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  • GDP, US$bn: 1,508.6
  • GDP per capita, US$: 41,571.3
  • Population, mn: 35.9
  • Inflation, CPI ave: 1.4
  • FX, LCY/US$: 1.3
  • Budget Balance, % of GDP: -1.3
  • Mining GVA, US$bn: 93.1
  • Mining Industry Value, US$bn: 21.5
Country: Canada

BMI Index

Ontario BMI Index

79.5

Country: Canada

Purchase reports
Hutte Score
86
0
100
Very Low Risk
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Fraser Institute

Ontario Fraser Institute PPI

Ranked 26 out of 104 Countries

2016

Access Ratings

Hutte Score

Ontario represents a high-water mark in the regulation of mining; by no means is it perfect, but the province has crafted a set of rules over decades of experience that strike a balance among prospectors, junior and major mining companies, investors and government, as well as the community at large. Fundamental to the law is its security of tenure - if one proceeds in an orderly manner, one will acquire mining rights.

subject review score
1st Come / 1st Serve The principle operates (s. 44(2)). 5
Application Criteria A mining claim may only be staked by the holder of a Prospector's License; this is easily obtained, however, through a simple training program. Any person or company may hold a mining claim. 5
Duration There is no expiration for a MC provided that the assessment work requirements are met and/or prescribed fees paid (s. 65(1)). 5
Right to Renew MCs do not expire provided that assessment work requirements are met and/or prescribed fees paid (s. 65(1)). 5
Competing Licences No claim may be staked over land that is the subject of a mining claim or lease (ss. 27(1) and 30). 5
Mineral Coverage MCs are not mineral specific and include all natural occurring metallic and non-metallic minerals, except aggregates, peat and hydrocarbons (s 1(1)). 5
Right to Mine A MC gives the holder the exclusive right to apply for a ML upon completion of the relevant assessment work and payment of the prescribed fees (ss. 50(1) and 81(1)). The right is absolute. 5
Criteria for Mining Rights A MC holder has the exclusive right to apply for a ML upon payment of the first year's rent and once a minimum amount of assessment work has been completed (s. 81(1)). There are no requirements or pre-requisites of any import. An agreement with or an order of the surface rights, if any, or an order of the Commissioner indicating that surface rights compensation, if required, has been paid, secured or settled is also required, where applicable. These requirements, however, are subject to common law principles that are now well established by virtue of Lands Commissioner decisions and pose no material risk to the applicant (ss. 81(1), (2) and (2.0.1)). 5
Tenure ML are issued for a term of 21 years (s. 81(3)), renewable for further 21 years terms (s. 81(6)) provided production has taken place for at least one year in the prior term. 5
Surface Rights It is possible to lease mining and surface rights under s. 84(1)-(2). Third party surface rights holders may not prevent development. According to s. 79(2), third party surface rights holders must be compensated for damages sustained by prospecting, staking, assessment work or operations. In cases where agreement cannot be reached, compensation may be determined by the Commissioner following a hearing and appeals can be made to the Divisional Court where appropriate (s. 79(4)). These principles are clearly established by common law (case law) and compensation does not take into account the value of the minerals. 5
Government Take ML holders must pay annual rental fees (s. 81(3)) which are currently set at $3 per hectare (s. 3, O Reg. 45/11). In addition a mining tax must be paid under s. 187, currently set at $4 per hectare (s. 6, O Reg. 45/11). Mining tax must also be paid under the Mining Tax Act 1990 with current rates set at 10% of taxable profit of non-remote mines and 5% of taxable profit for remote mines. Tax exemptions may apply for new mines (s. 3.1(1)-(3) Mining Tax Act). Miners operating diamond mines must pay royalties under s. 154 MA. Such royalties are calculated based on the output of the diamond mine (see O Reg. 323/07). The law is very clear and detailed on government take. 5
Transfer Rights The written consent of the Minister is required before a ML or its terms can be transferred, mortgaged, charged, sublet or made subject to debenture (s. 81(14)). A MC may be transferred (s. 59); Plans and Permits may be transferred (s. 78.4(1)-(2)). 1
Change of Control This is unregulated. 5
EIA Process The EA process will not generally apply to private mining operations in Ontario unless designated by regulation or a miner voluntarily submits to the requirements of the Environmental Assessment Act 1990 (EAA). The federal EA process will normally apply, however, to larger mine development projects. The aim of the legislation clearly entrenches the concept of sustainable development, provides recourse for legal appeal and rigorous timelines for process advancement. For new mines opening in the Far North area, community land-based plans will be required under the Far North Act 2010. 5
Power to Revoke The Lieutenant Governor in Council, on recommendation of the Commissioner, may declare a ML void if the miner is found to have used any rights granted under the MA for purposes other than mining (s. 85). ML may also be terminated for rent arrears dating back two years or more (s. 81(11)). 3
Age of Legislation 1990 with significant amendments made in 2009 by the Mining Amendment Act 2009. 7
Other Factors Some damage was done when Ontario introduced special laws to tax diamond mines after a discovery by DeBeers; this raised the political risk of doing business in Ontario's mineral sector; recent reforms have attempted to increase consultations with Aboriginal communities and it is in this area where Ontario falls far short; rather than leading in this area, Ontario has consistently placed the onus on prospectors and miners to sort out Aboriginal issues, which is the most difficult issue facing new miners. It is for this reason and the political risk raised above that we have only awarded five points in this category. Also noteworthy are problems associated with Exploration Plans and Permits in O Reg. 308/12. The Director has considerable discretion as to when Plan may be deemed insufficient and a Permit required - not clear or subjective benchmarks for when this may be required. 10
Hutte Score 86
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Mining Overview Commentary plus sign

