Mining Comparative Guide -

1 Legal and regulatory framework

1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?

Canada is a federal state, with one federal, 10 provincial and three territorial governments. As set out in Canada's Constitution Act, 1867, and its division of powers, Canada's mining industry is governed by both the provincial and federal government. The provincial government has primary jurisdiction over most areas that affect a mining project, for two reasons. First, Canada's provinces largely own their respective public lands; and second, the provinces have legislative jurisdiction on most matters related to natural resources. However, certain areas may share jurisdiction with the federal government, such as environmental regulation, over which neither level of government has overarching authority. Certain areas may also fall wholly within the federal government's jurisdiction. The federal government has exclusive jurisdiction over areas such as international relations, explosives regulations and nuclear energy. An exception is mineral uranium, where exploration is a provincial matter, but mining, milling, processing, transportation and exportation are federal matters.

The specific provisions governing mining often depend on the province or territory. For the most part, all 10 provinces, the Yukon, and the Northwest Territories, with some exceptions, have their own mining legislation. These provinces and territories have jurisdiction over the exploration, development, and extraction of mineral resources, and the construction, management, reclamation and closure of mine sites. These provinces and territories additionally own the majority of the mineral rights in Canada; however, mineral rights may also be held by private entities, Indigenous groups or the federal government. In Nunavut and certain areas of the Northwest Territories, the federal government governs and administers public lands and natural resources. In Nunavut, mineral rights are owned by private entities, Indigenous groups or the federal government.

1.2 When was the mining legislation last reviewed?

There have been several updates to the mining legislation in recent years. In March 2019, a plan to drive Canadian mining to the forefront of the industry – the Canadian Minerals and Metals Plan (CMMP) – was announced. In March 2020, the first CMMP action plan was released, with action plans to be released in 2021 and 2022, and subsequent action plans following every three years thereafter. Additional initiatives and refinements to the Action Plan 2020 are expected to be released at the Energy and Mines Ministers' Conference in 2020.

In June 2019, the Canadian Environmental Assessment Act, 2012, was replaced by the Impact Assessment Act (IIA). The IIA outlines the process for assessing major projects and projects carried out on federal lands or outside of Canada. The assessment includes the positive and negative environmental, economic, health and social effects, and the impact on Indigenous groups and the rights of Indigenous people.

Recently, Canadian jurisdictions have also modernised their ground-staking regimes and implemented electronic mineral tenure registries. Electronic registration regimes can be found in British Columbia, Ontario, Saskatchewan and New Brunswick; and online mining rights administration systems have been proposed in Nunavut and the Northwest Territories.

1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?

Most of the discussion of the division of powers relates only to the federal and provincial governments. In the past, the three territories have effectively been departments of the federal government. However, in recent years, there has been a devolution of resource ownership and legislative powers in the territories. In Nunavut, devolution has started, but is minimal. In the Northwest Territories, devolution was implemented recently and is complex because of the relationship between territorial governance and modern treaties. In the Yukon, devolution has granted the territory both resource ownership and legislative powers. The set of legislative powers for the Yukon are similar to those held by provincial governments. The devolution in the Yukon indicates that while territories may not formally attain provincial status, they may be granted powers that make them as close to a province as possible.

Indigenous rights are another dimension to Canada's division of powers. Indigenous issues have an impact on mining in two ways. First, Section 35 of the Constitution Act, 1982 protects Indigenous and treaty rights. Indigenous lands are statutorily recognised and held by the federal government for the use and benefit of Indigenous peoples. While many provincial laws apply on reserve, regulation of resource development is within federal jurisdiction. Second, there is a duty to consult and accommodate the concerns of Indigenous groups whose constitutionally protected rights may be affected by governmental decisions, such as approval for a proposed mine. Overall, it is important to consider potential Aboriginal title claims and how they may affect mining operations.

1.4 Are there any regional treaties or laws that need to be taken into account?

Mining parties must be cognisant of the treaty rights in their jurisdiction and their relationship with Indigenous peoples. The federal government and the courts recognise approximately 70 treaties between the Crown and Indigenous peoples. These treaties are held as solemn agreements that set out promises, obligations and benefits for both parties, and are affirmed in Section 35 of the Constitution Act, 1982. When conducting mineral exploration and development activities, Indigenous rights and treaty rights must be considered and, if appropriate, accommodated. If a proposed mineral development project will have a potentially large impact on Indigenous and treaty rights, there may be a required duty to consult the respective Indigenous group. Typically, the Crown is responsible for consultation and accommodation. However, responsibilities may be delegated to mining parties as part of the environmental assessment process.

In addition, the differences in common and civil law should be taken into account. In Canada, the federal government, nine of 10 provinces and the three territories have adopted a common law legal system similar to the United Kingdom, the United States and Australia. Common law can be superseded or changed by subsequent legislation. Unlike the other provinces, Quebec has adopted a civil law-based legal system similar to Europe, Asia and South America. Civil law is a codified law that is written into statutes, which are then strictly interpreted by the courts. The civil law system in Quebec results in some differences in pertinent legal concepts compared to elsewhere in Canada.

