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2014 – 2015 ANNUAL REPORT ALBERTA ENVIRONMENTAL MONITORING, EVALUATION AND REPORTING AGENCY

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2014 – 2015 ANNUAL REPORT ALBERTA ENVIRONMENTAL MONITORING, EVALUATION AND REPORTING AGENCY

vision

To be globally recognized as the comprehensive and trusted source of environmental data and information that results in better understanding of Alberta’s environment and informs decision-making.

missionTo measure, assess and inform on the conditions of Alberta’s environment.

mandate

Created under the Protecting Alberta’s Environment Act, AEMERA’s mandate is to provide provincial environmental monitoring, evaluation and reporting:

� Based on sound science and evidence

� Presented in a timely, open and transparent manner

� And that respects and incorporates community and traditional ecological knowledge from Alberta’s First Nations and Métis

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 1

THE ALBERTA ENVIRONMENTAL MONITORING, EVALUATION

AND REPORTING AGENCY (AEMERA)Officially established on April 28, 2014 with the proclamation of the Protecting Alberta’s

Environment Act, the Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA) is the provincial monitoring agency responsible for measuring,

assessing and informing the public on the condition of Alberta’s environment.

Operating at arm’s length from government to separate the monitoring, evaluation and reporting of environmental data and information from environmental policy development and regulatory decision-making, effective 2014, AEMERA took over the management of ambient monitoring activities, previously conducted by Alberta Environment and Sustainable Resource Development (now Environment and Parks). With the appointment of the Board of Directors, the strategic and business planning process also began to establish the organization to fully deliver on its mission and mandate to achieve its vision.

Working with monitoring organizations across the province, AEMERA has begun to bring together data and information from a variety of sources to provide scientific evaluation and online access to environmental reports. Our online information system, Alberta Environmental Monitoring, Evaluation and Reporting

Information Service (AEMERIS), provides searchable data from a variety of sources regionally and by category.

On April 28, 2014, AEMERA took over the role as provincial lead on the Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring (JOSM). Effective April 1, 2015, following the expiration of the initial three-year agreement between the provincial and federal governments, AEMERA assumed full responsibility and accountability for environmental monitoring, evaluation reporting in Alberta’s oil sands regions.

As part of its mandate, AEMERA is a working partner — along with Alberta Environment and Parks, the Alberta Energy Regulator (AER), Alberta Energy and Alberta Aboriginal Affairs — in managing and ensuring a coordinated and effective Integrated Resource Management System (IRMS) on behalf of all Albertans.

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MESSAGE FROM THE CHAIROn behalf of the Board of Directors and staff of AEMERA, it is both an honour and a pleasure to present this first annual report of the Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA).

This annual report is unique in that it is a summary of the story of AEMERA to date, including our milestones and accomplishments in getting established, rather than the traditional annual reporting against our business plan goals, activities and performance measures.

AEMERA was established as an entity on April 28, 2014, but did not come into being as a fully operational arm’s length agency from government until April 1, 2015 — AEMERA had no formal business plan during this time, and a key focus of our activities was on getting the core building blocks in place to prepare us to become a fully functioning agency, with the capacity and resources to effectively fulfill our mandate in 2015.

AEMERA is more than the transfer or delegation of environmental responsibilities from government to an arm’s length organization. AEMERA’s creation represents the transformation of Alberta’s

environmental monitoring system to an open, transparent, timely system that uses independent, evidence, traditional and science-based knowledge to inform environmental monitoring, evaluation and reporting. This environmental monitoring system incorporates Traditional Ecological Knowledge (TEK), is based on international best practices, and is designed in consultation with Albertans.

Based on the work of both the Board of Directors and staff in establishing AEMERA over the past year, I am confident we are well positioned to both deliver on our mission to measure, assess and inform on the condition of Alberta’s environment, but also to begin to fulfill the vision of becoming a globally recognized and trusted source of objective and scientific data and information that improves understanding and informs decision-making about our activities related to the environment.

St. Francis of Assisi is quoted as saying “Start by doing what is necessary, then what is possible, and suddenly you are doing the impossible.”

This report shows we have accomplished much over the past year in getting established, and to planting the seeds for our future success.

While AEMERA has much more to accomplish on the road ahead, what at one time may have seemed “impossible”— that is transforming the environmental monitoring, evaluation and reporting system in Alberta is — indeed becoming more possible every day.

Lorne Taylor, Ph.D, ICD.D Chair

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“Start by doing what is necessary, then what is possible, and suddenly

you are doing the impossible.” — St. Francis of Assisi

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BOARD GOVERNANCEAEMERA is governed by a Board of Directors that provides strategic direction for the agency’s approach and activities, oversees the management of AEMERA’s business and affairs, and assures sound financial management.

Reporting to the Board of Directors, the President and Chief Executive Officer (CEO) is responsible for managing, developing and implementing AEMERA’s strategies. This includes the day-to-day management of the agency, as well as operating within the mandate, policies, standards and budget approved by the AEMERA Board of Directors and the Province of Alberta.

Additional information on AEMERA’s mandate, role and accountabilities, and the Protecting Alberta’s Environment Act can be found at www.aemera.org.

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2014 – 2015 AEMERA BOARD OF DIRECTORS

LORNE TAYLOR, Chair

SHEILA LEGGETT

GREGORY TAYLOR, Vice-Chair

PATRICIA MCCUNN-MILLER

MIKE BEAVER

ROBERT PAGEARLIN HACKMAN

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LORNE TAYLOR, CHAIR

Board Chair Dr. Lorne Taylor is a consultant and businessman based in Medicine Hat in southeastern Alberta, and was the founding Chair of the Alberta Water Research Institute. He is currently the Special Advisor to Alberta WaterSMART. Dr. Taylor was a member of the Legislative Assembly for Medicine Hat from 1993 to 2004, and during that time served as the Minister of Innovation and Science (1999 to 2001) leading the creation of Alberta’s SuperNet, and as Minister of Environment (2001 to 2004) leading the development of the Water for Life Strategy and the introduction of Alberta’s Electronics Recycling Program. He has also held tenured positions at several universities.