CANADA – ONTARIO MINING COMMENTARY

 GENERAL

Canada, located on the North American continent between the Atlantic and Pacific Oceans to the east and west and the Arctic Ocean to the north, is the second largest country in the world by total area, with the 11th largest economy based on GDP (World Bank, 2014). Canada is one of the largest mining nations in the world and the minerals industry is a solid part of the country’s economy, contributing over $54 billion to the GDP in 2013 and accounting for almost 20% of Canadian goods exports. The most important mining provinces are Ontario, Quebec, British Columbia and Saskatchewan and Ontario is the most important among them.

Ontario, a large province located in the central-eastern part of the country between Manitoba and Quebec and stretching from the states of New York to Minnesota, is the fourth largest of the Canadian provinces and territories. It is the largest economy within the federation, contributing around 37% of the country’s GDP. While the services industry is by far the most significant, the mining and minerals industry is also important. Ontario has the largest mining industry of all the Canadian provinces and territories and is responsible for around 22% of all mineral production by value. These minerals include nickel, gold, copper, zinc, platinum group metals, diamonds, cobalt and silver.

In 2014 Ontario was ranked 21st in the Fraser Institute’s Policy Perceptions Index of 122 jurisdictions; this placed Ontario at 8th out of the 12 Canadian provinces and territories surveyed.

 PRINCIPAL LEGISLATION AND REGULATOR

The regulation of mining activities and mineral rights in the Canadian provinces is the responsibility of the provincial governments pursuant to its constitution. The principal legislation in Ontario in relation to the industry is the Mining Act 1990 (Act) and its accompanying regulations. Other relevant legislation includes the Far North Act 2010, the Mining Amendment Act 2009 and the Mining Tax Act 1990.

The Act is administered by the Ministry of Northern Development and Mines (MNDM), specifically the Mines and Minerals Division (MMD), alongside the Minister of Northern Development and Mines (Minister). The Minister is responsible for appointing provincial mining recorders (PMR), who play a key role in the licencing process, and is the ultimate authority regarding the administration of the Act. That said, the Mining and Lands Commissioner (Commissioner) within the Ministry of Natural Resources is responsible for hearing and resolving disputes arising under the Act (See Part VI, Act).

Under Canadian law, the provincial governments hold the majority of mineral rights; around 10% are privately owned.

GRANTS AND FORMS OF MINERAL TITLE

In Ontario, land can be acquired either by map staking or ground staking (using posts and other means of physical delineation). In order to ground or map stake a claim, one must hold a prospecting licence (PL). A company will typically retain a prospector to stake land on its behalf. They are granted following the completion of a prospector’s awareness program (PAP) to persons over 18 years of age. With respect to mineral tenure, the following specific titles exist:

