Introduction

Good morning to you all.

It is my pleasure to be here in the place of Linda Keen, President and CEO of the Canadian Nuclear Safety Commission, who unfortunately is unable to join you today.

It is in my new role as Vice President of Operations that I represent the views of the CNSC today.

Much has occurred in the past year since the President last spoke to you, not only here in Canada but especially in the United States and around the world.

The events of last September certainly had a large effect on our staff's activities and resulted in some redirection of effort.

I will return later to the events of September 11 and the effects they exerted on the Nuclear Safety Commission as well as the nuclear industry in Canada.

But first, in her speech to you last year, Ms. Keen told you that the CNSC would report to you in the next year on our progress in becoming a better regulator.

She has asked me to describe the progress we have made in pursuit of this goal.

A Framework for Success

As the President indicated to you a year ago, for the CNSC to become one of the best regulators in the world, we must first fulfill three strategic objectives. These objectives are:

• to ensure that our regulatory regime is effective and efficient;
• to ensure that we operate with a high level of transparency and openness; and
• to attract and retain excellent staff.

To guide us in fulfilling these objectives, the CNSC has developed a framework for excellence over the past 12 months.

This framework was developed keeping in mind the recommendations of the Office of the Auditor General and those of an independent consulting firm hired to help us identify areas for improvement.

The CNSC framework for excellence has four pillars - cornerstones of a foundation upon which we can build.

These pillars are;

• The Nuclear Safety and Control Act and our Management Charter;
• A strong and coherent strategic planning process;
• A well designed organizational structure to support our objectives, and lastly;
• Effective information and knowledge management.

And so, what progress have we made with our strategic objectives? How are we advancing our framework for excellence to become one of the best regulators in the world?

Let me tell you where we are at.

The Nuclear Safety and Control Act and our Management Structure

After the enactment of the Nuclear Safety and Control Act in May 2000, the mandate of the CNSC changed.

The Act provides the CNSC with the necessary mandate, tools and independence to regulate the nuclear industry effectively.

We also developed a Management Charter that includes a clear definition of our mission, mandate, vision and values.

Our new Office of Regulatory Affairs has responsibility for overall coordination of regulatory policy and direction.

We are making changes in our regulatory processes to support the implementation of the Act and regulations.

Our legislation and our management charter - together, these provide the focus and direction for all of our activities and serves as the basis for all of our planning and decision making.

A Strong and Coherent Strategic Planning Process

Our second pillar is a strong and coherent strategic planning process.

To that end, our President and CEO, just before Christmas, endorsed the main components of the CNSC's Strategic Plan for 2002 to 2007 and a Corporate Plan for 2002-2004 which were developed over the last year by the CNSC staff.

Our three strategic objectives mentioned earlier are part of this plan.

The next step will be identifying performance indicators and benchmarking against best practices.

A New Organizational Structure

In spring 2001, the Office of Regulatory Affairs and the Office of International Affairs were created and we restructured our Corporate Services Directorate and the Secretariat.

These changes delivered improvements in the management of the corporate functions, enhanced our safeguards business line, and improved the independence of the Secretariat for the Commission Tribunal.

On January 10, 2002, there was a restructuring of the operational directorates.

As a result, all regulatory functions have been consolidated under the umbrella of a single Operations Branch.

The five new directorates that make up the new Operations Branch have specific accountabilities to either deliver all regulatory functions related to specific groups of licensees or to provide operational strategies or specialist assessments in support of these functions.

These five directorates are:

• The Directorate of Power Reactor Regulation;
• The Directorate of Nuclear Cycle and Facilities Regulation;
• The Directorate of Nuclear Substance Regulation;
• The Directorate of Assessment and Analysis; and,
• The Directorate of Operational Strategies.

The objective of this restructuring is to help us do our work in a better way, to achieve our strategic objective of improving regulatory effectiveness and efficiency.

I have been given the task to, over the next few weeks and months, finalize the restructuring process and make additional changes. We are committed to having the final CNSC structure by April 1 of this year.

Information and Knowledge Management

Our legislation, our Management Charter, our Strategic Plan and an effective organizational design, are essential prerequisites to the establishment of the fourth supporting pillar - information and knowledge management, a challenge that we must address for the future.

We are all facing the possible loss of corporate memory due to our aging nuclear workforce.

The CNSC is addressing this challenge with aggressive succession planning activities and by increasing our support for nuclear education programs to ensure we have a suitable pool of knowledgeable people to draw from in the future.

