The Yukon government will take priority over anyone else owed money by the bankrupt Yukon Zinc Corporation once it spends the rest of the mining company’s security deposit cleaning up the Wolverine mine site, Yukon Supreme Court Justice Suzanne Duncan ruled. (Crystal Schick/Yukon News file)

Yukon government has valid claim in Wolverine mine bankruptcy, judge rules

“This application arises because of an irresponsible mining venture in the Yukon”

The Yukon government will take priority over anyone else owed money by the bankrupt Yukon Zinc Corporation once it spends the rest of the mining company’s security deposit cleaning up the Wolverine mine site, a judge has ruled.

Yukon Supreme Court Justice Suzanne Duncan issued a scathing decision on issue May 26, clearing the way for the territorial government to continue remediation efforts at the site without having to tap into public funds — yet.

“This application arises because of an irresponsible mining venture in the Yukon,” Duncan wrote, referencing a request from the government’s Department of Energy, Mines and Resources for an order declaring it had a claim of $35,548,650 against the company.

“It raises the tensions inherent in society’s and the legislatures’ quest to strike an appropriate balance between ensuring effective environmental regulation and encouraging profitable, responsible resource development. It also demonstrates the limits in the applicable legislation and the need for the regulators to be vigilant in order to protect against potential burdens on taxpayers.”

Yukon Zinc and the Wolverine mine, located about 280 kilometres northeast of Whitehorse between Ross River and Watson Lake, are the latest in a string of companies and mineral projects in the Yukon that have been abandoned and left for the government to clean up.

The company was put into receivership, on the application of the Yukon government, in September 2019 after years of failing to maintain environmental standards at Wolverine and an increasingly perilous financial situation.

The mine had been in care-and-maintenance since 2015 after unfavourable metal prices led to the cessation of actual mining activity. The government stepped in October 2018 to address flooding and water contamination issues, and has been on-site doing remediation work ever since.

The government has been funding the work with the $10,588,966 in security Yukon Zinc did provide, out of the total $35,548,650 that it owed.

Duncan ultimately found that the Yukon government did not have a valid $35,548,650 claim against Yukon Zinc as it could not provide certainty that remediation and clean-up efforts would cost that exact amount.

She ruled that the government would, however, get first dibs on any assets remaining after spending the security it did have on clean-up work.

Lawyers for the Yukon government had stated that it expects it will have used up the $10,588,966 by the end of 2020.

Duncan noted provisions in other jurisdictions like Alberta and the Northwest Territories, where governments have more power to do inspections and enforce the payment of securities on abandoned oil wells and mines.

“This case then, serves to point out the limits of the current Yukon legislation, as well as the need for the regulator to be vigilant in ensuring environmental remediation costs do not escalate and become a burden on others, including taxpayers,” she wrote.

“There is a balance,” she wrote in another part of the decision, “to be struck in encouraging responsible economic development in the Yukon in the context of the competitive mining world, and ensuring that mining activities are completed to closure in a way that protects the environment, not at taxpayers’ expense.”

Contact Jackie Hong at jackie.hong@yukon-news.com

Yukon courts

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Mobile vaccine team Team Balto practises vaccine clinic set-up and teardown at Vanier Catholic Secondary School. Mobile vaccine teams are heading out this week to the communities in order to begin Moderna vaccinations. (Haley Ritchie/Yukon News)
Mobile vaccine teams begin community vaccinations

“It’s an all-of-government approach”

The now empty lot at 410 Cook Street in Whitehorse on Jan. 19. As developers move forward with plans for a housing development that would feature 16 micro-units, they are asking city council for a zoning change that would reduce the number of required parking spaces. (Crystal Schick/Yukon News)
Developer asks for zoning change

Would reduce the number of required parking spaces

The Liard First Nation is preparing to enter negotiations for self-governance with the territorial and federal governments. (Jackie Hong/Yukon News file)
Liard First Nation preparing to enter self-governance negotiations with Yukon, federal governments

Chief Stephen Charlie seeking an agreement separate from “dead end” UFA

asdf
WYATT’S WORLD

Wyatt’s World for Jan. 20, 2021

A Copper Ridge resident clears their driveway after a massive over night snowfall in Whitehorse on Nov. 2, 2020. Environment Canada has issued a winter storm warning for the Whitehorse and Haines Junction areas for Jan. 18. (Crystal Schick/Yukon News file)
Winter storm warning for Haines Junction and Whitehorse

Environment Canada says the storm will develop Monday and last until Tuesday

Mayor Dan Curtis listens to a councillor on the phone during a city council meeting in Whitehorse on April 14, 2020. Curtis announced Jan. 14 that he intends to seek nomination to be the Yukon Liberal candidate for Whitehorse Centre in the 2021 territorial election. (Crystal Schick/Yukon News)
Whitehorse mayor seeking nomination for territorial election

Whitehorse mayor Dan Curtis is preparing for a run in the upcoming… Continue reading

Gerard Redinger was charged under the <em>Civil Emergency Measures Act</em> with failing to self-isolate and failing to transit through the Yukon in under 24 hours. (Joel Krahn/Yukon News file)
Man ticketed $1,150 at Wolf Creek campground for failing to self-isolate

Gerard Redinger signed a 24-hour transit declaration, ticketed 13 days later

Yukon Energy, Solvest Inc. and Chu Níikwän Development Corporation are calling on the city for a meeting to look at possibilities for separate tax rates or incentives for renewable energy projects. (Crystal Schick/Yukon News file)
Tax changes sought for Whitehorse energy projects

Delegates call for separate property tax category for renewable energy projects

Yukon University has added seven members to its board of governors in recent months. (Crystal Schick/Yukon News file)
New members named to Yukon U’s board of governors

Required number of board members now up to 17

Yukonomist Keith Halliday
Yukonomist: Your Northern regulatory adventure awaits!

“Your Northern adventure awaits!” blared the headline on a recent YESAB assessment… Continue reading

Yukoner Shirley Chua-Tan is taking on the role of vice-chair of the social inclusion working group with the Canadian Academy of Health Sciences’ oversight panel and working groups for the autism assessment. (Submitted)
Canadian Academy of Health Sciences names Yukoner to panel

Shirley Chua-Tan is well-known for a number of roles she plays in… Continue reading

The Fish Lake area viewed from the top of Haeckel Hill on Sept. 11, 2018. The Yukon government and Kwanlin Dün First Nation (KDFN) announced they are in the beginning stages of a local area planning process for the area. (Crystal Schick/Yukon News file)
Local area planning for Fish Lake announced

The Government of Yukon and Kwanlin Dün First Nation (KDFN) announced in… Continue reading

Most Read