Commentary: Ontario and Quebec propose changes to mining rules

Interestingly, both Ontario and Quebec are proposing significant changes to their respective mining legislation.

In Ontario, the public comment period closed on May 1, 2012, on six regulatory proposals under the Ontario Mining Act that were posted on the Environmental Registry (EBR) in March 2012 by the Ministry of Northern Development and Mines (MNDM). Feedback received is now under review.

The proposals were for amendments to certain existing regulations and introduction of new regulations to implement substantive changes made to the Mining Act in 2009.

The EBR postings were simply concept-level descriptions of what the regulations would address although the regulatory text itself was not provided. Until such time as specific draft regulations and associated policies and standards documents are released to the public, industry and First Nations, it is difficult to predict whether the concepts will be codified into law substantially as described. The regulatory proposals are outlined below.

Here are features of the proposed regulatory changes in Ontario:

• The regulatory scheme would be graduated, based on 2 classes (plans or permits) of early exploration activities and potential impact on the environment and Aboriginal and treaty rights. Exploration plans involve lower impact activities.

While consultation with Aboriginal communities prior to undertaking exploration work is encouraged, it would not be required. Proponents (called “exponents”) would be required to provide the plan to surface rights owners, which would include a report on whatever consultation the proponent elected to undertake by way of consultation. The MNDM would also be provided with the plan and in turn, provide it to Aboriginal communities.

Work could begin 30 days after the plan is provided to Aboriginal communities. The plan would be valid for a 2-year period.

Exploration permits on the other hand involve low to moderate impacts and could be approved within 31-50 days following circulation by MNDM to Aboriginal communities, although the timeframe could be halted (i.e. stop the clock) pending resolution of issues or disputes. The regulation will contain alternate dispute-resolution mechanism  provisions for disputes between Aboriginal groups and exploration exponents.

Exponents would have to provide the permit application to surface rights owners. The permit applications would be posted on the EBR for comment and notice of decision by the government. Exploration permits would be subject to standard requirements for permit activities (Provincial Standards that the MNDM has not yet released and that may evolve over time) and be valid for a 3-year period.

• Regarding assessment work, amendments to Regulation 6/96 would allow Aboriginal consultation to be included in costs eligible for assessment work credits provided that actual geosciences assessment work is submitted. Once accepted, the credits can be banked and distributed and are not discounted over time.

• Regarding mine development and closure, amendments to Regulation 240/00 require Aboriginal consultation prior to submission to the MNDM of a certified closure plan under part VII of the Mining Act. Again, there would be a dispute resolution mechanism. The amendments would also have the director of MNDM direct the proponent on required Aboriginal consultation where a proponent is undertaking voluntary rehabilitation of existing mine hazards.

To date the MNDM has not spelled out what the consultation requirements will be either for this regulation or the previous ones.

• The amendments to General Regulation 45/11 will specify criteria for what is considered to be a site of Aboriginal Cultural Significance that the government can withdraw from claims staking and prevent mineral exploration. The process for withdrawal is expected to be set out in a policy document. Additionally, the regulation will designate the Mining Act Awareness program as the prospectors’ awareness program training requirements under the Mining Act and revoke existing regulation requirements for permission to extract and test bulk samples of minerals (which will be added to the General Regulation).

• The amendments to Regulation 950 will allow the MNDM to prosecute lesser offences under the Mining Act by way of certificates of offence (tickets) under Part I of the Provincial Offences Act.

• The amendments Regulation 43/11 will require claims stakers to provide GPS data for claim boundaries on an application to record a mining claim on lands that have not already been surveyed into lots and concessions. The MNDM intends to move to a fully electronic on-line map staking process.

The MNDM timetable indicated that exploration plans and permits and measure to protect sites of Aboriginal cultural significance would be mandatory by December 2012.

