Restructuring of the Canadian nuclear industry

This paper addresses issues of structural change pertaining to Atomic Energy of Canada Limited (AECL), a federal Crown corporation responsible for the CANDU design, construction and engineering program as well as Canada's nuclear research and development program, and Ontario Hydro, a provincially-owned electric power utility with the highest concentration of nuclear in its generation mix. Restructuring of these two organizations will have significant impacts on the entire nuclear industry because of the major role they play in the industry. This paper briefly describes the roles and structures of AECL and Ontario Hydro, the trends forcing restructuring of these two organizations and efforts underway to adapt them to the ''new realities''. The main trends forcing structural change are: (1) the federal government's deficit-cutting policy which has forced the federal government to set priorities and make near-term cuts to government-funded programs, including funding allocated to the nuclear research and development program of AECL and (2) competition in electricity markets in North America which is expected to result in major restructuring of Ontario Hydro. Recently, strategic decisions have been taken by the federal government in its review of the AECL program to focus nuclear R&D funding on programs related to the CANDU. The Ontario government has established an Advisory Committee on Competition in Ontario's Electricity System to examine the challenges facing Ontario Hydro, including pressures to restructure the nuclear component of Ontario Hydro's operations. The Committee is to submit its recommendations to the Ontario government in June, 1996. There is confidence that AECL and Ontario Hydro will come out of this round of change stronger and healthier and better organized to ensure that the investment in the nuclear program will be leveraged to ensure maximum benefits for Canadians.