‘Elbows up’ means 'lots of things,' energy minister says after pressed on U.S.-based nuclear contract
OTTAWA — Pressed on a Crown corporation’s decision to award a contract to a U.S.-based joint venture for the management of the country’s nuclear laboratories, Energy Minister Tim Hodgson suggested his government’s promise of “elbows up” can mean “lots of things.”
The National Post first revealed in June that critics were sounding the alarm on the recent decision by Atomic Energy of Canada Limited (AECL) to award a contract to sole bidder Nuclear Laboratory Partners of Canada Inc. (NLPC) — a joint venture led by U.S.-based BWXT — for the management and operation of Canadian Nuclear Laboratories (CNL).
CNL includes mainly Chalk River Laboratories, the birthplace of the CANDU reactor.
Critics raised national security concerns about giving access to Canada’s homegrown nuclear technology to companies involved with the U.S. Department of Defence at a time when Canada’s sovereignty was seemingly under attack by the Trump administration.
It appeared to be also contrary to Prime Minister Mark Carney’s “elbows up” campaign promise, even though AECL awarded the contract independently from the government.
NLPC is spearheaded by Virginia-based BWXT — an important supplier to the U.S. Defence Department. The other partners are Amentum — also based in Virginia — and Kinectrics Inc. — a company based in Toronto but bought by BWXT earlier this year.
Its key subcontractor, Ohio-based Batelle Memorial Institute, is the world’s largest research and development organization and manages national laboratories, including for the U.S. Department of Energy and the U.S. Department of Homeland Security.
The management contract is valued at $1.2 billion per year on average, for six years, but could be extended up to a total of 20 years based on performance indicators.
The contract was originally planned to start on Sept. 13, but after the National Post reported on the transaction, a news release from AECL announced that it was delayed to a further date pending an “outstanding regulatory review of the transition” to be completed by the Competition Bureau.
“The Bureau works to complete our merger reviews as quickly as possible. That said, we must complete a thorough examination of the facts of a transaction before reaching an evidence-based conclusion,” said John Power, a spokesman for the Competition Bureau.
“As such, it would be inappropriate to speculate as to when the Bureau will reach its conclusion.”
A spokesman for AECL, Jeremy Latta, could not provide an exact date as to when the transition would occur. He would also not say if AECL would wait for the Competition Bureau to complete its investigation before proceeding with the hand-off to NLPC.
In the meantime, Canadian National Energy Alliance (CNEA), a consortium led by AtkinsRéalis, is continuing to manage CNL, as it has been doing for the past decade.
Hodgson, who was appearing at the House of Commons natural resources committee on Monday, had a testy exchange with Conservative MP Corey Tochor in explaining AECL’s decision to award a contract to a U.S.-led venture for Canada’s nuclear laboratories.
Hodgson reiterated that NLPC management is based in Canada — a contractual obligation for all members, including the CEO — and that every CNL employee is in Canada. He has also previously said that 95 per cent of the money involved will be spent in Canada.
“Are you against any American company operating in Canada?” the minister asked Tochor, adding that he does not think that view is “consistent” with Conservative thinking.
Tochor shot back: “I think it’s consistent with the ‘elbows up’ campaign you just ran.”
Hodgson replied that “‘elbows up’ means lots of things.”
“Elbows up means negotiating with all of the countries in the world, doubling our exports, creating alternatives to Americans. That’s what we’re doing,” he said.
Tochor also mentioned that the Competition Bureau announced last week it has expanded its investigation into BWXT’s acquisition of Kinetrics in determining whether the transaction is likely to prevent competition in Canada’s live-saving medical isotopes.
Hodgson said the Competition Bureau is an “independent entity” and is not in his department but said he does not see anything wrong with the process taking place.
“Look, I was in the investment banking world for my entire life. It is normal for transactions to be reviewed. Because a transaction is being reviewed, it in no way implies there’s anything wrong. It’s a normal process,” he said.
Latta, spokesman for AECL, has said this review process by the Competition Bureau concerns a “separate transaction” than NLPC’s acquisition of CNL shares.
Later in the committee meeting, Conservative MP Jonathan Rowe tabled a motion — initially put on notice by his colleague Shannon Stubbs, who is currently on medical leave — to study AECL’s decision to award a contract to a U.S.-based joint venture.
The motion proposed to invite Hodgson, as well as representatives from AECL, Natural Resources Canada, the Treasury Board Secretariat and any other witnesses the committee deems appropriate, as well as the production of documents relevant to this decision.
Liberal MPs on the committee, however, said that the study would interfere with the Competition Bureau’s investigation and shut down debate on the motion.
National Post calevesque@postmedia.com
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