1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?

Each province has principal jurisdiction over its boundaries. Regulatory responsibility is often spread among departments, subject to the issue. It is typical to have ministries for mining, petroleum, environmental regulation, employment standards, workplace health and safety, and fisheries, to name a few.

Although most mining takes place in unorganised territory, there are also local or municipal governments to consider. Municipalities are created under provincial laws and can administer bylaws dealing with local matters, such as land use planning and the issue of construction, water and waste management permits.

Finally, the federal government exercises its authority within its jurisdiction. A few areas over which the federal government has authority are fisheries, interprovincial projects, environmental assessment and protection for larger mines.

1.6 What is the regulators' general approach in regulating the mining sector?

The specific approaches taken vary in each jurisdiction. In general, issues regarding sustainability and environmental protection, economic benefit and the adequacy of financial assurance for project reclamation are considered when regulating the mining sector.

In particular for sustainability, individuals and companies may be required to obtain regulatory approvals and licences to ensure they are meeting environmental requirements. Common federal regulatory approvals include:

the Fisheries Act, from Fisheries and Oceans Canada;
the Explosives Act, from Natural Resources Canada; and
the Navigation Protection Act, from Transport Canada.

Common provincial and territorial licences include Mines Act permits, Environmental Management Act permits, water licences and mining licences.

2 Mining industry

2.1 How mature is the mining industry in your jurisdiction?

Canada's formal mining industry dates back to the early exploration of North America. However, large-scale industrial exploitation of mining did not commence until the 19th century. Throughout the first half of the 20th century, Canada emerged as a top mining producer. Since the 1950s, the mining industry in Canada has enjoyed significant growth and it has been a major contributor to Canada's economy.

2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?

Canada is a supplier of more than 60 minerals and metals. It is:

the world's number-one producing country in potash;
the second top-producing country in uranium and niobium;
the third top in nickel, cobalt, aluminium and platinum group metals; and
the fifth top in gold and diamonds.

The largest producers of these key minerals are Ontario, Quebec, British Columbia and Saskatchewan; however, all provinces and territories produce minerals in Canada. Ontario is the largest minerals and metals producer in Canada, mainly producing gold, copper and nickel. Quebec has the most diversified mining industry in Canada, producing a range of iron ore, zinc, gold and diamonds. British Columbia is the largest producer of copper in Canada, in addition to producing metallurgical coal – an irreplaceable ingredient for making steel. Saskatchewan is a top potash and uranium mining producer. Other notable areas are the Northwest Territories, the world's third largest producer of diamonds by value; and Manitoba, the top Canadian producer of zinc.

2.3 Are any minerals deemed strategic and, if so, what impact does this have?

Uranium is considered a strategic mineral and as such is heavily regulated by the federal government. The Canadian Nuclear Safety Commission (CNSC), an independent federal regulatory agency, regulates the use of nuclear energy and materials. A CNSC licence, which is required for each phase in the lifecycle of a uranium mine, is issued only if the CNSC is satisfied that the mine proponent can protect health, safety, security and the environment. The minimum level of Canadian ownership in uranium mining is supposed to be 51%. However, lower levels of Canadian ownership are accepted if there is de facto Canadian control or if no Canadian partners can be found.

2.4 Who are the key players in the mining industry in your jurisdiction?

In 2019, the five largest Canadian mining companies were Barrick Gold, Nutrien, Agnico Eagle Mines, Teck Resources and Kirkland Lake Gold.

Barrick Gold – originally an oil and gas company – is the second-largest gold mining company in the world and operates mines in North America, South America, the Middle East, Africa and Australia. Nutrien – a fertiliser company born in 2016 through a merger between Potash Corp and Agrium Inc – is the largest producer of potash in the world. Agnico Eagle Mines, founded in 1957, has mines in Finland, Mexico and Canada, and is a major producer of gold. Teck Resources is a natural resources company and is the largest producer of steelmaking coal in North America and the second-largest exporter of seaborne steelmaking coal in the world. Finally, Kirkland Lake Gold is a gold mining company with operations in Canada and Australia.

2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?

Artisanal or small-scale mining plays a very small role in Canada's mining industry. More common is placer mining, found predominantly in British Columbia and the Yukon. In British Columbia, placer claims can be acquired by using the Mineral Titles Online system. The fee for placer claim registration is C$5 per hectare and upon confirmation of payment, which is immediate, a placer title is issued.

In addition to placer rights, individuals may have private land grant rights or freehold rights. In the 1800s and early 1900s, early mining legislation provided land grants to private parties, giving rise to a group of mining rights that are privately held today. These grants are also called ‘freehold' tenure and refer to the outright ownership of mineral rights or substances. If a company is interested in acquiring rights from these private parties, private negotiations with the owner are required.

3 Exploration rights

3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

Prospecting and exploration licences vary from jurisdiction to jurisdiction. In general, prospector's licences are obtained by contacting the provincial or territorial government, completing the requisite form and paying a small fee. The government typically cannot refuse to issue a licence if the applicant meets the criteria; however, a licence can be cancelled or suspended for a breach of mining legislation. In some jurisdictions, there may be a requirement to consult Indigenous groups prior to conducting exploration.

