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Ontario

Legislation

  • Mining Act 1990 (and accompanying regulations)
  • Mining Tax Act 1990
  • Environmental Assessment Act 1990
  • Far North Act 2010

Regulatory Risk Rating

85
Minimal
Regulatory Risk

Regulatory Corruption Risk

75
Low
Regulatory Corruption Risk

Corruption Exposure Risk

89
Very Low
Corruption Exposure Risk
Regulatory Risk Rating Factors Risk Level
First Come / First Serve Very Low
Application Criteria Moderate
Duration Very Low
Right to Renew Very Low
Competing Licences Very Low
Mineral Coverage Very Low
Right to Mine Very Low
Criteria for Mining Rights Very Low
Tenure Very Low
Surface Rights Very Low
Government Take Very Low
Transfer Rights Critical
Change of Control Very Low
EIA Process Moderate
Power to Revoke Moderate
Age of Legislation Very Low
Other Factors Low

From a legal risk perspective, 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 (eventually) acquire and protect mining rights.

Contents

Legislation

  • Mining Act 1990 (and accompanying regulations)
  • Mining Tax Act 1990
  • Environmental Assessment Act 1990
  • Far North Act 2010

Regulatory Risk Rating

85
Minimal
Regulatory Risk

Regulatory Corruption Risk

75
Low
Regulatory Corruption Risk

Corruption Exposure Risk

89
Very Low
Corruption Exposure Risk
Regulatory Risk Rating Factors Risk Level
First Come / First Serve Very Low
Application Criteria Moderate
Duration Very Low
Right to Renew Very Low
Competing Licences Very Low
Mineral Coverage Very Low
Right to Mine Very Low
Criteria for Mining Rights Very Low
Tenure Very Low
Surface Rights Very Low
Government Take Very Low
Transfer Rights Critical
Change of Control Very Low
EIA Process Moderate
Power to Revoke Moderate
Age of Legislation Very Low
Other Factors Low

Overview

Canada is one of the largest mining nations in the world and the minerals industry is a major part of the country’s economy, According to Natural Resources Canada, in 2018 the mining industry directly contributed some $72.4 billion to GDP, with indirect impacts adding a further $25.4 billion and mineral exports accounting for almost 20% of all domestic exports. Ontario is the leading mining province in Canada and is responsible for around 22% of all mineral production value. The province is the largest producer in the country of gold, platinum group metals and nickels, and the second largest copper producer (Ontario Mining Association). The province also produces diamonds, cobalt, zinc and silver. Major mining companies including Glencore and Vale have long established operations in the province. Ontario also attracts a large portion of exploration spend – with almost $600 million spent in 2018.

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Regulatory Risk Ratings & Full Analysis

subject review Risk Rating
First Come / First Serve

First Come / First Serve

The principle of first come / first serve operates. The first applicant to register a Mining Claim (Claim) on the Mining Lands Administration System (MLAS) will receive priority (ss. 28 & 38, Mining Act 1990 (MA); see also s. 61, MA). Exceptions to this apply where an application is made for mineral or rights under the Public Lands Act (s. 28(3), MA).
Very Low 5
Application Criteria

Application Criteria

A Claim may only be registered by the holder of a Prospector's Licence - which is easily obtained by persons aged 18 or over via a simple awareness training programme which must be completed within 60 days before the licence is requested (ss. 18 & 19, MA). Once a Prospector's Licence has been obtained, Claims may be registered via the MLAS in respect of any free cell on the provincial grid (ss. 28 & 38, MA; see also Reg. 2.1, O. Reg. 66/18).

