Case Summary: Citizens Against Radioactive Neighbourhoods (CARN) v. BWXT Nuclear Energy Canada Inc.

On 9 June 2022, the Federal Court of Canada released a decision dismissing a judicial review application brought by a community-based organization to challenge a licensing decision of the Canadian Nuclear Safety Commission. ^{Footnote 1}   The Applicant CARN had argued that the Commission’s decision to renew BWXT Nuclear Energy Canada Inc.’s licence to operate two nuclear fuel fabrication facilities in Toronto and Peterborough, Ontario was unlawful and unreasonable.

On this page:

• Background
• The Commission decision
• The Decision of the Federal Court of Canada on the Judicial Review Application
• Significance

Background

CARN is an unincorporated non-profit organization based in Peterborough, Ontario.  It was established in spring 2019 in response to BWXT’s intention to apply to the Commission for a ten-year licence renewal which would include seeking authorization to produce uranium dioxide fuel pellets at the Peterborough facility.

BWXT owns and operates the two nuclear fuel manufacturing facilities in Toronto and Peterborough.  Both facilities are, under the Nuclear Safety and Control Act and its Class I Nuclear Facilities Regulations, defined as “Class IB nuclear facilities”.^{Footnote 2}  Prior to 2016, these facilities were operated by GE-Hitachi Nuclear Energy Canada Inc. The Commission transferred the operating licence for these facilities to BWXT following its acquisition of that company in 2016.

On November 2, 2018, BWXT applied for a ten-year renewal of its operating licence for the two Class IB facilities. It sought authorization to conduct “pelleting operations”, previously authorized only at the Toronto facility, at the Peterborough facility, for potential future business reasons.  Pelleting operations consist of the production of natural and depleted uranium dioxide (UO₂) pellets, which are then used together with zircalloy tubes to assemble fuel bundles for nuclear power reactors. The Peterborough facility is in a residential area of downtown Peterborough and is adjacent to an elementary school.

The Commission decision

In March 2020, the Commission held a 5-day public hearing to consider BWXT’s application.  Over two days in Toronto and three days in Peterborough, it heard from BWXT, from its own staff and from 248 intervenors, including CARN.

In its decision dated 18 December 2020,^{Footnote 3} the Commission renewed the licence for a period of ten years pursuant to s 24 of the NSCA and severed the single licence into two separate facility-specific licences for the Toronto and Peterborough facilities. The renewed facility-specific licences were validated from January 1, 2021 until December 31, 2030.

By majority decision, the Commission authorized commercial fuel pellet production by BWXT at the Peterborough facility, subject to three licence conditions, the first two commonly termed “hold points”:

• Licence Condition 15.1 required BWXT to submit and implement an updated environmental monitoring program at the Peterborough facility prior to the commencement of fuel pellet production;^{Footnote 4}
• Licence Condition 15.2 required BWXT to submit a final commissioning report related to production of fuel pellets that is acceptable to the Commission, prior to the commencement of commercial fuel pellet production at the Peterborough facility;^{Footnote 5} and
• Licence Condition 15.3 stipulated that fuel pellet production could be conducted at either the Toronto facility or at the Peterborough facility, but not at both facilities.^{Footnote 6}

The minority Commission decision (dissent) would not have authorized fuel pellet production at the Peterborough facility.  The Commission majority was satisfied that pelleting operations would be adequately safe at either location, since the public effective dose, the air uranium dioxide releases and the effluent uranium dioxide releases would remain well below regulatory and licence limits.  The majority found that BWXT was “entitled to determine how best to conduct its business, and that the Commission’s role is to ensure it does so safely in accordance with the NSCA and related regulations”.^{Footnote 7}  The minority, on the other hand, was of the view that even if the safety case were met for either location, the “question is not whether pelleting is safe in Peterborough, but rather, at what location is it ‘safer’ to pellet”.^{Footnote 8}

The minority was satisfied that the matter had to be viewed through the “As Low As Reasonably Achievable” (ALARA) principle, the justification principle, the precautionary principle and the relative risk of pelleting operations at either location.  Through these lenses, the minority would not have authorized pelleting at the Peterborough facility; the proximity of the elementary school and the concerns of residents were predominant factors for not allowing pelleting in Peterborough. The minority found:

