Harry Koza
Thomson IFR Bonddata
January 12, 2006

Energy Probe has released a new study examining federal subsidies to Atomic Energy of Canada (AECL). According to Probe, since its inception in 1952, subsidies to AECL account for CAD74.5 bln of today”s federal debt. Further, Probe contends that had those subsidies been instead invested in the Canadian economy, their value today would be CAD194.6 bln, roughly equivalent to 11.5% of the market cap of the TSX.

In addition, AECL has a morass of contingent liabilities, some of which could confer big future costs on taxpayers. The study”s conclusion is that the ongoing subsidies to AECL are a significant drain on Canada”s national resources, and there is no prospect of taxpayers ever recovering the investment. You can access the entire report here.

With Ontario now embarked on attempting to solve its major electricity problems with a huge new commitment to nuclear power, the report is particularly timely, and should be of particular interest to holders of Ontario debt.