The Ontario Bar Association (OBA) and the Prospectors and Developers Association of Canada (PDAC) have both submitted comments on the regulatory proposals to the MNDM. While supportive of the objectives of the regulations, the OBA requested clarifications and changes on a number of aspects. The PDAC indicated a need for further consultation to ensure the regulations are clearer and properly reflect the needs of all parties to be affected-the mineral exploration industry, Aboriginal communities and the Crown. Some Aboriginal representatives have commented that improvements need to be made regarding early consultation between mining companies and Aboriginal communities.

Representatives of some junior mining companies are concerned there may be a negative impact on business and delays in getting approvals for permits which will increase the cost of business.

Quebec

In Quebec, the government tabled Bill 14 in 2011. The Bill was the subject of public hearings during 2011 and a number of amendments were subsequently brought to the Bill and approved by a Committee of the National Assembly of Quebec. However, the clause-by-clause adoption of Bill 14 has not been completed despite 43 days of session by the committee, which adjourned its proceedings a few weeks ago for the summer recess. The issue of royalties on mining resources continues to divide the committee. The Official Opposition is pushing for an increase of the level of these royalties, which already have been increased by the government.

In Quebec, most of the changes are proposed to the existing Mining Act. In Ontario, the changes are proposed to regulations adopted pursuant to the Mining Act. Changes proposed by both governments deal, to a certain extent, with similar issues, although changes to Quebec’s Mining Act put much emphasis on sustainability as the new concept

upon which the Mining Act is to be predicated. The title of the Mining Act is even changed to reflect this very important change in the fabric of Quebec’s mining legislation. Provisions dealing with social and environmental aspects of mining have been introduced in the legislation.

Here are the features of the proposed legislative changes in Quebec:

• An amendment is made to the Mining Act stating that the act is to be interpreted in a manner compatible with the duty to consult Aboriginal communities in a distinct manner, considering circumstances. The minister’s duty to consult Aboriginals is provided in plain terms.

• All mining projects shall henceforth be subject to mandatory environmental assessment and review in accordance with the process provided in the Enviro
nment Quality Act. Bill 14 goes as far as amending the environmental assessment regulations to include mining projects in the list of projects subject to environmental assessment and review. The environmental impact assessment of any new mine will be up for public consultation for a period of 45 days. Any citizen shall have the right to request a public hearing. The reclamation plan for the mine will be part of the public hearing.

The minister may, in the mining lease, impose conditions designed to avoid conflict with other uses of the land.

• The holder of a claim shall henceforth have the duty to notify the landowner of the fact that he has obtained a mining claim over his property and notify the town authorities of any exploration work he plans to undertake on his claim.

• The holder of a mining lease shall, with representatives of the local population, establish a follow-up and economic benefits maximization committee designed to maximize employment, contracts and other economic benefits for local communities.

• Reclamation plans have been mandatory in Québec since 1995. They apply to new mining projects, including designated exploration work. A mining company will now have to post a bond equivalent to 100% of the estimated cost of reclamation of the mining site. The bond shall be provided in three installments within the three first years of the implementation of the mining project.

• There are new restrictions on mining activities: Mining will henceforth be prohibited in an urbanization perimeter, in a residential sector or in a recreational area designated pursuant to municipal planning legislation.

The holder of a claim subject to such prohibition may negotiate a deal with local town authorities and obtain permission to proceed with a mining activity. If such authorization cannot be obtained, the holder of the claim may seek mediation.

The urbanization perimeters and residential or recreational areas where mining activities are prohibited are designated on a map kept by the Office of the Registrar of Mining Rights and shall not be changed before 20 years.

The Barreau du Québec testified before the committee to support certain aspects of the Bill 14, but raised questions concerning the advisability of giving a right of veto to local towns over the development of mining resources which belong to the state, in other words to the public in general. Trade organizations representing mining exploration and development interests strongly oppose this new measure, but it appears the members of the committee support this controversial measure for which new wording was adopted.

— 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, Québec, Caracas and Bogota. See nortonrose.com for details.