QUEBEC, CANADA - MINING REGULATIONS
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.
Quebec is located in eastern Canada and is the country’s largest province. In 2014 its economy contributed to over 18% of Canada’s total GDP, the third largest contributor after Ontario and Alberta (Statistics Canada). The province has a diversified economy, with important sectors including aerospace, finance, technology, transportation, agriculture, tourism, and of course, mining.
According to The Mining Association of Canada, in 2014 Quebec was responsible for 19.5% of the country’s total mineral production, second only to Ontario with 24.6% of production. The Ministry of Economy identifies three main mining regions within the province: Abitibi-Témiscamingue where gold, silver, zinc and copper are mined; Côte-Nord where iron is mined; and the Nord-du-Quebec region where nickel, gold and zinc are mined. Quebec is the largest producer of both iron ore and zinc in Canada and the second largest producer of gold. Other key minerals include nickel, copper, silver, niobium and tantalum. Canadian diamond exploration and development company, Stornoway, is also in the process of constructing Quebec’s first diamond mine, with commercial production forecast for December 2016.
In the 2015 Fraser Institute Policy Perceptions Index, Quebec placed at 22nd out of the 109 jurisdictions surveyed.
PRINCIPAL LEGISLATION AND REGULATOR
Pursuant to the Canadian Constitution, regulation of mining activities and mineral rights in the Canadian provinces is the responsibility of the provincial governments and it is worth noting that, unlike the other Canadian provinces and territories, Quebec is governed by civil law. The principal mining legislation in Quebec is the Mining Act (M-13.1) (MA), which was updated as recently as 2015, after considerable reforms were adopted in 2013, and the Regulation Respecting Mineral Substances Other Than Petroleum, Natural Gas and Brine (MA Reg.). Other relevant legislation includes the Mining Tax Act and the Environmental Quality Act and its accompanying regulations.
The mineral industry in Quebec is overseen by the Ministry of Energy and Natural Resources (Ministère de l’Énergie et des Ressources Naturalles) (MERN), which is headed by a Minister of the same title. The Minister of Mines (Minister) also sits within the Ministry and is responsible for the administration of the MA and the grant of mineral titles in the province.
Quebec uses a computerised system known as GESTIM (Gestion des titres Miniers Title Management) for the online management of mining rights in the province. GESTIM allows users to manage claims online; consult mapping technology and data; and conduct various other administrative tasks.
GRANTS AND FORMS OF MINERAL TITLE
Any person or company may hold mining rights in Quebec. Mining claims may only be staked by the holder of a Prospecting Licence (PL) (ss. 19 and 20, MA), which is issued by the MERN following a short application and payment of the relevant fees (s. 23, MA and Ch. 1, MA Reg.). A PL is granted for a period of five years, renewable for further five-year periods upon payment of the relevant fee (s. 24, MA). A PL is non-transferable (s. 23, MA).
The MA also provides for the following:
- Mining Claim (MC): Any holder of a PL may stake a claim on an area open for prospecting. A notice of staking must be made within 20 days, for registration in the public register of real and immovable property rights (s. 46, MA). Claims are issued on a first come / first serve bases, save where the property has historically proven mineral value or otherwise meets criteria established by the Minister (s. 49, MA). Where the order of priority cannot be determined it will be decided by the drawing of lots (see ss. 54 and 207, MA), although it is somewhat unclear as to why map staking would ever give rise to uncertainty as to order of priority. A MC grants the holder the exclusive right to explore for mineral substances on the parcel of land subject to the claim, save for certain exceptions (see s. 64(1)-(3), MA). Claim holders are permitted to extract or dispatch mineral substances for sampling only, unless the Minister permits otherwise (s. 69, MA). MC’s are granted for an initial 2-year term, with perpetual renewals permitted for additional two-year terms, providing claim holders have paid the relevant fees, complied with the MA and regulations, and met the work requirements listed under Section 72 of the legislation. Work reports must be submitted to the Minister annually (s.71.1, MA; see also ss. 72-80, MA).
