“Securities” are funds or financial assurances such as letters of credit supplied by authorized users of land and water, and held by government, to ensure there is money available to clean up a site, if needed.
The security deposit requirements are conditions of specific authorizations such as water licences, land use permits, or leases. The requirement for a security deposit is not limited to authorizations for resource development or infrastructure project activities. Any significant use of public land or water that requires an authorization may also require a security deposit. This means that these securities help government ensure funds will be available for the associated costs of project decommissioning, reclamation, and any damages resulting from accidents.
The polluter pays principle
The legislative framework supports and the Government of the Northwest Territories operates according to the polluter pays principle, that those who cause contamination should be liable for restoring the land. This means that the owner/operator of a project is financially and legally responsible for cleaning up the site both during the project and once operations cease.
If an owner/operator abandons a site or becomes insolvent (bankrupt), cleaning up the site may become the responsibility of the government that administers the land. The government can then use any securities to mitigate the cost of the cleanup, ensuring that the owner/operator still bears the cost.
Securities for land and water are governed by the following legislation:
- Northwest Territories Lands Act, administered by the Department of Lands;
- Commissioner's Land Act, administered by the Department of Lands;
- Waters Act, administered by the Department of Environment and Natural Resources; and
- Mackenzie Valley Resource Management Act, administered by Crown-Indigenous Relations and Northern Affairs Canada.
The GNWT has adopted the federal Mine Site Policy for the Northwest Territories on an interim basis and has endorsed the Guidelines for the Closure and Reclamation of Advanced Mineral Exploration and Mine Sites in the Northwest Territories, developed jointly by the federal government and the Land and Water Boards of the Mackenzie Valley.
The regulatory body issuing the authorization or land tenure instrument sets the security amounts. The amounts are set based on site conditions, proposed activities at the site, and technical information and recommendations provided by governments participating in the regulatory process.
Water licences and land use permits
In the Mackenzie Valley: The Mackenzie Valley Land and Water Board, or a regional panel of the board, issues all water licences and land use permits within this region and therefore sets the security amounts for these water licenses and land use permits.
In the Inuvialuit Settlement Region: The Inuvialuit Water Board issues all water licences within this region and therefore sets security amounts for these water licences. The Department of Lands issues land use permits for Territorial Lands within this region and sets the security amount for these land use permits.
The Department of Lands can also attach securities to land tenure instruments, such as leases.
Ensuring adequate securities
It is important for governments and regulatory boards to ensure adequate securities are in place for each authorization. Regular site inspections, reviews, and licence and permit renewals provide ongoing opportunities for boards and governments to evaluate the progress of authorized activities, monitor site conditions, and increase or decrease securities as needed.
Security deposits are paid by the licence, permit or lease holder, and held by the government responsible for managing the land.
In the Northwest Territories, securities for authorizations are collected by the Department of Environment and Natural Resources and the Department of Lands according to their respective legislative responsibilities. All securities and financial assurances collected by the Government of the Northwest Territories are held by the Department of Finance.\
Securities must be provided in an acceptable form. The GNWT's preferred forms of security are cash and irrevocable letters of credit.