LINE CREEK OPERATIONS PHASE II ASSESSMENT REPORT

With Respect to

the Application by Teck Coal Limited

for an Environmental Assessment Certificate

pursuant to the Environmental Assessment Act, S.B.C. 2002, c.43

Prepared by:

Environmental Assessment Office

August 30, 2013

August 2013 Line Creek Operations Phase II Assessment Report Preface

Environmental Assessment Office (EAO) manages the assessment of proposed major projects in British Columbia, as required by the Environmental Assessment Act. The process includes:

• opportunities for the involvement of all interested parties; • consultations with First Nations; • technical studies to identify and examine potential significant adverse effects; • strategies to prevent, or reduce, adverse effects; and • development of comprehensive reports summarizing input and findings. At the conclusion of each Environmental Assessment (EA), EAO provides a comprehensive Assessment Report (Assessment Report), and makes recommendations to the Minister of Environment and to the Minister responsible for the project sector. The Ministers may decide to certify a project, decline to certify a project, or require further assessment.

This Assessment Report considers the proposed Project’s potential to cause significant adverse environmental, economic, social, heritage and health effects. It identifies measures to prevent or reduce adverse effects, and sets out EAO’s analysis and conclusions. It also documents the work undertaken by EAO to consult and accommodate First Nations, in keeping with the Supreme Court of Canada's direction in Haida v. Minister of Forests and related case law.

Information and records relating to EAs is available on EAO’s website at www.eao.gov.bc.ca. Questions or comments can be directed to:

Environmental Assessment Office PO Box 9426 Stn Prov Govt Victoria BC V8W 9V1 Phone: 250 356-7441 Fax: 250 387-2208 Email: [email protected]

August 2013 Line Creek Operations Phase II Assessment Report Table of Contents

SUMMARY OF THE ASSESSMENT REPORT ...... 1 PART A – INTRODUCTION AND BACKGROUND ...... 1 1 Purpose of the Report ...... 1 2 Project Overview ...... 2 2.1 Proponent Description ...... 2 2.2 Project Description and Scope ...... 2 2.3 Project Benefits ...... 5 2.4 Project Land Use ...... 6 3 Assessment Process ...... 7 3.1 Provincial EA Process ...... 7 3.1.1 Pre-Application Stage ...... 7 3.1.2 Application Review Stage ...... 9 3.2 Federal Environmental Assessment ...... 9 3.3 Applicable Permits ...... 10 3.4 First Nations Consultation ...... 10 3.5 Public Consultation ...... 11 3.6 Canada / US Boundary Waters Treaty and BC / Montana Memorandum of Understanding ...... 12 PART B – ASSESSMENT OF POTENTIAL EFFECTS, MITIGATION, AND SIGNIFICANCE OF RESIDUAL EFFECTS ...... 13 4 General ...... 13 4.1 Assessment Methodology ...... 13 4.1.1 Methodology for Assessing Potential Significant Adverse Effects ..... 13 4.1.2 Determining whether significant adverse effects (if any) are justified ...... 14 4.1.3 Ensuring the Crown’s duties to consult and accommodate First Nations are met ...... 15 4.2 Valued Components ...... 15 4.3 Spatial Boundaries ...... 15

August 2013 Line Creek Operations Phase II Assessment Report 4.4 Temporal Boundaries ...... 16 4.5 Cumulative Impacts ...... 16 5 Assessment of Potential Environmental Effects ...... 18 5.1 Water Quality and Aquatic Health ...... 18 5.1.1 Background Information ...... 18 5.1.2 Canada US Boundary Waters Treaty ...... 19 5.1.3 Valued Components ...... 22 5.1.4 Local Study Area and Regional Study Area ...... 22 5.1.5 Temporal Boundaries...... 24 5.1.6 Water Quality Baseline Values ...... 24 5.1.7 Sediment Quality Baseline Values ...... 27 5.1.8 Water Quality Modeling Used to Predict Potential Effects ...... 28 5.1.9 Screening ...... 29 5.1.10 Assessment Methodology for Aquatic Health Effects From Selenium ...... 29 5.1.11 Assessment Methodology for Aquatic Health Effects Related to Cadmium, DOC, Nitrate, Phosphorus, Sulphate and TDS ...... 29 5.1.12 Magnitude Determination ...... 30 5.1.13 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 31 5.1.14 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 38 5.1.15 Potential for Residual Effects and Significance Analysis ...... 53 5.1.16 Conclusion ...... 61 5.2 Fish and Fish Habitat ...... 62 5.2.1 Background Information ...... 62 5.2.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 64 5.2.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 68 5.2.4 Potential for Residual Effects and Significance Analysis ...... 74 5.2.5 Conclusion ...... 77

August 2013 Line Creek Operations Phase II Assessment Report 5.3 Vegetation and Wildlife ...... 78 5.3.1 Background Information ...... 78 5.3.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 84 5.3.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 92 5.3.4 Potential For Residual Effects and Significance Analysis ...... 93 5.3.5 Conclusion ...... 95 6 Assessment of Potential Economic Effects ...... 96 6.1 Economic Effects ...... 96 6.1.1 Background Information ...... 96 6.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 100 6.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 104 6.1.4 Potential for Residual Effects ...... 104 6.1.5 Conclusion ...... 105 6.2 Effects on Land Based Livelihoods ...... 105 6.2.1 Background Information ...... 105 6.2.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 106 6.2.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 109 6.2.4 Potential for Residual Effects and Significance Analysis ...... 109 6.2.5 Conclusion ...... 111 7 Assessment of Potential Social Effects ...... 111 7.1 Recreation ...... 111 7.1.1 Background Information ...... 111 7.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 112 7.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 113 7.1.4 Potential For Residual Effects and Significance Analysis ...... 114

August 2013 Line Creek Operations Phase II Assessment Report 7.1.5 Conclusion ...... 115 7.2 Social Conditions ...... 116 7.2.1 Background Information ...... 116 7.2.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 118 7.2.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 119 7.2.4 Potential for Residual Effects and Significance Analysis ...... 119 7.2.5 Conclusion ...... 120 8 Assessment of Potential Heritage Effects ...... 120 8.1 Archaeology and Heritage Resources ...... 120 8.1.1 Background Information ...... 120 8.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 121 8.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 121 8.1.4 Potential For Residual Effects and Significance Analysis ...... 122 8.1.5 Conclusion ...... 122 9 Assessment of Potential Human Health Risk ...... 122 9.1 Human Health Risk Assessment ...... 122 9.1.1 Methodology ...... 122 9.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application ...... 125 9.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review ...... 126 9.1.4 Potential for Residual Effects and Significance Analysis ...... 129 9.1.5 Conclusion ...... 132 10 Summary of Environmental and Operational Management Plans ...... 132 11 Compliance Reporting ...... 132 PART C – FIRST NATIONS CONSULTATION ...... 132 12 General ...... 132 12.1 First Nations Potentially Affected by the Proposed Project...... 132

August 2013 Line Creek Operations Phase II Assessment Report 12.2 Ktunaxa Nation ...... 134 12.2.1 Ktunaxa Nation Overview ...... 134 12.2.2 Ktunaxa Nation Traditional Occupation and Use of the Middle Elk Valley and Mountains to the East ...... 139 12.2.3 Ktunaxa Nation Current Occupation and Use of the Proposed Project Area for Traditional Purposes ...... 143 12.2.4 Ktunaxa Nation Aboriginal Rights (Including Title) EAO’s assessment, based on current information available to it, is that: .... 146 12.2.5 EAO-led Consultation with Ktunaxa Nation ...... 147 12.2.6 Proponent-led Consultation with Ktunaxa Nation Proponent-led Consultation Prior to Start of the EA (Prior to September 28, 2009)...... 150 12.2.7 Ktunaxa Nation Concerns ...... 156 12.2.8 Potential Impacts to Ktunaxa Nation’s Asserted Aboriginal Rights .. 167 12.2.9 Proposed Accommodation Measures for Potential Impacts to Ktunaxa Nation’s Asserted Aboriginal Rights ...... 173 12.2.10 Economic Interests ...... 176 12.2.11 Ministerial Order for an Elk Valley Area Based Management Plan...... 177 12.2.12 Potential Socio-Economic and Cultural Impacts to Ktunaxa Nation and Proposed Accommodation Measures ...... 179 12.3 Shuswap Indian Band ...... 181 12.3.1 Shuswap Indian Band Asserted Territory...... 181 12.3.2 Shuswap Indian Band Traditional Occupation and Use ...... 182 12.3.3 Shuswap Indian Band Aboriginal Interests ...... 184 12.3.4 EAO-led Consultation with Shuswap Indian Band ...... 184 12.3.5 Proponent Consultation with Shuswap Indian Band ...... 185 12.4 Conclusions Regarding the Crown's Duty to Consult First Nations ...... 186 PART D – CONCLUSIONS ...... 187

August 2013 Line Creek Operations Phase II Assessment Report Appendices

APPENDIX 1 LIST OF WORKING GROUP MEMBERS

APPENDIX II ISSUE TRACKING TABLES

APPENDIX III TABLE OF CONDITIONS

August 2013 Line Creek Operations Phase II Assessment Report List of Tables Table 1 List of projects and activities that were included in the cumulative impacts assessment...... 17 Table 2 Watercourses Downstream of the Proposed Project and the Operating Coal Mines that Contribute to Existing Cumulative Effects on Water Quality...... 21 Table 3 BC Water Quality Guidelines for Selenium...... 25 Table 4 Selenium maximum concentrations (µg/L) for selected locations in the RSA, comparing current conditions with conditions predicted in the Application for operations...... 26 Table 5 Characterization of Residual Adverse Effects of Selenium on Aquatic Life...... 55 Table 6 Characterization of Residual Adverse Effects of Cadmium, Sulphate, Nitrate and Total Dissolved Solids on Aquatic Life...... 56 Table 7 Characterization of Residual Adverse Effects of Habitat Loss on Fish and Fish Habitat...... 75 Table 8 Vegetation Assessment Valued Components...... 78 Table 9 Wildlife Assessment Valued Components...... 80 Table 10 Cumulative losses to VCs from reasonably foreseeable projects and the proposed Project before reclamation...... 86 Table 11 Characterization of Residual Adverse Effects on Wildlife and Vegetation...... 93 Table 12 Estimated Personal, Commodity, Corporate and Property Tax Revenue from Line Creek Operations (reported in millions of dollars) in 2008...... 99 Table 13 Proposed Project Contribution to Provincial Gross Domestic Product ...... 101 Table 14 Proposed Project Direct, Indirect and Induced Tax Revenues of dollars. ... 102 Table 15 Project Contributions to Government Tax Revenue...... 103 Table 16 Trap Line Areas Affected by the proposed Project in Hectares...... 107 Table 17 Characterization of Residual Adverse Effects on Trab Line Tenures and Forestry...... 109 Table 18 Characterization of Residual Adverse Effects on Recreation...... 114 Table 19 Population of the Ktunaxa Nation Communities ...... 137 Table 20 Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation ...... 158 Table 21 Overarching Mitigation Measure that would Accommodate Potential Effects of the Proposed Project on Ktunaxa Nation’s Aboriginal Rights ...... 174 Table 22 Mitigation Measures that would Accommodate Potential Effects of the Proposed Project on Ktunaxa Nation’s Aboriginal right to harvest fish ...... 175

August 2013 Line Creek Operations Phase II Assessment Report Table 23: Mitigation Measures that would Accommodate Potential Effects of the Proposed Project on Ktunaxa Nation’s Aboriginal right to Harvest Wildlife and Plants ...... 175 Table 24 Mitigation Measures that would Accommodate Potential Effects of the Proposed Project on Ktunaxa Nation’s Aboriginal Right to Safely Consume Wild Food ...... 176 Table 25 Proposed Accommodation Measures for Potential Socio-economic and Cultural Impacts on Ktunaxa Nation ...... 180

August 2013 Line Creek Operations Phase II Assessment Report

List of Figures Figure 1 Map showing the location of the proposed Line Creek Operations Phase II Project...... 3 Figure 2 Overview of five mines operated by the Proponent and regional context...... 20 Figure 3 Aquatic local study area from the Application...... 23 Figure 4 Dry Creek water management system...... 43 Figure 5 Ktunaxa Statement of Intent Area and Traditional Land Districts ...... 135 Figure 6 Ktunaxa Nation Reserves and Proximity to the Project ...... 138 Figure 7 Kootenay Territory at Contact ...... 141 Figure 8 Ktunaxa Territory showing Michel and Fernie Band Locations ...... 142 Figure 9 Archaeological sites identified in 1973 (North of Grave Lake) ...... 144 Figure 10 Archaeological sites identified in 1973 (South of Grave Lake) ...... 145 Figure 11 Reported Ktunaxa Site Specific Values Within the Local Study Area ...... 170 Figure 12 Shuswap Indian Band Asserted Territory (Shuswap Indian Band, 2009) ...... 182 Figure 13 Secwepemc Territory at Contact (Ignace 1998: 204) ...... 184

August 2013 Line Creek Operations Phase II Assessment Report Acronyms Used in this Report

AIA: Archaeological Impact Assessment ARD: Acid Rock Drainage BC: British Columbia BMP: Best Management Practices CCME Canadian Council of Ministers of the Environment CEA Agency: Canadian Environmental Assessment Agency

CO2 : Carbon Dioxide CO: Carbon Monoxide DFO: Fisheries and Oceans Canada DOC: Dissolved Organic Carbon EA: Environmental Assessment EAO: Environmental Assessment Office EML: Environmental Management Levels ENV: Ministry of Environment EPA: United States Environmental Protection Agency FLNR: Ministry of Forests, Lands and Natural Resource Operations HADD: Harmful Alteration, Disruption or Destruction of Fish Habitat KNC: Ktunaxa Nation Council LCO: Line Creek Operations LRMP: Land and Resource Management Plan LSA: Local Study Area MAD: Mean Annual Discharge MEM: Ministry of Energy and Mines ML: Metal Leaching MOTI: Ministry of Transportation and Infrastructure MT: The State of Montana NAG: Non-Acid Generating NRCan: Natural Resources Canada PAG: Potentially Acid-Generating RDEK: Regional District of East Kootenay RSA: Regional Study Area SARA Species at Risk Act

SO2: Sulphur Dioxide TDS: Total Dissolved Solids TRIM: Terrain Resource Inventory Mapping US: United States of America VC: Valued Component WQG: Water Quality Guidelines

August 2013 Line Creek Operations Phase II Assessment Report SUMMARY OF THE ASSESSMENT REPORT Overview of the Proposed Project

Teck Coal Limited (Proponent) is proposing to expand its existing Line Creek Operations (LCO) coal mine located approximately 22 km northeast of Sparwood. The expansion known as Line Creek Operations Phase II (proposed Project) would be located adjacent to the north boundary of the existing Line Creek Operations mine, and would use existing infrastructure at Line Creek Operations. The proposed Project would develop two new coal mine operating areas totalling approximately 1940 ha, with a mine footprint of about 1154 ha. The proposed Project would extend the overall mine life by about 18 years, and would produce about 59 million metric tonnes of clean coal.

Overview of the Environmental Assessment

EAO assessed whether the proposed Project would result in any significant adverse environmental, social, economic, heritage and health effects. The EA focused specifically on assessing potential effects on the following:

• Air Quality; • Water Quality; • Fish and Fish Habitat; • Vegetation Resources; • Wildlife Resources; • Biodiversity; • Employment and Economy; • Land and Resource Use; • Sound Quality; • Human and Ecological Health; and • Cumulative Effects.

August 2013 Line Creek Operations Phase II Assessment Report

EAO assessed relevant issues raised by First Nations during the course of the EA and whether the Crown has fulfilled its obligations for consultation and accommodation. This EA report which includes EAO’s First Nations Consultation report in Part D have been provided to the responsible Ministers for consideration in their decision of whether or not to issue an EA Certificate for the proposed Project.

EAO is satisfied that:

• consultation with government agencies and the public has been adequately carried out by the Proponent; • relevant issues identified by the public and government agencies were duly considered and assessed by the Proponent during the review of the Application; • the Crown’s consultation duty with First Nations has been discharged; and • the proposed Project is not likely to result in any significant adverse environmental, economic, social, heritage or health effects, with the exception of water quality and aquatic health, for which EAO has not been able to conclude on the magnitude, reversibility and therefore significance of potential effects.

PART A – INTRODUCTION AND BACKGROUND

1 Purpose of the Report

The purpose of this report is to summarize the EA of the Application for the proposed Project. EAO is required to prepare this report for provincial Ministers who are responsible for making a decision on the proposed Project under section 17 of the BC Environmental Assessment Act (Act). For mine projects the responsible Ministers are the Ministers of the Environment and Energy and Mines.

The Report:

• describes the proposed Project, provincial EA process, and consultations undertaken during the EA; • identifies the potential environmental, economic, social, heritage and health effects of the proposed Project and how the Proponent proposes to mitigate effects; and • sets out conclusions based on the proposed Project’s potential for significant adverse effects.

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2 Project Overview

2.1 Proponent Description

The Proponent for the proposed Project is Teck Coal Limited, a corporation of Teck Resources Ltd. which is based in Vancouver, BC. Teck Resources Ltd. operates six open pit mines in western Canada, with five of them located in the Elk Valley and one located in west-central Alberta. Teck Resources Ltd. owns or has an interest in, 13 mines in Canada, the United Sates of America (US), Chile and Peru, as well as one metallurgical complex.

2.2 Project Description and Scope

The Proponent is proposing to expand its existing LCO open pit coal mine located approximately 22 km northeast of Sparwood in the Elk Valley. The proposed Project would develop two new open pit coal mine operating areas totalling approximately 1940 ha, with a mine footprint of about 1154 ha. The proposed Project would be located adjacent to the north boundary of the existing LCO mine, and would use existing infrastructure at LCO. Existing infrastructure includes waste and coal haul roads, mine access roads, power supply distribution network, coal stockpile and sorting areas, coal processing facilities, coarse coal reject area, cable belt (coal conveyor), Canadian Pacific rail line, rail load out loop, explosives storage and delivery systems, and maintenance shop and offices.

The nearest communities are Elkford and Sparwood, with Cranbrook being the nearest major centre located to the Southwest of the proposed Project. The centre of the footprint is located at 114° 47’ 7.35”” W and 49° 59’ 2.96” N in the Front Ranges of the Rocky Mountains, with elevations ranging from about 1500 to over 2470 m above sea level within the proposed Project area. The proposed Project is located within lands that have been dedicated in the East Kootenay Land Use Plan for resource use and development. Under the Kootenay-Boundary Land Resource Management Plan Implementation Strategy, the proposed Project area is within a coal enhanced resource development zone.

The map below (Figure 1) shows the location of the proposed Project relative to the adjacent LCO Phase I mine, the Elk and Fording Rivers and the other mines in the Elk Valley.

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Figure 1: Map showing the location of the proposed LCO Phase II Project.

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The Proponent has applied to amend their existing Mines Act permit, and their waste discharge permit under the Environmental Management Act, and has applied for a new water licence under the Water Act. All are under review pursuant to the Concurrent Approval Regulation.

• The proposed Project would be a mountain top removal and valley fill operation where rock is blasted, and then shovel and truck are used to move the waste rock to the dumps and the coal to the existing LCO processing plant. Development would include two new operating areas referred to as Burnt Ridge North and Mount Michael. It is estimated that these two areas would provide an aggregate total of approximately 59 million metric tonnes of clean coal and would extend overall mine life by about 18 years, mining at a rate of about 3.5 million metric tonnes of clean coal per year. The proposed development would generate about 637 million m3 of waste rock that would be placed in new spoil areas within the upper reaches of the Dry Creek Valley, in mined-out pits on Mount Michael and Burnt Ridge North, and in existing pits within the existing LCO operational area. According to the conceptual plan, the proposed Project would result in a mining footprint approximately 6 km long by 3 km wide with an area of approximately 1,154 ha. The scope of the proposed Project within this new disturbance area would include the following on-site and off-site components and activities: • the Burnt Ridge North and Mount Michael open pit mining areas; • waste rock (spoil) storage in the Dry Creek Valley, in the mined out Burnt Ridge North and Mount Michael pits, and in existing operating areas at LCO; • surface water management and treatment systems, including:

o water diversion systems; o sediment ponds; o outlet structures to drain water from final pit areas; o a rock drain in the Dry Creek Valley bottom beneath the stored waste rock;

o a diversion structure and pipeline system to convey mine-affected water from the: . toe of the Dry Creek rock drain to sediment ponds in the Dry Creek Valley; . sediment ponds to Dry Creek and the Fording River; and . water treatment facility to Dry Creek and the Fording River.

o a water treatment facility for the removal of selenium and other contaminants from the mine-affected water collected from the Dry Creek rock drain;

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o outfalls to convey treated water from the water treatment facility to Dry Creek and the Fording River. • transportation and electrical transmission infrastructure for coal and waste hauls, pit access, and provision of power to operating areas, including the area designated for construction of the water treatment facility in the Dry Creek Valley; • a marshalling area, fuel and lubrication stations and parts storage areas; • overburden and soil storage areas; • coal stockpile and sorting areas; and • process coal reject storage within LCO.

An operational buffer with an area of approximately 786 ha would be established around the mining footprint. The operational buffer represents an area that may be required at some point over the life of the proposed Project, in which some surface water management and treatment infrastructure would be constructed, and an area where rocks may incidentally roll down the steep mountain slopes and accumulate. Access to the proposed Project area to construct and operate the mine would be via the existing LCO mine. The proposed Project would also use existing infrastructure at LCO, including waste and coal haul roads, mine access roads, power supply distribution network, coal stockpile and sorting areas, coal processing facilities, coal reject disposal area, cable belt, Canadian Pacific rail line, rail load-out loop, explosives storage and delivery systems, and maintenance shop and office facilities. Additional facilitiy capacity beyond its current design and approved operating conditions would not be required, and the proposed Project would not result in an increase to the operational productive capacity of LCO.

2.3 Project Benefits

Proposed Project benefits would include: the continued employment of the LCO workforce, which would shift to the construction and operation of the proposed Project; the continued secondary employment of supporting businesses and contractors; and the continued generation of tax revenues.

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The Proponent has estimated that employment during:

• construction of the mine in 2013 and 2014, and construction of the selenium water treatment facility in 2020 and 2022, would total 193 person years; and • operations would total 8719 person years (485 full time jobs) for an 18 year period from 2014 to 2031. There would also be an estimated 407 jobs for suppliers. Employment would include progressive reclamation during operations. • post mine reclamation would be 52 person years in the period 2032-2034, and 22 person years in the period 2035-2132, during the active closure phase.

The Application states that excluding labour costs, capital investment would total $3.4 billion for the life of the proposed Project, or $189 million annually. Operations labour costs are estimated at $32 million annually. According to the Application, the five existing coal mining operations in the Elk Valley collectively contribute to the local economy through the Elk Valley Property Tax Sharing Agreement. The Agreement contributes $9 million annually to the three Elk Valley Communities of Elkford, Sparwood and Fernie, and to the Regional District of East Kootenay (RDEK) Area A. A base property tax would be levied on the proposed Project that would contribute additional revenue to support local communities under the Elk Valley Property Tax Sharing Agreement.

For the proposed Project, the Proponent has estimated that federal, provincial and municipal government tax revenues would total about $300 million over the life of the Project. This does not include federal and provincial income tax and mine tax payable on company profits, which could contribute another $50 million per year to provincial and federal governments. The source of the tax estimates was a BC Input-Output Model customized simulation conducted by BC Stats in 2011.

2.4 Project Land Use

The proposed Project is located adjacent to the existing LCO mine operated by the Proponent on undeveloped fee simple land owned by the Proponent, and on undeveloped Crown land on coal licences held by the Proponent. The Crown land portion of the proposed Project is within the Cranbrook Resource Management Zone of the Coal Enhanced Resource Development Zone C-E01. The Coal Enhanced Resource Development Zone encompasses areas of known coal reserves, existing coal mining facilities and infrastructure, as well as areas for potential expansion.

The entire proposed Project footprint is on land that is currently zoned “Rural Resource” under the RDEK Elk Valley Zoning Bylaw No. 829. Mineral and hydrocarbon extraction is not permitted in Rural Resource Zones, and the land would require rezoning to allow coal mining. 6 August 2013 Line Creek Operations Phase II Assessment Report

The proposed Project is currently accessed by a forest service road that roughly follows Dry Creek in the north and Grace Creek to the west. A large area near the proposed Project is off limits to the public to ensure that they stay a safe distance from the existing mining operation. Much of the proposed Project area is also covered by the Chauncey-Todhunter Access Management Area, which restricts public access except for one road, a portion of which is open from June 16 to August 31.

No agricultural activity occurs, and no Agricultural Land Reserve is located within the proposed Project area. Timber harvesting occurs on both crown land and private land in the proposed Project area.

A trap line lease overlaps the proposed Project and includes one cabin. There are no commercial recreational activities such as guide or outfitting services or other tourism-based businesses located in the area of the proposed Project. No historic sites or special landscape features were identified within the proposed Project area.

The proposed Project is located on ungulate winter range, and commonly hunted species include elk, deer, sheep and moose. Access for hunting is primarily by all-terrain vehicle and on foot, and other non-motorized access includes hiking and cross-country skiing.

3 Assessment Process

3.1 Provincial EA Process

3.1.1 Pre-Application Stage

Before this Application was accepted for the review, the following steps occurred:

1. September 28, 2009 - EAO determined that the proposed Project required an assessment, and issued an Order to this effect under section 10 of the Act. The proposed modification of the existing LCO is a reviewable project pursuant to Part 3 of the Reviewable Projects Regulation (B.C. Reg. 370/02) because it would have a production capacity of greater than or equal to 250,000 tonnes per year of clean or raw coal or a combination of clean and raw coal, and result in the disturbance of at least 750 ha of land that was not previously permitted for disturbance.

2. October 5, 2009 - EAO established a working group (Working Group) to provide technical and First Nations input throughout the EA, and to comment on documentation prepared by EAO and the Proponent. The Working Group comprised representatives of First Nations, federal, provincial and local

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government agencies, and US Federal and Montana state agencies (see Appendix 1 for a list of Working Group members).

3. October 2009, through February 2010 – EAO and the Working Group reviewed the draft Application Information Requirements submitted by the Proponent. The draft Application Information Requirements were revised by EAO, based on Working Group and First Nations input, in preparation for a public comment period on the document.

4. February 11, 2010 - EAO issued a procedural Order pursuant to section 11 of the Act, which defines the scope of the proposed Project, and the procedures and methods for conducting the EA.

5. March 9, 2010 - Copies of the draft Application Information Requirements were posted on EAO’s website. Copies were placed in local libraries on March 16, 2010.

6. March 16 to April 14, 2010 – EAO held a 30 day public comment period with open houses in Elkford and Sparwood to seek input on the draft Application Information Requirements. Comments were received from 67 individuals and organizations and approximately 73 people attended the open houses.

7. May 2010, to October 2011 – EAO and the Working Group (including First Nations) reviewed and provided input on the Proponent`s workplans and methodologies for information collection and modelling, as well as on preliminary data and draft sections of the Application.

8. October 7, 2011 - EAO approved the final Application Information Requirements and issued them to the Proponent. Approval was delayed pending the release of the Strategic Advisory Panel on Selenium Management’s report “A Strategic Plan for the Management of Selenium at Teck Coal Operations” on June 30, 2010, and the Proponent’s response to the report. The Proponent commissioned the independent advisory panel to help develop a strategic plan for the sustainable management of selenium at the company’s operations.

9. December 16, 2011, to January 30, 2012 - EAO, with input from the Working Group and First Nations, evaluated the Application against the Application Information Requirements. On January 30, 2012, EAO determined that the Application contained the information required by the Application Information Requirements. EAO also assessed the Proponent’s First Nations and public consultation activities during the Pre-Application Stage, and activities proposed during the Application Review Stage, and determined that they were adequate 8 August 2013 Line Creek Operations Phase II Assessment Report

and allowed sufficient opportunities for the public and First Nations to review and comment on the proposed Project. The Proponent was notified of this on February 2, 2012.

3.1.2 Application Review Stage

1. February 15, 2012 - Review of the Application was initiated and the Application was posted to EAO’s electronic Project Information Centre.

2. February, 2012 - The public comment period and open houses were advertised in six local newspapers, and the Application was made available for public viewing in local government offices and libraries.

3. February 20, 2012, to April 5, 2012 – EAO held a 45-day public comment period on the Application and a total of 13 comments were received. Open houses were held in Sparwood and Cranbrook. At the open houses, the Proponent provided information about the project and the public had the opportunity to ask questions and express support for or raise concerns about the proposed Project. Representatives of both EAO and the Proponent made presentations and were available to answer questions. Approximately 65 people attended. A copy of the Proponent’s consultation report, which contains details of public consultations held during review of the Application, can be found on EAO’s web site.

4. February 15, 2012, to August 30, 2013 – EAO and the Working Group (including First Nations) reviewed the Application. This review period included a time limit suspension from July 19, 2012 (day 155 of the 180-day Application Review) to August 14, 2013 to allow time for the Proponent to address outstanding issues related to water quality. During the time limit suspension the Working Group and EAO participated in an iterative issues resolution process with the Proponent to avoid and/or mitigate adverse effects. The Working Group and First Nations Issues Tracking Tables can be found in Appendix II, and the Table of Conditions is in Appendix III.

3.2 Federal Environmental Assessment

A Federal EA of the proposed Project was initially required under the Canadian Environmental Assessment Act, SC 1992, c.37 (CEAA 1992), and the conduct of this EA was delegated to the Province of BC. In 2012 CEAA 1992 was repealed and replaced with the new Canadian Environmental Assessment Act, 2012 (CEAA 2012) which was brought into force on June 29, 2012. Under CEAA 2012 the proposed Project does not require a federal EA.

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Federal agencies participated in the provincial EA of this proposed Project. Federal comments received during the EA are reflected in this Assessment Report and have informed the analyses and conclusions. Before the proposed Project can proceed, Fisheries and Oceans Canada (DFO) must determine that the proposed Harmful Alteration, Disruption, or Destruction of Fish Habitat (HADD) is acceptable and that proposed mitigation (including compensation) is acceptable.

3.3 Applicable Permits

If a provincial EA decision allows the proposed Project to proceed, the Proponent would also be required to obtain the necessary provincial licences, leases and other approvals, as well as regulatory approvals from DFO. The Proponent has identified the following provincial and federal licenses, permits and/or approvals required for the construction, operation and decommissioning of the proposed Project:

• Coal leases under the Coal Act; • Amendment to the existing effluent discharge permit under the Environmental Management Act (EMA); • Licence to Cut under the Forest Act; • Amendment to the existing permit approving the mine plan and reclamation plan under the Mines Act; • Water licences under the Water Act; • Permits for archaeological impact assessment (AIA) under the Heritage Conservation Act; and • Section 35(2) authorization under the Fisheries Act Canada, to allow HADD.

The Proponent has requested concurrent permitting under the Act pursuant to the Concurrent Approval Regulation (BC Reg. 371/2002) for the following provincial permits:

• Amendment to Permit C-129 under the Mines Act; • Amendment to Effluent Discharge Permit PE-05353; and • Application for a Water License.

3.4 First Nations Consultation

The proposed Project is situated within the asserted traditional territory of the Ktunaxa Nation (Ktunaxa). The Ktunaxa are identifed as a First Nation in the section 11 Order including the following member bands: Tobacco Plains Band, the St. Mary’s Band the Lower Kootenay Band and the ?Akisq’nuk First Nation. All of these bands have 10 August 2013 Line Creek Operations Phase II Assessment Report

directed the Ktunaxa Nation Council (KNC) to consult on their behalf. The Ktunaxa Nation have asserted rights that may be impacted by the proposed Project, and were consulted during the EA.

The KNC participated on the Working Group throughout the EA. Representatives attended Working Group meetings, and submitted many valuable comments on the potential effects of the proposed Project. The KNC also participated in issues discussions and influenced the development of mitigation measures. BC and Canada engaged in government to government consultations with the KNC regarding potential effects on Ktunaxa rights.

The Shuswap Indian Band indicated an interest in the proposed Project after Application Review had started, and EAO and Canadian Environmental Assessment Agency (CEA Agency) engaged them in consultation. EAO did not direct the Proponent to consult with the Shuswap Indian Band because the proposed Project is outside of the Shuswap Indian Band’s asserted traditional territory.

Part C of this Report provides a detailed review of First Nations consultations and EAO conclusions with respect to the consultation process, asserted Aboriginal rights and the potential for impacts to those rights.

3.5 Public Consultation

EAO held two public comment periods during the EA. There was one 30-day comment period during Pre-Application, and one 45-day comment period during Application Review. Two open houses were held during Pre-Application, with one in Elkford, BC on March 24, 2010, and one in Sparwood, BC on March 25, 2010. Two open houses were held during Application Review, with one in Sparwood on February 28, 2012, and one in Cranbrook on March 5, 2012.

Prior to starting the 45-day Application Review public comment period, copies of the Application were made available for public review in libraries and municipal halls in Cranbrook, Elkford, Fernie and Sparwood, BC, and in Blairmore and Coleman, AB. Copies of the concurrent permit application package were also made available at these locations. The 45-day public comment period, open houses, and public viewing locations for the Application were advertised in local newspapers, on the radio and on EAO’s web site.

At each of the open houses EAO provided a presentation on the EA process followed by a question and answer period, and the Proponent provided an overview of the proposed Project followed by a question and answer period. In general, questions were raised regarding the potential effects of the proposed Project and whether the 11 August 2013 Line Creek Operations Phase II Assessment Report

mechanisms to protect ecological values during operation would be adequate. The questions raised were answered satisfactorily by the Proponent. Comments received from the public during the comment periods and the Proponent’s responses were posted on the Electronic Project Information Centre. Public comments are addressed in Part B of this report, and a table including the public comments and Proponent responses is included in Appendix II of this report.

The Proponent’s consultation efforts included participation in all of EAO’s open houses. The Proponent also consulted the public through other forums including meetings and correspondence with stakeholders, special interest groups and forest licensees and other tenure holders. The Proponent distributed information on the proposed Project via press releases, newspaper advertisements, and radio.

3.6 Canada / US Boundary Waters Treaty and BC / Montana Memorandum of Understanding

Canada / US Boundary Waters Treaty

Lake Koocanusa is a boundary water subject to the terms of the Boundary Waters Treaty. Signed in 1909, the Treaty provides principles for Canada and US to follow in managing their shared waters. This joint commitment to protecting the environment and the resources of the boundary waters is reflected in the various articles of the Treaty. Article IV states that waters shall not be polluted on either side of the border to the injury or health or property on the other side.

Under Article IX of the Treaty, questions or matters of difference arising between Canada and US involving the rights, obligations, or interests of either party shall be referred to the International Joint Commission for examination and report whenever requested by either the US Government or the Canadian Government.

Memorandum of Understanding and Cooperation on Environmental Protection, Climate Action and Energy between the Province of British Columbia and the State of Montana

On February 18, 2010, the Province of BC and the State of Montana (MT) signed a Memorandum of Understanding and Cooperation on Environmental Protection, Climate Action and Energy. Under the environmental protection component of the Memorandum, BC and Montana agree to collaborate on EA of any project of cross- border significance that has potential to affect land or water resources. In accordance with the Memorandum, BC invited the following US agencies to participate on the EA Working Group:

• Montana Department of Environmental Quality (Montana DEQ);

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• Montana Department of Fish, Wildlife and Parks; • Montana Department of Natural Resources and Conservation; • EPA; • Department of the Interior; and • Confederated Salish and Kootenai Tribes.

The United States Environmental Protection Agency (EPA) and the Montana DEQ and Fish, Wildlife and Parks responded and were active participants on the Working Group.

PART B – ASSESSMENT OF POTENTIAL EFFECTS, MITIGATION, AND SIGNIFICANCE OF RESIDUAL EFFECTS

4 General

4.1 Assessment Methodology

4.1.1 Methodology for Assessing Potential Significant Adverse Effects

In undertaking this evaluation, EAO assessed whether the proposed Project would have significant adverse environmental, economic, social, heritage and health effects, including cumulative impacts, and whether there would be potential effects on First Nations’ asserted aboriginal rights and interests, having regard to the mitigation measures proposed in the Application or otherwise developed through the EA process.

More specifically, for each issue under consideration, this Report:

• provides a summary of relevant background information (which is set out in considerably more detail in the Application); • discusses the potential for residual adverse effects, including cumulative impacts, having regard to mitigation measures proposed in the Application or developed subsequently as a result of public consultations, input from the Working Group and consultations with First Nations; and • assesses, with input from the Working Group and First Nations, whether any residual adverse effects, including cumulative impacts, would be significant.

In addressing what may constitute a “significant” adverse effect, EAO considers the following factors:

• Magnitude: This refers to the magnitude or severity of the effect. Low magnitude effects may have no impact, while high magnitude effects may have an impact.

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• Probability: The likelihood that an adverse effect will occur. • Geographic Extent: This refers to the extent of change over the geographic area of the proposed Project. The geographic extent of effects can be local or regional. Local effects may have a lower impact than regional effects. • Duration and Frequency: This refers to the length of time the effect lasts and how often the effect occurs. The duration of an effect can be short term or long term. The frequency of an effect can be frequent or infrequent. Short term and/or infrequent effects may have a lower impact than long term and/or frequent effects. • Reversibility: This refers to the degree to which the effect is reversible. Effects can be reversible or permanent. Reversible effects may have lower impact than irreversible or permanent effects. • Context: This refers to the ability of the environment to accept change. For example, the effects of a project may have an impact if they occur in areas that are ecologically sensitive, with little resilience to imposed stresses.

The development and refinement of mitigation measures is a key component of the EA process and one where EAO spends an extensive amount of time facilitating discussion and negotiation among the Proponent, interested parties and First Nations. In the case of this proposed Project, there are 26 conditions which are set out in detail in Appendix 3. Key conditions will be discussed in the following sections of this report, but for a full explanation and consideration of conditions readers are advised to consult Appendix 3, Table of Conditions.

4.1.2 Determining whether significant adverse effects (if any) are justified

Significant adverse effects are usually avoided due to the extensive commitments for mitigation that are made by proponents during the EA process. These commitments would be included in an EA Certificate as enforceable conditions if an EA Certificate is issued. If, however, EAO concludes that a proposed project is likely to cause significant adverse effects, EAO then assesses whether the proposed project could be considered justified. In assessing whether a proposed project that is likely to cause significant adverse effects may be justified, EAO would consider all relevant factors, including the following:

• the number, type and extent of significant adverse effects that are expected; • the economic benefits that would be provided by the projects (including taxes, jobs and infrastructure development), and the degree to which those who would otherwise be adversely effected by the project would benefit; • the degree to which the project would contribute to community development; and

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• the allocation of costs and benefits of the project between present and future generations.

4.1.3 Ensuring the Crown’s duties to consult and accommodate First Nations are met

EAO is required to ensure that the honour of the Crown is discharged with respect to the decision that will be made by Ministers at as to whether to issue an EA Certificate. EAO must ensure that there is appropriate consultation with First Nations, and that

First Nations’ interests are accommodated if required. In this report, First Nations interests refer to asserted Aboriginal rights, including title. There are no proven rights or treaty rights in the area.

There is often considerable overlap between the interests of First Nations and the assessment of environmental, economic, social, heritage and health effects. Part C of this report contains an analysis of First Nations interests, the potential effects of the proposed Project on these interests, and First Nations comments with respect to their interests. First Nations comments that directly relate to the technical environmental, economic, social, heritage and health assessments are discussed in Part B.

4.2 Valued Components

Valued Components (VCs) are used in the assessment of potential adverse effects and are determined by the Proponent in consultation with the public, First Nations, and government agencies. Importance may be determined on the basis of values including First Nations interests, scientific and/or regulatory concern, and sensitivity to the proposed Project effects. For the proposed Project, the VCs selected for assessment are described for each assessment pillar in sections 5 through 9 of this report.

4.3 Spatial Boundaries

For the assessment of local effects, study area boundaries were selected to encompass an area large enough to efficiently analyze the potential effects of the proposed Project on VCs. The assessment of effects within the area near the proposed Project, termed the Local Study Area (LSA), was based on the spatial extent of the footprint and an associated buffer zone to capture immediate direct and indirect effects on VCs.

The size of the Regional Study Area (RSA) was based on the specific attributes and properties of VCs. The boundaries of the RSA are specific to VCs, and encompass an area that includes the LSA plus a larger surrounding area. The LSA and RSA boundaries vary among subject areas such as water quality and aquatic health, and

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wildlife and vegetation. The RSA and LSA boundaries specific to each subject area are described in the assessment of potential effects sections (5 – 9) of this report.

