9.1 Overview

The roles and responsibilities of the Program Director (who is usually a staff member in the Environmental Assessment and Approvals Branch or in Regional and District Offices) (Section 9.2), the Business and Fiscal Planning Branch (Section 9.3), the Regional and District Offices (Section 9.4), the Environmental Assessment and Approvals Branch (Section 9.5) and the Economic Analysis Section (Section 9.6).

9.1.1 Flow charts presented in Appendix F illustrate the primary responsibilities for the proper administration of obtaining, returning, converting non-cash financial assurance to cash and using financial assurance.

9.2 Program Director

9.2.1 The Program Director is generally employed in one of the following two Ministry branches or offices:

  1. Regional Offices; and
  2. Environmental Assessment and Approvals Branch (EAAB).

9.2.2 Ministry staff noted in Section 9.2.1 can solicit advice from the following Ministry divisions, branches or sections (or their equivalents):

  1. Economic Analysis Section (EAS) in Ministry of Energy, as per a shared services agreement between the Ministry of the Environment and the Ministry of Energy;
  2. Legal Services Branch (LSB);
  3. Business and Fiscal Planning Branch (BFPB);
  4. Environmental Sciences and Standards Division (ESSD);
  5. Environmental Assessment and Approvals Branch (EAAB); and
  6. Regional Offices.

9.2.3 The primary contact with regulated parties will be through the Program Director.

9.2.4 Where discussions are to take place between the Ministry and the regulated party, meetings and other direct contacts with the regulated party should be arranged by or through the Program Director and other staff as needed.

9.2.5 The principal responsibilities of the Program Director are to:

  1. Write the conditions for financial assurance in the order or approval;
  2. Issue order or approval with financial assurance conditions;
  3. Deliver the order or approval to the regulated party;
  4. Ensure that the financial assurance proposal and financial assurance amount has been received from the regulated party;
  5. Ensure that copies of the financial assurance and supporting documents are sent to the Environmental Assessment and Approvals Branch in terms of an order and to the District Offices in terms of an approval for their information;
  6. Ensure that the original financial assurance and supporting documents are sent to the Business and Fiscal Planning Branch for final review, verification and safekeeping;
  7. Review financial assurance proposal to ensure all information items noted in Section 6.4 have been included in proposal and seek advice, if necessary, from Legal Services Branch and Economic Analysis Section;
  8. Ensure that the financial assurance proposed and provided is sufficient to pay for compliance with terms and conditions in the relevant order or approval by determining whether the underlying cost estimates are reasonable and whether the financial assurance amounts are calculated according to this Guideline, with assistance from the Economic Analysis Section;
  9. Review non-cash financial assurance documents to verify expiry dates, automatic renewal clauses, values, contract provisions and accessibility;
  10. Ensure that cash financial assurance has been deposited in the Consolidated Revenue Fund;
  11. Ensure that the financial assurance amount is amended annually or according to the Cumulative financial assurance Balance Schedule specified in the order or approval;
  12. Ensure that the Business and Fiscal Planning Branch is informed of new accounts or specific new actions regarding existing accounts;
  13. Ensure that all information in a new or updated financial assurance account is provided to the individual, section or office that maintain financial assurance databases;
  14. According to the approval conditions, review the amount of the financial assurance in each active account to ensure that the amount of financial assurance is sufficient to cover any increases in expected capital and other one-time costs, or operating costs and any changes in other program requirements such as economic parameters;
  15. Request and authorize conversion of non-cash form to cash (refer to Section 8.3);
  16. Instruct Business and Fiscal Planning Branch to demand cash payment from issuing institution if letter of credit and bond are not renewed;
  17. Request use of cash in a section 136 Order (refer to Section 8.4);
  18. Ensure that all work done has been completed in a satisfactory manner before all or any amounts of the financial assurance can be returned to the regulated party;
  19. Request and authorize returns or reductions in non-cash financial assurance in a section 134 Order (refer to Section 8.5);
  20. Request returns or reductions in cash financial assurance in a section 134 Order (refer to Section 8.5);
  21. Monitor periodically, review and report on active financial assurance accounts as required by Ministry management. Reports should include information on each account and should include, at a minimum, the following items:
    • Name and identifiers (e.g., location, order or approval number, etc.) of the regulated party for each account;
    • Type of facility or operation (e.g., landfill, steel mill, sewage or treatment facilities, etc.);
    • Type of environmental problem or pollutant (e.g., hazardous waste, non-hazardous solid waste, air pollutants, industrial water pollution, PCB destruction, etc.);
    • Type of legal instrument requiring financial assurance (e.g., type of order or approval issued);
    • Amount of financial assurance provided;
    • Form of financial assurance provided;
    • Expiry date of the financial assurance requirement or form if applicable; (All non-cash instruments should have automatic renewal clauses. Some old existing forms may not have the clause. Flag accounts where financial institution or guarantor have issued forms without renewal clauses.)
    • Payments into and out of each account, accrued interest, current balance of account for the trust fund within the Consolidated Revenue Fund;
    • Cases where the financial assurance was called in (whether a non-cash financial assurance was just converted to cash or financial assurance was actually used); and
    • Cases where financial assurance funds are used by the Ministry to fulfill the terms and conditions in an order or approval.
  22. Conduct periodic reviews of financial assurance accounts which include but are not limited to the following appropriate steps:
    • Obtain any financial assurance that has been required in orders or approvals;
    • Obtain additional financial assurance where required;
    • Ensure that time-limited, non-cash financial assurance has been properly renewed;
    • Authorize the use of financial assurance if necessary; and
    • Authorize the return of financial assurance to regulated parties where appropriate.

