Cost Recovery Advisory Group – 2025 Meeting Minutes

March 27, 2025

Virtual meeting

Meeting agenda

• Introductions and opening remarks
• Adoption of the agenda and approval of the previous meeting minutes
• Review of the past year
• Operational management presentation
  • Update on Regulatory Activity Plans
• Financial management presentation
  • CNSC financial overview
  • Expenditure oversight and dispute resolution mechanism
• Other business
  • Meeting format
  • CRAG Terms of Reference
  • Granularity of CNSC invoicing
• Concluding comments and next meeting

Meeting minutes

Licensee participants

Member	Sector represented	Work organization
Brian Torrie	Canadian Nuclear Association	Canadian Nuclear Association
Maury Burton	Power Reactors	Bruce Power
Jason Nouwens	Power Reactors	NB Power
Sarah Brewer	Nuclear Research and Test Facilities	Canadian Nuclear Laboratories
Kevin Park	Uranium Processing Facilities and Uranium Mines	Cameco
Richard Wassenaar	Nuclear Substance Processing Facilities	Nordion
Stephen J. Walker	Canadian Council of Independent Laboratories	Canadian Council of Independent Laboratories
Arliss McNalley	Nuclear Substances and Prescribed Equipment (Oil and Gas Exploration)	Schlumberger Canada Ltd.
Ryan Lacharite	Nuclear Substances and Prescribed Equipment (Small Industrial Radiography; Non-destructive Testing Management Association)	MISTRAS Group
Doug Otto	Nuclear Substances and Prescribed Equipment (Portable Gauges)	TBT Engineering
Nathan Duff	Dosimetry	Landauer Inc.

CNSC participants

Name	Position
Julia Cropley	Director General, Strategic Planning Directorate
Benoit St-Jean	Director General, Finance and Administration Directorate
Sarah Eaton	Director General, Directorate of Advanced Reactor Technologies
Karen Owen-Whitred	Director General, Directorate of Nuclear Substance Regulation
Alexandre Viktorov	Director General, Directorate of Power Reactor Regulation
Tiana Branch	Director, Operations Secretariat
Denys Bousquet	Director, Financial Management and Internal Controls Division
Sylvain Faille	Director, Nuclear Substances and Radiation Devices Licensing Division
Andrew McAllister	Director, Nuclear Processing Facilities Division
Josée Turcotte	Project Officer, Operations Secretariat
Sarah Kelly	Senior Policy Officer, International and Government Affairs Division

9:00 a.m. – Meeting begins

Introductions and opening remarks

Julia Cropley, Cost Recovery Advisory Group (CRAG) Chair, opened the meeting and welcomed participants. She welcomed 2 new representatives: Brian Torrie of the Canadian Nuclear Association (CNA) as the new CNA representative and Nathan Duff of Landauer Inc. as the new dosimetry sector representative.

Adoption of the agenda and approval of the previous meeting minutes

Julia noted that the minutes of the last CRAG meeting, held on March 25, 2024, had been distributed to all CRAG members and that no comments had been received. Therefore, they were available on the Canadian Nuclear Safety Commission (CNSC) website. It was agreed that the minutes would be considered final.

The agenda for the current meeting was adopted as drafted with a note to correct the work organization listed for the Canadian Council of Independent Laboratories Representative, Stephen Walker, as the incorrect organization was listed.

Review of the past year

Julia shared some notable developments for the CNSC since the last meeting, including the following:

• Onboarding of the new CNSC president and CEO, Pierre Tremblay, who had begun his term on August 12, 2024. Julia mentioned Mr. Tremblay’s leadership in the Canadian nuclear sector and noted that Mr. Tremblay had previously served as Chair of the CNSC’s Departmental Audit Committee from 2017 to 2023.
• The work the CNSC’s executive and management teams had been doing to refocus the organization’s priorities in support of a new vision statement that reflected the CNSC’s commitment to the environment and to nuclear safety and security for all. Julia noted that while the CNSC’s domestic agenda remained a top priority, efforts were also under way to modernize work programs and build capacity to ensure readiness for the years ahead.
• The 7 public hearings, 15 hearings in writing and 7 public meetings that the CNSC had held using a combination of virtual and in-person options. Highlights included
  • extending the operation of Units 5 to 8 of the Pickering Nuclear Generating Station until December 31, 2026; and
  • Ontario Power Generation’s application to construct a BWRX-300 reactor for its Darlington New Nuclear Project.
• The publication or updating of several new or updated regulatory documents focused on licences to prepare the site for a deep geological repository, nuclear fuel safety and reporting requirements for nuclear power plants.
• The CNSC’s continued use of a hybrid work model, which allowed CNSC staff to work in the office or remotely. CNSC staff were working well in this model to carry out the CNSC mandate.