  • Mining Claims (MC): Any holder of a PL may stake a claim on land open to prospecting (s. 28(1), Act). The grant is not discretionary; claims that comply with the requirements for staking and recording must be recorded by the applicable PMR (s. 46(1), Act). The claim boundary may not exceed 3,200m and no one boundary can be more than four times the length of any other boundary (s. 3, O Reg. 43/11). No later than 30 days after the completion of staking, an application must be made to record the claim (s. 44(1), Act) and a fee must be paid. Priority of completion of staking prevails over competing applications to record (s. 44(2), Act). MC holders are required to perform “assessment work” or pay the prescribed fees (s. 65(1), Act) in accordance with O Reg. 6/96 for the duration of the MC (which have no expiration); failure to do so may result in the forfeiture of the claim. MCs do not grant the holder any rights to extract minerals. The Minister has the power to cancel any MC following a recommendation from the Commissioner after a hearing (ss. 26(6)-(10), Act). MCs do not grant the holder any surface rights (s. 50(2); where there is a surface rights owner, the holder must notify the owner of the staking of the claim within 60 days or apply for a waiver from a PMR (s. 46.1(1), Act). A MC can be transferred and sold without restriction.

 

  • Mining Lease (ML): MC holders wishing to extract minerals must apply for a ML and are entitled to a lease upon compliance with the Act (s. 81(1), Act), including the performance of a minimum amount of assessment work, the payment of the first year’s rent and the completion of a survey, if required. MLs grant the holder the exclusive right to enter the relevant land and search for and extract minerals, subject to applicable laws. MLs are granted for a period of 21 years, renewable for further 21-year periods, provided the production of minerals has occurred continuously for more than one year since the issuance or last renewal of the lease or the lessee has demonstrated to the satisfaction of the Minister a reasonable effort to bring the property into production (s. 81(8), Act). MC holders applying for a ML can lease the mining rights only or lease the mining rights and the surface rights (s. 81(4), Act). MLs cannot be transferred, mortgaged, charged, sublet or made subject to a debenture without the consent of the Minister following an application by the holder (s. 81(14), Act).

 

Other less common titles under the Act include licences of occupation and patented mining claims (involving acquisition of the freehold).

 DEVELOPMENT CONSIDERATIONS

All leases issued under the Act are subject to reservations outlined in sections 86 and 87 of the Act, including those relating to Aboriginal or treaty rights, which require leaseholders to conduct activities on the relevant land in manner consistent with the protection of such rights. As well, compensation for surface rights holders is required under section 79 of the Act for any damages sustained to the surface by prospecting, staking, assessment work or mining operations; applicants for an ML must provide an agreement or an order of the Commissioner indicating that surface rights compensation, if required, has been paid, secured or settled before the lease may be granted (s. 81(2.0.1)(b) Act).

Environmental assessment (EA) legislation in Ontario is limited in its application to private mining operations, generally applying only if designated by regulation or the proponent voluntarily submits to the requirements of the Environmental Assessment Act, 1990. The MNDM has its own form of environmental assessment (a so-called Class EA process), but this applies only to projects requiring decisions by MNDM, such as tenure decisions that are discretionary. Federal legislation (Canadian Environmental Assessment Act 2012) will apply, however, to larger mining projects and an agreement between the Canadian and Ontario governments exists for co-operation in this regard.

Under the Far North Act 2010 (FNA), while prospecting, mining claim staking, mineral exploration or obtaining a mining lease or licence of occupation for mining purposes do not require a community land-based plan, the opening of a new mine in the area covered by the FNA will require such plan; thus proponents should make themselves aware of the consultation procedures under the FNA where relevant. In addition, the FNA reserves a large portion of land in the Far North for environmental purposes where claims cannot be staked at all (s. 30(g), Act).

ENVIRONMENTAL REGULATION

 See Canada – Ontario Environmental Regulation.

Environmental Overview Commentary plus sign

CANADA – ONTARIO ENVIRONMENTAL COMMENTARY

GENERAL

Canada is the second largest country in the world by geographic size, covering nearly 10 million square kilometres. The country is divided into ten provinces and three territories, namely Alberta; British Columbia; Manitoba; New Brunswick; Newfoundland and Labrador; Nova Scotia; Ontario; Prince Edward Island; Quebec; Saskatchewan; Northwest Territories; Nunavut; and Yukon. Canada’s only international land border is shared with the U.S and is the longest in the world; eight of the thirteen provinces and territories, plus 13 U.S. states sit along the border.

Located in the east-central region of the country, Ontario is Canada’s second largest province by area and its largest province by population. Ontario has an incredibly varied landscape, which includes the Canadian Shield, vast expanses of forested land, over 250,000 lakes, including the Great Lakes (which are shared with various bordering U.S. states), and a wealth of farmland. Niagara Falls also straddles the border between Ontario and the state of New York.

