Regulations Amending the Metal and Diamond Mining Effluent Regulations: SOR/2022-159

Canada Gazette, Part II, Volume 156, Number 14

Registration
SOR/2022-159 June 24, 2022

FISHERIES ACT

P.C. 2022-819 June 24, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to subsection 36(5) of the Fisheries Act^{footnote a}, makes the annexed Regulations Amending the Metal and Diamond Mining Effluent Regulations.

Regulations Amending the Metal and Diamond Mining Effluent Regulations

Amendments

1 The headings before section 14.1 of the Metal and Diamond Mining Effluent Regulations ^{footnote 1} are replaced by the following:

Acute Lethality Test — Rainbow Trout

2 Schedule 2 to the Regulations is amended by adding the following in numerical order:

Item	Column 1 Water or Place	Column 2 Description
68	Dyno Basin, located approximately 19 km west of Fermont, Quebec	Dyno Basin, located at 52°46′23.020″ north latitude and 67°22′01.303″ west longitude, approximately 19 km west of the town of Fermont, Quebec, and covering an area of 5.7 ha.

Coming into Force

3 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The mine operator seeks to use one waterbody (the Dyno Basin), which is frequented by fish, to dispose of mine waste at the Mont-Wright Mine, an iron mine located in Quebec near the Newfoundland and Labrador border, approximately 15 kilometres west of Fermont. Since 2014, the Dyno Basin has been receiving effluent and waste rock. In 2019, the Dyno Basin was determined to be frequented by fish based on information provided by the mine operator.

Subsection 36(3) of the Act prohibits the deposit of deleterious substances (e.g. mine waste) into waters frequented by fish unless authorized by regulations. The MDMER, made pursuant to the Act, allow for the deposit of mine waste in waters frequented by fish, under certain conditions. Having met these conditions, an amendment to Schedule 2 of the MDMER is required to allow for the deposit of mine waste into the Dyno Basin.

Amendments are also needed to remove a duplicative header in the text of the MDMER.

Background

Metal and Diamond Mining Effluent Regulations

The MDMER, which came into force on June 1, 2018,^{footnote 5} prescribe the maximum limits authorized for prescribed deleterious substances in mine effluent in Schedule 4 (e.g. arsenic, copper, cyanide, lead, nickel, zinc, radium-226, unionized ammonia and total suspended solids). The MDMER also specify the allowable pH range of mine effluent and require that mine effluent not be acutely lethal.^{footnote 6} The MDMER further require that mine owners and operators sample and monitor effluent to ensure compliance with the authorized limits and to determine any impact on fish, fish habitat and fishery resources. The Department publishes annual performance summaries for mines with respect to the prescribed limits and various requirements of the MDMER.^{footnote 7}

The deposit of mine waste in waters frequented by fish can only be authorized through an amendment to the MDMER to list the waterbody to Schedule 2, designating it as a TIA. Section 27.1 of the MDMER requires the development of an FHCP to offset the loss of fish habitat that would occur as a result of the use of a fish-frequented waterbody for the deposit of mine waste. The FHCP must be approved by the Minister of the Environment before any mine waste is deposited into the relevant waterbodies. The owner, or operator of a mine is also required to submit an irrevocable letter of credit to ensure that funds are in place, should the owner or operator fail to address all the elements of the FHCP. For any project where the proposed deposit would affect fish-frequented waters, mine owners, or operators must consider options for mine waste management and demonstrate that the preferred option is the best option, based on environmental, technical, economic and socio-economic criteria specified in the Department’s Guidelines for the assessment of alternatives for mine waste disposal.

Mont-Wright Mine

The Mont-Wright mine is an open-pit iron ore mine located approximately 15 km west of the town of Fermont and 320 km north of Port-Cartier and Sept-Îles, in Quebec (see Figure 1). The mining complex has been accessible from Baie-Comeau by road 389 since 1987. The Dyno Basin is located northeast of Irene Lake and southeast of the Hesse Centre Basin (Hesse Lake is already listed on Schedule 2 of the MDMER).

The mine has been in operation since 1975 and currently consists of seven open pits, six of which are operational, an ore crusher, milling facilities, a maintenance workshop, tailings impoundment areas and waste rock piles, as well as an automated system for sending ore concentrate to Port-Cartier by train. The mining property covers a total area of 140 km².

The mine’s facilities, which are located in the Fermont area and at Port-Cartier (industrial complex and seaport), are linked by a 420 km rail line. The annual production is approximately 24 million tonnes (Mt) of iron ore concentrate. Of that amount, 15 Mt are shipped directly as concentrate and 9 Mt are shipped as iron oxide pellets.

