Canada Gazette, Part I, Volume 156, Number 1: Order Declaring that the Metal and Diamond Mining Effluent Regulations Do Not Apply to Certain Metal and Diamond Mines Located in the Northwest Territories

January 1, 2022

Statutory authority
Fisheries Act

Sponsoring department
Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

Under the Fisheries Act (FA), the Government of Canada and the Government of the Northwest Territories (NWT) have negotiated a proposed equivalency agreement entitled the Agreement on the Equivalency of Laws Applicable to Certain Metal and Diamond Mines Located in the Northwest Territories (the proposed Agreement). This would allow the Governor in Council (GiC), through the proposed Order, to stand down the Metal and Diamond Mining Effluent Regulations (MDMER) and subsection 36(3) of the FA footnote 1 in NWT for those mines that are subject to both federal (MDMER) and territorial requirements. NWT has laws and regulations for managing mine effluent that provide controls equivalent in effect to those under the federal MDMER. Standing down the MDMER and subsection 36(3) of the FA for any deposit of effluent that would otherwise have been regulated by the MDMER would reduce regulatory duplication while ensuring at least the same level of environmental protection.

Background

In 2018, the Government of the NWT expressed concern that the federal regulatory regime (MDMER) would impose additional regulatory burden on its mining sector because the sector was already complying with similar provisions under the NWT regulatory regime. Subsequently, the Government of the NWT requested an equivalency agreement with the federal government. footnote 2

The MDMER apply to approximately 140 metal mines and 5 diamond mines in Canada. Six mines (3 metal and 3 diamond) are located in the NWT. Two are closed metal mines (Giant and Cantung) in federal areas of the Mackenzie Valley (so the NWT regime does not apply) and the MDMER continue to apply to them even though they are closed. Four mines (3 diamond mines: Diavik, Ekati, Gahcho Kué; and 1 closed metal mine: Con footnote 3) are in non-federal areas and subject to both federal (MDMER) and territorial requirements.

The MDMER authorize metal and diamond mines to deposit effluent containing deleterious substances into waters frequented by fish, subject to effluent quality standards to protect the aquatic environment. The NWT regulatory regime comprises the Waters Act (PDF), Waters Regulations (PDF), and water licences. The NWT regulatory regime prohibits the deposit of waste (any substance or altered water that would degrade or alter water quality, rendering its use detrimental to people, animals, fish or plants) to NWT waters by mining and milling undertakings unless authorized in a water licence. Subsection 27(5) of the NWT Waters Act requires that water licences may not include conditions that are less stringent than what regulations made under the FA require (e.g. MDMER), where they apply.

Equivalency agreement and Order under the Fisheries Act

Under section 4.1 of the FA, the Minister of the Environment (the Minister) may enter into an equivalency agreement with the government of any province or territory if the regulatory regime of the respective province or territory is determined to be equivalent in effect to provisions of the FA or its regulations. When this is the case, under subsection 4.2(1) of the FA, the GiC may declare by way of an order that the federal regulations (e.g. MDMER) and certain provisions of the FA (e.g. subsection 36(3) of the FA) do not apply within that province or territory.

In the event that the GiC is satisfied that the regulatory regime of the province or territory is no longer equivalent in effect to provisions of the FA and its regulations, or is not being adequately administered or enforced, under subsection 4.2(3) of the FA, the GiC may revoke the order. In this case, relevant provisions of the FA and its regulations would again apply within that jurisdiction.

Equivalency assessment summary of the federal and NWT regulatory regimes

In order to determine whether the NWT regulatory regime (the NWT Waters Act, Waters Regulations, and water licences) is equivalent in effect to the MDMER, four elements were assessed:

  1. Provisions in force: territorial requirements must have the force of law (e.g. they are found in regulations, permits, licences, or regulatory approvals);
  2. Application of the laws: territorial requirements must apply to at least the mines that are subject to the MDMER;
  3. Performance of the provisions: territorial requirements must include effluent quality standards reflecting equivalent or better end-of-pipe effluent quality than the MDMER, and monitoring and reporting that is scientifically sound and provides for assessment of compliance and of environmental monitoring of effects; and
  4. Addressing non-compliance: the territorial regime must address non-compliance fairly, predictably, and consistently while providing equivalent inducement to comply.