None of the participants had any questions or comments following Julia’s opening remarks.

Operational management presentation

Update on Regulatory Activity Plans

Tiana Branch provided an overview of the Regulatory Activity Plans (RAPs), including the classes of licensees that are subject to RAPs, and examples of the factors that contribute to the estimated level of effort for planned regulatory activities. Tiana explained what information was included in the RAP packages that licensees received and referenced example documents which had been included in the CRAG’s meeting materials.

Tiana provided an update on the RAP-related activities that had taken place in fiscal year 2023–24:

• On March 28, 2024, the CNSC issued RAPs and fee estimates for fiscal year 2024–25.
• In July 2024, the CNSC issued reports on the number of licensing and compliance activities completed during fiscal year 2023–24. These reports included the number of
  • licensing decisions for new licences, renewals and licence amendments;
  • Type I and Type II inspections conducted; and
  • orders issued.

Tiana said that the RAPs and fee estimates for fiscal year 2025–26 would be issued no later than Monday, March 31, 2025.

• The RAP format and level of detail will remain the same, and RAPs and fee estimates will be issued electronically only.
• No updates were made to the RAP cover letter.

As in previous years, the report on the number of major licensing and compliance activities completed by the CNSC last fiscal year (2024–25) will be provided around the time that final invoices are typically issued, which is in July.

Tiana reminded members that any questions about specific licensing and compliance activities should be directed to the appropriate regulatory program director or project officer, and any questions related to fees should be directed to the CNSC’s finance team.

Discussion

A question was asked about the timing of issuing RAPs and fee estimates and whether they could be issued earlier in the year. Another member echoed this question, adding that licensees typically provided the CNSC with projected work and major licensing activities in the fall, several months ahead of March, and that these projections could also shift to an earlier timeframe to accommodate an earlier issuance of RAPs and fee estimates.

In response, Benoit noted that it would be difficult to issue RAPs and fee estimates earlier for a few reasons:

• The CNSC underwent a formal planning process that began in November and took a few months to complete. Several rounds of internal reviews took place to ensure that estimates were as accurate as possible and based on knowledge of planned activities.
• The final plans were costed and presented internally for approval (typically in mid-March) as they comprised part of the CNSC’s internal budget set-up for the next fiscal year.
• The fee estimates had to be made using the CNSC’s total cost estimate, which included appropriated funding from Parliament. Therefore, the CNSC was tied to Parliament’s cycle for budget estimates, for which the timing could not change.
• Appropriated funding had not been as predictable or steady for the CNSC in the past few years due to new funding envelopes related to supporting small modular reactors and Indigenous and stakeholder capacity.

Tiana noted that the CNSC was actively seeking opportunities to streamline and modernize operational planning internally and acknowledged that a leaner process could result in some time efficiencies.

Another question was asked concerning the estimated level of effort (full-time equivalent or FTE) that was typically required for certain activities, such as developing and revising CNSC Regulatory Documents (REGDOC), noting that it would be valuable to include a breakdown of this information in next year’s operational management presentation.

Tiana made note of this question and stated that CNSC staff would assess the feasibility of providing information at this level of granularity. She would get back to CRAG members with an update during next year’s meeting.

Financial management presentation

CNSC financial overview

Denys Bousquet began the presentation by noting that over the course of fiscal year 2024–25, CNSC expenditures had increased due to efforts to modernize regulatory frameworks, specifically establishing the necessary framework to regulate new and emerging technologies, and other priority areas such as the safe and secure disposal of nuclear waste.

