OTTAWA — The federal government is poised to slash payments to Canada's beleaguered nuclear Crown corporation by up to 85 per cent this year.

Payments to Atomic Energy Canada Ltd. for 2011-12 are currently pegged at $102.1 million, according to government financial documents. That's a substantial drop from the $696.5 million Ottawa funnelled into its coffers last year.

The potential 85 per cent cut to the nuclear corporation's operating and capital spending represents the largest percentage decrease in funds the government has proposed so far this year for a federal agency.

At the outset of each fiscal year, which begins April 1, government produces a document called the "main estimates," which lay out spending details for all federal agencies and departments.

Up to three times during the fiscal year, however, government may produce supplements that detail new spending requirements.

At the outset of 2010-11, Natural Resources indicated it would pay $102.5 million to AECL. That figure jumped to $696.5 million within a few months, once supplementary documents were published.

The additional funds were requested — and approved in Parliament — in order to help AECL ensure continued isotope production and maintain safety standards among other requirements, the department said.

And the same could happen this year, a spokeswoman for Natural Resources said, noting that in its recent budget, government pledged extra funds for the corporation.

The first round of supplementary information this year hasn't indicated any requests for additional funding above the initial $102.1 million, despite the provision for $405 million to AECL the Conservatives included in the 2011 budget. Yet when those funds are added to the AECL budget, the Crown corporation is still looking at a 27 per cent reduction in funding.

Some opposition MPs are convinced the numbers will increase throughout the year.

"They're lowballing numbers like this to try and fool the public, to make them think they're good at handling taxpayers' money," said NDP MP Nathan Cullen, who was the party's natural resources critic in the last Parliament.

The federal government has been interested in getting the troubled Crown corporation off its books for some time.

A bidding process for AECL's reactor division, which builds its flagship Candu reactors, was launched in December 2009. But AECL has been crippled by cost overruns and low sales, said.

Although AECL's labs in Chalk River, Ont. — which produce medical isotopes — aren't currently on the block, they also have been beset with problems and contributed to the strain the corporation has put on the public purse.

Among other things, a reactor there — the world's oldest operating research reactor, in fact — returned to service in August 2010 following a 15-month, $72-million breakdown that crippled the global supply of medical isotopes.

Cullen noted that government has funnelled almost $1 billion to AECL over a few years.

"Meanwhile they've completely botched the sale. No one wants to buy it under any conditions we can see," he said.

Even if government succeeds in selling the portions of AECL up for grabs, there's no guarantee it will be for anything near the amount being invested, Cullen said. "There is no chance taxpayers are going to recoup this investment," he said.

The best government can hope for at this point, Cullen said, is that the corporation will be chopped into parts and sold off — an action that will "devastate" a high-tech industry.

Liberal critic for natural resources David McGuinty echoed Cullen's concerns.

"Government's running down the asset," he said. "And what's at stake here is an entire industrial sector."

aminsky@postmedia.com

Twitter.com/amyminsky