Liability for Contaminated Sites

All public sector entities, local governments included, will be required to report liability for remediation of contaminated sites for calendar years beginning on or after April 1, 2014. The requirement is for contaminated sites that the public sector entity has responsibility for and that have contamination that exceeds environmental standards.

Five criteria must be met for remediation of contaminated sites to be recognized in local government accounting:

  1. An environmental standard exists
  2. Contamination exceeds the environmental standard
  3. The government is directly responsible or accepts responsibility
  4. It is expected that future economic benefits will be given up, and
  5. A reasonable estimate of the amount can be made.

For the issue of local government liability, most liabilities for remediation arise from legal obligations that can be enforced by a court of law. Typical examples to consider would include a liability of all or part of an operation that is no longer in productive use, or an unexpected event (i.e. chemical spill or natural disaster) resulting in contamination. The regulation does not include liabilities for closure and post-closure care of a solid waste landfill site when the site stops accepting waste.

A Decision Tree has been designed to help explain the process.

For more information about contamination standards, please contact the Ministry of Environment. For questions related to liability, local governments may want to seek legal council.

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