Participant Funding Program – Regular Funding Envelope to Support Aboriginal Participation
Funding Review Committee's Report

Allocation of Federal Funds for the Environmental Assessment of the Schaft Creek Mine Project

The Participant Funding Program (PFP) is established pursuant to subsection 58(1.1) of the Canadian Environmental Assessment Act (the Act), which states: For the purposes of this Act, the Minister shall establish a participant funding program to facilitate the participation of the public in comprehensive studies, mediations and assessments by review panels. Under its Regular Funding Envelope (RFE), the PFP supports both public and Aboriginal group participation in federal-only or joint environmental assessment (EA) processes and in related consultation activities.

A Funding Review Committee (FRC) independent of the EA was established for the Schaft Creek Mine Project (the Project), which is being conducted by means of a comprehensive study (CS). Its purpose was to assess applications received under the PFP – RFE to support Aboriginal participation in the EA process for the proposed Project, and to recommend whether funding should be provided, and if so, in what amount.

Under the RFE for this project, a total of $115,000 was made available to support Aboriginal participation and related consultation activities in the EA, including provision of input to the Environmental Impact Statement (EIS) and Comprehensive Study Report (CSR), participation in community-specific meetings and public comment activities (e.g. open houses). The deadline to submit an application was January 14, 2011. Three applications were received, for a total funding request of $287,470.

In addition to the PFP - RFE funding being made available to assist Aboriginal groups to participate in the EA process, some limited funding is also being provided for this purpose by the Province of British Columbia (BC).

On February 3, 9 and 14, 2011, the FRC met to review the applications. The FRC members were Mr. Paul Scott, retired Regional Director of the Canadian Environmental Assessment Agency's (the Agency) Pacific and Yukon office, acting as Committee Chairperson; Mr. Ray Crook, EA Consultant; and Mr. Patrick Duffy, EA Consultant.

Background

Copper Fox Metals Inc. (the Proponent) is proposing to develop the Project to process about 812 million tonnes of measured and indicated mineable base and precious metals resources (copper, gold, molybdenum, and silver). The Proponent's proposal (which forms the scope of the Project to be considered in the EA) is to develop an open pit polymetallic mine approximately 60 kilometres south of Telegraph Creek in northwest BC, with a proposed ore production rate of up to 150,000 tonnes per day over a minimum 15-year operation period.

The Project will utilize conventional truck and shovel equipment and typical drill and blast techniques, and will include an explosives storage facility. The ore will be crushed, milled and filtered on-site to produce ore concentrates. The Project will also include an access road and a 287-kilovolt transmission line within the Mess Creek watershed. The proposed mine pit, plant/mill, and waste rock storage facilities are to be located along the east bank of Schaft Creek. An airfield capable of handling Boeing 737s will also be constructed to the east of the pit. The tailings impoundment area will be located within the Skeeter Creek watershed (a tributary of Schaft Creek). Camp facilities to house and feed workers (approximately 700 anticipated direct employees during operation) are also part of the Project scope. The Proponent also proposes to transport the ore concentrates by truck along Highways 37 and 37A to the Port of Stewart, BC, for onward ocean-going shipment to markets.

All Project components are located on provincial Crown land, with no federal land involved. Early studies have indicated that the proposed tailings impoundment area does not contain fish (barrier downstream), and therefore, a Metal Mining Effluent Regulations exemption is not believed to be required.

This project is not subject to the Major Resource Project Initiative (the Initiative) as it entered the EA process prior to the inception of the Initiative. The Agency will exercise the powers and perform the duties and functions of the federal Responsible Authorities (RAs) until submission of the CSR to the Minister of the Environment. Natural Resources Canada, Fisheries and Oceans Canada, and Environment Canada are confirmed RAs with Explosives Act responsibilities, Fisheries Act responsibilities, and International River Improvements Act responsibilities, respectively. Transport Canada is a potential RA with potential Navigable Waters Protection Act responsibilities. Health Canada is participating as a federal authority to provide expert advice (e.g. regarding health issues, country foods, etc.).

The Project is located within the traditional territory of the Tahltan First Nation (comprising the Tahltan Indian Band and Iskut First Nation). This group is represented by the Tahltan Central Council and the Tahltan Heritage Resources EA Team, both of which have been participating in the EA process and are members of the working group. The FRC were advised that other groups are being consulted at a lower level. They are being provided with notification and public comment opportunities only, due to lower anticipated significant adverse effects from additional truck traffic on an existing highway or proposed transmission line development. These groups include: Skii km Lax Ha, Métis Nation BC, and Wilp Wii'Litsxw (Gitanyow First Nation). The Nisga'a Nation will also be consulted pursuant to the Nisga'a Final Agreement on potential effects of additional truck traffic on an existing highway. The FRC understands that all of these groups received notification letters of the commencement of the EA and the Agency's preliminary assessment of the level of consultation to be undertaken with them in early October 2010 (prior to commencement of the initial public comment period or open houses in their area).

