The recent collapse of two Vale tailings dams at Mariana and Brumadinho, Brazil, ecological catastrophes that left hundreds dead, underscore the urgent need to reform Ontario’s Mining Act to provide greater security to mining communities, the environment and the public treasury.

The Ministry of Energy, Northern Development and Mines’ (ENDM) most recent Table of Financial Assurances, updated on March 31, 2019, continues to list seven of Vale’s sites as assured under the “Financial Test” despite the fact that in February Moody’s downgraded the company’s credit rating to junk status. Under the Mining Act, companies that have provided financial assurance in the form of the financial test must deposit realizable financial assurances in full within 30 days of having their credit rating downgraded.

There is no indication that the government of Ontario has acted to ensure Vale complies with this provision of the Act. An inquiry sent to the Ministry (ENDM) received no response to the time of writing.

Vale Canada estimates the costs of remediating and maintaining its Central Tailings Facility – forever – at $330.4 million. When the company includes its smelter, two refineries, and Copper Cliff North Mine in Sudbury and the refinery in Port Colborne, the total estimate comes to $548 million.

Without realizable financial assurances, these clean-up costs will revert to the public, should Vale declare bankruptcy, or find itself unable to pay.

An “Asset Retirement Obligation” line on the Vale Canada Inc.’s balance sheet is the only financial security for the public when (not if) the company closes the operations

The largest of the seven mine sites is the Copper Cliff Central Tailings Area, which (according to company documents available online) covers an area of 35 square kilometers and contains some 547 million tons of toxic mine waste. The wastes in the impoundment will have to be managed forever. The company says it is “one of the largest tailings operations in the world”.  The screenshot taken from Google Maps below gives an impression of the severity of the environmental challenge.

Aerial Overview, Copper Cliff Central Tailings Area (Google Maps)

The public has good reason to mistrust profit-driven mining companies like Vale when it comes to tailings management and environmental rehabilitation. Indeed, there are strong indications that Vale executives knew about the structural problems plaguing the Brumadinho tailing dam before it collapsed. According to Reuters, Brazilian prosecutors alleged that Vale managers responsible for ensuring the dam’s stability pressured a third-party engineer to “make up technical numbers, and falsely pledge the stability of the dam, which allowed for the situation of risk to be perpetuated.”

The risk of similar tragedies occurring in Canada is real. The government of Ontario must act to ensure that they do not come to pass.

 

Campaign financing is hardly the only way that big corporations gain political clout, but it is no doubt an important one. As Nicholas Graham, Shannon Daub and Bill Carroll put it in their analysis of the fossil fuel industry’s political influence in British Columbia, “One of the most direct ways that corporations participate in the political process is through donations to political parties. Few believe that such donations are an act of altruism, or that they represent mere ‘gifts.’” Corporations make political contributions for one of two purposes. “Ideological contributions” are given to political parties “whose policies favour corporate needs and wishes,” while “pragmatic donations” are “more tightly connected to the particular interests of the corporation, helping them gain personal access to politicians, and ensuring their views on key matters are heard.”

Inspired by Graham, Daub and Carroll’s revealing analysis of the fossil fuel industry’s deep and extensive political influence in British Columbia, OJAMS decided to take a closer look at the relationship between Ontario’s political parties and the metal mining industry in this province.

Using Elections Ontario’s financial statements available online, we found out how much each of the major mining companies with active operations in the province and the two junior mining companies with claims in the Ring of Fire gave to the three main political parties between 2014 and 2016 (because of technical problems on the Elections Ontario website, data prior to 2014 and after 2016 were not available).

The mining industry appears to have made both ideological and pragmatic donations, as evidenced by Barrick Gold’s extensive contributions to the right-wing Progressive Conservative Party, and various companies’ selective donations to individual New Democratic Party candidates in important mining jurisdictions.

To be sure, as the recent changes to the province’s election financing laws have barred corporate donations, the mining industry will have to adjust its political strategies. However, it would be a mistake to think that campaign financing is the only route for the industry to gain influence with political parties or governments. As we will show below, the Ontario Mining Association – the industry’s main lobbying group in the province – enjoys deep ties with the Progressive Conservative Party, such that a 2018 Conservative election victory would be a welcome outcome for the mining industry, even if the Liberal Party appears to be the industry’s favorite.