Figure 1: Location of the Mont-Wright Mine

Dyno Basin

The Dyno Basin (Figure 2) was originally an unnamed natural pond with a surface area of 0.64 ha and was converted into a water retention basin in 1989 following the construction of a dike. Following the construction of the dike, the Dyno Basin was flooded with water and, as of 2008, spans an area of 5.7 ha. As of 2019, only two fish species have been identified to be present in the Dyno Basin, namely the longnose sucker and lake chub.

In 2014, the mine operator proceeded with the development of the Irène Canal (Figure 2). The canal collects mine water runoff from nearby areas of operation and flows into the Dyno Basin, which also receives runoff from an adjacent waste rock pile to its south (Figure 2). Effluent from the Dyno Basin is then directed towards the Central Hesse Basin via the Dyno Basin’s outfall stream, known as HC1 (Figure 2), for treatment. The mine operator plans to continue mining development in the area which will encroach on the Dyno Basin.

Figure 2: Dyno Basin and Hydraulic Connections

Environmental assessment of the Mont-Wright Mine

The Mont-Wright Mine was subject to a provincial environmental impact assessment and review procedure from 2016 to 2018. The scope of the impact analysis prepared by the mine operator was limited to the construction of new basins: the process water basin (B+ Basin) and a settling basin in the planned development of a northwestern tailings impoundment area. Waterbodies frequented by fish associated with the development of these new basins were added to Schedule 2 of the MDMER in 2018. The Dyno Basin, however, was not included within the scope of the mine operator’s impact analysis. A provincial order regarding the issuance of a certificate of authorization was published on September 5, 2018, allowing the project to move forward.

Jeannine Lake Fish Habitat Compensation Plan

Regulations Amending the Metal and Diamond Mining Effluent Regulations were published in the Canada Gazette, Part II, in December 2018, which added three of the waterbodies currently used by the mine operator as tailings impoundments areas but did not add the Dyno Basin as it had not been assessed.^{footnote 8} The associated Regulatory Impact Analysis Statement described the loss of fish habitat due to the deposit of tailings and waste rock and estimated this loss at 63.9 ha. The mine operator developed the Jeannine Lake FHCP to compensate for this loss of fish habitat. When fully implemented in 2025, the FHCP is expected to result in a direct gain of 74.6 ha of similar or higher quality than the fish habitat destroyed. In February 2021, DFO re-evaluated the loss of fish habitat associated with the 2018 MDMER amendments. As a result, the total of fish habitat loss was determined to be 59,66 ha following a new assessment conducted by the mine operator, and validated by DFO, in 2019. As such, 26.55 ha of residual compensation from the Jeannine Lake FHCP is now considered available to offset the adverse effects on fish habitat resulting from the deposit of mine waste in the Dyno Basin.

The area covered by the FHCP is located on the north shore of the former Jeannine Lake Mine site, which was in operation in the 1960s and 1970s. The former mine is approximately 160 km south of Fermont, 7 km southeast of the former town of Gagnon, and 164 km south of the Mont-Wright Mine (Figure 3). More specifically, the FHCP covers the tailings management facility at the former mining site and two watercourses (an outlet of Jeannine Lake and a watercourse connected to the outlet). The FHCP involves the restoration of the tailings management facility and is limited to the area between the mining site and Regional Road 389 (Figure 3). The objectives of the project are the following:

• to stabilize the tailings management facility at the former Jeannine Lake mine to prevent the iron mine tailings from continuing to erode and migrate towards neighbouring waterbodies;
• to restore the habitat in the outlet of Jeannine Lake and raise the water level in the series of lakes downstream of the pond, first to allow for fish passage and also to be able to recreate stable and productive ecosystems through the restoration of aquatic habitats and wetlands;
• to create a large body of water for brook trout; and
• to promote the establishment and maintenance of a population of brook trout through the development of a breeding ground for that species.

Once completed, the upstream and downstream parts of this watershed, which have been cut-off and impacted for over 60 years, will be reconnected. In addition, the compensation activities will allow the fish population located in Jeannine Lake (captive population) to have access to a greater diversity of habitat in the river, as well as increased access to areas for rearing and reproduction.

Figure 3: Jeannine Lake Plan Site Localization

Objective

The objectives of the Amendments are to

• authorize the deposit of mine waste generated by the Mont-Wright Mine to one fish-frequented waterbody (Dyno Basin); and
• remove a duplicated heading in section 14.1 of the MDMER.

Description

The Amendments will list Dyno Basin in Schedule 2 of the MDMER as item 68, designating it as a TIA.

The Amendments will also remove a duplicated header in section 14.1 of the MDMER.

