On April 17, 2025, the Protect Ontario by Unleashing our Economy Act, 2025 ("Bill 5") completed its first reading in the Legislative Assembly of Ontario. Bill 5 sets out a wide range of legislative changes principally aimed at reducing regulatory barriers to project development and stimulating economic growth. However, Bill 5 also seeks to secure the province's critical mineral supply chains from foreign interference. To this end, Bill 5 proposes significant new powers for the provincial government to intervene in the Ontario mining sector. Key features of these powers include:
- Limiting Access to the Mining Lands Administrative System and Prospector's Licensing. Bill 5 proposes to amend the Mining Act to permit the Ontario Minister of Energy and Mines (the "Minister") to suspend functions of and access to the Mining Lands Administration System (or limit registration to that system) where "desirable for the protection of the strategic national mineral supply chain." The Mining Act would also be amended to empower the Minister to prevent a person from obtaining a prospector's licence or terminate an existing prospector's licence to safeguard the strategic national mineral supply chain.
- Ministerial Powers Over Leases, Claims, and Other Rights. The Minister will be given the authority under the Mining Act, where desirable for the protection of the strategic national mineral supply chain, to deny the issuance of a lease under the Mining Act, and, with the Lieutenant Governor in Council's approval, cancel or revoke unpatented mining claims or licenses of occupation or terminate leases of mining lands or mining rights.
- Restrained Procedural Rights and No Compensation: Bill 5 provides for the Minister to be able to exercise the above powers without prior notice or a hearing and expressly bars impacted parties from seeking compensation for actions taken by the government under its new powers to protect the strategic national mineral supply chain.
Bill 5 remains in the early stages of the legislative process. As a result, its scope and application may evolve as the bill advances through the legislature and related regulations are put in place. At present, the bill raises a number of important questions in terms of its practical operation and interaction with the broader legal landscape. For example:
- Foreign investment in Canada is subject to existing regulation at the federal level, including through the Investment Canada Act (the "ICA"), the ICA's National Security Review of Investments and Canada's various international trade and investment protection agreements. Bill 5 will expand the regulatory framework that needs to be considered when evaluating investments, mergers and acquisitions and other commercial arrangements in respect of Ontario mining assets.
- Under the existing drafting of Bill 5, it is unclear what, if any, triggers may be necessary for the Minister to be able to intervene (e.g., a change in control concerning mineral rights, new or amended off-take arrangements, etc.) and if there will be any grandfathering of existing investments.
- While the bill is directed at preventing "adversarial foreign governments or corporations or bad actors from claiming critical minerals", the manner in which these will be defined is unknown, as is the basis on which the principle of prevention will be applied to complex ownership structures (e.g., in the context of a minority interest holder).
We will be continuing to monitor Bill 5, and its potentially wide ranging implications for Ontario's mining industry, as Bill 5 works its way through the legislative process. For a more general overview of Bill 5, please see our previous blog post.
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