The following is a summary of the assessment.

1. Provisions in force

2. Application of the laws

3. Performance of the provisions

Table: Comparison of the federal and NWT regulatory regimes
Federal regulatory regime NWT regulatory regime
The MDMER set effluent quality standards to require that effluent released is not acutely lethal; has a pH between 6.0 and 9.5; and does not exceed maximum authorized concentrations for deleterious substances. They prescribe minimum requirements for testing/monitoring and reporting and require owners and operators to keep documents for a period of five years. The NWT Boards set effluent quality standards on a site-specific basis, contained in water licences. Subsection 27(5) of the NWT Waters Act specifies that the NWT Boards may not include in water licences conditions that are less stringent than the provisions of regulations made under subsection 36(5) of the FA, where those regulations apply to those waters. This means that effluent quality standards set in the water licences cannot be less stringent than those in the MDMER.
The MDMER enable the authorization, by GiC decision, of deposits of mine waste into tailings impoundment areas (TIAs), subject to thorough analysis to determine that the TIA is the best waste management option and that compensation for loss of fish and fish habitat is provided. The NWT regulatory regime does not authorize deposits of mine waste into TIAs.
The MDMER require environmental effects monitoring (EEM) studies of the potential effects of mine effluent on the aquatic environment.

The NWT regulatory regime requires that Surveillance Network Programs (SNPs) and Aquatic Effects Monitoring Programs (AEMPs) be conducted to collect monitoring data, which includes the data required to assess environmental effects.

The NWT Boards establish conditions on a case-by-case basis for SNPs and AEMPs, contained in water licences. Subsection 27(5) of the Waters Act specifies that the NWT Boards may not include in water licences conditions that are less stringent than the provisions of regulations made under subsection 36(5) of the FA, where those regulations apply to those waters. This means that SNPs and AEMPs set in water licences cannot be less stringent than the EEM studies required under the MDMER.

4. Addressing non-compliance

Based on the above equivalency assessment, the Department of the Environment (the Department) determined that the NWT regime is equivalent in effect to the MDMER once some gaps are addressed by the Government of the NWT. The Government of the NWT has committed to making the necessary changes to the water licences. For example, two water licences issued to mine operators currently include performance standards related to pH limits that are outside the range authorized in the MDMER. The NWT has agreed to undertake amendments to the licences to bring the pH range in line with the MDMER. Department officials will not recommend that the final Agreement be executed and that the GiC make the final Order standing down the MDMER until the NWT water licences are amended.

Objective

The objectives of the proposed Agreement and the proposed Order are to increase regulatory clarity for the metal and diamond mining sector in the NWT, and to reduce regulatory duplication in the NWT.

Description

Under subsections 4.1(1) and 4.1(2) of the FA, the federal government and the Government of the NWT have negotiated the proposed Agreement. With the proposed Agreement in place, under subsection 4.2(1) of the FA, the GiC, through the proposed Order, would stand down the MDMER, as well as subsection 36(3) of the FA, for those mines that are subject to both federal (MDMER) and territorial requirements. The MDMER will continue to apply to mines found in federal areas within the Mackenzie Valley of the NWT.

Under the proposed Agreement, the Government of the NWT would provide the federal government with information annually on the administration and enforcement of the NWT regulatory regime, as well as written notification of any proposed and actual amendments to the NWT regulatory regime. The federal government would also provide notification to the NWT government of any proposed amendments to the federal regulatory regime to ensure equivalency is maintained. The two governments agree that the proposed Agreement would be reviewed and evaluated every five years. The proposed Agreement could be terminated by either party with at least six months’ written notice or upon mutual consent.

