AECLÂ’s fate may hinge on Ontario deal

Raitt, answering questions following a lunchtime speech in Toronto, said the Conservative government continues to be a strong supporter of nuclear power but respects the need to balance that view with shareholder interests.

"And that's the taxpayers of Canada," said Raitt, adding that department officials have the report in hand and are sifting through its findings. "They told me today they expect it will take a few more months to go through the report. They'll make recommendations to us, and we'll consider any recommendations that come forward."

The government announced in November 2007 that it would launch a strategic review of AECL. National Bank was selected to do the work last January from a list of 25 top-ranked investment bankers. Its report will estimate AECL's commercial value and advise Ottawa on whether the crown corporation should be sold, partially privatized, or kept in public hands.

It's unlikely the report will be made public, and some industry observers say a decision on the future of AECL will likely hold until Ontario announces its choice this spring for building a new nuclear plant in the province. France's Areva SA and U.S.-based Westinghouse Electric Co. are also in the running.

The company's sale value rests heavily on Ontario's decision. AECL's new Advanced Candu Reactor has never been sold. A deal with Ontario would be a tremendous boost of confidence in the technology, making it easier for AECL to market the reactor abroad.

Failure to sell the reactor to Ontario would be a crippling blow to AECL's reputation and business plan.

But by waiting to announce whether it will sell or keep AECL public, the federal government has created uncertainty that could work against the company as Ontario weighs its options. With electricity consumption in the province falling - the result of an economic downturn and the effects of conservation - it's conceivable Ontario could postpone its selection.

Asked whether Ottawa is intentionally delaying a decision on AECL, Raitt dodged the question. "The one thing we're all focused on is the economy. We only have so many hours of the day, so for us (right now) it's about doing pre-budget consultations," she said.

A number of companies, including Areva, SNC-Lavalin Group, General Electric and Bruce Power have said publicly or privately that they would be interested in some kind of strategic partnership with AECL.