GREGORY TAYLOR, VICE-CHAIR

Board Vice Chair, Dr. Gregory Taylor, is the former Dean of the Faculty of Science at the University of Alberta and a Professor in the Department of Biological Sciences. As an environmental toxicologist, his research focuses on understanding the mechanisms plants use to tolerate stresses in the soil environment, such as metal toxicity and nutrient deficiency.

MIKE BEAVER, BOARD MEMBER

Board Member Mr. Mike Beaver is a well-respected member and Elder of the Bigstone Cree Nation. In the past, he was elected as Regional Chief for the Assembly of Nations representing Alberta First Nations. He is also a Traditional Mentor for Bigstone Cree Nation Health and Wellness. Mr. Beaver spends his time involved with and leading his Nation. As an Indigenous Spiritual Leader, he conducts ceremonies and leads workshops on native culture to ensure traditions and culture are preserved. Before leading his Nation as Chief and Elder, Mr. Beaver “walked the land” where he honed his skills as a hunter and bushman through years of practice.

ARLIN HACKMAN, BOARD MEMBER

Board Member Mr. Arlin Hackman’s forty-year career was spent in environmental work as a consultant, a staff environmentalist, an executive director and a board member of a number of conservation organizations. He served for over a decade as Vice President and Chief Conservation Officer at World Wildlife Fund (WWF) Canada, guiding programs in the circumpolar Arctic and Cuba as well as Canada. In his final position, as Senior Conservation Advisor, he was responsible for scoping WWF’s international engagement on mining, and serving on the advisory group for the Responsible Mineral Development Initiative of the World Economic Forum.

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SHEILA LEGGETT, BOARD MEMBER

Board Member Ms. Sheila Leggett is the President and Consultant at Tower Peak Consultants Ltd., providing clients with strategic regulatory, environmental and governance advice. From 2010 to 2013, Ms. Leggett was the Presiding Member (Chair) of the National Energy Board and Canadian Environmental Assessment Agency, Northern Gateway Project, Joint Review that conducted an oral hearing process and a comprehensive technical review of the project and provided public recommendation to the Minister of Natural Resources for Cabinet decision. Ms. Leggett was the Deputy Administrator of the Northern Pipeline Agency from 2008 until 2013, and was the Vice-Chair of the National Energy Board. Before joining the National Energy Board, Ms. Leggett was a board member with the Alberta Natural Resources Conservation Board. Prior to this, Ms. Leggett was a Vice-President and senior consultant with an environmental consulting firm, and a founding board member for Alberta Ecotrust.

PATRICIA MCCUNN-MILLER, BOARD MEMBER

Board Member Ms. Patricia McCunn-Miller is a lawyer with experience in regulatory, environmental, social and governance matters. With thirty years of energy, environmental and regulatory experience, Ms. McCunn-Miller is currently the President of Blue Bridge Energy, an energy advisory company. Prior to that, she was Vice-President Regulatory, Government and Public Affairs - Gas Monetization at Talisman Energy Inc. During her position there, she did extensive engagement work with all levels of government, local stakeholders, and First Nations in the development of a strategic framework for liquefied natural gas (LNG). Ms. McCunn-Miller also served as the Executive Vice President of Corporate Responsibility of Synenco Energy Inc., and served as its Corporate Secretary and General Counsel. Ms. McCunn-Miller’s experience includes serving as a Board Member of the National Energy Board. She was also a Member and Vice-Chair of the National Roundtable on the Environment and the Economy from 1999 to February 2004, and a Board Member of Climate Change Central from 2000 to 2010, including a period as interim President and CEO. She served as Managing Director of Environment and Regulatory Affairs for PanCanadian Petroleum from July 1996 to April 2001, and as Vice-President, Environment and Regulatory Affairs with its successor company, EnCana Corporation, from April 2001 to November 2003. Prior to that Ms. McCunn-Miller was General Counsel to the Alberta Petroleum Marketing Commission.

ROBERT PAGE, BOARD MEMBER

Board Member Dr. Robert Page has 25 years of experience in environmental impact assessment and sustainability challenges for public and private sector parties. Before joining the Enbridge Centre for Corporate Sustainability at the Haskayne School of Business, University of Calgary (U of C) in November 2012, he was the TransAlta Professor for Environmental Management and Sustainability in the Institute for Sustainable Energy, Environment and Economy at the U of C. His career demonstrates both academic and corporate leadership. He chairs the International Standards Association ISO 14000 series of international environmental standards out of Geneva. Over the years he has been active in Pollution Probe (Toronto), Canadian Parks and Wilderness Society (southern Alberta Chapter) and the International Institute for Sustainable Development (Ottawa). He serves on the Board of the Canadian Water Network, (Center of Excellence) and the Royal Canadian Geographical Society (Ottawa). He is the former Chair of the National Round Table on Environment and Economy (Ottawa) and the International Emissions Trading Association Board (Geneva). He was also a former member of the Business Environmental Leadership Council to the Pew Centre on Global Climate Change (Washington, DC). He has served on several advisory committees to the Alberta Government including 10 years with the Clean Air Strategic Alliance (CASA) representing the electricity sector.

