The Standing Committee on Government Operations recommends that the Government of the Northwest Territories consider bringing together all of its information about P3 projects under one note in the consolidated public accounts, until such time as the new Canadian Public Sector Accounting Board standards on the accounting treatment of P3 projects are put in place.
Environmental Liabilities
The accounting treatment of environmental liabilities by public sector bodies is set out in the Public Sector Accounting Board's standard PS 3260, Liability for Contaminated Sites. Under this standard, the GNWT is responsible for recording estimates in its financial statements for the further evaluation or remediation of all known contaminated sites for which it is legally responsible.
Environmental liabilities arise when contamination exceeds established environmental standards. Estimated remediation costs are recorded in the year in which they become known. Where no financial liability has been recognized, this is because the contamination is determined unlikely to affect public health or safety, cause damage, or impair the surrounding environment. These sites continue to be monitored as part of the GNWT's ongoing environmental protection program. Where new information becomes available indicating greater concerns, the remediation costs would be recorded at that time.
As reported under Section 1, environmental liabilities and asset retirement obligations for the government reporting entity totalled $72.3 million [2016 - $66.2 million] and included 279 identified sites [2016 - 223] as potentially requiring environmental remediation. Included in the 279 sites are 80 sites for which no financial liability has, as yet, been recognized.
For Section II (government departments only), environmental liabilities totalled $53.7 million and include 245 sites [2016 - 191] potentially requiring environmental remediation. Included in the 245 sites are 79 sites [2016 - 74 sites] for which no financial liability has, as yet, been recognized.
There were six sites [2016 - two sites] closed during the fiscal year that were either remediated or no longer meet the criteria required to record a liability for contaminated sites, in accordance with Canadian Public Sector Accounting standards (PSAS). This is the same information as reported in Section 1, meaning all of the closed sites were under departmental administration or responsibility.
Giant Mine is included as one of the sites and has been formally designated as contaminated under the NWT Environmental Protection Act. In 2005, the GNWT recorded a liability for its share of the remediation, the remaining balance of which is $2.7 million [2016 - $2.9 million]. There are six other abandoned, non-operating mine sites that the GNWT and Canada will be jointly remediating on a cost-sharing allocation similar to that used for Giant Mine.
The committee understands that the information on environmental liabilities provided by the Department of Finance in the public accounts is driven by public sector accounting standards. Nonetheless, the information is of considerable public interest and the GNWT has a stated commitment to improving accountability and transparency. Given these considerations, and the fact that the GNWT's inventory of contaminated sites is managed by the Department of Finance, the committee makes the following recommendation: