MHCA supports auditor’s recommendations for quarry rehab


The MHCA is calling on the provincial government to implement, with industry’s full input, the recommendations contained within the Auditor General’s report on the Quarry Rehab Program, released May 20.

“This must be done in a timely manner so that the program can resume in construction season 2020,” said MHCA President Chris Lorenc.

The AG’s investigation found the program lacked appropriate management oversight. It noted inspectors had far too much responsibility and the program focused on spending, not prioritizing the most pressing projects.

“This reflects that provincial administrations well ahead of 2016 ignored appropriately resourcing the department which industry regards as a key enabler of economic activity,” noted Lorenc.

The program was suspended in 2018 after an internal review began in the Mines Branch. The branch and its inspectors had complete responsibility for the program, which began in 1992 and served as a model for similar programs across Canada.

The AG also called for tendering rules to be respected, noting the department had a practice of approving larger projects being split to allow for $50,000, untendered rehab projects.

The Auditor General found there was insufficient management and internal control, including on revenue reporting. The Agriculture and Resource Development Department, which assumed responsibility for the Mines Branch last year, is continuing its own investigation of irregularities and so will continue suspension of the program.

“The department will be embarking on a zero-based review of the program to ensure quarries and pits are rehabilitated in an effective and responsible manner,” said a note included by the department in the report.

The release held back some details of the investigation, pending decision by the government on whether there should be legal action taken.

“We are glad to have the report finally public and call upon the province to implement the recommendations released with industry input so we can restart a program that is so important to the communities that support pits and quarries,” Lorenc said.

The AG also found the fees collected, to be deposited into an account to fund rehab, were actually financing over-stated costs of departmental staff tasked with administering the program. In 2005, an internal audit found the department recovered 75% of salary and costs when the actual rate of recovery should have been about 57%. The AG was told that since 2013/14 the department has been recovering 85% of salary and administrative costs.

Lorenc noted the MHCA and the AMM have been calling for upgrading the program rehabilitation standards and potentially increasing the levy rate, applied for every tonne of aggregate extracted from pits and quarries. It is the landowner’s responsibility to report the tonnage and remit fees to the branch, which then assumes responsibility for approving applications for rehabilitation. The rehab payment is made once inspectors confirm the work was done.

Among the AG’s recommendations were:

  • Separate the quarry inspection function from the administration of rehab projects
  • Implement formal cost-recovery methodology substantiated by tracking of costs related to inspection and quarry rehab functions to ensure cost-recovery rates are relevant
  • Develop a quality assurance process to ensure sufficient documentation to confirm what rehab work was done, where and that the amount billed was reasonable
  • Adopt a risk-assessment process to prioritize rehab of spent pits and quarries based on need, rather than simply approving applications as they come in
  • The department should ensure that required tendering practices are followed

In 2016/17 there were 84 rehab projects totaling $3.4 million. As if March, 2019, the rehab fund was $5.2 million.

To read the Auditor General’s full report click here.

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