Canada’s federal nuclear waste liability is $16 billion

November 2, 2020

…estimates of AECL’s nuclear liability are heavily discounted, such that when the discount rate increases, the liability decreases.[1]  Actual clean-up costs are far higher.  AECL’s 2018 Annual Report stated that “The undiscounted future expenditures, adjusted for inflation, for the planned projects comprising the liability are $15,932.9 million.”[2]  

The accounting firm Deloitte recommends discounting for environmental liabilities and asset retirement obligations only if two criteria are met:

·         The “aggregate amount of the liability or component” is “fixed or reliably determinable.”

·         The “amount and timing of cash payments for the liability or component are fixed or reliably determinable.”[3]

Neither condition is met in the case of the Government of Canada’s nuclear liabilities.  Both liability amounts and timing of cash payments are highly uncertain.  The federal government funds AECL’s decommissioning and waste management expenses on an annual basis. 

[1] Atomic Energy of Canada Limited 2016 Annual Report, p. 20.

[2] Atomic Energy of Canada Limited 2018 Annual Report, p. 50.

[3] A Roadmap to Accounting for Environmental Obligations and Asset Retirement Obligations, Deloitte, 2019.
Excerpt from  “The Government of Canada’s Radioactive Wastes:  Costs and Liabilities Growing under Public-Private Partnership”