B.C. coal mines' economic impact was overstated to gain environmental review approval, study says

A new study based on three British Columbia coal mines says the economic benefits from the projects, used to justify their approval during the environmental review process, were "significantly overestimated."

The report, authored by six scholars including Simon Fraser University professor Rosemary Collard and University of British Columbia professor Jessica Dempsey, concludes the province's environmental impact assessment process did not protect wildlife habitat as intended.

The issue, Collard said in an interview, is that economic benefits had been used to offset or justify environmental downsides without rules requiring agencies or companies to track the projects' actual effects.

The Mining Association of British Columbia said the information in the report is "outdated" and the results do not portray the situation around mines and their economic impacts accurately.

'Predictive audit'

According to Collard and Dempsey's report, a "predictive audit'' of the three northeastern B.C. mines — Willow Creek, Wolverine and Brule — from 1999 to 2019 shows the projects only achieved 59 per cent of their original projected employment and 34 per cent of predicted tax revenue.

Collard said the lack of tracking allowed mine operators to break their "social contract" to deliver a certain level of economic gain in exchange for access to public resources.

In a written reply, the provincial Environmental Assessment Office said it now has laws in place requiring mine proponents to disclose potential overestimates or shortfalls during the environmental impact assessment process, and the rules have been in place since December 2019.

No project has yet passed under the new rules, although some are undergoing the three-to-five-year process.

"The Environmental Assessment Office has a strong interest in research like this and are always looking for ways to improve our methods, effect assessment conclusions and recommendations and ultimately better support ministers' decisions on whether or not a major project is approved to move forward," the statement from the office said.

The provincial agency said it wants to ensure "effective, enforceable monitoring requirements" are in place.

'The Extinction Paradox'

The study from Collard and Dempsey, published in Environmental Impact Assessment Review, comes as a result of another ongoing project, titled "The Extinction Paradox," that is being conducted by the two researchers.

That project examines the "accelerating loss of wild abundance,'' including the loss of caribou habitat and population in northeastern B.C.

Collard said the drop in caribou population in the region has accelerated despite a strengthening of the environmental assessment process in the mid-1990s.

She said environmental impact assessment "rarely leads to project rejection," especially when economic impacts are introduced as a counterweight.

"It is explicit in the decision letter that those economic benefits were what tipped the balance in favour of doing the project," Collard said, speaking in general of mines that underwent review.

"And so to then just walk away and not find out if those benefits were delivered — most businesses would be keeping much better track."

Michael Goehring, president and CEO of the Mining Association of British Columbia, said he "takes issue" with Collard and Dempsey's study.

Goehring said another coal mine in the same region as the three used in the study, Glencore's Sukunka project, was rejected after environmental impact assessment by the federal government last December.

He also said coal that was deliberately left in the ground when prices dipped, then extracted after the end of the study period in 2019, had created "hundreds of millions of dollars" in economic activity and supported thousands of jobs.

Conuma Resources, which took over operations at the Willow Creek, Wolverine and Brule mines upon the company's founding in 2016, does not dispute the report's numbers.

However, the company said in a written response that a jump in coal prices in 2021 had resulted in gains that should have "closed the gap significantly" in the discrepancy between projected and actual benefits.

According to Conuma, the company now employs 1,073 workers, up from 802 in 2020. The company also paid wages totalling $180 million, corporate tax of $100 million, $12 million in B.C. mineral tax and $2.6 million in property tax to the district of Tumbler Ridge.

"We do operate in a cyclical industry, but [if unextracted] the resource always remains in the ground for the benefit of the Crown and citizens of British Columbia,'' Goehring said. "So the study alleges that steelmaking coal mines in northeast B.C. have not delivered their predicted economic benefits, and I would completely disagree.''

Goehring also said the mining sector had surrendered, deferred or restored more than 400,000 hectares of high-value habitat.