The MA also requires the admission of an Exploration Plan and/or the obtainment of an Exploration Permit where certain prescribed 'early exploration' activities are to be carried out on a Claim prior to any work being conducted (ss. 78(2) & 78(3), MA; see also s. 50, MA). The relevant activities are set out under Schedules 2 & 3 of O. Reg. 308/12. Activities include geophysical surveys which use a generator and mechanised drilling with equipment under a certain weight for Exploration Plans and mechanised drilling with equipment over a certain weight and mechanised surface stripping for Exploration Permits. Exploration Plans or the application for an Exploration Permit must be submitted to a Director and must identify the qualified supervisor who has completed the awareness programme under the MA within the last five (5) years or confirm that the individual applicant has completed the programme (Regs. 5 & 12, O. Reg. 308/12). Surface rights owners must be notified in advance of the submission of an Exploration Plan or application for an Exploration Permit and either the proponent or the Director may notify any relevant Aboriginal communities. Such communities shall have the opportunity to provide written comments and a consultation process may be subsequently required at the direction of the Director (Regs. 6-7 & 13-14, O. Reg. 308/12). The Director has some discretion over the issuance of an Exploration Permit and the terms and conditions which may apply to it (Reg. 15, O. Reg. 308/12). Holds may be placed on the issuance of an Exploration Permit in certain circumstances and the Director shall also have the discretion to require an Exploration Permit for activities which are not specified under Schedule 2 of the regulation (Regs. 16 & 18, O. Reg. 308/12).

Activities under an Exploration Plan can commence within 30 days of the circulation date - defined as the date upon which either the Aboriginal community is sent the Exploration Plan or Permit application or, where no community is identified, the date upon which the Director sends notice that the Exploration Plan or Permit application has met the regulatory requirements (Regs. 1 & 9, O. Reg. 308/12). For an Exploration Permit, the Director shall have 50 days from the circulation date to make a decision on the application (Reg. 15, O. Reg. 308/12).

General conditions for the conduct of early exploration activities are also provided under the regulations.
Moderate 3
Duration

Duration

There is no expiration date for a Claim; providing the assessment work requirements have been met and/or the prescribed fees paid, a Claim shall continue in perpetuity. Prospecting Licences are granted for a period of five (5) years and are also renewable for further periods of five (5) years, with a lifetime grant once the licence has been held for a period of 25 years (ss. 19(2) & 21, MA).

It should however be noted that paying the prescribed fees is subject to certain limitations, including that payment cannot be made in substitution of assessment work in the first year and payment cannot substitute assessment work for more than two consecutive years (s. 65(1), MA and see Reg. 5, O. Reg. 65/18). The amount of money that is required to be spent on assessment work is prescribed and ranges between $200 and $400 (CAD) (depending on the type of cell) (Reg. 4, O. Reg. 65/18).

Exploration Plans are effective for a period of not more than two years (Reg. 9(2), O. Reg. 308/12). Exploration Permits are effective for a period of not more than three (3) years but may be renewed (Regs. 12(3) & 20, O. Reg. 308/12).
Very Low 5
Right to Renew

Right to Renew

As noted above, Claims shall not expire provided that assessment work requirements are met and/or prescribed fees paid - subject only to the limitations noted above (s. 65(1), MA; see also Reg. 5, O. Reg. 65/18). Prospecting Licences may be renewed on application every five (5) years (s. 21, MA). Renewal requires only the completion of the awareness programme via MLAS within the 60-day period before the licence is due to expire. The law and accompanying regulations are silent as to renewals of Exploration Plans, though these are limited in duration. It is assumed a new plan can be submitted as and when required. The Director may decide to renew an Exploration Permit based on the same considerations as for the original grant, including Aboriginal consultations and arrangements (s. 78.3, MA; see also Reg. 20, O. Reg. 308/12).
Very Low 5
Competing Licences

Competing Licences

No Claim may be registered over land that is the subject of an existing Claim or Lease (ss. 27 & 30, MA). The regulation makes clear that Claims shall not be registered for a cell on the provincial grid unless the MLAS indicates the cell is open for registration (Reg. 2.1, O. Reg. 66/18).
Very Low 5
Mineral Coverage

Mineral Coverage

Claims are not mineral specific and include all natural occurring metallic and non-metallic minerals, except aggregates, peat and hydrocarbons (s 1(1), MA). Claim holders have the right to prospect and explore for all minerals in the area, subject only to the requirements of the MA (s. 50, MA).
Very Low 5
Right to Mine

Right to Mine

A Claim gives the holder the exclusive right to apply for a Mining Lease (Lease) upon completion of the relevant assessment work and payment of the prescribed fees, providing the holder has complied with the MA and its accompanying regulations (ss. 50(1) & 81(1), MA). This right is absolute.
Very Low 5
Criteria for Mining Rights