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MESSAGE FROM THE PRESIDENT AND CEOAs of October 1, 2014, it became my great honour and privilege to accept the invitation of AEMERA’s Board of Directors to serve as the interim President and Chief Executive Officer (CEO), and lead the organization towards its goal of becoming fully functioning as an arm’s length agency and a recognized and respected environmental monitoring, evaluating and reporting organization.

I am very appreciative of the opportunity provided to me by our committed and diverse Board to work with you. In a resource rich province, such as ours, we are privileged to be on the ground floor creating an organization that will inform Albertans on the state of our environment and assisting our many stakeholders in regulating, protecting and conducting research in critical areas.

This document — as AEMERA’s first annual report — outlines some of the key milestones and accomplishments on the first year of our journey towards that goal. It also includes a report from the Office of the Auditor General of Alberta with AEMERA’s audited financial statements for 2014 –2015 — which we are proud to say reflect the good work of our hard-working staff in establishing and managing accountability and reporting on AEMERA’s finances, despite the challenges of creating new systems

and a brand new organizational structure.

Our progress over the past year is remarkable. We have created AEMERA as an arm’s length agency, operating independently from government, in a very dynamic political landscape in Alberta — with three different Premiers, three Environment Ministers, a leadership race, and a provincial election. We also had a change in CEOs less than five months into AEMERA’s existence, and we conducted the recruitment and the hiring process of our entire leadership team.

While achieving these milestones in our creation, we also continued and maintained the excellent work of our monitoring staff every day without compromise, delivering on everything as expected and at a professional standard and quality.

With the ability to hire permanent

staff at AEMERA as of June 1, 2015, in the coming months AEMERA is well positioned to solidify its scientific expertise and capacity in order to fulfill the full scope of its legislated mandate.

The story of AEMERA to date is truly a model of adaptive management. We have come a long way, yet in some ways our journey is just beginning.

As we begin to write the next chapter for AEMERA, let’s continue in that same spirit — to learn and understand why things happen, and to understand what it means to us and how can we adapt and manage in order to ensure we thrive and grow — as individuals, as an organization, and as a province — both today and into the future.

Jay Nagendran, M.Sc., P.Eng., QEP, BCEE President & CEO

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2014 – 2015 MILESTONES AND ACCOMPLISHMENTSOn April 28, 2014, with the proclamation of the Protecting Alberta’s Environment Act, and the appointment of the Board of Directors, AEMERA officially came into being as legal entity and arm’s length organization.

As a new government agency, and a new organization, from May 2014 to March 2015, AEMERA took a number of steps to assume and manage all provincial environmental monitoring and evaluation activities, and to become operationally independent from government.

TRANSITION OF RESOURCESBetween the time period of April 28, 2014 to March 31, 2015, AEMERA was truly in start-up mode as an organization.

Discussions continued throughout the year to determine what monitoring programs and activities – previously conducted by Alberta Environment and Sustainable Resource Development (ESRD) and related staff, financial and other resources were to be transferred to AEMERA as its foundation.

While the transition of resources was not fully resolved by March 31, 2015, core functions and staff resources transferred to AEMERA as of April 28, 2014 consisted of the equivalent of 85 staffing positions. These staff represented the core team

of individuals who had been part of the Environmental Monitoring Division and the Monitoring Management Team of ESRD, with staff across the province, primarily focused on field monitoring and support for water operations.

Work continues to identify the current monitoring activities within the Government of Alberta that are part of AEMERA’s mandate.

STRATEGIC AND BUSINESS PLANNINGAs a new agency and organization, AEMERA needed to establish its governance model and structure, financial and operating systems, employee benefits, payroll and management system, as well as setting up office accommodations and locations.

In June 2014, on behalf of the AEMERA Board of Directors, the Chair, along with the Minister of ESRD, completed and signed AEMERA’s Mandate and Roles document outlining the roles, responsibilities and commitments of the Board, the Minister, and government staff

in working together to deliver on effective environmental monitoring, evaluation and reporting in Alberta.

The Board of Directors also led a Strategic Planning process — beginning in September 2014 — to set the priorities for AEMERA to both inform its three-year business plan and budget, and to ensure it fully meets the mandate.

Both the Strategic Plan and the 2015–2018 Three-Year Business Plan were completed in February and March 2015, and formally approved by the Board of Directors on April 1, 2015.

EXECUTIVE LEADERSHIPAs of October 1, 2014, the Board appointed Jay Nagendran to a one-year term as the CEO of AEMERA, replacing Brad Pickering, who became Deputy Minister of Alberta Municipal Affairs. In 2015 – 2016, the Board will complete a competitive recruitment process to hire a permanent CEO for the agency.

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Open recruitment for four Vice-Presidents for AEMERA was also initiated in the fall of 2014, with the goal of having new Executive Team in place as of April 1, 2015.

These executive positions included:

� Vice-President and Chief Scientist � Vice-President and Chief Monitoring Officer

� Vice-President of Strategy and External Relations

� Vice-President of Corporate Services and Chief Financial Officer

SCIENCE AND STAFF CAPACITYAs an entirely new organization, a number of pieces needed to be in place to hire staff directly into AEMERA: payroll system, pension plan, benefits package, and union agreement. While the payroll and benefits systems were established in the fall of 2014, AEMERA was delayed in its ability to hire permanent staff until a change in the provincial pension regulation to add AEMERA to the Management Employees Pension Plan (MEPP) and Public Service Employees Pension Plan (PSPP) was approved at the end of January 2015.

AEMERA and the Alberta Union of Provincial Employees (AUPE) concluded discussions on a collective agreement in February 2015, and worked through the spring of 2015 to resolve matters relating to the transition of employees from ESRD to AEMERA.

