February 2014


Fourth time’s the charm: Quebec amends its mining act

By Charles Kazaz

Quebec updated its mining law last December with the passage of Bill 70 – its fourth attempt in four years. The changes came on the heels of the defeat of Bill 43, introduced in May 2013, which sought to completely replace the existing Mining Act. Following that failure, the Marois government obtained the support of one of the opposition parties, Coalition Avenir Québec, for many of its proposed changes and presented a slightly streamlined version of the previous bill, to amend the act rather than replace it.

Following criticism that Bill 43 did not sufficiently address aboriginal issues, the act now includes a specific chapter on aboriginal communities. It provides that the act must be construed in a manner consistent with the duty to consult and that consideration of aboriginal rights and interests are part of reconciling mining with other uses of the aboriginal land. The natural resources minister must also prepare and maintain a native community consultation policy for the mining sector.

Claim holders are now required to notify affected Quebec municipalities and surface rights owners when they obtain a claim within 60 days of registration. Claim holders are also obligated to provide advanced notice of 30 days to the municipality and landowner prior to performing work, rather than the proposed 90-day period in Bill 43.

Claim holders retain the right to apply excess work costs for renewing adjoining claims within a radius of 4.5 kilometres. The government’s attempt to reduce the radius to 3.5 kilometres did not pass. However, the act now provides that the period during which excess amounts may be carried over is limited to 12 years. It remains possible to make a cash payment in lieu of mandatory exploration work, but the in lieu amount is set at twice the amount of the outstanding work.

As with Bill 43, the approval of a mine closure plan and the issuance of environmental approvals will be required before a mining lease is issued. The minister can now add conditions to a lease in order to avoid conflicts with other uses of the territory.

The Quebec environmental impact assessment process is now required for all mineral processing plants and all mine projects where the processing or production capacity of the plant or the mine is 2,000 tonnes per day or more. (Rare earth processing projects are subject to the process regardless of the processing or production capacity.) This is in contrast to the current 7,000-tonne-per-day limit but above the threshold set in Bill 43, where no processing or production limits were set. For metal mine projects (excluding rare earths) that have a production capacity below the 2,000-tonne-per-day threshold, a public consultation process must be held before a mining lease is granted.

A scoping and market study on processing in Quebec must be submitted with the lease application and every 20 years thereafter. This will be less costly to prepare than the ore processing feasibility study proposed under Bill 43.

As with Bill 43, Bill 70 proposes that when granting a lease and 20 years after mining activities begin, the government may require that the economic spinoffs of mining the mineral resource within Quebec be maximized. However, the act now provides that this may only be required if there are reasonable grounds to do so. The government may also oblige the lessee to establish and maintain a monitoring committee to foster the involvement of the local community in the project.

Similar to Bill 43, documents and information obtained by the minister from mining rights holders under the act are considered to be public. The minister can make these documents and information public in the manner he or she sees fit, except for certain work reports that remain confidential for five years.

The quantity and value of the ore extracted as well as the royalties paid during the previous year and the overall contributions paid by the holder must be made public yearly for each lease, concession and surface mineral substances lease. The closure plan and the financial guarantee are also made public. In contrast with Bill 43, however, there will no longer be a requirement for community agreements to be made public.

Mining rights holders can now only exercise their power to expropriate during the actual mining stage, and they will be required to compensate expropriated parties for certain costs of professional services. Also, fines for violations of the act have been increased substantially and, depending on the offence, may reach as high as $6 million.

Finally, regional county municipalities may declare portions of their territory as a mining-incompatible area in their land use and development plan. If the municipality designates an area as incompatible, the minister may, within a 30-day period, overrule the decision if it is inconsistent with government policy. The minister must provide valid reasons, however.

Changes to the Quebec Mining Act have been long anticipated, controversial and the subject of many debates between the various stakeholders. After the defeat of Bill 43 there was concern that an anticipated change to the legislation at some future undetermined date would create a high level of uncertainty for investors and developers. That risk of uncertainty provided an impetus for the major political parties to come together and adopt these changes. What remains to be seen are how these amendments will be implemented and whether the amendments put an end to the modernization of the Quebec legislation in the short to medium term.

Charles_Kazaz Charles Kazaz is a partner at Blake, Cassels and Graydon LLP and specializes in mining and environmental law.

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