Regulatory development

Consultation

The Department sought comments from the public and Indigenous groups on the listing of one waterbody in Schedule 2 of the MDMER through the consultation web page for the Amendments, which can also be found through the Consulting with Canadians web page. The public consultation period ran from July 5, 2021, to September 6, 2021. No comments were received from the public and one Indigenous group expressed support for the amendments.

Modern treaty obligations and Indigenous engagement and consultation

The Department assessed possible treaty implications associated with the Amendments, as required by the Cabinet Directive on the Federal Approach to Modern Treaty Implementation. This assessment concluded that no modern treaties apply to the mine site and that there were no potential modern treaty implications.

The location of the waterbody to be listed in Schedule 2 of the MDMER is within the traditional territory (Nitassinan) asserted by the Innu communities of Uashat mak Mani-Utenam (ITUM) and Matimekush-Lac John (NIMLJ). Preliminary videoconferences were held with representatives of ITUM and the NIMLJ on November 17, 2020, and March 3. 2021, respectively. The videoconference sessions provided participants with information on the regulatory process and its purpose; the use of the expected residual compensation from a prior Schedule 2 authorization to offset the loss of fish habitat; and the justification document prepared by the mine operator. Participants had the opportunity to ask questions, express any concerns and were invited to share their formal consultation protocols and inform the Department of whether they would like to be further consulted on the Amendments, and if so, how.

Following these discussions, ITUM representatives applied for funding to study the Amendments as well as future amendments. ITUM subsequently wrote to the Department expressing its support for the Amendments and their necessity to continue mining operations at the Mont-Wright Mine. The NIMLJ did not present any further comments or concerns after a follow-up with them.

The Department also engaged Indigenous groups and communities on plans to apply the Streamlining Policy for the purpose of expediting the approval timelines for the TIA authorization and publishing directly in the Canada Gazette, Part II. No groups expressed opposition to the Amendments or the use of the Streamlining Policy.

Instrument choice

Non-regulatory options would involve the deposit of mine waste in a manner that would not impact fish-frequented waterbodies, or land-based options. Regulatory options correspond to those that would result in the deposit of mine waste into waters frequented by fish.

In April 2021, the mine operator submitted a report entitled Inscription du Bassin Dyno à l’annexe 2 du REMMMD (PDF) [in French only] to the Department to justify the use of Dyno Basin, a fish-frequented waterbody, for the deposit of mine waste. The document describes the steps undertaken by the mine operator to assess different options for the management of mine waste generated at the Mont-Wright Mine and how the determination of the preferred location for the management of mine waste was made.

No non-regulatory options were identified due to the existing mining installations surrounding the Dyno Basin and the direction of water flow in the area. The only other potential regulatory option allowing for the continued management of mine waste at the Mont-Wright Mine is to enclose the Dyno Basin and divert effluent into the Central Hesse Basin. The Central Hesse Basin is the nearest waterbody that could feasibly receive effluent intended for the Dyno Basin as it is already listed on Schedule 2 of the MDMER. This option would require the construction of a watertight berm^{footnote 9} and diversion canal to prevent further mine waste deposits in the Dyno Basin, as well as the removal of waste rock from within the Dyno Basin itself. These changes would result in cutting off all of the external water supply to the Dyno Basin and would further reduce the quality of the existing fish habitat. Given the lengthy history of the basin, the extensive mining operations surrounding it, and the environmentally harmful alternative identified, the Amendments were identified as the preferred option from environmental, technical, economic and socio-economical standpoints.

Regulatory analysis

Benefits and costs

Analytical framework

The Amendments will list Dyno Basin, a waterbody frequented by fish, in Schedule 2 of the MDMER, thereby authorizing the mine operator to use it for the deposit of mine waste. The loss of fish habitat corresponding to this use of the Dyno Basin will be offset by the use of the residual compensation from the Jeannine Lake FHCP, which was approved by the Department as part of a previous Schedule 2 authorization under the MDMER for the Mont-Wright Mine. The FHCP meets DFO’s Policy for Applying Measures to Offset Adverse Effects on Fish and Fish Habitat Under the Fisheries Act, which means that the offsetting measures include, but are not limited to

• restoring degraded fish habitat to improve conditions for the production of fish;
• enhancing fish habitat to improve conditions for the production of fish; and
• creating productive and sustainable fish habitat where none existed before.

The analysis below examines the incremental impacts of the Amendments on the environment, businesses (the mine operator) and the Government. While costs for the mine operator are known and monetized, it is not feasible to quantify and monetize benefits due to data limitations. As a result, the cost-benefit analysis reflects monetized costs and qualitatively described impacts.