Criteria for Mining Rights

A Claim holder may make the application for a Lease providing the requisite level of assessment work (the fifth prescribed unit) has been carried out and / or payments made in lieu of work where permitted (s. 81(2), MA; see also Reg. 23, O. Reg. 65/18). Such assessment work must be reported and, where necessary, approved (s. 81(2)(b), MA). There are no other requirements or pre-requisites of any import. The application for the Lease must be accompanied by a survey where one is required and an agreement with the surface rights owner or an order of the Mining and Lands Tribunal indicating that surface rights compensation, if any, has been paid, secured or settled (s. 81(2.0.1.). These requirements, however, are subject to common law principles that are now well established by virtue of the Mining and Lands Tribunal decisions and pose no material risk to the applicant (ss. 81(1), (2) & (2.0.1), MA).
Very Low 5
Tenure

Tenure

A Lease is issued for a term of 21 years, renewable on application for further 21-year terms (ss. 81(3) & (6), MA). The application for renewal must be submitted in the 90-day period before the Lease expires, though provisions are made for late renewals (ss. 81(6.1 – 6.3), MA). The Minister of Energy, Northern Development and Mines (Minister) shall refuse the renewal unless production has occurred continuously for more than one year since issuance or the last renewal or the Minister is satisfied that the Lease holder has demonstrated a reasonable effort to bring the property into production (s. 81(8), MA).
Very Low 5
Surface Rights

Surface Rights

The MA makes provisions for the lease of surface rights, both inside and outside the Lease area, where such land is required for any purpose which is essential to mining or mining exploration (s. 84(1), MA). The application for such lease must include such information as the Minister deems necessary, alongside the first year’s rent (s. 84(2), MA). Third party surface rights holders may not prevent development. Both holders of surface rights and certain occupants of the land must be compensated for damages sustained to the surface rights by prospecting, exploration or mining (s. 79(2), MA). Where an agreement on compensation cannot be reached, compensation may be determined by the Mining and Lands Tribunal following a hearing. Appeals to the Divisional Court may also be made where appropriate (s. 79(4), MA). These principles are clearly established by common law (case law) and compensation does not take into account the value of the minerals.
Very Low 5
Government Take

Government Take

Lease holders must pay annual rental fees (s. 81(5), MA) which are currently set at $3 (CAD) per hectare (Reg. 3, O. Reg. 45/11). A Mining Land Tax must also be paid each year, with a rate currently set at $4 (CAD) per hectare (s. 187, MA; see also Reg. 6, O. Reg. 45/11). Additional taxes are also set out under the Mining Tax Act 1990 (MTA), with current rates set at 10% of taxable profits for non-remote mines and 5% of taxable profit for remotes mines. The MTA contains considerable detail on tax calculations and also provides for exemptions for new mines (s. 3.1(1)-(3), MTA). Exemption periods may last 10 years in the case of remote mines and three (3) years in the case of non-remote mines. Special royalties apply to diamond mining, calculated on the basis of net value of output (s. 154, MA; see also O. Reg. 323/07). Ontario’s legal framework is very clear on the applicable taxes and royalties – warranting a low-risk rating in this category.
Very Low 5
Transfer Rights

Transfer Rights

Leases may not be transferred, mortgaged, charged, sublet or made subject to a debenture unless an application is made to the Minister and written consent obtained (s. 81(14), MA). Claims, Exploration Plans and Permits may all be transferred (ss. 59 & 78.4, MA). Prospecting Licences are non-transferable.
Critical 1
Change of Control

Change of Control

Changes of control are not regulated under the MA or its accompanying regulations.
Very Low 5
EIA Process

EIA Process

The Environmental Assessment (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, which is now regulated under the Impact Assessment Act (IAA) will normally apply, however, to larger mining projects and expansions based primarily on a projects output. Ontario also has territorial legislation which may apply to projects in the Far North area – with the Far North Act 2010 setting out requirements for community land-based plans. Overall, the environmental legislation is found to pose a moderate risk only to development – the law clearly entrenches the concept of sustainable development, provides recourse for legal appeal and sets out rigorous timelines for process advancement.