4.4 Temporal Boundaries

Temporal boundaries for the effects assessment are defined by the characteristics of the proposed Project and the VCs being assessed, and include the time prior to project-related activity (i.e. baseline) and the periods when the VCs would be affected by the proposed Project.

The EA evaluated a project plan that would be implemented over a specific period of time. By defining a temporal scope, clear boundaries were established for the time periods being assessed. The proposed Project and the periods assessed are defined by the following phases:

• construction, which would last approximately 16 months, beginning in 2013; • operations, which would begin in 2014 and continue through 2031; a period of active mining and processing. This period would also include some construction including an selenium active water treatment facilitiy in Dry Creek in 2022; • reclamation and closure:

o 2016 to 2031 – reclamation of depleted mining areas that would be available while normal operations continue;

o 2032 to 2038 – a period of intensive reclamation, decommissioning and monitoring after the end of operations; • 2038 through 2074 – a period of reclamation monitoring and maintenance that would allow sufficient time for forest development and two free-to-grow assessments (i.e., assessments of forest regeneration against specific benchmarks) of the reclaimed landscape; and • 2075 –the year in which the Proponent anticipates that most of the land base would be opened for public use.

Temporal boundaries included the baseline conditions, and the period of time over which the residual effects from the proposed Project overlap with reasonably foreseeable developments.

4.5 Cumulative Impacts

EAO integrates potential cumulative impacts into the significance analysis of relevant valued environmental, economic, social, heritage and health components as identified by EAO, the Proponent, Working Group members or the public. EAO considers potential cumulative impacts through:

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• An examination of background information on relevant VCs including:

o approved land use plans that designate the most appropriate activities on the land base; and

o historical data, trends and comprehensive baseline studies that set out the current conditions and factor in effects of prior developments. • An identification of potential impacts of the proposed Project on relevant VCs. • An identification of potential overlapping impacts due to other developments, even if not directly related to the proposed Project. • An identification of predicted impacts from future developments that are reasonable foreseeable and sufficiently certain to proceed. • An assessment of the potential for residual adverse effects, taking into account the mitigation measures proposed by the Proponent for the proposed Project. • An assessment of the significance of any residual effects after mitigation, considering the following factors: magnitude, geographic extent, duration and frequency, reversibility, context and probability.

The cumulative impacts of the proposed Project on VCs are evaluated by EAO based on past, present and reasonably foreseeable project and/or activities as described in Table 1 below.

Table 1: List of projects and activities that were included in the cumulative impacts assessment.

Potential, Potential Project/Facility/Activity Description Spatial Temporal Overlap Overlap Forestry Forest Management in the Yes Yes Elk Valley Recreation Blackstone Resort Yes Yes Development in Fernie Coal Mining Swift Project, an expansion of Yes Yes the Fording River Operations Coal Mining Castle Mountain North, an Yes Yes expansion of the Fording River Operations Coal Mining Castle Mountain West, an Yes Yes expansion of the Fording River Operations

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Potential, Potential Project/Facility/Activity Description Spatial Temporal Overlap Overlap Coal Mining Turnbull Ridge, an expansion of Yes Yes the Fording River Operations Coal Mining Cougar North and Phase 6 Yes Yes Extension, an expansion of the Greenhills Operations

Coal Mining Baldy Ridge Expansion, an Yes Yes expansion of the Elkview Operations

Coal Mining Turnbull Tailings Pond, new Yes Yes supplemental tailings storage at the Fording River Operations

5 Assessment of Potential Environmental Effects

5.1 Water Quality and Aquatic Health

Water quality and aquatic health are assessed together because the Proponent evaluated the effects of the proposed Project on aquatic life that would be caused by changes to water quality and by the cumulative effects of other reasonably foreseeable projects. Descriptions of baseline conditions, what was assessed and how the assessment was done are provided under the sub-headings below.

5.1.1 Background Information

The proposed Project would remove the tops of two mountain ridges (Mount Michael and Burnt Ridge North) adjacent to the Proponent’s existing LCO mine, and place waste rock from these ridges into the upper reaches of Dry Creek. Downstream water quality would be affected, and there is also the potential for cumulative effects from the proposed Project and the other four operating coal mines in the Elk River watershed (Figure 2 and Table 2) which are also owned by the Proponent. Dry Creek is presently unaffected by mining, has clean, uncontaminated water and is fish bearing. The Fording River is already affected by mining and studies have shown that contaminant levels are high and increasing due to other past and present mines located in the watershed. Contaminants from the mines have been detected downstream in the Elk River, Lake Koocanusa and the Kootenay River, and contaminant levels have been

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increasing. Concerns with the increasing contaminant levels in downstream waters have been raised by BC, Canada and the US.

5.1.2 Canada US Boundary Waters Treaty

The primary concerns of the US relate to the cumulative effects of contaminants from all five Teck Coal Limited’s coal operations in the Elk River watershed. Selenium in coal mine drainage moves downstream via the Fording River and Elk River in BC into Lake Koocanusa and the Kootenai River in Montana. Ministry of Environment (ENV) estimated that the selenium loading from the coal mines in the Elk Valley exceeds 10,600 kg annually, and has been increasing steadily over time. Montana DEQ estimates that MT’s legal water quality standard for selenium (5 µg/L) is likely to be exceeded in Lake Koocanusa within 5 to 15 years unless adequate measures are taken to reduce selenium loading to the Elk River and Lake Koocanusa. In 2012, MT listed Lake Koocanusa as “threatened” on its 2012 list of water quality impaired waters under Section 303(d) of the US Clean Water Act due to concern over increasing selenium levels in the lake.

The EPA and Montana DEQ have identified that the increasing selenium loads in Lake Koocanusa from coal mining may adversely impact aquatic life, including bull trout, which is listed as a “threatened” species under the US Endangered Species Act, and west slope cutthroat trout, which is considered a “species of special concern” by MT. Bio accumulation of selenium in Lake Koocanusa exacerbates the concern about potential adverse impacts to aquatic life.

On September 10, 2012, US Senators Max Baucus and Jon Tester from Montana wrote to the US Secretary of State and expressed concern about the threat to US water quality and the environment posed by selenium discharged from the Elk Valley coal mines. The US State Department has raised the issue with Foreign Affairs and International Trade Canada and Environment Canada. On October 11, 2012, the KNC and the Confederated Salish and Kootenai Tribes jointly wrote to the US Secretary of State and the Canadian Minister of Foreign Affairs requesting that the International Joint Commission, which is the dispute resolution body under the Canada / US Boundary Waters Treaty, examine and report upon the issues.

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Figure 2: Overview of five mines operated by the Proponent and regional context.

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Table 2: Watercourses Downstream of the proposed Project and the Operating Coal Mines that Contribute to Existing Cumulative Effects on Water Quality.

Existing Cumulative Effects Watercourses (or Sections) Downstream of the on Water Quality from Proposed Project Upstream Operating Coal Mines

Grace Creek None

Unnamed Creek None

Dry Creek None

Fording River between Dry Creek and Line Creek 1. Fording River Operations Josephine Falls, a barrier to upstream fish passage, 2. Greenhills Operations is located in this section.

1. Fording River Operations Fording River between the Line Creek and Elk River 2. Greenhills Operations confluences 3. LCO

1. Fording River Operations Elk River between the Fording River confluence and 2. Greenhills Operations Lake Koocanusa 3. LCO Plus 4. Elkview Operations Lake Koocanusa (Canadian and US waters) 5. Coal Mountain Operations

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5.1.3 Valued Components

Under the Water Quality and Aquatic Health section of the Application (section B2.2.4), aquatic life was considered to be the relevant VC for all proposed Project effects except those resulting from selenium. The term aquatic life refers collectively to the key components of the aquatic ecosystem (e.g., fish, aquatic invertebrates and aquatic plants). The Proponent assessed the potential for increased contaminants levels in the water and their potential effects on aquatic life using a model as described later in this section.

To assess selenium effects, the Proponent used a different approach because selenium bioaccumulates and certain organisms are more sensitive than others. For the selenium assessment, egg-laying vertebrates with aquatic diets were the selected VCs because they tend to be relatively sensitive to selenium exposure, and would experience relatively high exposure because selenium is leached from minerals by water and transported into downstream aquatic ecosystems where it accumulates in food resources and is transferred to higher levels in the food web.

Egg-laying vertebrates that use surface waters downstream of the proposed Project include fish, birds and amphibians. The VCs chosen for the assessment of selenium effects were west slope cutthroat trout, bull trout, mountain whitefish, longnose sucker, largescale sucker, peamouth chub, red-winged blackbird, spotted sandpiper and the Columbia spotted frog. The Proponent assessed the potential effect of increased selenium concentrations in the tissues of these VCs using a model as described later in this section.

5.1.4 Local Study Area and Regional Study Area

The Aquatic RSA includes the Fording River and Elk River watersheds and Lake Koocanusa downstream to the Canada-US border.

The aquatic LSA includes the Dry Creek, Grace Creek, unnamed creek and Line Creek watersheds downstream to their confluences with the Fording River (Figure 3). Dry Creek, Grace Creek and unnamed creek are relatively small headwater streams that are presently unaffected by mining. Waste rock from the proposed Project would be placed in the upper Dry Creek Valley, and contaminants from the waste rock would leach into the creek below. Groundwater flows from the Burnt Ridge pit and surface runoff from waste rock could potentially Impact Grace and unnamed creeks. Line Creek is presently affected by the existing LCO. Waste rock has been placed in the upper Line Creek watershed and contaminants are leaching from the rock drain into the creek and downstream.

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Figure 3: Aquatic local study area with operational boundary in pink. 23 August 2013 Line Creek Operations Phase II Assessment Report

5.1.5 Temporal Boundaries

The temporal boundaries chosen by the Proponent for the assessment of water quality and aquatic health are snapshots that represent periods when water quality changes would have the greatest potential to occur:

• 2011 – represents current conditions; • 2021 – represents the year when about half of the total waste rock that is to be generated by the proposed Project would have been placed in the Dry Creek watershed, and is immediately prior to the commencement of operations of the Dry Creek selenium active water treatment facilitiy; • 2022 – represents conditions immediately after the Dry Creek water treatment facilitiy begins treating water; • 2059 – represents conditions after operations end, and when pit lakes are full and are discharging water to the environment. This snapshot represents the year when the highest concentrations are anticipated, between the end of operations (2032) and closure of the mine area (2075); and • Far future – represents conditions in the far future, after mine closure, in which all pit lakes have filled with water, mining areas have been reclaimed and all groundwater seepages are assumed to be reporting to receiving surface waters. The Proponent’s far future concentrations are predictions for the year 2100. The duration of the far future condition is not known, but it could take hundreds of years before the waste rock source of the contaminants is exhausted.

Baseline water and sediment quality data were compiled by the Proponent from existing reports. Sampling was conducted between March 2009 and May 2010 to collect supplementary water quality data from Line Creek, Dry Creek, Lake Koocanusa and the Elko Reservoir.

5.1.6 Water Quality Baseline Values

The Application reports that surface water quality at sites with no upstream mining activity in the LSA (i.e., Grace Creek, Dry Creek and upper Line Creek) is generally similar. Waters in these reference (unaffected) areas tend to be slightly alkaline, with moderate to high concentrations (i.e., greater than 100 mg/L) of Total Dissolved Solids (TDS). They can be classified as hard to very hard and sulphate concentrations are typically below the BC aquatic life guideline which is a maximum concentration of

100 mg/L SO4. Alkalinity levels indicate that the waters are not susceptible to acid deposition. Ammonia, nitrite, nitrate, total phosphorus and metal concentrations are generally low, often below method detection limits. In some areas upstream of mines in the LSA, selenium can be present at concentrations in excess of the BC aquatic life guideline, although in general, natural selenium levels tend to be below the guideline at 24 August 2013 Line Creek Operations Phase II Assessment Report

sites with no upstream mining activity. The Water Quality Guidelines (WQG) for selenium in BC are currently set at 10 µg/L for drinking water, and 2 µg/L for the protection of aquatic life.

According to the ENV definition, a guideline is “A maximum and/or minimum value for a physical, chemical or biological characteristic of water, sediment or biota, applicable province-wide, which should not be exceeded to prevent specified detrimental effects from occurring to a water use, including aquatic life, under specified environmental conditions.” WQG do not have any direct legal standing. They are intended as a tool to provide policy direction to those making decisions affecting water quality provided that they do not allow legislated effluent standards to be exceeded. WQG can be used to establish the allowable limits in waste discharges. These limits are set out in waste management permits, approvals, plans or operating certificates which do have legal standing.

Table 3 below lists the BC WQG for selenium at the time the Application was submitted for EA, along with guideline updates that were approved earlier in 2013.

Table 3: BC Water Quality Guidelines for Selenium.

Water Use Guideline for Selenium at Selenium Guideline the time of Application Approved in 2013 Submission

Drinking Water 10.0 µg/L 10.0 µg/L

Aquatic Life 2.0 µg/L 2.0 µg/L (freshwater)

Aquatic Life 2.0 µg/g dry weight 2.0 µg/g dry weight (sediments)

Aquatic Life (fish 4.0 µg/g whole-body, dry 11 µg/g egg/ovary, dry tissue) weight weight 4 µg/g whole-body, dry weight 4 µg/g muscle, muscle plug, dry weight

Wildlife (bird egg) 7.0 µg/g dry weight 6.0 µg/g dry weight

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In the RSA, surface water quality at unaffected reference sites (i.e., in the upper Fording River and upper Elk River) is similar to that described above for unaffected sites in the LSA. The waters found in these areas of the RSA tend to be hard and well buffered, with low nutrient and metal concentrations.

In both the RSA and LSA, surface water quality in reference or unaffected upstream areas are notably different from that observed at sites located immediately downstream of mining operations (e.g., in West Line Creek; in Line Creek downstream of the rock drain; and in the Fording River downstream of Swift Creek). The primary differences include elevated concentrations of cadmium, selenium, sulphate, nitrate, ammonia, TDS, calcium, chloride and magnesium. These substances show an increasing trend in the rivers downstream of the existing mines.

The Application reports that selenium, sulphate and nitrate concentrations generally exceed WQG at sites immediately downstream of the mining operations.

Table 4 below shows model results for current and predicted selenium levels for selected locations in the RSA, without consideration of future water treatment measures at other mine sites.

Table 4: Selenium maximum concentrations (µg/L) for selected locations in the RSA, comparing current conditions with conditions predicted in the Application for operations.

Predicted Current Condition Predicted Location Condition During Operations

Mouth of the Elk River 8 10

Elk River Downstream 18 19 of the Fording River

Mouth of the Fording 45 42 River

Fording River downstream of Dry 42 56 Creek

a Mouth of Dry Creek 1 120 a During the Time Limit Suspension, mitigation was negotiated that changed the prediction for selenium concentrations in Dry Creek down to 4 µg/L from 120 µg/L.

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Water temperatures and the concentrations of total suspended solids (TSS) and dissolved oxygen tend to be similar between mine exposed sites and sites with no upstream mines.

At downstream sites in the RSA (i.e., in the Elk River), selenium, sulphate, nitrate, ammonia, TDS, calcium, chloride and magnesium tend to be present at concentrations well above naturally occurring conditions, with some increasing trends being observed through time. The Elk Valley selenium task force reported that selenium is increasing by about 13 percent annually within the Fording River and 8 percent within the Elk River. The increasing trend is the direct result of the existing mining operations in the Elk Valley. The magnitude of the total increase and the rate of increase of all of these contaminants are not as pronounced in distant sites compared to sites immediately downstream of mining operations. This observed difference between local and distant sites likely reflects the effects of dilution, as water from mine-affected areas mixes with unaffected water as it flows downstream towards Lake Koocanusa. At the mouth of the Elk River in Lake Kookanusa, selenium is the only water quality parameter that is currently found at levels that exceed BC WQG for aquatic life. The maximum selenium concentrations at the mouth of the Elk River (downstream of all of the mining activity) were reported in the Application to range from 4.6 to 5.9 µg/L.

5.1.7 Sediment Quality Baseline Values

Sediment quality is not considered a VC, but it is a measureable value and the quality of the sediment would have a direct effect on the aquatic life VC. Sediment quality data are available from four reference and six mine-exposed lentic (still water) sites located throughout the RSA. Bottom sediments at all lentic sites are dominated by silt-sized particles. Concentrations are generally below sediment quality guidelines, although arsenic, cadmium, copper, nickel, iron and zinc can occasionally be present at concentrations in excess of BC sediment quality guidelines, both in reference and mine-exposed areas. Based on the available data, sediment quality tends to be consistent among the reference and mine-exposed sites, with one exception. Selenium levels consistently exceed the BC sediment quality guideline (2 mg/kg dry weight) at all sites, and selenium concentrations in sediments tend to be about an order of magnitude (ten-fold) higher at mine-exposed sites when compared to reference sites. For example, sediment selenium concentrations reported in the Application for sites exposed to mine effluent range from 2.6 to 62.3 mg/kg dry weight.

Observed Biota Tissue Baseline Values

Selenium concentrations in the aquatic food web are elevated in most areas of the Elk Valley located downstream of mining, relative to levels observed in reference

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(non-mining) areas. The largest increases in tissues selenium levels have been observed in a small number of lentic areas located immediately downstream of mines.

In some lotic (flowing water) habitats located immediately downstream of mine operations, elevated selenium concentrations in biota are found. However, selenium tissue concentrations in these lotic areas are notably lower than those observed in lentic areas (relatively still water), and they generally attenuate with distance downstream. For example, the Application reports that selenium concentrations in west slope cutthroat trout eggs are:

• up to 10 mg/kg dry weight in reference areas; • moderately elevated (10 to 20 mg/kg dry weight) in the lotic, mine-exposed environments of Line Creek and the Fording River; and • substantially elevated (50 to 70 mg/kg dry weight) in the lentic environment of the Fording River Oxbow.

According to the Application, at sites further downstream in the Elk River and Lake Koocanusa, egg selenium concentrations decline and approach reference levels (approximately 5 to 15 mg/kg dry weight) although still partly in the moderately elevated range. Environment Canada suggests that 15 mg/kg dry weight is too high to be considered reference (i.e., that they are mine affected levels not reference levels).

The Application reported that metal concentrations measured in fish, periphyton, and benthic invertebrate tissues are generally low at both reference and mine-affected sites. To date, mercury and lead levels in all fish tissue samples have been below the BC fish tissue guidelines. Fish tissue guidelines have not yet been established for other metals, although levels have been proposed for selenium.

5.1.8 Water Quality Modeling Used to Predict Potential Effects

Models are often used to predict effects of disturbing or manipulating a system to better understand the potential consequences of disturbances, and where there are limited empirical data models allow extrapolation beyond the observed data. In this case, a water quality model was used to predict future water quality in Dry Creek, Line Creek, the Fording River and the Elk River as affected by mining, by simulating changes in concentrations of potential contaminants in streams within the Elk Valley. The model included all water bodies and watercourses potentially affected by the proposed Project from Dry Creek to the mouth of the Elk River. The model considered loading sources within the LSA, as well as loading sources in the RSA, including the Proponents four other operating mines.

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Comparing model simulations to observed data, the model was calibrated to provide estimates that would resemble actual data as closely as possible, with a tendency toward slight overprediction. The Proponent concluded that since their model was designed to predict higher constituent concentrations than the observed data during calibration, future loading estimates provided by the model are conservative (i.e., they err on the high side). Using estimated geochemical loading rates, potential changes to constituent concentrations under low, average and high flow conditions were simulated. Concentrations were predicted by the Proponent for a total of 36 substances, including cadmium, Dissolved Organic Carbon (DOC), nitrate, phosphorus, selenium (only in lotic systems residing downstream of Dry Creek and upstream of Line Creek), sulphate and TDS.

5.1.9 Screening

Using the modelled concentrations, the Proponent identified which of those substances may be of concern by comparing the maximum predicted concentrations with relevant guidelines This process was termed screening in the Application. All substances identified in the screening process to be of potential concern were further evaluated for potential effects on aquatic health. The substances identified during the screening process for assessment by the Proponent are cadmium, DOC, nitrate, phosphorus, selenium, sulphate and TDS.

5.1.10 Assessment Methodology for Aquatic Health Effects From Selenium

The potential for adverse ecological effects through bio-accumulation of substances such as selenium is most effectively assessed by evaluating tissue concentrations. The Proponent assessed potential aquatic health effects from selenium by evaluating predicted selenium concentrations in the tissues of the aquatic VCs rather than on the direct evaluation of predicted water selenium concentrations. The selenium assessment was undertaken using species-specific bio-accumulation models to predict selenium concentrations in eggs of each relevant VC, and the predicted concentrations were then compared to literature-based effects benchmark concentrations. The models were applied to west slope cutthroat trout, bull trout, mountain whitefish and spotted sandpiper.

5.1.11 Assessment Methodology for Aquatic Health Effects Related to Cadmium, DOC, Nitrate, Phosphorus, Sulphate and TDS

Predicted concentrations of substances were evaluated by comparing them to screening values. The Proponent proposed a screening value that is expressed as a water concentration for each of the substances. The screening value represents the concentration above which changes to aquatic health could occur. The low screening 29 August 2013 Line Creek Operations Phase II Assessment Report

value is the concentration above which effects could occur to individual organisms belonging to sensitive species. The high screening value is a concentration above which effects could occur to individuals of a broader range of species. For each substance there is a low screening value for sensitive species, and a high screening value for the remainder. For example the high screening value for nitrate is 42.6 mg/L and the low screening value is 30.1 mg/L.

For most substances, screening values were derived from the associated toxicological database used to develop the BC WQGs for the protection of aquatic life. For cadmium, the BC WQG is a function of water hardness. Screening values were, therefore, calculated as a function of the lowest (i.e., most conservative) water hardness that was predicted to occur during the life of the proposed Project and beyond. Predicted phosphorus concentrations were evaluated in the context of the Canadian Council of Ministers of the Environment (CCME) phosphorus management framework (CCME 2003). DOC was evaluated based on the BC WQG, which stipulates a change of no more than 20 percent from background conditions. DOC has the potential to stimulate bacterial production, but is not expected to have toxic effects.

The screening values derived by the Proponent are significantly less conservative (i.e., less restrictive) than BC’s WQG, but are intended by the Proponent to retain a level of conservatism for the evaluation of population-level effects. The screening values were derived from toxicity tests completed on individual organisms. Screening values developed from single-species toxicity tests tend to be conservative with respect to predicting population or ecosystem-level effects.

5.1.12 Magnitude Determination

Magnitudes of effects on VCs from selenium after proposed mitigation measures were taken into account were assessed by the Proponent using the following effects classification:

• Negligible: No effect on individuals expected; • Low: Possible effect on some individuals expected, but effects on populations unlikely; • Moderate: Likely effect on individuals; effect on the local population possible, but a self-sustaining, ecologically functioning, local population is expected to remain; and • High: Likely effect on, and possible loss of, the local population.

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Magnitudes of effects on VCs from other parameters after proposed mitigation measures were taken into account were assessed by the Proponent using the following effect classification:

• Negligible: Predicted concentration is less than the low screening value; • Low: Predicted concentration exceeds low screening value, but remains below the high screening value; potential for low-magnitude, sublethal effects on the most senstivie speices in the community during the period associated with maximum water quality predictions; and • High: Predicted concentration exceeds the high screening value; potential for effects on a broader range of species, which could trigger changes to the aquatic community.

5.1.13 Project Issues and Effects and Proposed Mitigation Identified in the Application

Residual Effects Assessment

After the implementation of mitigation measures, the proposed Project would still lead to increases in DOC, cadmium, nitrate, phosphorus, sulphate, and TDS levels. The predicted increases and the Proponent’s assessment of the magnitude of effects are summarized below. During Application Review, the Proponent, in response to comments from the Working Group, changed the proposed Dry Creek Water Management Plan.

The Proponent predicted that DOC concentrations in Dry Creek and unnamed creek would represent changes of greater than 20 percent compared to predicted baseline concentrations. Effects of DOC are related to the stimulation of bacterial productivity. In small creeks like Dry Creek and unnamed creek, this increased bacterial productivity is likely to stimulate production of benthic invertebrates, rather than result in oxygen depletion and was considered by the Proponent to be beneficial. The magnitude of effect for DOC was therefore considered by the Proponent to be negligible.

The Proponent predicted that there would be low cadmium concentrations for all locations and all phases of the proposed Project, indicating that cadmium would not be expected to adversely affect aquatic life. Predicted cadmium concentrations were assigned a ‘negligible’ magnitude of effects rating by the Proponent for all locations.

The Proponent predicted that there would be high nitrate concentrations in Dry Creek during operations prior to the implementation of water treatment. The magnitude of effect rating for nitrate was determined to be high. After water treatment begins, predicted nitrate concentrations would be substantially reduced leading the Proponent 31 August 2013 Line Creek Operations Phase II Assessment Report

to assign a negligible magnitude rating at Dry Creek and at all other locations downstream.

The Proponent identified total phosphorus as a concern in Dry Creek, Grace Creek, and unnamed creek, because of a slight increase in predicted concentrations relative to the baseline. Since peak total phosphorus concentrations are predicted to be below 0.025 mg/L in Dry Creek, Grace Creek and unnamed creek throughout the life of the proposed Project and beyond, the Proponent considered it unlikely that the predicted change in total phosphorus levels would lead to reductions in oxygen available to fish in these streams. Consequently, the Proponent expects that total phosphorus concentrations would have a low effect on aquatic health.

The model predicted increased sulphate concentrations in Dry Creek during operations. Maximum sulphate concentrations in Dry Creek are predicted to reach 688 mg/L for the proposed Project compared to 22 mg/L for baseline conditions. The Proponent rated the magnitude of effect for sulphate at ‘low’ because the levels of sulphate predicted for Dry Creek were considered by the Proponent to be below harmful levels. Maximum sulphate concentrations were predicted to be low at all other locations, and were assigned a ‘negligible’ magnitude of effect rating by the Proponent for all other locations throughout the life of the proposed Project and beyond.

The magnitude of effect rating for TDS was determined by the Proponent to be ‘low’ with maximum TDS concentrations in Dry Creek predicted to reach 1,005 mg/L with the proposed Project, compared to 161 mg/L under baseline conditions. A ‘low’ magnitude of effect rating was assigned for TDS concentrations predicted in Dry Creek during closure and a ‘negligible’ magnitude of effect rating was assigned for all other periods. TDS concentrations for the other streams were predicted by the Proponent to be less than the low screening value throughout the life of the proposed Project and beyond. A ‘negligible’ magnitude of effect rating was assigned for TDS concentrations at all other locations throughout the life of the proposed Project and beyond.

The proposed Project would cause an increase in selenium in Dry Creek, and in the Fording River between Dry Creek and Line Creek. As a result of predicted selenium concentrations, the Proponent’s model predicted an increase in egg selenium concentrations that would have a ‘negligible’ to ‘low’ magnitude effect on fish in Dry Creek, Grace Creek, and the Fording River, and on lotic-feeding birds in Grace Creek, unnamed creek, and the Fording River. For these assessment locations, the potential effects of selenium are expected by the Proponent to be negligible, or restricted to reproductive effects on a relatively small proportion of individuals, such that population-level effects would not be expected to occur.

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The Proponent predicted an increase in egg selenium concentrations for spotted sandpiper on Dry Creek that would have a ‘moderate’ magnitude effect during operations and a ‘low’ magnitude at closure and beyond. This assessment indicates a potential for effects on lotic-feeding birds on Dry Creek during mine operation that could result in local changes in abundance. These changes are not expected to affect the maintenance of a self-sustaining local population, and are not expected to continue beyond closure. Given that potential habitat exposed to elevated selenium concentrations as a result of the proposed Project is less than one percent of available streams in the RSA, the Proponent expected no measurable change in the abundance or distribution of spotted sandpipers at the regional scale as a result of the proposed Project.

The Proponent’s analysis indicated that the only valid pathway for changes to sediment quality was through changes in selenium concentrations in downstream lentic habitats in Elko Reservoir and Lake Koocanusa. The Proponent concluded that since selenium concentrations are expected to decrease in the Elk River after they implement water treatment measures, there would be no adverse changes to sediment quality.

Cumulative Effects Assessment

The Proponent assessed cumulative effects for the Fording and Elk Rivers for those parameters that were predicted to increase as a result of the proposed Project, and that would still have a residual effect after implementing mitigation measures such as the Dry Creek water treatment facility. These parameters which include cadmium, selenium and sulphate are discussed below.

Selenium

The cumulative effects of selenium were assessed by the Proponent in the section of the Fording River between Dry Creek and Line Creek, but cumulative effects were not assessed in the Fording River downstream of Line Creek or in the Elk River or Lake Koocanusa, because the Proponent predicted that there would be no residual Project effects downstream of Line Creek because they are building a water treatment facilitiy on Line Creek at the existing mine. This water treatment facility would be operating prior to the start of operations for the proposed Project.

For the Fording River between Dry Creek and Line Creek, predicted egg selenium concentrations in west slope cutthroat trout and spotted sandpiper were assessed by the Proponent to be of low magnitude, because they exceeded the benchmarks for individual effects, but no population effects would be expected. Bull trout egg selenium concentrations were assessed to be negligible, because they were predicted to be below the benchmark. 33 August 2013 Line Creek Operations Phase II Assessment Report

Egg selenium concentrations in mountain whitefish in the Fording River between Josephine Falls and Line Creek are predicted by the Proponent for the far future, to approximately equal the effects benchmark for species that are tolerant of selenium. It is not known whether mountain whitefish are sensitive or tolerant to selenium, so the Proponent assigned a ‘high’ magnitude of effects rating to predicted cumulative selenium concentrations in the Fording River, indicating a potential for effects on half of exposed individuals, such that an effect to the population cannot be excluded.

The Proponent predicted that selenium mitigation for the proposed Project (the Dry Creek selenium active water treatment facility) in combination with mitigation for cumulative selenium effects at LCO (West Line Creek selenium active water treatment facility) would decrease selenium concentrations to levels below current conditions in watercourses and water bodies located downstream of Line Creek. Consequently, there would be no residual Project effects in the Fording River downstream of the Line Creek confluence, or in the Elk River and Lake Koocanusa due to the proposed Project. The Proponent acknowledged that the proposed Project would contribute to cumulative selenium effects in the Elk Valley, and the Application assumes cumulative effects on water quality from selenium, but it includes mitigation at the existing LCO mine that would result in no cumulative effects of selenium on water quality.

Cadmium and Sulphate

Cadmium was assessed by the Proponent to be of negligible magnitude because concentrations would not be expected to adversely affect aquatic life. Sulphate was given a low magnitude rating by the Proponent because levels would increase, but they would be less than the high screening value for the closure and the far future periods.

Proponent’s Conclusions Regarding the Significance of Effects

A total of 36 parameters were assessed for potential effects to aquatic life. Of those parameters, seven were identified as substances of potential concern including cadmium, DOC, nitrate, phosphorus, selenium, sulphate and TDS. Of those substances, the Proponent predicted that concentrations of DOC and cadmium would have a negligible effect on aquatic life, including benthic organisms, fish and other components of the aquatic ecosystem and were not considered by the Proponent to be significant.

Nitrate is predicted to exceed the high screening value in Dry Creek prior to operating the Dry Creek active water treatment facility. Nitrate is predicted to remain below the low screening value after water treatment is active, along with concentrations of sulphate, TDS and phosphorus in the other watercourses considered in the 34 August 2013 Line Creek Operations Phase II Assessment Report

assessment. The predicted effects related to these substances are not considered by the Proponent to be significant.

The Proponent concluded that there is potential for ‘negligible’ to ‘low’ magnitude effects from selenium on fish in Dry Creek, Grace Creek, and the Fording River, and on lotic-feeding birds in Grace Creek, unnamed creek, and the Fording River. Based on their significance criteria, low magnitude effects would be restricted to reproductive effects on a relatively small proportion of individuals, and population-level effects are not expected to occur. The Proponent considered the effects not to be significant.

This Application indicates a potential for effects on lotic-feeding birds (e.g., spotted sandpiper) on Dry Creek during mine operation that could result in local changes in abundance. These changes are not expected by the Proponent to affect the maintenance of a self-sustaining local population, and are not expected to continue beyond closure. Given that potential habitat exposed to elevated selenium concentrations as a result of the proposed Project is very small (i.e., less than one percent of available streams in the RSA), no measurable change in the abundance or distribution of spotted sandpipers is expected at the regional scale. The Proponent concluded that these changes would not be environmentally significant.

In the Fording River between Dry Creek and Line Creek, the potential effects of selenium for most species are expected by the Proponent to be negligible, or restricted to reproductive effects on a relatively small proportion of individuals, such that population-level effects would not be expected to occur. The one exception may be mountain whitefish, and the Proponent is currently conducting a study, to determine selenium toxicity thresholds for mountain whitefish, for which there is currently no information. In the absence of toxicity thresholds for mountain whitefish, the assessment was completed using conservative assumptions. The results of the assessment indicate potential for a high magnitude effect to local populations of mountain whitefish in the Fording River between Josephine Falls and Line Creek. These effects are predicted by the Proponent to only occur during the closure and reclamation phase of the proposed Project and into the far future, because the predictions are based on upstream, reasonably foreseeable projects that would start much later and the predictions were developed without considering selenium mitigation for those upstream projects.

To address cumulative effects on water quality in the Elk River system, the Proponent committed to develop a Valley-wide Selenium Management Action Plan. Given the assumption of conservatism in the Proponent’s assessment in combination with the Valley-wide Selenium Management Action Plan, the Proponent predicted that there would be no residual cumulative effects of selenium on mountain whitefish. The Valley-wide Selenium Management Action Plan has been superceded by a Ministerial 35 August 2013 Line Creek Operations Phase II Assessment Report

Order to the Proponent to develop an Elk Valley Area Based Management Plan (ABMP), which is described in section 5.1.14.

Cumulative effects of two other substances, cadmium and sulphate, were assessed by the Proponent in the RSA. The predicted concentrations of cadmium are expected to have a negligible effect on aquatic life, including benthic organisms, fish and other components of the aquatic ecosystem. Predicted sulphate concentrations may lead to low magnitude effects in the Fording River only during reclamation and closure and into the far future, because the predictions are based on upstream, reasonably foreseeable projects that would start much later and the predictions were developed without considering mitigation for those upstream projects. Neither effect is considered to be significant by the Proponent.

Summary of Mitigation Proposed in the Application

In the Application, the Proponent proposed measures to avoid or minimize effects of the proposed Project on water quality in downstream aquatic habitat and on the fish and wildlife that use the habitat. The Dry Creek Water Management Plan [mitigation (i) below] was modified during Application Review, and the final proposed mitigation is discussed in section 5.1.3. Measurable and enforceable conditions were developed after review by EAO and the Working Group, which are also summarized in section 5.1.14.

Mitigation Proposed in the Application for Residual Effects of the Proposed Project

A selected list of proposed mitigation is included below, and a full list can be found in the Application, Table F2-1:

• Minimize the proposed Project footprint (including the size of the external waste rock spoil) through backfilling of pits, storing of waste at Phase 1 sites and making best use of existing facilities (e.g., utilize existing sediment management system in Line Creek watershed); • Minimize incidental spillage of waste rock to Grace Creek, unnamed creek and the east tributary of Dry Creek; • Limit placement of waste rock to the upper watershed of Dry Creek (i.e., within the areas that will drain to Dry Creek upstream of the east tributary confluence) and the existing disturbed area of Line Creek, so that runoff through waste rock can be directed to existing or planned water management infrastructure; • Where practical, direct other mine-affected surface water runoff to existing or planned water management infrastructure (e.g., sediment pond);

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• Where surface water runoff cannot be directed to water management infrastructure, mitigate potential sources of erosion and sediment generation by directing surface runoff from active mining areas to areas with natural vegetation buffers; • Mitigate potential sources of erosion and sediment generation through application of Best Management Practices (BMP) and engineering design of water management facilities; • Use progressive Reclamation to mitigate changes in surface runoff patterns; • Design the Project pit lakes such that they are not suitable for the establishment of aquatic ecosystems (i.e., steep rock walls, no designed lentic areas, difficult access to surrounding vegetation); • Build and operate the Dry Creek selenium active water treatment facilitiy to reduce selenium loading; and • Once the mine is in operation, direct as much mine-affected water as possible (up to 5,000 m3/day) to the Dry Creek selenium active water treatment facility.

Mitigation Proposed in the Application for Cumulative Effects of Selenium in the Elk Valley

At the existing LCO mine, the Proponent has started constructing a water treatment facility to mitigate the potential cumulative effects of selenium. Owing to this facility, the Proponent predicted in their Application that when the water treatment facility at LCO is operating, the proposed Project would not contribute to the cumulative effects of selenium in the Elk Valley. The Proponent also recognizes that the increasing selenium trend in the Elk River watershed must be stabilized and reversed. As a result, in the Application the Proponent committed to develop and implement a Valley-wide Selenium Management Action Plan. The Valley-Wide Selenium Management Action Plan would include a comprehensive valley wide approach to selenium mitigation and monitoring at existing and future operations. The Proponent predicted that the plan would meet the objective of stabilizing and reducing selenium levels in the Elk Valley. To stabilize and reduce selenium levels, contributions of selenium from the five existing coal mines in the valley must be reduced, and new net contributions from proposed expansions of the existing mines must not occur. The Valley-Wide Selenium Management Action Plan has been superceded by a Minister’s Order to the Proponent, requiring them to develop an Elk Valley ABMP. This plan is intended to stabilize levels of contaminants in the Elk River watershed and downstream, establish short-term, medium-term and long-term water quality targets and timeframes for the Fording River, Elk River and Lake Koocanusa, and define an implementation plan for meeting those water quality targets and timeframes.

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5.1.14 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, water quality issues were raised by the Working Group, First Nations and members of the public. These issues, the Proponent responses and EAO’s assessment of the adequacy of responses are detailed in Appendix II. Key issues and responses are discussed below.

A time limit suspension was initiated on July 19, 2012, to allow additional time for the Proponent to resolve water quality related issues identified by ENV, and to refine the commitment for developing a cumulative effects management framework for the Proponent’s operations in the Elk Valley. The key suspension issues identified by ENV included:

• receiving environment targets for Selenium, including: what they are intended to achieve, how and when they will be set (short versus long term), and how they will be used; • the proposed Valley-Wide Selenium Management Plan, and how it may or may not be part of the short or longer term resolution of the receiving environment targets issue; • receiving Environment Targets for other contaminants that would exceed BC’s WQG; • managing possible effects related to mixtures of contaminants near, at or above BC’s WQG; • calcite impacts, including: predictions and mitigation/management options; and • Selenium treatment, including: what is currently achievable for “end of pipe” concentrations, planning for installation including size and timing, availability of contingencies to deal with uncertainties (and what can be done if the treatment facility does not perform as predicted).

The results of the discussions held during the time limit suspension are summarized below.

Water Quality Modeling and Predictions

Selenium Concentrations in West Slope Cutthroat Trout Eggs

The bioaccumulation model developed by the Proponent to predict selenium concentrations in west slope cutthroat trout eggs for given water concentrations applies to moving (lotic) water. ENV identified a number of questions and concerns related to the model, and uncertainties relevant to its use. ENV suggested that a more conservative approach would involve using the Proponent’s model for still or very 38 August 2013 Line Creek Operations Phase II Assessment Report

slow-moving (lentic) water instead, to better emulate actual conditions encountered by fish in the river system. During the time limit suspension expert meetings and a workshop were held to discuss and to resolve outstanding concerns with the model and the Proponent’s predictions.

With some changes and additional analyses to explicitly describe some of the uncertainties in the model, the model itself has been deemed acceptable by ENV staff for the prediction of levels of selenium in living tissue based on water concentrations of selenium. Agreement was not reached between the Proponent and ENV on the levels of selenium that would be considered harmful to various forms of aquatic life, and levels that would be protective of aquatic life.

Selenium Concentration in the Fording River Downstream of Dry Creek

The predicted concentrations of selenium in the Fording River downstream of Dry Creek were generated for two scenarios:

1) Revised Dry Creek Water Management Plan; and 2) Taking into account the revised Dry Creek Water Management Plan plus all mitigation and future developments considered in the Valley-wide Selenium Management Action Plan (which has been superseded by a Ministerial Order to the Proponent to prepare an Elk Valley ABMP (described further along in this section).

Environmental Management Levels

The current concentrations of selenium, sulphate, nitrate and cadmium exceed BC’s WQG in much of the Elk River watershed. These concentrations would increase as a result of the proposed Project, and ENV and MT raised concerns regarding the potential effects of these increased levels. Since Site Specific Water Quality Objectives have not yet been developed for these contaminants, ENV advised that the Proponent could propose science-based Environmental Management Levels (EMLs) as interim benchmarks to assist with the assessment of potential impacts from the proposed Project. The proposed EMLs would be derived to provide an appropriate level of protection to sensitive species and life stages, and would represent concentrations below which adverse effects to aquatic life are not expected to occur.

