February 1, 1958

ATOMIC ENERGY

URANIUM

PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Hon. Gordon Churchill (Minister of Trade and Commerce):

Mr. Speaker, I have a statement concerning Canada's atomic energy program which I should like to make at this time. I regret the length of the statement, but the subject is very important.

In March, 1948, Eldorado Mining and Refining Limited was designated by the government as the sole purchaser of uranium produced in Canada. Since that time Eldorado has entered into purchase contracts with 16 companies and has entered into matching sales contracts. The total value of these contracts is approximately $1,425,723,000.

Six of the companies are now in full production, four are producing but not at the rated capacity, and six have still to come into production. In addition, Eldorado has entered into sales contracts covering production from its own mines, which contracts have a total value of approximately $211 million.

During 1957 Canada produced 6,687 tons of uranium. It is estimated that 13,000 tons will be produced in 1958, and it is expected that production will rise to approximately 15,500 tons in 1959. The total value of shipments made under contracts as at December 31, 1957, was $223,162,037.

The bulk of the uranium to be produced under existing contracts will be delivered to the United States atomic energy commission under an arrangement entered into in March, 1948. This arrangement provided that Canada would reserve for its own use such quantities of uranium as might be required for the Canadian program. In 1956 the United Kingdom expressed a desire to obtain some part of its uranium requirements from Canada. As announced on March 26 last at the conclusion of the Bermuda conference, a contract with an approximate value of $115 million has been entered into with the United Kingdom atomic energy authority. Deliveries will be made over a period ending March 31, 1962, by diversion from existing contracts.

It was also stated in the joint communique issued following the Bermuda conference that consideration was being given to the 96698-262

supply from Canada of a substantial part of the uranium requirements of the United Kingdom atomic energy authority in the period after March 31, 1962. Arrangements have now been made whereby the United Kingdom atomic energy authority will obtain an additional quantity of uranium with an approximate value of $105 million. The delivery of this quantity will be made over the period April 1, 1962, to March 31, 1963, by a diversion from quantities now under contract which are scheduled for delivery in that period.

Negotiations are now under way with regard to the supply from Canada of a substantial part of the uranium requirements of the United Kingdom atomic energy authority over the period April 1, 1963, to December 31, 1966. These negotiations are proceeding satisfactorily, and Canada has undertaken to supply the quantity which the United Kingdom atomic energy authority has requested in this period. This will be supplied from quantities under option in the present purchase contracts.

In each of the three periods in question Canada has undertaken to supply in full the quantities requested by the United Kingdom atomic energy authority. Moreover, the same authority has been advised that the quantities could be increased should this be desired.

On the basis of present information it is expected that certain uranium mines will be able to produce in excess of the rates specified for delivery in their contracts with Eldorado. Every effort will be made to sell this surplus uranium to individual friendly countries and to organizations of friendly countries such as Euratom and the organization for European economic cooperation. These sales will be made under agreements for co-operation in the peaceful uses of atomic energy. As announced in the house some days ago, such an agreement has now been entered into with the Federal Republic of Germany. Negotiations for a similar bilateral agreement with the Confederation of Switzerland are now under way. Uranium sales will be made under these two bilateral agreements. At the conference of the international atomic energy agency held in Vienna in October the Canadian delegation advised the conference that Canada could make available to the agency substantial quantities of uranium.

Atomic Energy-Uranium Sales Contracts

The nature and scope of the research and development program under way at Chalk River are described in detail in the annual report of Atomic Energy of Canada Limited which was tabled on October 15. The objectives of the program are fourfold; first, to develop economic nuclear power in order that nuclear power may be available for use in Canada in those regions where a new source of energy will be required to supplement existing conventional sources; second, to carry out this development in a manner which will provide for the most effective participation of the utilities and the manufacturers; third, to expand the civil market, both domestic and foreign, for Canadian uranium; fourth, to produce and market radioisotopes for use in industry, medicine and research, and to develop new uses for these radioisotopes.