9.2.5.1 Where Program Director learns of, is informed of or is advised that a regulated party with active financial assurance accounts faces financial difficulties, such as:

  1. The regulated party files for credit protection or bankruptcy;
  2. The regulated party lays off employees to an unprecedented extent;
  3. A bank notifies the Ministry that it will not renew the regulated party’s letter of credit; or
  4. A surety company notifies the Ministry that it will not renew a surety bond.

The Program Director should take the following steps, expeditiously:

  1. As soon as possible, initiate conversion of non-cash financial assurance to cash;
  2. Initiate any investigations necessary to verify evidence of the regulated party’s impending insolvency. The Program Director should obtain assistance from the Economic Analysis Section for this task; and
  3. Review sufficiency of the financial assurance for the site or establishment and if the amount of the financial assurance is determined to be insufficient, obtain as soon as possible, sufficient financial assurance in cash from the regulated party.

9.3 Business and Fiscal Planning Branch

9.3.1 Primary responsibilities of the Business and Fiscal Planning Branch (BFPB) are to:

  1. Hold all Financial Assurances, including cash and original financial assurance documents, as well as supporting documents, for safekeeping;
  2. Record data on all financial assurance accounts and maintain an electronic database of accounts. Coordinate and liaise with other databases such as the Integrated Divisional System (IDS) which maintain information regarding financial assurance;
  3. Report on financial assurance accounts and statistics;
  4. Review and verify that non-cash financial assurance forms and documents are still valid;
  5. Review non-cash financial assurance forms for completeness to ensure form meets Ministry standards;
  6. Monitor fluctuations of the value of financial assurance accounts as appropriate;
  7. Set up accounts for new cash and converted Financial Assurances. Record to the Integrated Financial Information System (IFIS);
  8. Record cash deposits and ensure that deposits and refunds are correctly reported to IFIS;
  9. Prepare monthly reconciliation of cash Financial Assurances in IFIS;
  10. Calculate and distribute yearly interest (calculated using the Tiered Rate offered by Ontario Financing Authority at Ministry of Finance) to individual cash financial assurance accounts. Send records to the Ministry of Finance for payment;
  11. Return financial assurance to the regulated party as per the instructions of the Program Director;
  12. Convert non-cash form to cash as per the instructions of the Program Director;
  13. Document the responsibility of regulated party to pay taxes on interest earned on cash financial assurance in correspondence accompanying release of financial assurance funds;
  14. Ensure that requested surplus payments (difference between the actual and required Financial Balance) are returned to the regulated party in accordance with appropriate Ministry and Government of Ontario guidelines, procedures and policies. If funds are to be returned, the Program Director will notify and instruct Business and Fiscal Planning Branch in writing to release funds;
  15. Issue periodic reports as required by Ministry management. This report should include information on each account and should include, at a minimum, the information cited in Section 9.2.5, paragraph u);
  16. Issue other reports requested by Ministry management and other government staff who work on financial assurance accounts; and
  17. Provide financial guidance to the Program Director.