The Proponent proposed EMLs for each of the substances, which are provided in the sections below. The Proponent developed proposed EMLs after receving guidance from ENV in October 2012, but ENV was not satisfied that their guidance had been followed. Furthermore, the proposed EMLs are based on individual toxic effects of each contaminant, and do not consider cumulative effects, including additive or antagonistic 39 August 2013 Line Creek Operations Phase II Assessment Report

effects resulting from the mixture of contaminants or effects of physical habitat alteration resulting from mining activities. ENV staff and external reviewers concluded that the proposed EMLs were not protective of aquatic resources in the Elk Valley, and there would be a likelihood of adverse environmental impacts. ENV recommended that additional toxicity testing and further discussions would be needed to identify appropriate EMLs. These discussions will be continued with the Technical Advisory Committee for the Elk Valley ABMP during the development of the short, medium and long-term concentration targets and timeframes for selenium, cadmium, nitrate and sulphate. The Ministerial Order for the Elk Valley ABMP also requires the Proponent to calculate site specific water quality objectives in accordance with ENV processes for the purpose of understanding environmental risk and for developing the medium and long-term concentration targets.

Dry Creek Water and Selenium Management

Capacity of the Treatment Facility

The capacity of the proposed Dry Creek water treatment facilitiy was discussed at length, and was increased as a result. In the Application, the Proponent proposed a 5,000 m3/d capacity. The primary purpose of the water treatment facilitiy would be to remove selenium, although if it is technically and economically feasible to do so, the Proponent would also incorporate technology that would treat all parameters of concern. ENV suggested that the 5,000 m3/d capacity may not be sufficient, and Ministry of Energy and Mines (MEM) requested that additional information and commitments be provided to achieve higher efficiencies of selenium removal and better targets for water treatment facilitiy effluent quality.

The Proponent responded that the 5,000 m3/d capacity would maximize the amount of time that the facility would operate at full capacity, and conversely minimize the amount of time that the facility would operate below design capacity. This would be the most efficient use of the capital investment required to construct and operate the facility.

Concerns were raised by ENV and Environment Canada that there are currently no full-scale selenium water treatment facilities in the Elk Valley or elsewhere, and it is uncertain to what level selenium can be reduced at full-scale operations. The Proponent is confident that they could treat effluent and discharge to Dry Creek to an average monthly concentration of 20 µg/L. The Proponent’s overall objective for the Dry Creek selenium active water treatment facilitiy would be to reduce selenium concentrations to the maximum extent possible.

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Target Selenium Concentration in Dry Creek

During the time limit suspension, meetings and discussions were held to further evaluate appropriate selenium treatment and potentially achievable concentrations of selenium in the effluent. The Proponent’s target average annual selenium concentration of 20 µg/L in treated effluent that would be discharged into Dry Creek, was from the perspective of ENV, MEM, Environment Canada, EPA and MT, too high relative to BC’s water quality guideline for protection of aquatic health of 2 µg/L. In response, the Proponent revised the target to a receiving environment selenium concentration of 10 µg/L.

Revised Dry Creek Water Management Plan

To achieve the revised receiving environment target selenium concentration of 10 µg/L (0.01 mg/L), the Proponent revised the Dry Creek Surface Water and Selenium Management Plan. Multiple changes were incorporated in the plan that would mitigate effects on water quality in Dry Creek not only for selenium, but also for other mine-related contaminants including cadmium, sulphate and nitrate. Figure 4 below shows the general arrangement of the water management facilities described in the plan. The revised plan would direct all mine affected water to the Fording River, and would include:

• relocating the sediment control and water treatment facilities further upstream in the Dry Creek watershed; • a diversion located near the toe of the upper Dry Creek rock drain to capture mine affected surface and ground water; • a pipeline to convey the mine-affected water to sediment ponds in the Dry Creek Valley; • a pipeline from the sediment ponds and active water treatment facility to the Fording River:

o Prior to the commissioning of the water treatment facility, all captured mine affected water would be conveyed to the Fording River.

o During operation of the treatment facility, the bypass water (in excess of the capacity of the treatment facility) would be conveyed to the Fording River, and the treated water would be conveyed either to Dry Creek or to the Fording River, depending on whether or not the discharge of treated water into Dry Creek will allow receiving water quality targets to be met; and • a selenium active water treatment facility that would be operational in 2022. The facility would have a capacity to treat at least 7500 m3 per day of water from the

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sediments ponds, and an outfall or return channel from the treatment facility to Dry Creek in addition to the pipeline to the Fording River.

The Proponent predicts that the water treatment facility would remove sufficient selenium from mine affected water such that the 30 day mean concentration of selenium in Dry Creek would not exceed 10 µg/L. Mine affected water in excess of 7500 m3 per day would be conveyed directly to the Fording River without treatment.

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Figure 4: Dry Creek water management system. 43 August 2013 Line Creek Operations Phase II Assessment Report

Current and Predicted Selenium Concentrations

The objective of the pipeline to the Fording River would be to reduce the amount of selenium discharged into Dry Creek. The diversion would also reduce the amount of cadmium, sulphate and nitrate discharged into the creek. Up to now, Dry Creek water quality has not been affected by mining. Fording River water quality is already impacted by mining and the relative increase in selenium concentrations from the proposed Project in the Fording River between Dry Creek and Line Creek, may increase the risk of effects on aquatic life in that portion of the Fording River. Reducing the flows in Dry Creek by diverting a substantial amount of the flow to the Fording River would also reduce the amount of fish habitat in Dry Creek. This effect is discussed in this report under section 5.2.3.

The current concentration of selenium in Dry Creek is 1 µg/L. In Dry Creek downstream of the water collection system, the proposed Project would result in a maximum predicted selenium concentration of 5 µg/L prior to treatment (2021 and earlier), 5.8 µg/L following treatment (2022 - 2031), 9.9 µg/L during reclamation and closure (2032 - 2059), and 9.6 µg/L in the far future. At the mouth of Dry Creek, the maximum predicted selenium concentration would be 3.6 µg/L during operations prior to treatment, 4.3 µg/L following treatment, 4.1 µg/L during reclamation and closure, and 4.3 µg/L in the far future.

In the Fording River downstream of Dry Creek (and upstream of the Line Creek Operation), the current concentration of selenium is 42 µg/L. The proposed Project would result in a maximum predicted selenium concentration of 56 µg/L prior to treatment, and 50 µg/L following treatment, during reclamation and closure, and into the far future. With the mitigation in the upper Fording River that was proposed in the Valley-wide Selenium Action Management Plan (now superceded by the Minister’s Order to the Proponent to develop an Elk Valley ABMP), the proposed Project would result in a maximum predicted selenium concentration of 25 µg/L during operations prior to commissioning the treatment plant, 26 µg/L during operations with the treatment plant operating, 28 µg/L during relamation and closure, and 35 µg/L into the far future. The proposed mitigation in the upper Fording included two selenium active water treatment facilities at the Fording River Operations, and one at the Greenhills Operations. The Proponent intends to proceed with permitting and construction of the selenium active water treatment facilities as part of the Elk Valley ABMP.

The predicted maximum concentrations for selenium in both Dry Creek and the Fording River downstream of Dry Creek are less than the Proponent’s proposed EML for selenium of 43 µg/L. The Proponent has therefore concluded that effects to aquatic health due to changes in selenium concentrations in Dry creek and the Fording 44

River downstream of Dry Creek would not be significant. ENV does not support use of the Proponent’s proposed selenium EMLs for the Fording and Elk Rivers, and notes that further discussions are necessary in order to identify acceptable EMLs. ENV has concluded, with input from external reviewers, that the:

1. the Proponent has underestimated the risk to aquatic species; 2. the proposed EMLs are not likely protective of environmental resources in the Elk Valley; and 3. the proposed Project has the potential to result in adverse effects to aquatic life in the Elk Valley, especially in the Fording River.

Collection Efficiency

One of the most critical components of the revised Surface Water and Selenium Management Plan for Dry Creek is the requirement to ensure that seepage losses from the rock drain to Dry Creek are kept as low as possible. The Proponent’s proposed revised selenium target for Dry Creek is a maximum 30-day mean concentration of 10 µg/L. Water quality predictions provided by the Proponent indicate that to maintain selenium concentrations in Dry Creek below 10 µg/L, the mine affected water diversion structures must have a collection efficiency of 99.3 percent (0.7 percent seepage loss) and must maintain this collection efficiency throughout the life of the infrastructure. Both ENV and MEM agree that theoretically most of the proposed water management system is technically feasible, but that the ability of the proposed water diversion structure to collect mine affected water seepage to required levels is uncertain due to a number of unknowns. These unknowns relate to a lack of information on ground water movement and discharge within the Dry Creek Valley and on underlying geology near the proposed water collection structure. In the absence of this information, there is uncertainty regarding whether or not the diversion structures can be designed and built to achieve and maintain losses of 0.7 percent or less. If the proposed collection efficiency cannot be realized and maintained into the future, then the selenium target concentration of 10 µg/L would not be achievable.

Condition 10 of the EA Certificate would require that the holder provide to MEM and ENV for consideration in the permitting decisions under the Mines Act and Environmental Management Act for the Surface Water and Selenium Management Plan for Dry Creek, information that would confirm the collection efficiency and contingencies should mitigation not achieve the expected performance. If the proposed Project is issued an EA Certificate, MEM and ENV will require detailed design of the contact water collection, conveyance and sediment control systems.

45

Commencement of Operation of the Dry Creek Active Water Treatment Facility

The Proponent proposes to begin operation of the Dry Creek active water treatment facilitiy in 2022, at which time approximately half of the waste rock would have been placed in Dry Creek. MEM, MT, EPA and ENV have stated that nine years of unmitigated loadings from the proposed Project would not be reasonable when mitigation could be implemented significantly earlier and with greater efficiency. Earlier implementation of active water treatment is needed to further minimize the ecological risk and cumulative loadings to the Fording and Elk River watersheds.

The Proponent responded that for efficient operation, the active water treatment facility requires selenium concentrations greater than 20 µg/L, and the commencement of operation has been timed to coincide with a maximum monthly average concentration of 20 µg/L in Dry Creek at the intake. The Proponent noted that a 2022 start date would also allow the design of the Dry Creek facility to be informed by the learning and experience gained through the operation of the West Line Creek selenium active water treatment facility.

The revised surface water and selenium management plan for Dry Creek still proposes an implementation of water treatment in 2022, based on water quality modelling results. MEM noted that the modelling results were produced using conservative source term estimates, and that actual concentrations measured in Dry Creek spoil drainage may be different than predicted values due to uncertainties and performance variables that may influence the quality of spoil drainage over time. MEM recommended that water quality based trigger levels should be developed and used to help guide and refine decisions regarding the timing of water treatment implementation in Dry Creek, and that these triggers should be provided for permitting.

Condition 9 of the EA Certificate would require that the holder develop water quality based triggers for consideration during permitting to guide the timing of the operation of the Dry Creek water treatment facility.

Other Substances of Potential Concern

For Dry Creek, the Proponent identified five substances of potential concern during screening: cadmium, DOC, phosphorus, selenium and TDS. Nitrate and sulphate were not identified as substances of potential concern because concentrations are predicted by the Proponent to remain below BC’s WQG.

For the Fording River downstream of Dry Creek, the Proponent identified cadmium, selenium, sulphate and TDS as substances of potential concern. The Proponent predicted that concentrations of these substances in the Fording River downstream of 46

Dry Creek, would remain below the proposed EMLs. For Dry Creek, the Proponent predicted that concentrations would also remain below the Proponent’s proposed EMLs for the Fording River (no EMLs were proposed for Dry Creek). The Proponent’s conclusion is therefore that mine-affected water releases from the proposed Project would not result in significant adverse effects to aquatic life or other sensitive receptors.

ENV disagrees with the Proponent’s conclusions. ENV has completed a comprehensive review of the proposed EMLs and their derivation, along with results from preliminary toxicity testing. Based on this review, ENV has concluded that the proposed EMLs for sulphate, nitrate, cadmium, and TDS do not adequately protect aquatic resources in the Elk Valley, and represent a risk to the environment. As such, ENV does not accept the Proponent’s proposed EMLs for these contaminants in the Fording and Elk Rivers. ENV, and recommends the application of BC’s current WQG to protect freshwater aquatic life in Lake Koocanusa, and has directed Teck Coal Limited to develop alternate targets for the Elk and Fording Rivers, to be approved by the Minister of Environment through the area based planning process.

Sulphate

The current concentration of sulphate in Dry Creek is 22 mg/L. Because all mine-affected flows would be collected below the waste rock dump and conveyed to the Fording River, in Dry Creek downstream of the water collection system, the proposed Project would result in a maximum predicted sulphate concentration of 38 mg/L prior to treatment, 39 mg/L following treatment, 47 mg/L during reclamation and closure, and 45 mg/L in the far future. At the mouth of Dry Creek, the maximum predicted sulphate concentration would be 31 mg/L during operations prior to treatment, 32 mg/L following treatment, and 31 mg/L during reclamation and closure and in the far future.

In the Fording River downstream of Dry Creek (and upstream of the Line Creek Operation), the current concentration of sulphate is 256 mg/L. The proposed Project would result in a maximum predicted sulphate concentration of 346 mg/L prior to treatment, 344 mg/L following treatment, 379 mg/L during reclamation and closure, and 376 mg/L into the far future.

The Proponent proposed a hardness-dependent EML for the Fording and Elk Rivers, based on recent study of sulphate toxicity which indicates that toxicity depends on water hardness, and that as water hardness increases, toxicity decreases. The proposed EMLs are 743 mg/L (for “high” hardness of 120 – 200 mg/L CaCO3) and 425 mg/L (for “very high” hardness > 200 mg/L CaCO3). The BC guidelines (revised in 2013) for the protection of aquatic life for sulphate are 309 mg/L at hardness levels of

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76-180 mg/L (moderately soft/hard to hard), and 429 mg/L at hardness levels of 181-250 mg/L (very hard).

ENV commented that preliminary toxicity testing results suggest that the EMLs could pose a toxicity risk to invertebrates and rainbow trout. The relationship between the very high water hardness conditions found in the Fording River and sulphate toxicity has not been validated and it is unclear if the EML would protect aquatic life at high hardness levels. ENV concluded that the proposed EMLs do not appear to be protective of all sensitive receptors, nor do they provide an appropriate margin of safety to protect aquatic organisms.

Nitrate

BC’s water quality guideline for nitrate expressed as the 30 day average concentration to protect freshwater aquatic life is 3.0 mg/L. The maximum guideline concentration is 32.8 mg/L.

A large proportion of nitrate is leached from active waste rock dumps during the first year after deposition, with future concentrations from inactive dumps decaying with age of the dumps. Over the long term, the Proponent predicts a decline in the number of active operations in the Elk Valley, with a corresponding reduction in the amount of newly deposited waste rock, which will lead to a decrease in nitrate concentrations from current conditions in the Elk and Fording Rivers.

The current nitrate concentration in Dry Creek is 0.04 mg/L. In Dry Creek downstream of the water collection system, the proposed Project would result in a maximum predicted nitrate concentration of 1.9 mg/L prior to treatment, 2.1 mg/L following treatment, 0.31 mg/L during reclamation and closure, and 0.17 mg/L in the far future. At the mouth of Dry Creek, the maximum predicted nitrate concentration would be 1.3 mg/L during operations prior to treatment, 1.6 mg/L following treatment, and 0.15 mg/L during reclamation and closure, and 0.091 mg/L in the far future.

In the Fording River downstream of Dry Creek and upstream of the LCO, the current concentration of nitrate is 18 mg/L. The proposed Project would result in a predicted maximum nitrate concentration of 9.4 mg/L prior to treatment, 4.2 mg/L following treatment, 2.5 mg/L during reclamation and closure, and 0.92 mg/L into the far future. During operations, nitrate levels would exceed BC’s 30-day average water quality guideline of 3.0 mg/L even after treatment, potentially resulting in residual adverse effects that would contribute to cumulative effects downstream. ENV expressed concern that the elevated levels of nitrate could have an adverse effect on early life stages of amphibians and fish, and that nitrate concentrations would approach acute toxicity levels for caddis flies, a food source for resident fish. 48

The current concentration of nitrate at the mouth of the Elk River is below BC’s water quality guideline (30-day average) and the US EPA drinking water standard (10 mg/L). In the future, nitrate loadings are predicted to decrease from current levels, and the Proponent has stated that nitrate loadings to Lake Koocanusa would not be a concern.

Cadmium

BC’s water quality guideline for cadmium is considered an interim guideline and is based on the CCME interim guideline. Water hardness is a modifying factor in the CCME interim guideline and BC’s guideline. BC’s guideline to protect aquatic life is 0.05 ug/L at a hardness of 150 mg/L CaCO3. This is thought to represent the typical background water hardness in the Elk and Fording Rivers.

The current concentration of cadmium in Dry Creek is 0.021 µg/L. In Dry Creek downstream of the water collection system, the proposed Project would result in a maximum predicted cadmium concentration of 0.10 µg/L prior to treatment, 0.13 µg/L following treatment, 0.20 µg/L during reclamation and closure, and 0.36 µg/L in the far future. At the mouth of Dry Creek, the maximum predicted cadmium concentration would be 0.11 µg/L during operations prior to treatment, 0.14 µg/L following treatment, and 0.08 µg/L during reclamation and closure, and 0.15 µg/L in the far future.

In the Fording River downstream of Dry Creek (and upstream of the Line Creek Operation), the current concentration of cadmium is 0.52 µg/L. The proposed Project would result in a maximum predicted cadmium concentration of 0.62 µg/L prior to treatment, 0.62 µg/L following treatment, 0.65 µg/L during reclamation and closure, and 0.68 µg/L into the far future.

Cadmium levels in unnamed creek and Grace Creek would also be elevated above BC’s WQG as a result of the proposed Project, increasing from 0.021 μg/L to 0.35 and 0.18 μg/L, respectively.

A review by ENV of the toxicity data used to derive the CCME guideline for cadmium found that the Proponent’s predicted concentrations of cadmium would exceed levels shown to have adverse effects for numerous invertebrate and fish species.

The Proponent proposed the following hardness-adjusted EMLs (for a water hardness of 50 mg/L CaCO3): Fording River (0.39 µg/L); Elk River (0.25 µg/L). ENV has concerns with these proposed EMLs because data for sensitive species in the Fording River were excluded from the analysis leading to the likelihood that the EML would not be protective of sensitive species.

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The hardness-normalization was only evaluated for hardness levels between 17 and 280 mg/L CaCO3. It is uncertain whether this relationship is valid for higher hardness levels such as those typically seen in the Fording River, and no data were provided to demonstrate whether hardness levels above 280 mg/L CaCO3 continue to ameliorate cadmium toxicity, or whether the high hardness may cause osmotic stress to aquatic organisms. There appears to be an inverse relationship between cadmium and hardness in the Elk River, such that cadmium concentrations peak sharply during freshet (June and July) when hardness is lowest. Further evaluation is required to assess whether this relationship is consistently observed in the Fording River and other tributaries and how this may affect the proposed EML.

Contaminants Mixing

In addition to the risks posed by each of the above-mentioned individual contaminants, there may be an increased level of risk associated with their presence in combination. ENV raised the issue of potential increased toxicity from the potential interactions among water quality constituents, as well as the potential effects of complex mixtures on aquatic biota. It is widely acknowledged in the literature that the cumulative effects from multiple stressors are not well understood and are difficult to predict, but that effects may result at lower levels of stress than would be otherwise expected to be a concern.

In response, the Proponent initated a mixtures toxicity study, and that study is now underway. Only a few preliminary results were available at the time of writing this report. Based on the preliminary results, it does not appear to ENV that the toxicity testing demonstrates that the proposed EMLs are sufficiently protective. The Elk Valley ABMP, which the Proponent has been ordered to prepare and implement (see section below), must address the potential interactive effects of the mixture of contaminants (selenium, cadmium, nitrate and sulphate) at the target levels established for the short, medium and long-term.

Valley Wide Selenium Management

The Proponent’s original goal for selenium management in the Elk Valley, which is stated in the Application, was to keep loadings from its five existing operations plus any new expansions below 2010 levels. A proposed Valley-Wide Selenium Management Plan, based on stakeholder input as reported by an advisory panel on selenium management, would have included long term targets for stabilizing and reducing selenium concentrations in the Elk River and downstream in Lake Koocanusa. Regulatory agencies such as MEM, ENV and MT indicated that the goal should be to achieve the greatest reductions possible for contaminants such as selenium given the

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state of continued and increasing loadings in the Elk River and into Lake Koocanusa and beyond.

A draft summary report on the proposed Valley-Wide Selenium Management Action Plan was provided by the Proponent in February, 2013. The proposed Valley-Wide Selenium Management Action Plan has since been superseded by a Ministerial Order to the Proponent to develop and implement an Elk Valley ABMP (below).

Elk Valley Area Based Management Plan

On April 15, 2013, while the suspension was still in effect, the Minister of Environment issued an Order to the Proponent requiring them to prepare an ABMP for the Elk Valley pursuant to Section 89 of the Environmental Management Act. The Proponent is responsible for preparing the ABMP, and the Terms of Reference for the plan developed by the Proponent and were approved by the Minister of Environment on July 22, 2013. The Proponent must complete the ABMP and submit it for the Minister’s approval by end of day on July 22, 2014.

To remediate water quality effects such as high levels of selenium and other contaminants, from current and past coal mining activities at the Proponent’s five coal mines, and to guide future development in the Elk River watershed, including Lake Koocanusa the purpose of the plan is to describe the operational actions which will be taken by the Proponent to:

1) Immediately begin to stabilize water quality concentrations of selenium, cadmium, nitrate and sulphate, and the rate of formation of calcite in the designated area; 2) In the medium-term, reduce the rate of formation of calcite and set targets to demonstrate progressive reduction in water quality concentrations of selenium, cadmium, nitrate and sulphate in the designated area; and 3) In the longer term further reduce concentrations of selenium, cadmium, nitrate, and sulphate in the designated area to acceptable contaminant levels, and control the rate of calcite formation to acceptable levels.

The Plan must address at a minimum:

1) The impact of point and non point sources of waste; 2) Identify all substances that currently exceed provincial WQG related to the protection of the environment and/or human health in water, sediment, or biota; 3) The cumulative impacts of point and non point sources of waste;

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4) The potential interactive effects of the mixture of contaminants (selenium, cadmium, nitrate and sulphate) at the target levels established for the short, medium and long-term; 5) The impact of calcite formation; 6) The economic and social costs and benefits of addressing risks to the environment through treatment.

The environmental management objectives and outcomes of the ABMP include the:

7) Protection of aquatic ecosystem health; a) Management of bioaccumulation of contaminants in the receiving environment (including fish tissue); b) Protection of human health; and c) Protection of groundwater.

The Proponent must:

8) Immediately establish short-term concentration targets and time-frames to stabilize water quality concentrations for selenium, cadmium, nitrate and sulphate. 9) Calculate Site Specific Water Quality Objectives in accordance with ministry processes for the purpose of understanding environmental risk and for developing medium and long-term concentration targets. 10) Develop long-term concentration targets and time-frames to stabilize water quality concentrations for selenium, cadmium, nitrate and sulphate, taking into consideration at a minimum: a) Current contaminant concentrations; b) Current and emerging economically achievable treatment technologies; c) Sustainable balancing of environmental, economic and social costs and benefits; and d) Current and emerging science regarding the fate and effects of contaminants.

The long-term concentration targets must include 2 µg/L for Lake Koocanusa south of the mouth of the Elk River.

11) Establish medium-term concentration targets and time frames to demonstrate progressive improvement in water quality in a phased approach, from the short-term targets to the long-term targets. 12) Establish medium and long-term targets and time frames to reduce the rate and control the formation of calcite, and for the management of impacted streams.

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The Order establishes a technical advisory committee to guide development of the ABMP. The technical advisory committee must consist of one representative from each of the following:

• The Proponent; • The provincial government (representatives from each of the ENV, MEM, and EAO; • Government of Canada (represented by Environment Canada); • United States Government; • Government of the MT; • The KNC; and • An independent third-party qualified professional scientist.

Summary of Conditions Developed During Application Review

Conditions to address water quality and aquatic health issues developed during Application Review include:

• Requirement for an independent environmental monitor to evaluate and report on compliance with the EA Certificate and conditions and to monitor effectiveness of mitigation; • Revised Dry Creek Water Management Plan that would result in improved water quality mitigation for Dry Creek; • Detailed information on groundwater movement and seepage control for the Dry Creek water diversion must be provided to MEM and ENV for their consideration during permitting; • An Aquatic Effects Monitoring Program must be submitted to ENV for their consideration in permitting decisions; and • A Calcite Monitoring and Management Plan must be developed for ENV and MEM consideration in permitting decisions.

5.1.15 Potential for Residual Effects and Significance Analysis

The predicted concentrations of contaminants that would be released into downstream watercourses as a result of the proposed Project exceed BC’s WQG. The Proponent and ENV are not in agreement as to whether there would be residual adverse effects to aquatic life.

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The Proponent has concluded that adverse effects to aquatic life are not expected to occur because the predicted concentrations would be less than the Proponent’s proposed EMLs. ENV disagrees, and has concluded that the risk to aquatic life has been underestimated, and that the Proponent’s proposed EMLs are not likely protective of aquatic species, ecosystems and other water resources in the Elk Valley. The Environmental Quality Section of ENV considered the current state of both site-specific and global science for water quality contaminants of concern, including third-party expert review as required, and concluded that the proposed Project has the potential to result in significant adverse effects to environmental resources in the Elk Valley, especially in the Fording River.

After consideration of the conflicting conclusions of the Proponent and ENV, and given that the predicted concentrations of contaminants would substantially exceed BC’s WQG, EAO has concluded that residual adverse effects on downstream aquatic life are likely due to increased concentrations of selenium, cadmium, sulphate and nitrate and TDS.

These potential residual adverse effects and cumulative effects of selenium and other contaminants are discussed by zone of impact:

• Dry Creek; • Fording River between Dry Creek and Line Creek (approximately 10 km); and • Downstream of Line Creek (Fording River, Elk River and Lake Koocanusa).

Characterization of Potential Residual Effects on Aquatic Life The potential residual selenium effects are characterized in Table 5 below. The potential residual effects of cadmium, sulphate, nitrate and TDS are characterized in Table 6.

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Table 5: Characterization of Residual Adverse Effects of Selenium on Aquatic Life.

Fording River Downstream of Line Creek Dry Creek between Dry Creek (Fording River, Elk River & and Line Creek Lake Koocanusa)

Currently impacted Currently impacted by 3-5 Unaffected by Context by 2 upstream coal upstream coal mines mining mines (depending on the location) No net increase in selenium. West Line Creek active water Unable to treatment facility will remove Magnitude Unable to conclude conclude as much or more selenium than that generated by the proposed Project. Toe of waste Extent rock to mouth 10 km stretch of river N/A of Creek Duration Far future Far future N/A Unable to Reversibility Unable to conclude N/A conclude Frequency Continuous Continuous N/A Contributes to Cumulative No Yes No Effects?

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Table 6: Characterization of Residual Adverse Effects of Cadmium, Sulphate, Nitrate and Total Dissolved Solids on Aquatic Life.

Fording River Downstream of Line Creek Dry Creek between Dry Creek (Fording River, Elk River & and Line Creek Lake Koocanusa)

Currently impacted Currently impacted by 3-5 Unaffected by Context by 2 upstream coal upstream coal mines mining mines (depending on the location) Unable to Magnitude Unable to conclude Unable to conclude conclude Fording River (2.6 km). Toe of waste Elk River = 100 km rock to mouth 10 km stretch of river Extent Lake Koocanusa (100 km of Creek long reservoir). Duration Far future Far future Far future Unable to Reversibility Unable to conclude Unable to conclude conclude Frequency Continuous Continuous Continuous Contributes to Cumulative No Yes Yes Effects?

Context

Coal mining is the most significant human influence on the Elk River watershed, with lesser influences from forestry, tourism, agriculture, and residential and commercial development. Table 2 show the watercourses downstream of the proposed Project and the existing cumulative effects on water quality from upstream operating coal mines.

Figure 2 provides the regional context for the watershed. Dry Creek flows into the Fording River, which is a major tributary to the Elk River. The Elk River eventually discharges into Lake Koocanusa at the Canada/US border and subsequently continues in the Kootenay River in the United States. The Fording River, Elk River and Lake Koocanusa are mine-affected. Dry Creek is currently unaffected by mining

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Water quality conditions in the Elk Valley are deteriorating. Concentrations of mine-related contaminants in the Fording and Elk Rivers, and in many tributaries, exceed BC’s WQG for the protection of aquatic life. Of particular concern are selenium concentrations that are increasing in the Elk and Fording Rivers at a rate of 8 percent and 13 percent per year, respectively, and are currently 3-5 times (Elk) and 13-20 times (Fording), greater than the water quality guideline for the protection of aquatic life. Areas close to coal mine sites have much higher concentrations of selenium in the water. Selenium concentrations in Lake Koocanusa are lower, but are starting to increase with some recent samples showing exceedence of the WQG. Increasing selenium trends can be detected past Lake Koocanusa, more than 300 km downstream in the Kootenay River at Creston.

Magnitude

EAO is not able to conclude on the magnitude of potential adverse effects on aquatic life from increased concentrations of selenium, cadmium, sulphate, nitrate and TDS. Potential residual adverse effects on aquatic life could range from:

• Low magnitude, where a small percentage of a population would be affected, but there would be no significant reduction in abundance and distribution; to • High magnitude, where a sufficiently large percentage of the population would be affected such that there would be a significant reduction of local and potentially regional abundance and distribution.

A reduction in reproductive success due to selenium is the primary residual effect of concern. Selenium is different from many other contaminants because it bio-accumulates in aquatic ecosystems. Elevated selenium concentrations have the potential to cause population-level impacts on fish and wildlife due to reproductive effects. Selenium effects are often more pronounced in lentic areas (e.g., lakes and wetlands as opposed to rivers and streams), where bioaccumulation can lead to increased embryo mortalities and deformities in fish and aquatic birds.

Acute and chronic exposures to elevated levels of sulphate, nitrate and cadmium are also a concern, and present an array of risks to aquatic-dependent species including benthic invertebrates, fish, amphibians and birds.

The magnitude of residual adverse impacts on aquatic life as a result of the proposed Project is expected to be greatest in the Fording River, between the Dry Creek and Line Creek confluences. In this 10 km section of river, concentrations of contaminants are currently the highest, and would be increased by the proposed Project. In general, the magnitude of and potential for residual adverse impacts is expected to decrease

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with increasing distance (and dilution) downstream from Line Creek. The exception is the lentic (slow-moving water) environments which include the Elko Reservoir and Lake Koocanusa, where the bioaccumulation of selenium is a significant concern.

It is possible that westslope cutthroat trout populations are already affected by current water quality conditions. The selenium concentration in some tissue and egg samples collected from the Elk Valley, exceeded ENV’s recommended safe level of 11 µg/g to protect against reproductive effects. The isolated upper Fording River population, which is exposed to the highest selenium concentrations, is most at risk. Anecdotal evidence from recent fish sampling programs, and a 2010 snorkel survey, suggested to fisheries managers that precautionary measures may be appropriate for managing this species. In 2010 the westslope cutthroat trout fishery on the upper Fording River was closed when the BC Freshwater Fishing Regulations were updated, and lethal collection of westslope cutthroat trout in the Fording River drainage has been limited by BC Fish Collection Permits.

In 2012, the Proponent initiated a four-year upper Fording River westslope cutthroat trout population study, to be completed in 2015. The design and reporting for the study is overseen by a Steering Committee that includes representatives from DFO, Ministry of Forests, Lands and Natural Resource Operations (FLNR), KNC and the Proponent. Completion of the population study is required to estimate current impacts to this species from coal mining, the potential residual and cumulative effects from the proposed Project, and the significance of these effects.

There has been limited sampling of other species including fish, amphibians, aquatic feeding birds and benthic invertebrates, and little information is available for these other species regarding effect thresholds and bioaccumulation dynamics of selenium.

EAO is not able to conclude on the magnitude of potential adverse residual impacts because:

1. There is substantial disagreement as to the risk posed to aquatic life by the predicted concentrations of each contaminant.

2. In addition to the risks posed by each of the individual contaminants, there may be an increased level of risk associated with their presence in combination. A mixtures toxicity study is underway, but only a few preliminary results were available for the EA. The results will, however, inform the Elk Valley ABMP, the Ministerial Order for which directs the Proponent to address the potential interactive effects of the mixture of contaminants (selenium, cadmium, nitrate and sulphate) at the target levels established for the short, medium and long-term;

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3. There are a number of uncertainties in the predicted maximum concentrations of contaminants. For example: a. There is uncertainty regarding whether the required 99.3 percent collection efficiency of mine-affected water at the toe of the Dry Creek rock drain could be achieved, and therefore whether the Proponent could meet a maximum 30-day mean concentration of 10 µg/L of selenium in Dry Creek. This uncertainty translates into a risk that the selenium concentrations in Dry Creek would be higher than the Proponent has predicted. This information was not available for the EA. b. There is uncertainty associated with the predicted effectiveness of the proposed selenium treatment facilities on Dry Creek and West Line Creek, and, therefore, uncertainty with the predicted magnitude of residual selenium effects downstream of Dry Creek. The uncertainty arises because the technology is complex and sensitive to changes in water chemistry, and has not been proven at the scale proposed. This type of biological treatment facility has been successfully piloted at the Line Creek Operation, but on a much smaller scale. The Proponent’s research and development programs are expected to lead to improved technology for reducing selenium concentrations, and would enable the Proponent to apply adaptive management the West Line Creek selenium treatment facility would be constructed first, and is expected to be operational in 2014, while the Dry Creek facility would begin operations approximately 8 years later in 2022.

4. The Ministerial Order for the Elk Valley ABMP requires Teck Coal Limited to establish short, medium and long-term concentration targets and time-frames to stabilize and then reduce water quality concentrations for selenium, cadmium, nitrate and sulphate. The ABMP when approved and implemented is expected to reduce cumulative effects downstream of Dry Creek. The extent of the reductions, and the timeframe over which the reductions would occur are not available for consideration in the EA.

Extent

Potential adverse residual effects of the proposed Project on aquatic life due to increased concentrations of:

• selenium would occur in Dry Creek and in the 10 km section of Fording River between Dry Creek and Line Creek;

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• cadmium, sulphate, nitrate and TDS would occur in Dry Creek, the Fording River downstream of Dry Creek (~30 km), the Elk River downstream of the Fording confluence (~100 km), and Lake Koocanusa (an ~100 km long reservoir).

Potential cumulative effects of selenium would occur in Dry Creek and in the Fording River between Dry Creek and Line Creek. Potential cumulative effects of the other contaminants would occur downstream of Dry Creek, in the Fording River, Elk River and Lake Koocanusa.

Duration

Potential adverse effects on aquatic life would be long term; potentially hundreds of years after the mine closes. Selenium, sulphate and cadmium would be released from the waste rock (via precipitation and runoff) when rock dumping into Dry Creek begins, and would continue to be released until the source is exhausted. Nitrate levels, which result from blasting, would naturally decrease after closure of the mine.

Reversibility

The reversibility of potential residual and cumulative effects on aquatic life cannot be estimated without an estimate of the magnitude of residual effects. Depending on the species and ecosystem, reversibility could range from fully reversible, to partially reversible to irreversible, and will be influenced by the effectiveness and timeframe of the stabilization and reduction of contaminant concentrations mandated in the Ministerial Order for the Elk Valley ABMP.

Frequency

The potential residual and cumulative effects on aquatic life would be continuous until the waste rock source is exhausted, but would be expected to attenuate with the Elk Valley ABMP, and with time.

Significance

The significance of potential residual adverse effects and cumulative effects on aquatic life cannot be determined in the absence of an estimate of magnitude and reversibility of the effects.

West slope cutthroat trout populations in the Elk River watershed are of particular concern. West slope cutthroat trout is a federally-listed Species of Special Concern under the Species at Risk Act (SARA), and is a blue listed species in BC. The west slope cutthroat trout populations within Dry Creek and the Upper Fording River are 60

important populations as they are isolated from the lower Fording River and the Elk River by a large waterfall downstream of the mouth of Dry Creek. They are considered genetically pure, and conserving pure west slope cutthroat trout and critical habitat are essential to preserve unhybridized, ecologically-viable populations. The Elk River watershed also supports a world-class west slope cutthroat trout fishery which generates approximately $1 million in revenue to local businesses, supporting the local economy.

Bull trout are also present in the lower Fording River, Elk River and Lake Koocanusa. Bull trout are on the provincial blue list, and have been listed as a Species of Special Concern under SARA.

Likelihood of residual adverse effects

Residual adverse effects on aquatic life are likely. As with magnitude, downstream of Line Creek the likelihood of residual adverse effects is expected to decrease with increasing distance (and dilution). The exception is the lentic (slow-moving water) environments which include the Elko Reservoir and Lake Koocanusa, where the bioaccumulation of selenium is a significant concern.

5.1.16 Conclusion

EAO has concluded that there would likely be residual adverse effects to aquatic life, including cumulative effects, from the proposed Project.

EAO has not been able to conclude on the the magnitude, reversibility and therefore significance of these effects due to uncertainty regarding:

• the concentrations of contaminants above which adverse effects on aquatic life would be expected; • unanswered questions regarding mixtures toxicity; and • the predicted effectiveness of the proposed West Line Creek and Dry Creek selenium active water treatment facilities.

It is expected that the Elk Valley ABMP, once approved, will provide a path forward to stabilize and then reduce the increasing concentrations of contaminants from coal mining in the watercourses of the Elk River watershed, and actions resulting from the ABMP are expected to mitigate cumulative downstream effects on aquatic life from the proposed Project.

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5.2 Fish and Fish Habitat

5.2.1 Background Information

This section of the assessment report will assess potential adverse effects of the proposed Project on fish and fish habitat. The potential effects of water quality on fish are assessed in section 5.1. Dry Creek supports west slope cutthroat trout, and the rock dump in Dry Creek would eliminate a portion of fish habitat for west slope cutthroat trout, while significantly reduced flows in Dry Creek would also affect the amount of available habitat downstream of the rock dump. These effects were assessed and are reported on below.

The aquatic LSA has an area of about 190 km2 and encompasses the drainage basins of Dry Creek, Grace Creek, Line Creek and a small unnamed tributary of the Fording River that drains into the Fording River about 1.7 km downstream of the confluence of Dry Creek. The watercourses in the LSA all flow into the Fording River. The aquatic RSA has an area of about 4,390 km2, and encompasses the Elk River drainage basin and the portions of Lake Koocanusa located in Canada. The aquatic RSA delineates the area where the cumulative effects assessment for surface water hydrology, water quality and aquatic health, and fish and fish habitat was focused.

Under the Fish and Fish Habitat section of the Application (section B2.2.5), west slope cutthroat trout, bull trout, mountain whitefish and longnose sucker were the VCs assessed. For the purposes of this assessment report, all of these VCs are discussed in this section.

Field studies were conducted in spring 2009, fall 2009, winter 2010, and fall 2011 within the drainages of Dry Creek, Grace Creek and unnamed creek to address specific gaps in the available information. Field surveys focused on determining fish presence and distribution, habitat features, habitat use, and abundance and community structure of benthic invertebrate populations. The 2009 and 2010 studies focused on Dry Creek and a large tributary of Dry Creek referred to as the east tributary. Additional field studies on Grace Creek and unnamed creek were undertaken in October 2010 to assess habitat conditions and complete substrate assessments. An assessment of conditions at unnamed creek determined it was a non-classified drainage which is a watercourse that does not meet the definition of a stream. No further work on this unnamed creek was necessary.

In the aquatic RSA, the largest number of fish species is found in the Elk River mainstem (10 species) and immediately downstream of the Elk River in Lake Koocanusa (19 species). Fewer fish species are found farther upstream within the Elk River drainage. Bull trout, mountain whitefish and westslope cutthroat trout are the 62

only species that have been found in the Fording River and its tributaries. Westslope cutthroat trout is the only fish species that has been found in the Fording River and tributaries upstream of Josephine Falls. Josephine Falls is a known physical barrier to upstream fish movement between the lower and the upper Fording River. Other known or potential barriers to upstream fish movement include the Elko dam, a series of cascades just downstream of the Elko dam and beaver dams in the Fording River near the confluence of Grave Creek. Within the LSA, westslope cutthroat trout have been reported in Dry Creek, Grace Creek and Line Creek. Bull trout and mountain whitefish have also been captured or observed in Line Creek, which joins the Fording River downstream of Josephine Falls.