(Jan 2021: Note that Ontario is in the process of updating its EA legislation, with amendments to the EAA made, though at the time of writing many were yet to enter into force and accompanying regulations were yet to be issued. This category and the EA process review detailed below will be updated as necessary once legal changes are implemented.)
Moderate 3
Power to Revoke

Power to Revoke

The MA provides only limited grounds upon which a Lease may be revoked. These include where any rights granted under the MA are used for purposes other than mining and where rent arrears date back two (2) years or more (ss. 85 & 81(5), MA). Leases may also be terminated where applications for renewal are not made according to the timelines under the MA (s. 81(6), MA). Cancellations relating to land misuse may only be made by the Lieutenant Governor in Council, on recommendation of the Mining and Lands Tribunal.
Moderate 3
Age of Legislation

Age of Legislation

1990 with significant amendments made in 2009 and amendments to the registry system in 2017.
Very Low 10
Other Factors

Other Factors

Overall, Ontario’s legislative framework offers a sound structure for project development and advancement. The MA includes only minor instances of governmental discretion, with the majority of decision making based on clear and objective requirements, save for some vague terms around Exploration Plans and Permits and the absence of grounds upon which the approval of transfers will be based. Reputationally, some damage was done to Ontario when it suddenly introduced special laws to tax diamond mines after a discovery by DeBeers; this raised the geopolitical risk of doing business in Ontario’s mineral sector and for a time impacted risk perceptions of the province. Today, however, these terms are well established under the legal framework and will be of no surprise to future diamond miners. More recent legislative and policy reforms focused on environmental aspects, as well as increasing consultations with Aboriginal communities and it is really this area where Ontario’s legislative regime falls rather short. Rather than leading in this area, Ontario has consistently placed the onus on prospectors and miners to address and resolve Aboriginal issues and this area continues to raise considerable challenges for stakeholders in the province.
Low 10
Regulatory Risk Rating

Regulatory Risk Rating

Minimal
Regulatory Risk
85

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Regulatory Bodies

Under the Canadian Constitution, the regulation of mining activities and mineral rights in the Canadian provinces is the responsibility of the provincial governments. In Ontario, the primary administrative body is the Ministry of Energy, Northern Development and Mines (MENDM), specifically the Mines and Minerals Division (MMD). The Ministry is headed by the Minister of Energy, Northern Development and Mines (Minister) who is the ultimate authority regarding the administration of the primary mining laws and regulations. The Minister is responsible for appointing Provincial Mining Recorders (PMR), who play a key role in the licensing process for exploration and development.

From an environmental perspective, the Ministry of Environment, Conservation and Parks (Environment Ministry), headed by a Minister of the same title (Environment Minister), administers the main environmental laws and is responsible for the approval of projects and the issuance of the various environmental permissions required under the legal framework. That being said, the MENDM is responsible for the Class Environmental Assessment (Class EA) and is the primary authority for activities which fall within this class, though it works closely with the Environment Ministry on such matters.   

Other important bodies of note include: the Ministry of Natural Resources and Forestry (MNRF) which is responsible for the protection of Ontario’s biodiversity and the promotion of economic opportunities in the resource sector; the Mining and Lands Tribunal (Tribunal) within the Ontario Lands Tribunals, which is responsible for hearing and deciding matters which arise in relation to the legislation overseen by both the MENDM and MNRF, including the resolution of mining and land disputes; and the Environmental Review Tribunal – also within the Ontario Lands Tribunal -, which holds hearings on appeals related to the various licences and permits provided for under a suite of environmentally focused legislation.

It should also be noted that in Canada, whilst environmental concerns are primarily the responsibility of the provinces, in cases that affect the federal jurisdiction, a project may be subject to federal level environmental legislation. Federal level assessments are led by the Impact Assessment of Canada (Agency) which is overseen by Environment and Climate Change Canada, headed by the Minister of Environment and Climate Change.

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Key Features and Development Considerations

Mining in Ontario is primarily regulated by the Mining Act 1990 (MA) and its accompanying regulations. Other relevant legislation includes the Far North Act 2010, the Mining Amendment Act 2009, the Aggregate Resources and Mining Modernisation Act 2017 and the Mining Tax Act 1990.

In Ontario, mineral rights are acquired and registered via the Mining Lands Administration System (MLAS) which was established in 2017, replacing the older system of map and ground staking. The MLAS is used for administering public lands for the purposes of mining and the administration of the registration of mineral tenure.