Regulatory development

Consultation

From 2018 to 2021, the Department worked with NWT government officials to negotiate the proposed Agreement. Additional consultation with the NWT metal and diamond mining sector, Indigenous peoples, and the general public was not undertaken prior to the prepublication of the proposed Order because it is relieving in nature, and because the Order itself only serves to stand down the application of the MDMER in the NWT, which industry stakeholders, the Government of the NWT and Indigenous communities have previously expressed support for. footnote 5

Stakeholders and Indigenous communities will have the opportunity to provide feedback during the 60-day public comment period. The Department will notify stakeholders and Indigenous communities of the opportunity to comment on the proposed Agreement and proposed Order following their publication in the Canada Gazette, Part I.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted and concluded that the proposed Order is not expected to have any impact on modern treaty rights or obligations. The proposal would stand down the federal regulatory regime in favour of an equivalent regulatory regime, and there are no other substantive changes from the status quo. Therefore, specific engagement and consultations with Indigenous peoples were not undertaken. Following the prepublication of the proposed Order, for a 60-day public comment period, the federal government will engage with Indigenous groups and the Wek’èezhìi Land and Water Board.

Instrument choice

Under subsection 4.1 of the FA, when a provincial or territorial regulatory regime is determined to be equivalent in effect to provisions of the federal regulatory regime under the FA and its regulations, the Minister may enter into an equivalency agreement to stand down the application of certain provisions of the FA or provisions in federal regulations in that province or territory. Therefore, the proposed Agreement and the proposed Order are required to stand down the MDMER in the NWT. No other mechanisms are available.

Regulatory analysis

Benefits and costs

The proposed Order is not expected to have an impact on the environment or human health. This is because under the proposed Agreement, the NWT regulatory regime must be at least as stringent as the MDMER in order for the two regimes to be considered equivalent in effect.

The proposed Order would be beneficial to the NWT mining sector, as it would remove duplicative regulatory requirements.

The total cost savings anticipated as a result of the proposed Order are estimated at approximately $22,832 annually (in 2019 dollars), stemming from the following:

In addition to the projected cost savings, other qualitative benefits include the following:

Small business lens

Analysis under the small business lens concluded that the proposed Order will not impact Canadian small businesses because the four NWT mines that would benefit from the proposed Agreement and the proposed Order are not small businesses.

One-for-one rule

The one-for-one rule would apply to the proposed Order, since there is a change in administrative burden/costs for businesses (a decrease), resulting from the standing down of reporting requirements under the MDMER. Following the Treasury Board Secretariat’s standard costing model for applying the rule, and using a 7% discount rate, the estimated annualized decrease in administrative costs for the four affected businesses is approximately $3,336 and $834 per business (in 2012 dollars). This represents an “out” under the rule.

The decrease in administrative burden/costs is associated with the reduced time, using 2012 hourly wage rate averages, footnote 6 a lawyer ($50/hour), an environmental/regulatory coordinator ($36/hour), and a scientist with training in natural or applied science ($42/hour) would have otherwise spent to comply with associated reporting requirements.

Regulatory cooperation and alignment

The federal government and the Government of the NWT identified an opportunity to pursue a regulatory cooperation approach by way of an equivalency agreement under the FA to reduce regulatory duplication between the two levels of government. The federal government has negotiated the proposed Agreement with the Government of the NWT.

The proposed Order would stand down the MDMER in the NWT because the territorial regime is equivalent in effect. The result would be a reduction in regulatory duplication while also ensuring at least the same level of environmental protection.

Strategic environmental assessment

A strategic environmental assessment (SEA) was conducted for the MDMER and concluded that the amendments introduced to the MDMER in 2018, including the addition of diamond mines to the scope of the Regulations, are expected to contribute to increased protection of fish and fish habitat and to support the following 2016 to 2019 Federal Sustainable Development Strategy (FSDS) goals: Healthy Coasts and Oceans, and Pristine Lakes and Rivers.