The Proponent described six reaches for Dry Creek. The two reaches farthest upstream (reaches five and six) would be completely covered by waste rock, and were reported by the Proponent to be non-fish bearing, but the non-fish-bearing status has not been proven. The closest three reaches to the Fording River (reaches one, two and three) were found to be fish bearing. Reach four was found to have suitable habitat, but no fish were found during the Proponent’s field surveys.

Federal Regulation of Fish and Fish Habitat

The Federal Fisheries Act defines fish habitat as “spawning grounds and nursery, rearing, food supply, and migration areas on which fish depend directly or indirectly in order to carry out their life processes”. In the Pacific Region, DFO regulates marine fisheries for salmon, in addition to other sea-coast fisheries. The Province regulates inland fisheries (e.g., resident fish and steelhead trout), including those within the watercourses potentially affected by the proposed Project.

DFO also enforces the prohibition of HADD of fish habitat (Fisheries Act section 35(1)), and the prohibition of the killing of fish by means other than fishing (Fisheries Act section 32(1)). When a proposed Project has the potential to cause a HADD, DFO applies the guiding principle of no net loss of fish habitat productive capacity, set out in DFO’s Policy for the Management of Fish Habitat. Under this principle, DFO requires the proponent to relocate or redesign the proposed development to avoid potential HADD’s, or to fully mitigate and/or compensate effects the proposed development may have on fish and fish habitat. DFO may authorize a HADD under section 35(2) of the Fisheries Act under conditions consistent with the no net loss guiding principle.

Provincial Fisheries Regulation and Management

The BC Freshwater Fisheries Program identifies the role of the provincial Fisheries Branch to “manage the allocation and use of freshwater fish through licensing, permitting, and regulation, and develops legislation and policy for effective fisheries 63

management.” Additional program goals are to “conserve wild fish and their habitats” and to “optimize recreational opportunities based on the fishery resource”. Achieving these goals requires “management actions designed to protect, maintain and restore fish stocks.”

To this end, FLNR sets angling regulations in fresh water for provincially managed species including west slope cutthroat trout. ENV plays a supporting role by providing scientific and technical advice to FLNR Fisheries on fish and fish habitat management.

Currently the provincial vision is for “Abundant and diverse populations of Westslope Cutthroat Trout that provide quality fishing opportunities.” The overarching goal is “Long-term maintenance of the species within its native range at abundance levels capable of providing sustainable benefits to society, within the context of broader ecosystem values.” The provincial management objectives are to:

• maintain the native distribution and genetic diversity of populations; • maintain wild populations at abundance levels capable of providing sustainable societal benefits; • maintain the capacity of natural habitat to meet abundance targets for populations; and • optimize sustainable recreational benefits.

5.2.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

There are five principal ways in which the proposed Project could affect fish and fish habitat:

• loss of fish habitat due to waste rock disposal in Dry Creek; • changes to surface water flows in Dry Creek; • calcite precipitation in Dry Creek; • changes to invertebrate drift; and • changes to water quality.

Loss of Fish Habitat Due To Waste Rock Disposal The Proponent predicted that 11,539 m2 of fish habitat would be lost from disposing waste rock in two upper reaches of Dry Creek (reaches five and six). The Proponent opted to offset this loss with habitat compensation, and proposed compensation options that include works in the upper Fording River. The Proponent did not find evidence of fish production in reaches five and six of Dry Creek, but treated these reaches as 64

providing viable fish habitat in the calculation of impacts. Based on this lack of fish production evidence, the Proponent:

• concluded that loss of habitat from the waste rock disposal would not likely affect the west slope cutthroat trout population that currently use the remaining reaches of Dry Creek and the Upper Fording River; and • predicted that the proposed Project would not affect the maintenance of a self- sustaining population of west slope cutthroat trout in Dry Creek and in the Upper Fording River.

The residual effect of habitat loss from the waste rock dump required the Proponent to assess the effects of reasonably foreseeable developments on fish and fish habitat. In their assessment of reasonably foreseeable developments, the Proponent acknowledged that other projects in the Elk River Valley including future mining, would cause fish habitat loss, but that in their opinion compensation would offset the losses and they predicted no effect to the maintenance of a self-sustaining population of west slope cutthroat trout in the Upper Fording River.

Surface Water Flow Changes

The Proponent predicted changes to the surface water hydrology in Dry Creek using modeling. Flow reductions in Dry Creek were predicted to occur throughout the year, although flows would continue to fluctuate in a seasonal pattern of high flow (e.g., spring) and low flow (e.g., winter) periods. The Proponent predicted that mean monthly flow conditions in Dry Creek would be reduced and would not meet the BC in-stream flow guideline threshold of 20 percent of the Mean Annual Discharge (MAD), but would exceed the targets for MAD for juvenile rearing, and would exceed the target for spawning migration access in most years.

The Proponent assessed the effects of predicted reduced flows on juvenile rearing and spawning migration for west slope cutthroat trout. They predicted that the target of 20 percent MAD for rearing during July-September would be achieved in all years, while the target for spawning migration of 200 percent MAD during May-June would be met in about 75 percent of the years. Both the frequency and duration of flows suitable for spawning migration would be reduced by the proposed Project.

Changes to the physical habitat in Dry Creek as a result of low effects,were also assessed. Flow rductions in Reach two, three and four of Dry Creek would result in a loss fo fish habitat equal to 3852 m2. The Proponent proposed to offset these losses through compensation habitat to be developed elsewhere in the upper Fording River drainage.

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The Proponent concluded in the Application that the effect of reduced flows on the west slope cutthroat trout population would be negligible because the only known spawning area is located downstream of the treatment facility within 500 m of the Fording River and would be unaffected by flow reduction.

Calcite Precipitation Effects

Calcite precipitation in Dry Creek is expected to occur downstream of the rock dump, and was estimated by the Proponent. Calcite deposition can alter the physical characteristics of a streambed as bed materials become encrusted with calcium carbonate. As calcite deposits continue to accumulate, the physical changes to the stream bed affects fish and benthic communities. The effects primarily occur when channel morphology is altered, and bed material is cemented, reducing or eliminating available fish habitat.

In heavily affected areas, calcite precipitation can lead to streambed cementation where streambed particles become fused together. Many fish species, including westslope cutthroat trout, dig redds in streambed gravels to bury their eggs during spawning. In cementation areas, this activity may not be possible due to consolidation of streambed particles. Streambed cementation may also adversely affect benthic invertebrates that use interstitial spaces between streambed particles as habitat.

In Dry Creek, initial calcite deposition is likely to occur in Dry Creek immediately downstream of the rock dump, where fish habitat loss has already been included in the habitat compensation estimate. Over time, as the waste rock spoil increases in size, calcite deposition may also occur in the lower portion of Dry Creek, and in the Fording River. This effect could occur before the Dry Creek water treatment facilitiy is functioning. The Proponent predicts that the risk of calcite deposition in this area would be low, and could be confirmed through monitoring.

The proposed Dry Creek water treatment facilitiy would reduce the potential for calcite precipitation downstream of the facilitiy by softening the water. The risk of calcite precipitation would be negligible during the winter months, when a substantial amount (if not all) of the waste rock drainage would pass through the treatment facilitiy. The risk of calcite deposition would be greater during periods when flows in excess of 10-year flood return levels bypass the treatment facilitiy.

To address the potential for calcite precipitation in Dry Creek downstream of the sediment pond and water treatment facilitiy outlet, the Proponent has developed a Calcite Management Plan and will develop a separate habitat compensation plan to offset habitat lost due to calcite deposition if required.

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With respect to potential cumulative effects, the Proponent expects that calcite precipitation would occur downstream of waste rock spoils in other future coal mine projects in the upper Fording River drainage, and proposes to mitigate these effects with appropriate calcite management plans, similar to the Calcite Management Plan identified for the proposed Project. They concluded that the magnitude of change in fish habitat in other tributaries to the Fording River is not expected to have a significant adverse effect on maintenance of a self-sustaining population of west slope cutthroat trout.

Invertebrate Drift

Macro-invertebrates and their habitats are important to the growth and abundance of fish and were considered in the assessment. The abundance and variety of invertebrate species in Dry Creek (which was measured as invertebrate drift) is also an important measure of stream productive capacity, and serves as an indicator of river system health. The loss of fish habitat could result in a reduction of invertebrate biomass downstream of the waste rock dump by reducing invertebrate drift.

The Proponent concluded, from the results of studies of drift distances, that under normal flow conditions, the amount and variety of invertebrates present in any reach is not the result of the accumulation of organisms from the entire upper section of the stream, but rather originates from the area immediately upstream. The Proponent does not expect that the waste rock dump would affect the availability of drifting invertebrates as a food source to west slope cutthroat trout in downstream reaches, because invertebrate drift in those lower reaches and the reaches immediately upstream of them would be unaffected by the waste rock dump.

Water Quality Changes

Using the water quality and aquatic health assessment, the Proponent evaluated changes to fish and fish habitat quality. Based on the selenium assessment results, the Proponent predicted low magnitude effects on west slope cutthroat trout and on mountain whitefish located in Grace Creek and in the Fording River downstream of Josephine Falls to Line Creek. They concluded that there may be reduced reproductive success for the most exposed individual fish, but that there would be no measureable effect at the population level of either fish species.

Other contaminants including cadmium and sulphate were predicted by the Proponent to have negligible and low magnitude effects respectively. Nitrate would affect sensitive invertebrate species in Dry Creek initially, but with an operating water treatment facility as proposed, nitrate levels would be reduced to negligible levels by the water treatment.

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Overall, the Proponent concluded that the magnitude of change to fish and fish habitat would be low, and that with habitat compensation the effects on fish and fish habitat would be not significant, and there would be no net effect on maintenance of a self-sustaining population of west slope cutthroat trout in Dry Creek and the upper Fording River.

Summary of Mitigation Proposed in the Application:

In the Application, the Proponent proposed the following key measures to avoid or minimize effects on fish and fish habitat:

• Minimize the proposed Project footprint (including the size of the external waste rock spoil) through backfilling of pits, storing of waste at Phase I sites and making best use of existing facilities (e.g., utilize the existing sediment management system in the Line Creek watershed); • Minimize incidental spillage of waste rock to Grace Creek, unnamed creek and the east tributary of Dry Creek; • Limit placement of waste rock to the upper watershed of Dry Creek (i.e., within the areas that will drain to Dry Creek upstream of the east tributary confluence) and the existing disturbed area of Line Creek; Implement a Calcite Management Plan; • Include water softeners in the design of the Dry Creek water treatment facility, which will reduce the concentrations of major ions in the treated water and the potential formation of calcite in the lower reaches of Dry Creek; • Apply selenium management measures in Dry Creek to reduce selenium loading, represented herein by the Dry Creek water treatment facility; • Implement the mitigation noted for the water quality and aquatic health assessment; and • Implement a Fish Habitat Compensation Plan to offset losses or harmful alterations of west slope cutthroat trout habitat where prevention of harmful habitat alteration or loss cannot be avoided.

5.2.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, additional issues were raised by the Working Group and First Nations. These issues, the Proponent responses and EAO’s assessment of the adequacy of responses are detailed in Appendix II. Key issues and responses are discussed below.

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Cumulative Effects Assessment

DFO and FLNR Fisheries identified that the Proponent did not estimate the amount of fish habitat that has been lost over the years of coal mining in the Elk Valley area, so the overall accumulation of impacts to the present day is not known. DFO is of the opinion that the Proponent did not complete an appropriate cumulative effects analysis related to fish and fish habitat. However, it is EAOs view that the Proponent followed currently accepted methodology for assessing cumulative effects by considering the present state of fish habitat as the baseline condition. EAO is satisfied that the Proponent’s assessment was completed according to currently accepted standards for EAs.

Population Persistence

Members of the Working Group raised the concern that the manner in which the Proponent used the term population persistence to assess magnitude of effects was misleading and an inappropriate use of the term. The term is usually used when referring to populations that are at risk and represents the minimum number of animals necessary to define a recovered population, but in the context of this EA there is the implication and perception that the Proponent considers it acceptable to reduce a population to a point where it ‘merely persists’, rather than be present at sustainable levels.

The Proponent and the Working Group agreed on a revised term replacing population persistence:

• “self-sustaining and ecologically effective populations”.

The new term replaces the term “population persistence” in the Application and any related documentation and the Proponent agreed to use the new term in the future when discussing effects and their significance. The new term refers to healthy, self-sustaining populations that are capable of withstanding environmental change and accommodating stochastic population processes such as unpredictable events (e.g., several dry summers, or an exceptionally cold winter). A self-sustaining population is one that is expected to be present in perpetuity.

Habitat Loss and Compensation

At the request of DFO, ENV and FLNR Fisheries, the original Application estimates of habitat loss were revised by the Proponent. The original Habitat Suitability Index (curves were evaluated by the Working Group and updated to better reflect regional knowledge on the species and input from an ENV specialist. Field evaluation of the habitat

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suitability in the Fording River watershed will be conducted by the Proponent in consultation with fisheries agencies to verify predictions and to refine fish habitat estimates should an EA Certificate be issued, and as a condition of that certificate.

During Application Review, using the updated habitat suitability model curves, the Proponent revised their estimate for loss of fish habitat. Under the federal Fisheries Act, the HADD of fish habitat would require an Authorization from DFO and compensation would be required to offset the loss. The Proponent has committed to develop a habitat compensation plan for approval by DFO (Condition # 15). The Proponent concluded that with compensation to offset habitat loss, there would not be a significant adverse effect on fish and fish habitat because they predicted that the proposed Project would not affect the ability of west slope cut-throat trout populations to remain self-sustaining and ecologically effective.

Additionally, measures identified in the water quality section of this report such as the amount of water that would be diverted away from Dry Creek to the Fording River, and the habitat loss from constructing the water treatment facilitiy, sediment ponds and conveyance pipe line in the Dry Creek Valley, would also reduce the amount and quality of fish and fish habitat and would require compensation. These loss amounts were not determined during this EA because EAO decided that the detailed information needed could be gathered post EA during the compensation planning and permitting phase. The final fish habitat loss amounts would be calculated after further details on mitigation for water quality in Dry Creek are known, and after agreement on the assessment of habitat loss is reached among the Proponent, FLNR Fisheries and approved by DFO. The final fish habitat loss amounts would inform a final fish habitat compensation plan that would require approval by DFO.

DFO noted that the percent reduction in fish habitat associated with the proposed Project equals 43,148 habitat units out of a total of 75,769 habitat units for the entire Dry Creek watershed. A habitat unit is a number derived by multiplying habitat quality (as determined by the habitat suitability model) by the habitat quantity (i.e., the stream surface area in m2). This proposed loss of fish habitat amounts to about 57 percent of the habitat units in Dry Creek. Concerns that DFO considers not yet to be addressed include the cumulative loss of tributary streams and overall fish habitat connectivity in the upper Fording system, overall fish habitat reductions in Dry Creek, potential fish access issues in Dry Creek, potential loss of channel maintenance flows, potential loss of floodplain connectivity and the need to determine the legacy effect from past fish habitat impacts in the upper Fording River watershed (i.e., estimate how much habitat has been lost to mining over the years).

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Calcite Deposition

Calcite deposition, prediction of effects on fish habitat, and mitigation and management options were raised as issues by DFO, MEM and ENV. There was a high degree of uncertainty regarding where calcite deposition would occur in Dry Creek, how extensive it might be and how the Proponent would manage the effects.

To address the calcite deposition issues raised and their potential effects on fish and fish habitat, the Proponent prepared additional information during the time limit suspension.

The Proponent has proposed to minimize calcite formation in upper Dry Creek by maximizing the collection efficiency of the Dry Creek water diversion. The effluent discharge which conveys the mine affected water to the Fording River is not expected by the Proponent to result in calcite precipitation in the Fording River, except for the potential for localized precipitation in the immediate vicinity of the discharge to within several metres downstream. If impacts from precipitation are confirmed further downstream of the outfall into the Fording River, the Proponent proposes an adaptive management approach which could include available calcite control technology, where technically and economically feasible, or providing habitat compensation under the Fisheries Act Canada.

While the potential for calcite precipitation in Dry Creek has been reduced due to the recent water management plan revisions to convey all Dry Creek spoil discharge directly to the Fording River, the potential for calcite precipitation in Dry Creek due to seepage from the diversion/intake structure, sediment pond system, and Fording River outfall still exists. To manage this risk, the Proponent has outlined a number of measures that would be used to manage this issue including:

• industry standard practices that are applicable for the site-specific conditions to minimize seepage losses from the intake structure; • incorporation of water softening in the design of the Dry Creek Water Treatment Facilitiy; and • implementing an adaptive management plan that would allow monitoring results to direct future management actions.

Monitoring for calcite precipitation in Dry Creek would occur annually upstream and downstream of the East Tributary to identify and map the initiation, occurrence and progression of calcite deposition. This information would be used to develop a better understanding of the mechanisms and timing of calcite precipitation in receiving water courses. As well, annual inspections downstream of the outfall at the Fording River

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would be conducted to identify and map the occurrence and progression of calcite deposition in the Fording River. If calcite precipitation is identified in either Dry Creek or the Fording River, then calcite treatment technologies would be implemented to reverse the progression of calcite deposition. If calcite precipitation is not fully mitigated, then any resulting habitat alteration would be offset by habitat compensation as approved by DFO.

In addition to the calcite mitigation/management measures outlined above, the Proponent has created a new position of Superintendent of Calcite Management who will work with the Proponent’s Applied Research and Technology group to develop, evaluate, and pilot active and passive treatment options to help mitigate calcite precipitation from all of the Proponent’s operations.

ENV suggested that the potential for calcite formation represents a risk of significant adverse effects to the health of aquatic ecosystems. In the Application the Proponent recognizes that the effects of calcite precipitation are permanent, frequent, irreversible and likely, and that calcite deposition in the Elk Valley has already resulted in dramatic changes to stream channels and benthic invertebrate communities in some locations. There is currently insufficient scientific information to understand the calcite precipitation mechanism and the rate of deposition. The base case calcite control technologies proposed by the Proponent have not been reviewed and accepted by ENV and there have been no environmental impact assessments submitted to verify the effectiveness of the technologies. ENV and MEM consider that an adaptive management framework in itself is not a commitment to proactively prevent impacts from calcite.

Significant quantities of waste rock in the Dry Creek drainage and the associated risk of calcification are not predicted to occur for several years. If the proposed Project received an EA Certificate, there should be sufficient time to address calcite management inadequacies, by developing comprehensive management plans, conducting research and development, and requiring Environmental Management Act permit conditions.

ENV Conclusions and Recommendations on Calcite Deposition

Calcite deposition has already resulted in significant changes to stream channels in the Elk Valley, and poses a risk of significant adverse effects to the health of aquatic ecosystems if not addressed. There are currently no reliable tools to predict exactly when and where calcite deposition would occur because the calcite precipitation mechanism and the rate of deposition are not well understood.

If an EA Certificate is issued the Proponent would need to work with ENV to ensure that appropriate monitoring, triggers, contingencies, mitigation and prevention are in place 72

before impacts from calcite deposition occur. Any calcite control technology to be employed, including supportive environmental impact assessments, would need to be thoroughly reviewed by ENV.

The ABMP Order issued by the Minister of Environment requires the Proponent to immediately begin to stabilize the rate of calcite formation, in the medium term to reduce the rate of formation of calcite, and in the longer term to control the rate of calcite formation.

MEM Comments, Requirements and Conclusions for Calcite Deposition

MEM recognizes the difficulties and uncertainties associated with predicting the location and timing of calcite precipitation in receiving water courses. This situation is further complicated by the supersaturated conditions that can exist naturally prior to the initiation of calcite precipitation. While the measures proposed in the updated calcite monitoring plan provide the ability to detect and monitor the progress of calcite precipitation, the proposed adaptive management approach means that initiation of calcite precipitation would occur in the receiving environment before any actions are taken. MEM believes that current technology exists (e.g., acid addition) that could effectively reduce the risk of calcite precipitation to a level where it would not impact the receiving environment. MEM as part of Mines Act permitting, and ENV as part of Environmental Management Act permitting would require the Proponent to incorporate options into the calcite management plan that prevent calcite precipitation prior to initiation, as well as implementing an adaptive monitoring and management plan to confirm the effectiveness of the measures implemented.

Given the elevated potential for calcite precipitation in Dry Creek spoil discharge, there is a risk that fouling of the water conveyance system by the formation of calcite scale may occur. Due to the the water conveyance system being an integral component of the Dry Creek Selenium Management Plan, MEM believes that measures should be established to prevent the formation of calcite in conveyance structures, monitor the progress of calcite precipitation if it does occur, and conduct routine scale removal maintenance, as required. These measures would be included as a Mines Act permit condition.

Summary of Mitigation Developed During Application Review

The following key measures developed during the EA to further avoid or minimize or offset effects on fish and fish habitat would be implemented by the Proponent:

• fish and fish habitat compensation;

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• based on a revised habitat suitability model, the estimate of habitat that would be affected by the proposed Project was increased, resulting in an increase to the amount of habitat compensation that must be provided; • further work on validating the fish habitat suitability model would be required (condition 13); • undertake a westslope cutthroat trout population study of the Upper Fording River (condition 16); and • an in-stream flow needs study to refine estimates of changes in fish habitat quality and quantity that would result from changes in stream flow in Dry Creek (condition 14). 5.2.4 Potential for Residual Effects and Significance Analysis

Residual effects on fish and fish habitat would occur if there is a difference between the habitat lost due to direct placement of rock in Dry Creek and flow reduction, and the ability of the Proponent to compensate for that habitat lost. This significance analysis is based on the assumption that habitat lost would be fully compensated by the Proponent.

Characterization of Potential Residual Effects on Fish and Fish Habitat

The potential residual effects of habitat loss are characterized in Table 7 below.

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Table 7: Characterization of Residual Adverse Effects of Habitat Loss on Fish and Fish Habitat. Downstream of Dry Fording River Creek (Fording River and between Dry Dry Creek tributaries, Elk River and Creek and Line tributaries & Lake Creek Koocanusa)

Due to the legacy of mining in the Elk River Unaffected by Unaffected by valley, fish habitat lost due Context mining mining to past mining and currently operating mines, is not known. Magnitude High N/A N/A Extent Dry Creek N/A N/A Duration Far future N/A N/A Not reversible where waste rock has been Reversibility deposited, and N/A N/A reversible in the remainder of Dry Creek Frequency Continuous N/A N/A Contributes to Cumulative Yes N/A N/A Effects?

Context

The proposed Project is located in an intensively managed area (Elk River Valley) that includes a long history of mining and processing facilities, extensive forestry activities including logging, road building and silviculture. These activities continue today. Fishing is a regulated activity within the Elk River and Fording River watersheds, but it is currently prohibited in the Upper Fording River.

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Presently it is unknown if the west slope cut-throat trout population located upstream of Josephine Falls in the Upper Fording River is sustainable. This genetically isolated population of west slope cut-throat trout is considered to be of high importance by FLNR (Fisheries) and DFO, and is vulnerable due to its isolation and limited habitat, and the accumulated reductions of habitat (tributary streams) due to mining. The amount and distribution of fish habitat lost due to past mining is not known, and DFO and FLNR have stated that loss of tributaries to the Fording River has reduced the amount of small stream habitat that may be critical at certain stages in the life cycle of west slope cut-throat trout.

The Proponent in collaboration with DFO, FLNR fisheries, university experts and KNC, is undertaking a fish population study of the Upper Fording River to better understand the population status. Results will be reported annually, with year one results reported in 2013 and the final results of the study reported in 2016.

Magnitude

EAO has determined that there would be a high magnitude residual effect on fish and fish Habitat in Dry Creek. A portion of Dry Creek would be covered with waste rock, which would eliminate an estimated 15,539 m2 of fish habitat and would reduce the food available for downstream fish by reducing inverterbrate drift, resulting in a high magnitude residual effect. Dry Creek flows would also be diverted to the Fording River, which would reduce flows in Dry Creek and further reduce the remaining fish habitat in Dry Creek, including the confirmed spawning areas near the Fording River. Habitat compensation is required under DFO policy, and EAO anticipates that the habitat losses would be addressed in the Fish Habitat Compensation Plan that must be developed in consultation with the KNC and approved by DFO.

Extent

Potential effects on fish and fish habitat are considered to be local and confined to Dry Creek in the immediate area of the proposed Project.

Duration

Loss of fish habitat in Dry Creek from the rock dump would begin when waste rock is first scheduled to be dumped in the creek and the loss would be permanent.

Reversibility

The loss of fish habitat in Dry Creek from the rock dump would not be reversible, but losses due to flow reduction are reversible.

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Frequency

The residual effects on fish and fish habitat would be continuous and permanent in the area of the waste rock dump, but flow effects would cease when flow diversion from Dry Creek ends.

Significance

West slope cut-throat trout populations in the Elk River watershed are of particular concern. West slope cut-throat trout is a federally-listed Species of Special Concern under SARA, and is a blue listed species in BC. The west slope cutthroat trout populations within Dry Creek and the Upper Fording River are important populations as they are isolated from the lower Fording River and the Elk River by a large waterfall (Josephine Falls) downstream of the mouth of Dry Creek. They are considered genetically pure, and conserving pure west slope cut-throat trout and critical habitat are essential to preserve unhybridized, ecologically-viable populations. Years of mining have reduced the amount and quality of habitat in the Upper Fording River and the proposed Project would pose a risk to furher loss of habitat.

The Elk River watershed also supports a world-class west slope cut-throat trout fishery which generates approximately $1 million in revenue to local businesses, helping to support the local economy.

EAO predicts that there would not be significant adverse effects to fish and fish habitat due to condition # 15 that would require compensatory habitat for the habitat that would be lost in Dry Creek. The Proponent would be required to obtain a HADD authorization from DFO that would determine the amount and type of compensatory habitat required.

Likelihood of Residual Adverse Effects

Fish habitat in upper Dry Creek where the waste rock would be dumped would be lost permanently, and reduced flows in Dry Creek would also reduce the amount of available habitat. Fish habitat compensation is expected to offset those losses, however, there is a risk that fish habitat compensation in the Upper Fording River would not successfully replace the type of habitat that would be lost, in which case there could be a net decrease in fish habitat and an adverse effect on fish habitat.

5.2.5 Conclusion

This conclusion is regarding the potential effects of the proposed Project on fish and fish habitat. As referenced at the beginning of section 5.2, the potential effects of water quality on fish have been assessed in section 5.1.

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EAO anticipates that although compensation of “like for like” habitat is unlikely, the lost habitat would be satisfactorily offset by compensatory habitat that would be constructed under a habitat compensation plan that would be approved by DFO. Based on the above analysis and having regard to the certificate conditions which would become legally binding if an EA Certificate is issued, EAO concludes that the proposed Project would not have significant adverse effects on fish and fish habitat.

5.3 Vegetation and Wildlife

5.3.1 Background Information

Vegetation

The VCs listed in Table 8 below are taken from the Vegetation section of the Application (section B2.3.2). The Proponent selected the ecosystem-level vegetation VCs because of their importance and value for conservation, biodiversity, habitat for rare plants and wildlife, and linkages to hydrology. Some plant VCs were selected primarily because they are species of conservation concern that are listed by provincial or federal agencies, and were identified within the LSA through field surveys. Species-level VCs were also selected because of their potential sensitivity to proposed Project development and to development of past, present and future projects. Traditional use species VCs included in the vegetation assessment are key plant species of interest identified by KNC.

Table 8: Vegetation Assessment Valued Components.

Vegetation Valued Component Ecosystem Level Wetlands ecosystems Riparian ecosystems Old growth forests High-elevation grassland/herb ecosystems Species Level – Listed Plant Species Parry's townsendia (Townsendia parryi) pink agoseris (Agoseris lackschewitzii) Sutherland's larkspur (Delphinium sutherlandii) whitebark pine (Pinus albicaulis) Species Level – Traditional Use Species black huckleberry (Vaccinium membranaceum) Canby's lovage (Ligusticum canbyi) and/or verticillate-umbel lovage (Ligusticum verticillatum) shaggy mane (Coprinus comatus)

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The vegetation and wildlife assessments used the same RSA which is defined by the Proponent as the boundary of the provincial wildlife management unit 4-23, and covers 332,321 ha in the Elk Valley watershed. The RSA was chosen to account for incremental and cumulative effects from the proposed Project and includes previous, existing and reasonably foreseeable developments in the Elk Valley. The vegetation and wildlife LSA covers 3,026 ha and is largely defined by a 500 m buffer around the proposed Project footprint. In areas of potential run out (i.e., rock fall that may occur as a result of normal mining activities), the boundary was extended to capture the potentially affected area. The primary purpose of the buffer zone is to consider potential effects of the proposed Project on wildlife that are not related to disturbance of vegetation or soils (e.g., sensory disturbance from noise). The temporal boundaries are defined by the life cycle of the proposed Project and are described previously in section 4.4 of this report.

The LSA is characterized by high mountain ridges and incised valleys ranging in elevation from 1500 m to 2500 m above sea level. The mean annual precipitation ranges between 600 and 900 mm, and mean annual temperatures range between 0° and 5° C. Terrestrial ecosystem mapping was conducted for the LSA, and included a field study program in the LSA implemented during June 9-12, 2009, August 5-8, 2009, and July 28-29, 2010, with the objectives of ground-truthing maps, describing the vegetation and ecosystems, and searching for listed plants and ecological communities. The field studies were conducted following accepted BC provincial standards. A broad, ecological landscape classification map was developed to facilitate comparisons between the LSA and RSA.

A geographic information system was used by the Proponent to calculate and summarize existing and potentially impacted habitat areas, by species habitat requirements and ecosystem type. Ecosystem level VCs account for about 11.5 percent of the total LSA area. In the LSA, wetland ecosystems cover 12.4 ha (0.4 percent) distributed over 7 wetlands or complexes, and riparian ecosystems are mainly confined to the valley bottoms associated with streams and cover 96 ha (3.2 percent). Old growth forests, which were described in the Application as forests greater than 140 years old, cover 100 ha (3 percent) of the LSA, and high elevation grassland ecosystems in the LSA cover 156 ha (5 percent).

Wildlife

The VCs listed in Table 9 below are taken from the Wildlife and Wildlife Habitat section of the Application (section B2.3.3). This VC list represents a subset of wildlife species that would likely be affected by the proposed Project. These particular species were chosen based on input from FLNR and KNC, their proximity to the proposed Project and 79

potential for direct effects, rare or endangered status, or as representatives of the array of habitats within the LSA.

Table 9: Wildlife Assessment Valued Components.

Wildlife Valued Components

Mammals Grizzly bear (Ursus arctos) Canada lynx (Lynx canadensis) Wolverine (Gulo gulo) American marten (Martes americana) Elk (Cervus elaphus) Bighorn sheep (Ovis canadensis) Least chipmunk (Neotamias minimus) Columbian ground squirrel (Spermophilus columbianus) Birds Northern goshawk (Accipiter gentilis) Olive-sided flycatcher (Contopus cooperi) American pipit (Anthus rubescens) American dipper (Cinclus mexicanus) White-tailed ptarmigan (Lagopus leucura) Invertebrates Gillette’s checkerspot (Euphydryas gillettii)

The spatial and temporal boundaries for wildlife and wildlife habitat are the same as described above for vegetation.

LSA field surveys for birds and terrestrial mammals were conducted in 2009 and 2010 to provide site-specific information for a detailed assessment. Survey types included ground plot surveys, winter snow tracking surveys and breeding bird surveys, with incidental wildlife observations recorded for all survey types. All surveys were conducted according to accepted BC standards.

In conjunction with vegetation plot surveys, the Proponent conducted wildlife surveys in early summer (June 9 to 12, 2009) and late summer (August 5 to 8, 2009) to capture potential in-season variation among wildlife-habitat relationships. A total of 35 wildlife plot samples were completed (15 in early summer and 20 in late summer). Winter snow tracking surveys were conducted from January 8 to 10, 2010. Breeding bird presence and distribution within the LSA were assessed using point counts, with 63 breeding bird point counts in total completed from May to July 2010.

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The Proponent developed models for wildlife species based on the vegetation classifications developed in the vegetation assessment, to predict potential effects of habitat alteration on wildlife populations, evaluate land management alternatives on selected VCs, and estimate resource selection by others. The wildlife VCs modeled included grizzly bears, Canada lynx, elk, Rocky Mountain bighorn sheep, wolverine, American marten, and olive-sided flycatcher. For each of the wildlife VCs not modelled (except Gillette’s checkerspot), impacts were assessed over broad classes of habitat that could contain potentially suitable habitat. The Proponent did not use a model or habitat associations for Gillette’s checkerspot because habitats used by this species are poorly understood and more detailed data would be needed than those currently available from the maps.

The LSA contains many of the wildlife species present in the RSA. The wildlife habitat in the LSA is diverse, spanning a broad elevation gradient and encompassing a variety of ecological communities including forested ecosystems (73 percent), sparsely vegetated and non-vegetated (15 percent), high elevation grasslands (8 percent), and avalanche tracks (3 percent).

Of 58,538 ha of a legally established ungulate winter range suitable for moose, elk and deer, 352 ha (less than one percent) are located within the LSA. More details on individual species and baseline information can be found in the Application in Annex J.

Grizzly bears are considered by BC to be vulnerable to extirpation or extinction and are also considered a species of special concern federally, though they are not considered at risk under the federal SARA. The best available estimates indicate that there are approximately 16,000 grizzly bears in BC. Grizzly bears are present in the LSA during the summer months, but it is not known if they hibernate in the LSA during winter. Grizzly bears have large home ranges and the Proponent surmised that the LSA would comprise only a small portion of the landscape covered annually by an individual bear. No estimates were provided in the Application for the number of grizzly bears likely to occur in the RSA, but for the Southern Rockies Grizzly Bear Population Unit (8306 km2) which includes the RSA, the population is estimated at 304 grizzlies.

Canada lynx are not considered to be at risk and while considered secure throughout the Province, the lynx distribution in southern BC may be shrinking. Canada lynx are present in the LSA.

The BC government considers wolverines to be vulnerable to extirpation, and they are considered to be of special concern in BC by the Committee on the Status of Endangered Wildlife in Canada, though they are not listed in Schedule 1 of SARA. Similar to grizzly bears, wolverines have very large home ranges, and though they are

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known to occur in the LSA, the LSA would likely form a small portion of the area covered by an individual wolverine. However, wolverines are closely associated with ungulate ranges and ungulates are abundant in both the LSA and RSA.

American marten are considered widespread, abundant and secure by BC and are not listed federally in BC. They are a forest dependent species and are found in forested habitats throughout the LSA. Marten require forested habitats with structural complexity, and generally avoid open habitats, but they will cross open areas.

Elk are not at risk federally, are secure provincially and are a valuable big game species managed for hunting and viewing. Elk are present in the LSA at all times of the year.

Rocky Mountain bighorn sheep (bighorn sheep) are not listed federally. BC considers them vulnerable to extirpation or extinction, but they are managed for hunting and viewing. Bighorn sheep are frequently found within the LSA during summer and are occasionally present during winter. However, no high quality winter habitat for bighorn sheep occurs within the LSA. Data from an ongoing study of bighorn sheep in the Elk Valley indicate that bighorn sheep using the LSA during summer may migrate to Ewin Ridge during winter. Ewin Ridge is located within the RSA immediately north-northwest of the LSA and is considered one of the best winter ranges for bighorn sheep in BC.

Two sub-species of the least chipmunk occur in the Rocky Mountains and Purcell Range of southern BC, one of which is of special concern in BC, and the other is considered vulnerable to extirpation or extinction. Neither sub-species are listed federally. Occurrence of the least chipmunk in the LSA is not known, and the Proponent did not attempt surveys directed toward confirming their presence or absence. These sub-species are confined to subalpine and alpine habitat in the 1,945 to 2,320 m elevation range due to interspecific competition (i.e., competition with other chipmunk species) and could be present in the LSA. The Proponent estimated suitable habitat at 177 ha (6 percent) for the LSA and 23,807 ha (7 percent) for the RSA.

The Columbian ground squirrel is not listed federally and is considered secure by BC. They are distributed throughout southeastern BC where suitable habitat is present (i.e., high grassy plateaus, valley grasslands, alpine meadows or openings in coniferous forests such as meadows, clearcuts and burned areas) and are adaptable to disturbance. The Columbian ground squirrel is common in the LSA and the RSA, with habitats estimated to cover 240 ha (8 percent) of the LSA and 55,392 ha (17 percent) of the RSA.

The northern goshawk is listed as “not at risk” federally and is considered secure by BC. They are widespread throughout the Province, and are known to occur in the LSA. 82

Based on the amounts of old and mature forest, the Proponent estimated goshawk habitat to cover 1440 ha (48 percent) of the LSA and 105,675 ha (31 percent) of the RSA, but acknowledged that these are likely to be overestimates because only a portion of the ecosystem types selected for this estimate would supply suitable nesting, rearing and foraging habitat.

The olive-sided flycatcher is listed as threatened on Schedule 1 of SARA, and is considered of special concern, but secure by BC. They occur throughout the Province and were observed using a variety of habitats within the LSA. Typical habitat includes forested areas near riparian zones with adjacent open areas that contain snags or remnant live trees for perching and foraging. Open areas include burned forest, open to semi-open mature forest stands, forest edges near natural openings such as meadows, rivers and wetlands, or forest edges near openings such as logged areas. The Proponent’s model predicted that within the LSA there is substantial moderate-high and high quality habitat (1280 ha) and the relative proportion of habitat types is comparable to the RSA as a whole.

The American pipit is considered secure by BC and is not listed federally. They are widespread in BC and are found within the LSA. The American pipit is a high elevation grassland specialist during the breeding season and is found in open habitats throughout the year. Breeding takes place above the tree line in open, well-vegetated alpine tundra and sedge meadow communities.

The American dipper is considered secure by BC and is not listed federally. They are widespread in BC and are found within the LSA. The American dipper is highly aquatic and inhabits mountain streams and rivers in western North America. During summer, dippers nest near, and forage in, cold, fast flowing mountain and coastal streams and occasionally nest at the edges of high elevation lakes.

The white-tailed ptarmigan is considered secure by BC and is not listed federally. They occur above the tree line in alpine habitats, and are present within the LSA. No habitat models were developed for white-tailed ptarmigan, but the Proponent estimated that there are 368 ha (12 percent of the LSA) of habitat types that contain potentially suitable habitat. During the summer, white-tailed ptarmigans nest at high elevations, typically in rocky areas, krummholz vegetation, willow-dominated plant communities, or moist habitats near snowfields or streams. This VC exhibits high fidelity to breeding territory in successive years and tends to breed in a vacant territory within its natal area. In winter, individuals typically move to lower elevation habitats such as willow-sedge marsh, hairgrass meadow, sedge-grass wet meadow and krummholz vegetation dominated by willow, Engelmann spruce and fir.

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The Gillette’s checkerspot is a red listed butterfly that is rated as imperilled in BC, but is not listed federally. It is not known if they occur in the LSA and field studies did not record any observations. The Proponent did not conduct studies specifically designed to detect Gillette’s checkerspots. If Gillette’s checkerspots occur within the LSA, the Proponent predicted that they would most likely occur in open habitats within slightly dry

to moist forests and especially in open habitats within moist to wet forests.

5.3.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

Vegetation

Given the proposed Project footprint, 50 percent of the wetland ecosystems in the LSA (6 ha, including 2 ha of pink agoseris and lovage habitat) would be lost. Four ha of wetlands would be directly removed, and 2 ha would be affected by reduced groundwater discharge. It is highly uncertain whether wetland restoration could succeed.

Of the 96 ha of riparian ecosystems occupying the LSA, 20 ha (21 percent) would be removed in the upper reaches of Dry Creek. Surface water and pit water that would be directed to the Dry Creek rock drain would reduce the amount of groundwater discharging to Dry Creek, Grace Creek, unnamed creek and adjacent riparian areas. This reduction in groundwater discharge could affect the hydrological conditions of the riparian ecosystems in these areas.

The Proponent completed groundwater modelling to estimate the reduction in groundwater discharge to riparian ecosystems that are situated outside of the mine footprint. The modelling predicted that groundwater discharging into riparian ecosystems along Dry Creek (downstream of the rock drain) and Grace Creek (west side of the LSA) would be reduced by 8 percent during operations when surface water and pit water would be directed elsewhere. It is unknown what effect these reduced discharges would have on the riparian ecosystems.

