Financial Assurance

In order to ensure that the rehabilitation work outlined in a closure plan is successfully performed, even in the event that the proponent of the exploration activity faces financial or legal troubles, a financial guarantee equal to the estimated cost of the rehabilitation work must be held in trust by the ministry. This financial guarantee is known as financial assurance. Financial assurance must be included with the submission of a closure plan.

Forms of Financial Assurance

Financial assurance can be provided in one of the following forms:

  • Cash
  • A letter of credit from a bank named in Schedule I of the Bank Act.  A letter of credit is a document issued by a bank agreeing that it will pay money to a beneficiary, on behalf of the bank's customer , if certain events take place.
  • A bond of a guarantee company approved under the Insurance Act.  A bond (surety bond) is a document issued by a guarantee (insurance)company agreeing to pay money to an obligee if certain events take place.
  • A mining reclamation trust as defined in the Income Tax Act
  • Compliance with a corporate financial test in the prescribed manner
  • Any other form of security or any other guarantee or protection, including a pledge of assets, a sinking fund or royalties per tonne, that is acceptable to the Director of Mine Rehabilitation

Return of Financial Assurance

Financial assurance will be returned to the proponent of the exploration activity after the rehabilitation work has been performed. Financial assurance will only be returned if the rehabilitation work is performed in accordance with the closure plan and meets the ministry's satisfaction following an inspection of the site.

How Do I Find Out More About Financial Assurance That Have Been Submitted?

Financial Assurance that have been submitted are included on the Financial Assurance Table.

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