This policy is effective for the fiscal year
beginning April 1, 2002, and subsequent fiscal years.
To ensure that all costs and liabilities related
to management and remediation of environmentally contaminated
sites, for which the Government of Canada has ongoing
responsibility, are accounted for and reported in the financial
statements of the government in the fiscal year in which
environmental damage is incurred, or in the fiscal year in which
costs and liabilities are identified.
It is the policy of the government to account for
costs and liabilities related to the management and remediation
of environmentally contaminated sites when contamination occurs
if the government is obligated, or is likely to be obligated, to
incur such costs:
- for reasons of public health and safety;
- due to contractual arrangements; or
- to meet standards set out in an act or regulation of a
government (federal, provincial or municipal) in Canada or abroad
which are considered to be acceptable to the government.
For purposes of applying paragraph c) of the
policy statement, it is not intended that the federal government
waive immunity from legislation, regulations or by-laws passed by
other levels of government; in cases of voluntary compliance with
such legislation, regulations or by-laws, it will constitute a
financial obligation for the purposes of this policy.
A department is obligated or likely to be
obligated when there is little or no discretion to avoid a future
transfer of assets (probably in the form of cash) to remediate a
contaminated site. However, a general policy intention to
remediate, where no public health and safety concerns, no
contractual arrangements or no legislation, regulation or by-law
exist, is not sufficient to establish a liability.
Departments will account for and report closure
and post-closure liabilities related to solid waste landfills in
accordance with the direction contained in Section PS 3270 of the
Public Sector Accounting Recommendations issued by the Public
Sector Accounting Board (PSAB) of the Canadian Institute of
Chartered Accountants (CICA). Such liabilities represent a
special class of contaminated site and the government will base
its reporting on the standard as issued.
This policy applies to all organizations
considered to be departments within the meaning of Section 2 of
the Financial Administration Act.
- Costs are to be accounted for when the damaging event takes
place and not when site management or remediation is undertaken.
Should damage not be identified when it is incurred, costs for
such damage will be accounted for in the fiscal year when the
damage is identified.
- Departments must report as liabilities expected management
and remediation costs related to contaminated sites
assessed as Classes 1 and 2 under the classification system
established by the Canadian Council of Ministers of the
Environment (CCME) (see Appendix A) or any classification system
which produces similar results.
- If it is unclear whether the government is obligated or if
the government is unlikely to incur remediation costs, the costs
should be considered as contingent liabilities.
- Departments should estimate costs using the most appropriate
methods for their circumstances. Methods may include technical or
engineering estimates, historical comparisons or other analytical
tools. The costs should be estimated based on the technology and
costs at the time the damage is incurred or identified (current
cost estimate). Estimates will be reassessed and adjusted
annually to recognize technological advances, inflation and
progress toward remediation as appropriate. The inflation rate to
be used for the annual adjustment is the change in the consumer
price index.
- The recording of liabilities under this policy by the
Government of Canada for purposes of financial reporting will be
in accordance with direction issued from time to time by the
Treasury Board Secretariat. Costs will only be charged against
appropriations at the time site management and remediation work
is undertaken.
- Site management and remediation costs which are not
obligations as defined in this policy, should only be recorded
when site remediation work is undertaken. The provisions of the
Treasury Board Accounting Standard (TBAS) 3.1 Capital Assets will
apply where appropriate.
- Solid Waste Landfills, as special cases, will be accounted
for based on the Public Sector Accounting Recommendations issued
by the Public Sector Accounting Board of the Canadian Institute
of Chartered Accountants.
- Guidelines on financial reporting and record keeping
requirements are contained in attached appendices. Departments
need not report a total liability less than $ 100,000.
Accounting for site management and remediation
costs and liabilities will be reviewed by departmental internal
audit groups on a regular basis.
This policy is issued under the authority of the
Financial Administration Act.
For Solid Waste Landfills, Section PS 3270 of the
Public Sector Accounting Recommendations issued by the Public
Sector Accounting Board of the Canadian Institute of Chartered
Accountants applies.
Treasury Board Accounting Standard (TBAS) 3.1 -
Capital Assets will apply as appropriate.
Treasury Board Real Property Policies and
Guidelines can be found at the below listed URL:
http://www.tbs-sct.gc.ca/rpm-gbi/home-accueil.asp?Language=EN
Enquires concerning this policy should be
directed to your departmental headquarters. For interpretations
of this policy departmental headquarters should contact:
Treasury Board Secretariat
Comptrollership Branch
Financial Management and Accounting Policy Directorate
Government Accounting Policy Division
Ottawa, Ontario
K1A 0R5
Telephone: (613) 952-1530 or
Facsimile: (613) 941-8487
Definitions
A contaminated site as defined by the
Contaminated Sites Management Working Group is a site at which
substances occur at concentrations (1) above background levels
and pose or are likely to pose an immediate or long term hazard
to human health or the environment, or (2) exceed levels
specified in policies and/or regulations.
A solid waste landfill site is a defined
area of land or excavation that receives waste that may include
household waste, commercial solid waste, non-hazardous sludge and
industrial solid waste. (CICA)
The Canadian Council of the Ministers of the
Environment (CCME) has developed a national classification
system to provide a basis for classifying sites according to
their current and potential adverse impact on human health and
the environment. The system provides a convenient basis for
assessing the need for remediation at individual sites, and for
establishing the relative priority for implementing remedial
measures among the sites that have been classified.
