Phase 2 of Ontario’s proposed new mining regulations – what’s up?

We last reported on proposed regulatory changes under Ontario’s Mining Act in a July 2012 legal update. What is the status of these regulations? What has occurred since then and when will the regulations be issued? The short answer is that the regulations and guidance documents are still under development and the earliest the regulations may be out is November.1 Although the public consultation period on the six regulatory proposals posted on the Environmental Registry (Registry) in March 2012 is closed, the Ministry of Northern Development and Mines (MNDM) is continuing to consult with First Nations on phase 2 of the Mining Act regulations, which deals extensively with relations between First Nations and the mining industry.

Industry backlash

Some First Nations have pointed out what they see as flaws in the regulations and are concerned with how the government will monitor and enforce mining industry regulations and also how First Nations will be compensated for their consultation expenses. Some are also concerned with the attitudes, public statements and actions by some junior exploration companies who have grouped themselves in an ad hoc manner under the name “Miners United” and who appear to be taking a hard line stance on consultations with and compensation for First Nations by companies exploring for minerals on Crown lands.

Various news reports this past summer have highlighted the increased clashes and confrontations between some of these companies and First Nations. Recently, on September 4, the Ontario Superior Court granted Solid Gold Resources Corp. leave to appeal the January 3, 2012, interim injunction that was successfully obtained by the Wahgoshig First Nations (Wahgoshig) and effectively prevented this TSX Venture Exchange junior miner from continuing further exploratory activity in the Lake Abitibi area, within traditional Wahgoshig territory, until meaningful consultation and accommodation took place among the government of Ontario, the company and Wahgoshig. The case raises critical issues about consultation with First Nations, a mining company’s right of “free entry” onto Crown lands under the Mining Act, and who has the duty to consult2 and how it is to be carried out.

Current status

Meanwhile, the MNDM is hoping to produce regulations that will balance the interests of First Nations and the industry. The regulations will have to be approved by cabinet committee and may not be posted on the Registry before then, although a notice of the government’s decision will be. Necessary guidance documents and operational policies are currently being prepared, some of which will progressively be posted on the MNDM website and/or Registry.

Of note is that the MNDM website was changed over the summer with negative results for anyone trying to keep abreast of developments. In an apparent government move to streamline and standardize websites, almost all of the information about modernizing Ontario’s Mining Act has disappeared. Hopefully the MNDM will, sometime this fall, establish a dedicated place on its website for Mining Act regulatory developments. Anyone with an interest in this topic should consider lobbying the MNDM and their MLA representatives to ensure that comprehensive update information is posted to the website in a timely, transparent manner so that all interested parties have adequate opportunity to know what is happening, as it is happening.

Mining development policy of the new government of Quebec

The election of a new government in Quebec is likely to have an effect on mining development in the province. The Parti québécois election platform contained the following policy announcements for the mining industry:

  • Encourage secondary and tertiary processing of Quebec’s mining resources;
  • Increase royalties to “economically and socially acceptable levels”;
  • Create a Mining Stock Purchase Plan to encourage Quebec workers and Quebecers generally to invest in mining projects in Quebec;
  • Modernize the Mining Act, eliminating the precedence of the Mining Act over the Act respecting land use planning and development, the Environment Quality Act and the Sustainable Development Act and “adding a flexible mechanism to harmonize uses of the territory”;
  • Modernize the Mining Act, ensuring protection of the environment and respect for First Nations and safeguarding the ability of local and regional authorities to act “for all the interests of the communities they represent.”
  • Abolish the power of expropriation that holders of mining exploration rights currently have.

Recent measures

This ambitious program was crafted in 2011. Since then, the previous government continued its own efforts to modernize the Mining Act by tabling Bill 79 and subsequently Bill 14. Bill 14 introduced measures to improve environmental protection (especially by making all mining projects subject to mandatory environmental assessment), ensure respect for First Nations’ rights and enhance municipalities’ control over mining lands, particularly around urban areas, vacation areas and residential areas where mining activity is not appropriate. The amendments to Bill 14 made by the parliamentary commission maintained the veto right of local municipalities but provided for the possibility of mediation between a mining operator and a municipality that is reluctant to allow mining on its territory. The new government wishes to go further by abolishing mining operators’ current immunity from the application of municipal bylaws.

As for the “precedence” of the Mining Act over the Environment Quality Act and the Sustainable Development Act, we do not know what that means since those statutes do not grant any immunity or privilege to Quebec mining operators, who are subject to the Environment Quality Act in its entirety and even to the depollution attestation regime.

The Parti québécois platform also promises a moratorium on shale gas exploration until new regulations to ensure environmental protection and public health are adopted, in all likelihood after the tabling of the report on strategic environmental assessment that is currently being prepared. The platform does envisage the possibility, however, of “allowing safe exploration and sustainable development of potential oil and natural gas reserves in the Gulf of St. Lawrence and on land” having regard for the territorial sovereignty of Quebec and its ecosystems, after holding a comprehensive public debate in which the coastal regions of the Gulf of St. Lawrence “should participate actively.”

Compliance issues

We do not know what the new government’s timetable will be for the above-mentioned policy proposals and which ones will be treated as a priority. However, we note that the policies advocated by the new government of Quebec aim to strengthen regulatory aspects of environmental protection, give more control over mining in Quebec to local communities, and encourage Quebecers to participate in mining development in the province. If coercive action is taken to achieve these objectives, compliance with the international free trade agreements to which Canada is a party and the Agreement on Internal Trade to which Quebec is a party will need to be assessed. If incentive measures are taken to implement this policy, issues of compliance with intergovernmental trade agreements of Quebec and Canada will probably be avoided.

Clearly the Quebec mining industry does not like the idea of giving a veto or right of control to municipalities over the development of mining resources, preferring to support the view that mining resources are a collective resource that belongs to all Quebecers, to be used for the economic development of the province, job creation and the creation of wealth for all Quebecers. We expect the public debate on this question to continue.