Ontario real Estate Newsletter
November 1, 1989
Just imagine that, against all calculated odds, a fairly serious accident occurs at one of Ontario Hydro’s nuclear power generators at Pickering. Radioactive contamination is released and everyone living or working within a 15 km radius is ordered to evacuate. The affected area includes all of Pickering, Ajax, Whitby, plus the east end of Scarborough. After living in tent cities and school gymnasiums for a month, the victims are told that, although there is no real danger and just to be on the safe side, no one can be allowed back into the affected area for another two months (to give army decontamination crews time to hose down the buildings and generally flush radioactive dust into Lake Ontario). Of course children should stay clear for at least a year! In the meantime, while Toronto real estate will have taken a serious nose dive, property values in the affected area will be worth about zero on the open market. So who pays for lost equity (not to mention lost business and wages)? Well, Ontario Hydro will be liable for a maximum of $75 million – say two hundred dollars per person affected. If property owners want more they will have to look to the federal government for compensation. Who knows, they might eventually get as much as fifteen cents on the undepreciated dollar (if they are lucky).
Of course, Ontario Hydro would argue that the possibility for such a serious nuclear accident to occur at one of their CANDU plants is simply too remote to be taken seriously. However, Canadian insurance companies refuse to take the nuclear industry’s assurances seriously. They specifically exclude coverage for nuclear accidents from property insurance policies. Like insurrection and war, nuclear accidents are considered by the insurance companies to be so potentially catastrophic that they are too risky to insure. Canada’s Nuclear Liability Act was brought into force in response to that attitude. According to David Poch, lawyer for Energy Probe, the Nuclear Liability Act “guarantees suppliers in the nuclear sector protection from claims of victims in the event of a nuclear accident”, and limits the financial liability of plant operators to a token $75 million.
Unhappy with the situation, Energy Probe, the City of Toronto, and 11 individuals have challenged the legality of the Nuclear Liability Act. Ontario Hydro, NB Power and the Federal government tried to stop them getting the case to court but last month they lost that fight. The utilities and the federal government had argued in the Ontario Court of Appeal that there was no reason to hear the case in court, that it was all academic until there was a meltdown. The Court disagreed. It accepted Energy Probe’s argument that the case should be heard because the Act may discourage safety consciousness on the part of the private sector nuclear parts suppliers. The Court agreed that the Act subsidized the industry, and could affect the likelihood of future plants being built. The government and the utilities tried again, this time appealing to the Supreme Court. On October 13th the Supreme Court of Canada refused to hear the appeal. So the nuclear industry will face trial on the liability law.
According to Clayton Ruby, the lead counsel for the plaintiffs challenging the Act, “The Act’s very existence exposes the industry’s own fears of catastrophic accidents. The industry wants financial protection from nuclear accidents. We will argue that government should be protecting the public from the industry, not the other way round.”
We agree with Mr. Ruby and believe it is in the interest of property owners to support this challenge to the Nuclear Liability Act. Most car owners carry $1,000,000 in public liability. The public liability of a nuclear power plant operator should not be limited to the insurance equivalent of 75 automobiles.