CRAG Meeting Minutes, March 3, 2009
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Cost Recovery Advisory Group (CRAG)
Minutes of Meeting
March 3, 2009
- Introduction and Opening Remarks
- Status of Action Items from Last CRAG Meeting
- CRAG Member Roundtable Retrospective
- The Future of CRAG – Looking and Moving Forward
- Operational Management of Cost Recovery
- Financial Update
- June 2009 International Regulatory Review Service Mission to Canada
- Concluding Comments / Next Meeting
Members in Attendance
Canadian Nuclear Association
Mr. Steve Coupland
Nuclear Reactors
Ontario Power Generation
Mr. Imtiaz Malek
Nuclear Research and Test Facilities
Atomic Energy of Canada Limited
Mr. Bernard Gerestein
Uranium Processing Facilities
Cameco Fuel Manufacturing
Mr. John P. Jarrell
Uranium Mines
Cameco Corporation
Mr. John P. Jarrell
Nuclear Substance Processing
MDS Nordion
Ms. Jackie Kavanagh
Accelerators
Pharmalogic
Mr. André Gagnon
Canadian Industrial Radiography Safety Association
Aztec Inspection Inc.
Mr. Rick DeBruyn
Nuclear Substances and Prescribed Equipment
Jacques Whitford Limited
Mr. Jean St-Pierre
(portable gauges)
Team Industrial Services Inc
Mr. Rick Robichaud
(Nondestructive Testing Management Association)
CNSC Representative
Jason Cameron - Chair
Other:
CNSC Staff
Gordon White – Vice President and Chief Financial Officer, Corporate Services Branch
Patricia McDowell – Vice President, Regulatory Affairs Branch
André Joannette – Director General, Finance and Administration Directorate
Barclay Howden – Director General, Directorate of Regulatory Improvement and Major Projects Management
André Régimbald – Director General, Directorate of Nuclear Substance Regulation
Clare Cattrysse – Director, Policy Coordination Division
Brian Gracie – Senior Project Officer, Internal Quality Management Division
Lee Brunarski – Senior Policy Officer, Policy Coordination Division
1. Introduction and Opening Remarks
J. Cameron opened the meeting by having those around the table introduce themselves.
J. Cameron reviewed the agenda CRAG members had received, and asked for members’ concurrence to add a brief item – a presentation on the upcoming international review of the CNSC’s regulatory system, which members agreed to.
J. Cameron noted that some documents on the CNSC’s public web site related to the Cost Recovery Advisory Group (CRAG), including the Terms of Reference (TOR) and the membership, are in need of an update.
The documents are available at http://www.nuclearsafety.gc.ca/eng/licenseesapplicants/costrecovery/crag/index.cfm
Action: CNSC to update CRAG-related documents for CNSC public web site, and inform CRAG members when completed.
J. Cameron added that L. Brunarski would be taking minutes and noting action items, and that an attempt would be made to circulate a draft version of the Minutes to CRAG members within two weeks of the meeting.
Action: J. Cameron to distribute a draft version of the Minutes to CRAG members for review and comment.
2. Status of Action Items from Last CRAG Meeting
J. Cameron summarized the status of the action items raised at the last CRAG meeting.
After reporting that no new audits had been posted on the CNSC web site, and that, as Chair, he remains committed to informing CRAG members whenever audits or assessments are posted, J. Cameron noted that the CNSC is moving to have external members on its internal audit committee, which is in-line with best practices and the Government of Canada’s new Internal Audit Policy.
G. White added that two of the three external members on the CNSC internal audit committee will be retired public servants.
A CRAG member asked about the status of the CNSC’s Management Accountability Framework (MAF). A. Joannette responded that updates are provided on the CNSC public web site, which also makes available the original MAF, the CNSC Management Response, and progress against commitments.
J. Cameron noted that, in response to a request at the last CRAG meeting, FY 2008-09 mid-year actual expenditures and year-end projected costs were provided to fee-paying licensees in August 2008.
In response to J. Cameron’s question on how the earlier reporting structure worked, a CRAG member stated that the deadline was met, and it will be interesting when the actuals arrive for the balance.
J. Cameron recounted that he sent CRAG members an update on April 1, 2008 regarding the implementation of the CNSC’s Revenue Spending Authority.
3. CRAG Member Roundtable Retrospective
Members were invited to provide comments or identify issues that have arisen, with respect to CNSC cost recovery, since the last CRAG meeting.
A CRAG member noted that there is often a significant difference between CNSC cost estimates and actual costs, which presents challenges for those with limited budgets, and that estimates and actuals should align better.