- Mining Lease (ML): Holders of a MC shall be granted a ML provided the claim holder (a) establishes the existence of indicators of the presence of a workable deposit; (b) pays the annual rental fees; (c) has provided a rehabilitation and restoration plan; (d) has an approved environmental authorisation; and (e) has submitted a project feasibility and market study report (s. 101, MA). The area of land must not exceed 100 hectares, unless the Minister grants the lease for a larger area (s. 102, MA). Mining operations must commence within five years (s. 118, MA). ML’s are granted for a period of 20 years, with three mandatory renewals of 10 years each permitted upon application, providing the lease holder has: applied within the given time frame; submitted a report establishing that mining operations have been performed for at least 2 years in the last 10; provided a scoping and market study as regards processing in Quebec; paid the annual fees; and complied with the relevant legislation and regulations (s. 104, MA). Additional five-year renewals may be granted after the third renewal at the discretion of the Minister. Annual reports must be submitted under section 120 and scoping and marketing studies relating to processing in Quebec must be submitted every 20 years (s. 120 and 1. 118.1, MA).
The MA also provides for leases to mine surface mineral substances. The type of lease granted (exclusive or non-exclusive) depends on the surface mineral substances mined.
MC and ML are transferable providing transfers are registered within the public register on presentation of a copy of the instrument evidencing the transfer and upon the payment of transfer fees (see s.14, MA). Mining rights may be revoked under Chapter VIII of the MA. Grounds for revocation include: failure to comply with the conditions, obligations and restrictions of the mining right; failure to pay the annual fees and royalties; obtaining or renewing a mining right via fraud, misrepresentation or mistake; being found guilty of an offence under the MA within the last five years; failure to comply with the Mining Tax Act or the requirements in relation to economic spinoffs; and failure to begin operations within the five year time limit.
According to section 101.0.2 of the MA, the Quebec government may, “on reasonable grounds”, require that the economic spinoffs within Quebec of the mining be maximised (see also s. 119, MA). In addition, leaseholders are required to establish a monitoring committee to foster the involvement of the local community. The committee must be established within 30 days from the grant of the ML and must be maintained until all work provided for in the rehabilitation and restoration plan has been completed. The lessee has the right to determine the number of representatives on the committee but, as a minimum, the committee must contain one representative from the region from each of the following: the municipal sector; the economic sector; the general public; and the Native community where applicable. A majority of the committee must be independent from the lessee.
Metal mine projects with a production capacity of less than 2,000 metric tonnes per day must hold a public consultation in the project region and send a report to the Minister of Sustainable Development, Environment and Parks prior to submitting the application for the mining lease.
Mining rights holders must obtain written authorisation from the landowner, at least 30 days in advance of works, to order access to the site. It is also possible to acquire any real or property right, allowing the leaseholder to access the site or conduct exploration or mining activities, providing agreement is reached with the landowner. In cases where agreement cannot be reached the mining rights holder may obtain the property via expropriation. Where the rights holder intends to acquire a residential immovable or an immovable used for agriculture or farmland, the rights holder must pay the costs of the professional services required to negotiate the agreement, up to a maximum of 10% of the value of the immovable. Certain limitations on expropriation apply and compensation appears to be based on agreement only (see s. 235, MA).
Before a ML can be granted a certificate of authorisation under the EQA must be obtained and a rehabilitation and reclamation plan must be approved. The rehabilitation and reclamation plan must contain: a description of the rehabilitation and reclamation work to be carried out in relation to the mining activities in order to restore the land to a "satisfactory condition"; conditions and phases of work where progressive work is possible; the conditions and phases of work to be completed in the event of cessation of mining activities; a detailed estimate of the costs associated with rehabilitation; and a backfill feasibility study in the case of an open pit mine (see s. 232.2, MA). A guarantee must be provided to cover the costs of rehabilitation. Revised plans must be submitted every five years or when other changes occur (s. 232.6, MA). Rehabilitation work must begin within three years after operations cease (232.7.1, MA). Following an application process outlined under the EQA, involving the preparation and submission of an environmental impact assessment statement and a public consultation period, the certificate of authorisation will, on the recommendations of the Minister of Sustainable Development, Environment and the Fight Against Climate Change, be granted (with or without conditions) or refused by the government. Subtle differences in the EA process and a range of different agencies and committees will operate in the territory subject to the James Bay and Northern Quebec Agreement.
See Quebec - Environmental Overview Commentary.