Province needs to account for contaminated sites

Ashley Fitzpatrick
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New standard will require cleanup estimates in short order, says AG

The provincial government needs to hurry to develop estimates on the cost of cleanup for abandoned mines, mills, schools and other “legacy sites” under its control if it wants to meet new accounting standards coming into effect in the next year, according to the province’s auditor general (AG).

The former Abitibi mill in Grand Falls-Windsor.

In a report released today, Terry Paddon chiefly looks at the overall state of the province’s finances, but the AG also raises questions about how this province is booking its environmental liabilities, in light of a new Public Sector Accounting Board standard.

The requirement applies to what the province records as its liability for the contaminated sites it is partially or wholly responsible for, including sites with PCB contamination or old fuel storage tanks.

Paddon offered the examples of the old Harmon air force base, the Marystown shipyard and sites taken over in the province’s expropriation of the former Abitibi mill in Grand Falls-Windsor.

The new standard for liabilities related to contaminated sites becomes effective on April 1, 2014 and, as a result, the province’s financial statements will need to be in compliance with this standard for the year ended March 31, 2015,” he states.

Bringing the books into line is trickier than might be understood at first glance.

The province will need to evaluate all of the contaminated sites, seeing how they fit into the new reporting standard and recording an amount to represent the liability associated with each site. “This would include information regarding estimated remediation costs,” the AG notes.

Cleanup estimates require detailed and current information on each site.

The government does not have a complete listing of potential cleanup costs in its database on contaminated sites. Getting those numbers is expected to require a series of detailed and potentially costly consultant reviews of the locations.

Paddon expressed concern the information needed might not be available before it is required for the province’s accounting, recommending the province step up its work to identify contaminated sites it is responsible for and complete environmental assessments, with estimates on cleanup costs as soon as possible.

As of the year ending March 2013, the province has an environmental liability of $28.3 million covering 15 sites.

The AG’s concerns and full report have been put to the Department of Environment for comment.

More on the Auditor General's report CLICK HERE.

Organizations: Public Sector Accounting Board, Department of Environment

Geographic location: Marystown, Abitibi, Grand Falls-Windsor

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