A CRAG member wondered whether there is a mechanism to give an idea of what fees will look like as the CNSC moves from an organization formerly comprising 400-500 staff, to one which comprises 700-800 staff, and possibly as high as 1000 staff.
4. The Future of CRAG – Looking and Moving Forward
J. Cameron noted that 2008 was a transition year for the CNSC, and the present is a good time to revisit CRAG’s raison d’être, since the CNSC is reviewing most of its stakeholder engagement initiatives.
J. Cameron continued that CRAG is a mature entity, and was created to help the CNSC through the initial stages of implementing the CNSC’s Cost Recovery Fees Regulations, and remains a useful mechanism for the exchange of information on the management and future of the CNSC cost recovery program.
J. Cameron expanded that CRAG members should, however, give thought to certain aspects of CRAG, including the Terms of Reference, frequency of meetings, level of participation, reporting, etc., so that CRAG can play a constructive role going forward.
A CRAG member suggested that CNSC licensees would like to have more influence in the development and implementation of CNSC policies, especially those that effect licensees’ costs, but concluded that that type of input may be beyond CRAG.
Another CRAG member advocated for a CNSC ombudsperson’s office, which would allow CRAG members substantive input on CNSC policy directions, because licensees pay for a lot of the CNSC’s policies.
A CRAG member raised the issue of costs associated with Certified Exposure Device Operators (CEDO), particularly that the costs pose a barrier to individuals; especially high school graduates, trying to enter the business. A. Régimbald responded that the CNSC regularly meets with industrial radiography groups, and in November 2008 in Ottawa and Alberta, the CNSC outlined its strategy for improving the regulatory oversight of industrial radiography licensees.
A. Régimbald continued that, in looking for improvements, the CNSC will involve industrial radiographers in the discussion to determine what is reasonable to achieve the CNSC’s regulatory mandate while respecting the needs of the industrial radiography community. A. Régimbald concluded that the CNSC must respect its mandate to regulate the industry to achieve the desired levels of safety for workers and the public.
A CRAG member stated that the cost benefit analysis of requirements that are made via licence conditions is not the same for those that result from formal regulatory changes, and that the CNSC system underestimates the cost of re-licensing, where some projects become virtual research projects, with no defined scope for CNSC project officers.
J. Cameron responded that as the CNSC transitions to revenue spending authority, it will be incumbent on the CNSC to reduce variations in fees estimates. B. Howden added that the CNSC needs to better estimate costs, and to make technical improvements, notably, by implementing a process-based system in which experts work within envelopes.
5. Operational Management of Cost Recovery
5.1 Regulatory Activity Plans
B. Howden made a presentation on Regulatory Activity Plans (RAP), which included a proposal for a new approach to presenting information in fiscal year 2009-2010 RAPs.
A. Joannette explained that the reformatted RAPs will include a breakdown of all CNSC costs incurred in regulating licensees, including internal CNSC services – overhead – which represents approximately 30 per cent of the costs.
B. Howden, in response to a CRAG member question responded that under the new RAP format, costs for generic issues may be spread over the entire licensee base, or sub-sets, and that other, licensee specific costs will be charged directly to individual licensees.
As presented, the new RAP format removes a column of quantitative data from the RAPs, but in response to a CRAG member comment on the utility of the quantitative data for planning purposes, B. Howden agreed that, outside of the RAP process, some quantitative data will continue to be provided to licensees with an interest.
Action: CNSC to continue providing some quantitative data, outside of the RAP process, to licensees with an interest.
5.2 Compliance Coefficient Update
A. Régimbald made a presentation on the Compliance Coefficient Update.
A. Régimbald explained that during the last year, the CNSC has looked at the Compliance Coefficient and determined that it is too complicated.
Beginning April 1, 2009, CNSC staff will now identify regulatory effort spent in addition to baseline regulatory activities, and this information will be provided to CNSC Finance, which will note and bill licensees separately for CNSC staff regulatory effort in addition to baseline.
5.3 Financial Guarantees Update
J. Cameron informed CRAG members that there was no formal update to provide on financial guarantees, but that the CNSC is rethinking its approach to financial guarantees, for example, whether the application of financial guarantees for Class II facilities is robust enough.
Action: J. Cameron to keep CRAG members informed of developments on CNSC approach to financial guarantees.
6. Financial Update
6.1 Revenue Spending Authority
A. Joannette made a presentation on the CNSC’s Revenue Spending Authority, and noted that approximately 50% of the total increase in fees for 2009-2010 is associated with increased CNSC regulatory effort related to new build nuclear power plants, which will be cost recovered from new build licensees.
