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Relaunching the Northern Plan

The Northern Plan will focus on the integrated and coherent development of the area covered by the Northern Plan which includes all of Québec located north of the 49th degree of north latitude and north of the St. Lawrence River and the Gulf of St. Lawrence. There are several mining exploration projects and major mining projects at various stages of development in the north, some of which require significant access to infrastructures. The Government of Quebec intends to take steps to facilitate the implementation of mining and other projects in the area. With confirmation by the Government of Québec of its intention to relaunch the Northern Plan by introducing Bill 11, An Act respecting the Société du Plan Nord, on September 30, 2014, the implementation of the Northern Plan continues. Bill 11 reiterates the majority of the elements included in the former Bill 27, An Act respecting the Société du Plan Nord, introduced in 2011, which was examined by a parliamentary committee. However, Bill 11 contains new elements and incorporates differences when compared to the previous version as outlined in Relaunching the Northern Plan: Introduction of the Bill to establish the Société du Plan Nord. Mr. Couillard’s government seems determined to proceed with the implementation of all mechanisms required for the orderly deployment of the Northern Plan while the mining sector and international business community continue to demonstrate interest in this major plan.

Relaunching the Northern Plan

Adoption of Bill 70 Amending the Mining Act: Overview of Amendments

After several failed attempts at reforming the Mining Act, on December 10, 2013 the National Assembly finally adopted Bill 70, An Act to amend the Mining Act (“Bill 70”).

Bill 70 draws upon a number of the measures that were proposed in Bill 43 of May 29, 2013 (“Bill 43”) as well as in Bill 14 of May 12, 2011 tabled by the previous government, which was actually a modified version of defunct Bill 79. For more details about the measures proposed in Bill 43, please see our May 13 article “Focus on Mining” (available here).

However, unlike the previous bills, which put forth a complete reconsolidation of the Mining Act, Bill 70 introduces a series of amendments to the existing act. It is also worth noting that Bill 70 is the result of certain compromises made by the government further to various comments received including from the mining industry, municipalities, environmental groups and aboriginal groups.

Essentially, the provisions that are amended by Bill 70 focus on three main aspects: mining titles, environment and communities and MRCs.

Mining Titles

(a) Mining leases

Scoping and market study. As a precondition for the grant of a mining lease, Bill 70 requires, instead of a feasibility study on the processing of the ore in Quebec as proposed in Bill 43, a scoping and market study, which will be less stringent.

Economic spinoffs within Quebec. Bill 70 carries on one of the proposals contained in Bill 43 concerning the option for the Minister of Natural Resources (the “Minister”) to require, when granting a mining lease, that the economic spinoffs within Quebec from the mining of the mineral resources authorized under the lease be maximized. However, this requirement can now only be imposed on reasonable grounds.

Public consultation. Any metal mine project having a production capacity of less than 2,000 metric tons per day will be subject, before a mining lease is granted, to the holding of a public consultation. The conditions and form of the public consultation will be determined by regulation, so it is difficult for the time being to determine what the public consultation requirements will be. As for projects having a production capacity of 2,000 metric tons or more per day, they will also require a public consultation, but it will be held in the framework of the environmental assessment process described below.

The grant of a surface mineral substance operating lease for peat or a lease needed for an industrial activity or to engage in commercial export is also subject to a prior public consultation.

Reporting. Following in the footsteps of Bill 43, Bill 70 stipulates that holders of mineral rights have an obligation to provide information to the Minister on the quantity and value of the ore that is extracted, the duties paid under the Mining Tax Act and the overall contributions they have paid. In principle, this information is public, except for data appearing in the reports on exploration work involving amounts beyond the allowances claimable under the Mining Tax Act, which will remain confidential for a period of five years. This is an adjustment introduced in Bill 70. Similarly, the data contained in the agreements concluded with a community will not have to be made public and may only be used for statistical purposes.

    (b) Mining Claims

Notice to the municipality and the landowner. Claim holders must notify the municipality and the landowner concerned within 60 days after registering a claim of the fact that they have obtained the claim, and must inform the municipality at least 30 days before performing any work.