The “Majors”

According to the Ontario Mining Association’s map of mining operations in Ontario, there were twelve companies engaged in active mineral extraction as of 2017 (Companies engaged in mineral extraction are known as “majors” in the mining lingo. This is to distinguish them from the “juniors,” firms that are primarily engaged in mineral exploration.). Of these twelve companies, seven made registered political donations in the period 2014-2016.

The table below lists each company in descending order according to its total contributions:

Company	Liberal Party of Ontario	Progressive Conservative Party	New Democratic Party	Total
Barrick Gold Inc.	$64,445.00	$83,164.00	$5,857.94	$153,466.94
Detour Gold Inc.	$62,286.00	$4,140.00	$980.32	$67,406.32
Goldcorp Inc.	$49,719.00	$3,890.00	$1,117.12	$54,726.12
Vale S.A.	$20,450.00	0	0	$20,450.00
Glencore P.L.C.	$4,775.00	0	0	$4,775.00
Wesdome Gold Mines Ltd.	0	0	$2,249.68	$2,249.68
Alamos Gold Inc.	0	0	$742.70	$742.70
Totals	$201,675.00	$91,194.00	$10,947.76	$303,816.76

 

In total, metal mining companies donated $303,816.76 to Ontario’s political parties over the period 2014-16. At $201,675.00, the Liberal Party received more than 66 percent of the total, the Progressive Conservative Party just over 30 percent, while the NDP received just under 4 percent of the donations.

As can be seen in the table, Barrick Gold was by far the largest donor. Its combined contributions of $153,466.94 accounted for more than half of the industry’s total donations and were more than double the amount donated by Detour Gold, the next largest donor. While Barrick gave $83,164.00 to the Progressive Conservative Party – an amount greater than the total political contributions of any other mining company – its substantial donation of $64,445.00 to the Liberal Party made it the mining industry’s most important backer of that party as well.

Barrick Gold’s founder and chairman emeritus – Peter Munk – was also a major contributor. In fact, Munk and his wife Melanie donated $72,600 to the Progressive Conservative Party, $20,000 of which went to Christine Elliott’s 2015 leadership campaign (Elliott was former Minister of Finance Jim Flaherty’s wife before he passed away). If Munk’s donations are combined with Barrick’s, then the company spent $226,066.94 on political parties in three years, $155,764.00 of which went to the Progressive Conservative Party.

For their part, the Sudbury-area nickel mining companies – the Brazilian multinational Vale S.A. and the Swiss multinational Glencore P.L.C. – donated just over $25,000, all of which went to the Liberal Party and its candidates.

As far as campaign contributions go, the Liberal Party is the mining industry’s number one choice. Clearly, then, the big companies have not been much bothered by the current Liberal government’s efforts to “modernize the Mining Act.” Notably, while the industry donated far more to the Progressive Conservative Party than it did to the New Democratic Party, were it not for Barrick Gold, the New Democratic Party would have received a larger share.

 

Ring of Fire

Big mining companies with active operations were not the only members of the mining industry to make political contributions. So too did the two main players in the so-called “Ring of Fire,” Noront Resources and KWG Resources. In fact, only Barrick Gold made larger political donations than KWG. However, this wasn’t entirely clear from Elections Ontario’s financial statements because KWG made some of its donations through its subsidiary companies, Canada Chrome and Debut Diamonds.

The table below shows lists the donations to each of the three main political parties.

	Liberal Party of Ontario	Progressive Conservative Party	New Democratic Party	Total
KWG	$48,922.00	$1,066.52	$15,780.39	$65,768.91
Canada Chrome*	$10,475.00	0	$19,285.00	$29,760.00
Debut Diamonds*	0	0	$1,330.00	$1,330.00
KWG and Subsidiaries	$59,397.00	$1,066.52	$36,395.39	$96,858.91
Noront Resources	$25,640.00	$3,932.23	$5,187.36	$34,759.59
Totals	$85,037.00	$4,998.75	$41,582.75	$131,618.50

*Denotes a subsidiary of KWG Resources.