RECRUITMENT AND APPOINTMENT OF SCIENCE ADVISORY PANELIn February 2015, AEMERA strengthened its scientific capacity with the appointment of six internationally recognized environmental science experts to a Science Advisory Panel (SAP). The SAP will provide peer review and will validate AEMERA’s provincial environmental monitoring, evaluation and reporting programs and activities.

The SAP will primarily provide a “science audit” function of the programs and activities delivered by AEMERA. Advice from the SAP will be used to guide continuous improvements in AEMERA’s scientific standards and processes to ensure they are credible and will meet or set global best practices.

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THE SIX SCIENCE ADVISORY PANEL (SAP) MEMBERS INCLUDE:

DR. JILL BARON, Chair – Founder and Co-Director of the John Wesley Powell Centre for Earth System Science Analysis and Synthesis at Colorado State University, Fort Collins, Colorado

DR. JOHN GIESY – Faculty Member in the Department of Veterinary Biomedical Sciences, Faculty of the Toxicology Centre and Emeritus Distinguished Professor of Zoology at Michigan State University; and Professor and Canada Research Chair at the University of Saskatchewan, Saskatoon, Saskatchewan

DR. JOANNE NIGHTINGALE – From the National Physical Laboratory in the United Kingdom, and a Research Scientist, Sigma Space Corporation Contractor in the Terrestrial Information Systems Branch at NASA’s Goddard Space Flight Centre in Greenbelt, Maryland, London, UK

DR. REED NOSS – Provost’s Distinguished Research Professor, Davis-Shine Professor of Conservation Biology, and Pegasus Professor in the Department of Biology at University of Central Florida; and President of the Florida Institute for Conservation Science, Orlando, Florida

DR. RUSSELL SCHNELL – Deputy Director of the Global Monitoring Division of the National Oceanic and Atmospheric Administration (NOAA), Boulder, Colorado

DR. ALEXANDER J.B. (SASCHA) ZEHNDER – Founder and director of triple Z Ltd. and former president of the ETH Board and Professor emeritus of ETH Zurich, Switzerland; Visiting Professor and member of the Board of Trustees of Nanyang Technological University in Singapore; and Scientific Director of Water Resources of Alberta Innovates – Energy and Environment Solutions, Zurich, Switzerland

In announcing the appointments, AEMERA Chair Dr. Lorne Taylor noted:

“These scientists are all recognized as leading experts in their individual fields of science and I am pleased that each of them not only accepted our invitation to provide advice to AEMERA, but that they did so enthusiastically and despite the many other commitments and demands on their time. We are honoured to have these individuals providing their independent oversight to assess and validate the quality of our science against global and leading edge best practices.”

Note: Subsequent to the appointments, Dr. Reed Noss informed AEMERA that he would not be able to contribute to the panel due to academic commitments and schedule.

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The SAP held its initial meeting via teleconference in the spring of 2015, and is scheduled to hold its first face-to-face meeting in the fall of 2015.

TRADITIONAL KNOWLEDGE AND ABORIGINAL ENGAGEMENTAEMERA strongly values, and is committed to recognizing, Traditional Ecological Knowledge (TEK), and to involving and working with Alberta’s First Nations and Métis in its environmental, monitoring, evaluation and reporting programs and activities.

In 2014-2015, AEMERA’s main activity in this area was focused in the oil sands region in programs outlined in the Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring.

Recognizing this initial effort did not reflect the full commitment to work with the communities, AEMERA conducted a third party review and sought recommendations on how to work with and engage more effectively and meaningfully with Alberta’s First Nations and Métis.

The results of that review shaped a specific goal and seven specific areas of action for AEMERA’s 2015–2018 Business Plan.

In 2014-2015, AEMERA also initiated discussions and a robust recruitment process for the establishment of a TEK Advisory Panel, and reached out to a number of communities for one-on-one discussions to both talk about local and regional needs and concerns, and to explore how traditional knowledge may better inform environmental reporting in future.

INTEGRATED RESOURCE MANAGEMENTAEMERA is the environmental monitoring, evaluation and reporting body that supports Alberta Environment and Parks, the Alberta Energy Regulator (AER), Alberta Energy and Alberta Aboriginal Affairs, in managing and ensuring a coordinated and effective Integrated Resource Management System (IRMS) on behalf of all Albertans.

AEMERA’s role within IRMS is to provide:

� Objective reporting of scientific data and information on the condition of Alberta’s environment, including baseline environmental monitoring

� Cumulative effects monitoring; data evaluation and management

� State of the environment reporting in all regions of Alberta

� Credible data, evaluation, knowledge and reporting to inform policy and regulatory decision-making related to natural resource development

AEMERA was in a start-up phase as an organization during 2014/2015, and as such, fully delivering on this mandate proved to be a challenge – compounded with the fact the IRMS approach, processes and working agreement are still in development among the participating organizations and government departments.

Initial progress made by all IRMS parties in 2014-2015, laid the foundation for positive and constructive working relationships moving forward.