All surface water from the upper Dry Creek watershed affected by the mine would be diverted to a pipeline for about 2 km alongside Dry Creek to the sediment pond, reducing flows in Dry Creek along this section for the duration of water treatment facility operation. Only the East Tributary would provide water to Dry Creek above the sediments ponds and water treatment facilitiy. Attenuations in stream flow could affect a small area of riparian ecosystem if substantial changes to the hydrologic regime occur. It is uncertain whether or not reduced flows would have a measurable effect on riparian ecosystems.

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The Application reports that old growth forests cover 100 ha (3 percent) of the LSA and 42,255 ha (13 percent) in the RSA. Construction and operations would remove 29 ha of coniferous old growth forest (29 percent of the LSA total). There is potential that reduced soil quality and quantity would affect the ability to regenerate old growth forests in the long-term. The Proponent plans to reclaim the forests, but reclaimed soil material contains less organic matter, which is important for moisture and nutrient retention. The Proponent asserts that based on their reclamation research and field monitoring, forests can be established on reclaimed soil if proper reclamation techniques are used, and that the end land use objectives for the proposed Project can be achieved. The Proponent’s monitoring data indicate that reclamation success may benefit from salvaging better soil types and selective soil placement.

High-elevation grassland/herb ecosystems cover 147 ha (5 percent) of the LSA and they cover 12,873 ha (4 percent) of the RSA. The proposed Project would remove 92 ha of these ecosystems (63 percent of the LSA total). As with old growth forests, wetlands and riparian areas, successful reclamation and replacement of these important ecosystems is uncertain. The Proponent has monitored some nearby small scale trials over a 20 year period and has seen some success, but not on the large scale necessary to replace comparable amounts of in kind grassland habitat. The Proponent is planning to initiate long term trials at the adjacent LCO mine site to evaluate reclamation success of these ecosystems at a larger scale.

Areas that include habitat for Parry’s townsendia, Sutherland’s larkspur, whitebark pine, black huckleberry, and shaggy mane will be removed, but the Proponent plans to include these species in reclamation.

Vegetation Cumulative Effects

The cumulative effects assessment in the Application section 2.3.2.4.3, predicted losses to VC’s as summarized in Table 10.

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Table 10: Cumulative losses to VCs from reasonably foreseeable projects and the proposed Project before reclamation.

Percentage Amount of Valued Component Decrease in Decrease (ha) the RSA

Ecosystems Wetland Ecosystems 35 6 Riparian Ecosystems 103 1 Old-growth Forest 401 <1 High Elevation Grassland/herb 96 <1 Ecosystems Individual Species Parry’s townsendia 346 <1 pink agoseris 35 6 Sutherland’s larkspur 444 <1 whitebark pine 277 1 Traditional Use Species black huckleberry 2336 1 lovage 43 2 shaggy mane 650 6

Wetlands would not be reclaimed in the proposed Project area or for reasonably foreseeable developments which would lead to a cumulative permanent loss of the entire 35 ha of wetlands affected.

The Proponent predicts that 188 ha of high elevation grassland/herb ecosystems would be reclaimed in the proposed Project area and future development areas leading to a net increase over the long term, but the quality of these reclaimed ecosystems is unknown due to uncertainties for reclamation success of these ecosystems at a large scale.

Suitable rocky microhabitat would be created for Parry's townsendia in the proposed Project area and future development areas within reclaimed grassland/herb ecosystems, exposed land and sparsely vegetated areas. The Proponent predicts that the extent of suitable habitat for Parry's townsendia that would be created in the 86

proposed Project area and in future development areas would exceed the 346 ha of habitat lost.

Sixty-one hectares of Sutherland's larkspur habitat in the proposed Project LSA, and 5,435 ha in future development areas would be reclaimed prior to 2031, which the Proponent predicts would result in a net increase of this habitat type.

A total of 30 ha of whitebark pine habitat would be reclaimed in the future development areas in addition to 89 ha in the proposed Project LSA., resulting in a net loss of 158 ha of whitebark pine habitat.

The Proponent predicts that 1,787 ha of suitable black huckleberry habitat would be reclaimed in the proposed Project area and future development areas, which would result in a net decrease of 549 ha for this habitat type. The abundance and quality of reclaimed black huckleberry habitat is not certain, but the Proponent stated that they are studying the success of black huckleberry reclamation and would use knowledge gained from that research.

The Proponent did not propose any active reclamation for lovage habitat (43 ha decrease), though habitat may be created indirectly by topographic changes and natural processes in the reclaimed landscape.

The Application states that a total of 4,600 ha of suitable shaggy mane habitat would be reclaimed in the proposed Project area and future development areas prior to 2031, exceeding the amount of suitable habitat lost (650 ha) by 3950 ha.

Wildlife

The proposed Project would remove 1142 ha of wildlife habitat by the end of mining in 2031. The Proponent would reclaim the mined site, but the quantity and quality of future wildlife habitats would be substantially different from the currently existing habitat.

The Application states that no grizzly bear mortality has been reported as a direct consequence of construction at other coal mines in the Elk Valley and the Proponent anticipates that there would be no direct mortality from the proposed Project. The model predicted that grizzly bear habitat values would change by reducing moderate and low quality habitats to low and very low quality. The change would amount to less than one percent of grizzly bear habitats available in the RSA (of an available 328, 508 ha) with no habitat related effects on survival or reproduction. No grizzly bear dens were found during the wildlife surveys, but to minimize effects on bears in dens, the Proponent would clear areas that have potential denning sites outside of the denning period, or

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they would conduct ground surveys for active dens if clearing were to occur during the denning period.

The Application predicted that 894 ha of high and moderate suitability wolverine habitat would be converted to low suitability habitat, but at the RSA scale this represents less than one percent of wolverine habitat. Wolverines cover large home ranges, avoid human activity, and occur at very low density. Wolverines are likely to avoid construction activities and based on wolverine behaviour the Proponent predicted that the likelihood of wolverine mortality from construction would be very low. The Application states that no wolverine mortality has been reported as a direct consequence of other coal mines in the Elk Valley and the Proponent does not anticipate any mortality as a result of the proposed Project. Because habitat would change by less than one percent across habitat classes in the RSA, and wolverines occur at such low density on the landscape, no habitat-related changes in survival or reproduction are anticipated by the Proponent.

Habitat modelling predicted that 795 ha of high and moderate-high suitability marten habitat in the LSA would be converted to very low suitability habitat, and effective reclamation of marten habitat is uncertain. This change in habitat would affect less than one percent of the habitat available in the RSA. Marten within the LSA would be displaced and some may be killed during clearing, but overall habitat related effects on survival or reproduction in the RSA were predicted by the Proponent to be minor.

Elk would be affected by the loss of 352 ha of ungulate winter range, and modelling predicted that 943 ha of moderate and low quality elk winter habitat would be converted to very low quality elk winter habitat. The Proponent predicted that there may be a small benefit to elk, because reclaimed areas would be attractive to elk and prohibiting hunting on mine property would reduce mortality risk.

Habitat modelling predicted that 680 ha of moderate and low quality bighorn sheep habitat would be removed and reclamation would replace it with very low quality bighorn sheep habitat by 2031. However, reclaimed grasslands are anticipated by the Proponent to provide high quality habitat for bighorn sheep. Observations from the Elk Valley suggest that bighorn sheep are tolerant of human activity on and near active mines. The Proponent predicted that overall bighorn sheep habitat quality in the LSA in 2031 would decline, but habitat rated as very high quality would remain relatively constant. The Proponent surmised that the abundance of bighorn sheep wintering in the LSA would remain similar, but that their distribution may shift to reclaimed grasslands. They concluded that changes to sheep abundance and distribution in the RSA should be minor as predicted habitat quality changes at the RSA scale would be less than one percent. 88

It is not known if the two species of least chipmunk occur in the LSA, but given the small amount of habitat that would be lost (less than one percent of potential habitat in the RSA), the Proponent concluded that there would be no change in the distribution and abundance of least chipmunk.

The Application states that within the LSA, suitable habitat for the Columbian ground squirrel would decrease by 47 ha (20 percent of suitable habitat). This reduction represents a loss of less than one percent of the 56,392 ha of suitable habitat within the RSA. The Proponent also predicted that reclamation would increase the amount of suitable habitat for this VC over the long term.

Within the LSA, potentially suitable habitat for the northern goshawk is predicted to decrease by 703 ha. This reduction would be about one percent of the 105,675 ha of suitable habitat estimated within the RSA. The population level effect of habitat loss is determined by the number of nests lost. The Application reported that the number of nests present in the LSA is not known, but given existing densities calculated from the southern portion of the RSA (i.e., 1.3 nests/100 km2) the Proponent anticipates that few nests would be lost leading to a minor change to goshawk distribution and abundance in the RSA.

The Proponent’s habitat modelling predicted that 665 ha of high and moderate-high suitability olive-sided flycatcher habitat in the LSA would be converted to very low suitability habitat. At the RSA scale, this represents a change of less than one percent of the habitat supply, leading to a conclusion by the Proponent that effects on this VC would be minor.

The Application identified suitable habitat for the American pipit as high elevation grassland/herb areas. Suitable breeding habitat for the American pipit would be reduced from 77 ha to 25 ha, which amounts to a decrease of 52 ha in the LSA, representing a loss of less than one percent of suitable habitat within the RSA. The Proponent predicts that there would be little change to American pipit abundance and distribution within the RSA. American pipits do not typically re-use nest sites from one year to the next and individuals displaced by the Project are expected by the Proponent to continue breeding within the remaining suitable habitat in the RSA and LSA. The Proponent expects that loss of nests and individual adults from site clearing would be minor.

The Application estimated that the proposed Project footprint would contribute to a measurable loss of American dipper habitat quantity and quality in the LSA. A total of 21 km of 1st order streams (44 percent of baseline), 4 km of 2nd order streams (26 percent of baseline), and 2 km of 3rd order streams (29 percent of baseline) would be removed, amounting to less than one percent of potentially suitable breeding habitat

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within the RSA. Given that potential habitat lost as a result of the proposed Project would be less than one percent of available streams in the RSA, the Proponent predicted no measurable change in the abundance or distribution of American Dippers at the regional scale, and they expect that loss of nests and individual adults from site clearing would be minor.

The Application identified suitable habitat for the white-tailed ptarmigan as the exposed land grassland/herb land classes. Suitable habitat for the white-tailed ptarmigan is predicted to decrease by 143 ha in the LSA representing a loss of less than one percent of the suitable habitat available within the RSA. Most previous and existing developments in the RSA (other than mining) occur in valley bottoms, away from white-tailed ptarmigan habitat and do not act cumulatively with the Project to adversely affect ptarmigan habitat. The Proponent predicted no measurable changes to white- tailed ptarmigan abundance and distribution within the RSA because they expect this species to continue breeding within the suitable habitat outside of the proposed Project footprint, and they also anticipate that loss of nests and individual adults from site clearing would be minor.

Clearing activities would remove early successional habitats containing black twinberry honeysuckle, adversely affecting a small amount of potential Gillette’s checkerspot habitat in the LSA. Ten locations with breeding populations of Gillette’s checkerspots were previously identified in the RSA, but as none of these locations would be affected by the proposed activities, the Proponent predicted no change in abundance or distribution of this VC.

Wildlife Cumulative Effects

The proposed Project would cause residual adverse effects to all wildlife VCs, which requires the Proponent to assess the cumulative effects on those VCs. When human-caused disturbances are pooled (e.g., roads, mines and clear-cuts) across the RSA in 2031, the disturbed area would be 44,185 ha, a net increase of 819 ha representing 0.2 percent of the RSA, from 2010 conditions of 43,367 ha. The net increase would be small because many of the disturbances from reasonably foreseeable projects overlap existing disturbance (e.g., mines developed over existing exploration roads), and because 5,785 ha of reclamation at existing mine sites is expected to occur in the RSA by 2031. This estimate includes reclamation of the Proponent’s entire Coal Mountain Operations mine site.

Reclaimed sites would be primarily in early seral stages by 2031 and these early stages would have variable effects on wildlife, depending on species requirements. Species

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using grassland habitats and young forests would benefit, whereas species requiring mature and old forests would not benefit from reclaimed areas by 2031.

Proponent’s Conclusions

The Proponent concluded that adverse effects to the maintenance of self sustaining, ecologically functional plant populations and communities from all phases of the proposed Project would be limited by mine design features and by implementing management plans including the Soil Salvage Plan and the Reclamation and Closure Plan. The incremental effects of the proposed Project to vegetation VCs are predicted by the Proponent to be small, with no significant cumulative effects to plant populations or communities.

The Proponent predicted that the cumulative effects for all wildlife VC’s would not be significant, and that adverse effects to the maintenance of self sustaining, ecologically functional wildlife populations during all phases of the proposed Project would be limited by implementing the environmental design features and the policies and procedures described in the Wildlife Mitigation Plan and the Reclamation and Closure Plan.

Summary of Mitigation Proposed in the Application The Proponent proposes the following measures to avoid or minimize effects on wildlife and vegetation resources:

• Progressive reclamation during operations and reclamation as per the Reclamation and Closure Plan (Application section E1.9); and reclaiming disturbances to an end-land-use objective of wildlife habitat (Application section E1.9); • In advance of vegetation removal during the grizzly bear denning season the Proponent would search for active dens in high potential denning areas. Management strategies for known active den sites would be developed to avoid effects on grizzly bears in dens; • Continue to implement the practice of clearing blast sites of large mammals or birds before blasting; • Manage, to the extent possible, the incremental removal of migratory bird nesting habitat to occur outside of the breeding bird period of April 1 to August 31 of each year to avoid disturbing active migratory bird nests; • If vegetation removal is required during the breeding bird period of April 1 to August 31, then steps will be taken to minimize effects to migratory birds that may be nesting in the area; • Implementation of Invasive Species Management Plan;

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• Old growth management areas that are affected by the Project, have been replaced by old-growth management areas that were established elsewhere; • A Soil Salvage Plan and Reclamation and Closure Plan have been developed to provide environmental BMP Caron and soil handling methods during Construction, Operations and Reclamation; • Selective salvage and prioritized replacement of cover soil in areas where its effectiveness is maximized in support of end land use objectives; • Develop and implement measures to mitigate impacts to listed species as part of the Reclamation Research Program; and • Where possible, reintroduce traditional use and listed species such as black huckleberry and whitebark pine to the closure landscape where they are appropriate to environment and the reclamation prescriptions.

5.3.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, additional issues were raised by the Working Group, First Nations and members of the public. These issues, the Proponent responses and EAO’s assessment of the adequacy of responses are detailed in Appendix II. Key issues and responses include the following:

Significance Methodology

In their assessment of significance the Proponent compared the effects at the LSA to the RSA and used this comparison to determine levels of significance. FLNR and KNC expressed concern that the effects were all determined by the Proponent to be not significant because when a small local scale (less than 2000 ha) is compared with a very large regional scale (tens of thousands of ha), and when comparing effects on a few individuals with populations, effects were diluted and could never be found to be significant.

The Proponent responded that ecological significance is appropriately evaluated at the population scale and using the larger RSA scale for their evaluation reflects this concept. They noted that no wildlife or plant VCs and populations or communities are confined to the LSA, precluding evaluating significance at the local scale. The RSA was chosen because it is likely large enough to contain all or most individuals that comprise the breeding populations that inhabit the areas for part or all of the year.

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Cumulative Effects

FLNR identified that the Proponent did not estimate the amount of wildlife habitat and vegetation that has been lost over the years of coal mining in the Elk Valley area, so the overall accumulation of impacts to the present day is not known. However, the Proponent followed currently accepted methodology for assessing cumulative effects by considering the present state of wildlife habitat and vegetation as the baseline condition. EAO is satisfied that the Proponent’s assessment was completed according to currently accepted standards for EAs.

Forest Age Classes

The KNC identified that the age classes used in the Application to define young, mature and old forests were inconsistent with provincial policy, and requested that the Proponent re-analyze the habitat supply evaluations based on the forest age classes used by the BC government. The Proponent recalculated the area values for forest age classes using the age classes accepted by BC provincial agencies, and found that there was negligible change in the area of old forest, and concluded that it would not be necessary to model and assess VCs further based on the revised forest age definitions.

5.3.4 Potential For Residual Effects and Significance Analysis

Characterization of Potential Residual Effects on Wildlife and Vegetation

The potential residual effects on wildlife and vegetation are characterized in Table 11.

Table 11: Characterization of Residual Adverse Effects on Wildlife and Vegetation.

Local Study Area Regional Study Area

Due to the legacy of mining in the Elk River valley, wildlife Context Unaffected by mining habitat and vegetation have been lost due to past mining and currently operating mines.

Magnitude High Negligible Extent Entire LSA Adjacent to the LSA only Duration Far future N/A Reversibility Not reversible N/A 93

Frequency Continuous N/A Contributes to Cumulative Yes Yes Effects?

Context

The proposed Project is located in an intensively managed area (Elk River Valley) that includes a long history of mining and processing facilities, extensive forestry activities including logging, road building and silviculture, and these activities continue to the present time and are anticipated to continue into the future. Presently, vegetation and wildlife populations are considered healthy. Hunting is a regulated activity within the Elk River and Fording River watersheds and First Nations derive benefits from practicing traditional activities such as hunting and gathering for food and cultural purposes. The intensive resource development in this area and increasing habitat alteration could reduce resilience of vegetation and wildlife to change.

Magnitude

The landscape at the proposed Project site would be changed dramatically by removing two mountain ridges and filling Dry Creek with waste rock. Vegetation and wildlife habitat in the mine footprint would be completely removed, but with reclamation some of the habitat value would be returned leading to a long term negligible magnitude effect when considering the entire RSA.

Extent

Potential effects on vegetation and wildlife would be local and mostly confined to the LSA. It is anticipated that wildlife habitat would be removed and wildlife would be displaced, leading to some effects adjacent to the LSA.

Duration

Loss of vegetation and wildlife habitat would begin when timber harvesting is first scheduled, but reclamation planned concurrently with mining is expected by the Proponent to replace habitat lost. Effects are anticipated by the Proponent to end when the end land use objectives are predicted to be met around 2075. However, to replace the same quality of habitat would take an indefinite period of time due to the uncertainty with reclaiming habitat types like high elevation grasslands, wetlands, riparian areas and old forest.

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Reversibility

Reclamation would reverse some of the vegetation and wildlife habitat loss, and wildlife would return to reclaimed areas, but it is not likely that the end land use objective would provide the same quality of ecosystems or habitat for vegetation and wildlife that currently exists in the LSA. The distribution and abundance of the VCs would certainly be changed in the LSA, and some changes outside of the LSA are likely to occur through displacement. Removing the mountain tops and filling the upper reaches of Dry Creek would be permanent alterations to the landscape. A new equilibrium for vegetation and wildlife is expected after the end land use objectives are met and natural succession takes its course. However, the new landscape is not expected to match the habitat value of the current landscape, and the degree of similarity in habitat value to the current landscape is not possible to estimate.

Frequency

The potential residual effects on vegetation and wildlife would be continuous during mining, but vegetation and wildlife habitat would recover as reclamation proceeds and as the end land use objectives are met.

Significance

There would be localized adverse effects confined to the LSA due to the complete conversion of two mountain ridges into mine pits, but the area is relatively small, and reclamation would replace some vegetation and habitat. The overall magnitude of effects at the RSA level on wildlife populations or vegetation would be negligible and effects would not be significant.

Likelihood of Residual Adverse Effects

Based on information provided in the Application, it is certain that the proposed Project would remove vegetation, remove wildlife habitat, kill some wildlife and displace wildlife in the LSA. However, the LSA is small in relation to the RSA and the proposed Project is not likely to have adverse effects at the regional and population levels.

5.3.5 Conclusion

Based on the above analysis and having regard to the Proponent’s commitments (which would become legally binding as a condition of a certificate) EAO is satisfied that the proposed Project is not likely to have significant adverse effects on vegetation and wildlife.

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6 Assessment of Potential Economic Effects

The available coal at the LCO mine is nearly exhausted and reductions in production and an associated reduction in workforce could begin as early as 2014. The proposed Project is an expansion that would extend the existing economic benefits. Current jobs would be maintained until the anticipated end of operations in 2031, but reclamation and water quality mitigation jobs would extend beyond that period.

6.1 Economic Effects

6.1.1 Background Information

Under the Sustainable Economy section of the Application (section B3.1), employment opportunities, income generation, fiscal benefits to governments and local business opportunities were the VCs assessed. All of these VCs are discussed in this section.

The RSA for employment opportunities, income generation and local business opportunities includes the RDEK and the community of Crowsnest Pass in Alberta. The RDEK includes the rural area of Electoral Area A, and the LSA communities of Elkford, Sparwood, Fernie, and Cranbrook. For potential Project effects on government revenues linked to gross domestic product (GDP) and taxation generation, the RSA is the Province of BC.

For the economic assessment, the spatial boundaries of the LSA include the Elk Valley sub-region plus Crowsnest Pass. The four major LSA communities in proximity to the proposed Project likely to experience effects include Fernie, Sparwood, Elkford and Crowsnest Pass (Alberta). The Proponent did not include the City of Cranbrook in the LSA, because although Cranbrook would experience some employment, income, and business effects and opportunities as a result of the proposed Project, these effects would not be as concentrated as the effects within the LSA.

The temporal boundaries used in the assessment are as follows:

• Construction Phase: a 16 month period from 2013 through 2014; • Construction of the Dry Creek selenium active water treatment facilitiy: 2020 to 2022; • Operations Phase: 2014 through 2031 (18 years); • Operation of the Dry Creek selenium active water treatment facilitiy occurs from 2022 to 2031; and • Reclamation and Closure Phase: 2032 through 2075.

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The potential effects associated with each of the temporal periods (construction, operations, and reclamation and closure) were evaluated for all VCs.

Employment Opportunities

The Application described that in the historical context of commodities, mining has been characterized by boom and bust cycles of both supply and demand. As demand for coal rises, the production from Elk Valley mines rises commensurately. Conversely as demand for coal decreases, production slows. This changing demand has contributed to a fluctuating economy and workforce that rises and falls with coal prices.

In 2006, the RDEK had a labour force of 30,520 people, or 1.3 percent of the provincial labour force. The size of the labour force increased modestly by 2.9 percent from 2001 to 2006, compared to 8.8 percent for the Province during the same period, indicating a slower growth in working age population. Fernie, Sparwood, Elkford and Crowsnest Pass had 8,760 people in the labour force in 2006, compared to 9,075 in 2001. This 3.6 percent reduction in labour force size is proportional to the population decline in the area during this period.

Aside from other services, the manufacturing and construction industries were the largest employing sector in the RDEK in 2006, accounting for 17.1 percent of the labour force. Other important industries for employment included agriculture and other resource based industries (of which 8.3 percent was mining), retail trade, health and education and business services. This labour force distribution is similar to 2001 estimates; however, the labour force in mining and oil and gas sector fell from 11.4 percent in 2001 to 8.3 percent in 2006. Overall, primary industry employment (including agriculture and resource-based industries and construction and manufacturing) was fairly constant between 1996 and 2006 at approximately 30 percent.

According to the Application, in 2009, the five Elk Valley mines employed over 3,000 people. Approximately 80 percent of the workforce (about 2,400 employees) resided in the communities of Fernie, Sparwood, Elkford and Crowsnest Pass. The remaining 20 percent of the workforce are from other communities including Calgary, Lethbridge and Cranbrook.

In 2008, the LCO workforce was approximately 416 people. During this operating year, an additional estimated 551 jobs were supported by industries that supply goods and services used by the mine. Nearly 60 percent of these jobs were in rail transportation, a key supplier to the industry. In addition, an estimated 314 jobs were held within indirect supplier industries.

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Income Generation

The Application states that in 2008, total employment income for the RDEK was $1.3 billion. Total combined employment income in Fernie, Sparwood, Elkford and Crowsnest Pass was a third of the total at $444.3 million. In 2006, the median income in RDEK at $25,218 was very slightly over the provincial median of $24,867. In 2008, the average employment income reported in the RDEK was $38,170, slightly under the provincial average of $39,565. In 2006, Elkford, Sparwood and Fernie all had higher median and employment incomes compared to the RDEK and that of the Province. The Fernie-Elk Valley sub-region has historically had one of the highest employment incomes in the region and in the Province due to the prevalence of high paying mining and forestry sectors.

In 2008, the LCO mine generated a total of $100 million in household income. This income comprised $74 million in direct income to workers and suppliers (with the majority of this income going to workers in the LSA) and an additional $26 million in indirect and induced income generated through mine operations workforce spending.

Fiscal Benefits to Governments

In 2008, the Proponent’s five coal mines collectively contributed $224 million in mineral, sales, fuel, carbon and property taxes. Mineral taxes accounted for $193 million of the total.

In 2008, the LCO mine generated an estimated $35.9 million in personal and corporate income taxes, and commodity tax revenues. Of this amount, $16.4 million in taxes were associated with direct operations of the mine, and the mine was responsible for also generating a similar level of taxes from the industries supplying goods and services directly and indirectly used by the mine.

Breakdown of tax allocation to the various levels of government (as a result of direct mine employment and the activities of industries that supply goods and services used by the Project) is summarized in Table 12. Federal government received $18.8 million in taxes with personal income comprising the majority of tax contributions at $12.3 million. Provincial taxes accounted for $16.0 million (with personal income taxes and commodity taxes comprising $5.4 million and 9.5 million respectively). Municipalities received $1.1 million in the form of property tax.

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Table 12: Estimated Personal, Commodity, Corporate and Property Tax Revenue from LCO (reported in millions of dollars) in 2008.

Corporate Level of Personal Commodity Property Income Total Government Income Tax Tax Tax Tax

Federal 12.3 3.9 2.6 0 18.8

Provincial 5.4 9.5 1.1 0 16.0

Municipal 0 0 0 1.1 1.1

Total 17.7 13.4 3.7 1.1 $35.9

The District of Elkford, the City of Fernie, the District of Sparwood and Electoral Area A of RDEK have an Elk Valley Property Tax Sharing Agreement that shares the property taxes levied on the industrial coal mining properties in the Elk Valley. This agreement reflects the existence of these communities as the product of the coal mining industry, that diversification of the Elk Valley area has been slow and the reliance on the industrial taxes to support local services is significant considering each community’s limited ability to diversify its taxation base.

In 2008/2009, the tax sharing agreement included a base property tax levied on industrial coal mining properties of $8.9 million (the base amount is adjusted annually for inflationary effects). LCO’s contribution under the Tax Sharing Agreement was estimated at $1.7 million for 2011.

According to the Application the tax sharing agreement contributes substantial revenues to support infrastructure, service and economic development activities in the Elk Valley communities. For example, in 2008, 50 percent of Elkford’s and 28 percent of Sparwood’s total municipal revenues came from coal mining property tax allocations.

Local Business Opportunities

According to the Application several businesses in Cranbrook, Fernie, Sparwood, Elkford and Crowsnest Pass provide goods and services to the Proponent’s Elk Valley mines. Suppliers generally include fuel and transportation services, equipment repair, purchase and rental, logging/clearing services, administrative and communication services, and catering services.

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In 2009, the Elk Valley mines purchased $883 million of goods and services. Of this amount 35 percent (or $309 Million) was purchased locally (e.g., from Elkford, Sparwood, Fernie and Crowsnest Pass) and $277,800 was spent on goods and services from Aboriginal suppliers.

The Application states that in 2008, the Proponent’s LCO mine expenditures totalled $207.1 million, almost all spent in BC to purchase goods and services directly from suppliers and indirectly from industries further up the supply chain.

6.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

Employment Opportunities

The Application states that for the duration of the proposed Project, a slight increase in the number of workers from the LCO workforce would be required. During operations the proposed Project would provide an annual average of 485 FTEs of direct employment to operational mine workers and 407 FTEs to suppliers over the 18 year operational period. Since the proposed Project would use the existing work force to extend the mine life, an estimated 75 percent of direct employees would be from the LSA.

The Proponent predicts that employment numbers for the proposed Project would be similar to those of the existing LCO mine, but that jobs would be extended into the future for the existing LCO workers (i.e., for an additional 18 years), as well as requiring a small number of new employees (approximately 15 annually) due to attrition. The overall employment effects of the proposed Project at closure would be similar to the effects of closure of the existing LCO mine if the proposed Project were not to proceed, but with a delay of about 18 years.

Income Generation

The Application states that income generated during construction would be equivalent to approximately 4.8 percent of the total LSA annual employment income and during operations would be 13 percent of LSA annual employment income. Construction and operational employment would provide higher-than-average wages for regional and local residents, especially for those hired directly by the Proponent.

During operations, overall income benefits would be similar to those of the existing LCO mine. The proposed Project would extend employment for existing LCO workers (as well as newly hired workers) for 18 years and would help maintain area incomes. The overall income effects at mine closure in 2032 would be similar to closing the

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existing LCO mine in 2014 if the proposed Project were not to proceed, but with slightly more workers and income lost in 2032.

Fiscal Benefits to Governments

According to the Application a total of $35.7 million in GDP (Table 13) would be generated through proposed Project construction. New provincial GDP directly generated by construction is estimated to be $14.2 million and would consist mainly of wages and salaries to workers. The GDP associated with activities of direct suppliers is $10.3 million with another $5.6 million of GDP originating in the activities of industries further up the supply chain. Spending by the labour force was estimated by the Proponent to generate an additional $5.6 million in induced GDP.

Table 13: Proposed Project Contribution to Provincial GDP (in millions of dollars).

Project Phase Direct Indirect Induced Total Construction (a) Construction expenditure 14.2 n/a n/a 14.2

Supplier industry effects 10.3 5.6 5.6 21.5 Total 24.5 5.6 5.6 35.7 Operations (Annual) Operational expenditure 33.0 n/a n/a 33 Supplier industry effects 50.0 20.1 14.4 84.5 Total 83.0 20.1 14.4 117.5

(a) Includes initial mine construction 2013 to 2014, and construction of the Dry Creek selenium active water treatment facilitiy from 2020 to 2022.

A total of $593.3 million in direct GDP would be generated throughout the operational life of the Project (or $33 million annually). An additional $896.5 million in GDP (or $50 million annually) would be generated through the output of industries supplying goods and services during operations, and another $362.5 million in GDP (or $20.1 million annually) would be generated in those industries that would indirectly benefit from the proposed Project. Spending by the labour force would generate an additional $259.2 million in induced GDP (or $14.4 million annually). The operational GDP figures represent GDP that would be preserved by the proposed Project rather than representing net increases to existing GDP.

Combining direct and indirect effects, proposed Project operations would contribute a total of $1.85 billion (or $103 million annually) in GDP. When including induced

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changes, mine operations would create a total of $2.1 billion in GDP (or on average, about $117.5 million per year).

The average annual government revenues anticipated from direct personal income tax, as well as tax from sourcing materials and services is summarized in Table 14 below. Specific taxes include provincial income tax, net child benefits, net property tax, sales tax, fuel tax, healthcare premiums/payroll tax, federal taxes and net HST.

Table 14: Proposed Project Direct, Indirect and Induced Tax Revenues in millions of dollars. 1

Project Phase Direct Indirect Induced Total Construction (a) Tax Revenue: Construction 2.1 n/a n/a 2.1 Expenditure Tax Revenue: Supplier 1.6 0.9 0.7 3.2 Industry Effects Total 3.7 0.9 0.7 5.3 Operations (Annual) Tax Revenue: Operational 5.5 n/a n/a 5.5 Expenditure Tax Revenue: Supplier 6.3 2.8 1.9 11.0 Industry Effects Total 11.8 2.8 1.9 16.5 (a) Includes initial construction 2013 to 2014, and construction of Dry Creek selenium active water treatment facilitiy (2020 to 2022). n/a = not applicable.

As shown in Table 14, tax revenues associated with proposed Project operations are estimated at $297.9 million (or $16.5 million annually). This estimate includes $99.6 million (or $5.5 million annually) directly associated with mine operations, and another $198.3 million (or $11 million annually) arising from the activities of direct and indirect supplier industries, as well as spending by workers employed at the mine and in various supplier industries.

1 Tax revenues represent personal income tax generated through direct employment wages and salaries, as well as personal income tax, corporation tax, sales and other taxes generated as a result of the activities of the industries that supply goods and services used by the Project. Direct corporate income and provincial mining taxes paid by the Proponent are not included in this table. 102

During construction, the Province would benefit mainly from commodity taxes, while the federal government would benefit mainly from income and corporate taxes (Table 15). During construction, the federal government would receive $3 million, with personal income taxes comprising $2.4 million (or 80 percent) of this amount.

Table 15: Project Contributions to Government Tax Revenue. [$Million]2

Personal Corporate Commodity Accommodation Project Phase Income Income Total Taxes Tax Tax Taxes

Total Construction (a)

Federal 2.4 0.2 0.4 0 3.0

Provincial 0.9 0.7 0.2 0 1.8

Municipal 0 0 0 0.5 0.5

Total 3.3 0.9 0.6 0.5 5.3

Annual Operations

Federal 6.0 -1.1(b) 2.5 0 7.4

Provincial 2.4 0.9 2.9 0 6.2

Municipal 0 0 0 2.9 2.9

Total 8.4 -0.2 5.4 2.9 16.5 Source: British Columbia Input-Output Model customized simulation conducted by BC Stats (BC Stats 2011).

(a) Includes initial construction 2013 to 2014, and construction of water treatment facility (2020 to 2022).

(b) The negative value represents transportation services that are subsidized by the federal government.

Local Business Opportunities

2 Tax revenues represent personal income tax generated through direct employment wages and salaries, as well as personal income tax, corporation tax, sales and other taxes generated as a result of the activities of the industries that supply goods and services used by the proposed Project. Direct corporate income and provincial mining taxes paid by the Proponent are not included in this table. 103

The Application states that the proposed Project would continue to use the same contracts for suppliers of goods and services as currently used by LCO. The Proponent also expects to continue to procure goods and services from existing local businesses during both construction and operations.

The Proponent anticipates that opportunities for local and regional businesses during operations would be similar to those of the existing LCO, with the proposed Project extending new business opportunities into the future (i.e. for an additional 18 years), as well as providing a small number of new additional business opportunities (such as equipment maintenance and servicing for the water treatment facilitiy). Extending supplier requirements for another 18 years of operations would assist businesses to continue.

The Proponent predicts that the proposed Project during operations would have positive effects for local businesses, and benefits would accrue mainly to businesses in the LSA. However, as goods and service requirements for the proposed Project would be similar in nature to that of LCO as well as the other Elk Valley mines, any changes to the existing business profile of the LSA as a result of the proposed Project (i.e., influx of new businesses to service the proposed Project) was predicted by the Proponent to be negligible.

The Proponent predicts that if the proposed Project does not proceed, and without alternatives for local businesses, there would likely be economic retraction locally. This effect would include a decrease in the direct and subsequent indirect and induced demand for goods and services.

The Proponent anticipates a strong coal mining economy in the LSA over the next two decades, and that the region’s mine services and supplier business sector would continue to have access to business opportunities with other mines in the area after the proposed Project closed.

6.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, no issues were raised by the Working Group, First Nations or members of the public on potential impacts to the economy.

6.1.4 Potential for Residual Effects

In consideration of EAO’s assessment of the Application, and comments from the public, Working Group and First Nations, EAO is satisfied that the proposed Project is not likely to have residual adverse effects on the economy.

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6.1.5 Conclusion

It is EAO’s assessment that the proposed Project would generate benefits to the local, regional, provincial and national economies and would preserve existing economic benefits (jobs, incomes, revenues to government) currently generated by the LCO mine. Based on the above analysis and having regard to the certificate conditions which would become legally binding if an EA Certificate is issued, EAO is satisfied that the proposed Project is not likely to have significant adverse economic effects. This conclusion applies to the direct, indirect or induced impacts of the proposed Project, and section 6.2 of this report addresses other economic activities.

6.2 Effects on Land Based Livelihoods

6.2.1 Background Information

The LSA is defined by the proposed Project footprint, plus a buffer of approximately 500 m. The RSA includes the RDEK and the communities of Elkford, Sparwood, Fernie and Cranbrook. Forestry and trapping are two land based livelihoods that would be affected by the proposed Project and are addressed in this report below. There are no commercial recreational activities such as guide or outfitting services or other tourism- based businesses located in the LSA.

Forestry

In the RSA forestry takes place on both private and Crown land. The total Crown Forest Land Base in the RSA is 113,280 ha, and of this land base the area of operable forest on Crown land (i.e. Timber Harvest Land Base) is 37,736 ha. The area of non-harvest land base (i.e., productive but inoperable forest [inaccessible for logging]) on Crown land in the RSA is 75,545 ha.

The area of private Managed Forest in the RSA is 78,303 ha. While Tembec holds the timber rights on these lands, the lands are owned by the Proponent. Under an agreement (MF 27), Tembec has the exclusive right to harvest, sell, process, or dispose of all timber, but they also must practice silviculture. Tembec’s rights are subject to the Proponent’s dominant user rights to explore for minerals, conduct mining and drilling operations, and to use or remove certain lands from MF 27 lands.

In the LSA the total Crown forest land base is 369 ha. The area of operable forest on Crown land (i.e. Timber Harvesting Land Base) in the LSA is 93 ha. The area of non- harvest land base (i.e. productive but inoperable forest) on Crown land in the LSA is 276 ha. Private managed forest land occupies 1,459 ha in the LSA. MF 27 overlaps the

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LSA and covers 1,413 ha of the LSA. Two Old Growth Management Areas are also located in the LSA and within the proposed Project footprint.

The proposed Project is located in the Cranbrook Timber Supply Area (TSA). The provincial forestry revenues generated from Crown land in this TSA were $34.8 million annually during the period 2000 to 2002 or more than $33,000 per thousand cubic metres of timber harvested. The Proponent estimated the sources of revenues in the TSA as follows:

• Stumpage: the average 2001-2002 Cranbrook TSA stumpage was $14.16/m3 and the average 2003 stumpage was $12.25/m3; and • Other forestry industry taxes: this revenue category included logging taxes, corporate income taxes, property taxes, export fee in lieu of manufacture against export logs, gas tax, sales tax and Workers Compensation Board premiums paid by forest industry employers. The estimate of other forest industry taxes was a unit cost total of $11.42 per harvested m3. This is a gross estimate as it includes multiple tax items that can change annually.

Trapping

From the Application, a large area of a trap line lease (1,872 ha or 11 percent of TR0423T013) overlaps the LSA and includes one cabin. There are three additional trap line tenures that overlap the LSA:

1) TR0423T020 is, according to the Proponent, not currently used and the registered trap line holder is deceased. 2) TR0423T012 has been previously impacted by the LCO mine and compensation was provided to the tenure holder by the Proponent; development of the proposed Project would not substantially modify the current access restrictions on this trap line. 3) TR0423T014, of which 135 ha (less than one percent of its total area) overlaps the LSA.

6.2.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

Forestry

For the timber that would be harvested from the proposed Project site, the value of timber for both private and Crown land was estimated at $246,136. This estimate was based on an average price of $43 per m3 for spruce, pine and fir and $55 per m3 for whitebark pine (assuming saw log grades). Although these prices are low by historical standards, they are based on recent trends in prices for those products. 106

The cost associated with reforestation of the total disturbance area following the closure of the mine is estimated at $611,000 if only crown land is reforested, and an additional $331,000 if the private land is reforested (based on 2011 prices). This estimate was calculated based on an average cost per hectare of $1,045. These costs include only the silviculture costs and do not include other reclamation costs. Stumpage revenues were calculated for the present timber located on crown land. This includes 1,527 m3 of lodgepole pine, 1,237 m3 of Engelmann spruce, and 690 m3 of sub-alpine fir. Based on current stumpage rates, total stumpage revenue associated with logging the standing timber is estimated at $25,400.

Trapping

Three trap lines would be affected by the proposed Project, and the areas affected are summarized in Table 16. A fourth trap line, TR0423T012 has not been included in the table because:

• access to the trap line has already been affected by, and compensated for, as part of the LCO mine; • there would be no change to the existing access restrictions on the trap line that are associated with the LCO mine operating area; and • less than one percent of the total trap line area (45 ha) would be removed by the proposed Project.