We are also both challenged by, and can benefit from, our increasingly wired world.

With an increasing demand for electronic services, the CNSC is piloting an on-line initiative.

Specifically, later this year, over 300 licensees in the nuclear medicine community will be given the opportunity to start doing some of their business with the CNSC on-line.

The experience and knowledge gained from this pilot program could lead to more on-line services for a wider base of licensees in the future.

Of course, information and knowledge management goes beyond these two examples. We recognize that a sustainable organization must manage the knowledge it has.

Effective information and knowledge management, including consultation and communication, will assist us in meeting our strategic objectives.

Progress to Date

Over the past year, in addition to the strategy, planning and organizational changes, we have made additional progress on the three objectives.

When the President spoke to you last year, she told you about new initiatives intended to make us a better regulator - initiatives which would concretely affect the way we regulate and the way we do business with our licensees and other stakeholders.

Progress has been made in a number of areas.

In the area of increased effectiveness, for example, the CNSC is instituting an improved rating system for ranking the safety performance of power reactor licensees. Gone are the ratings of "acceptable", "conditionally acceptable" and "unacceptable." The new, improved, performance rating system, discussed with the CNA regulatory committee and tabled at the Commission in January, clarifies the CNSC's expectations and findings for licensees.

We have also initiated our corporate compliance program. The CNSC Compliance Policy was published in May 2001. Our improved compliance approach is being implemented beginning in April, 2002.

In parallel with the compliance program, we are moving to the application of risk-informed principles and employment of risk-based assessment throughout the regulatory regime. This approach was used successfully in our recent review of security.

We have heard the requests for increased regulatory clarity.

In response, we continue to accelerate the development of regulatory documents that set out the requirements by which licensees will be assessed. We have committed to having key regulatory policies and standards in place by March 2003.

We will also be implementing a new process for the production of regulatory documents designed to reduce the time and cost of their development and to maximize their usefulness.

Steps are underway to implement a mechanism to ensure appropriate consultation with licensees and stakeholders on the development of these documents.

On the openness and transparency front, we are increasing the transparency of our cost-recovery program. Since the CNSC established its cost recovery program in 1990, fees have been revised on only two occasions, the last time being in 1996.

We have instituted a comprehensive automated resource management process to understand where we are putting our time and effort.

Increased regulatory oversight due to expanded regulatory responsibilities, increased costs in providing required services, public expectations in relation to security, and inflation have all raised the cost of regulating Canada's nuclear industry

As a first step, we've established a Cost Recovery Advisory Group, which has been created to advise the CNSC on the program to make sure that changes are fair and equitable for all licensees.

Over the next few months, we will consult with industry, licensees and other stakeholders in the development of the update to cost recovery.

We have also, beginning in January 2001, published reasons for decisions for licensing decisions.

These are only some of the developments intended to make the CNSC a better regulator.

Earlier this month, we published an update on our progress in responding to the recommendations of the December 2000 Auditor General's report.

This update is now available on the CNSC website.

In keeping with our objective of attracting and retaining excellent staff, we have developed an intern program to ensure that we continue to have a suitable pool of talent from which to draw new employees. Our first eight interns began this program last June.

We have also become involved in the Canadian Universities Network for Excellence in Nuclear Engineering.

I believe some of the organizations represented here today are also taking part in this initiative. I also commend your proactive response to the human resource issues facing the nuclear industry.

Before I finish, I mentioned earlier that I would return to the impact of September 11 on the CNSC and our licensees.

I believe the quick and effective response by the CNSC and industry to the events of September 11 was achieved because the foundation for good regulatory performance was already in place.

Our collective, and effective, response to September 11 illustrated that the regulatory regime is not only working, but also that there is a genuine pursuit of safety and security by both the regulator and industry.

However, as the security measures are put in place, they represent a challenge for all to maintain.

Conclusion

So, have we made progress in the past year to become a better regulator? I believe so.

That is not to say that we are finished with our task. More work needs to be done and the foundation has been laid for other improvements we will be instituting in the future.

We will continue to look for new ways to improve the way we do business - to improve regulatory clarity, to increase effectiveness and efficiency, to be more open and transparent.

However, it is important to note that the effectiveness of what we do - protecting health, safety, security and the environment - will always be our first priority and will not be compromised by other considerations

Thank you and I am ready to answer any questions.