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KEY MILESTONES AND ACTIVITIES APRIL 2014 TO MARCH 2015

Since April 28, 2014, some initial milestones and accomplishments include, but are not limited to, the following:

Appointment of Board of Directors

Launch of aemera.org brand, new corporate identity, website

Completion of initial Mandate and Roles Document with Alberta Environment and Sustainable Resource Development

Release of the 2013 – 2014 Annual Report on JOSM

Launch of the initial on-line environmental data reporting system — AEMERIS

Completion of AEMERA’s first Strategic Plan

Release of 2013 – 2014 JOSM Technical Results Report

Regulatory approval to include AEMERA staff in Alberta Public Service Pension Plan

Completion of the 2015 – 2016 work plan for oil sands monitoring

Appointment of the Vice-President and Chief Scientist

Appointment of the Science Advisory Panel

Completion of the Agency Review process

Completion of the 2015 – 2018 Business Plan

Recruitment of the balance of Executive Team including Vice President and Chief Scientist, Vice-President and Chief Monitoring Officer, Vice-President of Corporate-Services and Chief Financial Officer, and Vice-President of Strategy & External Relations

Acquisition, through a lease, of new Edmonton head office space for occupancy October 2015

Delivered six- and twelve-month updates and presentations to key stakeholders

Organized and hosted, with Environment Canada, a two-day science forum to report on the oil sands monitoring

Completion of a thorough financial audit process by the Office of the Auditor-General, resulting in a positive report and “clean” audit for its first year of operations.

Completion of a Master Agreement with the Alberta Union of Provincial Employees (AUPE)

Held an initial teleconference meeting of Science Advisory Panel

Initiation of the hiring of permanent employees to AEMERA

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THE AEMERA.ORG BRANDIntroduced on May 22, 2014, the aemera.org logo is a

symbol designed to be instantly recognizable and associated with our principles and our values in

what we do and how we do it.

Clean and attractive, the visual identity includes the elements of air with the light blue cloud, water with the blue droplet and land and biodiversity in both the green leaf and in the image of an animal in the white space of the design. The individual images come together to form the earth, representing not just the environment and its interconnected components,

but also how we use global best practices and technology to monitor, evaluate and report on both specific environmental indicators and the combined impact of all activities on Alberta’s environment.

The lower case letters in a softer, approachable font communicate the open, transparent, collaborative and approachable nature of the

organization. The colour green represents nature, biodiversity and a healthy environment. The colour blue is a tribute to open skies and fresh water, and at the same time it represents focus, professionalism and a business-like approach to our work.

aemera.org is also our address in the digital world.

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MONITORING ALBERTA’S OIL SANDSIn February 2012, the governments of Canada and Alberta announced the Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring, which outlines a three-year commitment — from April 1, 2012 to March 31, 2015 — to implement a single, government-led monitoring program for the oil sands.

The Implementation Plan recognized the importance of the oil sands as a key natural resource driver of economic development for Canada, and also acknowledges that the expansion of industrial development in the oil sands region necessitates a better understanding of cumulative environmental impacts. In the Implementation Plan, both governments committed to a scientifically rigorous, comprehensive, integrated and transparent ambient environmental monitoring program of the cumulative environmental effects of oil sands development.

The key objectives of the Implementation Plan include:

� Support sound decision-making by governments, as well as stakeholders

� Ensure transparency through accessible, comparable and quality-assured data

� Enhance science-based monitoring for improved characterization of the state of the environment and collect the information necessary to understand cumulative effects

� Improve analysis of existing monitoring data to develop a better understanding of historical baselines and changes, and

� Reflect the trans-boundary nature of the issue and promote collaboration with the Governments of Saskatchewan and the Northwest Territories

Further, both Governments made a commitment that at the conclusion of the three-year Implementation Plan, monitoring of the impacts of development on the ambient environment will be more comprehensive, with more compounds sampled at more sites, with greater frequency, using consistent scientific standards and protocols. The results will help characterize the condition of the environment in the oil sands area, and provide an enhanced understanding of cumulative environmental effects, as well as environmental change due to oil sands development activities.

From 2012 to April 28, 2014, Alberta Environment and Sustainable Resource Development (ESRD) served as the provincial lead on the joint program, working with Environment Canada on behalf of the Government of Canada.

With the creation of AEMERA on April 28, 2014, under its legislated mandate, AEMERA took over as the provincial lead on the program, working with Environment Canada. The responsibility for oil sands monitoring is part of AEMERA’s legislated mandate. Accountability for the management of funds collected under the Oil Sands Environmental Monitoring Program Regulation, and for the outcomes of the programs, rests with AEMERA.

Annual reporting on both the Implementation Plan and summaries of Technical Results for 2013-2014, and for 2014-2015 are being jointly prepared and published by AEMERA and Environment Canada.

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REPORT AND RECOMMENDATIONS FROM THE OFFICE OF THE AUDITOR GENERAL OF ALBERTA

On October 7, 2014, the Auditor General of Alberta released a report and recommendations on the first year annual report (2012 – 2013) of the three-year implementation of the Joint Oil Sands Monitoring Plan (JOSM).

The scope of the 2012 – 2013 annual report covers the first year of a three-year plan, which was prior to AEMERA’s establishment, and during which the project was co-led by Alberta Environment and Sustainable Resource Development on behalf of the Government of Alberta and Environment Canada on behalf of the Government of Canada. 

The Auditor General’s report includes recommendations on public reporting, planning and monitoring during the initial year of the three-year project.

The Auditor General directed the recommendations in its report to the Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA), as it assumed provincial responsibility for the Joint Canada-Alberta Plan for Oil Sands Monitoring (JOSM) upon the proclamation of the Protecting Alberta’s Environment Act, establishing the agency, on April 28, 2014.

As the recently appointed provincial lead responsible for the project moving forward, AEMERA accepted all the Auditor General’s recommendations and is taking action to address the issues identified. Follow-up on the specific recommendations is being reported in the 2014 – 2015 Annual Report on the Implementation Plan to be released in July 2015. AEMERA is also providing reports on progress to the Auditor General on AEMERA’s formal implementation plan, submitted in October 2014, outlining how AEMERA will address the specific recommendations.