Environmental impacts

The deposit of mine waste will destroy Dyno Basin, which is frequented by fish. Due to a lack of data on the fish habitat of the Dyno Basin prior to its conversion to a retention basin in 1989, the Department, with the assistance of DFO, determined in March 2021 that the surface area of the waterbody to be considered as fish habitat for the purposes of the Amendments is 0.64 ha.

The fish habitat of the Dyno Basin is a homogenous environment consisting of little or no rock cover, woody debris, and vegetation to support aquatic wildlife. As of 2019, only two fish species have been identified to be present in the Dyno Basin, namely the longnose sucker and lake chub. The Dyno Basin constitutes a habitat with an average potential for both species.

The implementation of Jeannine Lake FHCP, which started in 2018, will allow for a direct gain of 74.76 ha of fish habitat, when fully implemented in 2025. The area of gains evaluated for the entire FHCP exceeds the balance of losses compensated for the waterbodies currently listed in Schedule 2 of the MDMER. Taking into account this net habitat gain, DFO provided expert advice to the Department confirming that the adverse effects on fish habitat resulting from the deposit of mine waste into the Dyno Basin can be offset by 0.64 ha of the 26.55 ha of residual compensation from the Jeannine Lake FHCP.

The implementation of the compensatory measures under the Jeannine Lake FHCP will therefore result in the creation of 0.64 ha of fish habitat of equivalent or superior quality to compensate for the 0.64 ha of fish habitat to be destroyed by the deposit of mine waste, as required under section 27.1 of the MDMER. Once the Dyno Basin is listed in Schedule 2 of the MDMER, 25.91 ha of residual compensation will be expected to remain available for the mine operator to potentially offset further losses of fish habitat at the Mont-Wright Mine.

Cost to business and Government

The Amendments will not result in any additional cost to the mine operator than the cost of fully implementing the Jeannine Lake FHCP, which is already fully funded and guaranteed by an irrevocable letter of credit.^{footnote 10} It will also not result in any additional cost to the Government of Canada.

Small business lens

There are no impacts on small business associated with the addition of one waterbody to Schedule 2 to the MDMER, as the mine operator does not meet the definition of small business as set out in the Policy on Limiting Regulatory Burden on Business.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on business and no regulatory titles are repealed or introduced.

Regulatory cooperation and alignment

The Cabinet Direction of Regulation requires departments and agencies to assess opportunities for cooperation with other jurisdictions, domestically and internationally, on regulations and associated regulatory activities. In the context of these Amendments, there are no laws in Quebec that govern the deposit of mine waste into fish-frequented waters. The Department did not identify any opportunity for regulatory cooperation or alignment.

Strategic environmental assessment

A strategic environmental assessment concluded that authorizing the deposit of tailings in a TIA will have adverse environmental effects, namely, the loss of fish habitat. However, the adverse environmental effects will be offset by the implementation of the Jeannine Lake FHCP that will result in no net loss of fish habitat. The mine operator has also submitted an irrevocable letter of credit covering the implementation costs of the plan, including the costs of any corrective measures necessary if the objective of the plan is not achieved.

Gender-based analysis plus (GBA+)

The Department determined that the Amendments are not expected to disproportionately affect Indigenous peoples or any other socio-demographic group.

Implementation, compliance and enforcement, and service standards

The Amendments will authorize the mine operator to use a waterbody that is fish-frequented for the deposit of mine waste.

Given that the MDMER are made pursuant to the Fisheries Act, enforcement personnel would, when verifying compliance with the MDMER, act in accordance with the Compliance and enforcement policy for the habitat protection and pollution prevention provisions of the Fisheries Act.

Verification of compliance with the MDMER and the Fisheries Act would include, among other inspection activities, site visits, sample analysis, review of FHCPs and related reports associated with the Amendments.

If there is evidence of an alleged offence of the fisheries protection and pollution prevention provisions of the Fisheries Act and/or related regulations, enforcement personnel would determine an appropriate enforcement action, in accordance with the following criteria, as set out in the Compliance and enforcement policy for the habitat protection and pollution prevention provisions of the Fisheries Act:

• the nature of the alleged violation;
• effectiveness in achieving the desired result with the alleged violator; and
• consistency in enforcement.

Given the circumstances and subject to the exercise of enforcement and prosecutorial discretion, the following instruments are available to respond to alleged violations:

• warnings;
• directions;
• orders by the Minister;
• injunctions; and
• prosecutions.

Contacts

Aimee Zweig
Executive Director
Mining and Processing Division
Industrial Sectors and Chemicals Directorate
Environment and Climate Change Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: mdmer-remmmd@ec.gc.ca

Matt Watkinson
Director
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Environment and Climate Change Canada
200 Sacré-Cœur Boulevard
Gatineau, Quebec
J8X 4C6
Email: ravd.darv@ec.gc.ca