Ottawa has sold nuclear company Atomic Energy of Canada Ltd. to Montreal-based engineering giant SNC-Lavalin Group.
Natural Resources Minister Joe Oliver announced the sale late Wednesday, ending at least two years of attempts by Ottawa to privatize AECL.
The sale price was $15 million, but Oliver said the government will have opportunities to get royalties down the road because it’s keeping intellectual property rights.
“The Candu commercial reactor business will benefit greatly from SNC-Lavalin’s entrepreneurial capacity and global scale,” Oliver told a news conference after stock markets closed Wednesday.
“The transaction will place Candu technology in proven, competent hands to be serviced and deployed in Canada and abroad, meeting energy needs and stimulating a supply chain located largely in Canada.”
Meanwhile, SNC-Lavalin is creating a new division called Candu Energy that will house AECL’s three former business lines.
About 1,200 AECL employees will move to Candu Energy, less than a quarter of the 5,000 workers the Crown company employs.
“This acquisition will require concerted and co-ordinated effort on the part of all stakeholders to work together,” said Patrick Lamarre, executive vice-president of global power operations for SNC-Lavalin.
“We will strive to make it a success both for the people who have built it, and for our shareholders.”
SNC-Lavalin (TSX:SNC) was the sole bidder to meet Ottawa’s conditions for buying the financially troubled Crown corporation.
AECL has long been a headache for successive federal governments and has cost Canadian taxpayers billions of dollars in subsidies, including about $1 billion in the last two years alone.
The company has also faced major cost overruns at key projects in recent years while struggling to find a buyer.
In May 2009, the Conservatives announced plans to spin off AECL’s commercial reactor business from its research division.
The announcement coincided with what turned into a lengthy shutdown of the company’s research reactor at Chalk River, Ont., which caused a worldwide shortage of the medical isotopes used to detect cancer and heart ailments.
An earlier shutdown in late 2007 also strained the global isotope supply and ended only after Parliament voted to bypass the nuclear safety regulator’s closure order.
The AECL sale could have major spillover effects on two Canadian provinces which face questions about how the sale will affect their own provincial nuclear power industries.
The company has bid for the two new reactors Ontario wants to build, but the province won’t make a decision until AECL’s future is certain.
Ontario Finance Minister Dwight Duncan told reporters Tuesday that he doesn’t expect to sign any deals before the Oct. 6 provincial election.
The Ontario government has pressed Ottawa to help underwrite any possible cost overruns on those two nuclear reactors, which could cost billions of dollars to build.
Oliver said Ottawa won’t be responsible for any cost overruns if Ontario moves ahead with new nuclear power stations.
In New Brunswick, the provincial Liberals said earlier this week that the possible sale of AECL could have major repercussions for the province as it grapples with cost overruns at the Point Lepreau nuclear power plant.
The provincial Tory government has been looking to Ottawa to cover roughly $1 billion in additional costs during the Lepreau refurbishment, which is being overseen by AECL.
But Liberal energy critic Brian Kenny says any sale of the federal Crown corporation could make it unclear how New Brunswick will recover that money.