Canada: Bill 43 Proposes A New Québec Mining Act

On May 29, 2013, the provincial Minister of Natural Resources (the "Minister") introduced Bill 43 ("Bill 43") proposing the enactment of a new statute that would replace the existing Québec Mining Act enacted in 1987 (the "Act").

Background and existing legislation

In 2011, the Liberal government introduced Bill 14 ("Bill 14") which proposed several amendments to the Act but was never adopted into law. Following the latest Québec elections in September 2012, the new Parti Québecois minority government (the "Government") has shown renewed interest in reforming the legislation governing Québec's mineral extraction industry and has introduced Bill 43 , which incorporates many of the amendments proposed by Bill 14. Bill 43 comes on the heels of a Government proposal for a new mining tax regime, as we discussed in this previous article.

If passed, Bill 43 would result in significant changes to the legal framework governing mining activity in Québec, namely increasing obligations for mining rights holders aimed at creating more responsibility and transparency, enhancing the power of the provincial and local governmental authorities to oversee mining activities in the province, and measures to ensure sustainable development and compliance with respect to the environmental impact of mining activities.

Overview of the proposed changes

The most important modifications proposed in Bill 43 include:

  1. Increasing obligations for mining rights holders. Bill 43 proposes additional requirements designed to foster greater transparency and responsibility for provincial mining rights holders.

    1. Applicants for mining leases will be required to file a project feasibility study and an ore processing feasibility study in addition to existing application requirements, which include a land survey.
    2. A mining lease will not be granted until a certificate of authorization has been issued in accordance with the Environment Quality Act (Québec) and a rehabilitation and restoration plan has been submitted to, and approved by, the Minister. The rehabilitation and restoration plan will be made public by the Minister, as will any documents and information obtained by the Minister from mining right holders for the purposes of the Act.
    3. Lease holders will be required to establish, within 30 days after a lease is issued, an economic spinoff monitoring and maximization committee, with a view to increasing jobs, contracts and other economic benefits for local communities. The committee will be required to be maintained until the completion of the rehabilitation and restoration plan. The lease holder will chose the members of the committee, provided that a majority must be independent from the lease holder and that the committee include at least one representative from the municipal sector, one representative from the economic sector and one member of the public, all from the region concerned.
    4. Certain rights holders and mine operators will be required to send the Minister annual reports indicating, inter alia, the quantity and value of ore extracted, along with the amount of royalties paid, during the previous year. These amounts will be made public by the Minister once a year for each mining lease, mining concession and lease to mine surface mineral substances

      These measures are in keeping with the public disclosure provisions proposed in the new mining tax regime, as we discussed in this previous article.
    5. Certain rights holders and mine operators will be required to provide a financial guarantee covering 100% of the costs of rehabilitation and restoration plans for mine sites. The guarantee will generally be payable in three installments over the span of two years following the approval date of the rehabilitation and restoration plan. The total amount of the financial guarantee required will be made publically available by the Minister.

      The amount of the financial guarantee provided for by the existing Act and its regulations is 70% of the estimated rehabilitation and restorations costs while the payment thereof may be spread out over a period of up to 15 years. The higher amount and the accelerated payment schedule is the same as that which was proposed in Bill 14.
  2. Enhancing powers for the Minister and municipalities. Bill 43 also proposes measures for greater involvement by the Minister and a more robust public consultation process.

    1. Regional County Municipalities ("RCM") will have the power to delimit any territory as a "mining incompatible territory" or a "conditionally mining compatible territory" in their land use and development plans. The Minister will retain the power to request amendments to an RCM plan if such delimitation is inconsistent with a Government policy direction.
    2. Claim holders will be required to notify the local municipality and landowner concerned that a claim has been obtained within 60 days after registering their claim. If the claim is located in the territory of a local municipality, the claim holder must also notify the municipality of the work to be conducted at least 90 days before the work is to begin. This notification requirement was initially proposed in Bill 14.
    3. When granting a lease, the Minister may require that an agreement be entered into by a lease holder for the purpose of maximizing the economic spinoffs within the province related to the mining of mineral resources authorized under the mining lease.
    4. The Minister may renew an initial 20 year mining leasefor three additional terms of 10 years, in each case provided that the lease holder has complied with certain conditions throughout the term of lease, including compliance with the Mining Tax Act and the provision of an ore processing feasibility study. The Minister may grant 5-year extensions after the third lease renewal.
    5. Applicants for a peat lease, or a lease necessary to carry on an industrial activity or engage in commercial export, will be required to hold a public consultation on the project in the region concerned. This public consultation requirement was previously proposed in Bill 14.
    6. The Minister will have the power to refuse an application for a lease or terminate a lease for public interest reasons. In the case of termination, the Minister must grant the lease holder a lease on another parcel of land or compensate the lease holder for the loss suffered. These ministerial powers were previously proposed in Bill 14.
    7. Any exploratory drilling related to uranium must be previously authorized by the Minister and the mining right holder must file a hydrogeological survey with their authorization request.
  3. Promoting prospecting and exploration activities with sustainable development. Bill 43 imposes additional measures on prospecting and exploration activities with the goal of ensuring environmental sustainability.

    1. Claim holders will be required to report to the Minister on all exploration work performed, including work for which an exploration allowance or a pre-production development allowance may be claimed under the Mining Tax Act. This reporting requirement was previously proposed in Bill 14.
    2. Mining claims may be granted by auction by the Minister in relation to targeted exploration areas in accordance with the criteria and conditions determined by the Minister.
    3. The Regulation respecting environmental impact assessment and review will be amended to make all ore processing plant construction and operation projects, as well as mine development and operation projects, subject to an environmental assessment.
    4. The fines for failing to comply with the provisions of the Act will be substantially increased, both in the cases of offences by natural persons and legal persons. As an example, anyone who contravenes the provisions related to the financial guarantee for a restoration and rehabilitation plan will be liable to a fine equivalent to 10% of the total amount of the guarantee, which was initially proposed in Bill 14.
    5. Activities related to petroleum, natural gas, brine and underground reservoirs will continue to be governed by the existing Act, which will be designated under a new title, namely the Mining Act (Petroleum, Natural Gas, Brine and Underground Reservoirs).

Next steps

In order to have the force of law, Bill 43 must next be passed by the National Assembly of Québec. The minority Government has expressed its intention to pass Bill 43 this year, though the specific provisions discussed above will remain subject to on-going debate until Bill 43 is enacted. In the meantime, various interests groups, including the Québec Mining Association, the Union of Québec Municipalities and Nature Québec, have publicly spoken out against certain aspects of Bill 43.

Further Reading: - Government of Québec, Bill 43: Mining Act

-Government of Québec, News Release (French only), "Projet de loi sur les mines – Martine Ouellet propose un développement minier responsable au bénéfice de tous les Québécois" (May 29, 2013)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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