ENV 1283MC May 14,2010. Chief Norm Hardisty Jr. Moose Cree First Nation P.O. Box 190 Moose Factory ON POL 1 WO

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1 Mlnlstry of the Environment Office of the Minister 77 Wellesley Street West 1 1Ih lo or, Ferguson Block Tel.: Fax: Bureau du ministre 77, rue Wellesley Ouest 1 la Btage, Bdifice Ferguson TBI. : TBIBc. : ENV 1283MC May 14,2010 Chief Norm Hardisty Jr. Moose Cree First Nation P.O. Box 190 Moose Factory ON POL 1 WO Chief Randy Kapashesit MoCreebec Council of the Cree Nation Box Four Moose Factory ON POL 1 WO Chief Linda Job Taykwa Tagamou Nation RR2, Box 3310 Cochrane ON POL 1CO Dear Chief Hardisty, Chief Kapashesit and Chief Job: I am writing with regard to Ontario Power Generation's (OPG) Lower Mattagami her Hydroelectric Project and the Mattagami Extensions Coordinating Council. I would first like to recognize the contributions of each of your communities towards the development of the Environmental Assessment (EA) approval for the Project under Ontario's Environmental Assessment Act (EAA) in the 1990s. It was a complex and challenging process and the role of each of your communities was important in developing the detailed terms and conditions we are now tasked with implementing. The Mattagami Extensions Coordinating Council (MECC) was a key provision of the approval, developed to ensure that First Nations had a role in ensuring appropriate environmental oversight occurred and that the proponent fulfilled the terms and conditions of the approval. The provision for the MECC also recognized that there may be circumstances in which the formation of a Committee in place of the Council may be more appropriate. In my view, the formation of a Committee is the appropriate way to move forward. There has been a significant change in relationships between the First Nations and OPG since the EA was approved. I believe these changes have been for the better and reflect a commitment to working together towards a more respectful and prosperous future. Printed on 100% recycled paper

2 Chief Hardisty Jr,, Chief Kapashesit, Chief Job Page 2. Initially, the EA for this Project was valid for 5 years. OPG did not proceed with the Project at that time but wanted the ability to do so in the future. In 1999, the Minister, with the support of Cabinet, extended the EA approval through a Declaration Order under the EAA extending the life of the EA approval. In 2005, this Declaration Order extended approval to June 15,2010. It was not until 2006 that OPG felt a business case could be made for the Project and began working on it again by entering into negotiations with local First Nations. The Ministry of the Environment (MOE) has been asked why the formation of MECC as a Council is not possible. The~e are a number of reasons for this. The Council model is not supported by some of you, in part, because of the view that it does not reflect the change in relationships between the communities and OPG as well as the current regulatory context. The EA approval did not foresee that the First Nations would be taking an ownership role in hydroelectric projects, a positive and significant achievement. The Council is also a complex model to implement before the EA approval expires. The MOE initially took steps to discuss the MECC in 2006 but these were put on hold to allow negotiations between OPG and Moose Cree First Nation and Taykwa Tagamou Nation to continue. These negotiations took much longer than expected. Immediately upon receipt of the Moose Cree's February 12,2010 proposal for the formation of a Committee in place of the MECC, the ministry sought to meet with each of your communities to discuss the proposal and obtain your views on moving forward. The Committee would assume the mandate of the Council, which is to monitor and provide input regarding OPG's compliance with the terms and conditions of the EA approval and would ensure that First Nations have a lead role in this effort. The formation of the Committee is provided for in Condition 1 (a) of the EA approval. Since the proposed Terms of Reference for the Committee was submitted, the ministry has been seeking to work with each of you on the proposal to attempt to develop an agreeable path forward, within the limited time available, whether it be based on Moose Cree's proposal or otherwise. Since February, ministry staff have met with both Moose Cree and Taykwa Tagamou on two occasions and a joint meeting with these communities as well as MoCreebec and OPG was held on May 7, 2010 in Timmins, which I understand was quite positive. I have personally met with all three communities on two occasions and met with OPG once. Numerous letters, s and telephone conversations have occurred between all parties. In these discussions, I have heard clearly that we all recognize that the Project itself is an important opportunity to develop green energy in a manner that has few environmental impacts. Projects like this, which offer such tremendous benefits to the people of Ontario with such minimal impacts, do not come along very often. While I recognize that to date only two of the three communities agree that the Committee is an appropriate alternative to the Council and, that there remains a need for discussion on some aspects of the Committee, I am confident that through continued dialogue and collaboration, those issues can be resolved for the sake of the Project. I am recommending that the Committee's structure be based on the Terms of Reference proposed by the Moose Cree. However, I am not imposing those Terms of Reference on the Committee as its final governing structure. I believe the Committee itself should have the opportunity to...3