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MOVING FORWARDAs of April 1, 2015, AEMERA assumed sole administrative responsibility

and accountability for oil sands monitoring following the expiration of the three-year JOSM agreement with the Government of Canada. AEMERA continues

to work closely with Environment Canada on monitoring and science activities.

To help inform the process moving forward, AEMERA commissioned an independent Governance Review of the past three years of the oil sands program — to be completed in the early fall of 2015 — to inform the AEMERA Board of Directors and Executive on options for effective working relationships with all stakeholders, monitoring organizations, and Environment Canada moving forward.

The 2015 – 2016 oil sands monitoring work plan was jointly developed by AEMERA and Environment Canada. In early 2015, AEMERA’s Board of Directors approved a total budget of $49,940,553 to support the 2015 – 2016 work plan.

Environment Canada is providing significant scientific support and expertise in the 2015 – 2016 work plan. A formal contract to provide funding to support Environment Canada’s work in this fiscal year is being finalized and will be completed on or before July 31, 2015.

AEMERA and Environment Canada also continue to work together to complete:

� The 2014 – 2015 JOSM Annual Report (scheduled for release in July 2015)

� The 2014 – 2015 JOSM Technical Results Resort (scheduled for release in October 2015)

� The Three-Year JOSM Science Integrity Review (scheduled for completion and release in November 2015)

� Joint reporting through the Alberta Environmental Monitoring, Evaluation and Reporting Information System (AEMERIS) and the Joint Oil Sands Information Portal

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THE ROAD AHEADWith the ability to hire staff at AEMERA as of June 1, 2015, in the coming months AEMERA will be building up its scientific expertise and capacity to begin to fulfill the full scope of its legislated mandate.

Key activities for AEMERA in the early months of the 2015 – 2016 fiscal year include:

� Appointment of Traditional Ecological Knowledge (TEK) Advisory Panel

� Public release of AEMERA’s Strategic Plan and 2015 – 2018 Business Plan

� Finalizing recruitment and appointment of permanent President and Chief Executive Officer

� Launching an Aboriginal environmental community monitoring training program with Alberta Innovates Technology Futures

� Launching of new AEMERA website with a focus on presenting relevant and timely environmental information

� Holding initial face-to-face meetings of Science Advisory Panel and Traditional Ecological Knowledge (TEK) Advisory Panel

� Confirming a new agreement with the Government of Canada on oil sands monitoring

� Provide First Nations and Métis cultural awareness and traditional knowledge training to AEMERA staff

Environmental reports scheduled to be released in 2015 – 2016 include:

� Oil Sands Monitoring Project 2014 – 2015 Annual Report (July 2015)

� 2014 Air Quality Framework Reporting: Lower Athabasca Regional Plan (July 2015)

� 2014 Surface Water Quality Framework Report: Lower Athabasca Regional Plan (July 2015)

� 2014 Air Quality Framework Reporting: South Saskatchewan Regional Plan (Fall 2015)

� 2014 Surface Water Quality Framework Report: South Saskatchewan Regional Plan (Fall 2015)

� Oil Sands Monitoring 2014 – 2015 Technical Report and Results (Fall 2015)

� Oil Sands Monitoring Governance Review (Fall 2015)

� Scientific Integrity Review of Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring (Fall 2015)

Additional reports and studies will be identified as AEMERA’s science capacity is developed in 2015 – 2016.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 21

2014 – 2015 AUDITED FINANCIAL STATEMENTS

ALBERTA ENVIRONMENTAL MONITORING, EVALUATION AND REPORTING AGENCY | MARCH 31, 2015

2014 – 2015 ANNUAL REPORT / AEMERA.ORG22

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors of the Alberta Environmental Monitoring, Evaluation and Reporting Agency

REPORT ON THE FINANCIAL STATEMENTSI have audited the accompanying financial statements of the Alberta Environmental Monitoring, Evaluation and Reporting Agency, which comprise the statement of financial position as at March 31, 2015, and the statements of operations and cash flows for the period April 28, 2014 to March 31, 2015, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILITYMy responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the

auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

OPINIONIn my opinion, the financial statements present fairly, in all material respects, the financial position of the Alberta Environmental Monitoring, Evaluation and Reporting Agency as at March 31, 2015, and the results of its operations, its remeasurement gains and losses, and its cash flows for the period April 28, 2014 to March 31, 2015 in accordance with Canadian public sector accounting standards.

[Original signed by Merwan N. Saher, FCA]

Auditor General May 22, 2015

Edmonton, Alberta

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 23

STATEMENT OF OPERATIONS

April 28, 2014 to March 31, 2015

(in thousands)

2015

BUDGET ACTUAL

REVENUES

Government Transfers

Government of Alberta Grants $ 55,103 $ 48,513

Investment Income — 292

55,103 48,805

EXPENSES (NOTE 2(B))

Program (SCHEDULE 1)

Monitoring — 95

Science 46,103 40,322

Strategy and External Relations — 202

Chief Executive Office 5,000 1,862

Corporate Administration 4,000 3,445

55,103 45,926

OPERATING SURPLUS FOR THE PERIOD $ — $ 2,879

The accompanying notes and schedules are part of these financial statements.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG24

STATEMENT OF FINANCIAL POSITION

As at March 31

(in thousands)

2015

ASSETS

Cash and Cash Equivalents (Note 4) $ 24,101

Accounts Receivable (Note 5) 6,330

Prepaid Expenses (Note 5) 1

$ 30,432

LIABILITIES

Accounts Payable and Accrued Liabilities (Note 6) $ 20,963

Deferred Revenue (Note 7) 6,590

27,553

NET ASSETS

Operating Surplus for the Period 2,879

$ 30,432 Contractual obligations (Note 8)

