Audit warns of soaring cleanup costs for northern contaminated sites

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Northern remediation
As of 2023, Canada has identified 24,109 contaminated sites nationwide, with 2,627 located in the North. While progress has been made in closing more than 18,000 sites, approximately 4,500 active sites, including 322 in the North, still require remediation. Photo Credit: By Emil, stock.adobe.com

By ES&E Staff 

In Canada’s northernmost regions above the 60th parallel, where only 11% of federally contaminated sites are located, a recent audit reveals that despite their relatively small number, these sites account for a significant portion — up to 60% — of the country’s projected financial liability for site cleanups. 

The Office of the Auditor General of Canada audit report, Contaminated Sites in the North, conducted by Commissioner of the Environment and Sustainable Development, Jerry DeMarco, sheds light on the escalating financial burden of remediating federal contaminated sites. Since 2005, Canada’s collective financial liability for such sites has surged from $2.9 billion to $10.1 billion, with northern sites contributing over $6 billion to this total. 

Released in late April 2024, the audit identifies several factors driving cost adjustments for northern remediation projects. These include updated estimates reflecting the true scope of cleanup efforts, revisions to long-term monitoring plans, and extensions to project schedules. Challenges such as remoteness, complex regulatory requirements, and harsh weather conditions also contribute to prolonged cleanup timelines in the North. 

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DeMarco emphasizes the ongoing need for concerted efforts to reduce financial liabilities associated with contaminated sites and to mitigate environmental and health risks. He underscores that cleanup costs can escalate due to various reasons, including the discovery of new contamination post-assessment, delays in remediation, insufficient assessment data, and inflation. 

“After 20 years, there is still much work needed to reduce financial liability related to contaminated sites and to lower environmental and human health risks for current and future generations,” announced DeMarco upon the audit’s release.  

As of 2023, Canada has identified 24,109 contaminated sites nationwide, with 2,627 located in the North. While progress has been made in closing more than 18,000 sites, approximately 4,500 active sites, including 322 in the North, still require remediation. Moreover, 1,496 suspected contaminated sites await assessment across the country, with 107 located in the North and managed by Transport Canada and Crown-Indigenous Relations and Northern Affairs Canada, the site custodians. 

Graphic Courtesy of the Office of the Auditor General of Canada

Notably, the audit highlights a sharp increase in costs for remediating northern Canada’s eight largest abandoned mines, including the Giant Mine in the Northwest Territories and Faro Mine in the Yukon. For instance, the cost estimate to address arsenic trioxide dust at the Giant Mine soared to $4.38 billion in 2022, four times the original estimate. The federal government has spent nearly 20 years assessing the site, developing a remediation plan, and conducting consultation and engagement activities. 

DeMarco found that the remediation phase had started for only one of the eight projects listed under the Northern Abandoned Mine Reclamation Program: the Giant Mine. He said these costs typically increase gradually until the implementation of the remediation plan. With $1.8 billion in expenditures already incurred, and a further $6 billion in estimated costs remaining, costs will likely increase further as the other seven projects advance and enter the remediation stage, he said. 

Crown‑Indigenous Relations and Northern Affairs Canada has also encountered delays in the remediation of the former Rayrock uranium mine, in part due to uncertainties with remedial options or incomplete water and land‑use applications, noted DeMarco. 

Looking ahead, DeMarco emphasizes the need to secure long-term funding and ensure access to critical records for abandoned mine reclamation projects in the North. He underscores the significance of these efforts not only in managing environmental risks but also in advancing reconciliation with Indigenous peoples and fostering regional economic development. 

In response to the audit’s findings, measures are being taken to enhance project planning precision and cost estimation for northern projects. Crown-Indigenous Relations and Northern Affairs Canada told the commissioner that the department aims to collaborate with experts to update its cost estimating guide, considering factors unique to northern project costs. 

Environment and Climate Change Minister Steven Guilbeault emphasized that increasing liability amounts reflect improved assessments, revealing more accurate underlying liabilities. 

Federally managed contaminated sites in northern Canada. Graphic Courtesy of the Office of the Auditor General of Canada

“The ongoing assessment and remediation activities throughout Canada help the government understand the true scope and scale of contamination,” Guilbeault said in reaction to the audit. “Contamination at many of the sites is the result of historic activities, spanning decades. Without the significant actions taken by the government, that liability would amount to an additional $4.6 billion,” he added. 

While his audit called the costs to remediate federal contaminated sites “a burden to current and future generations of Canadian taxpayers,” DeMarco noted that the dilemma also represents a significant opportunity to support reconciliation with Indigenous peoples and promote economic development in the region. 

Looking at labour statistics for contaminated sites in the North, the audit shows that in 2022–23, the proportion of hours worked by Indigenous peoples on contaminated sites in the North (10,752 of a total of 77,010 hours worked, or 14%) was significantly lower than on reserve lands in the South (27,144 of 55,194 total hours, or 49%). However, without targets for these indicators, it is unknown how the program is progressing with regard to the priority of socio-economic benefits for Indigenous peoples, DeMarco stated. 

“As well, the government needs to take urgent action to advance socio-economic benefits, including employment opportunities, and to support reconciliation with Indigenous peoples whose lands are often affected by contaminated sites,” DeMarco announced in a statement with the audit’s release. 

In response to the audit’s point about working hours, Minister of Northern Affairs, Dan Vandal, announced in a statement that “we’re actively exploring ways to promote Indigenous participation in remediation activities and ensuring they benefit from the management of contaminated sites in the North.” 

Faro Mine is another project where remediation costs have ballooned. It was once one of the largest open‑pit lead‑zinc mines in the world when it began operating in 1969. Remediation officially began in 2021 and is expected to be completed in 2038, some 33 years after the mine was abandoned. Costs at the site, which will “require maintenance and monitoring in perpetuity”, the commissioner said, have greatly increased since the commissioner’s 2002 audit, and the total cost to Canadians is much higher. 

A 2002 report on federal contaminated sites by the Commissioner of the Environment and Sustainable Development outlined the federal government’s obligation to locate, assess, and remediate these sites, and led to the establishment of the Federal Contaminated Sites Action Plan in 2005.  

The Federal Contaminated Sites Action Plan did not meet its liability reduction target in Phase 3, nor is the plan on track to meet targets for Phase 4, which ends in 2025.  

The 2024 audit examined the Federal Contaminated Sites Action Plan, as well as the Northern Abandoned Mine Reclamation Program. 

To achieve the Federal Contaminated Sites Action Plan’s objective of reducing financial liability, DeMarco recommends that Environment and Climate Change Canada work with program partners and the custodian departments to reduce financial liability. Three suggestions were made: First, increase the capacity of custodian departments to develop more accurate liability estimates; second, develop measures and flexibility mechanisms to utilize any funding carried forward to address associated delays in the remediation; and third, conduct analysis to identify and recommend appropriate proportions of assessment and remediation funding. 

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