3 Chief Hardisty Jr., Chief Kapashesit, Chief Job Page 3. finalize the Terms of Reference, taking into account the following matters as well as any others the Committee deems appropriate including developing a new name for this important body. Firstly, in order to ensure the Committee provides a seat for each of Moose Cree, Taykwa Tagamou, and MoCreebec Council of the Crees, I am asking that, even if a community chooses not to participate in the Committee at this time, a seat be left open for them to participate in the future should they wish to. With that said, it is my sincere hope that each community will come to the table and work together. While I understand there is some concern regarding the proposal to allow OPG to be a member of the Committee, I feel it is appropriate for it to be a member to provide expertise and represent its interests just as your communities will represent theirs. I have no doubt that OPG and, in fact all Committee members, will act in good faith. Having the proponent on the Committee is consistent with the structures of other oversight bodies in the current EA context, and as decisions will be made by consensus, all parties must work together to achieve agreement regardless of whom they represent. Some of you have suggested that a representative from the government of Ontario sit as a member. However, I feel that Ontario's role should be that of an observer on the Committee, to provide technical input and advice as necessary. This practice is consistent with current approaches for liaison committees and I feel is appropriate in these circumstances. I ask that as each community and OPG consider potential representatives for the Committee, and that each party ensure that the member it appoints has an appropriate technical background to ensure meaningful and productive environmental oversight occurs. The Committee, first and foremost, is an environmental oversight body and its mandate will be to provide oversight regarding OPG's compliance with the terms and conditions of the EA approval. An additional matter I would like the members to discuss relates to seats for "observers" on the Committee. In addition to providing observer seats for the federal Department of Fisheries and Oceans and the Government of Ontario (represented by the Ministries of Natural Resources and/or Environment), I ask that the Committee turn its mind to additional observer seats for local municipalities or other interested parties. For example, I have been contacted by the Town of Moosonee, who has expressed an interest in participating as an observer and I understand from OPG that the Town of Kapuskasing would also like the opportunity to participate in this manner. A key principle of MECC, and now the Committee, is that decisions would be made by consensus. I ask all members of the Committee to make their best efforts to work towards consensus as the Committee conducts its work. However, as outlined in the terms of reference for the Committee proposed by Moose Cree, a dispute resolution mechanism has been developed to address the event of a failure of the members to reach consensus on a given issue. This process is similar to that provided in the EA approval. The final step would involve the relevant approval authority making a decision if all other efforts (including other efforts such as mediation or arbitration) had been exhausted without consensus being reached. For matters related to a regulatory issue under the mandate of the Ministry of the Environment, myself or the appropriate ministry official will make a decision if necessary but, depending on the issue, may also choose to refer a matter to arbitration or mediation.

4 Chief Hardisty Jr., Chief Kapashesit, Chief Job Page 4. I would like to note that nothing in the Terms of Reference (with specific reference to items 6 and 7 of the Terms of Reference proposed by Moose Cree) binds or affects the statutory decision making authority of government officials. This applies to decision making on permitlapproval applications, and to decision making in other contexts. I recommend that the Committee reflect this in finalizing its Terms of Reference. However, the relevant Ontario Government ministries are committed to working with the Committee in a meaningful and productive manner and addressing its comments and concerns to the extent possible. Unless OPG has begun construction by June 15, 2010, the EA approval will expire. There is important business for the Committee to begin by then and, therefore, I am requesting that the first meeting of Committee be held as soon as possible. At this first meeting, Committee members will need to be prepared to discuss issues such as. potential candidates for Chairperson, finalize its Terms of Reference, and receive the first submissions from OPG. I would propose that this meeting occur the week May 24,2010. For this first meeting, I will ask staff from the ministry to work with you to confirm this meeting date and an agreeable location. Staff will help facilitate this first meeting before turning the work of Committee over to you, its members. As provided under the authority of condition l(a) of the 1994 EA approval, as incorporated into Declaration Order OPG-1 approved by O.C , I am hereby forming the Committee. With the Committee now formed, OPG may now issue its Notice of Intent to proceed with the Project. I thank each of you for your hard work, and I encourage you to continue to work together on the Committee to monitor and provide valuable input regarding OPG's compliance with the terms and conditions of the EA approval so that we can all benefit from the opportunities this Project will present. If you have any questions, please contact Mr. Ross Lashbrook, Special Project Officer, Environmental Assessment and Approvals Branch, at or, toll-free at , or by at ross.lashbrook@ontario.ca. Please accept my best wishes. Sincerely, Minister of the Environment c: The Honourable Dalton McGuinty, Premier The Honourable Chris Bentley, Ministry of Aboriginal Affairs The Honourable Brad Duguid, Minister of Energy and Infrastructure The Honourable Michael Gravelle, Minister of Northern Development, Mines and Forestry The Honourable Linda Jeffrey, Minister of Natural Resources