Thus, the two Ring of Fire companies donated a total of $131,618.50 over this period. As was the case among the majors, the governing Liberal Party was the companies’ party of choice, receiving about 65 percent of the total.

However, unlike the majors, the Ring of Fire juniors showed a clear preference for the NDP and its candidates over the Conservatives. This appears to represent a pragmatic choice, that is, an effort to gain influence with key politicians. For instance, through its subsidiary Canada Chrome, KWG made the maximum contribution to NDP candidate Michael Mantha’s (Algoma-Manitoulin) 2014 election campaign. Mantha had served from 2011-2014 as his party’s critic for northern affairs and mining, while more recently he has taken the job as critic for indigenous relations and reconciliation.

Similarly, both KWG and Noront donated to the Gilles Bisson’s (James Bay-Timmins) 2014 campaign. Not only is Bisson from an important mining area, but he is also a prominent member of his party, serving as the NDP’s house leader.

The Ontario Mining Association

As noted above, campaign financing is far from the only way corporations gain political influence. Lobbying associations are another important mechanism. In Ontario, the mining industry is represented primarily by the Ontario Mining Association (OMA).

The current OMA staff is, for all intents and purposes, former Progressive Conservative Premier Mike Harris’ Ministry of Northern Development and Mines. The association’s current president, Chris Hodgson, was from 1995-1999 the Minister of Natural Resources and Northern Development and Mines. It should be noted that it was during Hodgson’s term that members of the Ontario Provincial Police violently suppressed the Chippewa of Kettle and Stoney Point First Nation’s protest at Ipperwash Provincial Park and killed Dudley George. At an inquiry into the handling of the protest, the former deputy solicitor-general, Elain Todres, testified that she heard Hodgson say, “Get the fucking Indians out of my park” at a meeting just 11 hours before George was killed.

At least two of Hodgson’s staffers from Northern Development and Mines are now with him at the OMA. The association’s manager of industrial and government relations, Philip Bousquet, was Hodgson’s lead policy advisor at the ministry. The association’s manager stakeholder relations, Cheryl Brownlee, was also one of Hodgons’s policy advisors.

The OMA’s ties to the Ontario Conservative Party don’t end there. It’s energy policy coordinator – Adam Bloskie – was previously an intern in Norm Miller’s (Parry Sound) office. Miller has been the Progressive Conservative Party’s Northern Development and Mines critic since 2014.

Conclusion

Clearly, the mining industry makes a significant effort to influence political decisions in the province. Given the industry’s extensive ties with both the Liberal and Progressive Conservative parties and its selective backing of key New Democratic Party candidates, mining justice activists need to keep the pressure on government no matter which party gains office in the next election.

Ontario is the only jurisdiction in Canada that does not automatically do an  assessment of  the potential environmental impacts of mining projects before they can go ahead.

Environmental Assessment (EA) is the process by which risks and impacts of proposed developments to the environment and human health are weighed based on technical reports and advice from members of the public, particularly those who are most affected. In Ontario, the EA system is broken.

Although federal environmental assessments may cover some aspects of a proposed mine project, other jurisdictions insist on a provincial EA, for good reasons..Recently some companies in Ontario have volunteered to have a provincial EA of their project.

In December 2016, Auditor-General Bonnie Lysyk released a damning report about the state of Environmental Assessment in Ontario, and outlined the steps necessary to bring it into the 21st century.

“Ontario’s environmental assessment process needs to be modernized and aligned with best practices in Canada and internationally”, Lysyk wrote “Because the Act is 40 years old – and is, in fact, the oldest environmental assessment legislation in Canada- it falls short of achieving its intended purpose.”

Government-sponsored reports demanded changes to the system in 2005, 2007, 2008 and again in 2014. In spring 2016, a coalition of environmental groups set out a road map for changes to the Act.

The Ontario Government has done little in response to these demands.

Every time a new Ontario mine goes ahead without a full understanding of its risks to people and the environment, we are threatening the land, waters and the health of future generations.