Annual work report. Claim holders have an obligation to submit an annual report on the work that is performed. The requirement to submit an annual work plan to the Minister contained in Bill 43 was excluded from Bill 70.

Work credit. The radius within which the work credits accumulated for a claim could be used to renew other claims was reduced from 4.5 to 3.5 km in Bill 43. Bill 70 did not carry on such a measure, and the applicable radius therefore remains at 4.5 km. The 12-year limit on the lifespan of the work credits, as proposed in Bill 43, does remain however, along with an increase in the amount to be paid to double the cost of the work that should have been performed for purposes of renewing the claim.

Dropped measure: public auction. Bill 70 drops the measure proposed in Bill 43 which gave the Minister the option to auction off certain claims.

Environment

Environmental assessment. Bill 70 also provides for the amendment of the Regulation respecting environmental impact assessment and review, such that mineral processing plant construction and operation projects and mine opening and operation projects with a production capacity of 2,000 metric tons or more per day, as well as all projects involving the processing of rare earth (regardless of the processing or production capacity) will, going forward, be subject to the environmental assessment process stipulated in the Environment Quality Act. Note that Bill 43 provided instead that all of the aforesaid projects would be subject to such an assessment, regardless of their production capacity.

Mine site rehabilitation and restoration plan. Like Bill 43, Bill 70 stipulates that the grant of a mining lease is subject to approval of the mine site rehabilitation and restoration plan in accordance with the Mining Act and issuance of the certificate of authorization required for that purpose under the Environment Quality Act. However, where the time frame for obtaining the certificate of authorization is unreasonable, the Minister may still grant the lease.

Communities and MRCs

(a) Native communities

Bill 70 adds a new section to the Mining Act concerning the obligation to consult Native communities. This section draws on some of the provisions already contained in the previous bills. For more details on the new Bill 70 measures concerning Native communities, we invite you to read the bulletin published on that subject by our Aboriginal Law group (available here).

(b) Local communities

Monitoring committee. Bill 70 stipulates that all holders of mining leases must establish and maintain a project monitoring committee to foster local community involvement in the project as whole. The committee must comprise at least one representative of the municipal sector, one representative of the economic sector, one member of the public and, where applicable, one representative of a Native community consulted by the Government with respect to the project.

(c) Regional County Municipalities (MRCs)

Bill 70 also amends the Act respecting land use planning and development to allow the MRCs to delimit any mining-incompatible territory in their land use and development plan. However, it is in the Mining Act that particulars regarding what constitutes such territories will be found, as well as regarding the exclusion of the mineral substances found thereon from mining activities. Bill 70 did not keep the concept of a “territory compatible on certain conditions,” which was originally proposed in Bill 43. The power of the Minister of Natural Resources to review the delimitation of any mining-incompatible territory and to request changes to the land use plan to permit the conduct of mining activities (often referred to as a veto right) was also dropped in Bill 70.

Other Measures

Bill 70 also introduces a series of other amendments to the Mining Act, many of which were proposed in Bill 43.

  • Obligation to provide financial guarantees covering the full costs set out in the rehabilitation and restoration plan;
  • Obligation to disclose any uranium discovery;
  • Limitation of the power of expropriation to the holders of mining rights that want to proceed to the mining stage;
  • Power of the Minister to refuse, on public interest grounds, an application for a lease to exploit sand and gravel; and
  • Updating of the penal sanctions system.

For any questions about Bill 70, please contact a member of our Mining Law group.

Adoption of Bill 70 Amending the Mining Act: Overview of Amendments

Adoption of Bill 70, an Act to amend the Mining Act: Amendments relating to Native communities and reactions of those communities

On last December 10th, the National Assembly of Québec adopted Bill 70, An Act to amend the Mining Act (“Bill 70”). The adoption of Bill 70 came in the wake of three aborted attempts to modify Quebec’s mining regime in recent years, most recently the government’s failure, last October, to pass Bill 43, which would have enacted a new mining act (“Bill 43”).

