safely terminate activities in the event of a default (such as failure to comply with licence requirements or bankruptcy). Without the guarantee program, funding and coordinating decommissioning activities fell to the CNSC; financial exposure was pegged at $60 million.

When it became clear that complying with the new guarantee program was administratively and financially prohibitive for industry, CNSC aggressively explored innovative approaches to find a workable model. Working in conjunction with licensees and a private sector partner, CNSC developed a financial instrument that is in effect a hybrid between traditional insurance policies and surety bonds.

Using a convenient portal link on the CNSC website, licensees pay a contribution toward the cost of the insurance premium. Their contribution is based on a formula that takes into account a number of factors including the cost of disposing or decommissioning radioactive equipment and/or sites. This approach is more affordable for licensees who would have otherwise been forced to negotiate individual financial instruments with their own financial institutions.

Within six months of launching the FGP, all of the more than 1,500 licensees were compliant.

Through foresight, innovation and collaboration between CNSC management and staff, licensees and the insurance industry, the project contributes to making the nuclear industry safer for Canadians and the environment, while strengthening the CNSC’s financial framework.

Team members include:

Stéphane Cyr, vice-president, Corporate Services and CFO
Pierre Souligny, director, Accounting, Controls and Contract Management Division
Benoit Labelle, chief, Policy and Internal Control