The development of economic nuclear power involves three main areas of activity, fundamental research, applied research, and the design, construction and operation of demonstration nuclear power plants. These activities have a common objective, the development of a power reactor technology based on the use of natural uranium as a fuel and heavy water as a moderator, the technology which Canada pioneered so successfully with the NRX reactor.

The fundamental research program under way at Chalk River consists of pure research in physics, chemistry, biology, physical metallurgy, and associated sciences. It is necessary that this program be continued and expanded in areas of particular interest if Canada is to maintain her position as one of the countries most advanced in the science of atomic energy, and if Canada is to continue to play an appropriate part in the program of international co-operation in the field of atomic energy.

It is now recognized in all nuclear programs that the economics of nuclear power can only be demonstrated by designing, engineering, constructing and operating nuclear power plants. Canada has two power reactor projects under way, the design and construction of a demonstration power reactor known as the NPD with an output of 20,000 kilowatts electric, and a design study for a power reactor with an output of 200,000 kilowatts electric.

Construction of the NPD reactor was suspended in April last in order to incorporate in the design certain new and desirable features. The work of redesign was completed successfully late in 1957. Fabrication and construction will now be resumed. It is expected that the NPD reactor will be in operation early in 1961. This project is being carried out in

co-operation with the Hydro-Electric Power Commission of Ontario and the Canadian General Electric Company. While it is not expected that the NPD station will produce power at competitive costs, it will demonstrate reliability of operation; it will provide information on fuel element design and performance, and it will serve as a prototype for nuclear stations with a larger power output.

Reference has been made in the annual report of Atomic Energy of Canada Limited to the results of the preliminary design study for a nuclear power station with an output of

200,000 kilowatts electric. A conceptual design was proposed in the report which offers good promise of producing power at an acceptable cost. However, the proving-up of the engineering and economic feasibility of the conceptual design proposed in the report will require a large and comprehensive development program. This program will take a period of from three and one-half to four years for its execution. The government has now approved the carrying out of such a program.

Atomic Energy of Canada Limited will set up a nuclear power plant division in Toronto which will be responsible for directing both the NPD project and the development program for the large reactor. All the Canadian utilities and those manufacturers who are now engaged in the program or who have an interest in the program will be invited to contribute staff to the new division. In this way we hope to provide for the most effective participation of the utilities and the manufacturers in the development of economic nuclear power.

It is estimated that the net cost of the research and development program, including the cost of the two power reactor projects, over the period April 1, 1958, to March 31, 1926, will be $140 million. This estimate has been established after allowing for certain revenues which Atomic Energy of Canada Limited will earn in that period and after allowing for the contributions which the Hydro-Electric Power Commission of Ontario and the Canadian General Electric Company will make toward the cost of the NPD station. Of the total amount of $140 million, approximately $100 million will be required to maintain the programs in fundamental and applied research and approximately $40 million will be required for the two power reactor projects.

The requirements of funds in each fiscal year over the four-year period will be subject to parliamentary approval. However, I have thought it desirable to give the house an estimate of the total requirements, since in a program of this kind commitments cannot be confined to a single fiscal year.

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Hon. L. B. Pearson (Leader of ihe Opposition):

Mr. Speaker, I think the house will have listened with great interest to this important statement of the minister which deals with the development and marketing of one of our most important products and will, I think, have learned with satisfaction that the policy of the previous government in working out bilateral contracts with other governments for the sale of this commodity is making progress. In his statement the minister indicated the commitment of the government to make available certain quantities of uranium to the international atomic energy authority. Perhaps he will permit me to ask him at this time whether that is to be by gift or by sale.

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink
PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Mr. Churchill:

I think perhaps that will be by sale.

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink
CCF

Stanley Howard Knowles

Co-operative Commonwealth Federation (C.C.F.)

Mr. Stanley Knowles (Winnipeg North Centre):

May I too join in the welcome that has been indicated with respect to the statement made by the Minister of Trade and Commerce. May I ask him one question. Does the three and a half to four year development program to which he referred envisage that at the end of that period electricity from nuclear power will be commercially available.