Contaminated sites are placed into one of five
classes, namely:
-
- Class 1 - available information (assessment) indicates
that action is required to address existing concerns for public
health and safety,
-
- Class 2 - available information (assessment) indicates
that there is a high potential for adverse off-site impacts,
although threat to human health and the environment (public
health and safety) is generally not imminent. Action is likely
required,
-
- Class 3 - available information (assessment) indicates
that the site is not a high concern. Additional investigation may
be carried out to confirm the classification and some degree of
action may be required,
-
- Class N - available information (asssessment)
indicates that there is probably no significant environmental
impact or human health threats, and there is likely no remedial
action required, and
-
- Class I - some assessment action has been taken but
there is insufficient information to classify the site.
Any other suitable classification system
which produces comparable results may be applied to a particular
site if considered by the department to be more appropriate in
the circumstances.
Guideline on Departmental Records
General: This guideline is intended to indicate the minimum
record keeping required and to complement the requirements of the
Treasury Board Contaminated Sites Inventory Input Guide and the
Solid Waste Landfill Inventory Input Guide which can be found
at:
http://www.tbs-sct.gc.ca/rpm-gbi/home-accueil.asp?Language=EN
Contaminated Sites
Departments will be required to keep appropriate
records of sites in their custody that are contaminated or
suspected of being contaminated. This inventory, related to the
Property Number assigned in the Directory of Federal Real
Property (DFRP), will contain sufficient information to permit
the department to manage their contaminated sites and to allow
external auditors to form an opinion on the effectiveness,
efficiency and economy of the management of contaminated sites.
As a minimum, the following data will be maintained:
- DFRP Property Number;
- Site Identification: departmentally assigned in sufficient
detail to permit location of the site within the property;
- Description of contamination or suspected contamination;
- Classification of the site in accordance with the National
Classification System for Contaminated Sites (including the date
the classification was assigned);
- Action Plan for further evaluation or remediation;
- Estimated Cost for further evaluation or remediation (date
estimated and pertinent assumptions) and classification as
liability or contingent liability;
- Costs incurred on a particular site by fiscal year;
- Other information considered significant.
Solid Waste Landfills
As a minimum the following data will be
maintained:
- DFRP Property Number1;
- Site Identification: departmentally assigned in sufficient
detail to permit location of the site within the property;
- The nature and source of landfill closure and post-closure
care requirements;
- The basis of recognition and measurement of the
liability;
- The reported liability for closure and post-closure care at
the balance sheet date, the estimated total expenditure for
closure and post-closure care, and the amount remaining to be
recognized;
- The remaining capacity of the site and the estimated
remaining landfill life in years;
- The estimated length of time needed for post-closure
care;
- Costs incurred on a particular site by fiscal year.
Guideline on Reporting Requirements
Reporting requirements will be in accordance with
this policy and direction from time to time issued by the
Treasury Board Secretariat. Examples of the detail required
follow (data are for illustrative purposes only):
CONTAMINATED SITES
DEPARTMENT/AGENCY - As at March 31, 2002
DFRP
Property
Number
|
Number of Contaminated Sites
|
Estimated Cost of Evaluation and
Remediation
|
Expenditures Fiscal Year 01/02
|
Assessed
|
Suspected
|
Total
|
Liability
|
Contingency
|
XXXXX
|
25
|
78
|
103
|
$256,000
|
$2,999,000
|
$9,567
|
YYYYY
|
11
|
|
11
|
$87,900
|
$987,760
|
|
ZZZZZ
|
8
|
9
|
17
|
$8,788,700
|
$888,800
|
$8,777
|
TOTAL
|
44
|
87
|
131
|
$9,132,600
|
$4,875,560
|
$18,344
|
Contaminated Sites Assessed
DEPARTMENT/AGENCY - As at March 31, 2002
DFRP
PROPERTY
NUMBER
|
CATEGORY (CCME)1
|
1
|
2
|
3
|
N
|
I
|
TOTAL
|
XXXXX
|
4
|
11
|
7
|
2
|
1
|
25
|
YYYYY
|
5
|
4
|
0
|
2
|
0
|
11
|
ZZZZZ
|
6
|
1
|
1
|
0
|
0
|
8
|
TOTAL
|
15
|
16
|
8
|
4
|
1
|
44
|
Note 1: A contaminated site can only be assigned
to a category after some assessment work has been undertaken.
Suspected sites that have not been assessed are not to be
included in this table nor assigned a classification of I.
Solid Waste Landfills1
DEPARTMENT/AGENCY - As at March 31, 2002
A
|
B
|
C
|
D
|
E
|
F
|
|
DFRP Property Number
|
Estimated Total Expenditure
|
Cumulative Capacity Used To Date
|
Total Estimated Capacity
|
Expenditures Previously Recognized
|
Change in Liability Current Year
(B*(C/D)-E)
|
Total Expenditure Recognized to Date
(E+F)
|
AAAAA
|
$150,000
|
5,000
|
50,000
|
$
|
$15,000
|
$15,000
|
BBBBB
|
$200,000
|
8,000
|
100,000
|
$
|
$16,000
|
$16,000
|
CCCCC
|
$1,000,000
|
84
|
100
|
$
|
$840,000
|
$840,000
|
TOTAL
|
|
|
|
|
$871,000
|
$871,000
|
Note 1: Based on the PSAB Recommendations
Guideline on Liabilities and Contingent Liabilities Related
to Federal Contaminated Sites
The Contaminated Sites Management Working Group
has developed a guideline on the application of the Policy on
Accounting for Costs and Liabilities Related to Contaminated
Sites. This guideline is endorsed by the Treasury Board and may
be found at the following internet address:
http://www.tbs-sct.gc.ca/rpm-gbi/home-accueil.asp?Language=EN
1. Where a department is responsible
to remediate a contaminated site on other than Government
property, ensure that adequate identification is available to
permit the site to be located. [Return]
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