…BWXT has not provided justification that would override the need to protect the more vulnerable population of Peterborough, and that it is therefore more justifiable to conduct pelleting in Toronto than in Peterborough.^{Footnote 9}

Respecting the “precautionary principle”, the minority reasoned that:

…even if it would be difficult to argue that there is potential for “serious or irreversible damages” with moving the pelleting operations, adding radiation doses and UO2 air and effluent emissions in a site which has an adjacent vulnerable population, is not acting in an abundance of precaution.^{Footnote 10}

The Commission majority was of the view that

… the very low levels of environmental releases and doses to the public would not have an impact on the health of persons and the environment, in accordance with subsection 24(4) of the NSCA. It is the licensee which has the responsibility to assess and document the rationale for its proposal, and the Commission is satisfied that BWXT will comply with the ALARA principle and aim at minimizing doses at either location. In addition, the majority is of the view that there is no reasonable basis on which to deny the request for flexibility to be built into the licence, which is conditional on further confirmation of these low levels via a final commissioning report and an updated safety analysis, should BWXT opt to transfer its pelleting operations;^{Footnote 11}

and reasoned as follows with respect to the adequate protection of the health and safety of persons and “relative risk” of pelleting operations at either facility:

the transfer of the pelleting operations would increase the environmental emissions of UO2 in air and water and the resulting dose to the public in Peterborough. However, it is the view of the majority that these doses would be so negligible that they would have no health and safety impact to persons and the environment, including to the most vulnerable population such as the students at the Prince of Wales Public School. Releases would be a very small fraction of the regulatory limits.^{Footnote 12}

The Decision of the Federal Court of Canada on the Judicial Review Application

The Federal Court per Mosley J. began his judgment and reasons in this matter as follows:

This is a case where community interests are in conflict with those of a business subject to a regulatory regime designed to protect the public. The question before the Court is whether the regulatory body responsible for administering the regime failed to discharge its duties properly in rendering a decision about the operations of the company. The test the Court must apply is not whether the Court agrees with the decision but whether it met the legal standard of reasonableness.^{Footnote 13}

The Court concluded that the decision was lawful and reasonable, and dismissed the application seeking to have the licence decision quashed.  There were four major issues in the application that the Court addressed:

• the appropriate standard of review, or level of deference to be given to the decision-maker
• the sufficiency of the licence renewal application materials and information provided for hearing
• the legality of the use of “hold point” licence conditions, and
• how the principles of ALARA, justification and precaution fit within the statutory scheme of the NSCA and domestic law, to assess the legality of the Commission majority decision.

(i) Standard of Review:

The parties before the Court agreed that the appropriate standard through which the Court ought to review the Commission decision was reasonableness.  The Court explained this standard as follows:

A reasonable decision is “based on an internally coherent and rational chain of analysis” and is “justified in relation to the facts and law that constrain the decision maker”. It must encompass the characteristics of a reasonable decision, namely, justification, transparency and intelligibility. The reviewing court must adopt a deferential approach and intervene only “where it is truly necessary to do so in order to safeguard the legality, rationality and fairness of the administrative process”.^{Footnote 14}

The Court cited as “directly relevant to the case at bar”, the following guidance of the Federal Court of Appeal in a 2016 decision respecting the review of another CNSC decision:

Where, as here, the issues at play involve detailed factual findings and discretionary decisions within the heartland of the tribunal’s expertise, the reasonableness standard requires that considerable deference be given to the tribunal’s determinations. This is particularly so when the issues under review concern nuclear safety and the tribunal is the nuclear safety regulator. In short, the CNSC is much better placed than a reviewing court to factually assess and determine what types of possible accidents are likely to occur at a nuclear power plant and how to conduct the assessment of the environmental impacts of potential accidents. It is therefore inappropriate for a reviewing court to second-guess these determinations through a detailed re-examination of the evidence as the appellants would have us do in the instant case. [emphasis added] ^{Footnote 15}

(ii) Sufficiency of the licence application material

In its judicial review application, CARN argued that BWXT’s licence application lacked information that was required by the statute and the applicable regulations, violating the statutory scheme and resulting in an unreasonable decision on the part of the Commission.  CARN submitted that since this alleged lack of sufficient information failed to satisfy the statutory and regulatory information requirements, the Commission therefore had no authority to license the activities.

