Amendments to the Ontario Mining Act

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The Ontario Mining act is undergoing a lot of changes. The government aims to bring it into the 21st century with more consultations, more rights for native communities and online staking. To digest the changes, Morris Popowich, LLB, of Macleod Dixon answered my questions from his Toronto office. Take a look at the video below to understand what is coming down the pipeline. Transcript is below the video.

1. What is the principal aim of the amendments to the Mining Act?

The government has stated that the purpose of the amendments is to bring Ontario’s mining legislation into harmony with the values of a modern Ontario. This is an attempt to match up the rules governing Ontario’s vibrant, economically important mining industry with the changes that have taken place in wider society.

That’s a pretty big job. And the job is still ongoing, because the government is still in the process of preparing the regulations to go along with the legislation. In addition, a key companion piece of legislation called the Far North Act, which  is intended to supplement the changes to the Mining Act has yet to be passed by Ontario’s legislature.

2. What are some of the most important changes?

As with all major change to important legislation, the devil is going to be in the details. However, with the changes to the Mining Act, we can break down the major areas of change into 5 topics:

  1. The withdrawal of Crown-held mineral rights from staking in Southern Ontario.
  2. Modernization of the staking process by a phased move from what is called ground staking to map staking.
  3. The adoption of a system of exploration plans and exploration  permits, so that there is improved government awareness and in some cases scrutiny over exploration plans by mining companies.
  4. A legislated requirement for mining companies to consult with Aboriginal Peoples in respect of exploration activities on their traditional lands.
  5. The introduction of Community Based Land Use Plans in Northern Ontario. The new Mining Act has a prohibition on exploration in areas it is inconsistent with an existing land use plan. Going further, the new mining act has a prohibition on new mine openings unless a community based land use plan has been implemented in the area of the proposed mine. It should be noted that there are expected to be some exceptions to these restrictions which will be set out in the legislation or the regulations.

3. Can you explain a little about consultation with Aboriginal communities?

Its important for mining companies to know that a duty to consult exists right now. This is a constitutional requirement for the Crown – meaning government – to consult with First Nations when there is going to be resource development on their lands.

The key catalyst was a series of Supreme Court decisions going back to 2004.  Not long after those decisions were released, we saw a number of conflicts play out in the public sphere between Aboriginal communities in Ontario and mining companies that were seeking to carry out exploration activities.

With the amendments in to the Mining Act, the Ontario government is clearly trying to find a way to avoid these conflicts in the future. They’ve set up a system of legislated consultation, which requires mining companies to advise First Nations in advance of their activities. In some cases there may also be a requirement to obtain the consent of a First Nation before development can take place.

4. How are these changes being received by mining companies, aboriginals and other affected parties?

I don’t think there is a great deal of hostility directed at the basic purpose of the changes to the Mining Act. There is understanding that the rules around mining had to evolve with the times, but at the same time the economic importance of the mining industry can’t be ignored.

Certainly, cottagers in southern Ontario are going to be happy that mining companies can no longer stake claims on the lands surrounding their vacation properties.

I think it is also fair to say that in terms of actually moving ahead with changes, there has not been unanimous acceptance of the details in the new legislation. And I expect that as the regulations are released over the next two years, we will see more opposition to the details of implementation.

In particular, there has been concerns expressed by some Aboriginal groups that the changes don’t go far enough to protect their legal rights. That could be a problem going forward if there isn’t widespread acceptance of the framework for Aboriginal consultation.

5. What steps should mining companies be taking to minimize the impact of these amendments and ensure they remain compliant?

There are going to be several areas of concern:

  1. First, obviously companies are going to want to have comfort that they are complying with the new legislative regime. Prospectors and mining companies should get comfortable with the changes in the new legislation, and the regulations as they are developed. For example, the change from traditional ground staking to internet based map staking is going to involve a real cultural shift in the mining exploration business in Ontario.
  2. They should understand where they are situated relative to the new division between southern and northern Ontario. There are different rules and restrictions depending on where you are situated.
  3. If there are First Nations communities near your mining claims, or near to areas that you’re thinking about staking, you should be aware of the basic principles of how consultation works, and how it could affect your operations through the different phases of exploration and development work.
  4. If you’re in the Far North, you should understand the issues involved in preparing a community land use plan.

5. Do you have any other comments on the Mining Act or the general environmental regulatory framework in Ontario?

I think its important to note that this process of revising the Mining Act is still ongoing. Proactive mining companies with concerns about how the changes are going to impact their business should consider getting involved in the process to have a role in how the new Mining Act is implemented.

Morris Popowich is an associate in the Securities, Business Law and Energy groups at Macleod Dixon LLP. His practice focuses on mergers and acquisitions, corporate finance, and environmental regulatory and transactional matters.

Macleod Dixon LLP is a global law firm with offices in Canada (Calgary and Toronto) and 4 emerging markets with a natural resource based economy: Venezuela, Brazil, Russian Federation and Kazakhstan. Nine lawyers from Macleod Dixon were ranked as leading practitioners by Who’s Who Legal, Mining 2010 – the highest number of any Canadian-based law firm.