The CNSC received funding from RAP and Formula/Fixed Fees paid by the industry, which covered approximately 70% of expenditures, and appropriated funds from government, which accounted for the remaining 30% of expenditures. In 2023–24, expenditures had included salaries and benefits ($146.6 million or approximately 76%) and non-salary goods and services ($46.5 million or 24%). The CNSC continued to prudently manage fee increases, considering ongoing regulatory initiatives and inflation impacting all elements of its cost base.

Since 2019–20, CNSC expenditures had increased by $39.8 million, or 23.8%. Approximately 57% of the increases were attributed to regulatory modernization, Indigenous consultation, and SMRs and new builds, including the Darlington New Nuclear Project. The remaining 43% was due to an increase in staff (111 new FTEs) to support the expanding nuclear sector, as well as recent collective bargaining salary settlements for NUREG employees and management. While providing a breakdown of non-salary expenditures, Denys noted that rent expenses for 2025–26 were expected to decrease by 46% compared with 2023–24.

Regulatory Activity Plans

Denys explained that the CNSC had engaged in a detailed planning process to generate its annual regulatory activity plan for each Class I licensee. Fees were set on a proportional allocation of costs, based on estimated level of direct effort for each planned regulatory activity and each licensee. Once the direct effort per licensee was established, the CNSC applied its costing model, which used an established algorithm to calculate the allocation of costs for common direct, indirect and internal services. This exercise resulted in the creation of individual RAP licensee fees. Plans and costing information were reviewed and validated against prior years to ensure consistency and, at each quarter, the progress of the work plans was monitored and adjustments were made when required.

Regulatory activity initial plans for 2025–26 were estimated at $142.3 million, an increase of 6% when compared with 2024–25 initial plans. Denys noted that 100% of the 2025–26 RAP fee increases were attributed to new build activities and that forecasted core activities alone (without new build activities) would have reflected a decrease of approximately 0.4%.

As of the third quarter of 2024–25, the estimated return to licensees was 3.43% of the initial plan, representing $4.6 million to be redistributed. The final amount would be confirmed once all financial statements were audited. Final figures would be known around mid-June 2025.

Formula fees

Denys explained that fees were calculated using the formulas that had been set out in the Cost Recovery Fees Regulations (CRFR), Part 2 of Schedule 1. The formulas took base hours, variable hours, a compliance coefficient and an hourly rate into consideration. The hourly rate was reviewed and calculated yearly, using instructions from section 14 of Part 3 of the CRFR. The CNSC continued with its phased-in approach to annual formula fee increases, which had begun in 2014–15 but had been paused during the pandemic, to enable the CNSC to fully recover the costs to regulate formula fees licensees. The CNSC’s regulatory effort related to formula fees licensees had been higher than the revenues collected for many years, and that gap had been subsidized from the CNSC’s parliamentary appropriation. In 2023–24, the cost to regulate formula fee licensees had been higher than the revenues collected by approximately $4.6 million.

For 2025–26, the hourly rate would be increased from $293 to $311 (or 6.1%), and variable and base hours would increase by 10%.

Fixed fees

It was reiterated that in June 2017, the Service Fees Act (SFA) had set how departments could manage fees and was based on the following 3 requirements:

• Service standards needed to be established.
• Fixed fees were to be adjusted annually, based on the Consumer Price Index.
• If service standards had not been met, the CNSC was obligated to remit the portion of the services that were not rendered.

These requirements only impacted fixed fees under Part 4 of the CNSC CRFR. For 2025–26, these fees would increase by 2.7%.

Expenditure oversight and dispute resolution mechanism

Denys explained that the CNSC continued to review budgets and costs every year to ensure that industry stakeholders received value-for-money with respect to regulatory oversight. The following activities were conducted to ensure this:

• Rigorous operational regulatory planning process;
• CNSC Executive Management committee review and challenge;
• Office of the Auditor General review of financial statements, management discussion and analysis; and
• Authority approval by the Treasury Board and Parliament on a yearly basis.

There were regulatory mechanisms in place to resolve any disputes over fee administration or regulatory activity assignments. These mechanisms were outlined and available on the CNSC website – Dispute Resolution Mechanism for Fee Administration and Dispute Resolution Mechanism for Regulatory Activity Assignments.

