Legal perspectives on SMRs in Canada

Regulatory limitations relating to SMRs

Canada previously examined the nature and scope of its nuclear regulatory regime with respect to SMRs over a decade ago. Specifically, the CNSC issued a discussion paper on 31 May 2016 entitled Small Modular Reactors: Regulatory Strategy, Approaches and Challenges[4] and solicited feedback from various industry stakeholders regarding potential licensing challenges for SMRs. Participants cited significant uncertainties that often delay licensing timelines for traditional new builds, including (i) the degree of completeness of licence applications; (ii) requirements for stakeholder support, including from the host community; (iii) the state of completeness of the design; (iv) outstanding safety issues; (v) novel features or approaches; (vi) the state of completion of supporting research and development; and (vii) the quality and timeliness of construction and commissioning.

Ensuing changes

Following feedback, the CNSC concluded that its existing regulatory requirements would largely remain in place for SMRs, although a ‘risk-informed’ and ‘graded approach’ would be followed during the licensing process. In other words, the CNSC declined to promulgate a separate regulatory regime or a tailored set of regulatory rules for SMRs, which continue to be classified as Class IA nuclear facilities under the Class I Nuclear Facilities Regulations. Applicants, for their part, are required to follow the established licencing process, including environmental reviews and impact statements applicable to traditional (eg, CANDU) reactor facilities.

Canada’s Minister of Natural Resources subsequently released the Federal Government’s Small Modular Reactors (SMR) Action Plan (the ‘Action Plan’) in December 2020 in consultation with over 100 different stakeholders including indigenous groups, regulators, utilities, academic and industry groups.[5] Recognising the low to zero carbon emitting potential of SMR projects, the Action Plan aims to support SMR development through regulatory, policy and legislative changes.

The Action Plan recommends (i) more performance based and less prescriptive recommendations relating to nuclear security; (ii) technology-neutral licensing and objective-based performative criteria to support regulatory decision making; (iii) a focus on community and indigenous-engagement when assessing and regulating SMRs; and (iv) increased international engagement.

Vendor design review

The CNSC did, however, permit reactor vendors to complete an optional vendor design review (VDR) process, which allows CNSC staff to provide feedback to a vendor early in the design process of its nuclear facility. The VDR is not a licence, nor does it constitute a certification of a particular design by the CNSC; however, the purpose of the VDR is to receive general feedback as to whether Canadian nuclear regulatory requirements, and Canadian codes and standards, will be met, including the identification of any fundamental barriers. The VDR proceeds in a three-phase process, with the first phase consisting of an assessment of compliance with regulatory requirements, the second phase consisting of an identification of key areas of concern with respect to licensing and the third phase consisting of a follow up in connection with unresolved issues from the second phase.

The CNSC previously completed VDR reviews of SMR reactor designs from X-energy (Xe-100 high-temperature gas – Phase 1 and Phase 2), GE Hitachi Nuclear Energy (BWRX-300 – Phase 1 and Phase 2), Moltex Energy (SSR-W300 – Phase 1), SMR, LLC (Holtec International) (SMR-160 – Phase 1), ARC Clean Technology (ARC-100 – Phase 1), USNC-Power Ltd (MMR – Phase 1) and Terrestrial Energy Inc (IMSR400 – Phase 1 and Phase 2).

Looking ahead

OPG’s submission in respect of the BWRX-300 SMR project is ongoing and is currently undergoing a technical review against international guidance, codes and standards, which covers topics that range from, among other things, safety, radiation protection, decommissioning plans and operator training. The CNSC only issues a licence to construct when the applicant demonstrates (i) that it is qualified to carry on the activity that the licence will authorise; (ii) an ability to protect health, safety and the environment; (iii) the ability to maintain national security; and (iv) compliance with Canada’s international obligations. It remains to be seen how the CNSC will apply its risk-informed and graded approach throughout the licence to construct phase in respect of the BWRX-300 SMR.

The Royal Bank of Canada (RBC) projected that Canada will require over 85 SMR projects[6] (among other tools) to achieve its net-zero goals by 2050. The global nuclear industry will be closely observing Canadian SMR developments over the next decade as other countries look to incorporate SMRs into their decarbonisation objectives.

Notes