1 Relevant Authorities and Legislation
1.1 What regulates mining law?
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of 10 provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of government. Responsibilities and functions under this democratic structure are distributed through a federal system of parliamentary government whereby the federal or central government shares governing responsibilities and functions with the provincial and territorial governments pursuant to the division of powers under the Constitution Act, 1867 (see question 13.1). The Prime Minister, elected by the public, is the head of government in Canada.
Certain areas within the federal government's jurisdiction may affect a mining project, for example: Aboriginal rights; trade and commerce; railways; nuclear energy; and environmental matters that involve matters of federal jurisdiction, such as fisheries. However, most of the areas which will affect a mining project are within the provincial governments' jurisdiction.
1.2 Which Government body/ies administer the mining industry?
Pursuant to the division of powers under the Constitution Act, 1867, both the federal government and the provincial or territorial governments regulate mining activity in Canada (see question 13.1). Exploration, development and extraction of mineral resources, and the construction, management, reclamation and closure of mine sites are all primarily within the jurisdiction of the provinces of Canada, the Yukon and the Northwest Territories (with some exceptions). In Nunavut and certain areas of the Northwest Territories, public lands and natural resources are governed and administered by the federal government. Other than Nunavut, each province and territory has its own mining legislation and mineral tenure system, though certain mineral rights in the Northwest Territories are administered by the federal government. The provinces and territories (other than Nunavut) own the majority of the mineral rights in Canada, though mineral rights may also be held by private entities, by Aboriginal groups and by the federal government. In Nunavut, mineral rights are owned by the federal government, by Aboriginal groups or by private entities.
Federal government involvement in the regulation of mining operations is limited to those undertakings that fall within federal jurisdiction. These specific undertakings include uranium in the context of the nuclear fuel cycle (i.e., from exploration through
to the final disposal of reactor and mine waste), mineral activities related to federal Crown corporations, and mineral activities on federal lands and in offshore areas. The manufacture, sale, use, storage and transportation of explosives used in exploration and mining also all fall within federal jurisdiction. These are regulated under the Explosives Act (Canada). Federal jurisdiction also covers the export, import and transit across Canada of rough diamonds, which is regulated under the Export and Import of Rough Diamonds Act. The federal Extractive Sector Transparency Measures Act creates stringent reporting standards for Canadian oil, gas and mining companies, in order to implement Canada's international commitments in combatting domestic and foreign corruption. All (i) entities that are listed on a stock exchange in Canada; and (ii) entities that have a place of business in Canada, do business in Canada or have assets in Canada and that meet certain thresholds must report payments including taxes, royalties, fees, production entitlements, bonuses, dividends and infrastructure improvement payments of 100,000 Canadian dollars or more, in the aggregate, to local and foreign governments; as of 2017, this includes sums paid to Aboriginal governments
Any mining disclosure (whether oral or written, and including presentations to investors and disclosure on a mining company's website) made available to the public in Canada is governed by National Instrument 43-101, Standards for Disclosure in Mineral Projects. This instrument was developed by the Canadian Securities Administrators and is administered by the relevant provincial and territorial securities commissions.
1.3 Describe any other sources of law affecting the mining industry.
The areas of contract law and tort law are generally regulated by the provinces pursuant to their "property and civil rights" powers delineated under the Constitution Act, 1867. These bodies of law are mostly "common law" (i.e., "judge-made" law, rather than law created under legislation by Parliament or legislatures). Common law can be superseded or changed by subsequent legislation.
Québec, unlike the other provinces, is governed by civil law. Civil law is a codified law that is written into statutes (e.g. the Civil Code of Québec) which are then strictly interpreted by the courts.
2 Recent Political Developments
2.1 Are there any recent political developments affecting the mining industry?
In March 2019, the Government of Canada announced the release of the Canadian Minerals and Metals Plan (CMMP), which is a forward-looking framework, jointly authored by mining ministers across the country. The CMMP aims to address systematic challenges and issues in the mining industry, with a focus on: competitiveness; the participation of Indigenous Peoples; community benefits; respect for the environment; scientific and technological innovation; and global leadership. The first CMMP Action Plan, intended to be the first of a series of action plans designed to operationalise the CMMP, was released in March 2020. The 2020 Action Plan proposes strategising approaches and programmes and initiatives to enhance the Canadian mining industry's economic development and competitiveness, advance the participation of Indigenous Peoples in the mining industry, protect the environment, encourage scientific and technological innovation, deliver benefits for communities located near mining activities and strengthen Canada's position as a world leader in the industry. Further CMMP Action Plans will be released in 2021 and 2022, with subsequent editions following every three years, enabling Canada to adjust its approach and respond to future opportunities.
In August 2019, the new federal Impact Assessment Act came into force, replacing the previous Canadian Environmental Assessment Act, 2012 (see section 9). Under the Impact Assessment Act, the Canadian Environmental Assessment Agency will be continued as the Impact Assessment Agency of Canada and will now be the single agency responsible for the management and coordination of federal impact assessments.
A recent trend in many Canadian jurisdictions has been the movement away from traditional ground-staking regimes towards more modern electronic mineral tenure registries. Provinces such as British Columbia, Ontario, Saskatchewan and New Brunswick have replaced their respective requirements for physical staking of mineral claims with electronic registration regimes. In Nunavut and the Northwest Territories, mining legislation amendments have been proposed to allow for the introduction of online mining rights administration systems. These developments have had the effect of reducing the cost of staking mineral claims in these jurisdictions, which may indicate a willingness to allow for more speculative staking of claims.
