Atomic Energy of Canada Ltd.’s (AECL’s) CANDU reactor division is to be sold to Canadian engineering firm SNC-Lavalin Group Inc. for C$15 million Canada’s natural resources minister, Joe Oliver, announced last Wednesday.

Under the terms of the agreement, SNC-Lavalin, through its wholly owned subsidiary CANDU Energy, will take over the CANDU Reactor Division’s three business lines: services to the existing fleet, life-extension projects, and reactor new builds.

The Government of Canada will retain ownership of all CANDU intellectual property, while providing an exclusive licence to CANDU Energy to grow its business. In addition to an upfront payment of $15 million from SNC-Lavalin, this will create an opportunity for Canadian taxpayers to benefit from royalties on future sales of reactors, future life-extension projects and certain products and services, AECL said.

The government press release said that "The transaction is part of a necessary restructuring amid challenging domestic and international developments and is consistent with the overall Government approach to fiscal responsibility. It is a critical step to strengthen Canada’s nuclear industry while reducing taxpayers’ exposure to nuclear commercial risks." It also said that "approximately 1,200 jobs will be protected at the closing of the transaction."

Nevertheless, The Toronto Star reported that "The union representing engineers and other professionals at AECL said the deal will chop about 40 per cent of the division’s staff [about 800], most working at AECL’s Sheridan Park labs and offices in Mississauga."

The Star quoted Oliver as saying that the deal is a good one for the government because "Cost over-runs have contributed to total funding requirement of the Candu reactor division of about $1.2 billion over the past five years." He added, "This cannot continue, given our government’s commitment to fiscal responsibility."

Sources: Natural Resources Canada, Toronto Star