The climate of Ontario can generally be described as continental and it is affected by the province’s varied geography; the north of Ontario experiences long, cold winters and short summers, while the southern part of the province, under the influence of the Great Lakes, has warmer, longer summers, yet still cold winters. Ontario’s fauna includes over 150 species of fish; more than 80 species of mammal including the beaver, black bear, artic fox, lynx, polar bear, wolf, moose, wolverine and walrus; over 480 species of bird including the bald eagle, red-tailed hawks, peregrine falcon, northern cardinal and several types of owl; and various types of amphibians and reptiles. Over 3,500 species of plants and a large variety of trees can also be found in the province.    

PRINCIPAL LEGISLATION AND REGULATOR

In Canada, environmental protection is primarily the responsibility of the provincial governments and various pieces of legislation are important to the regulation and management of the environment in Ontario. While the Environmental Protection Act 1990 (EPA) is the primary legislation for environmental protection and conservation in the province and applies to mining operations in relation to pollution and waste management, it is not relevant in the context of the environmental assessment (EA) process. Of greater importance in this context are the Environmental Assessment Act, 1990 (EAA) and its regulations; the Far North Act 2010 (FNA), where applicable; and the Mining Act 1990.

The Minister (Minister) responsible for the Ministry of Environment and Climate Change (Ministry) administers both the EAA and the EPA and is responsible for the approval of undertakings that fall within the remit of the EAA. The EAA provides for Class Environmental Assessment (Class EA) under Part II.1 and the Ministry of Northern Development and Mines (MNDM) has its own Class EA, in accordance with section 14 of the EAA. The MNDM is the primary administrator with respect to activities falling within this class, but works closely with the Ministry on such matters. The FNA is administered by the Minister for Natural Resources and may be applicable to projects operating within the Far North of Ontario (42% of the province).

Other useful information relevant to environmental regulation in Ontario can be found within the Code of Practice issued pursuant to the EAA, the Municipal Class EA manual, and in the Class EA documentation issued by the MNDM in relation to activities under the Mining Act.

EIA PROCESS

EAA Review: Under the provincial framework, the majority of mining projects will not be subject to an EA process (see ss. 3(b), 3(c) and 3.0.1, EAA). Private sector (mining and other) projects are not subject to the EAA, unless the project involves certain decisions by another ministry or agency or is designated by regulation or arises from a voluntary agreement. In this regard, Ontario principally uses the EA process to assess projects undertaken by or on behalf of the government or its political subdivisions. That said, an EA for a mining project may be required where the project involves the construction of power or transportation facilities, or waste facilities, or a discretionary grant of land rights; note, however, that the acquisition of a mining claim or lease does not trigger an EA since these grants are not discretionary under the Mining Act.

In practice, proponents often voluntarily submit to the provincial EA process when subject to the Canadian Environmental Assessment Act 2012 (CEAA). Under the CEAA, a mining project will be subject to an EA in the following circumstances:

 

  • In the case of the construction, operation, decommissioning and abandonment of a new:

 

(a)      metal mine, other than a rare earth element mine or gold mine, with an ore production capacity of 3 000 t/day or more;

(b)      metal mill with an ore input capacity of 4 000 t/day or more;

(c)      rare earth element mine or gold mine, other than a placer mine, with an ore production capacity of 600 t/day or more;

(d)      coal mine with a coal production capacity of 3 000 t/day or more;

(e)      diamond mine with an ore production capacity of 3 000 t/day or more;

(f)       apatite mine with an ore production capacity of 3 000 t/day or more; or

(g)      stone quarry or sand or gravel pit, with a production capacity of 3 500 000 t/year or more.

 

  • The expansion of an existing:

 

(a)      metal mine, other than a rare earth element mine or gold mine, that would result in an increase in the area of mine operations of 50% or more and a total ore production capacity of 3 000 t/day or more;

(b)      metal mill that would result in an increase in the area of mine operations of 50% or more and a total ore input capacity of 4 000 t/day or more;

(c)      rare earth element mine or gold mine, other than a placer mine, that would result in an increase in the area of mine operations of 50% or more and a total ore production capacity of 600 t/day or more;

(d)      coal mine that would result in an increase in the area of mine operations of 50% or more and a total coal production capacity of 3 000 t/day or more;

(e)      diamond mine that would result in an increase in the area of mine operations of 50% or more and a total ore production capacity of 3 000 t/day or more;

(f)       apatite mine that would result in an increase in the area of mine operations of 50% or more and a total ore production capacity of 3 000 t/day or more; or

(g)      stone quarry or sand or gravel pit that would result in an increase in the area of mine operations of 50% or more and a total production capacity of 3 500 000 t/year or more.