See question 11.3 for a discussion of recent political developments related to the COVID-19 pandemic.
2.2 Are there any specific steps the mining industry is taking in light of these developments?
The mining industry is a significant stakeholder and has been an active participant in consultations regarding the development of the new environmental assessment regime.
3 Mechanics of Acquisition of Rights
3.1 What rights are required to conduct reconnaissance?
Reconnaissance right requirements in Canada vary by jurisdiction. In the Northwest Territories, Nunavut, British Columbia, Manitoba, New Brunswick and Prince Edward Island, both individuals and companies are required to obtain a prospector's licence from the applicable provincial or territorial government in order to engage in prospecting for minerals, subject to certain exceptions. There are similar requirements in Ontario and Québec, though those provinces do not directly issue prospector's licences to corporations. In Nova Scotia, individuals and companies are required to register as a prospector and pay the prescribed fees, but no "licence" is required for preliminary exploration with no ground disturbance.
Prospector's licences (or their equivalent) can be obtained in the majority of jurisdictions by contacting the applicable provincial or territorial governmental authority, completing the requisite form and paying a small fee. In most cases, prospector's licences expire after a period of time (for example, one year in British Columbia), but can be renewed.
Prospector's licence requirements differ from jurisdiction to jurisdiction. In general, the government does not have the discretion to refuse to issue a licence; prospector's licences are granted automatically if the applicant meets the statutory criteria. However, it should be noted that a prospector's licence can be cancelled or suspended for a contravention of applicable mining legislation.
In the Northwest Territories and Nunavut, a prospector may also obtain a "prospecting permit", which grants the holder exclusive rights to explore and have mineral claims recorded within the assigned boundaries of a given permit area for a specified period of time. Similarly, in Saskatchewan, holders of permits issued by the Minister of Environment are granted the exclusive right to explore the lands in question and subsequently can convert the permit into a mineral claim.
Reconnaissance right requirements are less stringent in the Yukon, Alberta, Saskatchewan and Newfoundland and Labrador, as one can conduct certain prospecting activities without a licence or other formal registration.
3.2 What rights are required to conduct exploration?
In Canada, any significant exploration by a prospector will require that prospector to hold the mineral rights to the area of interest. Mineral rights are obtained by "staking" a mineral claim, or "licence" or "permit" in some jurisdictions. The permitted methods for staking a claim vary from jurisdiction to jurisdiction, and include physically staking a claim on the ground, on a map or through an online computer registration system. Applicable fees and documents are often required to complete the staking and recordation process and in some jurisdictions (for example, the Yukon), there may be a requirement to notify or engage with Aboriginal groups prior to recordation or prior to conducting exploration programmes on recorded claims.
The provinces and territories (other than Nunavut) each have their own mineral tenure system, though certain mineral rights in the Northwest Territories are administered by the federal government. Nunavut (except with respect to Inuit-owned lands) utilises a mineral titles system administered by the federal government.
With respect to federally owned lands within the provinces, the federal Public Lands Mineral Regulations regulate the issuance of exploration and mining rights (in the form of a lease). The federal regulations differ from the provincial systems in that they provide for a competitive bidding process for mineral claims.
In order to retain a mineral claim, prescribed amounts of work must be conducted thereon. In addition to exploration, an "assessment report" describing the exploration and its costs must be filed each year with the relevant mining recorder. If the prescribed exploration costs are not incurred, most jurisdictions permit a claim holder to pay an amount of money in lieu of incurring exploration costs. If the assessment report is not filed, or if money is not paid in lieu, the claim will be forfeited by the holder.
The duration of a claim will differ from jurisdiction to jurisdiction. In some jurisdictions (such as British Columbia), a mineral claim may be renewed indefinitely. In other jurisdictions, a mineral claim may only be held for a limited period of time. For example, in the Northwest Territories and Nunavut, a mineral claim may be held for a maximum of 10 years and after such time, it will expire, unless it has been converted into a lease or an extension has been granted by the relevant mining recorder.
In general, a mineral claim or licence only entitles the holder to the right to conduct exploration and not any additional mining operations, subject to certain exceptions. The Yukon is an exception to this general proposition.
A mineral claim holder will generally have rights of access to explore the claim; however, if the surface is privately owned, a notice to, or an agreement with, the surface owner will usually be required. The legislation in most provinces and territories provides for some form of tribunal or other dispute resolution mechanism to resolve disputes between the holders of mineral claims and surface rights owners (see question 8.2). If there are parties who hold other rights to the land, notice to such parties may also be required.
The above describes the situation where minerals are held by the applicable government. However, minerals may also be held by private entities and originate from either Crown grants or patents or freehold tenures that were issued as part and parcel of another type of grant, such as historic railway grants. The owner of such privately held minerals is entitled to conduct reconnaissance and exploration activities and develop those minerals, provided that he or she obtains the necessary surface access (in cases where the surface is separately held).
In some cases, Aboriginal groups may hold the surface rights and/or mineral rights, in which case it is necessary to negotiate with the applicable Aboriginal group the terms on which one can access the lands and conduct exploration activities thereon. Surface access may take the form of a licence or exploration lease and exploration activities may be governed by an exploration agreement.
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Originally published by International Comparative Legal Guide.
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