Table 16: Trap Line Areas Affected by the proposed Project in Hectares. Area within No Total Area within the Area within Access Area LSA Footprint Trapline Boundaries Only

ha ha % ha % ha %

TR0423T013 16,298 1,872 11 973 6 466 3

TR0423T014 31,774 135 <1 11 <1 162 1

TR0423T020 8,059 404 5 81 1 345 4

Total 56,131 2,411 4 1,066 2 973 2

Trap line TR0423T013 would be most affected by the proposed Project. Approximately 9 percent of the trap line would be affected by the proposed Project (6 percent in the footprint and 3 percent affected by the “no authorized entry” boundary), and the cabin could not remain at the current location due to safety concerns. The Proponent stated in 107

the Application that they would work with the trap line holders and also stated that they have reached agreement regarding compensation. The Proponent has agreed to pay annual compensation to the trap line holders that would be applied to the annual lease costs for a lot at Grave Lake for a period of five to eight years. The trap line holders would be responsible for the removal of the current cabin. On October 1, 2012, EAO received a report from the Proponent stating that the cabin had been relocated to the lot at Grave Lake by the trap line tenure holders.

Less than one percent of the area of TR0423T014 would be directly affected by the footprint, and an additional one percent would be affected by the no access boundaries. The Proponent stated that in a 2011 interview, the trap line holder indicated that he primarily accesses his trap line from the north along the Fording River to the McQuarrie Creek area where he has a cabin. The trap line holder also accesses his cabin through the Fording River Operation with permission from the Proponent.

The portions of TR0423T014 and TR0423T020 that would be directly affected by the proposed Project footprint and the no unauthorized access boundary are located on lands owned by the Proponent. The Proponent’s assessment of access effects on TR0423T014 and TR0423T020 takes into consideration that the area affected by the proposed Project is high elevation and difficult to access, and in the Proponent’s opinion is not likely to be used for trapping.

According to the Application, much of the RSA was low quality habitat in 2010, with pockets of high quality habitat indicating that Canada lynx may be patchily distributed at relatively low density. Wolverines tend to avoid people and wolverine habitat suitability may decline where human presence is high or where anthropogenic development has altered the landscape. Many of the previous and existing human disturbances in the RSA have reduced marten habitat suitability by removing forests, but this habitat loss has not likely approached or exceeded the resilience thresholds of the population. The Proponent predicts that changes to the abundance and distribution of trapped species in the terrestrial RSA would be minor for Canada lynx, wolverine and marten. The Proponent concludes that while access (and therefore trapping) would be progressively restricted within the LSA, trapping opportunities in the RSA and within the unaffected portions of the existing trap line tenures that overlap the proposed Project footprint would not be affected.

Summary of Mitigation Proposed in the Application

The Proponent proposes the following measures to avoid or minimize effects on land based livelihoods:

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• Mine reclamation would include re-vegetation of coniferous forest to replace that which would be lost; and • Compensation agreement with the holder of trap line TR0423T013 for moving a cabin. 6.2.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, no issues were raised by the Working Group, First Nations or members of the public on potential impacts to trap line tenure holders and forestry.

6.2.4 Potential for Residual Effects and Significance Analysis

Characterization of Potential Residual Effects on Trap Line Tenures and Forestry

The potential residual effects of trap line tenures and forestry are characterized in Table 17.

Table 17: Characterization of Residual Adverse Effects on Trab Line Tenures and Forestry.

Local Study Area Regional Study Area

Due to the legacy of mining in the Elk River valley, trap line Context Unaffected by mining areas have been reduced and areas have been removed from the timber harvesting land base. Magnitude Low Negligible Extent Entire LSA N/A Duration Far future N/A Reversibility Not reversible N/A Frequency Continuous N/A Contributes to Cumulative Yes Yes Effects?

Context

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The proposed Project is located in an intensively managed area (Elk Valley) that includes a long history of mining and processing facilities, extensive forestry activities including logging, road building and silviculture, and these activities continue to the present time. Presently, the wildlife populations are healthy and are considered to be of high importance by FLNR. Trapping and forestry are regulated activities within the Elk River and Fording River watersheds.

Magnitude

The LSA would be made unavailable for trapping. Effects on the holder of trap line tenure TR0423T013 would be of low magnitude since 9 percent of the trap line (6 percent in the footprint and 3 percent affected by the “no authorized entry” boundary) would be affected by the proposed Project, and the trap line tenure holders verbally agreed to compensation offered by the Proponent. Effects on forestry for both Crown and private land would be of low magnitude since a relatively small portion of productive timber would be made permanently unavailable, and the forest company would be harvesting the timber from the proposed Project site.

Extent

Potential effects on trap line tenures are considered to be local and confined to tenures in the immediate area of the proposed Project. The effects on forestry would be local.

Duration

Effects are anticipated to begin when construction starts and would last for the life of the proposed Project, and continue at least until end land use objectives are met, which is predicted by the Proponent to be in about year 2075.

Reversibility

Reclamation is expected to restore the mine site to a useable state for forestry and trapping, and may include habitat suitable for wildlife to support trapping. However, techniques for restoring productive forests are still under development and the quality of the restored stands while likely useable, would not likely match the existing stand quality. The amount of time restored stands would take to reach maturity and be available for harvestable again is uncertain.

Frequency

The potential residual effects on trap line tenures and forestry would be continuous during mining, but would attenuate as reclamation proceeds and as the end land use objectives are met.

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Significance

There would be localized adverse effects confined to the LSA due to the complete conversion of two mountain tops into mine pits, but the area is relatively small, and reclamation would replace some furbearer habitat and forest in the far future. The overall magnitude of effects at the RSA level on forestry would be negligible and effects would not be significant. The compensation for the trap line most affected by the proposed Project has been completed and no significant adverse effects on trap line tenures are anticipated.

Likelihood of Residual Adverse Effects

Based on information provided in the Application, the proposed Project would have residual adverse effects on trap line tenures and forestry within the LSA only.

6.2.5 Conclusion

Based on the above analysis and having regard to the certificate conditions which will become legally binding if an EA Certificate is issued, EAO is satisfied that the proposed Project is not likely to have significant adverse effects on forestry and the trap line tenure holders.

7 Assessment of Potential Social Effects

7.1 Recreation

7.1.1 Background Information

Under the Land Use and Tenure assessment in the Application (section B4.1), recreation, hunting, fishing and focal areas for public recreation and tourism were four of the ten VCs assessed. For the purposes of this assessment report, all of the four recreation related VCs are discussed under this recreation section. The LSA is defined by the proposed Project footprint, plus a buffer of approximately 500 m. The RSA includes the RDEK and the communities of Elkford, Sparwood, Fernie and Cranbrook.

There are no parks or protected areas within the LSA, but Alberta’s Beehive Natural Area and Don Getty Wildland Provincial Park are located within the RSA. Several hunting and fishing clubs and organizations are active in the Elk Valley including the following groups that provided information about popular hunting and fishing locations in the RSA and LSA:

• East Kootenay Wildlife Association; • Fernie Rod and Gun Club; 111

• Sparwood Fish and Wildlife Association; and • Elkford Rod and Gun Club. The Proponent reported that hunting occurs on publicly accessible land in the LSA and the RSA. The LSA includes ungulate winter range and commonly hunted species include elk, deer, sheep and moose. Access to the LSA for hunting is primarily by ATV and on foot.

According to the Application, motorized recreation is a popular activity for community members in RSA communities and there are several hundred kilometres of trails throughout the RSA. Members of the Elkford ATV Club contact Tembec or the Proponent when they are planning an organized ride on privately owned lands, to discuss the route and any access considerations. ATV Club riders rarely enter active mining areas with the exception of a pipeline right-of-way through the Greenhills property that requires prior consent by the Proponent. Currently the Proponent’s lands in the upper Elk Valley do not have access restrictions.

Non-motorized recreation in the RSA includes camping, skiing, horseback riding and hiking, and non-motorized access to the LSA includes hiking and cross-country skiing. The proposed Project would affect access to the LSA, which in turn would affect hunting, fishing, ATV use, snowmobiling, hiking and cross-country skiing within the LSA.

7.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

The main effects on recreation would be to remove the mine site and immediately adjacent land from the area available for any form of recreation, to change access patterns, eliminate wildlife habitat and the consequent effect on wildlife, and affect water quality in the Fording River and the consequent effect on fish and angling. Effects on wildlife, fish and water quality have been addressed in previous sections of this report.

The Proponent concluded that the effects on recreation would not be significant, primarily because there are other similar opportunities readily available elsewhere within the RSA.

Summary of Mitigation Proposed in the Application

The Proponent proposes the following measures to avoid or minimize effects on recreation:

• Effective communication and consultation regarding boundaries on areas with no unauthorized entry, and areas that would be accessible to the public; • Access would be reopened as reclamation progresses and when safe to do so; 112

• Mitigations identified for wildlife and wildlife habitat (see Wildlife and Vegetation section 5.3 of this report); • Mitigations for water quality and aquatic health (see Water Quality and Aquatic Health section 5.1 of this report); and • Fish habitat compensation (condition # 15).

7.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, additional issues were raised by members of the public. These issues, the Proponent responses and EAO’s assessment of the adequacy of responses are detailed in Appendix II. Key issues and responses are reported below.

Concern was expressed by two members of the public that access to Dry Creek and the back country would be lost and that the cumulative effect of mines and their expansions in the Elk Valley would reduce the amount of area available for quality outdoor recreation and would negatively affect the rural outdoor lifestyle enjoyed by residents in the RSA.

The Proponent responded that they would delay access restrictions during mine development for as long as possible, and stage access restrictions in a way that would minimize the effect on local recreation. Boundaries would remain consistent between 2013 and 2018 around initial mine operations, expand to a larger area in 2018, and expand again to a larger area in 2023. Based on the plan shown in the Application, access closures in 2013 would directly affect Mount Michael and Burnt Ridge from the current LCO Phase I area north to Grace Creek. Current access from Dry Creek to areas east of the proposed Project (e.g., Mount Banner) would no longer be available from these areas. The Proponent would continue to work with communities of interest to maintain access to the East tributary of Dry Creek, and to collaboratively manage access and recreation opportunities throughout the life of mining operations.

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7.1.4 Potential For Residual Effects and Significance Analysis

Characterization of Potential Residual Effects on Recreation

The potential residual effects on recreation are characterized in Table 18.

Table 18: Characterization of Residual Adverse Effects on Recreation.

Local Study Area Regional Study Area

Due to the legacy of mining in the Elk River valley, the areas Context Unaffected by mining available for outdoor recreation activities have been reduced in the valley. Magnitude High Negligible Extent Entire LSA Negligible Duration Far future N/A Reversibility Reversible N/A Frequency Continuous N/A Contributes to Cumulative Yes Yes Effects?

Context

The proposed Project is located in an intensively managed area (Elk Valley) that includes a long history of mining and processing facilities, extensive forestry activities including logging, road building and silviculture. These activities continue today. Presently, the wildlife populations are healthy and are considered to be of high importance by FLNR. Hunting and angling are popular regulated activities within the Elk River and Fording River watersheds and are valued by local residents.

Magnitude

The magnitude of effect in the LSA would be high because it would be made unavailable for recreation, but effects on recreation would be of negligible magnitude

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regionally due to the relatively small area that would be affected by the proposed Project, and the availability of the same form of recreational activities in other parts of the RSA.

Extent

Potential effects on recreation are considered to be local and confined to the immediate area of the proposed Project.

Duration

Effects are anticipated to begin when construction starts and would last for the life of the proposed Project, and continue until end land use objectives are met, which is predicted by the Proponent to be in about year 2075.

Reversibility

Reclamation is expected to restore the mine site to a useable state for recreation, and would include habitat suitable for wildlife to support hunting and viewing.

Frequency

The potential residual effects on recreation would be continuous during mining, closure and reclamation, but would end when access to the area is again permitted and end land use objectives are met.

Significance

There would be localized adverse effects confined to the LSA due to exclusion of outdoor enthusiasts from the mine area, but the area is relatively small, and recreation could continue outside of the mining area. The overall magnitude of effects at the regional level are negligible because similar recreation opportunities can be found elsewhere in the RSA, therefore, no overall adverse effects are expected.

Likelihood of Residual Adverse Effects

The likelihood that the proposed Project would affect recreation is a certainty, as recreation users would be prohibited from the mine site.

7.1.5 Conclusion

Based on the above analysis and having regard to the certificate conditions which will become legally binding if an EA Certificate is issued, EAO is satisfied that the proposed Project is not likely to have significant adverse effects on recreation.

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7.2 Social Conditions

7.2.1 Background Information

Under the Socio-community Health and Well-being assessment in the Application (section B4.2), sustainable community population, housing availability and affordability, availability and access to community services, and availability and access to community infrastructure, were four of the six VC’s assessed. For the purposes of this assessment report, these four VC’s are discussed under this section. The other two VC’s not discussed here are healthy living and public safety.

The LSA is comprised of nearby communities that could experience proposed Project related effects on population change, housing, and community services and infrastructure. These communities include the District of Elkford, District of Sparwood, Hosmer, City of Fernie, West Fernie and rural areas of the Fernie-Elk Valley area, City of Cranbrook and the Municipality of Crowsnest Pass, Alberta. The RSA is the same as that used for recreation and is described in section 7.1.1 above.

Sustainable Community Population

According to the Application, in 2009, the population of the RDEK was 59,954, and the population of the LSA was 14,893. While the population of the Province as a whole increased by 5.3 percent between 2001 and 2006, the population of the LSA decreased by 4.8 percent. Over the past 15 years, the population of the LSA has slightly declined.

The LSA currently has a relatively young population, but the Application states that the population is generally aging, and with current trends would add 4.5 years to its median age between 2008 and 2036. The LSA age distribution forecast for this 28-year period predicts that the share of the population aged 0 to 65 will see a decline, but the 65 and over age group will increase from 11 percent to 35 percent.

Housing Availability and Affordability

In 2006, the LSA communities of Fernie, Sparwood, Elkford and Crowsnest Pass had approximately 9,000 dwellings and 80 percent of these dwellings were occupied by residents who spend a majority of the year in the dwelling, and the remainder were rentals with a near-zero vacancy rate. Elkford and Crowsnest Pass reported a high number of owner-occupied dwellings at about 87 percent and 86 percent respectively, while Fernie reported 71 percent resident ownership, indicating a larger rental market.

The availability of housing for short-term contractors working in the Elk Valley mines is a particular concern for Sparwood and Elkford where rooms in hotel and motel facilities in both communities are booked primarily by contract mine workers, making it difficult for 116

Sparwood and Elkford to host recreational sports tournaments and promote tourism. The campsite in Elkford is generally at capacity with short-term contract workers living at the campground. There are reports of contract workers living out of their vehicles, in parking lots at the mine and in town as well as in highway pullouts, including in the middle of winter.

The percentage of households (both owned and rental) where 30 percent or more of household income is spent on housing is below the provincial average in Elkford, Sparwood and Fernie with the exception of rental households in Fernie. Recent housing assessments in Fernie indicate that as house prices rise, fewer young families are able to purchase homes and there is little available rental housing for low income households.

Availability and Access to Community Services

With the financial support of the Proponent, Sparwood has a 12-hour child care centre, but enrolment is close to capacity. The Application states that Elkford’s pre-school is at capacity and that Elkford is considering supporting the development of a commercial daycare in the community.

Elementary and secondary schools are available in each LSA community, but the Application states that Fernie and Sparwood elementary schools have aging school infrastructure, and need elementary school replacement plans.

The College of the Rockies with over 3,500 full time students is the main post- secondary institution in the East Kootenays, has its main campus in Cranbrook, and secondary campuses in another area of Cranbrook and Fernie, with other secondary campuses located outside the LSA.

Elkford and Sparwood have a volunteer fire and rescue service staffed by on-call members of the community. Elkford has a full-time fire chief who oversees 27 volunteer firefighters from one fire hall. Sparwood has one fire chief and 28 paid-on-call members providing fire and rescue services from two fire halls. Community volunteers in both communities also assist with ambulance calls.

The Fernie Fire Department has seven full-time firefighters and a complement of paid-on-call volunteers. The fire hall is manned by two full-time firefighters during the day and one full-time firefighter at night. Fire service and mutual aid agreements exist between many of the local communities. These agreements allow for fire suppression and vehicle extrication services if needed.

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Law enforcement and protective services for the LSA communities are the responsibility of the Royal Canadian Mounted Police which has detachments in Elkford, Sparwood, Fernie and Crowsnest Pass. The Elkford, Sparwood and Fernie stations are collectively managed under the Elk Valley Detachment, and consist of 17 members in total.

Availability and Access to Community Infrastructure

In LSA communities, water supply, wastewater treatment, solid waste recycling and disposal are provided by the municipality.

All of the LSA communities with the exception of Elkford are located on highway 3, the Crowsnest Pass Highway, the major east-west highway that links the RDEK to Alberta to East passing through Cranbrook, Fernie, Sparwood and Crowsnest Pass. Highway 43, the Elk Valley Highway, is a north/south highway connecting Elkford to Highway 3 at Sparwood.

7.2.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

According to the Application, communities in the LSA, in collaboration with local industry, are working together to identify a long-term housing strategy that would support a retirement population while simultaneously maintaining housing availability and affordability to encourage families to move into the community. Specifically, the District of Sparwood and the District of Elkford are currently partnering with the Proponent and the Columbia Basin Trust and the BC Non-profit Housing Association to undertake a Housing Demand and Needs Assessment to develop affordable housing strategies.

To address cyclical housing shortages, provide housing for new employees to the Elk Valley mines, and encourage new hires to move to Elkford, the Proponent is building a condominium housing project in Elkford with 41 owner-occupied and 40 rental units. These housing rental and purchase opportunities will be offered primarily to new employees. LSA communities indicate there is a need for more housing to address the Elk Valley mine workforce, and interest has been expressed by Sparwood, Fernie and Crowsnest Pass in housing projects that would be similar to the development that the Proponent provided in Elkford.

The Fire Chiefs in Sparwood and Elkford indicated to the Proponent that mine shift work can make it difficult to fully staff the on-call schedule as most of their volunteer members also work in the mines. However, these municipalities have an arrangement with the Proponent that if there is an emergency in town, and more volunteers are needed, workers will be released from mine work to help attend the emergency. 118

The Proponent concluded that with proposed mitigation the proposed Project would benefit local communities and maintain or improve social conditions.

Summary of Mitigation Proposed in the Application

The Proponent proposes the following measures to avoid or minimize effects on social conditions:

• Provide financial and technical support to build new housing; • Collaborate with regional and local government authorities, business community and community groups to plan for long term sustainable housing; • Collaborate with regional and local government authorities, educational institutions, community service providers, business community and community groups in long-term planning for services; and • Collaborate with regional and local government authorities, educational institutions, community service providers, business community and community groups in long-term planning for infrastructure.

7.2.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, an issue was raised by a member of the public. This issue, the Proponent response and EAO’s assessment of the adequacy of responses are detailed in Appendix II. The issue and response is summarized below.

The issue raised was with the financial cost of maintaining roads and highways from increased wear and damage caused by increased mine traffic and heavy vehicles, and whether the taxpayers would be required to carry the financial burden.

The Proponent responded that the proposed Project would cause only a small increase in heavy truck traffic above existing levels on provincially maintained roads, to construct and maintain the Dry Creek sediment pond and water treatment facilitiy. The Proponent must maintain mine site roads on their property or on crown land held under lease or licence by the Proponent, at their cost.

7.2.4 Potential for Residual Effects and Significance Analysis

Based on the information presented in the Application, and the Working Group’s consideration of the information and the Proponents commitments, EAO is satisfied that the proposed Project is not likely to have any residual adverse effects on social conditions.

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7.2.5 Conclusion

Based on the above analysis and having regard to the certificate conditions which will become legally binding if an EA Certificate is issued, EAO is satisfied that the proposed Project is not likely to have significant adverse effects on social conditions.

8 Assessment of Potential Heritage Effects

8.1 Archaeology and Heritage Resources

8.1.1 Background Information

BC’s archaeological resources are protected under the Heritage Conservation Act. The Heritage Conservation Act and the Freedom of Information and Protection of Privacy Act provide for withholding detailed site location information from the public to prevent vandalism and other unauthorised alterations. To this end, the Application does not include specific site locations on maps and much of the information is confidential.

Generally, the BC Archaeology Branch does not participate as a member of EA working groups. The Archaeology Branch does not review Applications or other submissions unless requested by EAO. The Archaeology Branch requests that project Proponents retain the services of a consulting archaeologist to conduct an AIA consistent with the BC AIA Guidelines (Archaeology Branch 1998, available on the Archaeology Branch website). AIA’s are conducted under permits and the Archaeology Branch will review permit reports and provide input to the EA process once permit reports have been accepted.

Archaeological sites were selected by the Proponent as the single VC assessed for heritage effects. The LSA was defined as the operational boundary of the proposed Project plus an additional buffer of 100 m. The temporal bounds for the proposed Project include the following time periods:

• initial construction phase of 16 months, beginning in 2013; • operations phase from 2014 through 2031, representing active mining and processing coal. This period would also include some construction activities, such as building and operating an selenium active water treatment facilitiy in Dry Creek in 2022; and • reclamation and closure phase including intensive reclamation between 2032 and 2038, and monitoring and maintenance through 2074.

The Proponent conducted an Archaeological Overview Assessment (and two AIA’s entirely within the LSA. One AIA included the mining operations footprint area and the

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second AIA included the proposed active water treatment facilitiy location. Both reports were approved by the BC Archaeology Branch and were included as part of the Application (Application Annexes M and N).

According to the Proponent, the objective of the assessment of archaeological resources was to identify and quantify effects to archaeological sites as a result of the proposed Project. No previously recorded archaeological sites were identified within the archaeology LSA and no new sites were recorded during the studies. Based on these results, combined with the evaluation of research, the Proponent reported that no effects to archaeological sites are expected as a result of the proposed Project. No further archaeological work is proposed for the proposed Project as it is currently planned.

8.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

The Proponent recognized that during construction and operations, archaeological, palaeontological and heritage resources could be uncovered. To address this possibility, chance find procedures would be followed.

Summary of Mitigation Proposed in the Application

The Proponent proposes the following key measures to avoid or minimize effects on heritage resources:

• An Archaeological Resources and Palaeontology Chance Find Management Procedure would be implemented during construction, operations and reclamation and closure activities involving ground-alteration; and • The Proponent would continue to consult with the KNC regarding archaeological resources as part of their ongoing operations in the Elk Valley. This consultation would start in the pre-construction phase with consultation with the Ktunaxa Nation on the development and implementation of the Heritage Resources Chance Find Management Procedure for management of unanticipated archaeological resources.

8.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, no issues were raised by the Working Group, First Nations or members of the public on potential impacts to archaeological and heritage resources.

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8.1.4 Potential For Residual Effects and Significance Analysis

Based on the information presented in the Application, and the Working Group’s consideration of the information and the Proponent’s commitments, EAO is satisfied that the proposed Project is not likely to have any residual effects on archaeological and heritage resources.

8.1.5 Conclusion

Based on the above analysis and having regard to the certificate conditions which will become legally binding if an EA Certificate is issued, EAO is satisfied that the proposed Project is not likely to have significant adverse effects on archaeological and heritage resources.

9 Assessment of Potential Human Health Risk

9.1 Human Health Risk Assessment

9.1.1 Methodology

In the Human Health Risk Assessment (section B 6.1 of the Application) people are the valued component. The LSA is the area around the proposed Project site and includes nearby residences, cabins and the Elkford community. The RSA is a broader area taking in communities to the south and west including Fernie, east beyond the Alberta border including Blairmore, and north just beyond Elkford.

The human health risk assessment assumed that emissions of chemicals would occur throughout the construction, operations, closure and post-closure phases of the proposed Project, and evaluated both long-term (chronic) and short-term (acute) effects of chemical exposures on human health. The assessment used information and predictions from the following components of the EA: air quality, water quality, aquatic health, wildlife and wildlife habitat, land use and tenure, and Ktunaxa Nation interests (traditional food preferences, harvesting locations and ingestion rates).

The methodology used is based on guidance developed by BC ENV, Health Canada, the United States Environmental Protection Agency (US EPA), the Canadian Council of Ministers of the Environment, and other applicable risk assessment guidance documents and manuals The exposure and toxicity assessment followed basic principles of human health and ecological risk assessment frameworks endorsed by Health Canada and US EPA.

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The three components of the risk assessment included:

• an air quality risk assessment; • an assessment of exposure to airborne particulate matter; and • an evaluation of risk from exposure to materials that might be present in the soil, sediment, water and food.

The human health risk assessment estimated the nature and probability of adverse health effects in humans who may be exposed to chemicals in the environment from coal mining, should the proposed Project go ahead. This assessment was done by:

• identifying the chemicals or chemical groups that would be present in emissions from the proposed Project; • predicting changes to features in the environment that people would be exposed to such as air, water, soil and food; and • assessing the risk that these predicted changes would affect human health.

Notably different from other components of the EA, a modified approach to the classification of residual effects and evaluation of significance was used, because several of the criteria (e.g., geographical extent, duration, frequency and reversibility) are already incorporated into the risk estimates and, therefore, are not independent variables. The significance for human health was evaluated based on:

1. the potential magnitude of the response, as indicated by the hazard quotient (HQ), or the probability of the risk as indicated by the incremental lifetime cancer risk (ILCR), and 2. the degree of conservatism and uncertainty in the analysis.

The HQ represents the target ratio of the predicted chemical exposure relative to its health-based benchmarks. The ILCR represents the additional or extra risk of developing cancer due to exposure to a chemical (from the proposed Project) incurred over the lifetime of an individual.

The potential for adverse effects to occur was assessed by comparing the estimated exposures with levels of exposures that are considered to be acceptable based on environmental quality standards and guidelines from the BC ENV, Canadian Council for Ministers of the Environment, Health Canada, and other Canadian and international jurisdictions as needed. The characterization of risk included a consideration of uncertainty and conservatism in the elements of the risk assessment.

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Contaminants that were predicted to be below environmental quality standards and guidelines for the protection of human health were considered to have a negligible effect by the Proponent and they were not carried forward for further assessment on cumulative effects. The contaminants that were predicted to be greater than the environmental quality standards and guidelines for the protection of human health were assessed further. Substances that are predicted to increase to levels that could have a potential effect on human health included arsenic, cadmium, molybdenum, and nickel. Selenium was also assessed further because of concern expressed by the public, even though the prediction from the initial assessment indicated a negligible effect. The Proponent estimated the magnitude of potential risks that these substances may pose to human health.

The human health risk assessment categorized consumers based on the amount and frequency of traditional (wild) foods they consumed. The definitions of these categories are as follows:

• First Nations High Consumer: a First Nations resident who consumes a higher than average rate of traditional foods; • First Nations Seasonal High Consumer: a First Nations resident who is assumed to spend three months at a hunting/fishing camp located at the proposed Project no access boundary, nine months in Elkford, and consumes a higher than average rate of traditional foods; • First Nations Average Consumer: a First Nations resident who consumes an average rate of traditional foods; • First Nations Seasonal Average Consumer: a First Nations resident who is assumed to spend three months at a hunting/fishing camp located at the proposed Project no access boundary and nine months in Elkford and consumes an average rate of traditional foods; • Non-First Nation Community Residents; and • Recreational User.

The specific ingestion and exposure rates assumed for each of the above adult consumer scenarios was presented in Table B6.1-7 of the Application and must be considered in conjunction with the definitions above. Further information related to traditional food consumption and exposure rates for different life stages is presented in Appendix B.XIXc of the Application.

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9.1.2 Project Issues and Effects and Proposed Mitigation Identified in the Application

Residual and Cumulative Effects Assessment

The Proponent’s predictions for the long-term risk to human health for combined exposures to contaminants in air, water, soil, sediment, plants, fish and wild game are summarized as follows:

1) First Nations High Consumers and First Nations Seasonal High Consumers

• The magnitude of long-term risks to human health are predicted to be moderate for exposures to arsenic (as a carcinogenic substance) and lung cancer toxicants (arsenic, cadmium, chromium and nickel); • The magnitude of long-term risks to human health are predicted to be low for exposures to kidney toxicants (cadmium and molybdenum); and • The magnitude of long-term risks to human health are predicted to be low and likely negligible for exposures to cadmium, molybdenum, and nickel. 2) First Nations Average Consumers and First Nations Seasonal Average Consumers

• The magnitude of long-term risks to human health are predicted to be low for exposures to arsenic (as a carcinogenic substance) for the First Nations resident and for the seasonal user; and • The magnitude of long-term risks to human health are predicted to be low and likely negligible for exposure to kidney toxicants. 3) Non-First Nations Community Residents

• Magnitude of long-term risks to human health are predicted to be low for exposures to arsenic (as a carcinogenic substance) and lung cancer toxicants; and, • All other residual health risks are predicted to be negligible.

The Proponent concluded that the risks have likely been over-estimated due to the conservatism inherent in the assumptions and predictions in their assessment (see “Confidence and Risk“, section 9.1.4), and that it is unlikely that the increase in contaminants due to the proposed Project would have a significant effect on human health.

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Summary of Mitigation Proposed in the Application

Mitigation measures outlined in the water quality and aquatic health assessment (see section 5.1 of this report) and the Air Quality and Noise Control Plan in the Application would avoid or minimize effects of the proposed Project on human health risk.

9.1.3 Project Issues and Effects and Proposed Mitigation Identified During Application Review

During the review of the Application, issues were raised and clarifications were requested by KNC, the Working group, and members of the public. These issues, the Proponent’s responses and EAO’s assessment of the adequacy of responses are detailed in Appendix II. Key issues and responses are discussed below.

Health Canada requested clarifications from the Proponent on the human health risk assessment, but did not raise any issues that required resolution. KNC contracted expert third-party reviewers for review of the human health risk assessment, and for the review of the Proponent’s Recommended Environmental Management Levels (EMLs) for Cadmium for the Fording and Elk Rivers and Lake Koocanusa (February 2013). KNC’s reviewers concluded that overall, the assessment was a comprehensive and reasonable characterization of the potential health risks associated with the proposed Project.

Cancer Risk from Arsenic

KNC questioned information in the Application on effects to First Nations high consumers, and suggested that the proposed Project could be associated with an unacceptable cancer risk. KNC advised that the risk of cancer should be explained further, either in the form of more detailed exposure analysis, expanded discussion with respect to uncertainty and/or recommended follow-up actions that would somehow mitigate these risks.

The Proponent responded that, as indicated in the significance of effects tables (Tables B6.1-34 and B6.1-35 in the Application), the potential magnitude of the predicted risk estimates for the Project were considered to be low to moderate, in particular for receptors (people) that consume large quantities of fish and wild game within areas that are influenced by the proposed Project.

The Proponent re-iterated that the Government of Canada has estimated that for Canadians, the total daily exposure to inorganic arsenic from environmental sources ranges from 0.1 to 2.6 μg/kg-body weight/day, which includes exposure via drinking 126

water. In areas near point sources3, the Government of Canada has reported that exposure may be up to 35 µg/kg-bw/day. These exposures result in cancer risks of 1.5x10-4 < ILCR > 3.9x10-3 for the general population, and up to 5.9x10-2 in populations near point sources. The Proponent has estimated that exposure to arsenic from daily intake for local residents would range from 0.07 to 0.1 µg/kg-bw/day and that incremental life time cancer risks from the proposed Project (1.4x10-4 to 1.9x10-4) would be at the lower end of baseline cancer risks due to arsenic found throughout Canada.

It is EAO’s view that condition 25 would address KNC’s concern regarding exposure to arsenic from wild foods. Condition 25 would require the Proponent, in consultation with KNC, to:

1. Verify the findings of the human health risk assessment presented in sections B 6.1.4.2 and B 6.1.5.2 of the Application. Section B 6.1.4.2 presents the results of the prediction and assessment of residual effects. Section B 6.1.5.2 presents the results of the evaluation of significance of residual effects; 2. Provide for the ongoing monitoring of potential contaminants in species harvested by Ktunaxa Nation citizens in the Elk Valley and Lake Koocanusa; 3. Implement measures to communicate and address contaminant concerns regarding species harvested by Ktunaxa Nation citizens; 4. Update the 2013 Ktunaxa Nation dietary survey and the wild food assumptions used in the Human Health Risk Assessment; and 5. Provide a report to KNC annually, on or before December 31 that describes the results of the consultation and follow up programs (listed in requirements 1, 2, 3 and 4).

Cadmium Exposure Risk

During the time limit suspension, KNC provided comments on the Proponent’s proposed cadmium EML’s and the potential human health risk. Cadmium concentrations in the Elk River watershed and Lake Koocanusa were predicted by the Proponent to occur at levels below guidelines for drinking water established by Health Canada, and KNC agreed that drinking water from these rivers and lake should not be a concern for cadmium exposure.

KNC noted that in the Application, cadmium was considered to be a potential contaminant in fish, and First Nations high consumers and First Nations seasonal high consumers could still have an increased risk of adverse effects from cadmium.

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Long-term exposure to cadmium may lead to kidney diseases and osteoporosis-like symptoms. Cadmium tends to accumulate at higher concentrations in organ tissues. Frequent consumption of fish (e.g., burbot) and ungulate (e.g., deer and elk) organs can be a significant source of oral cadmium intake. Due to lack of data on fish and ungulate organ tissue concentrations and consumption rates, the evaluation of risks from fish and ungulate organ ingestion was not included in the Proponent’s exposure assessment. Cadmium concentrations in organs can be higher than in the meat (muscle tissue), but the consumption rate is often less. It is important to separate the measurement of concentrations and consumption rates between organs and meat to accurately predict cadmium intake. KNC recommended the following steps to improve the human health risk assessment of cadmium:

• Develop site specific bioaccumulation factors for liver and meat in different fish species collected from the Elk River and Lake Koocanusa; and • Obtain estimates of fish liver and ungulate organ consumption as well as fish meat intake information particularly from the high consumers.

It is EAO’s view, that condition 25 (previously described in the discussion on “Cancer Risk from Arsenic”) would address KNC’s concerns.

Safety of Drinking Water

The potential for surface/groundwater interaction to affect wells used for drinking water was discussed with respect to selenium. Selenium concentrations are increasing in the Fording and Elk Rivers at a rate of 13% and 8% per year, respectively. BC’s Water Quality Guideline for selenium in drinking water is 10 µg/L, and in the Fording River immediately downstream from the Dry Creek confluence (and the proposed Project), maximum selenium concentrations now exceed 50 µg/L. Further downstream, at Sparwood, selenium concentrations in the Elk River are approaching the guideline. In 2011, the average selenium concentration was 7.7 µg/L, and maximum concentrations exceed BC’s Water Quality Guideline every year.

The proposed Project would increase the concentration of selenium in the Fording River between the Dry Creek and Line Creek confluences, but would not increase the concentration of selenium downstream of Line Creek. Selenium concentrations are not predicted to increase downstream of Line Creek due to the combined mitigation of the Dry Creek selenium active water treatment facility that would be part of the proposed Project, and the selenium active water treatment facility that will be constructed at the existing Line Creek Operations. Sparwood, the closest community to the proposed Project is located approximately 18 km downstream of Line Creek.

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The residents of the regional communities have access to drinking water from municipal wells or use private wells. The Proponent predicted that there would be no changes to groundwater quality in the vicinity of where people would obtain drinking water from wells. Drinking water (as an effects pathway) was, therefore, assessed to have no linkage to human health.

ENV advised that the BC Center for Disease Control and the Interior Health Authority have been reviewing the health risks of selenium in the Elk River watershed, and that a risk assessment was completed in early 2013, which concluded that drinking water risks were low.

ENV cautioned that there is the potential for surface/groundwater interaction, and noted that although Sparwood’s drinking water wells remain potable, a preliminary review of some data suggests that one well may be influenced by the Elk River.

9.1.4 Potential for Residual Effects and Significance Analysis

Characterization of Potential Risks to Human Health

The potential effects of the proposed Project on human health were assessed using risk factors that inherently consider the geographic extent, duration, frequency, and reversibility of predicted changes to the environment. The remaining two components considered in EAO’s usual 6-part test for significance, context and magnitude, are described below.

Context

Coal mining is the most significant human influence on the Elk River watershed, with lesser influences from forestry, tourism, agriculture, and residential and commercial development. Water quality in the Elk Valley is deteriorating due to increasing levels of contaminants generated by the existing coal mines. In general, concentrations are greatest in the upper part of the watershed, and decrease with dilution, as one progresses downstream.

In response to the increasing trend, on April 15, 2013, the Minister of Environment ordered the Proponent to develop an Elk Valley ABMP pursuant to Section 89 of the Environmental Management Act (as outlined in section 5.1.14). The ABMP, which includes the management objective of protection of human health, is intended to stabilize and then reduce levels of contaminants in the Elk River watershed. The ABMP will establish short-term, medium-term and long-term water quality targets and timeframes for achieving these targets for the Fording River, Elk River and Lake Koocanusa, and define an implementation plan for meeting those water quality

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targets and timeframes. The Proponent must complete the ABMP and submit it for the Minister’s approval by end of day on July 22, 2014.

Magnitude of Potential Long-term Risks

For the proposed Project, an incremental increase in risk to human health is predicted from:

• Arsenic (as a carcinogen); • Lung cancer toxicants (sum of the ILCRs for arsenic, cadmium, chromium and nickel); • Kidney toxicants (sum of the HQs for cadmium and molybdenum); and • Cadmium, molybdenum and nickel.

For arsenic (as a carcinogen) and lung cancer toxicants, the magnitude of long-term risks to human health is predicted to be:

• Negligible for recreational users; • Low for non-First Nations residents, First Nations average consumers and First Nations seasonal average consumers; and • Moderate for First Nations high consumers and First Nations seasonal high consumers.

For arsenic (as a carcinogen), the estimated ILCRs as a result of the proposed Project are considered to be at the lower end of baseline cancer risks due to arsenic throughout Canada.

For kidney toxicants, the magnitude of long-term risks to human health is predicted to be:

• Negligible for recreational users and non-First Nations community residents; • Low and likely negligible for First Nations average consumers; and • Moderate for First Nations high consumers.

For cadmium, molybdenum and nickel, the magnitude of long-term risks to human health are predicted to be:

• Negligible for recreational users, non-First Nations residents and First Nations average consumers; and • Low and likely negligible for First Nations high consumers.

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There is a moderate to high degree of conservatism in the predictions (see footnote 1), such that the risks to human health are likely over-estimated rather than under-estimated. The justifications for the assignment of magnitude and degree of conservatism are provided in the magnitude of effects tables presented in Section B6.1.4.2 of the Application.

Significance of Predicted Risks to Human Health

The significance of the predicted risks to human health was evaluated based on the potential magnitude of the risks and the degree of conservatism in the risk analyses, as outlined in the methodology section 9.1.1.

Given the magnitude of the predicted risks, and the likelihood that the risks are over-estimated, it is unlikely that the increase in contaminants due to the proposed Project would have a significant effect on human health.

Likelihood of Predicted Risks to Human Health

It is likely that the proposed Project will result in the predicted increases to substances of potential concern to human health, and that the predicted risks to human health will occur.

Confidence and Risk

Health Canada did not raise any issues with respect to the human health risk assessment that required resolution. KNC’s expert third-party reviewers concluded that overall, the human health risk assessment was a comprehensive and reasonable characterization of the potential health risks associated with the proposed Project.

An inherent uncertainty is associated with all risk assessment predictions. The magnitudes of the uncertainties are in large part a function of the quality, quantity, and variability of available data. For the assessment of the long-term risk to human health from the proposed Project, when information was uncertain, the assumptions that were made were conservative (i.e., biased towards safety). This is standard practice in a risk assessment. Due to the conservatism in the assumptions and predictions of the assessment, the Proponent has concluded that the risks to human health have likely been over-estimated, and it is unlikely that the increase in contaminants due to the proposed Project would have a significant effect on human health.

It is possible that that the predictions of risk for human health may have been underestimated. This would have the potential to affect First Nations consumers more than others due to a higher consumption of wild foods such as fish and organ meat from

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game. It is EAO’s view that Condition 25 (previously described in the discussion on “Cancer Risk from Arsenic”) would mitigate for a potential underestimation of risks.

9.1.5 Conclusion

Based on the above analysis and considering the certificate conditions, which will become legally binding if an EA certificate is issued, EAO has concluded that the proposed Project would not likely result in significant effects on human health.

10 Summary of Environmental and Operational Management Plans

Environmental Management Plans (EMPs) are important parts of the Proponent’s strategy for avoiding or mitigating adverse environmental, social, economic, health and heritage effects from the construction, operation, closure and reclamation of the proposed Project.

The Proponent must develop and implement EMPs prior to construction to provide guidance for both construction and operations on actions and activities to be implemented as required to mitigate potential adverse impacts.

Details on each of the EMPs can be found in the Application (section E1). However, some EMP requirements were revised to address issues identified during the EA, and these EMPs can be seen in Appendix III, Table of Conditions.

The Proponent must submit the EMPs to the appropriate agencies for review and input. The EMPs are considered preliminary at this time and would be completed in greater detail by the Proponent during the detailed design stage of the proposed Project.