Eligibility

Under the PFP - RFE, for this project, funding may be provided to Aboriginal groups for the following activities:

• Prepare/participate in scoping and other meetings to identify issues that should be considered during the EA and during Aboriginal consultations associated with the EA, including review of and input to the draft Application Information Requirements document;
• Review and comment on the EIS submitted by the Proponent;
• Prepare for and participate in community meetings/open houses to consider the proposed Project;
• Prepare for and participate in the conduct of the EA prior to the preparation of the CSR;
• Review and comment on the draft joint Canada-BC CSR /assessment report; and
• Provide final input into the CSR.

Eligible recipients must plan to engage in Aboriginal consultation activities with the federal government that are linked to the EA of the proposed Project and be able to demonstrate that they meet at least one of the following eligibility criteria:

• have a direct, local interest in the proposed Project, such as a residence in the area or historical or cultural ties to the area likely to be affected by the proposed Project;
• have community knowledge or Aboriginal traditional knowledge relevant to the EA; or
• have expert information relevant to the anticipated environmental effects of the proposed Project.

All three of the applicants were deemed to have met the eligibility criteria.

Under the PFP - RFE, and for this project in particular, Aboriginal applicants can request funding for costs related to:

• professional fees;
• staff salaries and benefits;
• travel expenses;
• honoraria for Elders and Chiefs to attend meetings and functions;
• ceremonial offerings related to receiving traditional knowledge;
• administration and reporting;
• other expenses related to local collection and distribution of information;
• office supplies and telephone charges;
• rental of office space and meeting rooms;
• legal fees;
• general media, and advertising and promotion; and
• purchase of information material.

Rationale for Allocation

In reviewing the three applications received and in reaching its conclusions and recommendations, the FRC took into consideration a number of factors including the following:

• The limitation of funds available under the PFP - RFE to support Aboriginal participation;
• The quality, clarity and content of the applications, particularly with respect to the relationship between specific project components and each applicant's traditional lands and resources, and their respective proposed EA participation work plan;
• Advice received from the Agency regarding which Aboriginal groups are expected to participate in the EA, and the role that these groups may play in the review;
• Decisions already made by the BC EA Office, through its Section 11 Order, on which First Nations must be consulted under the BC EA Act process and would be invited to participate in the provincial Working Group;
• Presence/absence of specific Project components within each applicant's traditional lands;
• Project impacts on traditional land and resources, and on the related interests and asserted rights and title of the applicants, and in particular, recognition that the Tahltan Central Council is likely to be most directly and immediately impacted by the proposed Project, as the mine site is located within Tahltan traditional territory;
• Information provided by the Agency on the strength of individual First Nation's asserted rights and title; and
• Information available to the FRC on other sources of government funding made available to or received by Aboriginal groups related to the review of the Project, and on any established partnerships with other review participants.

Recommendation

The FRC recommended that the original approved funding level of $115,000 under the PFP-RFE be increase to $138,000 in order to account for the high potential impact of the Tahltan Nation, without reducing funding allocations to the Métis Nation of B.C. and the Nisga'a Lisims Government.

The FRC recommends awarding a total of $136,195 to the three applicants as follows: $94,020 to the Tahltan Central Council; $26,775 to the Nisga'a Lisims Government; and $15,400 to the Métis Nation of BC to participate in the EA process of the Project.

The FRC further recommends that a condition of any funding award be that the funding recipient must provide input to the EA through comments on either or both of the EIS and the CSR.

The Participant Funding Review Committee
Schaft Creek Mine Project
Regular Funding Envelope to Support Aboriginal Participation

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Paul Scott, Committee Chairperson, Retired Regional Director of the Agency's Pacific and Yukon Office

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Patrick Duffy, Environmental Assessment Consultant

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Ray Crook, Environmental Assessment Consultant

Recommended Participant Funding Allocations
Schaft Creek Mine Project
Regular Funding Envelope

Applicant	Total award amount recommended
Tahltan Central Council	$94,020
Nisga'a Lisims Government	$26,775
Métis Nation of B.C.	$15,400
TOTAL	$136,195