The AEL Advantage: How AEL Can Help with Asset Retirement Obligations (ARO)

Preparedness is crucial for public sector organizations managing their assets, but planning for their retirement has often been overlooked, leading to unnecessary costs and delays. The Asset Retirement Obligation (ARO) framework aims to help governments better prepare for and manage the financial implications of closing facilities. This includes public assets like school boards, municipalities, healthcare, community services, and government buildings.

Canada’s Public Sector Accounting Board (PSAB) introduced bill PS 3280 in 2022, which mandates that Asset Retirement Costs (ARCs) be included in liability estimates for public sector assets. This standard enhances financial accountability through mandatory annual reporting and ensures sufficient capital allocation for asset retirement, helping public entities mitigate unexpected liabilities and manage budgets more effectively. 

While the responsibility for financial reporting typically falls to financial leaders, determining the costs and timelines of retiring an asset requires multidisciplinary cooperation involving facility or operations managers, sustainability officers, financial teams, legal teams and environmental engineers. 

With over 25 years servicing public and private sector clients, AEL environment has the proven experience and technical knowledge to support you with the environmental portion of ARO planning. We provide Environmental Site Assessments (ESAs) to identify the potential environmental risks, and if applicable, conduct testing to confirm and/or quantify areas or contaminants of potential concern, and if necessary, provide a custom Remedial Action Plan (RAP) with the associated end-of-life costs and timing required for ARO reporting. 

What are the AROs of bill PS 3280?

Asset Retirement Obligations include: 

  • Removal of asbestos and similar hazardous material from buildings
  • Decommissioning of nuclear facilities and underground storage tanks
  • Closure and post-closure obligations associated with mining activities, landfills, other works and infrastructure, waste storage facilities, and oil and gas production facilities
  • Removal of leasehold improvements (especially costs associated with restoration of premises to original state)
  • Activities related to demilitarization or disarmament for all asset categories
  • Retirement activities linked to ships, boats, aircraft and other vehicles, machinery and equipment, and informatics

How can AEL help with the AROs of bill PS 3280?

AEL environment is a professional engineering firm with a track record of successfully completed projects and a high volume of repeat business. We work with a variety of different industries and are well-equipped to mitigate environmental risk and help you navigate the regulatory landscape. 

Here’s how AEL fits in with bill PS 3280 and asset retirement planning:

  • Client Representation – A skilled client representative will conduct a portfolio review to determine if there is reason to suspect contamination and help identify which assets may need environmental support in determining Asset Retirement Costs. Using a collaborative and straightforward approach, we will liaise with stakeholders and support your accountants and auditors to complete all necessary reporting. 
  • Phase 1 ESAA Phase 1 ESA is the first step in understanding the environmental history of your site to identify potential environmental risks and associated end-of-life costs required for ARO reporting. Primary components of this investigation include a thorough review of historical records and client information, site inspection, and the evaluation of available information.
  • Phase 2 ESAA Phase 2 ESA is the first intrusive step in site characterization, investigating Areas of Potential Environmental Concern (APEC) to identify contamination and subsequent liability. Through the use of on-site testing, sample selection, and careful laboratory analysis, we will identify the presence of any exceeding substances such as PHCs, lead or any other site specific contaminants of concern, thereby informing your custom Remedial Action Plan. 
  • Remedial Action Plan – AEL will work alongside you to develop a tailored plan with a cost analysis to help determine the best course of action moving forward. Key factors in planning a remediation include cost, disturbance to the site, timeframe of remediation, and future potential redevelopment. The RAP will assist your facilities and property managers to complete reporting requirements for applicable AROs. 
  • Site Remediation – Depending on the RAP and preferred remedial option, AEL will then conduct a Risk Assessment (RA) and/or Site Remediation. Our land restoration solutions include the removal or treatment of contaminants (in-situ or ex-situ), ensuring that your assets are retired without the risk of liability.

Case Study

As part of our work on a remedial excavation program at a remote, decommissioned microwave tower facility in Northern Ontario, we worked with stakeholders to restore and return the land leased to the client by the local First Nation community. Prior investigation had identified soil and groundwater contamination associated with leaking aboveground fuel storage tanks. The customized management strategy our team implemented reduced delays and costs, allowing the project to be completed under-budget within 18 months of AEL’s first arrival onsite, returning the land to a useful state and rightful owners much earlier than initially projected by previous consultants.

Why AEL?

At AEL, we are focused on providing value-added services in the assessment, management, and remediation of contaminated sites. Our team of dedicated professionals is always here to deliver honest and clear communication, individual advice, and a tailored plan based on personal goals and site-specific criteria. Let us help to protect and restore the value of your land investment. Contact us today and learn more about how AEL can assist with your asset retirement planning.

Previous post
Navigating the Leasing Landscape
Next post
Environmental Risk and Regulatory Compliance
ael blog