9.4 Regional and District Offices (R&DOs)

9.4.1 The primary responsibilities of the R&DOs are to:

  1. Prepare financial assurance conditions in an order;
  2. Review proposals for technical accuracy;
  3. Send financial assurance proposals to Economic Analysis Section for review of economic parameters and financial assurance calculations;
  4. Review financial assurance amounts and documents received from regulated party;
  5. Send documents to Legal Services Branch for review, if necessary;
  6. Send documents and cash to Business and Fiscal Planning Branch for safekeeping, and
  7. Prepare periodic reports as required by Ministry management. The report should be prepared by the designated divisional lead on financial assurance and should include, but not be restricted to:
    • The information cited in Section 9.2.5, paragraph u);
    • Operational changes and developments, if any;
    • Comments on problems with administration, implementation or other issues;
    • Staff time devoted to financial assurance and to other related activities;
    • Goals, targets and other indicators of progress and indicators of effectiveness; and
    • Statements on financial assurance accounts and coverage.

9.5 Environmental Assessment and Approvals Branch (EAAB)

9.5.1 The primary responsibilities of the financial assurance Officer at EAAB are to:

  1. Review existing approvals for landfills, sewage works, air, permits to take water to initiate financial assurance, where appropriate;
  2. Analyze/monitor financial assurance accounts to ensure that when financial assurance is required in an order, approval or regulation that financial assurance has been provided to the Ministry;
  3. Assist in preparing financial assurance conditions for approvals;
  4. Ensure financial assurance accounts remain in compliance with terms and conditions noted in orders or approvals; including that regulated parties submit all required re-evaluations and annual financial assurance payments;
  5. Review proposals for reasonableness and accuracy of cost estimates;
  6. Assess standard forms of financial assurance for automatic renewal clauses;
  7. Assess non-standard forms (value of bonds, marketable securities, shares, etc.) of financial assurance against fluctuations in market prices. If the values of the non-standard forms fall to a level less than the required value of the financial assurance, the Program Director should be informed that additional financial assurance must be provided in cash;
  8. Administer procedures for obtaining financial assurance and handling documents (e.g., send documents to Economic Analysis Section, Legal Services Branch and Business and Fiscal Planning Branch for safekeeping);
  9. Administer the procedures for converting non-cash financial assurance to cash once it has been identified that an active financial assurance account has financial difficulties;
  10. Administer the procedures using financial assurance and for returning financial assurance;
  11. Perform compliance audits of financial assurance accounts;
  12. Maintain the financial assurance component of the Integrated Divisional System (IDS);
  13. Make regular inquiries to the Superintendent of Deposit Institutions and the Superintendent of Insurance in the Ministry of Finance and to the Canadian Inspector General of Banks or similar institutions as to the status and solvency of the institutions that provide financial assurance;
  14. Make regular inquiries to the Financial Services Commission of Ontario regarding the status and solvency of Credit Unions and Caisse Populaires which provide financial assurance; and
  15. Provide financial advice and policy support.

9.6 Economic Analysis Section (EAS) in Ministry of Energy, as per a shared services agreement between the Ministry of the Environment and the Ministry of Energy

9.6.1 The responsibilities of the EAS with respect to financial assurance are to:

  1. Contribute to updates of financial assurance Guideline and policies;
  2. Review economic parameters and financial assurance calculations in the financial assurance proposal documents;
  3. Provide advice to Ministry staff about interpretation of the financial assurance Guideline;
  4. Provide advice to Ministry staff regarding appeals;
  5. Provide advice to regulated parties; and
  6. Conduct special studies as required such as the use of financial assurance or the effectiveness of the financial assurance program.