11 Compliance Reporting

A compliance management plan would be developed by EAO that would guide assessing compliance with the EA Certificate if one is issued. The plan would include a risk assessment, along with roles, responsibilities, activities and reporting requirements.

PART C – FIRST NATIONS CONSULTATION

12 General

12.1 First Nations Potentially Affected by the Proposed Project

The proposed Project is located within the asserted traditional territories of the Ktunaxa Nation and the Shuswap Indian Band. At the start of the EA, EAO determined

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that the Ktunaxa Nation would be potentially affected by the proposed Project but that the Shuswap Indian Band would not.

In determining the list of First Nations which potentially may have an interest in the proposed Project and in creating this part of this consultation report, EAO evaluated a number of sources of information including the following:

• any relevant information provided by First Nations to EAO (or information provided to the Proponent and passed on to EAO), through personal communications, meetings, correspondence, or involvement in the EA process (including comments received through EAO’s Working Group and public comment periods); • treaty negotiations and other available related information from within the provincial government, such as the Ministry of Aboriginal Relations and Reconciliation and BC Treaty Commission websites, Statement of Intent maps, status (if applicable) within the treaty negotiations process, and other information on First Nation communities in BC; • information on the Aboriginal Affairs and Northern Development Canada website, including locations of First Nation reserves/communities and statistical information on those populations; • available individual websites of First Nation communities or tribal councils/ associations; • the Proponent’s Application and supporting materials, including archaeological and traditional use/knowledge overviews commissioned by the Proponent; and • internal government sources, including available ethnographic data including reports developed by the Aboriginal Research Division, Ministry of Justice.

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12.2 Ktunaxa Nation

12.2.1 Ktunaxa Nation Overview

Ktunaxa Nation Traditional Territory

The proposed Project is located within the eastern portion of Ktunaxa traditional territory, an area over which Ktunaxa Nation has asserted aboriginal title and aboriginal rights, and which is subject to ongoing treaty negotiations with the Province of BC and the Government of Canada. Figure 5, which was provided jointly by the Proponent and Ktunaxa Nation in the Application, shows the proposed Project in relation to Ktunaxa Nation traditional territory, statement of intent area and traditional land districts.

The core of the area claimed by Ktunaxa Nation as traditional territory encompasses the valleys of the upper Columbia and Kootenay River systems, and the slopes and peaks of the Rocky Mountains and adjacent ranges to the west. The historic territory of Ktunaxa Nation extends well east of the Rocky Mountains into Alberta and south into present day Montana, Idaho, and Washington states (shown in the inset map in Figure 5).

Section C of the Application, which was prepared jointly by the Proponent and Ktunaxa Nation, explains that within Ktunaxa law and oral tradition, Ktunaxa Territory is divided into traditional land districts historically associated with key actors in the Ktunaxa creation story, but also with specific key resources, and with particular Ktunaxa individuals or lineages that held particular authority and responsibility for stewardship of resources in those areas. Traditional Land Districts play an important historic and contemporary role in Ktunaxa land governance and resource management. The Elk Valley itself falls within the Ktunaxa traditional land district of qukin ʔamakis, or Raven’s Land, and is an area well known by Ktunaxa peoples for the richness of its fish and game, but also for the presence of coal and extensive coal mining. The proposed Project lies within the boundaries of qukin ʔamakis.

Ktunaxa Nation Communities (Bands)

Ktunaxa Nation is made up of four communities in BC, which were consulted during the EA, and two communities resident in the United States (the Confederated Salish and Kootenai Tribes of the Flathead Indian reservation and the Kootenai Tribe of Idaho).

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Figure 5: Ktunaxa Statement of Intent Area and Traditional Land Districts

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The four communities in BC comprise:

• akink’umłasnuqłi?it (Tobacco Plains Band), near Grasmere, BC; • ʔaq’am (St. Mary’s Band), near Cranbrook, BC; • yaqan nuʔkiy (Lower Kootenay Band), near Creston, BC; and • ʔakisq’nuk First Nation (Columbia Lake Band) near Windermere, BC.

The Tobacco Plains Band, the St. Mary’s Band, and the ʔakisq’nuk First Nation are in closest proximity to the proposed Project. Refer to Table 19 for the population of each of these communities.

In addition to these four communities, a number of Ktunaxa people are formally part of the connected Kyaknuqłi?it (Kinbasket or Shuswap Band) near Invermere, BC, which has recent historical connections to the wider Ktunaxa Nation and reside in Ktunaxa territory.

Ktunaxa Nation Reserves

The Indian Reserves which belong to the four Ktunaxa Nation communities include:

• akink’umłasnuqłiʔit (Tobacco Plains near Grasmere) – two reserves (Tobacco Plains 2, St. Mary’s 1A); • ʔaq’am (St. Mary’s Band near Cranbrook) – five reserves (Bummers Flat 6; Cassimayooks (Mayook) 5; Isidore’s Ranch 4; Kootenay 1; St. Mary’s 1A); • yaqan nuʔkiy (Lower Kootenay Band near Creston): nine reserves (Creston 1; Lower Kootenay 1A; Lower Kootenay 1B; Lower Kootenay 1C; Lower Kootenay 2; Lower Kootenay 3; Lower Kootenay 4; Lower Kootenay 5; St. Mary’s 1A); and • ʔakisq’nuk (Columbia Lake Band near Windermere): two reserves (Columbia Lake 3 and St. Mary’s 1A).

The nearest Indian Reserve to the proposed Project is St. Mary’s 1A (approximately 73 km). Due to the extremely mountainous terrain of the East Kootenays, the closest Indian Reserve by road is Tobacco Plains 2 at approximately 109 km from the Project. Figure 6 shows the proposed Project in relation to the nearest Ktunaxa Indian Reserves.

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Table 19: Population of the Ktunaxa Nation Communities

Population First Nation Resident (on reserve) Population 2006 Registered Population (on and off reserve) 2011 2006 (2001) [# off home reserve]

akink’umłasnuqłi?it a 173 nd 67 (82) (Tobacco Plains Band) [106 or 61%] ʔaq’am 340 188 164 (160) (St. Mary’s Band) [185 or 54%]

yaqan nuʔkiy a 93 124 (120) 210 (nd ) (Lower Kootenay Band) ʔakisq’nuk First Nation 255 96 153 (165) (Columbia Lake Band) [102 or 40%] a No data available

Ktunaxa Nation Governance

KNC is the government of the Ktunaxa Nation and represents Ktunaxa communities (Bands) and citizens. KNC is organized according to four “pillars” or sectors: lands and resources; social; traditional knowledge and language; and economic investment. Each of these sectors, as well as the corporate sector, is governed by a sector council. The legal “entity” for entering into agreements is the KNC Society. The Ktunaxa Nation Executive Council is the ultimate decision-making body within the KNC governance structure. It is made up of the elected leadership of the four communities, the chairs of the five sector councils and the elected chairperson.

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Figure 6: Ktunaxa Nation Reserves and Proximity to the proposed Project

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12.2.2 Ktunaxa Nation Traditional Occupation and Use of the Middle Elk Valley and Mountains to the East

EAO’s understanding as to the use of the Middle Elk River Valley and eastern mountains by the Ktunaxa Nation at the time of contact and at the time of sovereignty is based on readily available ethnographic, archaeological and historical information.

The proposed Project is located on the eastern slopes of the Middle Elk River Valley, within what ethnographers have described as Ktunaxa territory (Figure 7). Specifically, the proposed Project is situated within a region that has been ascribed to the Upper Ktunaxa (referred to on the map as Upper Kootenai).

The ethnographic, archaeological and historical sources indicate that at the time of first contact (thought to be in the early 1790’s) Ktunaxa territory was centred on the Kootenay River and the upper Columbia River. The Lake Koocanusa / Tobacco Plains area appears to have been the core or “heartland”, although Lake Koocanusa did not exist at the time; only the pre-impounded Kootenay River. At the time of contact, the Ktunaxa people were semi-nomadic, forming large groups in the winter and dispersing into small family-based groups in the summer. Winter villages were situated on the shores or banks of lakes, rivers and creeks (e.g., Tobacco Plains) on well-drained flats or ridges.

According to available ethnographic literature, there were three discrete bands living within the Middle Elk River Valley prior to the time of first contact: the Michel Prairie Band, the Tobacco Plains Band and the Fernie Band (Figure 8). The Michel Prairie and Fernie Bands lived closest to the proposed Project area in pre- contact times, and likely used it the most. The main winter settlement of the Michel Prairie Band was located at Michel Prairie, at the junction of the Elk River and Michel Creek, near the present day community of Sparwood. The Fernie Band’s main winter settlement was on the Elk River near Fernie. The Michel Prairie Band was said to have become extinct by the time of contact; the survivors having joined other Ktunaxa Bands, including the ?Akisq’nuk Band. The Fernie Band was thought to have been a sub-group of the Tobacco Plains Band. When reserves were introduced, most members returned to Tobacco Plains, while others went to Windermere (?Akisq’nuk Band).

The winter settlements of the Upper Ktunaxa were located adjacent to major ungulate winter ranges, and hunting was an important subsistence and economic practice to provide food, clothing and blankets, some of which was traded with other First Nations. Fish were also harvested from the rivers, streams and lakes, and plants, berries and roots were gathered for food and medicinal purposes. Tobacco, which was used

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primarily for spiritual and ceremonial purposes, was cultivated at Michel Prairie and Tobacco Plains. Flint for arrowheads was mined throughout the mountains within Qukin ?amakis, particularly near Fernie and north and west of Elkford.

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Figure 7: Kootenay Territory at Contact

1. Kootenai territory at contact in 1792, with modern reservations and reserves. Bands: 1, Columbia Lake Band; 2, St. Mary’s Band; 3, Tobacco Plains Band; 4, Libby-Jennings Band; 5, Bonners Ferry Band; 6, Lower Kootenay Band. 141

Figure 8: Ktunaxa Territory showing Michel and Fernie Band Locations

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The Elk and Fording Rivers and their tributaries were used as travel corridors for hunting in pre-contact times, including access to the eastern slopes of the Rocky Mountains for bison hunting and other purposes. Recorded archaeological sites in the Middle Elk River drainage (as of 1973), primarily camps for hunting and for trans-mountain travel, are shown on Figures 9 and 10. Hunting camps were concentrated along river valleys and trails leading to the mountain passes. Bison were hunted on the eastern plains during the fall and winter, and before the mid-nineteenth century, there appears to have been a resident bison population in the mountains. Elk, deer, caribou, moose, bighorn sheep and mountain goat were hunted in the foothills and mountains during the summer and fall. Otter, weasel, wolf, coyote, skunk and grizzly bear were also hunted and trapped, as well as a wide variety of birds including ducks, geese, gulls, eagles and grouse.

The Ktunaxa people engaged in warfare primarily to defend their territory. Evidence shows that there was territorial conflict with the Shuswap, whose territory lay to the northwest, and the Stoney, from east of the Rocky Mountains, and that the Ktunaxa did not yield territory. Relations with the Blackfoot tribes on the east side of the Rocky Mountains, where the Upper Ktunaxa hunted bison and other large game, were also hostile at times.

12.2.3 Ktunaxa Nation Current Occupation and Use of the Proposed Project Area for Traditional Purposes

A small-scale Ktunaxa traditional use and occupancy mapping study was conducted for the proposed Project. Elders and knowledge holders reported that:

• the areas within and adjacent to the proposed Project are exceptionally rich in game, including elk and sheep; however • while some Ktunaxa members continue to practice subsistence rights in the area, the majority of land users indicated that while their parents’ generation used the Elk Valley regularly, they consider the upper Elk Valley to be an area of lost use due to the intensity of industrial development (primarily mining) and concerns regarding water and wind born pollutants downstream of the coal mines.

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Figure 9: Archaeological sites identified in 1973 (North of Grave Lake)

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Figure 10: Archaeological sites identified in 1973 (South of Grave Lake)

During the study, three specific current traditional use activities were reported by Ktunaxa Nation members inside or within 250 m of the proposed Project footprint:

• highly valued sheep habitat (and associated hunting area) associated with high altitude grasslands and steep escape terrain; • a foot and horse trail that forms part of a wide ranging high altitude Ktunaxa trail system, which extends north and includes nearby passes to the east side of the Rockies (Tornado Pass), and likely extended through the current Line Creek Mine property prior to disturbance; and

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• a seasonal camp (habitation) in the lower Dry Creek drainage used by Ktunaxa Nation members as a base for hunting, fishing and related subsistence activities.

12.2.4 Ktunaxa Nation Aboriginal Rights (Including Title) EAO’s assessment, based on current information available to it, is that:

• There is a strong prima facie case to support the assertion of aboriginal rights to carry out harvesting activities such as hunting, fishing, trapping and gathering (and reasonably incidental activities) within the broader region in which these activities were carried out at the time of contact. • Mount Michael, Burnt Ridge North and the upper half of the Dry Creek Valley which together comprise the ~1,840 hectare footprint of the proposed Project, were part of the broader territory used by Ktunaxa Nation for traditional activities associated with the typical annual round. Consequently, there is a strong prima facie case in support of the assertion that aboriginal rights are exercisable in the proposed Project area. • Existing information indicates that there is a seasonal hunting camp located in the Dry Creek Valley, and that there was a permanent settlement of the Michel Prairie Band located at Michel Prairie, at the junction of the Elk River and Michel Creek, near the present day community of Sparwood, and a permanent settlement of the Fernie Band on the Elk River near Fernie. The Michel Prairie Band was said to have become extinct by the time of European contact with Ktunaxa, thought to be in the early 1790s, which pre-dates 1846. The Province approaches the assessment of the strength of aboriginal title claims based on current case law that approaches aboriginal title on a site-specific basis of regular and exclusive occupation of a site at 1846, or regular and intensive use of definite tracts at 1846. The information suggests Ktunaxa use of the area of the proposed Project to be of a seasonal nature; however, EAO is prepared to assume that there is a prima facie claim to aboriginal title to the site of the seasonal camp. It is important to note that EAO’s assessment is a prima facie determination made in order to discharge EAO’s Haida analysis and is focused on the site of the proposed Project. This analysis is made for the purpose of the proposed Projects only and is not meant to apply to any other part of Ktunaxa Nation traditional territory.

In regard to the Haida spectrum, EAO’s preliminary assessment was that the required scope of consultation with Ktunaxa Nation was near the high end of the spectrum because the proposed Project:

• Would eliminate the opportunity to harvest resources (hunt, trap, fish and gather plants) within the ~1,840 ha footprint of the proposed Project for the life of the

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mine and for a long period of time thereafter, pending reclamation and ecological restoration; • Would result in post-closure changes to, and likely diminution of, these opportunities on the reclaimed landscape; • Could potentially reduce downstream fishing opportunities in Dry Creek, Fording River, Elk River and Lake Koocanusa if the proposed water quality mitigation measures are not as effective as predicted, in which case the result would be an adverse effect on fish populations (abundance and availability for Ktunaxa harvest) and/or impaired fish consumability; • Could potentially increase the human health risk of consuming traditional food, particularly fish, and drinking the water from the Fording and Elk Rivers; • Would impact the ability to conduct Ktunaxa cultural and educational activities deeply associated with resource harvesting and land use in this area; and • May be inconsistent with any future uses Ktunaxa Nation may view for this area that might be better aligned with Ktunaxa land use and stewardship values or might provide more net benefits to the Ktunaxa Nation, including any long-term financial benefits from any alternate use of these lands.

EAO’s preliminary assessment was communicated to KNC, and EAO has engaged with Ktunaxa Nation Council in a manner which is consistent with this assessment.

12.2.5 EAO-led Consultation with Ktunaxa Nation

For the purposes of the Line Creek EA and associated consultation, the interests of Ktunaxa Nation were represented by KNC. KNC was kept fully informed of the progress of the EA and was provided with the information that was sent to EAO’s Working Group.

EAO provided capacity funding to KNC to assist their participation in the Pre-Application and Application Review Stages of the EA, and to provide ethnographic information to the Ministry of Justice for evaluation of whether the Teck Mine Sites: Review of Anthropological and Historical Sources Relating to the Use of Land in the Vicinity of Fording, Greenhills, Line Creek and Elkview Operations (April 30, 2010) should be updated. KNC participated fully in all stages of the EA. During the Pre-Application Stage, KNC provided comments on the draft section 11 Order, the draft Application Information Requirements (AIR), the Proponent’s draft First Nations Consultation Report, and participated in the Working Group meetings. KNC also participated in the completeness evaluation of the Application prior to the start of Application Review. During the Application Review Stage, KNC participated in Working Group meetings, and provided comments on the Application, the Proponent’s responses to comments, the additional water quality related information provided during the EA timeline suspension, and drafts of the Certified Project Description, Table of Conditions, First Nations 147

Consultation Report, and Assessment Report. There were twenty-four Working Group meetings in Pre-Application, fifteen Working Group meetings in Application Review prior to the EA timeline suspension on July 19, 2012, and six Working Group meetings during the time limit suspension. KNC’s comments on the Application, the Proponent’s responses, and the status of the issues raised are documented in Appendix II.

Throughout the EA, EAO met directly with KNC outside of the Working Group structure to discuss and address concerns, interests, and asserted aboriginal rights, including title. At these meetings, EAO explained and answered questions about the EA process, shared EAO’s information and views or positions on matters relating to the information required for the EA and the potential for impacts on claimed aboriginal rights from the proposed Project, and sought feedback. The KNC asked questions, shared their views and positions, and sought feedback from EAO. The CEA Agency and Department of Fisheries and Oceans participated in the meetings until July 6, 2012, when the Canadian Environmental Assessment Act 2012 came into force, and a federal EA was no longer required. During the latter part of Pre-Application and during Application Review, the First Nations Consultation Coordinator for the FLNR, participated in the consultation meetings due to the concurrent review of provincial permits for the proposed Project.

There were four EAO-led consultation meetings during the Pre-Application Stage of the EA:

• On March 2, 2010, the EA process and anticipated timelines were discussed, as well as the delegation of the federal EA to BC, EAO’s and the CEA Agency’s approach to communications and consultation with KNC, KNC’s comments on the draft AIR, and the Province’s strength of claim. • On March 24, 2010, the meeting was dedicated to discussion of KNC’s comments on the dAIR. • On June 9, 2010, a memo submitted by KNC on the Cumulative Effects Assessment (CEA) was discussed in the context of the CEA information in the dAIR, as well as significance assessment, participation funding from EAO, and government to government consultation. • On June 30, 2011, the following topics were discussed: KNC mandate, leadership and governance structure; Ktunaxa-BC Strategic Engagement Agreement, and whether it overlaps with the BC EA process; KNC engagement with the Proponent, including communication and consultation protocols; concurrent review process for EA Certificate Application and applications for provincial permits; federal delegation of the EA process to BC, and continued federal responsibility for First Nations consultation; and ethno-historical information related to Ktunaxa historical use of the Elk Valley area.

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During the Application Review Stage, there were nine EAO-led consultation meetings with the KNC:

• On March 5, 2012, the main topics discussed were: the steps and timelines of Application Review; the determination of a significant adverse effect and its implications; participation funding from EAO for Application Review; potential funding from EAO for a comprehensive ethnographic study; the Proponent’s consultation to date with KNC; and EAO and CEA Agency consultation with KNC during Application Review. KNC had not had sufficient time to review and to prepare for a discussion about the provincial preliminary assessments of strength of claim, which had been provided on January 23, 2012. • On May 18, 2012, discussions covered: pending changes to the Canadian Environmental Assessment Act; CEA Agency’s consultation with the Métis and other First Nations; funding from EAO for further ethno-historic work and the deadline for the deliverables; how issues raised by the Working Group and KNC during Application Review are resolved through conditions written into the EA Certificate; management plan outlines that would be conditions of the EA Certificate; the circumstances under which a time limit suspension would be ordered for the EA; and how downstream effects in MT would be addressed. • On July 27, 2012, the following items were discussed: the reasons for and anticipated duration of the time limit suspension ordered on July 19th; human health concerns with respect to selenium in country foods; the Table of Conditions – how it is developed, and its upcoming review by the Working Group and KNC; the Proponent’s consultation record for Application Review, and when it must be provided to EAO; the three upcoming major decisions of interest to KNC – Line Creek Operations Phase II EA Certificate decision, Impact Management Benefits agreement with the Proponent, and the Economic and Community Development Agreement negotiations; a meeting with EAO’s Associate Deputy Minister if the plans and frameworks developed during the EA do not adequately address KNC concerns; and the need for a rights-based discussion before the end of the EA. • On March 4, 2013, the discussions included the following topics: the mineral tax revenue sharing agreement between KNC and the Province; an overview of the concluding stages of the EA; an implementation protocol for certificate conditions; the inclusion of conditions within Section C of the Application as conditions of the EA Certificate; outstanding Ktunaxa aboriginal rights issues including the Valley- wide Selenium Management Plan, Environmental Management Levels and cadmium management; the Cumulative Effects Management Framework; the biodiversity management plan; and fish habitat. • On March 19, 2013, discussion was initiated on KNC’s twenty-three proposed conditions for the EA Certificate. • On April 22, 2013, EAO and KNC discussed: EA timelines; the Dry Creek Surface Water and Selenium Management Plan and trade-offs between fish 149

habitat and water quality In Dry Creek; the Elk Valley Area Based Management Plan (ABMP) Order (see section 12.2.11); current draft certificate conditions affected or potentially affected by the ABMP Order; EAO’s draft assessment report and the ABMP Order; the Ministers’ decision and consideration of the ABMP Order; and the Elk Valley Cumulative Effects Demonstration Project. KNC’s proposed certificate conditions were also discussed, including the: relationship of proposed conditions to the Impact Management Benefits Agreement (IMBA) under negotiation with the Proponent; the status of the IMBA negotiations; common themes in KNC’s proposed conditions (access for harvesting, hunting and traditional use, reclamation planning, involvement of KNC in the development and revision of Environmental Management Plans; safety of traditional foods, social effects, economic effects, and biodiversity effects), and EAO’s responses to proposed KNC conditions. EAO did not consider all of KNC’s proposed conditions to be within the scope of the EA, and advised that some proposals would be best raised within the Impact Management Benefits Agreement negotiations that were underway with the Proponent. For those proposals that were in scope, most were already partially addressed in EAO’s draft conditions, and EAO modified the draft conditions as appropriate to accommodate KNC’s concerns. The main accommodation was requiring the Holder of the certificate to consult with KNC during the development of the environmental management plans and the Archaeological Resources and Palaeontology Chance Find Management Procedure, and for changes to the approved plans and procedure. EAO also indicated that it would consider the inclusion of a new certificate condition that pertains to Ktunaxa access to the proposed Project site for harvesting, hunting and cultural use, subject to safety considerations. KNC was seeking access to the Proponent’s properties throughout the Elk Valley, and subsequently negotiated such a condition with the Proponent (see last paragraph of section 12.2.6, first bullet).

12.2.6 Proponent-led Consultation with Ktunaxa Nation Proponent-led Consultation Prior to Start of the EA (Prior to September 28, 2009)

The Proponent and KNC are parties to a 2007 Protocol Agreement which provides a broad, non-project specific framework for ongoing meaningful engagement. Under the Protocol, annual work plans are developed which consider and address matters of mutual interest, and which provide for the early identification of potential KNC issues with the Proponent’s proposed Projects within Ktunaxa Nation traditional territory.

Prior to EAO’s issuance of the section 10 Order on September 28, 2009, and in keeping with the Protocol Agreement, the Proponent initiated discussions regarding the proposed Project with representatives of KNC and Ktunaxa Nation communities.

At the first meeting in October 2008, KNC raised concerns about work overload with respect to responding to resource development within Ktunaxa Nation territory. The

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Proponent committed to work with KNC to minimize strain on its internal resources and assist with capacity building.

In November 2008, January 2009 and March 2009, the Proponent met with representatives of KNC’s Economic Investment Sector and Nupqu Development Corporation to discuss training, employment, and procurement strategies for increasing the participation of Ktunaxa Nation individuals and businesses in the Proponent’s mining operations, including the proposed Project.

In June 2009, in parallel with discussions regarding the development of a consultation agreement for the proposed Project, the Proponent shared an early draft of the Project Description with KNC.

In September 2009, an early draft of the AIR was forwarded to KNC. The Proponent also contacted KNC to arrange for Ktunaxa Nation participation in the archaeological assessment for the proposed Project.

Proponent-led Consultation during the Pre-Application Stage of EA (October 2009 to February 2012)

EAO issued the section 10 Order on September 28, 2009, thereby initiating the Pre-Applicatrion Stage of the EA process.

In November and December 2009, the Proponent:

• Continued discussions with KNC on a non-project-specific Consultation Agreement; • Offered financial assistance to KNC for the hiring of a dedicated staff member that would work directly with the Proponent’s personnel; • Hosted a workshop for KNC on procurement opportunities, policies and procedures; • Worked with KNC to facilitate the distribution of updates and events regarding the proposed Project to Ktunaxa Nation communities; and • Provided funding for a representative of KNC to participate in the field work portion of the AIA in 2009. KNC also participated in the oversight of the archaeological field work (2010 through 2011), and reviewed archaeological reporting prior to finalization.

In 2010, KNC provided extensive comments on the draft AIR to EAO. As required by EAO, the Proponent responded to each comment and revised the draft AIR to address many of the concerns and issues. The identification and characterization of

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Ktunaxa Nation’s interests and the assessment of cumulative effects were significant concerns for Ktunaxa Nation, and to address these, the Proponent:

• Agreed to work jointly with KNC to develop Section C of the Application which describes Ktunaxa Nation’s interests and potential impacts to those interests. A project-specific work plan and budget guided the work, and the Proponent financially supported KNC’s engagement of an external consultant to facilitate the development of Section C. Beginning in July 2010 through to submission of the Application in December 2012, the Proponent, KNC and the external consultant worked collaboratively to identify potential adverse effects to Aboriginal rights, including title, and other Aboriginal interests of the Ktunaxa Nation, mitigation measures to address these adverse effects, and opportunities to enhance benefits to the Ktunaxa Nation. The external consultant’s work was concentrated on acquiring and documenting Ktunaxa Nation traditional use and occupancy, and assessing potential impacts to Ktunaxa rights and interests in order to address concerns relating to these Aboriginal rights and/or interests. The consultant also liaised with the Proponent’s EA consultants to assist in the integration of traditional ecological knowledge and community information into the appropriate technical sections of the Application. To facilitate the development of Section C, the Proponent shared the applicable information from technical sections of the Application with KNC, including information from the vegetation, wildlife, fish and fish habitat, water quality and aquatic health and human health risk assessments; • Engaged in discussions with KNC about cumulative effects, and provided financial support to KNC to engage external consultants specializing in the field of cumulative effects assessment to supplement KNC’s review of the draft AIR. Based on written comments provided by KNC’s external consultants, the Proponent further revised the cumulative effects assessment section of the draft AIR; and agreed to undertake a pre-development study to provide context on how existing and past development has influenced the environment of the Elk Valley. The initial phases of the study were completed in time for consideration during the Line Creek Operations Phase II EA, but the overall study was not. The overall study may be completed in time for consideration during the Fording River Swift EA. The objectives of the study are to seek appropriate available information to describe, where possible, developmental and environmental changes in the Elk Valley from a time prior to European contact with the Ktunaxa Nation to the recent open pit mining period. The focus will be on environmental information that may contribute to analyzing environmental effects of the Proponent’s current operations and/or help put the Proponent’s cumulative environmental effects assessment and management into context. The intent is to use the study as one basis for the start of a cumulative effects management system in the region. The study will also be used to determine which attributes of available historical data can be used to quantitatively and/or qualitatively analyze effects, and increase confidence in current and future cumulative effects assessments and management in the Elk Valley. 152

In 2010, the Proponent also:

• Met with representatives of the Ktunaxa Nation communities of Tobacco Plains and ?Akisq’nuk to provide information on the proposed Project; • Made a presentation on the proposed Project to the Tobacco Plains community; • Hosted a site visit of the Line Creek Operations for staff from the Ktunaxa Lands and Resources Agency; • Signed a non-project-specific Consultation Agreement, and began the development of Consultation Guidelines that will include post-EAC permitting. These guidelines will also aim to align with the engagement levels identified in the Strategic Engagement Agreement between the Ktunaxa Nation and Province of BC, dated October 22, 2010; and • Provided funding for KNC’s consultant to participate in the field portion of the AIA.

In 2011, the Proponent:

• Continued to work with KNC regarding the assessment of cumulative effects. The Proponent met with KNC and its consultants to review and discuss the proposed methods for the cumulative effects assessment for wildlife and to further engage on the pre-development study. In September, the Proponent, KNC and their respective consultants participated in a workshop to discuss cumulative effects methodology for biodiversity, traditional use plants, and sensitive species; • Met with KNC to discuss the development of end land use objectives. KNC requested a community workshop, and the Proponent has agreed to work with Ktunaxa Lands and Resources Agency to arrange a workshop; • Worked with KNC on developing non-project-specific Consultation Guidelines to address future regulatory and permitting requirements for the Proponent’s operations within Ktunaxa traditional territory. These guidelines aim to align with the engagement levels identified in the Strategic Engagement Agreement between the Province of BC and Ktunaxa Nation, dated October 22, 2010 (Government of BC 2010). As of the date of this report, these guidelines were still under development; • Met with KNC to review the proposed fish habitat compensation options; • Met with KNC to begin planning for negotiations toward an Impact Management and Benefit Agreement; and • Provided its Pre-Application consultation record and proposed consultation for Application Review to KNC for review and comment prior to submission of the Application for screening (as required by EAO). The Proponent incorporated KNC’s comments as appropriate.

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Proponent-led Consultation during the Application Review Stage of EA

In early February 2012, just prior to the start of the Application Review period, the Proponent initiated negotiations with KNC for an IMBA. The IMBA will address mutual interests that are broader than the scope of the proposed Project, and the Proponent committed to provide capacity funding to KNC to support their participation in these negotiations. Matters that are associated with stewardship, including cumulative effects, were included in discussions at the IMBA table. Interests that are under negotiation include:

• Employment and training; • Business development and procurement; • Environmental stewardship; • Reclamation planning; • Establishment of an environmental working group; • Ktunaxa involvement in the review of upcoming projects and permitting; • Financial payments; • Representation of Ktunaxa culture and language on the Proponent’s sites; • Procedures and plans for Ktunaxa cultural resources on the Proponent’s properties; • Supporting Ktunaxa cultural and related activities within the proposed Project area specifically and more broadly within the Elk Valley; • Ktunaxa access to the Proponent’s properties; and • Dispute resolution process.

The negotiating team is working to complete a tentative IMBA in late 2013 for KNC review and possible approval in late 2013 or early 2014.

Throughout the Application Review period, the Proponent continued regular communications, including face-to-face meetings with KNC representatives, including the Ktunaxa Lands and Resources Agency, Ktunaxa Economic Sector and Employment Services and Nupqu Development Corporation. These communications focussed on IMBA negotiations and implementation planning, and procurement and employment opportunities, but they also provided opportunities for the ongoing identification of:

• specific Ktunaxa Nation Aboriginal rights (including title) that may be adversely affected by the proposed Project, and measures that have been or would be taken to avoid, mitigate, or otherwise accommodate these rights; and

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• adverse environmental, economic, social, health and heritage effects that may result from the proposed Project and how these effects have been or will be addressed.

No new issues or concerns, other than those identified in the Application, were identified in the course of these communications.

During the Application Review period, KNC provided extensive comments to EAO regarding the technical aspects of the Application. As required by EAO, the Proponent responded to each comment and participated, with EAO and the Working Group, in the drafting of certificate conditions that would address many of the concerns and issues.

During the final stages of the Application Review period, the Proponent negotiated a number of conditions with KNC. KNC, the Proponent, MEM and EAO discussed and modified the draft negotiated conditions. Six conditions were agreed upon, and are included in the proposed Table of Conditions of the EA Certificate, should one be issued by the deciding Ministers. The conditions have been included in the proposed Table of Conditions as follows:

• Condition 26 requires a Ktunaxa Cultural Management Plan, a Ktunaxa Work Force and Business Opportunities Plan, a Ktunaxa Economic Participation in Mine Closure Plan, and a Ktunaxa Access Management Plan. • Conditions 22, 23 and 25 require a:

o a Reclamation Plan; o an Archaeological Resources and Palaeontology Chance Find Management Procedure; o verification of the findings of the human health risk assessment, ongoing monitoring of potential contaminants in species harvested by Ktunaxa Nation citizens, implementation of measures to communicate and address contaminant concerns regarding species harvested by Ktunaxa Nation citizens, and updating of the 2013 Ktunaxa Nation dietary survey to determine contaminant risk; and o stipulate how the certificate holder will consult with Ktunaxa Nation. • Condition 24 requires the use of archaeologists on the Holder’s properties in the Elk Valley who are accepted by Ktunaxa Nation, and the provision of the Ktunaxa with reasonable notice and access to the Holder’s properties to monitor and oversee archaeological work. • The sixth negotiated condition requires eight environmental management plans: Cumulative Effects Management Framework, Biodiversity Management Plan, Regional Fish Habitat Compensation Strategy, Dry Creek Water Management Plan, Aquatic effects Monitoring Program, Fish Habitat Compensation Plan, Wildlife and Habitat Mitigation Plan, and Invasive Plan Management Plan. It also stipulates how the Ktunaxa Nation must be consulted in the development of the 155

plans, and requires the certificate Holder to provide reasonable funding to Ktunaxa Nation for consultation activity. The requirements of this negotiated condition have been captured in conditions 3, 5, 6, 9, 11, 15, 20 and 21 in the Table of Conditions.

12.2.7 Ktunaxa Nation Concerns

This section of the report addresses the concerns and issues regarding the proposed Project that were identified by Ktunaxa Nation in the Application, through direct consultation and through Ktunaxa Nation participation in the EA Working Group.

Ktunaxa Nation Framework of Valued Components

The key potential concerns identified by the Ktunaxa Nation are framed in relation to twenty-two VCs, which fall under five themes.

I. Social and economic: o Jobs/employment; o Business development; o Ktunaxa rights-based economy (focussing on commercial activities); o Training and education; and o Housing, transportation and social services. II. Culture, health and language: o Ecological approach to human health, and confidence in wild foods; o Ktunaxa language and culture (intangible cultural resources); o Cultural areas and properties (tangible cultural resources); and o Future Ktunaxa relationship with/knowledge of the land. III. Ecology and technical: o Biodiversity; o Ungulates; o Large carnivores; o Fish and fish habitat; o Road density (duration of access); o Connectivity; o Slope stability; and o Ecosystem health (including air and water quality, and lake stewardship).

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IV. Ktunaxa knowledge, use and occupancy: o Subsistence use sites, including resource collection, hunting and trapping sites (which include harvesting and kill sites, plant food and trapping areas); and o Habitation and cultural sites, including burials and other cultural/spiritual sites and trails and associated ecological knowledge and management practices. V. Ktunaxa governance and policy: o Land and water use planning; and o Ktunaxa governance, policies, standards and practices.

Ktunaxa-Nation-Concerns and Proposed Mitigation Identified in the Application

The Proponent worked jointly with KNC to develop Section C of the Application, which describes Ktunaxa Nation concerns regarding the potential effects of the proposed Project. These concerns are summarized in Table 20, as well as the Proponent’s proposed avoidance and mitigation measures. In addition to the mitigation outlined in Table 20, and as outlined in section 12.2.6 and 12.2.7, the Proponent is also:

• Working with the Ktunaxa Nation and government agencies to develop and implement an Elk Valley Cumulative Effects Management Framework for the Proponent’s operations in the valley; and • Undertaking a pre-development study broader than the scope of the proposed Project to provide context for the cumulative effects assessment for the Proponent’s other proposed coal mine expansions in the Elk Valley.

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

The proposed Project may continue the Continue to increase Ktunaxa awareness of the pattern set by previous Elk Valley coal Proponent’s job opportunities, and promotion of projects: contributing minimal positive stewardship, mining and trades careers consistent benefits to Ktunaxa citizens by way of with a sustainable economy employment, and maintaining or Establish baseline and annual targets for direct intensifying economic disparities between Ktunaxa employment (through PEOWG), and Ktunaxa and non-Ktunaxa in the region. systems for monitoring success Improve and personalize Ktunaxa application and recruitment systems Ongoing discussion through Procurement and Implement programs to improve work culture, Employment Opportunities Working Group Ktunaxa retention, and advancement at Line (PEOWG) under which Ktunaxa employment / Creek facilities contracting has increased since 2008, and the Proponent’s commitment to increasing Ktunaxa participations will be kept intact through IMBA provisions. The construction of the proposed Project High-level planning for business development Proposed EA Certificate conditions 26(b) and may not result in large increases in contract (short to long term) 26(c), jointly developed by KNC and the jobs. Support pre-qualification attainment by Ktunaxa Proponent. (Ktunaxa Workforce and Business businesses Opportunities Plan, and Ktunaxa Economic Participation in Mine Closure Plan) Improve communication of business opportunities and Ktunaxa success Improve Ktunaxa participation in large contracts Provide contracts at an appropriate scale for Ktunaxa involvement (where feasible), and direct- award suitable contracts to known qualified Ktunaxa providers

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

The proposed Project can be anticipated to Direct financial benefit consistent with Ktunaxa Under negotiation at IMBA table. permanently remove commercially valuable right to commercial resources within its territories resources from Ktunaxa Territory and contribute minimally to Ktunaxa communities through direct or indirect revenue sharing.

Without enhanced education and training Continue involvement of KNC in strategic planning opportunities, it is likely that the ultimate for training and education goals of both the Proponent and the Ktunaxa to have more Ktunaxa engaged in mining and associated career paths will not be achieved.

Ongoing discussion. Erosion of Ktunaxa cultural and social The Proponent will work with PEOWG to develop institutions resulting from unsupported improved Ktunaxa access to Line Creek Proposed EA Certificate condition 26(b), jointly economic migration to communities in Operations from Ktunaxa communities developed by KNC and the Proponent. (Ktunaxa Workforce and Business Opportunities Plan) vicinity of mine. Increased strain on Ktunaxa provision of social and health services for off-reserve members. Barrier to employment due to distance from worksite.

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

Potential impacts on social and cultural Establishment of a Ktunaxa language and culture Ongoing discussion. cohesion and Ktunaxa family networks. management plan (for the Elk Valley or applicable Proposed EA Certificate condition 25 and 26(a), Potential impacts on human health as a across operations) jointly developed by KNC and the Proponent. result of concerns regarding risks in the Further baseline research and communications to (Condition 25: verify findings of human health risk workplace or degradation of environments support confident Ktunaxa harvesting and wild assessment, monitoring of potential contaminants or resources in the RSA related to food consumption in the Elk Valley in species harvested by Ktunaxa Nation citizens, consumption of locally-harvested foods  Communication of potential health and safety communicate and address contaminant concerns (coal dust and selenium in particular). issues specific to Ktunaxa regarding species harvested by Ktunaxa Nation citizens, and update the 2013 Ktunaxa Nation

Potential loss of confidence in traditional dietary survey to determine contaminant risk. foods in the vicinity of the Project. Condition 26a: Cultural Management Plan)

The Ktunaxa language is a critically Support Ktunaxa language and culture use Ongoing discussion. endangered language isolate. Without Proposed EA Certificate condition 26(b), jointly mitigation, additional negative pressure will developed by KNC and the Proponent. (Ktunaxa increase the severity of existing significant Workforce and Business Opportunities Plan) effects.

Potential impacts on Ktunaxa Support cultural areas and properties protection Ongoing discussion. archaeological or heritage resources. Proposed EA Certificate conditions 23 and 24, Disturbance of important areas for cultural jointly developed by KNC and the Proponent. and subsistence practices (non- archaeological), including burials. (Condition 23: Archaeological Resources and Palaeontology Chance Find Management Procedure. Condition 24: use of archaeologists accepted by Ktunaxa Nation, and provision of access for monitoring archaeological work)

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

Restriction of future Ktunaxa access to  Support further Ktunaxa research and  Ongoing discussion. resources including subsistence in the Elk documentation, and communication regarding Proposed EA Certificate condition 8, jointly Valley.  Ktunaxa historic and current use and occupation developed by KNC and the Proponent. (Pre- of the Elk Valley development Study)

Potential loss of biodiversity. Support Ktunaxa stewardship (including Under negotiation at IMBA table. conservation of biodiversity) of Elk Valley Proposed EA Certificate conditions 5 and 22, jointly developed by KNC and the Proponent. (Biodiversity Management Plan and Reclamation Plan)

Potential loss of important seasonal habitat  Support Ktunaxa stewardship of ungulates Ongoing discussion. for culturally and economically important Proposed EA Certificate conditions 20, 5 and 22, species including elk, sheep, goat, deer. jointly developed by KNC and the Proponent. Potential loss of connectivity between (Wildlife and Habitat Mitigation Plan, Biodiversity seasonal habitats. Management Plan, and Reclamation Plan) Potential mortality due to increased access (human and/or predators) or vehicle collisions. Potential enhancement of ungulate populations through role of mine property as an ungulate refugia (from hunting pressure).