5 Ministry of the Environment Office of the Minister 77 Wellesley Street West 1 lm Floor, Ferguson Block Tel.: Fax: Bureau du ministre 77, rue Wellesley Ouest 11' Btage, Bdifice Ferguson TbI. : TBIBc. : Ontario May 14,2010 Mr. Tom Mitchell President Ontario Power Generation 700 University Avenue Toronto ON M5G 1 X6 Dear Mr. Mitchell: I am writing today regarding Ontario Power Generation's (OPG) Lower Mattagami River Hydroelectric Project and the formation of a Committee in place of the Mattagami Extensions Coordinating Council. As you are aware, the Ministry of the Environment (MOE) has been working with your staff and consulting with members of the Moose Cree First Nation, Taykwa Tagamou Nation and MoCreebec Council of the Cree Nation about the formation of a Committee such as that proposed by the Moose Cree on February 12, The Moose Cree have proposed that a Committee be formed in place of the Mattagami Extensions Coordinating Council (MECC), and Taykwa Tagamou informed me at a May 1 1,2010 meeting that they support the formation of the Committee largely based on the Moose Cree's proposal and have provided some suggestions for the Committee to consider as it finalizes its Terms of Reference. The Moose Cree's proposal would see OPG responsible for funding the operations of the Committee for its lifespan. I also understand that OPG has committed to fund the Custodial Body, an important component of the Committee proposal which would ensure that input from community elders is taken into account in project planning. I would like to take a moment to address some of the concerns expressed by Chief Kapashesit from MoCreebec. In my own meetings with the Chief, as well as in meetings between the Chief and ministry staff, he has identified his view that his community has not been provided the same opportunity as the others to participate in the Project, including the development of the proposal for the formation of MECC as a Committee ultimately submitted by the Moose Cree. He has also identified a concern that his community's members will not benefit to the same extent as others from employment and training or a community impact agreement. MoCreebec has indicated they would prefer that MECC be formed as a Council. While I have decided to form a Committee, I... 2 Printed on 100% recycled paper

6 Mr. Tom Mitchell Page 2. have emphasized to the communities that the Committee must provide a seat for MoCreebec in recognition of the role that it played in the original Environmental Assessment (EA) approval. I would ask that OPG continue to meet with MoCreebec to discuss its concerns, and to work with it in good faith to develop a community impact agreement. I would ask that OPG report back to the ministry on progress with these discussions in six months time. I would also like to take this opportunity to note that the MCtis Nation of Ontario (WINO) has contacted the MOE identifying an interest in the Project. I understand that OPG and the MNO have been in discussions about the Project for some time, and I encourage you to continue to work together as the Project moves forward. As I have outlined in the attached letter to the Chiefs of Moose Cree, Taykwa Tagamou and MoCreebec, taking into account the input received from the communities and recognizing OPG's commitment to the Committee, I have now formed the Committee as provided under the authority of condition l(a) of the 1994 EA approval, as incorporated into Declaration Order OPG-1 approved by O.C With the Committee now formed, OPG may issue its notice of intent to proceed with the Project. Ministry staff will participate in coordinating the first meeting of the Committee, with a target for it to hold its first meeting the week of May 24,2010. If you have any questions, please contact Mr. Ross Lashbrook, Special Project Officer, Environmental Assessment and Approvals Branch, at or toll-free at , or by at ross.lashbrook@,ontario.ca. Please accept my best wishes. Sincerely, Minister of the Environment c: The Honourable Dalton McGuinty, Premier The Honourable Chris Bentley, Minister of Aboriginal Affairs The Honourable Brad Duguid, Minister of Energy and Infrastructure The Honourable Michael Gravelle, Minister of Northern Development, Mines and Forestry The Honourable Linda Jeffrey, Minister of Natural Resources Chief Norm Hardisty Jr., Moose Cree First Nation Chief Randy Kapashesit, MoCreebec Council of the Cree Nation Chief Linda Job, Taykwa Tagamou Nation