François Paradis, Hugo-Pierre Gagnon, Alexandre Fallon
June 14, 2013
On May 29, 2013, after eight months of work and two reform attempts by the former Liberal government, the Parti Québécois (the PQ) tabled Bill 43, proposing reform to the Mining Act.
Bill 43 follows the reform on mining royalties tabled by the PQ on May 6, 2013 (see Osler Update Plan Nord – Québec’s New Mining Royalty Regime), whereby the government stated its intention to introduce new legislative measures aimed at better protecting the environment, improving the transparency of mining activities and encouraging the transformation in Québec of minerals extracted in the province.
Bill 43 proposes a new Mining Act (the New Mining Act) that incorporates certain measures that were already proposed in 2011 when the previous government tabled Bill 14 (see article on this topic); however, the bill also includes additional measures that, if adopted, would have a significant impact on mining operations in Québec, particularly regarding matters relating to disclosure, expropriation, transformation and ore mining.
Proposed Modifications to the Mining Act
If Bill 43 is adopted in the Québec National Assembly and the New Mining Act enters into force, the following new measures will be imposed:
- All projects relating to the development and operation of mines, as well as projects regarding the construction and operation of mineral processing plants, will be subject to an environmental assessment by the Bureau d’audiences publiques sur l’environnement (BAPE).
- A committee will be established by all holders of mining rights for the duration of the lifespan of the mine, whose objective will be to maximize job creation, contracts and other economic benefits to local communities.
- The government will be able to auction off certain claims, including those for which it has completed the exploration work and has acquired geological value-added data.
- The granting of mining leases will become subject to the following conditions:
- the mining company’s filing of a feasibility study on the transformation of minerals in Québec;
- the Minister of Natural Resources’ discretion to impose a transformation agreement before granting or renewing a mining lease;
- compliance with all obligations contained in the Mining Tax Act (Québec).
- Municipalities will have increased powers to prepare their development plans and delineate their territory into three categories of compatibility with mining operations: (i) compatible, (ii) compatible under certain conditions and (iii) incompatible. Although the extent of this power has yet to be determined, the municipalities’ development plans would prevail over the New Mining Act, subject to the Minister of Natural Resources’ discretion on the matter, which would be based on necessity.
- Mining rights holders’ power of expropriation may be exercised only at the extraction stage, and mining companies will have to compensate landowners for professional services related to negotiations for the sale of a family residence.
- The public disclosure obligations of mining companies will be increased and will require, among other things, disclosure of their levels of extraction as well as their annual mining taxes.
In addition, the New Mining Act includes measures that had already been proposed by the previous Liberal party:
- A declaration must be made to the relevant municipalities of any prospecting and discovery of uranium and there will be an obligation to perform a hydrogeological study before making boreholes.
- A prior public consultation must be held in cases of exploitation of surface mineral peat required for an industrial activity or commercial export activity.
- The relevant provisions relating to claims will be modified as follows:
- Each licence holder will have to submit a report to the Minister of Natural Resources for all exploitation-related activities in the 48 months following the date of the claim listing.
- Work credits will be carried forward over 12 years, rather than the 20 years that were originally proposed in Bill 14 by the former Liberal government.
- The granting of mining leases will be subject to
- the Minister of Natural Resources’ approval of the rehabilitation and restoration plan of the mining company following the end of mining activities;
- the receipt of a certificate of authorization established by Québec’s Environmental Quality Act (Québec), following a public consultation before the BAPE.
- Mining companies must provide a guarantee sufficient to cover the anticipated costs of the rehabilitation and remediation plan approved by the Minister of Natural Resources, a plan that is to follow at the end of the mining activities at a mining site. The guarantee will be increased to 100%, from 70%, of the remediation costs. In the case of exploration, the guarantee must be provided in full before the work begins. In other cases, the guarantee will consist of three annual instalments of 50%, 25% and 25%.
- The Minister of Natural Resources will have the discretion to refuse the granting of or to put an end to mining leases for the extraction of surface minerals for reasons of public interest.
Petroleum and Natural Gas
Finally, Bill 43 would maintain the provisions of the current Mining Act (Québec) relating to petroleum, natural gas, brine and underground reservoirs, which would be named the Mining Act (Petroleum, Natural Gas, Brine and Underground Reservoirs) (Québec).
The PQ’s objective in proposing a New Mining Act is to modernize the regulatory structure of mining exploitation in the province by promoting the responsible and transparent development of resources while favouring the local transformation of mineral resources, the involvement of local communities in mining projects and respect for the environment.
Various industry stakeholders question the additional burden that the New Mining Act would impose on mining operations, especially on the ability of mining companies to remain internationally competitive and on the province’s appeal for mining investments. Several stakeholders, such as the Association minière du Québec (Québec Mining Association) and the Union des municipalités du Québec (Québec Municipalities Association), have expressed concerns about the potential benefits of Bill 43. These concerns demonstrate a lack of consensus on the proposals. The Liberal opposition, on the other hand, has criticized the uncertainty created by the New Mining Act and has indicated its intention to propose amendments following the consultations on the proposed legislative changes.
Consultations regarding Bill 43 will be conducted on August 22, 23, 26, as well as September 3 to 6 and 10. Its adoption would take place at the earliest in the fall of 2013, but in light of the government’s minority status, it might very well be delayed.
Should you have any questions or would like to discuss this Update, please do not hesitate to contact Ward Sellers, François Paradis, Hugo-Pierre Gagnon or Alexandre Fallon.
Authored by Ward Sellers, François Paradis, Hugo-Pierre Gagnon, Alexandre Fallon