Commentary: Surveying the landscape of Ontario’s new mining regime

In Ontario, the new and amended regulations under the Mining Act described in our legal update in September 2012 have since come into force, and Ontario has developed four policies relating to Aboriginal consultation that further clarify the government’s expectations. Junior exploration companies have already experienced the effects and

challenges of this new regime more significantly than majors or companies with advanced exploration projects.

This is a transition period for Ontario’s regulatory regime — one that requires patience, goodwill, education and the ongoing co-operation of all parties if the reforms are to achieve the positive results the government is hoping for. These include greater clarity, less confrontation, enhanced respect for existing Aboriginal and treaty rights, protection of sites of Aboriginal cultural significance and improved prosperity for First Nations communities.

Let’s examine the most important aspects of the new regime:

Mining Act Awareness Program: Effective Nov. 1, 2012, General Regulation 45/11 requires anyone wishing to apply for or renew a prospector’s licence to complete a free, on-line prospector’s awareness program within 60 days of applying. Additionally, current licensees have until Nov. 1, 2014, to complete the program. The program educates

prospectors on the recent changes to the Mining Act and regulations.

Sites of Aboriginal Cultural Significance: Effective Nov. 1, 2012, First Nations communities may apply to the Ministry of Northern Development and Mines (MNDM) to have sites of Aboriginal cultural significance withdrawn so that lands, mining rights or surface rights that are Crown property cannot be staked, prospected, sold or leased. The

threshold size for such protection is 25 hectares or less if certain criteria are met. This is provided for under the Mining Act and General Regulation 45/11. The MNDM will consider whether there are other means to address a community’s concerns, including terms and conditions in exploration permits. Mineral claims holders are entitled to receive notice of a proposal to withdraw or restrict surface rights and to make representations to the MNDM.

Exploration Plans and Exploration Permits: Effective April 1, 2013, and pursuant to Regulation 308/12, persons proposing to undertake certain low-impact, early exploration activities must submit an exploration plan to the MNDM before the activities are undertaken, although the plan is not approved by the MNDM, only circulated. Surface rights owners must also be notified. The MNDM will notify potentially affected First Nations, who will have 30 days to comment regarding any adverse effects the proposed activities may have on their existing or asserted Aboriginal and treaty rights. Unless the MNDM determines that an exploration permit is required, the proponent may not commence the activities until the 30 days have elapsed. The plan expires after two years.

Other early exploration activities having a higher impact require an exploration permit. Proponents may only proceed once the MNDM issues the permit. Surface rights owners must also be notified. The MNDM will notify potentially affected First Nations communities, who may comment on the application before a decision is made. Where a proponent consults with a First Nations community before applying for a permit, an Aboriginal consultation report must be included with the application. Within 50 days of MNDM circulating the permit application to potentially affected First Nations communities, the director of MNDM must decide whether to issue the permit and, if so, under what terms and conditions. However, the MNDM may “stop the clock” to allow for additional consultations if there are unresolved concerns. An independent third party may also be designated by the MNDM to hear specific Aboriginal consultation disputes.

Exploration permit applications are posted by MNDM on the Ontario Environmental registry, where the public is invited to submit comments within 30 days. If the application is approved, the permit is valid for three years, with the possibility of one three-year renewal. As at Aug. 14, approximately 76 permit applications and 145 permit decisions appeared to have been posted on the registry since January (although some decisions relate to applications made in 2012).

Amendments to Assessment Work Regulation 6/96: Effective Nov. 1, 2012, mining proponents may now include certain Aboriginal consultation costs as eligible for assessment work credits. Certain monetary payments may also be eligible.

Voluntary Rehabilitation and Closure Plans: Effective Nov. 1, 2012, Aboriginal consultation is required prior to a proponent submitting a certified closure plan or closure plan amendment. Where a proponent applies to the MNDM for approval to voluntarily rehabilitate an existing mine hazard that it did not create or worsen, the director of MNDM must consider whether Aboriginal consultation, if required, has occurred in accordance with regulatory requirements.

New MNDM Policies: In addition to the Mining Act and regulatory changes, the MNDM has published four policies further clarifying the following areas relating to Aboriginal consultation and the government’s expectations of mining companies and First Nations: Aboriginal consultation; dispute resolution; assessment work credits; and sites of aboriginal cultural significance — withdrawals and surface rights restrictions.

Additionally, the MNDM has developed provincial standards as part of the implementation of the graduated regulatory regime for early exploration and the exploration plans and permits regulations.

Commentary

The regulatory and policy developments in Ontario have been controversial, especially at a time of overall economic challenges and a slump in the minerals commodity markets, particularly for junior exploration companies. Some see the changes as a fundamental shift in mining and Aboriginal consultation that could result in higher costs, more bureaucracy, project delays and uncertainty. Others see it as a paradigm shift in the “free entry” system that has existed historically and a downloading by government of its consultation obligations. Still others view the changes as simply a codification in regulations of existing practices and court rulings on the duty to consult with Aboriginal Peoples. Certain First Nations in Ontario wanted the regulations delayed, claiming they had not been adequately consulted by the government. Others expressed concern about the potential inflexibility of the regulatory timelines, their lack of time and resources to engage in consultations and the risk that the government would approve exploration permits over their objections.

The Ontario Mining Act was clearly outdated and needed reform, not only to reconcile Ontario’s laws with decisions of the Supreme Court of Canada respecting Aboriginal rights and consultation, but also to try to reduce the confrontations that have gained notoriety over the last several years between mining proponents and First Nations communities. The current concerns and issues faced by mining companies, their investors and First Nations communities with respect to these reforms will likely remain for a while until all parties become more experienced with this new business environment.

The success of Ontario’s mining industry and its ranking as one of the best places for large and small min
ing companies to invest and prosper will depend in part on how parties work together under these new regulations. One can only hope for greater harmony and a balancing of the needs of the mining industry against the rights of First Nations people.

(Click here for a complementary commentary by Madeleine Donahue and Jean Piette on Quebec’s new regulatory regime.)

— Madeleine Donahue is a senior partner at Norton Rose Canada’s Toronto office, and is certified as an expert in environmental law by the Law Society of Upper Canada. She practises primarily in the environmental, occupational health and safety, mining and privacy law areas.

Jean Piette is a senior partner in Norton Rose Canada’s Montreal office, and is experienced in both environmental law and the development of environmental policy. He is chair of Norton Rose Canada’s environmental team and was the first lawyer in Quebec to develop a practice devoted entirely to environmental law in 1972.

As a member of Norton Rose Group, Norton Rose Canada LLP is a global international legal practice with close to 700 lawyers based in Calgary, Montreal, Ottawa, Toronto, Quebec, Caracas and Bogota. See nortonrose.com for details.