Canada: Ontario And Quebec Make Strides In Updating Their Mining Regimes

Quebec and Ontario have made further strides in updating their mining regimes to reflect their respective needs, realities and political priorities.

In Quebec, the government recently took some major steps towards this goal by (1) tabling a proposal in May 2013 to change the mining royalty regime; (2) introducing Bill 43 on May 29, 2013, to replace the current Mining Act, which dates back to 1987; and (3) passing amendments, on July 23, 2013, to the Regulation to amend the Regulation respecting mineral substances other than petroleum, natural gas and brine in order to set new rules concerning the financial guarantees required for the restoration of mining sites.

In Ontario, the new and amended regulations under the Mining Act described in our September 2012 Legal update have since come into force, and Ontario has developed four policies relating to Aboriginal consultation that further clarify the government's expectations. Junior exploration companies have already experienced the effects and challenges of this new regime more significantly than majors or companies with advanced exploration projects.

This is a transition period for Ontario's regulatory regime—one that requires patience, goodwill, education and the on-going co-operation of all parties if the reforms are to achieve the positive results the government is hoping for. These include greater clarity, less confrontation, enhanced respect for existing Aboriginal and treaty rights, protection of sites of Aboriginal cultural significance and improved prosperity for First Nations communities.


Mining royalties

In May, the government tabled its proposal to change the mining royalty regime to increase the return on mining royalties for Quebec. It decided to require all mining operators to pay a minimum mining royalty, called the minimum mining tax, and a progressive tax on mining profits. The minimum mining tax will be 1% of the total output at the shaft head below or equal to $80 million and 4% of each dollar in excess of the $80 million threshold. The minimum mining tax paid can be carried forward and applied against the tax on future mining profits. In 2011, half of the 20 mining companies operating mining fields in Quebec did not attain the profitability threshold at which mining tax is payable under the current regime. The new regime will subject them to a new tax burden.

The mining tax on profits will be 16% for mining companies with a profit margin between 0% and 35%, 22% for mining companies with a profit margin between 35% and 50%, and 28% for mining companies with a profit margin between 50% and 100%. According to government figures, the new mining royalty regime should allow the government to collect $376 million in revenues in 2015—$56 million more than the current mining tax regime would generate. When corporate income tax and the mining tax on profits are taken together, the new Quebec regime represents a combined taxation rate between 38.6% and 42.4% depending on a company's profit margin, compared to a rate of 32.5% in Ontario and 45.8% in Australia.

The new royalties are expected to come into effect on January 1, 2014.

A new Mining Act

Bill 43, tabled on May 29, 2013, is the third attempt to reform Quebec's mining legislation since 2010. Bill 43 contains most of the amendments proposed in Bill 79 and Bill 14 but also adds some new concepts, resulting in: (1) stronger recognition of sustainable development as the "perspective" for mining development in Quebec; (2) right of the minister to refuse or revoke a mining lease for surface mineral substances for "public interest" reasons; (3) requirement for mining operators to conduct a feasibility study for the processing of ore mined in Quebec; (4) a more robust penal sanctions regime based, in part, on the Environment Quality Act; (5) requirement to obtain a certificate of authorization under the Environment Quality Act before a mining lease is granted; (6) repeal of the power of expropriation for purposes of mining exploration; (7) increased protection of a family residence where it is acquired for mining purposes; (8) codification of the minister's duty to consult native communities, "having regard for the circumstances," for mining projects; (9) requirement to subject all mining projects to the environmental impact assessment and review procedure and provision of a financial guarantee covering 100% of the anticipated cost of rehabilitation; and (10) possibility for the minister to require the completion of a study on the maximization of economic spin-offs for Quebec.

The parliamentary commission of the National Assembly began hearings on Bill 43 at the end of August 2013. If the political parties in the National Assembly reach the consensus needed for it to pass, the Bill should become law in the fall of 2014 or no later than the spring of 2014.

A new regulation

Lastly, on July 23, 2013, the government enacted OC 838-2013, which amends the Regulation respecting mineral substances other than petroleum, natural gas and brine in order to set stricter requirements for mining site restoration and rehabilitation. With these regulatory amendments, several of the amendments set out in sections 176 to 196 of Bill 43 can be put into effect immediately.

Accordingly, the following changes will apply as of the effective date of this regulatory amendment, i.e. August 22, 2013: (1) the guarantee that a mining operator is required to submit will have to cover 100% of the anticipated costs of the rehabilitation plan, as compared to 70%, which is the requirement that applied until August 22, 2013; (2) the guarantee must be submitted in three instalments during the first three years; (3) the first instalment of the guarantee must be for 50% of the total amount of the guarantee and the second and third instalments, for 25% each; (4) operators whose rehabilitation plans were approved before August 22, 2013, are required to comply with the new rules regarding the financial guarantee, providing the first instalment within one year and the other instalments within three years; (5) the new financial guarantee requirements will apply to mining exploration operations as of revision of the already-approved restoration plan.


The three components of mining law reform in Quebec are intended to: (1) increase environmental responsibility of mining stakeholders; (2) ensure that mining development is in keeping with the principles of sustainable development; (3) increase government revenues from the development of mineral resources in Quebec; and (4) optimize the economic spin-offs from mining development for both local communities and Quebec as a whole. All these objectives, while laudable, will need to be adjusted in keeping with market realities. The challenge for the government is to make sure that Quebec remains attractive to individuals and businesses interested in mining development. It is important to remember that the marketplace for mining development is now global and capital is extremely mobile. Quebec is in ongoing competition with other provinces, states and countries that have mineral resources. Quebec, a democratic state with a dependable and competent legal system, offers undeniable advantages in terms of qualified labour, communication channels, political stability and legal certainty. In this respect, Quebec is attractive. However, it is not the only state that offers these benefits. The tax and regulatory regimes factor significantly in the decisions made by investors. It is important to remember that many mining exploration companies are under-capitalized and have access to limited financial resources. For Quebec to remain competitive, the government must therefore strike the right balance between its political objectives and the economic realities of the Quebec, Canadian and global mining markets.