In British Columbia, Manitoba, New Brunswick and Prince Edward Island, individuals and companies must obtain a licence from their respective governments, with some exceptions. In Ontario and Quebec, there are similar requirements, but no licences are granted to corporations. In Nova Scotia, individuals and companies must register and pay fees, but no licence is required for preliminary exploration with no ground disturbance. In Saskatchewan, permit holders issued by the minister of environment are granted the exclusive right to exploration; otherwise, prospecting can be done without a licence or formal registration. Similar to Saskatchewan, prospecting right requirements are less stringent in Alberta, Newfoundland and the Yukon, and prospecting can also be done without a licence or formal registration in these provinces and territory. In the Northwest Territories and Nunavut, individuals and companies must obtain a licence from the government. They may also obtain a prospecting permit, which grants the holder exclusive rights to explore and have mineral claims recorded within a given permit area and timeframe.

3.2 What requirements must be satisfied to obtain a licence?

The requirements to obtain a prospecting licence vary in each jurisdiction, but tend to be minimal. In general, an individual must be 18 years of age or in some provinces, such as New Brunswick, at least 19 years of age.

3.3 What is the procedure for obtaining a licence? How long does this typically take?

Obtaining exploration rights is usually on a first come, first served basis. A prospecting or similar licence is obtained by filling out a simple form, typically online. The timeframe for approval varies by jurisdiction, but can be expected to be between a few business days to a few weeks on average.

3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

In most jurisdictions, the sole requirement to apply for and hold a prospecting licence is the age of majority. Typically, anyone who is interested in owning exploration rights is generally able to do so. For foreign operators interested in prospecting in Canada, few restrictions will apply. Prior to acquiring a prospector's licence, most jurisdictions will require foreign corporations to be registered or authorised to carry on business in the province or territory.

3.5 What fees and other charges are incurred in obtaining a licence?

The cost of obtaining a prospecting licence for individuals is usually small; it is $5 in Nunavut and $15 in Manitoba. Prospecting licences for companies are often more expensive; the cost is $50 in Nunavut and $287 in Manitoba. Other fees may include claim tags to stake an area; a set costs $2 in Nunavut and $7.50 in Manitoba.

3.6 What is the duration of a licence? What is the process for renewal?

The duration of a prospecting licence varies in each province and territory, and can typically be renewed through an application form. In British Columbia and Manitoba, a mineral claim can be renewed indefinitely. In the Northwest Territories and Nunavut, a mineral claim may be held for a maximum of 10 years until it expires, unless it is converted into a lease or an extension is granted.

3.7 What are the operator's rights and obligations under the licence?

A prospecting licence typically grants the holder the right to enter, remain and travel on the land, and prospect, stake and work on the land. A prospector may have the necessary temporary housing, vehicles, machinery, equipment, supplies and personnel to prospect, stake and work in accordance with the jurisdiction's applicable legislation. Unlicensed individuals can help to stake a claim, but the licence holder must be present and is responsible for the work done. A prospector must carry his or her licence on his or her person when prospecting or staking land, and produce the licence upon request to an officer of the department.

3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?

When applying for a mining area, the associated licences, permits and approvals often include conditions for when the mining area is decommissioned and rehabilitated. Mining parties will need to follow these legal requirements and are encouraged to refer to industry guidance on environmental stewardship. Best practices include ensuring the excavated areas are backfilled and the drill holes are capped or plugged; removing camps, waste and redundant equipment from the area; and reclamation of the areas disturbed by the exploration activities.

3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

No answer submitted for this question.

3.10 Does an exploration licence give any priority when applying for a mining right?

No answer submitted for this question.

4 Mining rights

4.1 How is ownership of mining rights determined in your jurisdiction?

Mineral rights are owned by the provincial or territorial governments, except where:

they were sold or granted prior to the early 20th century;
they have Indigenous title; or
they are owned by the federal government, such as in Nunavut or in offshore areas.

Individuals and companies may lease mineral rights and, once obtained, these leases may be transferred. Mineral rights can be acquired through the ‘free entry' system or the ‘Crown discretion' system. The free entry system is used in British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Ontario, Quebec, Saskatchewan, Nunavut, Yukon and the Northwest Territories. Under this system, individuals and companies interested in carrying out exploration work make a ‘claim' under a first come, first served basis. If certain formalities are met and if the area is not already under another claim or permit, the application for the claim will be recognised. A claim holder will additionally have the right to obtain a mining lease, which is not subject to governmental discretion if all of the prior conditions have been met. Comparatively, the Crown discretion system is found in Alberta, Nova Scotia and Prince Edward Island. Under this system, interested parties must apply to their respective authorities and mineral rights are granted subject to the discretion of the applicable jurisdictional government. An important province to note is Quebec, which is generally a free entry jurisdiction. However, Quebec authorities have the discretion to refuse applications for sand and gravel mining leases for reasons of public interest.