Most private-sector projects in Ontario (such as mines and chemical manufacturing plants) do not require a provincial Environmental Assessment and many huge government planning acts, such as the Climate Action Plan (including wind farms), the Metrolinx Act, and the Far North Act, were exempted from Environmental Assessment.

Although individual private sector electricity generation/ transmission projects, landfill/waste management projects and rapid transit projects require an EA, they are only dealt with through a “streamlined” process conducted by the project owner, not by government.  Very few streamlined project EAs receive any public consultation. None result in a refusal of the project.

A concerned public can request the Minister to “bump up” a streamlined project to a full EA. From 1976-2016 (40 years) only 7 out of 42 requests from the public regarding private sector projects for bump-up were accepted by the Minister.

Ontario’s system is “harmonized” with federal environmental assessment of large projects. In recent years, some mining proposals have volunteered to undergo a provincial EA at the same time as the federal one, but Ontario is the only jurisdiction in Canada that does not automatically require an environmental assessment of large mines.

In 2007, the Environmental Commissioner for Ontario called for a “New Vision” for environmental assessment in Ontario. In 2018, let’s make reforming the Ontario Environmental Assessment Act a major issue for the Ontario government.

The Ministry of Labour’s announcement to provide $1 million in funding to help study potential links between exposure to McIntyre Powder and neurological disease is an important victory for Ontario’s mine workers. Doubtless, the funding would not have come without the efforts of Janice Martell, the Occupational Health Clinics for Ontario Workers and the United Steelworkers, who have been pressing the Ontario government to commit to funding a study for the past 4 years.

The history of occupational health and safety in Ontario’s mines, though, has offered few reasons to celebrate.

Between 1943 and 1980, Ontario gold and uranium mine workers were forced to inhale McIntyre Powder – a finely ground aluminum dust – prior to entering the mines as a condition of employment. According to union activists, some companies made workers who refused the “treatment” sign waivers, forfeiting their right to make compensation claims for illness.

Companies abruptly ended treatments in 1980, following the publication of Lloyd Tataryn’s book Dying for a Living, which severely criticized the practice. In the same year, the Ontario Ministry of Labour issued two reports recommending the practice be stopped; both were published after the companies had already decided to do so.

The powder was the mining industry’s answer to silicosis, a debilitating lung disease caused by excessive exposure to silica dust, a common substance in Ontario mines. As early as the 1930s, the measures required to prevent silicosis – ventilation systems and other dust control mechanisms – were well understood. But they were also expensive.

The mining companies’ main concern in terms of worker health and safety was to minimize costs. McIntyre Powder was much cheaper than installing expensive ventilation systems, even if there was no scientific evidence to back the industry’s claim that it prevented silicosis. The choice, from the company’s perspective, was an easy one.

The industry had other ways of limiting its compensation payments. Using chest x-rays, companies weeded out potential workers whose lungs showed any sign of weakness, and, at times, simply fired workers who were showing signs of developing the disease.

It was not until 1983 that the government of Ontario enacted a law limiting mine workers’ exposure to silica. Before that, the government issued “codes of requirements” based on industry-sponsored research of best practices. But these codes had no force of law, and so there was little government inspectors — who tended to be former mine employees in any case — could do when mines exceeded them.

Needless to say, the industry resisted the government’s silica regulations, weakening them significantly. When it came to other toxic substances, like arsenic, the government simply provided sweeping exemptions for mining companies, which remain in place to this day.

The industry’s indifference to the health of the working people that have made its profits possible is staggering. In the midst of a health and safety crisis, the Ontario government conducted a study of the mortality of Ontario miners who worked in the industry from 1955-1977, releasing the report in 1983. Globe and Mail reporter Victor Malarek described the report’s findings: “it suggests that a tragedy of considerable proportions is unfolding.”

The study found that 300 mixed ore miners had died of lung cancer, a rate 45 percent higher than the general population; 60 gold miners had died of stomach cancer, “a death rate 48 per cent higher than that in the general population.” Further, “silicosis and chronic interstitial pneumonia had claimed the lives of 111 underground gold miners and 68 mixed ore miners. Respectively, those figures are about 1,600 per cent and 2,000 per cent higher than would normally be found in the general population.”

