On June 29, 2009, the Government of Quebec launched its first mineral strategy entitled “Preparing the Future of Quebec’s Mineral Sector” based on the following policy directions:
- creating wealth and preparing the future of the mineral sector;
- ensuring environmental-friendly mineral development; and
- fostering integrated, communityrelated mineral development.
The mineral industry constitutes an important part of Quebec’s economy. In 2007, industry investment represented $1.43 billion and exploration expenditures alone were $476 million. Total shipments represented $5.5 billion. Nearly 18,000 workers are employed in the mining sector. However, by nature, the mineral industry is cyclical. To deal with these cycles, the Government of Quebec wishes to strengthen the foundations for mineral developments as to ensure that the mining industry keeps contributing to Quebec’s economic prosperity.
Creating Wealth and Preparing the Future of the Mineral Sector
Enhancing the Geoscientific Knowledge of Mining Regions
Along with the Plan Nord by which the Government of Quebec announced its intention to develop the Northern Quebec region, the strategy provides that Géologie Québec will conduct work to enhance the geoscientific knowledge of this area by mapping the region and conducting airborne geoscientific surveys. Similar work will be conducted in regions that are already mined.
Providing Access to the Northern Quebec Region
The Government of Quebec, as announced in its 2009-2010 Budget Speech, will invest nearly $350 million over the next five years to improve existing roads and airports and to build new infrastructures. Some of these new infrastructures will be developed in partnership with mining companies.
One of the changes to be expected with the implementation of the new strategy concerns the exploration work required for mining companies to maintain their claims. Under the Mining Act (Québec) (the “Act”), in order to obtain the renewal of its claim, a claim holder must conduct exploration work and report back to the Ministry of Natural Resources and Wildlife (the “MNRW”). However, as provided by Article 73 of the Act, it may choose to make a payment in lieu of its performance of the required minimal exploration work. With the objective of spurring exploration work on claims and avoid them to become dormant, the government intends to amend the Act as to review claim renewal terms in order to enhance mineral activities on claims.
The Government also intends to review the mining royalties regime to ensure a fair return on mineral resource mining. In a report dated April 1, 2009, the Auditor General of Quebec stated that 14 out of the 21 mines of Quebec have not paid any mining royalties between 2002 and 2008, although the value of their annual production was estimated at $4.2 billion. In an open letter later published in the press, the Minister for Natural Resources and Wildlife, Mr. Serge Simard, stated that:
“[TRANSLATION] From now on, the province of Quebec will receive a more important part of the benefits issued from the exploitation of its natural resources. One of the priority measures of this [mineral] strategy is no doubt the re-evaluation of the mining royalties regime. We will make sure that the mining sector, equitably, will bring its fair contribution to the collective wealth of the whole province of Quebec, while preserving the sector’s competitiveness.”
The reassessment will take into consideration, (i) the companies’ competitiveness; (ii) the maximization of benefits; and (iii) a fair share return on resource mining. The Government also plans to adapt the mining royalties regime to the special characteristics of the diamond industry.
To support research projects in partnership with universities, institutions and industry, the Government intends to institute a program to provide assistance for research in priority areas of the province’s mineral sector, such as deep exploration and mining, adaptation of technology to Quebec’s geology, adaptation to climate change, mining in a northern environment, optimization of mining extraction practices and energy consumption, reduction of environmental impact from mineral activity and rehabilitation of mining sites. Through tax measures and funding from the Mining Heritage Fund, the Government will also continue to support the industrial component of research projects.
Ensuring Environment-Friendly Mineral Development
Currently, mining lease holders are obligated to rehabilitate mine sites after the closure of a mine; to file a rehabilitation plan at the start of the project’s planning process and to deposit a sum equivalent to 70% of the estimated rehabilitation costs for the accumulation areas as a security for the performance of their obligation. However, as the strategy points out, “if mining companies go bankrupt before all payments are made, the government can be stuck with bills into the millions and have to pick up the tab for the 30% of unsecured rehabilitation costs”. In its financial statement as at March 31, 2008, the Government of Quebec recorded $264 million in environmental liabilities for contaminated mine sites.
With the objectives of diminishing the risk for the government to become responsible of new abandoned sites and to ensure mine sites rehabilitation after closure, the strategy proposes the following:
- increase coverage for estimated costs in the rehabilitation plan from 70% to 100%;
- extend the scope of the security deposit to cover all exploration work, including exploration camps, not just tailing accumulation areas;
- revise the security payment schedule to accelerate payments, making the first payment due as of the first year; and
- introduce a five-year transition measure for existing mines.
Fostering Integrated, Community- Related Mineral Development
With the objective of fostering integrated, community-related mineral development and with a view of transparency, social acceptability and respect for sustainable development principles, the Government proposes to amend the Act as to require the promoters of any metal or chrysotile mining project that is expected to generate less than 3,000 tons of ore per day to hold community public consultations before the beginning of mining operations.
The Native Fund Assistance Program which aims to encourage community development in mineral development has been extended until 2013. It pursues the following objectives:
- develop prospecting and mineral exploitation activities in less explored areas;
- develop first-rate expertise in aboriginal communities that helps job creation; and
- encourage the creation of aboriginal businesses in the mineral resources sector.
Agreements between mining companies and aboriginal communities help ensure that mining projects will benefit aboriginal people. For this reason, the government of Quebec encourages mining companies and aboriginal communities concerned by the development of a mining site to establish a dialog with a view to possible negotiation of such agreements. However, the strategy does not include any mention of measures reflecting such encouragement.
The strategy includes proposed amendments to the Act as to ensure the balancing of land uses, such as:
- granting to the Minister the option of invoking regional land uses plans in order to increase his ability to reserve or to withdraw land to reduce disputes over land use;
- giving the Minister the power, where public interest warrants, to refuse to grant leases for surface mineral substances and terminate mining titles for these same substances;
- giving the Minister the power to refuse the granting of pit and quarry leases; and
- clarifying the right of expropriation.