Bill 70 was part of an effort to harmonize the interests of the various mining stakeholders, such as the mining industry itself, the municipal sector, environmental advocacy groups, and aboriginal communities, which all submitted their observations and comments on Bill 43 during the Special consultations and public hearings on Bill 43 (the “Consultations”).

This newsletter will address the specific provisions of Bill 70 that relate to Native communities, and the reactions of those communities to Bill 70’s adoption. For an overview of the changes brought in by Bill 70, we invite you to read the bulletin on that topic published by our Mining Law group.

Changes to the mining regime relating to Native communities.

  • Consultation of Native communities

Like the earlier Bill 14, Bill 43 proposed an amendment to the Mining Act designed to reaffirm the minister’s obligation to consult Native communities separately. During the Consultations, the Native communities argued that this amendment was not specific enough in terms of the government’s consultation obligations and, moreover, that it only reiterated the government’s duty to consult the First Nations.

In response to those representations, Bill 70 introduces a new chapter (Chapter I.1) in the Mining Act, which reiterates that the government must consult the Native communities separately if the circumstances so warrant (new section 2.1). New section 2.2 states that taking into account the rights and interests of Native communities is an integral part of reconciling mining activities with other possible uses of the territory. At this stage however, it is difficult to determine how that taking into account will be translated into action. Bill 70 also stipulates that the Minister of Natural Resources (the “Minister”) must draw up, make public and keep up to date a Native community consultation policy specific to the mining sector (new section 2.3).

  • Disclosure of agreements with Native communities

Bill 43 contained an obligation for lessees and grantees to send the agreements entered into with any community, whether municipal or Native, to the Minister. Thus, under Bill 43, those agreements were made public.

The amendments proposed in Bill 43 were vociferously criticized during the Consultations, not only by the Native communities but also by certain members of the industry, and Bill 70 tones them down. Bill 70 now provides that the information contained in an agreement between the holder of a mining lease or a mining concession and a community sent to the government in accordance with the Act will not be made public. The data can only be used for statistical purposes. The whole is subject to the Act respecting Access to documents held by public bodies and the Protection of personal information (new section 215).

  • Expropriation

Like Bill 43, Bill 70 prohibits holders of mining rights and owners of surface mineral substances from expropriating Native cemeteries (new section 235).

  • Monitoring committee

Bill 70 stipulates that all holders of state mining leases must establish a project monitoring committee to foster local community involvement in the project as whole. Although the lessee chooses the committee members, they must include at least one representative of the municipal sector, one representative of the economic sector, one member of the public and, where applicable, one representative of a Native community consulted by the Government with respect to the project (new section 101.0.3).

Native community reaction to the adoption of Bill 70.

In a press release issued last December 10th, the Assembly of First Nations of Quebec and Labrador (“AFNQL”) promptly publicized its objections to the content of the Mining Act amendments contained in Bill 70, as adopted (1).

The AFNQL’s objections focus on two issues:

  • Consultation of Native communities

First, the AFNQL argues that the consultation measures introduced in new Chapter I.1 of the Mining Actwill be meaningless, because Quebec will still have no control whatsoever over the exploration work with this legislation.”

The AFNQL finds the amendments brought by Bill 70 insufficient , as there is no specific requirement for consultation at the exploration work stage, and it argues that the government, based on the “free mining” principles enshrined in the Act, has in practice taken the position of neither consulting nor accommodating the First Nations at the exploration work stage. The reason for the AFNQL’s position is that the Mining Act does not require claim holders to obtain a permit before carrying out that type of work (2).

To Native communities, such an approach is inconsistent with the mining sector law reforms initiated by the provinces of Newfoundland, Ontario, Alberta and British Columbia and, moreover, breaches the Crown’s constitutional obligations at the exploration work stage, based on the Court of Appeal of Yukon’s decision in Yukon Ross River Dena Council v. Government of Yukon (3).