But as union activists argued – and the researchers admitted – comparing mineworkers to the “general population” was flawed. This was because the mining companies tended to hire only the healthiest applicants. Had a more representative sample of the “general population” worked in the mines, the outcomes likely would have been even worse, an unsettling hypothetical.

Industrial disease remains a major problem among Ontario mine workers, in spite of industry propaganda to the contrary. In 2014, the Ministry of Labour’s Mining Health and Safety Review – which was prompted by a tragic workplace fatality – noted that “While traumatic fatality incidents in the mining sector have declined substantially over the past several decades, deaths related to occupational illness have not.”

Seven percent of the WSIB’s allowed claims for occupational death were related to the mining sector – a figure “roughly ten times the proportion of the insured workforce engaged in mining work.” Between 2004 and 2013, the WSIB had allowed 171 claims for occupational death related to mining. This means that, on average, 17 Ontario mine workers die every year from diseases related to their work.

Clearly, there remains much to be done when it comes to improving workers’ health and safety in Ontario mines. The $1 million pledge to study the effects of McIntyre Powder is just a start.

September 13, 2017.

The Ontario government decision announced on August 21, 2017 to fund a road to Ring of Fire mining claims over the objections of most of the Mattawa First Nations has the mining and construction industry cheering.

But the road is not going to happen unless there is consensus among the Mattawa First Nations.

The plan is for three of the First Nations (Marten Falls, Webequie and Nibinimik) to be the proponents of the road project, with the province funding it.  However, a condition of the funding is that the road has to service the Noront Ring of Fire claims.

Marten Falls is now a shareholder in Noront. In April, 2017, the First Nation was given over 300,000 shares in Noront, in return for “fulfilling certain obligations and arrangements” [which are of course confidential][i]. With more than 327 million Noront shares outstanding, this is drop in the bucket to Noront, but a serious compromise of Marten Falls’ position. Was one of the “obligations” that they would not publicly oppose the project? What are the restrictions on selling their shares?

Days after the announcement, Neskantaga and Eabametoong First Nations put out a press release stating:

“The reality is that all the roads to the Ring of Fire traverse the territory of our Nations, and nothing is happening without the free, prior, and informed consent of our First Nations,” said Neskantaga Chief Wayne Moonias.

Neskantaga and Eabametoong First Nations have been actively working to have their rights recognized by Ontario, along with all 9 Matawa-member First Nations, at the Regional Framework Negotiations and the Jurisdiction Table. Both of these processes are intended by our Nations to be collective, community-driven discussions. “

…Citing a ‘divisive’ approach as being behind the Wynne Government announcement, the two communities of Neskantaga and Eabametoong pledged to honour their respective community processes and to ensure that a concrete agreement over First Nations jurisdiction is actually in place as a pre-condition to road approvals. The Elders and Youth of both communities have stated their support for the positions taken by the leadership.”[ii]

In May, 2017, Wynne had threatened the Matawa Chiefs

“My government announced $1-[billion] to support infrastructure into the Ring of Fire three years ago and if we are going to deliver on that we can delay no further,” Ms. Wynne said in the letter, which was obtained by The Globe and Mail. “While I continue to hope progress can be made, I am prepared to continue to advance discussions with those First Nations that would like to pursue transportation infrastructure through our bilateral processes.”[iii]

She and her government have since pursued exactly that divisive strategy. Her government cut a backroom deal with three of the Chiefs.

The Chiefs of Nibinamik and Webequie scrambled to explain their position. On August 25, they held a press conference in Thunder Bay to “clarify Wynne’s announcement”.  Reported APTN:

“Webequie First Nation Chief Cornelius Wabasse and Nibinamik First Nation Chief Johnny Yellowhead said they did not agree to construction of the all-season road, but rather a study of the feasibility of a “multi-purpose corridor” that could include a road, transmission lines and other infrastructure needed to underpin expected Ring of Fire development.”[iv]

Noront is desperate for the road to be built

Noront, which now holds 75% of the Ring of Fire claims, is getting desperate for the road to be built. From the beginning of their investment in the Ring of Fire, the company has said the road (which will cost a minimum of $1 billion, and likely much more) has to be paid for by the province.

