Canada: Proposal For New Water Regulation: BC Government To Take A Lode Off Of Small-Scale Placer Mining And Mineral Exploration

In British Columbia, water use is governed by the Water Sustainability Act, SBC 2014, c 15, (the "WSA") and the Water Sustainability Regulation, BC Reg 36/2016 (the "WSR").  The Ministry of Energy, Mines and Petroleum Resources recently released an intentions paper (the "Paper") outlining a proposal for a new regulation with respect to water use in small-scale placer mining and mineral exploration. This proposal is unique in that the use of water for mineral exploration is rarely directly discussed in water legislation.

In other provinces, mineral exploration will typically fall under a broader category of water use purposes for which a water license will be required. For example, in Saskatchewan, industrial water use requires a temporary water rights license. The term "industrial water use" is defined in their Water Security Agency Regulation, RRS c W-8.1 Reg 1, as including the use of water for mineral exploration.

BC's Current Regime

Under s. 6(1) of the WSA, "a person must not divert water or use water diverted by the person unless they hold an authorization" ("authorization" being defined in the WSA as a license or use approval), or if the diversion or use is authorized under the WSR. There are two exemptions that allow individuals to divert or use unrecorded water to search for minerals without authorization: a prospecting exemption and a permit-holder exemption.

Prospecting Exemption

Section 6(3)(a) of the WSA provides for a prospecting exemption. If the diversion or use of unrecorded water is for prospecting for minerals, no authorization is necessary.

To claim this exemption, one must determine if the purpose for diverting or using unrecorded water falls within the definition of "prospecting for minerals". Historically, this term was undefined in BC's water legislation. When the WSA replaced the Water Act, RSBC 1979, c 429, the term was defined as searching for a mineral using hand-held tools in a manner that does not involve mechanical disturbance of the surface.

Consequently, the determining factor for the exemption is whether one is using a non-mechanized hand-held tool to search for minerals. If a person uses a non-mechanized hand-held tool, they can rely on the s. 6(3)(a) exemption.

Permit-Holder Exemption

Alternatively, individuals have the option to claim a permit-holder exemption. Section 56(2) of the WSR is a temporary provision that allows individuals to use or divert unrecorded water without an authorization, until December 31, 2018, if those individuals hold permits in relation to "mineral exploration activities" or "placer mining activities" pursuant to s. 10 of the Mines Act, RSBC 1996, c 293 (the "Mines Act").

To claim this exemption, the individual's activity must fall into the definition for mineral exploration or placer mining.

"Mineral exploration activities" is defined as the exploration and development of a mineral, a placer mineral, coal, sand, gravel or rock, whereas "placer mining activities" is defined as exploration and development or production of a placer mineral which involves the processing of less than 2000 m3 of pay dirt per year.

Using a specific volume as a threshold for licensing is also the approach of Yukon's Waters Regulation, OIC 2003/58 (the "WR") for placer-mining. Pursuant to s. 4(1) of the WR, a person may use water without a license for placer mining if their use is less than 300 m3 per day.

Additionally, individuals seeking to use the s. 56(2) exemption should be aware that they must comply with the terms and conditions set out in s. 56 of the WSR as well as any additional terms and conditions required under a Mines Act permit.

Alberta's mining legislation contemplates similar restrictions for placer mining. Pursuant to the Metallic and Industrial Minerals Tenure Regulation, Alta Reg 145/2005 (the "Regulation"), no person shall conduct placer mining without a lease, a license or a secondary mineral lease. Further, a person conducting placer mining must ensure they comply with the water use restrictions as set out in ss. 33, 35 and 36 of the Regulation.

The Proposal

A full list of proposed changes for the new regulation can be found in the Paper. This section will briefly summarize some of the key proposals:

  1. the addition and incorporation of environmental protection requirements: the proposed provisions for the regulation will incorporate many of the existing s. 56 conditions for mineral exploration;
  2. the continuance of the Mines Act permit exemption: the proposal will allow the s. 56(2) exemption to continue, subject to the limits and conditions of the proposed regulation;
  3. the creation of a new exemption for mineral exploration with mechanized hand-held tools: diversion or use of unrecorded water for mineral exploration using mechanized hand-held tools, such as hand-drills and rock-saws, will not require authorization, subject to the limits and conditions of the proposed regulation; and
  4. the addition of a right for Engineers and Water Managers to require authorization: engineers and water managers will be authorized to require a person to obtain an authorization if the engineer or water manager considers that the diversion or use of unrecorded water may have a significant adverse impact on the stream, including the flow of water within the stream or on other authorized users.

Given that regulatory oversight exists under the Mines Act for mineral exploration and small-scale placer mining, the proposed regulation is intended to align the WSA and the WSR with the Mines Act by preventing double regulation. As most provinces use mining legislation to impose restrictions, including water use, for mineral exploration and mining activities, this proposal is expected to bring the BC regulatory framework closer to those of other provinces.

The BC Government is inviting the public to provide feedback on these proposals. Feedback will be accepted until November 26, 2018 at 4:00pm. Comments should be sent to  livingwatersmart@gov.bc.ca or submitted to the Ministry's Water Sustainability Act site at http://engage.gov.bc.ca/watersustainabilityact/.

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