Mining Act Awareness Program: Effective November 1, 2012, General Regulation 45/11 requires anyone wishing to apply for or renew a prospector's licence to complete a free, on-line prospector's awareness program within 60 days of applying. Additionally, current licensees have until November 1, 2014, to complete the program. The program educates prospectors on the recent changes to the Mining Act and regulations.

Sites of Aboriginal Cultural Significance: Effective November 1, 2012, First Nations communities may apply to the Ministry of Northern Development and Mines (MNDM) to have sites of Aboriginal cultural significance withdrawn so that lands, mining rights or surface rights that are Crown property cannot be staked, prospected, sold or leased. The threshold size for such protection is 25 hectares or less if certain criteria are met. This is provided for under the Mining Act and General Regulation 45/11. The MNDM will consider whether there are other means to address a community's concerns, including terms and conditions in exploration permits. Mineral claims holders are entitled to receive notice of a proposal to withdraw or restrict surface rights and to make representations to the MNDM.

Exploration Plans and Exploration Permits: Effective April 1, 2013, and pursuant to Regulation 308/12, persons proposing to undertake certain low-impact, early exploration activities must submit an exploration plan to the MNDM before the activities are undertaken, although the plan is not approved by the MNDM, only circulated. Surface rights owners must also be notified. The MNDM will notify potentially affected First Nations, who will have 30 days to comment regarding any adverse effects the proposed activities may have on their existing or asserted Aboriginal and treaty rights. Unless the MNDM determines that an exploration permit is required, the proponent may not commence the activities until the 30 days have elapsed. The plan expires after two years.

Other early exploration activities having a higher impact require an exploration permit. Proponents may only proceed once the MNDM issues the permit. Surface rights owners must also be notified. The MNDM will notify potentially affected First Nations communities, who may comment on the application before a decision is made. Where a proponent consults with a First Nations community before applying for a permit, an Aboriginal consultation report must be included with the application. Within 50 days of MNDM circulating the permit application to potentially affected First Nations communities, the director of MNDM must decide whether to issue the permit and, if so, under what terms and conditions. However, the MNDM may "stop the clock" to allow for additional consultations if there are unresolved concerns. An independent third party may also be designated by the MNDM to hear specific Aboriginal consultation disputes.

Exploration permit applications are posted by MNDM on the Ontario Environmental registry, where the public is invited to submit comments within 30 days. If the application is approved, the permit is valid for three years, with the possibility of one three-year renewal. As at August 14, approximately 76 permit applications and 145 permit decisions appeared to have been posted on the registry since January (although some decisions relate to applications made in 2012).

Amendments to Assessment Work Regulation 6/96: Effective November 1, 2012, mining proponents may now include certain Aboriginal consultation costs as eligible for assessment work credits. Certain monetary payments may also be eligible.

Voluntary Rehabilitation and Closure Plans: Effective November 1, 2012, Aboriginal consultation is required prior to a proponent submitting a certified closure plan or closure plan amendment. Where a proponent applies to the MNDM for approval to voluntarily rehabilitate an existing mine hazard that it did not create or worsen, the director of MNDM must consider whether Aboriginal consultation, if required, has occurred in accordance with regulatory requirements.

New MNDM Policies: In addition to the Mining Act and regulatory changes, the MNDM has published four policies further clarifying the following areas relating to Aboriginal consultation and the government's expectations of mining companies and First Nations.

  • Aboriginal consultation
  • Dispute resolution
  • Assessment work credits
  • Sites of aboriginal cultural significance – withdrawals and surface rights restrictions

Additionally, the MNDM has developed provincial standards as part of the implementation of the graduated regulatory regime for early exploration and the exploration plans and permits regulations.

Commentary: The regulatory and policy developments in Ontario have been controversial, especially at a time of overall economic challenges and a slump in the minerals commodity markets, particularly for junior exploration companies. Some see the changes as a fundamental shift in mining and Aboriginal consultation that could result in higher costs, more bureaucracy, project delays and uncertainty. Others see it as a paradigm shift in the "free entry" system that has existed historically and a downloading by government of its consultation obligations. Still others view the changes as simply a codification in regulations of existing practices and court rulings on the duty to consult with Aboriginal Peoples. Certain First Nations in Ontario wanted the regulations delayed, claiming they had not been adequately consulted by the government. Others expressed concern about the potential inflexibility of the regulatory timelines, their lack of time and resources to engage in consultations and the risk that the government would approve exploration permits over their objections.

The Ontario Mining Act was clearly outdated and needed reform, not only to reconcile Ontario's laws with decisions of the Supreme Court of Canada respecting Aboriginal rights and consultation, but also to try to reduce the confrontations that have gained notoriety over the last several years between mining proponents and First Nations communities. The current concerns and issues faced by mining companies, their investors and First Nations communities with respect to these reforms will likely remain for a while until all parties become more experienced with this new business environment.

The success of Ontario's mining industry and its ranking as one of the best places for large and small mining companies to invest and prosper will depend in part on how parties work together under these new regulations. One can only hope for greater harmony and a balancing of the needs of the mining industry against the rights of First Nations people.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.