The company is deeply in debt to Resource Capital Fund ($15 million due at the end of the year), and has already had one extension of the loan. Through one of their subsidiaries, they also owe $25 million to Franco-Nevada, due in 2020. [v]

Federal and provincial government funding

Noront has raised the capital it needs to exist through many issues of flow-through shares. This is a federal and provincial program that allows the costs of exploration and development expenses to be claimed by investors that need tax write- offs. The foregone taxes, and the credits that go with them, affect all of us.

The province and the federal government have basically paid for most of the First Nations consultation, paying salaries for the lawyers, technical consultants and community mining advisors, including the Ring of Fire Secretariat, Bob Rae and Frank Iacobucci.

The federal government put in $15.98 million from 2010 to 2016 through the Strategic Partnerships Initiative “to support first nations’ mining readiness activities in the Ring of Fire“. In 2016, the government announced it was extending this program for another three years.[vi] The federal government also funds a program called Comprehensive Community Planning (in the amount of approximately $700,000). This appears to be at least part of the $200 million Carolyn Bennett said would be spent on indigenous children.[vii]

What else could have been done in the Mattawa communities if the money were used for supporting kids, housing, water, and sustainable job creation instead? As Bob Rae commented in 2015 to CBC: “This can’t be a process that is driven exclusively on the interests of one project or another,” Rae said. “It has to be seen as responding to a broader concern which is the isolation, the poverty, the real needs of these communities.”[viii]

Former federal Natural Resources Minister Greg Rickford is on the Noront Board.

No Feasibility Study for Ring of Fire Chromite.

No feasibility study has been completed on the chromite deposits. Cliffs Resources walked away from the project just as the feasibility study they commissioned was to be finished and sold the project to Noront for $22million. The only feasibility study undertaken to completion was for Noront’s Eagle’s Nest project; a carrot-shaped deposits of nickel, copper and PGM metals. It made it clear that the project needed the province to put up the road/rail costs or Eagle’s Nest could not be built.

The other question hanging over the Ring of Fire is the need for a ferrochrome smelter to process the ore. The location of the project is again in question, with Sault Ste Marie, Timmins and Sudbury all in competition for it. That smelter cannot be economic without serious electricity subsidies, in a province where electricity costs a great deal to produce.

Endnotes:

[i] https://www.northernontariobusiness.com/industry-news/mining/noront-poised-to-make-first-nation-a-ring-of-fire-shareholder-588541

[ii] Eabametoong and Neskantaga  First Nations: Roads not a done deal without jurisdiction agreement – August 24, 2017

[iii] Galloway, Gloria. Wynne pushes Ring of Fire chiefs for decision on regional road. Globe and Mail.

[iv] http://aptnnews.ca/2017/08/25/ontario-premier-wynne-cut-backroom-ring-of-fire-deals-chief/

[v] From Noront Annual Information return April 10, 2017.

[vi] Quoted from a memo to the Minister April 11, 2016. 

 

In a report released on December 2, 2015, Ontario Auditor-General Bonnie Lysyk has slammed the Ontario Ministry of Northern Development and Mines for its handling of everything from the Ring of Fire development to protecting Ontarians from the costs and impacts of abandoned mines.

The “value-for-money” audit was intended to see if the Ministry had systems in place to:

• support sustainable and responsible mineral development
• ensure compliance with regulation and policies
• measure its effectiveness in encouraging mine development while minimizing impacts on public health and the environment.

Given that the report was released at the same time as a number of other audits on the province’s energy policy and child protection services, the report on mining has received very little media attention. However, it is a damning indictment of the operations of OMNDM.