The  following mineral titles are available:

  • Prospecting Licence: Required in order to register a Mining Claim. Obtained via MLAS following the completion of a mining awareness programme. Initially granted for five years, with the ability to subsequently renew.
  • Mining Claims: Registered via MLAS on land open to prospecting (any free cell on the provincial grid). Single application must cover no more than 50 contiguous cells. Applications for multiple cells must be registered separately and multi-cell applications may not be in respect of more than 25 contiguous cells. Minimum assessment work requirements apply. Surface and extraction rights are not covered by a Claim. Surface rights owners must be notified within 60 days of the registration of a Claim. May be transferred and sold without restriction unless an application for a Mining Lease has been made, in which case consent is required.
  • Mining Lease: Granted to Claim holders who are in compliance with the MA. Grant the exclusive right to enter the land, search for and extract minerals. Option to lease the mining rights or make an application to also lease the surface rights to the land, where available. Renewable and transferable on application.

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

In terms of general development considerations, rights holders should be aware that leases granted under the MA are subject to certain reservations, including those relating to Aboriginal or treaty rights, which require leaseholders to conduct activities in a manner which is consistent with such rights. Requirements relating to compensation and surface rights are clearly stated under the law. Large portions of land in the Far North are reserved for environmental reasons and Claims may not be staked there. Where a new mine is set to be established on land in the Far North where mining is permitted, a community land-based plan will be required. Proponents in such areas should therefore make themselves aware of the consultation requirements under the FNA.

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EIA Process & Environmental Considerations

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, including the Environmental Assessment Act 1990 (EAA) and its accompanying regulations and the Far North Act 2010 (FNA), alongside various provisions of the MA. Meanwhile, the Environmental Protection Act 1990 (EPA) applies to mining operations in relation to areas such as pollution and waste management. Note that Ontario is currently in the process of modernising its environmental assessment programme and it is hoped that this update and review will reduce the timeline for project approval. Upon completion of the review, this commentary will be updated where necessary.  

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, is designated as being subject to an EA by regulation or the proponent voluntarily agrees to the application of the law. 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 Mining 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 federal Impact Assessment Act 2019 (IAA). Under the IAA, 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 coal, diamond or metal mine (other than a rare earth element, placer or uranium mine) or metal mill (other than a uranium mill) which has a production capacity of 5000 t/day or more: a rare earth element mine with a production capacity of 2500 t/day or more; a stone quarry or sand or gravel pit with a production capacity of 3,500,000 t/year or more.
  • In the case of the expansion of an existing mine, mill, quarry or sand or gravel pit where: for coal, diamond or metal mines (other than rare earth element, placer or uranium mines) and metal mills, the expansion would result in an increase in the area of mining operations by 50% or more and the total production capacity would be 5000 t/day or more; for a rare earth element mine, the expansion would result in an increase in the area of mining operations by 50% or more and the total production capacity would be 2500 t/day or more; for stone quarry or sand or gravel pits if the expansion would result in an increase in the area of mining operations by 50% or more and the total production capacity would be 3,500,000 or more.
  • For uranium mines – the construction operation and decommissioning, outside the licensed boundaries of an existing or new mine or mill with an ore production capacity of 2500 t/day or more or the expansion of a mine if the area of mining operations increases by 50% or more and the production capacity is 2500 t/day or more.
  • For oil sands – the construction, operation, decommissioning and abandonment of a new mine with a bitumen production capacity of 10,000m3/day or more or the expansion of an existing mine if the area of mining operations increases by 50% or more and the production capacity would be 10,000m3/day or more.

See the Physical Activities Regulations 2019 (Schedule 2, ss. 18-25)

For projects that are subject to an Ontario EA (voluntarily or otherwise), the process involves:

(1) The submission of Terms of Reference (TOR) 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 Environment Ministry (s. 6(3.1)-s. 6(3.6));

(2) The approval of TOR by the Environment Minister, along with amendments if deemed necessary, providing the Environment Minister is satisfied that an EA prepared in accordance with the TOR would be consistent with the EAA (s. 6(4) EAA);

(3) The submission of an EA in accordance with the approved TOR 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 TOR (s. 6.1(3), EAA).

The EA shall then be submitted to the Environment Minister for review (s. 6.2(1), EAA) and the proponent must again provide notice to the relevant parties so as to allow for comments (s. 6.3(1)-(4) and s. 6.4(1)-(2).

Following the review, the Environment 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 MA (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 to undertake the development without a plan (s.12(2), FNA).

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