Yellowknife (Feb 11/05) - Taxpayers could be on the hook for millions of dollars in environmental clean-up costs if the NWT doesn't strengthen its mining regulations, warns a report released last week.

"Mining companies have left many abandoned sites, created long-term environmental threats and left the Canadian taxpayer responsible," said the Canadian Arctic Resources Committee (CARC), which commissioned the 120-page study.

Territorial laws that govern mine clean-ups - or reclamations, as they are also known - still lag behind those of several provinces and American states, said Charles Birchall, chair of the organization.

"We need to seize this opportunity to put a regime in place that reflects the best practices (of the industry)," he said.

The study indicates more comprehensive laws are needed to ensure companies - not the federal and territorial governments - bear the cost of cleaning up mine sites.

In particular, the report urged policy makers to increase the security deposits companies are required to put down before developing a site.

"The NWT really stands alone without any legal requirement for a reclamation plan or security," said Birchall.

"We are not asking (the government) to be unique."

David Livingstone, director of renewable resources and environment with the Department of Indian and Northern Affairs Canada, contested the perception that a "regulatory vacuum" exists in the NWT.

While there is no legally binding requirement for a security deposit, the policy of environmental boards is to require funds for a reclamation plan, he said.

"We all recognize the circumstances that have surrounded (certain mining projects) and we do not want to see that repeated," he said.

Failed ventures have already cost taxpayers millions of dollars and could potentially cost billions more, the report said.

In 1990, Royal Oak Mines put down a $400,000 deposit for its water licence at Giant Mine, just outside of Yellowknife. When the company went bankrupt in 1999, the public sector was left to care for more than 200 tonnes of arsenic stored in underground chambers.

The government spends about $3.7 million per year to contain the deadly substance and reclamation estimates vary from $70 million to $1.7 billion, states the report.

In a more recent example, the operators of Cantung Mine - located on the border of Nahanni National Park - paid a $900,000 deposit on their water license when they re-opened the site in 2001. After the company sought bankruptcy protection in 2003, a government study pegged the clean-up cost between $9 and $49 million.

"New mines being developed or continued... need to be placed under a legally binding reclamation regime in order to prevent any further contributions to this legacy," the report states.

The study examined regulations in four provinces - British Columbia, Manitoba, Ontario and Saskatchewan - and six American states.

Livingstone said the federal government would examine the report and consider some of its recommendations.

"Some details may need looking at," he said.