Among other matters, the Auditor-General found that:

• Ontario is the only province that does not require environmental assessment before mines are developed.
• Mining revenues to the province are less than 2% of the value of the minerals extracted; for diamonds it is less than 1% . Our “Marginal Effective Tax Rate” for mining is the lowest in the country at 5.6%.  Rents for mining leases are often not collected and arrears collection is not enforced.
• Abandoned mines pose a significant risk to Ontario for contamination, physical hazards and financial risk. There are 4400 of them in Ontario. In the last 5 years, 63 mines have reverted to the province.
• The Ministry has no estimate of the cost of rehabilitating the  abandoned mines in the province, and no long term plan for doing so. The Ministry estimates it could cost anywhere from $163 million to $782 million to rehabilitate these sites.
• Ministry inspection of closed mine sites is woefully inadequate. In 2013 and 2014, only 6% of sites had been inspected.
• Ontario has inadequate protection against footing the bill if operating mines close.  Closure plan implementation is “minimally inspected” and over 40% of financial assurance in the province is nothing but a line on the balance sheet of a subsidiary company. 66% of contaminated sites on Ontario’s books are former mineral extraction sites.
• The Ministry does not have indicators to assess its effectiveness at meeting its goals.

The report makes 13 recommendations, consisting of 28 actions to address the audit findings. Many of the recommendations are a repeat of those made in their 2005 audit.

This is a shameful situation and speaks to the regulatory capture of the province by the mining industry.

 

News Release, Tuesday, November 10, 2015 –

Ontarians for a Just Accountable Mineral Strategy and Mining Watch Canada

Ontarians on the Hook for Water & Mine Site Clean-Up Costs – Alarming Report from Eco-Commissioner

In response to last week’s alarming report from Ontario’s acting Environmental Commissioner-  Ellen Schwartzel – MiningWatch Canada & Ontarians for a Just Accountable Mineral Strategy (OJAMS) are urging Premier Kathleen Wynne and her government to reform current water-user fees and environmental assurance requirements for mine site clean-up in Ontario.

“Just like the Commissioner, we are alarmed that most heavy industries in Ontario – including mining – continue to get a free ride for the million litres of freshwater they use every day,” says Ugo Lapointe, Canada Program Coordinator for MiningWatch Canada.

“We share the Commissioner’s ‘frustration’ that Ontario’s government has yet to act on the Drummond Commission recommendations and its own commitment to charge all large water users in order to recover the costs that it spends on water quantity permitting programs. Currently, large water users are only paying 1.2% of the 16.2 million dollars it costs to run the programs, leaving individual Ontarians to pay the remaining 98.8%. That’s unacceptable,” explains Joan Kuyek from OJAMS.

Billions potentially needed for mine site clean-up

“The Commissioner’s recent report also highlights the complete lack of transparency when it comes to getting a clear picture of the overall environmental and fiscal liability for contaminated mine site clean-up in Ontario. But when you start adding the bits and pieces of information you can find, the overall picture gets frightening,” asserts Lapointe.

“There are currently hundreds of active and abandoned mine sites in Ontario that pose a threat to the environment, waters, and communities. Some are very polluting, some will be very costly to fix – and some have no financial assurance at all to ensure their complete rehabilitation. We know the problem is big, but just not how big yet,” remarks Joan Kuyek.

The Eco-Commissioner’s report severely critiques the current financial assurance program meant to protect Ontarians and their environment for when mining companies are no longer able to pay for site rehabilitation. It stresses that financial securities are either insufficient, unreliable, or simply not collected by the responsible authorities. It also denounces the fact that Ontario is the only jurisdiction in Canada accepting the “corporate financial test” as a form of financial assurance. “That is the weakest form of assurance, yet it represents 40% ($654 million) of the total financial assurance held by the Ministry of Northern Development and Mines (MNDM) as of March 31 of this year,” states Lapointe.

Joan Kuyek: “The Commissioner is right. The problem is that the MNDM has no formal process for regularly reviewing the adequacy of collected financial assurance. In 2000, the MNDM revoked a regulation that previously required proponents to report annually on site rehabilitation, monitoring and any changes to the project. The government needs to reinstate this regulation and expand the financial assurance program to also address the huge environmental and fiscal problem that abandoned sites represent,” concludes Kuyek.

MiningWatch and OJAMS made a series of submissions earlier this year to both the Auditor General of Ontario and the MNDM in the context of the renewal of Ontario’s Mineral Development Strategy. Ontario’s new strategy should be released any time soon.