4.2 What are the key requirements in order to apply for a mining right?

The key requirements to apply for a mining right vary for each jurisdiction. In general, a miner must complete a specified amount of assessment work on the applicable mining claim and file an application with the appropriate governmental authority. The application will typically be accompanied by an application fee and in some cases, a plan of survey and evidence that surface rights compensation, if any, has been paid, secured or settled. For a major mining operation, the mineral operator will be required to submit a more detailed mining plan and reclamation plan, and in some cases an environmental assessment.

4.3 What fees and other charges are incurred in obtaining a mining right?

The fees incurred in obtaining a mining right are minimal. They typically include a lease fee payable on application and a renewal fee payable on reapplication. Some jurisdictions may additionally charge a small annual lease fee. Rather than incurring large fees when obtaining a mining right, the main charges associated with a mining right come from mining taxes and royalty payments.

4.4 What is the duration of a mining right? What is the process for renewal?

In general, mining leases are issued for a specific term, the duration of which varies from jurisdiction to jurisdiction. In Ontario, a mining lease has an initial term of 21 years. Mining leases are typically renewable. In Ontario, a mining lease is renewable for another 21-year term.

4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

In Canada, there is no distinction between domestic and foreign parties when obtaining mining rights. However, there are a few restrictions on foreign investment in Canada. Foreign investment is generally subject to the Investment Canada Act, which regulates investment in Canadian businesses by non-Canadians and limits the degree of ownership in specific industries such as banking, telecommunications and aviation. Foreign operators may also be restricted by the Competition Act if their investment would prevent or lessen competition in Canada. These restrictions, in conjunction with tax planning and other reasons, may lead foreign operators to conduct their Canadian operations through a local party.

4.6 Do any indigenous ownership requirements apply in your jurisdiction?

Indigenous ownership requirements vary in each jurisdiction and depend on whether the land is subject to Indigenous title. In areas east of British Columbia and south of the Territories, Indigenous title has been largely extinguished through treaties. In these circumstances where Indigenous title has been extinguished, there is no general legal requirement for Indigenous ownership. In order to secure local Indigenous cooperation and to establish social licence to operate, a negotiation of an ownership interest in the mining project may be required. In the interior of British Columbia, the Territories and parts of Alberta, large portions are not subject to treaties and have Indigenous title. Where Indigenous groups hold the mineral rights and surface rights, a lease may be required to develop the minerals. In most of these circumstances, an impact and benefit agreement will also be negotiated. An impact and benefit agreement attempts to mitigate the detrimental impacts of a mining operation and to provide economic benefits for the Indigenous group and its members. As best practice, mine operators should include local Indigenous groups in the discussion when planning a mine operation.

4.7 What role does the state play in the mining industry in your jurisdiction?

In general, all minerals that have not been granted to private persons or have Indigenous title are owned by the Crown. The federal government owns minerals under federally owned lands, such as federal national parks, and the Northwest Territories and Nunavut. The provincial governments own minerals under lands within their jurisdiction.

The state's role is as an owner and legislator. Mineral rights are obtained and regulated through mining laws in each jurisdiction. For prospecting and exploring, a miner will typically stake its mining claims, perform assessment work and then obtain leases to conduct mining operations. In most cases, the provincial government sets out the terms and conditions for leased mineral lands and may impose taxes and royalties. The government will also set out environmental, labour and other applicable laws to mining activities involving Crown minerals.

4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?

There are no requirements for the federal or provincial government to enter into a mining development agreement in Canada. The only exception where a government would be included is in areas subject to land claims agreements and Indigenous title, where there may be a need to enter into a mining development agreement with the local Indigenous government.

4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Canada permits the transfer of mining rights; however, there are important legal considerations that apply differently to the various provincial and territorial jurisdictions. In some jurisdictions, the transfer of mining leases requires the minister's consent. Many jurisdictions additionally require that the transfer be in writing or use a particular form, so that the difficulties associated with oral agreements can be avoided. Finally, a lease cannot be transferred to anyone that is not in compliance with legislative requirements, among other restrictions. The transfer of a lease may be subject to some costs. In most jurisdictions there is a transfer fee that gives effect to the transfer. In Nunavut, the cost of a transfer fee is $25. Any gains realised through the transfer may also be subject to income tax. Any transfers of real property may also be taxed at 0.25% to 2%, depending on the jurisdiction.

4.10 Can security be taken over mining rights?

The processes for taking security over mining rights are regulated in each jurisdiction, but are similar in most ways. In Ontario, for example, for leasehold interests, the land registry system governs title and registration matters. A lender can take security over a property by electronically submitting a mortgage, charge or debenture to the relevant land registry office. There may also be an additional requirement where a lender must send confirmation that all rents have been paid to the Ministry of Northern Development and Mines, and obtain the consent of the minister prior to registration of a mortgage or charge over the property. This consent process typically takes between four and six weeks. For mining claims, a lender can submit an application with a fee to the Ministry of Northern Development and Mines to record a mortgage, charge or debenture over the property.