Discussion

A member noted that during last year’s CRAG meeting, it was explained that the hourly rate for formula fee paying licensees had increased in large part due to collective bargaining settlements and asked if this year’s increases were still affected by this, or if the settlements had only affected 2024–25. Benoit explained that the effect of the collective bargaining settlements would be felt over several years, including the upcoming fiscal year. He noted that the increases to variable and base hours were more representative of the effort to reconcile revenues and actual effort.

When asked if the formula for calculating formula fees had changed, which would require changing the CRFR, Benoit confirmed that the calculation and methodology had not changed.

Other business

Meeting format

Julia stated that during the planning of the CRAG meeting, an inquiry was received about hosting the meeting in a hybrid format to enable in-person participation if desired. Julia did note that CRAG had always been hosted in a format that did not require in-person participation in order to maximize accessibility for the members outside of the National Capital Region and/or to eliminate the need for travel if it was not reasonable for members across Canada.

An anonymous poll had been launched during the meeting, and 71% of the members present had indicated that they would attend a CRAG meeting in person in Ottawa as opposed to virtually. Many members had voiced their support for a hybrid meeting format, citing that the benefits of in-person participation included increased engagement, better interpersonal interaction and increased productivity. Some members had also noted that they would be inclined to schedule other meetings with CNSC staff on the same day to take advantage of being at CNSC headquarters. A suggestion had also been made to hold the CRAG meeting in the afternoon in order to accommodate anyone who might be travelling the morning of.

CRAG Terms of Reference

Julia referred to an action from last year’s meeting to revisit the CRAG Terms of Reference (ToR), which had not been updated since 2007. Julia confirmed that CNSC staff had since carried out a review, and an updated version was being drafted. The first draft would be circulated internally for review by CNSC leadership in April, and after the review was complete, the draft would be shared with CRAG members for consultation, likely sometime in between May and June. The final agreed-upon draft would then be submitted to CNSC’s Executive Team for final approval.

Granularity of CNSC invoices

The following question was asked about increased granularity in fee invoices: for their own cost-sharing purposes, would it be possible to provide licensees with a more detailed breakdown of the fees charged? Denys responded by explaining that including more granularity in invoicing was not currently something that the CNSC’s financial system had the capacity to do. Invoices were automated, and adjusting individual invoices manually, if possible, would require putting forth a substantial amount of effort. The increased administrative cost associated with manual adjustments would be passed directly to RAP licensees. He encouraged individual licensees to seek more information on specific licensing and compliance activities by communicating with their regulatory program director or project officer or by raising any concerns regarding fee estimates or invoices directly with Finance.

Another member followed up on this response, clarifying that individual licensees would likely benefit from a high-level breakdown of non-salary expenditures, referencing a slide in the financial management presentation that was given earlier. Benoit acknowledged this request and agreed to look into it to see if a breakdown of those costs could be included, but he could not promise a certain level of granularity in the invoices.

A member pointed out that it would be beneficial to see a further breakdown of FTE estimates associated with proposed activities, such as licence amendments/applications and inspections, in the RAPs. This member stated that following up with the appropriate regulatory program director or project officer was the best way to inquire about this information, as it was licensee-specific.

Concluding comments and next meeting

The CRAG’s new dosimetry representative, Nathan Duff, asked for more information on his role in the forum and how he could represent the sector’s fee-paying dosimetry service providers in order to contribute effectively to the CRAG discussions. Julia and the CRAG secretary said they would follow up on this request after the meeting.

Julia thanked the CRAG members for their participation and confirmed that the next meeting would tentatively be held in March 2026. Julia adjourned the meeting.

Actions

1. Meeting minutes would be sent to the CRAG members for review as soon as possible after the meeting, ideally within a month, and the CNSC would aim to post the minutes online within a maximum of 3 months.
2. The CNSC would proceed with an internal review of the CRAG ToR, which could be followed by a consultation and engagement with the CRAG members in the summer.
3. The CRAG secretary would follow up with dosimetry representative, Nathan Duff, after the CRAG meeting to answer his questions about his roles and responsibilities.