6.2 Update on Hourly Rate for Calculating Formula Fees and Special Project Fees
A. Joannette presented an update on the CNSC hourly rate for calculating formula fees and special project fees and noted that the CNSC hourly rate has not changed since 2003 and that formula fees will be reviewed in the context of cost-recovery.
In response to a CRAG member question, J. Cameron noted that some contact information on the dispute resolution portion of the CNSC public web site will be updated. A. Joannette confirmed that licensees are not charged for using the CNSC dispute resolution process, which is overseen by CNSC staff.
6.3 Review of the Office of the Auditor General’s Audit of CNSC Costing Methodology
A. Joannette presented a review of the Office of the Auditor General’s (OAG) financial audit attesting to the CNSC’s compliance with the Cost Recovery Fees Regulations and noted that the OAG is of the opinion that the CNSC has complied with the Cost Recovery Fees Regulations.
In response to a CRAG member question on how the CNSC determines the appropriate level of control over the development of regulatory documents, B. Howden replied that the CNSC is doing a regulatory framework review, and is guided by the government’s Cabinet Directive on Streamlining Regulation, which emphasizes a triaging of regulatory tools using regulations as a last resort. The CNSC is also reviewing its process for the production of regulatory documents to make it shorter, while ensuring the level of consultation is appropriate.
A CRAG member asked whether the CNSC emphasis on simplification will translate into reduced costs for licensees. B. Howden responded that the CNSC will improve its efficiency, which will allow it to do more work with similar resources. B. Howden noted that the CNSC is still trying to stay abreast with an industry that is growing in all of its parts.
In response to a CRAG member question about CNSC benchmarking, G. White replied that a consulting firm hired by the CNSC is carrying out an analysis of the current implementation of the cost recovery regime with a view to making recommendations for changes in the future. Their review will include an assessment of the CNSC against the United States and United Kingdom.
Action: CRAG members to be kept apprised of the CNSC’s review of its cost recovery model and included in future consultations on new approaches.
7. June 2009 International Regulatory Review Service Mission to Canada
B. Gracie made a presentation on the International Regulatory Review Service (IRRS) Mission to Canada that will take place in June 2009. B. Gracie explained that IRRS program, launched by the International Atomic Energy Agency (IAEA), will compare, where possible, the regulatory practices in Canada with international standards and equivalent good practices elsewhere.
B. Gracie added that the IRRS peer review is conducted by a team of international experts with direct experience in the areas being evaluated.
In response to a CRAG member question on the effects on licensees of the IRRS Mission, B. Howden responded that it is expected that the Mission will result in suggestions to improve the CNSC’s regulatory effectiveness and efficiency. B. Howden, in response to another CRAG member question, added that the IRRS report will be made public.
In response to a CRAG member question on whether the CNSC Management System Manual will be evaluated, B. Howden responded that part of the IRRS Mission will be to look at what the CNSC has and what improvements can be made. The goal for the CNSC following the IRRS Mission, is to be able to show in five years that the CNSC has done what it said it would do, which will be indicated in a CNSC management response to the IRRS report, on the CNSC public web site.
8. Concluding Comments / Next Meeting
J. Cameron thanked CRAG members for attending and asked CRAG members to consider the future direction of CRAG (e.g., engaging the entire group versus sub-groups within the group, including how and with what frequency, how to get information out and interact on a more frequent basis, etc.), and to share their thoughts with him.
Action: CRAG members to consider future direction of CRAG and share thoughts with J. Cameron
G. White added that once per year communication with CRAG members is not sufficient, and from a Corporate Services Branch perspective, he will encourage better communication with CRAG members. G. White noted that the CNSC is transitioning from an organization funded by Parliamentary appropriations to one that collects fees directly from licensees and that better aligning estimates to actuals is an important part of that transition.
A CRAG member suggested that the next CRAG meeting be held in fall 2009, following the IRRS Mission.
J. Cameron committed to give some thought to the timing of the next CRAG meeting and to discuss timing and agenda issues with CRAG members via e-mail.
Action: J. Cameron to discuss timing and agenda of the next CRAG meeting with CRAG members via e-mail.
Summary of Action Items from CRAG Meeting, March 3, 2009
Action: CNSC to update CRAG-related documents for CNSC public web site, and inform CRAG members when completed.
Action: J. Cameron to distribute a draft version of the Minutes to CRAG members for review and comment.
Action: CNSC to continue providing some quantitative data, outside of the RAP process, to licensees with an interest.
Action: CRAG members to be kept apprised of the CNSC’s review of its cost recovery model and included in future consultations on new approaches.
Action: CRAG members to share comments on the future direction of CRAG with J. Cameron.
Action: J. Cameron to discuss timing and agenda of the next CRAG meeting with CRAG members via e-mail.