4.11 What provisions apply with regard to closure or abandonment of a mining right?

Each jurisdiction has its own mine closure and reclamation obligations. Generally, an individual or company must prepare and file a mine closure plan before mine production can start, and in some cases prior to commencing exploration work. The plan must also include estimated costs and a financial guarantee to cover the closure costs. The calculation of the amount and the acceptable forms of financial guarantee vary from jurisdiction to jurisdiction. In some cases, annual reporting and periodic plan updates may be required. A federal environmental assessment may also be required for certain projects.

5 Surface rights

5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?

In most cases, the Crown lands available through the claim-staking and leasing process grant only mining rights and not surface rights. The surface rights, or the ownership of the land, are often owned privately by another party. The person holding mining rights is still entitled to prospect, explore and carry out extractive and processing activities.

If there is a conflict in the rights and interests of the surface rights holder and the mining rights holder, the conflict is dealt with using the applicable jurisdiction's mining legislation and relevant property law. In general, the exercise of mining rights will not interfere with the use and enjoyment of surface rights. If there is an interference, the mining rights holder is required to compensate the surface rights holder. If financial compensation is not an appropriate remedy and the surface rights holder is a private party, most jurisdictions will provide for the mining rights holder to acquire the surface rights. It is advisable for a mining rights lessee to negotiate the acquisition of the surface rights privately.

5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?

In most jurisdictions, a mine operator must obtain permission, through a lease, from the landowner to enter its land or obtain an order from the appropriate authority to enter without the landowner's permission. There are exceptions, such as British Columbia, where the landowner's permission is not a necessary requirement. British Columbia's Mineral Tenure Act provides that a mine operator cannot begin mining activity unless the operator first serves notice to the owner of the surface.

5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).

In most situations, the licence holder will automatically be permitted to access the surface because the Crown holds the underlying mineral rights. Where the surface rights are privately held, there are two main ways to acquire surface rights: through consent or statutory rights. It is advised to consider obtaining the consent or agreement of the surface rights holder before resorting to statutory rights to enter onto land for exploration or mining development. In many cases, consent can be readily obtained and may facilitate more harmonious relations with the surface rights holder. In the absence of consent or agreement from the surface rights holder, different jurisdictions provide a variety of rights of entry to prospectors and miners. In Manitoba, access can be given by the order of a surface rights board. In British Columbia, automatic rights of entry are given for mining-related purposes, even on land with a private surface rights owner. In Saskatchewan, surface rights are not automatically granted and a land use permit may be required for any work under a mineral claim. In territories on Inuit-owned lands, a similar licence or lease may be required to gain access to the surface. Surface rights legislation typically dictates that the surface rights owner has a right to compensation for entry and damage caused to the property. The applicable legislation will typically also contain dispute resolution provisions to resolve disputes between the mineral rights holder and the surface owner.

5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?

Areas that have established Indigenous title are for the exclusive use and occupation of the respective Indigenous group. This land can only be sold, transferred or surrendered to the federal government. Mining parties can therefore acquire title to these lands only through the government, not from Indigenous groups.

Case law on Aboriginal title and mining rights is still sparse. Current case law dictates that both federal and provincial governments can infringe Aboriginal rights and title if there is a compelling and substantial legislative objective that satisfies a test of justification. The case law continues to evolve; therefore, mining parties must continue to stay up to date. Best practice is to expand stakeholder consultation activities to include Indigenous communities. By consulting with Indigenous communities and addressing their concerns, companies have been able to avoid or limit the issues and impacts on their operations.

5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?

The main rights involved in using the land are mining rights and surface rights. If water is required for processing or mining, there may additionally be provincial or territorial water rights legislation. Any additional rights will depend on the type of mine and the jurisdiction.

6 Environmental issues

6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

Various federal and provincial and territorial environmental laws and regulations affect Canada's mining industry. The number and jurisdiction of permits and processes required depend on the type, location and size of a mining project.

In the territories, federal environmental legislation generally does not apply. Instead, the Mackenzie Valley Resource Management Act regulates the Northwest Territories; the Yukon Environmental and Socio-economic Assessment Act regulates the Yukon; and the Nunavut Land Claims Agreement regulates Nunavut.

In most other jurisdictions, an environmental assessment process is required. This includes the preparation of an environmental study and a public information and consultation stage. A social impact study may also be required. The time required to complete the environmental assessment process varies depending on the location, the level of assessment required and the complexity of the project. In general, at least two years should be anticipated to complete the environmental assessment process. Prior to the commencement of mining operations, most jurisdictions will also require a closure plan and financial securities to cover mine reclamation costs.

6.2 What environmental obligations must the operator observe while the mine is operational?

The mining industry in Canada has made great progress in minimising the environmental footprint of mining operations in recent decades. This progress is the result of the actions of individual companies, government regulations and industry standards. One standard – the Mining Association of Canada's Towards Sustainable Mining initiative – has been especially impactful. Companies are measured and publicly report their performance for several environmentally focused Towards Sustainable Mining protocols, including tailings management, energy use and greenhouse gas emissions management, and biodiversity conservation management. The Canadian mining industry has become recognised as a leader in tailings management.

