Wake-Up Call: Ontario Ranks Worst in Canada for Environmental Liability of Mine Sites

(Ottawa, December 9, 2015) Based on the Ontario Auditor General’s report, released last week, MiningWatch Canada is alarmed by the rapidly growing environmental liability of mine sites in Ontario.

“Operating and abandoned mine site clean-up costs for the province, now officially estimated at over $3.1 billion, have increased 300% since the last Auditor General’s report 10 years ago, and this is only the tip of the iceberg,” says Ugo Lapointe, Canada Program Coordinator at MiningWatch Canada.

With 4,412 active and abandoned mine sites and 15,000 recorded mine hazards, MiningWatch reports that Ontario ranks first in Canada as having the biggest environmental liability in the mining sector (see Table 1, attached).

Based on the Auditor General’s report and on past experience of real, ground-based clean-up costs, MiningWatch Canada estimates the total liability in Ontario to be over 7.6 billion, well above the current official estimates (see Table 2, attached).

Lapointe observes, “True clean-up costs can easily double or triple once more detailed engineering and site assessments are done on the ground. We’ve seen this trend in the early assessments of Quebec’s sites in 2009, with a 400% increase since then, and we are starting to see it in Ontario as well.” The mining watchdog points to the Kam Kotia mine site near Timmins as an example, where costs increased by over 225% from their original estimates 15 years ago ($41 million, vs. $96 million today).

“Meanwhile, Ontario generated less than $1.3 billion in mining royalties over the last 10 years – the lowest rate in the country, not nearly enough to pay for cleaning-up existing contaminated mine sites. At this rate, it would take over 50 years of mining royalty revenues to clean up mine sites in Ontario. That’s simply bad public policy,” asserts Lapointe.

The Auditor General also points to major deficiencies in financial assurance for site clean-up, with only $1 billion held in ‘hard’ financial assurance by the province, and $0.7 billion in ‘soft’ corporate financial test assurance – the weakest form of assurance, not permitted in most provinces. “This means Ontarians could be left holding the bag for up to $6.6 billion to remediate contaminated mine sites,” adds Lapointe.

The Auditor General’s report echoes the Environmental Commissioner’s report released a month ago. They both call on the Ontario government to step up, as other provinces have done in recent years, and reform Ontario’s environmental requirements for mining. Among other key issues, the Auditor General found:

Ontario is the only province that does not require environmental assessment before mines are developed;
Financial assurances for site clean-up are poorly assessed and do not apply to major spills;
Inadequate inspections: only 6% of sites have been inspected in 2013 and 2014;
In the last 5 years alone, 63 mines have reverted as ‘abandoned mines’ to the province;
The Ministry does not have indicators to assess its effectiveness at meeting its goals.

See also tables below and Ontarians for a Just Minerals Strategy (OJAMS)'s blog.

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