The accompanying notes and schedules are part of these financial statements.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 25

STATEMENT OF CASH FLOWS

April 28, 2014 to March 31, 2015

(in thousands)

2015

OPERATING TRANSACTIONS

Annual Operating Surplus $ 2,879

Increase in Accounts Receivable (6,330)

Increase in Prepaid Expenses (1)

Increase in Accounts Payable and Accrued Liabilities 20,963

Increase in Deferred Revenue 6,590

Cash Provided by Operating Transactions 24,101

INCREASE IN CASH AND CASH EQUIVALENTS 24,101

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD –

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24,101

The accompanying notes and schedules are part of these financial statements.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG26

NOTES TO THE FINANCIAL STATEMENTS

March 31, 2015

NOTE 1 AUTHORITY AND PURPOSE

Alberta Environmental Monitoring, Evaluation and Reporting Agency (the “Agency”) was created on April 28, 2014 and operates under the authority of the Protecting Alberta’s Environment Act, Chapter P-26.8, Statutes of Alberta, 2013.

The purpose of the Agency is to: � obtain credible and relevant scientific data and other information regarding the

condition of the environment in Alberta, � ensure data and other information are available and reported to the public in an open

and transparent manner, and, � any other purpose prescribed by the Lieutenant Governor in Council.

Under the Act, the Agency was established as a provincial Crown corporation governed by a Board of Directors appointed by the Lieutenant-Governor in Council. The Agency is exempt from income taxes under the Income Tax Act. The Agency is not an agent of Crown and as such is subject to the Goods and Services Tax.

There are no comparative figures, as this was the Agency’s first year of operations.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND REPORTING PRACTICES

These financial statements are prepared in accordance with Canadian Public Sector Accounting Standards (PSAS).

(a) Reporting Entity

The reporting entity is Alberta Environmental Monitoring, Evaluation and Reporting Agency, which is part of the Ministry and for which the Minister of Alberta Environment and Sustainable Resource Development is accountable.

(b) Basis of Financial Reporting

Revenue Accounting Policy

All revenues are reported on the accrual basis of accounting. Cash received for which goods or services have not been provided by year end is recorded as deferred revenue.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 27

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND REPORTING PRACTICES (continued)

(b) Basis of Financial Reporting (continued)

Government Transfers

Transfers from the Government of Alberta, federal and other governments and other government entities are referred to as government transfers.

Government transfers and the associated externally restricted investment income are recorded as deferred revenue if the terms for use of the transfer, or the terms along with the Agency’s actions and communications as to the use of the transfer, create a liability. These transfers are recognized as revenue as the terms are met and, when applicable, the Agency complies with its communicated use of the transfer.

All other government transfers, without terms for use of the transfer, are recorded as revenue when the Agency is eligible to receive the funds.

Investment Income

Investment income includes dividend and interest income, and realized gains or losses on the sale of portfolio investments. Unrealized gains and losses on portfolio investments that are not from restricted transfers, donations or contributions are recognized in the Statement of Accumulated Remeasurement Gains and Losses until the related investments are sold. Once realized, these gains or losses are recognized in the Statement of Operations.

Expenses

Expenses are reported on an accrual basis. The cost of all goods consumed and services received during the year are expensed. Foreign exchange gains and losses are reflected within the cost of all goods and services.

Valuation of Financial Assets and Liabilities

The Agency’s financial assets and liabilities are generally measured as follows:

Financial Statement Component Measurement

Cash and cash equivalents Amortized cost Accounts receivable Amortized cost Accounts payable and accrued liabilities Amortized cost

Financial assets are assets that could be used to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations. Financial assets of the Agency are limited to financial claims, such as advances to and receivables from other organizations, employees and other individuals. The Agency does not have any transactions involving financial instruments that are classified in the fair value category and has no material foreign currency transactions. Consequently, there are no remeasurement gains and losses and a statement of remeasurement gains and losses has not been presented.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG28

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND REPORTING PRACTICES (continued)

(b) Basis of Financial Reporting (continued)

Cash and Cash Equivalents

Cash comprises of cash on hand and demand deposits. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value. Cash equivalents are held for the purpose of meeting short-term commitments rather than for investment purposes.

Liabilities

Liabilities are recorded to the extent that they represent present obligations as a result of events and transactions occurring prior to the end of the fiscal year. The settlement of liabilities will result in sacrifice of economic benefits in the future.

Net Assets/Net Liabilities

Net assets/net liabilities represent the difference between the assets held by the Agency and its liabilities.

Canadian public sector accounting standards require a “net debt” presentation for the statement of financial position in the summary financial statements of governments. Net debt presentation reports the difference between financial assets and liabilities as “net debt” or “net financial assets” as an indicator of the future revenues required to pay for past transactions and events. The Agency operates within the government reporting entity, and does not finance all its expenditures by independently raising revenues. Accordingly, these financial statements do not report a net debt indicator.

Measurement Uncertainty

Measurement uncertainty exists when there is a variance between the recognized or disclosed amount and another reasonably possible amount.

(c) Future Accounting Changes

In March 2015 the Public Sector Accounting Board issued PS2200 – Related party disclosures and PS 3420 – Inter-entity related party transactions. These accounting standards are effective for fiscal years starting on or after April 1, 2017.

� PS 2200 – related party disclosures defines a related party and identifies disclosures for related parties and related party transactions, including key management personnel and close family members.

� PS 3420 – Inter-entity transactions, establishes standards on how to account for and report transactions between public sector entities that comprise a government’s reporting entity from both a provider and recipient perspective.