When operating a mine, operators should be cognisant of all relevant environmental legislation in their jurisdiction. The Environmental Code of Practice for Metal Mines is a good resource for best practices for all phases of the mining lifecycle. In the planning phase, the Code recommends environmental management tools such as:

an environmental policy statement;
an environmental assessment;
a pollution prevention plan; and
environmental training and an awareness procedure.

In the exploration and feasibility phase, the Code recommends an exploration and feasibility study that includes environmental costs. In the construction phase, the Code recommends:

water management planning;
water use and recycling;
designing for extreme weather events;
designing of long-term stability; and
consulting for climate change and adaptation.

In the mine operations phase, the Code recommends:

site-specific programmes to monitor the mine water and seepage;
the use of tailings and waste rock as mine backfill;
the management of treatment sludge to maintain a physically and chemically stable state; and
site-specific plans to minimise the release of greenhouse gases.

At all stages of the mine cycle, a view towards sustainability and environmental protection should be taken.

6.3 What environmental obligations must the operator observe in relation to closure of the mine?

Mine operators must develop their closure plan during the planning phase for proposed mines or as early in the mine lifecycle as possible for existing mines. Mine closure should be executed in a way that minimises the impact to the environment and society. Closure plans should identify opportunities for progressive reclamation of disturbed areas, as well as the process to decommission and reclaim all facilities and infrastructure. Closure plans should additionally be incorporated into all aspects of mine planning, construction and operation, so that key aspects of the closure plan are planned for throughout the mine lifecycle. As the mine lifecycle continues, closure plans should be reviewed and revised as necessary. The Environmental Code of Practice for Metal Mines promotes best practices such as:

the evaluation and revision of existing environmental plans;
the anticipation of mine closure costs; and
the financing for long-term monitoring, maintenance and treatment of mine closures.

6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

If a corporation's activities result in environmental consequences, directors or officers may be held personally liable. If the director or officer is considered an ‘inside director' – that is, an employee of the corporation or a major shareholder – he or she may be more at risk for being personally liable. If the individual is a secured lender, he or she is generally not liable for the borrower's environmental failures.

6.5 Which bodies are responsible for enforcement of environmental obligations?

Environmental matters are overseen by both the federal and provisional and territorial governments. The provincial or territorial government is generally responsible for environmental matters within their jurisdiction. Typically, each province or territory has its own laws and bylaws that provide a framework to prohibit and limit the discharge of contaminants into the environment. The federal government has authority over international and inter-provincial environmental obligations, as well as navigable waters, fisheries, migratory birds, at-risk species and the transportation of dangerous goods. To avoid unnecessary duplication of effort, eight provinces have entered into environmental cooperation agreements with the federal government.

Municipalities additionally have the authority to regulate and manage aspects of the environment. In general, water and sewage systems, noise control and land use planning all fall under the responsibility of municipalities. In some cases, their responsibilities may extend to include public health, business licensing and regulation, and control of dangerous substances.

Finally, the First Nations Land Management Act has authorised some Indigenous groups to control the use of their reserve lands and other Indigenous groups have negotiated self-government agreements. Under these agreements, Indigenous groups may have the responsibility and authority over environment assessment and land use planning.

6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?

The approach that each province or territory takes varies from jurisdiction to jurisdiction. In general, the provinces and territories try to limit the discharge of contaminants into the environment by enacting laws and bylaws regulating the discharge of mine effluents, atmospheric emissions, water resources, solid waste, noise and other environmental impacts.

The federal government has enacted numerous acts to address the environmental impact of mining. Recently, the Canadian Environmental Assessment Act, 2012, was replaced with the new Impact Assessment Act. This new act created a new Canadian Energy Regulator to replace the National Energy Board and expanded the protections for navigable waters found in the Navigation Protection Act.

7 Health and safety

7.1 What key health and safety requirements apply to operators in your jurisdiction?

Health and safety matters are overseen by both the federal and provincial and territorial governments. However, approximately 90% of employees fall under the jurisdiction of provincial or territorial laws.

Mining operators must abide by health and safety legislation in their jurisdiction, which includes regulation of minimum employment standards, labour relations and occupational health and safety. Minimum employment standard laws include rules on minimum wage, hours of work and overtime. Labour relation standards include rights and obligations of unions and employers. Occupational health and safety is mainly governed by the federal Canada Labour Code. In general, each jurisdiction will have specific statutes and regulations dealing with mining operators, which should be consulted prior to commencing operations.

7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?

Reporting requirements vary from jurisdiction to jurisdiction. In general, the prime contractor or the employer of the work site is responsible for reporting mining accidents to the relevant authorities. Depending on the jurisdiction and the type of mine, the relevant authorities may include the workplace health and safety committee, the union, the minister of labour and/or the director of inspection.

In some jurisdictions, the employer must report the incident by telephone as soon as possible, followed by a written report no later than 48 hours after becoming aware of the result. In other jurisdictions, the employer can report the incident using an online reporting service. The report must typically include the type of injury, the type of incident and the source of the incident. Other information required may include:

a description of the machinery, equipment or procedure involved;
the names and addresses of all witnesses to the incident; and
the name and addresses of the physician or surgeon or other medical practitioner, if any, who attended to the injured or killed person.