 

For projects that require both a provincial and federal EA, the Canadian and Ontario governments have in place an Agreement for Environmental Assessment Co-operation (2004), which provides for co-operation between the two parties and aims to reduce the overlap between the two separate EA processes.

For projects that are subject to an Ontario EA (voluntarily or otherwise), the process involves: (1) The submission of terms of reference to the Minister for approval (s. 6(1) EAA) and the provision of public notice so as to allow such parties to submit comments to the Ministry (s. 6(3.1)-s. 6(3.6); (2) The approval of the terms of reference by the Minister, along with amendments if deemed necessary, if satisfied that an EA prepared in accordance with the terms of reference would be consistent with the EAA (s. 6(4) EAA); (3) The submission of an EA in accordance with the approved terms of reference, including:

  • a description of the purpose of the undertaking,
  • the rationale for the undertaking,
  • the alternative methods for carrying out the undertaking,
  • the alternatives to the undertaking,
  • a description of the environment that will (or may) be affected,
  • the effects that may be caused,
  • the actions which may prevent, change, mitigate or remedy such effects for the undertaking,
  • an evaluation of the advantages and disadvantages to the environment of the undertaking and of the alternatives to the undertaking, and
  • a description of any consultation relating to the project and its results (ss. 6.1(1) and 6.1(2), EAA) or information in line with the approved terms of reference (s. 6.1(3), EAA).

 

The EA shall be submitted to the Minister for review (s. 6.2(1), EAA) and the proponent must again provide notice to the parties listed so as to allow for comments (s. 6.3(1)-(4) and s. 6.4(1)-(2). Following the review the Minister has several options: to refer the undertaking to mediation; to approve the undertaking (with the approval of the Cabinet); to approve the undertaking subject to certain conditions (with the approval of the Cabinet); to refer the undertaking to a tribunal for a decision; or to refuse the undertaking (s. 8 and s. 9 EAA). Deadlines for each stage of the EA process are outlined in Regulation 616/98 and further guidance on the process is provided in the Code of Practice.

MNDM Class EA: The Class EA of the MNDM is limited in its application, applying to only two types of activities: discretionary tenure decisions of the MNDM and the MNDM administered mine rehabilitation activities and emergency remediation on Crown held sites. Thus, the request for Crown surface rights or discretionary mining rights (e.g., mining rights that have been withdrawn from staking) may trigger the requirement for an EA under these rules. Undertakings that fall within the remit of the MNDM’s Class EA are placed into a category based on their environmental impact and assessed following a specific EA process for that category. Detailed explanations of each process can be found within the MNDM Class EA guidelines.

Far North: The FNA provides for a joint planning process between the First Nations and the Ontario government in order to determine the most appropriate use of public land in the Far North region. According to the FNA, community based land use plans are not necessary for prospecting, claim staking, mineral exploration or grants of leases or licences of occupation in accordance with the Mining Act (s. 12(5)(e), FNA). However, a community land based plan will be required for the opening of a new mine (s. 12(1), FNA). As such, mine developers within the Far North will need to consider the requirements of the legislation or seek an order from the Minister for Natural Resources to undertake the development without a plan (s.12(2), FNA).

Exploration Activities: Certain activities carried out on land that is subject to a mining claim or mining lease require an Exploration Plan (Plan) or an Exploration Permit (Permit), guidance for which can be found in O Reg. 308/12 (see also s. 50(2.1) Mining Act). Plans and Permits are issued by the Director of Exploration (Director), who is appointed under section 78 of the Mining Act. Activities requiring a Plan include minor surface disturbances through pitting, trenching and stripping (Schedule 2, O Reg. 308/12), while activities requiring a Permit include diamond drilling and larger surface disturbances (Schedule 3, O Reg. 308/12). Plans and Permits must be submitted to the Director in the prescribed form. Prior to submission proponents must notify the relevant surface rights owners and consult with the Director if notifying Aboriginal communities. Following submission, the Director must notify the relevant Aboriginal communities; consultation may be required in relation to a Plan and shall be required in relation to a Permit. The Director may also require the filing of a consultation report by the proponent. Plans and Permits are assignable and transferable.

Technical Documents plus sign