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink
PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Mr. Churchill:

Some power will be available from the NPD power reactor producing, it is estimated, 20,000 kilowatts of electric power. At the end of the four-year period its design will be completed and the construction arranged of the larger power reactor which will take some further time for construction. At the conclusion of that operation it is expected to produce 200,000 kilowatts of electric power.

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink
CCF

Stanley Howard Knowles

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles (Winnipeg North Centre):

The

minister is getting close to my point. What is his forecast of the length of time between the end of the four-year period and the time taken to get that further development?

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink
PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Mr. Churchill:

I should not like to hazard a guess at this stage until more research has gone forward with regard to the designing of the larger power reactor.

Topic:   ATOMIC ENERGY
Subtopic:   URANIUM
Sub-subtopic:   CANADIAN PROGRAM
Permalink

WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT


ON 1956-57 crop


PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Hon. Gordon Churchill (Minister of Trade and Commerce):

I have another announcement to make which will be of interest to the house. I should like to advise the house that I have received a report from the Canadian wheat board dealing with the financial position of the 1956-57 wheat account. This account is in a surplus position, 96698-262J

Wheat-Interim Payment and it is possible to make an interim payment to producers in the near future. The government has therefore authorized an interim payment of 10 cents per bushel on all grades of wheat except milling grades of Durum wheat, upon which the interim payment will be 25 cents per bushel.

Producers delivered 361.4 million bushels of wheat to the 1956-57 pool. Taking into account the higher interim payment rate on milling grades of Durum wheat, the payment will provide for the distribution of $39.2 million to producers. It will be possible for the wheat board to commence issuing interim payment cheques within the next two or three weeks.

I might add, as indicating the success of the program for this year, that the total of this interim payment exceeds the total of last year by something over $2 million.

Topic:   WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT
Permalink
LIB

James Garfield Gardiner

Liberal

Right Hon. J. G. Gardiner (Melville):

May

I be permitted to say to the minister that the farmers of western Canada, more particularly those in Saskatchewan, who produced considerably more than half of this wheat, will be very much helped by the payment by the wheat board at this time, which I am sure they will greatly appreciate.

Topic:   WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT
Permalink
CCF

Hazen Robert Argue

Co-operative Commonwealth Federation (C.C.F.)

Mr. H. R. Argue (Assiniboia):

I wonder if the minister could say whether, prior to making this announcement, consideration was given to the possibility of paying into the account a deficiency payment from the treasury so that an interim payment of at least 20 cents a bushel might have been made, namely the same kind of payment which had been made for many years until a few years ago. Second, could the minister say when a payment will be made on the barley account?

Topic:   WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT
Permalink
PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Mr. Churchill:

With regard to the second part of the question, with respect to the barley account, the wheat board is now reviewing that situation and they consider that the barley pool is in good condition. My hope is that some payment will be forthcoming very soon.

With regard to the first part of the question, as to whether or not consideration had been given to adding a deficiency payment to this interim payment, I perhaps heard the hon. member incorrectly but I thought he said this had been done in the past, which was news to me. We were not able at this time to consider making the payment he suggests along with this interim payment. The whole question of deficiency payments has been brought to our attention very vigorously by farm organizations, but no decision has been reached as yet.

Inquiries of the Ministry

Topic:   WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT
Permalink
CCF

Hazen Robert Argue

Co-operative Commonwealth Federation (C.C.F.)

Mr. Argue:

I wonder if I might explain what I had in mind. Is the minister aware that in the vast majority of the years since the war the interim payment has been 20 cents a bushel, but in the last two or three years only the interim payment has become 10 cents a bushel?

Topic:   WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT
Permalink
PC

Gordon Minto Churchill (Minister of Trade and Commerce)

Progressive Conservative

Mr. Churchill:

I have examined all these figures very carefully, Mr. Speaker. The interim payment being made now corresponds with the interim payments made in the last four or five years and, as I have pointed out, the total amount is substantially higher than for the last year.

Topic:   WHEAT-ANNOUNCEMENT OF INTERIM PAYMENT
Permalink
LIB

REFERENCE TO INQUIRY INTO ALLOCATION OF BOX CARS


On the orders of the day:


February 1, 1958