In Alberta, for example, the categories of incidents that must be reported are:

serious injuries or incidents;
incidents at a mine or mine site; and
potentially serious accidents.

Situations where a vehicle goes out of control, where there is an unplanned stoppage of the main underground ventilation system or where there is an ignition of flammable gas or combustible dust fall into the category of mining accidents that must be reported. In general, if there is an accident or unexpected event in a mine or mining plant – even if no one is hurt – it must be reported.

7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

Commonly referred to as the ‘Westray Law', former Bill C-45, An Act to amend the Criminal Code (Criminal Liability of Organizations), came into force on 31 March 2004. Its objective was to modernise criminal law and establish criminal liability of corporations for workplace deaths and injuries. The law:

established rules for attributing criminal liability to organisations for the acts of their representatives;
established a legal duty for all persons directing the work of others to take reasonable steps to ensure the safety of workers and the public;
set out factors that a court must consider when sentencing an organisation; and
provided conditions of probation that a court may impose on an organisation.

Overall, the Westray Law creates an occupational health and safety duty for all organisations and individuals who direct the work of others in Canada. It requires operators, directors and managers to take all reasonable steps to prevent bodily harm to the person performing the work or task, and to any other person. Operators that fail to uphold their duty to take all reasonable steps may face a fine of up to $100,000 or jail time.

For further details see www.justice.gc.ca/eng/rp-pr/other-autre/westray/p1.html.

7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?

Mine operators should work together with the Ministry of Labour to ensure that their operations are following all health and safety requirements and recommendations in their jurisdiction. In general, mine operators should ensure that all of their employees are wearing high-visibility safety apparel. Additionally, mine operators should have on-site professionals dedicated to workplace health and safety. Larger mines may have numerous specialised safety trainers on site, while smaller mines may contract out safety training to specialist companies. Finally, mine operators should:

conduct health and safety training sessions;
promote first-aid courses; and
distribute health and safety equipment to all employees and teams.

7.5 Which bodies are responsible for enforcement of health and safety obligations?

Health and safety matters are primarily the responsibility of the provincial and territorial governments. As such, each province and territory has its own legislation and typically, a chief inspector of mines. The federal government is responsible for federally owned mines. As an exception, uranium mines are additionally under the authority of the federal government.

7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?

The Canadian mining industry has had a focus on safety, especially in the last couple of decades. Mine operators are being pushed to achieve ‘zero-harm' operations. In general, each province and territory regulates its own jurisdiction through an Occupational Health and Safety Act or similar legislation. The minister of labour or a similar authority will typically oversee the enforcement of health and safety regulations.

Labour unions and industry associations also play a key role in regulating the mining sector from a health and safety perspective. These parties encourage the sharing of best practices, develop industry standards and provide third-party verification of safety programmes. Since 1941, annual mine safety trophies – the John T. Ryan Trophies – have been awarded. The awards – the most prestigious in the industry – are presented nationally and regionally in three mining categories: metal mines, coal mines and select mines. The actions of labour unions and industry associations have also helped to transform the mining industry and foster a culture of safety.

8 Processing, refining and export

8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?

Processing requirements vary in each jurisdiction and legislation should be referred to in each province and territory. In Ontario, extracted minerals must be processed in Canada. In Newfoundland, extracted minerals must be processed in the province. In jurisdictions that have no legislation on this topic, the relevant authorities may attempt to negotiate processing requirements during the approval process. In general, while there has been a trend to require processing of minerals in Canada, governments have rarely imposed secondary or tertiary processing obligations on mine operators.

8.2 What requirements and restrictions apply to the export of minerals?

Based on the division of powers, the federal government has the authority to regulate international trade in commerce. In the past, Canada has not imposed controls on the export of minerals, as it favours international trade and is reluctant to impede the free flow of goods. While Canada has enacted the Export and Permits Act, a regime that controls imports and exports, it serves primarily to satisfy Canada's international obligations and interests, and not to restrict the export of minerals.

9 Taxes and royalties

9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?

Tax is imposed on Canadian mine operators at three levels:

First, federal income tax is imposed on taxable income from a mining operation carried on in Canada;
Second, provincial or territorial income tax is imposed on taxable income; and
Third, provincial or territorial mining taxes are imposed based on a separate calculation production profits, revenues and other criteria.

The calculation methodology for mining taxes varies from jurisdiction to jurisdiction. In addition to these three main forms of taxes, mining activities in Canada are generally subject to the same taxes applicable to other businesses, such as payroll taxes, custom duties, land transfer taxes, sales taxes and property taxes.

9.2 Are any tax incentives available for mining operators?

The Canadian tax system recognises how capital-intensive the mining industry can be, and as such has implemented numerous tax incentives for mining operators. These include:

favourable deduction of Canadian exploration expenses and Canadian development expenses;
accelerated depreciation for certain types of tangible property;
tax credits for certain intangible property expenses;
20-year operating loss carry-forward period;
indefinite carry-forward for capital losses; and
flow-through share mechanisms that allow corporations to pass along exploration and development expenses deductions to their shareholders.