Management does not expect the implementation of these standards to have a significant impact on the financial statements.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 29

NOTE 3 BUDGET (in thousands)

A preliminary business plan was created and due to the uncertainty of the amount being transferred to the Agency in its first year of operations, there was no formal approval by the Board. The amount transferred from Environment and Sustainable Resource Development (the “Department”) was anticipated to be $55,103 and expenses would not exceed this amount. The expenditures in the reported budget in the statement of operations reflect the allocated expenses planned for various programs.

NOTE 4 CASH AND CASH EQUIVALENTS (in thousands)

Cash consists of funds in operating accounts and deposits in the Consolidated Cash Investment Trust Fund (CCITF) of the Province of Alberta. The CCITF is managed with the objective of providing competitive interest income to depositors while maintaining appropriate security and liquidity of depositors’ capital. The portfolio is comprised of high-quality short-term and mid-term fixed-income securities with a maximum term-to-maturity of three years. For the year ended March 31, 2015, securities held by the CCITF had a time-weighted return of 1.2% per annum.

NOTE 5 ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (in thousands)

Accounts receivable are unsecured and non-interest bearing.

2015

Gross Amount

Allowance for Doubtful

AccountsNet Realizable

Value

Accounts Receivable from Department $ 4,639 $ – $ 4,639

Accounts Receivable from Other Department 102 102

GST Receivable 1,589 – 1,589

Prepaid Expenses 1 – 1

$ 6,331 $ – $ 6,331

NOTE 6 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (in thousands)

2015Accounts Payable General $ 122

Accounts Payable to Department (a) 17,310

Accounts Payable to Other Department 10

Accrued Liabilities 3,521

$ 20,963

(a) Represents the cost incurred by the Department on behalf of the Agency.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG30

NOTE 7 DEFERRED REVENUE (in thousands)

2015Balance, beginning of period $ –

Received/receivable during year 46,103

Less amount recognized as revenue (39,513)

Balance, end of period $ 6,590

The deferred revenue represents grants from the Department. These funds are collected by the Department from industry for monitoring activities as described in the Oil Sands Annual Monitoring Plan.

NOTE 8 CONTRACTUAL OBLIGATIONS (in thousands)

Contractual obligations are obligations of the Agency to others that will become liabilities in the future when the terms of the contracts or agreements are met.

2015

Obligations Under Contracts Service Contracts $ 1,000

Estimated payment requirements for obligations under operating leases, contracts and programs for the next two are as follows:

Obligations Under ContractsTotal

2015 – 2016 $ 997

2016 – 2017 3

$ 1,000

NOTE 9 APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Board of Directors on May 22, 2015.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 31

SCHEDULE TO THE FINANCIAL STATEMENTS – SCHEDULE 1

Expenses – Detailed by Object April 28, 2014 to March 31, 2015

(in thousands)

2015

BUDGET ACTUAL

Salaries, Wages and Employee Benefits $ 5,000 $ 4,218

Supplies and Services 50,103 41,708

$ 55,106 $ 45,926

2014 – 2015 ANNUAL REPORT / AEMERA.ORG32

SCHEDULE TO THE FINANCIAL STATEMENTS – SCHEDULE 2

Salary and Benefits Disclosure April 28, 2014 to March 31,2015

(in thousands)

2015Base

Salary (a)Other Cash Benefits (b)

Other Non-cash Benefits (c) Total

Chairman of the Board $ – $ 61 $ – $ 61

Board Members (d) – 261 8 269

Chief Executive Officer (e) (f) 249 23 32 304

(a) Base salary includes regular salary.

(b) Other cash benefits include honoraria and lump sum payments. There were no bonuses paid in 2015.

(c) Other non-cash benefits include Agency’s share of all employee benefits and contributions or payments made on behalf of employees including pension, supplementary retirement plan, health care, dental coverage, group life insurance, short and long term disability plans and professional memberships.

(d) The Board Members were appointed on April 28, 2014. The board consists of seven independent members including the Chairman, whose honorarium is disclosed separately. The totals include the Agency’s share of Canada Pension Plan contributions for Board Members as Other Non-cash Benefits.

(e) The Chief Executive Officer (CEO) position was occupied by two individuals. The first individual occupied the position from April 28 to September 16, 2014. The current CEO started effective October 1, 2014.

(f) The first individual for the CEO position had an automobile provided; no dollar amount is included in Other Non-cash Benefits.

The Executive and Vice-President positions were vacant in 2014-15.

2014 – 2015 ANNUAL REPORT / AEMERA.ORG 33

SCHEDULE TO THE FINANCIAL STATEMENTS – SCHEDULE 3

Related Party Transactions April 28, 2014 to March 31, 2015

Related parties are those entities consolidated or accounted for on the modified equity basis in the Government of Alberta’s financial statements. Related parties include key management in the Agency.

The Agency and its employees paid or collected certain taxes and fees set by regulation for permits, licenses and other charges. These amounts were incurred in the normal course of business, reflect charges applicable to all users, and have been excluded from this Schedule.

The Agency had the following transactions with related parties recorded on the Statement of Operations and the Statement of Financial Position at the amount of consideration agreed upon between the related parties:

(in thousands)

2015

Entities in the Ministry Other Entities

REVENUES

Grants $ 48,513 $ –

PAYABLE TO Department of Environment and Sustainable Resource Development $ 17,310 $ –Department of Treasury and Finance – 10

$ 17,310 $ 10RECEIVABLE FROMDepartment of Environment and Sustainable Resource Development $ 4,639 $ –Department of Municipal Affairs – 102

$ 4,639 $ 102

DEFERRED REVENUE $ 6,590 $ –

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