GUNNAR MINE: SK sues feds for $278 MILLION clean-up.....

GUNNAR MINE: SK sues feds for $278 MILLION clean-up.....

Postby Oscar » Thu Nov 29, 2018 11:15 am

'This has been going on for a very long time': Province suing feds over $278M mine cleanup after cost-sharing talks fail

[ https://thestarphoenix.com/news/local-n ... talks-fail [

The province is seeking $61 million plus a court order requiring Ottawa to cover half the remaining costs, estimated to be $153 million.

Alex MacPherson, Saskatoon StarPhoenix November 27, 2018

(PHOTO: The abandoned Gunnar uranium mine, with the flooded mine pit on the left and decaying headframe on the right, as it appeared in 2011. The headframe has since been demolished. Saskatchewan Research Council / Saskatoon )

Saskatchewan is suing the federal government to avoid being left holding the entire bill for a massively over-budget uranium mine cleanup project, the total cost of which has grown more than 1,000 per cent, to $278.1 million.

The province is seeking $61.8 million — the bulk of Ottawa’s original $12.3 million commitment plus $50.6 million to cover half of what has been spent to date — and a court order that the federal government “contribute equally” to remaining costs.

Filed this week in Regina Court of Queen’s Bench, the statement of claim is the latest development in a 12-year dispute over the ballooning cost of burying radioactive tailings and other work at the abandoned Gunnar uranium mine in northern Saskatchewan.

It alleges that the federal government — which has contributed $1.1 million to the mine cleanup project to date — breached its contractual obligations to cost-share the project and has also failed to advance or support it.

“Canada benefitted from the Gunnar mine’s operation as it controlled the uranium industry throughout said operation, but has imposed all financial responsibility for the decommissioning and reclamation of the Gunnar mine upon Saskatchewan,” the statement reads.

“It would be inequitable for the taxpayers of Saskatchewan to bear the entirety of all costs in excess of the (original estimate of $24.6 million) and there is no juridical reason why Canada should be excused from contributing its share,” the document continues.

Statements of claim contain allegations that have not been tested in court. The Attorney General of Canada, which is the statutory representative of the Crown, has 30 days to file a formal statement of defence.

In an interview on Tuesday, Saskatchewan’s Minister of Energy and Resources, Bronwyn Eyre, said years of talks with Ottawa proved fruitless, and the province had no choice but to take action through the courts because the statute of limitations is “looming.”

“This has been going on for a very long time. And the inaction on the part of the federal government has been going on for a very long time. Is this the right time? I guess there’s never a wrong time to implore a partner to help,” Eyre said.

Approximately $77 million has been spent to date on the quarter-billion-dollar project to clean up the abandoned Gunnar uranium mine in northern Saskatchewan, seen here in 2015. Photo: Saskatchewan Research Council.

(PHOTO: An aerial view of the abandoned Gunnar uranium mine, with the flooded mine pit on the left, in 2015. Saskatchewan Research Council / Saskatoon )

Eyre added that the remediation project is especially important to communities in northern Saskatchewan, as well as the northern ecosystem, and the province’s goal in taking legal action is to resolve the dispute “fairly.”

A request to interview federal Natural Resources Minister Amarjeet Sohi was declined. In a Nov. 1 letter to Eyre, Sohi reiterated Ottawa’s long-standing view that Saskatchewan owns the mine and Ottawa only owes its original commitment of $12.3 million.

“When the provincial leases for the mine were allowed to lapse in 1990, Saskatchewan assumed the liability for the site,” Sohi wrote.

Natural Resources Canada spokeswoman Alison Reilander said in an email that the federal department was not able to respond to a request for comment by deadline.

Perched on the north shore of Lake Athabasca, the Gunnar mine deposit was discovered in 1952. Gunnar Mining Ltd. operated the facility until 1963, when its underground shafts and open pit were flooded and the site was abandoned with little cleanup.

In 2006, the federal and provincial governments signed a memorandum of agreement to share the cost of removing asbestos-laced buildings, and covering millions of tonnes of waste rock and uranium tailings — then estimated at $24.6 million.

The memorandum states that federal and provincial contributions will be on a “dollar to dollar basis,” and the parties agree to discuss any further financing arrangements should the total cost of the project exceed the original estimate.

That work, which is complicated by the mine’s remoteness and harsh winter weather, has been ongoing for several years. Eyre said the province has continued spending money because the country’s nuclear regulator has asked that work continue.

The province’s claim notes that most of the cost overruns are attributable to regulatory requirements and other factors outside of its control, including the federal government’s requests that it undertake additional work at the site.

(PHOTO: The abandoned Gunnar uranium mine site as it appeared in 2015. Saskatchewan Research Council / Saskatoon )

“The parties knew at the time of entering into the (memorandum) that the total cost of the project could exceed the ‘estimated total cost’ identified in 2006,” and the total would not be known until work was underway, the statement of claim notes.

The federal government takes a different view.

In his letter, a copy of which was provided to the Saskatoon StarPhoenix, Sohi said the original memorandum “required that Saskatchewan manage the project in a ‘timely and cost-effective’ manner and that there would be ‘no cost overruns.’ ”

The remaining $11.2 million Ottawa believes it owes the provincial government for the project will come after “minor amendments” to address changing regulations are made to the original memorandum of agreement, Sohi wrote.

Asked whether the lawsuit will further sour the provincial government’s relationship with Ottawa, which Premier Scott Moe has described as “frosty,” Eyre acknowledged there is no “perfect time” to file a lawsuit, but noted the issue is “cross-partisan.”

That is largely because the federal government has maintained that economic and environmental issues go hand-in-hand, and all parties can support a cleanup project that benefits First Nations and other remote communities in the north, she said.

“This is an obligation that they have, and we’ve reached a point where we had to do something.”

amacpherson@postmedia.com
twitter.com/macphersona

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