9.3 What other strategies might mining operators consider to mitigate their tax liabilities?

Mining operators that qualify as ‘principal-business corporations' may consider flow-through shares. This allows the corporation to ‘renounce' certain exploration and development expenses. Investors that hold flow-through shares may then claim the renounced expenses as deductions when computing their own income. Investors will have some restrictions – for example, they may claim only up to the amount the investor paid for the flow-through shares.

9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?

In November 2018, the Canadian government announced several measures that benefit the mining industry:

The mineral exploration tax credit available to individuals who invest in flow-through shares has been extended from a one-year period to a five-year period. The five-year extension enhances the attractiveness of flow-through share financing and allows mining companies a longer planning horizon; and
Capital cost allowance has been accelerated, permitting three times the tax deduction for the year of acquisition that would normally be allowed, and a complete Year 1 deduction for qualifying clean energy equipment and manufacturing and processing equipment.

The Mining Association of Canada and the Prospectors & Developers Association of Canada have expressed strong support for these initiatives.

10 Disputes

10.1 In which forums are mining disputes typically heard in your jurisdiction?

In general, mining disputes are heard by independent administrative tribunals. If appealed, these tribunals' decisions lie with the Canadian courts. Under the free entry mining system, mineral leases are granted in a way that limits the government's involvement in disputes over mining rights. Under other systems, such as the Crown discretion mining system, the exercise of governmental discretion over mining rights and disputes is subject to the rules of Canadian administrative law. For international arbitrations, the provinces have broad jurisdiction and have passed legislation governing the conduct and enforcement of proceedings. For arbitrations involving the federal Crown and Crown-owned corporations, the federal Commercial Arbitration Act applies.

10.2 What issues do such disputes typically involve? How are they typically resolved?

Most disputes today concern assessment work, extensions and cancellation. Disputes also arise over the availability of land for mineral acquisition and access. The routine decisions on these dispute matters are usually made by departmental officials or mining recorders. However, where a difficulty arises, it can often be settled by discussion and negotiation. If not, the aggrieved party may be able to make a complaint under the statutory disputes resolution system. Depending on the jurisdiction, the dispute may be heard by a tribunal of the Mining Commissioner, the Chief Gold Commissioner, the Mining Tribunal, the Mining and Lands Tribunal or the Mining Board.

10.3 Have there been any recent cases of note?

An important category of cases to follow in mining law are those involving Indigenous rights and title. This area is quickly developing and has a significant impact on mine operators. In 2015, an unprecedented Supreme Court of Canada decision allowed two British Columbia First Nations to file damages against aluminium industry giant Rio Tinto. This decision paved the way for Indigenous groups to file for damages against companies, individuals or non-government entities without proving Indigenous title first.

Additionally, while it has not been heard in Canadian court, one developing case regarding Nevsun Resources could have major implications for other Canadian mining companies with foreign operations. Nevsun Resources has been accused of being complicit in the use of forced labour by a subcontractor at its mine in Eritrea. A five-to-four Supreme Court of Canada decision in early 2020 allowed the lawsuit to proceed in Canadian court. The case may expand liability; however, it remains to be tested when the case is heard.

11 Trends and predictions

11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?

In the last five years, the mining industry has increased its focus on health and safety, environmental protection and economic benefit. In terms of health and safety, individual provinces have begun implementing new safety requirements and regulations. In Ontario, the Ministry of Labour has started conducting mine safety inspection ‘blitzes' in response to injuries resulting from underground mine rock falls. In terms of environmental protection, the Impact Assessment Act has improved the assessment of environmental, economic, health and social impacts. In terms of economic benefit, the Canadian government has expanded the time period for flow-through shares and accelerated capital cost allowances. Many provinces have additionally moved to an electronic mineral tenure registry, which will reduce the number of disputes about land claims and save time. These changes have seen strong support and are likely to help support the mining industry in the next five years.

11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Canada's mining industry is in a strong position and will likely continue to flourish. This is because Canada has a stable democracy and good infrastructure, and is well endowed with natural resources. Canada additionally continues to attract strong interest from foreign investors, despite being a high-cost jurisdiction and the recent global downturn in commodity prices.

Recently, several trends have emerged – the foremost being the government's desire to ensure that environmental impact assessments and other regulatory processes are finite and cannot be needlessly delayed by third-party challenges. This trend has arisen from the past abuse of process, which increases project costs and delays development. If there is support from local populations, compliance with all laws and future financial benefit, the government views natural resource development projects as a positive opportunity. Compared to 10 or 20 years ago, this represents a considerable change in outlook.

12 Tips and traps

12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?

Overall, there are two main recommendations for mine operators:

They should be aware of all relevant legislation, requirements and regulations in their specific jurisdiction. Mine operators should work together with their local authorities to ensure that their operations are following all health and safety and environmental requirements and recommendations.
They should include local Indigenous groups in discussions when planning their mine operations. In many cases, there will be Indigenous title or rights; however, even if a mine is built on Crown land, there may be a future land claim or impacts on local Indigenous groups.

By being cognisant of their communities, employees and impact on the environment, mine operators can continue to push Canada's mining industry to the forefront.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Canada: Mining Comparative Guide