The Court was not persuaded by this submission, finding that the sufficiency of an application received by the CNSC under the NSCA and its regulations was

… a subjective standard left to the Commission to enforce, as the Regulations provide broad, general standards, and terms defined without scientific precision. These broadly defined standards leave room for the Commission’s judgment. It is worth noting that the Commission itself wrote the Class I Regulations … Calibration of the precise level of specificity required by these broad terms is a matter Parliament left for the Commission, not for the Applicant or the Court. [emphasis added]^{Footnote 16}

The Court was satisfied that there was no reviewable error respecting this issue.

(iii) “Hold Point” licence conditions

In its challenge to the Commission’s decision, CARN argued that the licence conditions 15.1 and 15.2 imposed by the Commission unlawfully deferred key elements of the Commission’s decision-making and relieved the licensee of mandatory licence application requirements.  The conditions require that, before commencing pelleting operations in the Peterborough facility, the licensee must first provide updated information to be verified.  From the perspective of CARN, this is information that the Commission must have before it for evaluation before being in a position to authorize any activity.  For its part, the Respondent BWXT noted that the imposition of hold points was not an unusual practice for the Commission, and forward-looking hold points existed in many CNSC licences and remain an important part of ongoing regulatory oversight.

The Court noted that the NSCA confers a broad discretion on the Commission respecting the power to impose licence conditions.  Subsection 24(5) of the NSCA provides that:

A licence may contain any term or condition that the Commission considers necessary for the purposes of this Act, including a condition that the applicant provide a financial guarantee in a form that is acceptable to the Commission.

Finding this wording to reflect Parliament’s intention that the Commission have flexibility in its interpretation of its enabling authority, the Court found the Commission’s imposition of ‘hold point’ licence conditions to be a valid exercise of its discretionary power:

This is but one of the several “broad powers” the legislature has conferred on the Commission with regard to granting licences, pursuant to ss 24 and 25 of the NSCA.  Thus, the intention was that the Commission is to have significant leeway in interpreting the meaning of s 24(5) of the NSCA.

The broad and open language of s 24(5) is, in the Court’s view, a complete response to the question of whether the license conditions were lawful, as the enactment provides the Commission with statutory authority to issue licence conditions in the form of hold points that must be satisfied prospectively. The attachment of conditions in the form of hold points is not a deferral of a decision, but rather an integral part of the decision that the Commission made. Thus, the Commission’s decision was fully compliant with its enabling statute.^{Footnote 17}

The Court was also satisfied that there was no reviewable error on the part of the Commission in requiring additional information from a licensee in the future. The Court noted that “[c]hanges to a licensed facility or activity are expected. The Commission’s authority to attach any condition it considers necessary would have little or no purpose if licence applications must fully account for every contingency during the licence period.”^{Footnote 18}

(iv) the principles of ALARA, justification and precaution – customary international law and the NSCA

It is in relation to these issues – the issues in respect of which there was disagreement between the Commission Members deciding the matter – that the Court’s analysis in this case is most instructive.  The reasoning of the Court turns on how international law is made into domestic law in Canada, and also reflects a focus on what Parliament has specifically tasked the Commission with doing – preventing unreasonable risk and implementing Canada’s international obligations when discharging its regulatory function under the NSCA.

CARN submitted that the Commission exercised its statutory discretion unreasonably in light of three principles: (i) the ALARA principle; (ii) the justification principle; and (iii) the precautionary principle. These principles, CARN argued, have been entrenched in international law, and sections 3, 9 and 24(4) of the NSCA required that they be applied by the Commission.

With respect to the ALARA principle, the Court found that the Commission “did not unreasonably fail to implement the ALARA principle as there was no obligation for it to do so in its decision. The Commission properly found that the Respondent complied with the ALARA principle by monitoring radiation doses, implementing “action levels” and establishing an ALARA Committee.”  The Court was satisfied that “none of the regulations or regulatory documents cited by the Applicant create an obligation for the Commission’s decisions to comply with the ALARA principle, nor for its decisions to take into account social considerations in applying that principle”.

