Sunday, November 29, 2009

Harper's India-Canada nuclear deal: who does it benefit?

Big news yesterday: "Canada, India reach nuclear deal." Namely:
Canada and India announced a major nuclear trade deal Saturday.

Officials in Prime Minister Stephen Harper’s office say the agreement, which has been in the works since the summer, will allow Canadian firms to export and import “controlled” nuclear materials, equipment and technology to and from India.

The deal, expected to be signed and implemented soon, has been controversial because Canada cut nuclear trade in 1974 after India used Canadian materials to manufacture its first nuclear weapon.

But the Harper government has been keen to re-establish the relationship because they estimate the energy market in the world’s largest democracy will be worth between $25 billion and $50 billion during the next 20 years.
OK, meaning that this is somehow in Canada's interest because...the principal beneficiary would be the crown corporation, Atomic Energy Canada, Ltd.? Yes:
Ottawa’s Crown corporation, Atomic Energy of Canada Ltd., has been keen to expand into the Indian market.

Canada’s nuclear energy industry currently generates about $6.6 billion in revenue.
Indeed, AECL did make a breakthrough with India earlier this year:
Trade Minister Stockwell Day announced earlier this year that government-owned Atomic Energy of Canada Ltd. had signed a memorandum of understanding with India for next-generation nuclear reactors.
So as Canada enters this brave new nuclear trading world with India, with all that revenue on the horizon, what is the Harper government poised to do? Privatize AECL, so the benefit of this new deal would accrue to the new private owner of AECL, not Canada, that has invested in AECL to the tune of billions for many years. Am I missing something here?

Beyond the political benefits of making a play for Indo-Canadian voters, is this deal supposed to sweeten the pot for potential suitors to AECL now? Recall that AECL's fate has been twisting in the wind as its attractiveness has been diminished due to Ontario's decision to put reactor additions on hold - because of AECL's uncertain status. And remember, the AECL move by the federal government is said to be imminent, from an October 14th Canwest report:
The federal government is preparing to unveil recommendations on how to restructure Atomic Energy of Canada Limited, and several foreign and domestic players in the nuclear industry are positioning themselves to make a bid for AECL's assets.
If that new owner is not a domestic player - and depending on the percentage of AECL the Harper government sells - you can see what kind of fallout (pardon the pun) there might be given news of this major Indian deal. As we learned last month, Canadians don't support AECL privatization. That sentiment might strengthen, particularly if Harper sells AECL to a non-Canadian entity. High tech jobs in jeopardy, etc.

Questions, questions. Principally, in whose interest will this deal ultimately be?