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

Potential loss of large carnivore habitat and Support Ktunaxa stewardship of carnivores Ongoing discussion. increased mortality resulting from Proposed EA Certificate conditions 20, 5 and 22, interaction with people. jointly developed by KNC and the Proponent. (Wildlife and Habitat Mitigation Plan, Biodiversity Management Plan, and Reclamation Plan)

Potential loss of habitat for fish and Support Ktunaxa stewardship of fish and fish Under negotiation at IMBA table. potential degradation of habitat due to habitat Proposed EA Certificate conditions 6, 15, 9, 11, 5 pollution (i.e., Selenium). and 22, jointly developed by KNC and the Proponent. (Regional Fish Habitat Compensation Strategy, Fish Habitat Compensation Plan, Dry Creek Water Management Plan, Aquatic Effects Monitoring Program, Biodiversity Management Plan and Reclamation Plan )

Potential for increased mortality of animals Reduce impacts from increased duration of road (due to vehicle collisions, hunting or use and access as part of closure plan destruction). Ongoing discussion. Proposed EA Certificate conditions 20, 5 and 22, jointly developed by KNC and the Proponent. Loss of connectivity linking important Maintain connectivity at the landscape scale (Wildlife and Habitat Mitigation Plan, Biodiversity habitat elements (i.e., seasonal habitat, Management Plan, and Reclamation Plan) mineral licks) or linking sub-populations (i.e., large ranging carnivores).

Potential erosion and failure of reclamation. Support Ktunaxa goals for habitat reclamation and Ongoing discussion. slope stability Proposed EA Certificate condition 22,) jointly developed by KNC and the Proponent. (Reclamation Plan)

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

Potential degradation of air quality, water Maintain air and water quality Ongoing discussion. quality, hydrological function, riparian Proposed EA Certificate conditions 6, 15, 9, 11, 5 ecosystems, flow regimes, and habitat for and 22, jointly developed by KNC and the fish and other aquatic species. Proponent. (Regional Fish Habitat Compensation Strategy, Increased levels of selenium, calcite and Fish Habitat Compensation Plan, Dry Creek other metals potentially foreclosing on Water Management Plan, Aquatic Effects future opportunities for Ktunaxa resource Monitoring Program, Biodiversity Management extraction. Plan and Reclamation Plan ) Reduced air quality due to coal dust.

Destruction of areas of high value habitat Support, improve, and communicate regarding Under negotiation at IMBA table. (including Sheep, Elk, and other species) Ktunaxa opportunities for accessing subsistence Proposed EA Certificate conditions 20, 5, 26(d) associated with site-specific and non-site resources and hunting on, or in the vicinity of, and 22, jointly developed by KNC and the specific, past, present, and planned future mine properties Proponent. Ktunaxa hunting and subsistence practice. (Wildlife and Habitat Mitigation Plan, Biodiversity Management Plan, Ktunaxa Access Management Continued impact (or potential recognition Plan, Ktunaxa Culture Management Plan, and of) Ktunaxa rights to access highly valued Reclamation Plan) subsistence resources on or adjacent to mine property.

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

Potential for ongoing or incidental Project Improve protection and cultural interpretation of Ongoing discussion. related disturbance (traffic, noise, trespass) Ktunaxa sites and properties associated with, and Proposed EA Certificate conditions 26(a) and to sensitive site-specific values (burials and potentially disturbed by Line Creek Operations 26(d), jointly developed by KNC and the possible adjacent values) near the Line Proponent. Creek rail corridor and in the vicinity of proposed the Project. (Ktunaxa Culture Management Plan and Ktunaxa Access Plan)

The proposed Project has potential to mitigate impacts of previous Line Creek Operations, including the removal and/or destruction of rock art panels and associated values in construction of the Line Creek access road. Theproposed Project will destroy areas associated with non-site specific historic foot and horse trails, and will con-tribute to reduced connectivity of usable hunting trails.

There is potential for the proposed Project Support KNC to confirm land and water use Under negotiation at IMBA table. to impact negatively on the recognition and planning objectives for the Elk Valley exercise of Ktunaxa stewardship authority and responsibilities in the Elk Valley, and for the proposed Project to proceed in a manner inconsistent with Ktunaxa law and planning.

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Table 20: Summary of Ktunaxa Nation Concerns Identified in the Application and Proposed Mitigation

Potential project effects Proposed Mitigations in Application Status of Mitigations at Conclusion of EA

Potential effect on treaty process (e.g., Support recognition of Ktunaxa stewardship and Under negotiation at IMBA table. through removal of underlying and un- governance in the Elk Valley Proposed EA Certificate conditions jointly surrendered resources of economic value Accounting of resources removed from Ktunaxa developed by KNC and the Proponent regarding prior to conclusion of a treaty). Territory through past Line Creek Operations a range of environmental management plans Ktunaxa monitoring and annual reporting would provide mitigation..

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Ktunaxa Nation Concerns of a Technical Nature Identified through Participation in the EA Working Group

The KNC was an active participant in the Working Group meetings held during the course of the EA. KNC’s concerns regarding the proposed Project submitted to EAO during Application Review, the Proponent’s responses, and the final status of these concerns (resolved or unresolved) are summarized in the Issues Tracking Table (Appendix 1). Key KNC concerns regarding the proposed Project included:

• Aquatic life:

o Potential effects of selenium from the proposed Project on aquatic life; o Potential contribution of the proposed Project to cumulative effects of selenium on aquatic life from all five of the Proponent’s operations in the Elk Valley; and

o Accuracy of the Bioaccumulation Factor modelling used to predict the potential effects of selenium on aquatic life (including fish and aquatic birds). • Fish habitat:

o Accuracy of the HSI modelling used to assess potential impacts to in Dry Creek and the Fording River; and

o Whether the fish habitat compensation plan would effectively offset the potential impacts to fish habitat. • Wildlife and wildlife habitat: o Loss of habitat and biodiversity, particularly old growth and mature forest types, and effects on wildlife species;

o Reclamation targets; and o Invasive plant management. • Human health:

o Potential bioaccumulation of selenium, arsenic and cadmium in traditional food (e.g., plants, berries, fish, aquatic birds and ungulates) and associated risks to human health, or perceptions of risk resulting in reduced consumption of traditional foods.

Further information on Ktunaxa Nation concerns and how they would be addressed through conditions proposed for the EA certificate is provided in the relevant sections of the Assessment Report: water quality and aquatic health (section 5.1); fish and fish habitat (section 5.2); vegetation and wildlife (section 5.3); and human health (section 9). In terms of matching specific concerns with corresponding mitigation measures, the reader is directed to those documents. The Minister of Environment and the Minister of 166

Energy and Mines will decide whether to issue an EA certificate for the proposed Project. If the Ministers decide to issue an EA certificate, they will consider EAO’s proposed EA certificate, including conditions, and will attach conditions they feel are necessary.

Ktunaxa Nation’s Request for a Review by the International Joint Commission (IJC) under the Canada / US Boundary Waters Treaty

The Elk River, which receives the drainage from the Elk Valley coal mines, flows into the Kootenay River or Lake Koocanusa (depending on reservoir elevation). Lake Koocanusa is a 90-mile long trans-boundary reservoir created by the damming of the Kootenai River in MT. International treaty obligations under the Canada US Boundary Waters Treaty apply to Lake Koocanusa; specifically, waters shall not be polluted on either side of the boundary to the injury of health or property on the other side.

Under the Treaty, disputes are resolved through the IJC. On October 11, 2012, KNC, the Confederated Salish and Kootenai Tribes (CSKT) and the Kootenai Tribe of Idaho (KTOI) made a joint request for an IJC review to the US Secretary of State and the Canadian Minister of Foreign Affairs. In the letter, KNC, KTOI and CSKT assert that “By degrading water quality, mine/selenium contamination threatens fish in the US and Canadian waters of the Elk River and Kootenai River watersheds that are of particular cultural, historic, and subsistence importance to our communities.” The Minister of Foreign Affairs replied that it is premature to refer the matter to the IJC. This conclusion is not supported by KNC.

12.2.8 Potential Impacts to Ktunaxa Nation’s Asserted Aboriginal Rights

Throughout the course of the EA, the Proponent and EAO engaged KNC with the goal of understanding the nature of Ktunaxa Nation’s asserted aboriginal rights, including title, its perspectives on potential impacts of the proposed Project on those rights, and potential changes to the proposed Project that would minimize any potential impacts.

Section C of the Application outlines the Ktunaxa Nation’s aboriginal rights from the perspective of Ktunaxa Nation, the potential impacts of the proposed Project on these identified rights, including title, as well as the Proponent’s proposed accommodation measures. Section C was developed jointly by the Proponent (through the Firelight Group Research Cooperative) and the Ktunaxa Lands and Resources Agency. Their perspective presented with respect to Ktunaxa Nation aboriginal rights, however, does not accord with the Province’s understanding in terms of their scope and status.

The Province considers Ktunaxa Nation’s aboriginal rights to be asserted, and uses the definition of aboriginal rights which has been established in law: aboriginal rights are 167

practices, customs or traditions integral to the distinctive culture of the First Nation claiming the right, and can include hunting, trapping, fishing and gathering plants for traditional medicines and spiritual ceremonies. Aboriginal title is a form of aboriginal right, which encompasses the right to exclusive use and occupation of the land for a variety of purposes, which need not be aspects of those aboriginal practices, customs and traditions that are integral to distinctive aboriginal cultures.

This section of the report addresses, from the perspective of the Crown, the potential impacts of the proposed Project on the asserted aboriginal rights of Ktunaxa Nation to harvest and safely consume plants, wildlife and fish, and the proposed accommodation that would mitigate potential impacts on these rights. Potential impacts of the proposed Project on Ktunaxa Nation’s assertion of aboriginal title are presented in section 12.2.4.

Reported Ktunaxa Site Specific Values within the Local Study Area

Figure 11 (from the Proponent’s Application) provides a map of KNC site-specific data reported within the LSA for the proposed Project. There are three site-specific use values inside, or within 250 m, of the proposed Project footprint, and five within 5 km of the proposed Project operational boundary. All mapped values are based on KNC use and occupancy reported in Project specific interviews. To account for margin of error and to protect confidential information, all KNC data were randomized and buffered. Points were randomized by 250 m, and then 1 km buffers were generated around all points, lines, and polygons.

Specific current traditional use activities reported by KNC members inside or within 250 m of the proposed the Project footprint include:

• Highly valued sheep habitat (and associated hunting) associated with high altitude grasslands and steep escape terrain; • A foot and horse trail that forms part of a wide ranging high altitude Ktunaxa trail system, which extends north and includes nearby passes to the east side of the Rockies (Tornado Pass), and likely extended through the current Line Creek Mine property prior to disturbance. This trail system provides for Ktunaxa access to resource harvesting and associated cultural use areas; and • A seasonal camp (habitation) in the lower Dry Creek drainage used by KNC members as a base for hunting, fishing and related subsistence activities.

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Beyond 250 m of the proposed Project footprint, but within the LSA, reported values include:

• Continuation of highly valued sheep habitat and sheep hunting areas (noted above); • Continuation of foot and horse trail network (noted above); • An elk kill site and elk hunting areas; and • A high altitude pass (Tornado Pass) associated with past Ktunaxa use.

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Figure 11: Reported Ktunaxa Site Specific Values Within the Local Study Area

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Potential Impacts on the Harvesting of Wildlife and Plants

While the existing LCO mine has already removed the mine and adjacent areas from active Ktunaxa practice for more than a generation, the proposed Project would remove an additional 1800 ha from the asserted traditional land base, and extend the duration of industrial mining and subsequent reclamation activities in the Line Creek and Dry Creek watersheds. The proposed Project would also ‘close the gap’ between the existing Line Creek Operations and the contiguous Fording River and Greenhills Operations to the north, creating an approximately 40 km long north-south band of active and partially reclaimed coal mines in the upper Elk Valley.

During construction and operation, and at least the early reclamation stages of the proposed Project, there would be the following potential adverse impacts on the harvesting of wildlife and plants by the Ktunaxa Nation:

• Lost opportunity to harvest wildlife and plants within the mine footprint; • Potential adverse impacts to the health (quantity and quality) of populations of culturally important wildlife (including elk, sheep, goat and deer) due to:

o Loss of 1800 ha of habitat within the proposed mine footprint, including ungulate winter range, movement corridors and potentially lambing/calving and mineral lick areas;

o Potential indirect impacts (visual, acoustic and coal dust) to habitat on the periphery of proposed footprint;

o Habitat fragmentation and loss of connectivity between important habitat elements (e.g., seasonal habitat, mineral licks and escape terrain), and sub-populations (e.g., large ranging carnivores and plants);

o Consumption and potential tissue accumulation of selenium and cadmium from ingestion of water and coal dust on vegetation; and

o Potential increase in wildlife mortality due to increased vehicle access and vehicle/wildlife collisions. • Reduction in access to harvesting areas east of the coal mines in the upper Elk Valley (due to closing of the gap between the three operations).

Post-closure, it is not likely that wildlife habitat, including high elevation grasslands and specific features such as mineral licks could be reclaimed to pre-disturbance equivalent function.

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Potential Impacts on the Harvesting of Fish

The proposed Project would potentially impact fish species relied upon for practice of Ktunaxa rights. Key fish species identified by Ktunaxa members as important for Ktunaxa use within the RSA include westslope cutthroat trout, whitefish and bull trout. The potential effects of the proposed Project include:

• Permanent loss of fish habitat in Dry Creek due to the deposition of waste rock in the upper Dry Creek Valley; • Loss of fish habitat in Dry Creek and in the Fording River due to calcite deposition; and • Potential adverse effects on local populations of mountain whitefish, westslope cutthroat trout and bull trout from:

o Increased concentrations of selenium, cadmium, nitrate and sulphate in Dry Creek and the ~10 km of the Fording River between Dry Creek and Line Creek; and

o Increased concentrations of cadmium, nitrate and sulphate in the Fording River downstream of Line Creek, the Elk River and Lake Koocanusa. With mitigation (treatment), no increases in selenium are predicted downstream of Line Creek.

Potential Impacts on the Safety of Wild Food

The Ktunaxa Nation has indicated (in the Application) that:

• Important links between Ktunaxa language, health, culture and land use are maintained through the confident practice of hunting, fishing and gathering wild foods in preferred harvesting locations; and • Ktunaxa elders and land users have noted that Ktunaxa citizens are concerned about coal dust, selenium and other metal loadings from the coal mines, and that confidence in wild foods from the Elk Valley, particularly fish, has been adversely affected for at least some Ktunaxa citizens.

The human health assessment conducted by the Proponent for the proposed Project addresses the potential for increasing health risks to Ktunaxa members who consume wild foods from the Elk Valley. The conclusion of the Proponent, which was reviewed by EAO’s Working Group, is that potential impacts to human health through the consumption of wild foods would be negligible.

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12.2.9 Proposed Accommodation Measures for Potential Impacts to Ktunaxa Nation’s Asserted Aboriginal Rights

The key mitigation measures developed during the EA to avoid or minimize potential effects on wildlife and wildlife habitat, fish and fish habitat, and vegetation would also avoid or minimize potential adverse effects on the harvesting of wild foods by the Ktunaxa Nation if the proposed Project is issued an EA Certificate. These mitigation measures have been incorporated in the Certified Project Description and the Table of Conditions, which together would comprise the EA Certificate. The relevant certificate conditions are also summarized in the sections below. There are, however, residual uncertainties including the degree to which it would be possible to restore pre-existing terrestrial habitat and ecosystem conditions on the mine-impacted landscape, and it is likely that Ktunaxa wildlife and plant harvesting rights would be permanently impacted within the proposed footprint of the mine. The effectiveness of the proposed water treatment and management technologies for selenium and other contaminants is also unproven.

The Minister of Environment has signed an Order requiring the Proponent to develop an Elk Valley Area Based Management Plan (section 12.2.11) to stabilize and then reduce the concentrations of selenium and other contaminants in the Elk and Fording Rivers and in Lake Koocanusa to acceptable levels.

The Province and Ktunaxa Nation have also entered into an Economic, Community and Development agreement (section 12.2.10), which sets out the framework for subsequent project-specific Appendices that can include provisions regarding the extent to which revenue-sharing payments constitute an accommodation for potential impacts of a project on Ktunaxa’s asserted aboriginal rights, including title.

Overarching Mitigation

There are two overarching mitigation measures, combined in one condition (in Table 21 below), that would also avoid or mitigate potential effects of the proposed Project on Ktunaxa Nation’s aboriginal interests.

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Table 21: Overarching Mitigation Measure that would Accommodate Potential Effects of the proposed Project on Ktunaxa Nation’s Aboriginal Rights

Mitigation/Accommodation Measure (Summary) Condition # An Independent Environmental Monitor will: a) Evaluate and report on compliance with the Certified Project Description and the Table of Conditions; and 1 b) Where a condition requires implementation of a plan, strategy or framework, monitor the effectiveness of the specified mitigation.

Mitigation for Potential Effects on Fish and Fish Habitat

Mitigation measures that would avoid or mitigate potential residual and cumulative effects of the proposed Project on Ktunaxa Nation’s aboriginal right to harvest fish are summarized in Table 22.

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Table 22: Mitigation Measures that would Accommodate Potential Effects of the proposed Project on Ktunaxa Nation’s Aboriginal right to harvest fish

Mitigation/Accommodation Measure (Summary) Condition # Regional Fish Habitat Management Plan 6 Dry Creek Water Management Plan 9 Aquatic Effects Monitoring Program 11 Dry Creek Calcite monitoring and management plan 12 Validation of the West Slope Cutthroat Trout Habitat Suitability Index Model 13 (used in the calculation of habitat compensation) In-stream flow needs study (used in the calculation of habitat compensation) 14 Fish Habitat Compensation Plan, including a monitoring program 15 West Slope Cutthroat Trout population assessment in the upper Fording River 16 West Line Creek selenium active water treatment facility. The permitting process is underway for the proposed plant, and it would not be a condition of N/A the EA Certificate for the proposed Project, should one be issued Minister of Environment’s Order to Teck Coal Limited to develop an Elk Valley ABMP that will stabilize and reverse the increasing concentrations N/A of contaminants from coal mining

Mitigation for Wildlife, Wildlife Habitat and Vegetation

Mitigation measures that would avoid or mitigate potential effects of the proposed Project on Ktunaxa Nation’s aboriginal right to harvest wildlife and plants are summarized in Table 23.

Table 23: Mitigation Measures that would Accommodate Potential Effects of the proposed Project on Ktunaxa Nation’s Aboriginal right to Harvest Wildlife and Plants

Mitigation/Accommodation Measure (Summary) Condition # Cumulative Effects Management Framework 3 Terrestrial Cumulative Effects Management Plan 4 Biodiversity Management Plan 5 Grizzly bear den survey for clearing planned between December 1 and March 17 31 Plan to mitigate impacts to breeding birds for clearing between April 1 and 18 August 31 Wildlife Mitigation Plan (human/wildlife interactions) 19 Wildlife and Habitat Mitigation Plan 20 Invasive Plant Management Plan 21 Reclamation Plan 22 Minister of Environment’s Order to Teck Coal Limited to develop an Elk Valley ABMP that will stabilize and reverse the increasing concentrations N/A of contaminants from coal mining 175

Mitigation for Safety of Wild Food

Mitigation measures that would avoid or mitigate potential effects of the proposed Project on the safety of wild food are summarized in Table 24.

Table 24: Mitigation Measures that would Accommodate Potential Effects of the proposed Project on Ktunaxa Nation’s Aboriginal Right to Safely Consume Wild Food

Mitigation/Accommodation Measure (Summary) Condition # Verify the findings of the human health risk assessment in the Holder’s Application sections B 6.1.4.2 and B 6.1.5.2 Provide for the ongoing monitoring of potential contaminants in species harvested by Ktunaxa Nation citizens in the Elk Valley and Lake Koocanusa Implement measures to communicate and address contaminant concerns 26 regarding species harvested by Ktunaxa Nation citizens Update the 2013 Ktunaxa Nation dietary survey to determine contaminant risk and update the wild food assumptions used in the Human Health Risk Assessment Dry Creek Water Management Plan 9 West Line Creek selenium active water treatment facility. The permitting process is underway for the proposed plant, and it would not be a condition of N/A the EA Certificate for the proposed Project, should one be issued Minister of Environment’s Order to Teck Coal Limited to develop an Elk Valley ABMP that will stabilize and reverse the increasing concentrations N/A of contaminants from coal mining

12.2.10 Economic Interests

On January 29, 2013, the Province and Ktunaxa Nation signed an Economic and Community Development Agreement (ECDA) which includes the Elk Valley Coal Mining Revenue Sharing Project Appendix. For Contributing Projects, the total amount payable to the Ktunaxa Nation for each Mine Fiscal Year will be:

a) 37.5 percent of the first $23 M of Incremental Mineral Tax Revenue for the Mine Fiscal Year, and b) 5 percent of any Incremental Mineral Tax Revenue for the Mine Fiscal Year exceeding twenty three million dollars $23 M.

A Project may become a Contributing Project if the Parties agree, and:

a) If it is reviewable under the Environmental Assessment Act, and an EA Certificate has been issued; 176

b) If it is reviewable by the Kootenay Mine Development Review Committee, and has been authorized by Government Action; c) The Project has undergone an assessment by the KNC, and the KNC, on behalf of the Ktunaxa Parties has provided the Province with written confirmation that the Ktunaxa Parties’ interests have been adequately addressed; and d) The Parties agree in writing to the matters set out in subsection 3(2) of the ECDA.

The proposed Project could therefore become a Contributing Project if the Province and Ktunaxa Nation agree, and conditions (a) through (d) are met.

Pursuant to the ECDA, if a Contributing Project is an expansion of an existing Mine, each of the Ktunaxa Parties hereby releases and forever discharges the Province, including each Provincial Agency, from all actions with respect to any legal obligation to consult and accommodate or to provide capacity funding, third party studies or payments or disbursements of any kind in respect of the Permit Amendment and any Government Actions related to that Contributing Project.

The Ktunaxa Parties agree to use Project Payments to pursue initiatives consistent with the Ktunaxa Nation’s socio-economic objective of enhancing the well-being of Ktunaxa Communities and Ktunaxa Citizens, including initiatives related to education, cultural revitalization, housing, infrastructure, health, economic development, land stewardship, intergovernmental engagement processes and governance capacity.

12.2.11 Ministerial Order for an Elk Valley Area Based Management Plan

On April 15, 2013, while the time limit suspension for the proposed Project was still in effect, the Minister of Environment issued an Order for the preparation of an Area Based Management Plan (ABMP) for the Elk Valley pursuant to Section 89 of the Environmental Management Act. Teck Coal Limited (the Proponent for the proposed Project) is responsible for preparing the ABMP, and its terms of reference. The terms of reference were approved by the Minister of Environment on July 22, 2013. The Proponent must complete the ABMP and submit it for the Minister’s approval by end of day on July 22, 2014.

The ABMP will address the high levels of selenium and other contaminants in the Elk Valley watershed, including Lake Koocanusa. The Plan must address at a minimum:

1) The impact of point and non-point sources of waste; 2) Identify all substances that currently exceed provincial WQG related to the protection of the environment and/or human health in water, sediment, or biota;

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3) The cumulative impacts of point and non-point sources of waste; 4) The potential interactive effects of the mixture of contaminants (selenium, cadmium, nitrate and sulphate) at the target levels established for the short, medium and long-term; 5) The impact of calcite formation; 6) The economic and social costs and benefits of addressing risks to the environment through treatment.

The environmental management objectives and outcomes of the ABMP include the:

7) Protection of aquatic ecosystem health; e) Management of bioaccumulation of contaminants in the receiving environment (including fish tissue); f) Protection of human health; and g) Protection of groundwater.

Teck Coal Limited must:

8) Immediately establish short-term concentration targets and time-frames to stabilize water quality concentrations for selenium, cadmium, nitrate and sulphate. 9) Calculate Site Specific Water Quality Objectives (SSWQO) in accordance with ministry processes for the purpose of understanding environmental risk and for developing medium and long-term concentration targets. 10) Develop long-term concentration targets and time-frames to stabilize water quality concentrations for selenium, cadmium, nitrate and sulphate, taking into consideration at a minimum: a) Current contaminant concentrations; b) Current and emerging economically achievable treatment technologies; c) Sustainable balancing of environmental, economic and social costs and benefits; and d) Current and emerging science regarding the fate and effects of contaminants. The long-term concentration targets must include 2 µg/L for Lake Koocanusa south of the mouth of the Elk River.

11) Establish medium-term concentration targets and time frames to demonstrate progressive improvement in water quality in a phased approach, from the short-term targets to the long-term targets.

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12) Establish medium and long-term targets and time frames to reduce the rate and control the formation of calcite, and for the management of impacted streams.

The Order establishes a technical advisory committee (TAC) to guide development of the ABMP. The TAC consists of one representative from each of the following:

• Teck Coal Limited; • The provincial government (representatives from each of the ENV, MEM and EAO); • Government of Canada (represented by Environment Canada); • United States Government; • Government of MT; • KNC; and • An independent third-party qualified professional scientist.

KNC was consulted on the draft Order for the ABMP and on the draft Terms of Reference (TOR) for the ABMP by the Province and the Proponent. KNC will be provided the opportunity to participate in the TAC to guide the development of the ABMP. During the development of the ABMP, Teck Coal Limited will consult KNC in accordance with a consultation plan which was jointly developed by Teck Coal Limited and KNC. The Elk Valley ABMP, once approved and underway, is intended to stabilize and reduce the concentration of contaminants from coal mining in the Elk Valley watershed, and thereby:

• mitigate potential adverse effects, including cumulative effects, of the proposed Project on fish and fish habitat, and on the human health risk associated with the consumption of wild foods (fish in particular); and • accommodate potential impacts to Ktunaxa Nation’s aboriginal right to fish and consume wild foods.

12.2.12 Potential Socio-Economic and Cultural Impacts to Ktunaxa Nation and Proposed Accommodation Measures

Near the end of the EA, in March 2013, KNC proposed twenty-three conditions for inclusion in the EA Certificate for the proposed Project, should one be issued by the deciding Ministers. For proposed conditions that EAO considered to be within the scope of the EA, including conditions related to potential effects of the proposed Project on Ktunaxa Nation’s aboriginal rights (including title), EAO responded by proposing modifications to existing draft conditions. For KNC’s proposed conditions that EAO

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considered to be outside of the scope of the EA, many of which related to all of the Proponent’s coal mines in the Elk Valley, EAO requested that the KNC and the Proponent work together to negotiate a solution.

KNC and the Proponent negotiated six conditions (see final paragraph of section 12.2.6), two of which pertain to the mitigation of potential cultural and socio-economic effects, as summarized in Table 25.

Table 25: Proposed Accommodation Measures for Potential Socio-economic and Cultural Impacts on Ktunaxa Nation

EA Certificate Condition (Summary) Condition # Collaboratively develop with the Ktunaxa Nation a: o Ktunaxa Cultural Management Plan which would: . apply to the Holder’s properties in the Elk Valley; and . ensure Ktunaxa involvement and inclusion of Ktunaxa Traditional Knowledge in remediation and reclamation planning; . be implemented during construction, operations, closure and 26 reclamation; o Ktunaxa Work Force and Business Opportunities Plan; o Ktunaxa Economic Participation in Mine Closure Plan; Ktunaxa Access Management Plan that will allow for Ktunaxa harvesting, and other cultural uses, subject to safety and operational considerations and regulatory requirements. Archaeological Resources and Palaeontology Chance Find Management 23 Procedure The Holder will only use archaeologists on the Holder’s properties in the Elk Valley who are accepted by the Ktunaxa Nation, and will provide the Ktunaxa 24 Nation with reasonable notice and access to the Holder’s Properties to monitor and oversee any archaeological work on the Holder’s Properties.

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12.3 Shuswap Indian Band

12.3.1 Shuswap Indian Band Asserted Territory

The proposed Project is located within the territory currently claimed by the Shuswap Band. Figure 12 shows the asserted territory of the Shuswap Indian Band. The Shuswap Band has two reserves – Shuswap IR 1 on the Columbia River near Invermere and St. Mary’s IR 1A on the St. Mary’s River north of Cranbrook. St. Mary’s IR 1A is a shared reserve with the Ktunaxa.

Figure 12: Shuswap Indian Band Asserted Territory (Shuswap Indian Band, 2009)

The traditional territory claimed by the Shuswap Indian Band extends from the eastern slope of the Rocky Mountains west to the height of land between the Columbia River valley and other valleys; and from the US/BC border to the Upper Columbia valley.

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12.3.2 Shuswap Indian Band Traditional Occupation and Use

EAO’s understanding as to the traditional land use of the ancestral Shuswap Indian Band at the time of contact and at the time of sovereignty is based on the Province’s August 2009 report, “Shuswap Indian Band: Review of Anthroplogical and Historical Sources Relating to the Use and Occupation of Land,” as well as a Shuswap Traditional Land Use Study entitled Re Tsqwatstens-kucw ne Csaliken’: Our People Between the Two Mountain Ranges (Fish Creek Press, 2008)4

The ancestors of the Shuswap Indian Band, the Kinbaskets, were reportedly an offshoot of the North Thompson and the Shuswap Lake people, both Secwepemc Bands. In the early 1800s, Chief Kinbasket migrated down the Canoe and Columbia Rivers with 50-60 followers and settled initially at Kinbasket Lake, near Golden, BC, in or around 1840, the Kinbaskets moved into the region of the Columbia River headwaters, and settled near Windermere Lake, in what was understood as Ktunaxa territory, specifically in the area of the Columbia Lake Kutenai.

The Kinbaskets formed an alliance with the Stoney to defend against the Ktunaxa, in whose territory they had apparently settled. The Kinbaskets were already familiar with the area surrounding the Upper Columbia Valley and had visited the area on seasonal hunting expeditions – ethnographer James Teit noted that the migration did not change or extend their territory.

In 1909, Teit described the outer boundary of Shuswap Territory as falling on the Columbia River just south of Windermere Lake; this boundary is also identified in a map produced by in 1998 by Ignace (Figure 13), and in 2004 by Ignace and Ignace. The boundary described by other ethnographers does not fall as far south as the Teit/Ignace boundary and does not include the Windermere Lake area. This ethnohistoric territory does not include the Elk River Valley, and the southern boundary of the territory is approximately 115 km northwest of the proposed Project site (233 km by road).

4 http://www.shuswapband.net/traditionallanduse.html

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Figure 13: Secwepemc Territory at Contact (Ignace 1998: 204)

Teit reports the Kinbaskets were “more or less nomadic”, spending winters ranging through the Upper Columbia Valley from Golden to Windermere. The Kinbaskets spent eight months of the year travelling and camping in order to harvest and process food. Chief Kinbasket was reported to have a fishing station on the Columbia River near Brisco and at the Salmon Beds – located where Toby Creek meets the Columbia River.

The Kinbaskets exploited a wide range of resources through a semi-nomadic seasonal round which included: fishing on the lakes (rainbow trout, steelhead and suckers) and the Columbia River, (particularly salmon runs in summer and early fall); hunting for deer and elk, beaver, muskrat; and trapping lynx, bear, eagles, fox, marmot, rabbits; and harvesting plant resources including shoots, roots and bulbs, cambium from lodge pole pine, and a variety of berries and mushrooms.

The proposed Project is located well outside of the area understood by ethnographers to have been used by the Secwepemc at the time of contact and at 1846.

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12.3.3 Shuswap Indian Band Aboriginal Interests

Existing information indicates that proposed Project is located well outside of the area understood by ethnographers to have been used by the Secwepemc, including the Shuswap Indian Band, at the time of contact and at 1846. Given the distance of the proposed Project from the area understood to have been traditionally used by the Secwepemc at the time of contact and at 1846, no potential impacts are anticipated to the Aboriginal Interests of the Shuswap Indian Band.

In regard to the Haida spectrum, EAO’s preliminary assessment was that the required scope of consultation with Shuswap Indian Band was near the low end of the spectrum.

12.3.4 EAO-led Consultation with Shuswap Indian Band

EAO’s preliminary assessment, that the required scope of consultation with Shuswap Indian Band was near the low end of the Haida spectrum, was communicated to the Shuswap Indian Band. EAO has engaged with Shuswap Indian Band in a manner which is consistent with this assessment.

EAO first communicated with Shuswap Indian Band by letter in November, 2009. The letter notified Shuswap Indian Band of the initiation of the provincial EA, and of EAO’s view that the proposed Project is unlikely to affect their aboriginal rights. Shuswap Indian Band did not reply.

In December 2011, EAO was informed by CEA Agency that on December 7, 2011, Shuswap Indian Band had sent an email stating that they wished to be consulted.

On March 23, 2012, EAO sent a letter to Shuswap Indian Band, agreeing with the view of the CEA Agency that the depth of the duty to consult is low, which EAO intended to meet with a proposed consultation approach that included: providing adequate notice; sharing relevant information; the opportunity to participate during public comment periods; providing comments on EA documents; and responding to queries about the EA process and the proposed Project.

On March 27, 2012, EAO and CEA Agency met with representatives of Shuswap Indian Band, including the Band’s legal counsel, to explore the Band’s interest in the EA and their assertion of rights that would be potentially affected. The following topics were discussed: level of consultation, capacity funding, information needed by EAO and CEA Agency with respect to asserted rights, the delegation of the federal EA process to BC, and current status of the EA.

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On March 28, 2012, EAO provided Shuswap Indian Band with a Gantt chart portraying the Application Review timeline, and on April 10, 2012, discussed the chart with the Band’s legal counsel.

On April 18, 2012, EAO and CEA Agency met with representatives of the Shuswap Indian Band, including the Band’s legal counsel, to confirm EAO’s and CEA Agency’s view of a low strength of claim and consultation at the low end of the Haida spectrum.

On May 3, 2012, EAO confirmed with Shuswap Indian Band that a $10,000 grant had been approved to assist with the Band’s review of EA documents.

On May 15, 2012, EAO and CEA Agency were scheduled to meet with Shuswap Indian Band to discuss ethnohistoric information not available to EAO and CEA Agency that shows, at the time of contact, the Band’s use of land south of Windermere. The Band cancelled the meeting due to the death of the Chief’s grandson, and did not respond to EAO’s attempts to reschedule.

During the Application Review Stage, Shuswap Indian Band was given an opportunity to comment on the Application, the Certified Project Description, the Table of Conditions, EAO’s First Nations Consultation Report, and EAO’s Assessment Report. Shuswap Indian Band provided comments on the Application. The comments were generally that Shuswap Indian Band did not participate in any discussions regarding the Application and if necessary, will provide its comments in its supplemental document regarding Shuswap’s interests.

In February, 2013, Shuswap Indian Band was given the opportunity to comment on the draft First Nations Consultation Report. In its response, the Shuswap Indian Band contends that it continues to be possible that their rights and title may be affected by the proposed Project.

In July 2013, Shuswap Indian Band was given the opportunity to comment on the draft Assessment Report and the revised draft of the First Nations Consultation Report, and to provide a separate submission to EAO for inclusion with the referral package for the Ministers. Shuswap Indian Band did not respond.

12.3.5 Proponent Consultation with Shuswap Indian Band

Prior to the section 11 Order taking effect, the Proponent notified, in October 2009, the Shuswap Indian Band (SIB; the “Kinbasket”) about the proposed Project based on their former affiliation with the Ktunaxa Nation in the Ktunaxa Kinbasket Tribal/Treaty Council. The SIB was provided with Project description information and draft AIR. An

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invitation to participate in archaeological field work for the Project was also extended. While the Proponent successfully made contact with Chief Paul Sam in November 2009, the SIB did not provide feedback on the information provided, nor did representatives of the SIB participate in the archaeological field work undertaken for the Project. The Proponent has had no further communications on the Project with the SIB.

12.4 Conclusions Regarding the Crown's Duty to Consult First Nations

It is EAO’s assessment that the Crown’s duty to consult and accommodate has been honourably upheld through a process of consultation and accommodation that included flexibility, accountability, inclusiveness, and responsiveness to issues raised by First Nations. EAO further concludes that, on behalf of the Province, it acted in good faith at all times to consult with potentially affected or interested First Nations, and made available opportunities for consultation which ensured that all concerns of First Nations potentially affected by the proposed Project were appropriately considered. EAO made reasonable and appropriate efforts to engage First Nations and remained open at all times to engaging in government-to-government discussions outside of the Working Group forum, as requested.

There are uncertainties regarding the magnitude and significance of potential impacts from increased levels of selenium and other contaminants on Ktunaxa Nation’s harvest of fish and on the safety of consumption of wildlife. There are also uncertainties regarding the ability to fully restore terrestrial ecosystems and therefore the harvesting of wildlife and plants, within the footprint of the proposed Project. However, EAO concludes that the potential impacts of the proposed Project on Ktunaxa Nation’s asserted aboriginal rights or title in the proposed Project area would be adequately minimized, avoided or otherwise accommodated by:

• the avoidance and mitigation measures identified during the EA process and reflected in the proposed EA certificate conditions; and • the Minister of Environment’s order for an ABMP for the Elk River watershed (refer to section 12.2.11), which provides for the KNC to participate in the Technical Advisory Committee and directly represent their interests in the development of the ABMP.

Furthermore, EAO understands that the Proponent is negotiating an IMBA with KNC to address other concerns of the Ktunaxa Nation as outlined in Table 20. The IMBA may include specific commitments to address potential impacts to Ktunaxa aboriginal rights, including title, and other Ktunaxa Nation concerns. EAO also understands that BC and KNC may agree that the proposed Project is a Contributing Project to which the revenue-sharing arrangement set out in the ECDA would apply.

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With reference to all of the above, EAO concludes that the process of consultation with both the Ktunaxa Nation and Shuswap Indian Band for the proposed Project has been carried out in good faith, and that it was appropriate and reasonable under the circumstances. EAO also concludes that there has been adequate and meaningful accommodation.

EAO is, therefore, satisfied that the Crown’s duty to consult has been fully discharged for the proposed Project.

PART D – CONCLUSIONS

EAO has reviewed the:

• information contained in the Application; • the Proponent’s and EAO’s efforts at consultation with First Nations (the Ktunaxa Nation and the Shuswap Indian Band), government agencies, including local governments, and the public; • comments on the proposed Project made by First Nations, and government agencies, including local governments, as members of EAO’s Working Group, and the Proponent’s and EAO’s responses and efforts to address these comments; • comments on the proposed Project received during the public comment period, and the Proponent’s responses to these comments; • mitigation measures identified as Conditions in Schedule B of the proposed EA Certificate. If an EA certificate is issued, these measures must be undertaken by the Proponent during the construction, operation, and decommissioning of the proposed Project; and • the design of the proposed Project as specified in Schedule A of the proposed EA Certificate. If an EA Certificate is issued, the Proponent must implement the design.

After consideration of the above, EAO is satisfied that:

• the Proponent has identified practical means to prevent or reduce potential negative:

o social, economic, heritage or health impacts of the proposed Project such that no significant adverse effects are expected; and

o vegetation, wildlife or fish habitat impacts of the proposed Project such that no significant adverse effects are predicted.

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However, for aquatic health, EAO has not been able to conclude on the magnitude, reversibility and, therefore, significance of residual adverse effects (after mitigation), including cumulative effects due to uncertainty regarding:

o the concentrations of contaminants above which adverse effects on aquatic life would be expected;

o potential interactive effects of the mixture of contaminants at the predicted concentrations; and

o the predicted effectiveness of the proposed Dry Creek and West Line Creek selenium active water treatment facilities; • consultation with First Nations, government agencies, and the public, and the distribution of information about the proposed Project have been adequately carried out by the Proponent and that efforts to consult with First Nations will continue on an ongoing basis; • issues identified by First Nations, government agencies and the public, which were within the scope of the EA, were adequately and reasonably addressed by the Proponent during the review of the Application; • the potential for adverse effects on the aboriginal rights of First Nations has been avoided, minimized or otherwise accommodated to an acceptable level; and • the provincial Crown has fulfilled its obligations for consultation and accommodation to First Nations relating to the issuance of an EA Certificate for the proposed Project.

The Minister of Environment and the Minister of Energy and Mines will consider this Assessment Report and other accompanying materials in making their decision on the issuance of an EA Certificate to the Proponent under the Act.

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