With respect to justification, it is important to note that, according to the applicant CARN, the justification principle dictates that the Commission could not authorize pelleting operations in the Peterborough facility without finding that the advantage or benefit posed by exposure to additional levels of ionizing radiation outweighed any risks.  The Court rejected this reasoning, accepting the argument of the respondent BWXT that in Canada under the NSCA, justification is a matter of “preventing unreasonable risk” under sections 3, 9 and 24 of the Act.  Importantly, the Court found:

In its response to the International Atomic Energy Agency declining its request to expressly incorporate the justification principle, the Commission noted that its licensing process “embodies” the justification principle of international law; however, it drew a distinction between the exercise of justification under s 24(4) of the NSCA, which requires that decisions be justified on the basis that there is no unreasonable risk, and the justification principle as understood under international law, which requires an assessment of whether the benefits outweigh the harm. Therefore, it cannot be said that the justification principle, as understood under international law, is believed to amount to a legal obligation in Canada. As such, it does not satisfy the criterion of opinio juris and does not constitute a norm of customary international law.^{Footnote 19}

In the result, the Commission’s determination that the licensee would adequately provide for the protection of the health and safety of persons, the protection of the environment, national security and Canada’s international obligations, satisfied the test for preventing unreasonable risk under the NSCA.

With respect to the application of the precautionary principle, the Court was satisfied that it was not engaged here, since there was, as had been established to the satisfaction of all of the Commission Members, no potential for serious or irreversible damages:

The Court agrees with the Respondent that […] the precautionary principle was not engaged in this instance. The Commission majority expressly found that “there would not be serious or irreversible damages” resulting from the transfer of pelleting operations to Peterborough. The dissenting Commission Member conceded “it would be difficult to argue that there is potential for ‘serious or irreversible damages’ with moving the pelleting operations”.The test is not, as the dissenting Member suggested, that the principle was breached because the transfer to Peterborough would not amount to “acting in an abundance of caution”. Thus it was reasonable for the Commission majority to determine that the precautionary principle was not engaged. [emphasis added]^{Footnote 20}

In its conclusion, the Court noted, in relation to the local concerns and societal considerations that were engaged in this matter, that while “[r]easonable people can disagree about whether expanding an industrial operation involving nuclear materials in a residential district and adjacent to a primary school is wise”, the technical evidence was clear and the Commission majority had acted reasonably and in accordance with the NSCA. The Court found that while it “may consider that the wisdom of expanding an industrial operation involving nuclear materials in the immediate vicinity of a primary school is dubious, that is not the question before it to determine”.^{Footnote 21}  In applying a standard of review of reasonableness, the Court was satisfied that the Commission majority decision was reasonable, and did not suffer from any error that would justify quashing the decision.

Significance

There are several ways in which this decision may be considered instructive, from the perspective of the interpretation of the NSCA as well as the interpretation of the scope of the Commission’s discretion under its enabling statute.  Firstly, it is of note that in 2022, the Commission continues to receive deference from reviewing Courts on its factual findings, its interpretation of its authorities under the NSCA and its discretionary exercise of those authorities, so long as Commission decisions are both within the scope of the Commission’s statutory mandate and expertise in nuclear safety, as well as being fully explained and justified with reasons that are intelligible and clear.

This extends to the Court’s recognition of a certain “flexibility” that the Commission has, to interpret its enabling statute and its own regulations.  This flexibility that Parliament intended means that ‘hold point’ licence conditions imposed by the Commission are well within its statutory power under section 24 of the NSCA.  In this respect, the Court recognized the reasonableness of imposing prospective requirements under a licence, as a function of regulatory oversight over time, and in light of changes that would be likely over time.

Importantly, the Court in this matter found that neither the ‘prevention of unreasonable risk’ under the NSCA nor the ALARA principle would require a specific analysis in this case that “benefits must outweigh harm”.  One may conclude that Parliament in making the NSCA has expressed the policy determination that nuclear activities are justified in Canada, and that it falls to the CNSC, in regulating those activities, to ensure they are done safely.  The NSCA may be seen as the manifestation of a general policy decision that the benefits of nuclear can outweigh its risks and are justified, so long as the CNSC performs its regulatory oversight to prevent risks that would be unreasonable.  Were it otherwise, if the benefits of nuclear activities did not outweigh their risks, the statutory scheme would be one of prohibition, not of regulation and risk minimization.

Finally, the decision is also an important reminder that principles and tenets of international law, in order to be applicable in Canada, must be made into domestic law, and it is domestic law which applies to the regulated community.  When the Commission weighs the evidence before it, it is the NSCA mandate that must guide its decisions.