Since the proposal would maintain equivalent environmental protection from metal and diamond mining activities in the NWT when compared to the MDMER, it was determined that another preliminary scan and another SEA were not required for the proposed Order.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

The proposed Order would stand down the application of the MDMER in the NWT for mines subject to both the federal and territorial regimes on the date of its registration. Following implementation of the proposed Agreement and proposed Order, only the territorial regime would apply to those mines. No federal enforcement of the MDMER or subsection 36(3) of the FA would therefore occur for any deposit of effluent from the final discharge point of mines in the NWT that are subject to the NWT regime. Two closed metal mines in the NWT are located in federal areas within the Mackenzie Valley and are therefore not subject to the NWT regime — the MDMER will continue to apply to these mines and federal enforcement for these mines will continue.

The Government of the NWT would be required to share information regarding implementation of the proposed Agreement annually with the Department, including information and data on the administration and enforcement of the NWT provisions applicable to effluent from metal and diamond mines. The information would allow for the ongoing evaluation of equivalency in effect by the Department of the NWT regime. It would also provide the Department with required information in relation to Canada’s Federal Sustainable Development Strategy, Environment Canada’s Departmental Performance Reports, and the Annual Report to Parliament on the Administration and Enforcement of the Fish Habitat Protection and Pollution Prevention Provisions of the Fisheries Act.

The information to be provided annually by the NWT would include the following:

In addition, the Government of the NWT would provide the Department with written notification of any proposed or actual amendments to the NWT provisions relevant to effluent from metal and diamond mines, and the Department would provide the NWT government with information regarding proposed and actual amendments to the FA or the MDMER.

The Government of the NWT and the Department also agree that the proposed Agreement would be reviewed and evaluated every five years, to assure continued effectiveness and relevance.

Contacts

Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Environment and Climate Change Canada
Fontaine Building
200 Sacré-Cœur Boulevard, 10th Floor
Gatineau, Quebec
K1A 0H3
Email: eccc.darv-ravd.eccc@canada.ca

Lorie Cummings
Manager
Mining and Processing Division
Environment and Climate Change Canada
Place Vincent Massey
351 Saint-Joseph Boulevard, 11th Floor
Gatineau, Quebec
K1A 0H3
Email: lorie.cummings@ec.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 4.2(1) footnote a of the Fisheries Act footnote b, proposes to make the annexed Order Declaring that the Metal and Diamond Mining Effluent Regulations Do Not Apply to Certain Metal and Diamond Mines Located in the Northwest Territories.

Interested persons may make representations concerning the proposed Order within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Lorie Cummings, Manager, Mining and Processing Division, Department of the Environment, 351 Saint-Joseph Boulevard, Gatineau, Quebec K1A 0H3 (email: Lorie.Cummings@ec.gc.ca).

Ottawa, December 16, 2021

Wendy Nixon
Assistant Clerk of the Privy Council

Order Declaring that the Metal and Diamond Mining Effluent Regulations Do Not Apply to Certain Metal and Diamond Mines Located in the Northwest Territories

Declaration

Definitions

1 For the purposes of sections 2 and 3, acutely lethal, diamond mine, effluent, final discharge point and metal mine have the same meanings as in subsection 1(1) of the Metal and Diamond Mining Effluent Regulations.

Non-application — Regulations

2 The Metal and Diamond Mining Effluent Regulations do not apply to metal mines and diamond mines located in the Northwest Territories that would otherwise have been subject to those Regulations and that are subject to the Waters Act, S.N.W.T. 2014, c. 18 and the Waters Regulations, N.W.T. Reg. 019-2014.

Non-application — subsection 36(3) of the Act

3 For a metal mine or a diamond mine referred to in section 2, subsection 36(3) of the Fisheries Act does not apply in respect of

Coming into Force

Registration

4 This Order comes into force on the day on which it is registered.