Mr. Speaker, I have a return to a written question asked by Mr. Bromley on June 5, 2014, regarding liability for operating sites in the Final Devolution Agreement.

1. Could the Premier please provide the following

information for each of the 13 sites listed: • amount of financial security currently held by

the federal or territorial government;

• the form of that security, e.g., irrevocable

letter of credit;

• the authority under which each security

amount is held;

• the expiry date of each security instrument; • the amount of security as set out in relevant

water licences, land use permits, surface leases or other instruments for the specific site;

• whether there has been an independent

review of the liability; and

• if there has been an independent review of

the liability, what was that amount?

This question is in respect of Section 6.5 of the Devolution Final Agreement. Later today, at the appropriate time, I will table a summary of the financial security held by the GNWT for each of the 13 sites listed.

2. If there is a gap between the amount of security

held and that which is authorized in relevant water licences, land use permits, surface leases or other instruments, does the GNWT still intend to take over the liability or will it exercise its right to not accept the site under Part 6.5(d) to not accept that operating site?

In response to question 2, Canada and the GNWT negotiated the transfer of existing operating sites to the GNWT as part of the Devolution Final Agreement. The GNWT is reviewing and assessing these sites according to the respective context under the Devolution Final Agreement.

The GNWT is reviewing and assessing the Canadian Zinc site in conjunction with existing regulatory process currently underway.

The Dominion Diamond Ekati Corporation and the GNWT are in the process of completing the form of the security to be posted under the water licence.

For the Deh Cho Bridge, the GNWT is the project proponent and no security is required by the terms of the authorizations for this project.

The GNWT is also the project proponent for the Mackenzie Valley Highway and this project is still in regulatory review. No authorizations for this project have yet been issued that would require security.

For the Patterson Sawmill, no security is required by the terms of the authorizations for this project.

No security is required by the terms of the authorizations for the Kunnek Resources project.

The Devolution Final Agreement provides various mechanisms by which Canada and the GNWT can address the ongoing management of financial assurances and potential liabilities. For example, in some cases the GNWT takes over responsibility for operating sites where it will assess security within the regulatory framework and processes to determine appropriate security during the life of the project.

Each operating site presents distinct circumstances that the GNWT is assessing to ensure that financial assistance and potential liabilities are managed in a proactive manner and in the public interest. GNWT departments are also assessing financial security on an ongoing basis, which includes providing expert advice and security cost estimates to the land and water boards to support informed decision-making.

3. How does GNWT plan to manage these

liabilities and what are the plans to prevent any further public liabilities?

In response to question 3, the regulatory framework in the Northwest Territories provides for an independent assessment of environment risk of proposed resource development projects, including the ongoing management and assessment of securities. As part of the regulatory framework, securities can be, and are, adjusted by land and water boards pursuant to the terms and conditions of an authorization.

This can happen on the initiative of the land and water boards or at the request of project proponents or interested parties, including the GNWT. GNWT departments continue to assess security and provide expert advice to the land and water boards, including security cost estimates, to support informed regulatory decision-making.

While legislative responsibilities related to financial securities now reside in several departments, GNWT departments are coordinating their reviews to ensure that the assessment of securities addresses the broad range of GNWT concerns. To this end, the GNWT is taking a strategic and coordinated approach to the management of financial assurances and potential liabilities on public lands following devolution. The GNWT has approved the creation of a liabilities and financial assurances division in the new Department of Lands. The division is now being established to oversee security management and policy development for the GNWT.

The division has three main functions. One is to implement a strategic and coordinated approach to the management of financial assurances that manages, reduces or avoids exposure of financial risk to the GNWT and addresses the shortcomings of federal financial assurances approaches. The second function is to provide effective integration of regulatory securities within the broader regulatory framework, including engagement and coordination with regulators including federal boards and stakeholders. The third function of the division is to lead and coordinate policy for the management of financial assurances and recommend procedures, protocols and policies.

The division is already initiating baseline policy reviews to inform short- and long-term policy development. It is also in the process of developing systems and frameworks for handling and processing security that are intended to support sufficiency analyses and risk assessment which will inform broader policy development once implemented.

4. When does the GNWT intend to make public a

list of financial securities held for the sites that it will manage into the future?

In response to question 4, security deposits that are required pursuant to land use permits and water licences for projects on public lands in the Northwest Territories are available through existing land and water board public registries. These registries also contain detailed assessments of security submitted by stakeholders, including project proponents and the GNWT, as well as board decision-making and reasons to substantiate a final security determination.

Environmental agreements for the Ekati, Diavik and Snap Lake mines also include provisions related to security. These agreements and their specific security requirements are publicly available through the respective monitoring boards.

As part of the GNWT’s policy development, the GNWT is considering how best to provide additional information related to securities to the public.

5. As of June 1, 2014, have any of the 61 sites

listed in Schedule 7, Part E – Operating Sites (Oil and Gas, Industrial and Mining Dispositions) been transferred to the GNWT and what is the status of the financial security being held for these sites?

In response to question 5, all of the 61 sites listed in Schedule 7, Part E were transferred to the GNWT on April 1, 2014. These sites reflect a broad range of project types and their transfer was part of the negotiated issues between all parties to the Devolution Final Agreement. With the transfer of these sites to the GNWT, Canada was required to provide the GNWT with associated financial security posted in accordance with these sites.

These sites were subject to the applicable environmental screenings and regulatory process and have current owners who are responsible for their cleanup and remediation as well as for the associated environmental liabilities. If the owner abandons the site and insolvency occurs within five years of the transfer date of April 1, 2014, the Devolution Final Agreement sets out steps by which Canada’s responsibilities for historic liabilities at the site can be determined.

The GNWT recognizes that it must take a proactive approach to regularly assessing and managing these projects. The new liabilities and financial assurances division is well placed to consider how the GNWT will ensure a proactive and coordinated approach to the management of financial assurances and liability issues for these operating sites. Thank you, Mr. Speaker.