  • Disclosure of agreements with Native communities

Although the data contained in an agreement will not be made public, the AFNQL still objects to the disclosure of that information to the government. The Grand Council of the Crees has also voiced concerns about that point. The AFNQL’s press release contains the following statement: “Worse still, the new Mining Act even constitutes a major setback in respecting First Nation self-governance, in relation to the status quo of the previous Mining Act. Minister Ouellet insists, in sections 59 and 79, in spite of fierce protests of First Nations in Quebec, on forcing the mining companies to disclose the information contained in the confidential commercial agreements they signed with the First Nations.”

For any others questions about Bill 70, please contact a member of our Mining Law group or our Aboriginal Law group.

1. The Grand Council of the Crees and the Algonquins, among others, have also made their reactions known.

2. See the memorandum filed by the Great Innu Nation in the course of the Consultations.

3. 2012 YKCA 14; leave for permission to appeal denied by the Supreme Court of Canada on September 19, 2013.

Adoption of Bill 70, an Act to amend the Mining Act: Amendments relating to Native communities and reactions of those communities

The Québec Government announces a new Mining Tax Regime “Fair for all”

The new Québec mining tax regime was announced on May 6th 2013, by the Minister of Finance, Nicolas Marceau, accompanied by the Minister of Natural Resources, Martine Ouellet.

The Québec Government has presented a new regime under which all mine operators in Québec will have to pay a minimum mining tax.

The mining corporation will be required to pay the greater of two amounts, either a minimum mining tax on ore extracted or a mining tax on annual profit for a fiscal year starting after December 31, 2013.

  • The minimum royalty rate is set at 1% for the first $80 million of ore extracted and at 4% of the value of ore extracted in excess of $80 million, these rates being applied to the output value of the ore at the mine shaft head.
  • The mining tax on profit will be calculated according to a progressive rate structure. The new tax rates to be applied will be 16%, 22% or 28% depending on profit margin, the Government having provided for three segments of profit margin (from 0% to 35%, from 35% to 50% and from 50% to 100%).

Minister Marceau also stressed the importance of jobs in Québec for processing activities, and therefore has added incentives in the new tax regime in an effort to increase processing in Québec.

Minister Ouellet spoke briefly about the future Mining Act and indicated that this new mining tax regime has been developed in order to be more transparent and in the context of more responsible development of mining resources.

The details relating to the newly announced mining tax regime may be found in the following documents which have been made available by the Government:

  • In English

– Press Release: http://www.finances.gouv.qc.ca/documents/Communiques/en/COMEN_20130506.pdf

– Full document: http://www.finances.gouv.qc.ca/documents/autres/en/AUTEN_NewMiningTaxRegime.pdf

– Charts: http://www.finances.gouv.qc.ca/documents/autres/en/AUTENCharts_MiningTaxRegime.pdf

– Information bulletin: http://www.finances.gouv.qc.ca/documents/bulletins/en/BULEN_2013-4-a-b.pdf

  • In French

– Communiqué de presse: http://www.finances.gouv.qc.ca/documents/Communiques/fr/COMFR_20130506.pdf

– Document complet: http://www.finances.gouv.qc.ca/documents/Autres/fr/AUTFR_NouveauRegimeImpotMinier.pdf

– Graphiques: http://www.finances.gouv.qc.ca/documents/Autres/fr/AUTFRGraph_RImpotMinier.pdf

– Bulletin d’information: http://www.finances.gouv.qc.ca/documents/bulletins/fr/BULFR_2013-4-f-b.pdf

This article was written by Ann Bigué and Dominique Quirk.

The Québec Government announces a new Mining Tax Regime “Fair for all”

The Government of Québec imposes a temporary moratorium on uranium exploration and development

On March 28th, Québec Environment minister Yves-François Blanchet announced that the Bureau d’audiences publiques sur l’environnement (BAPE) will hold public hearings on the uranium sector in Québec. These hearings are scheduled for the Fall of 2013 and will focus on the environmental and social impacts of exploration and mining of uranium in Québec. The Minister also indicated that no authorization certificates for uranium exploration or mining projects in Québec will be issued until the BAPE’s independent study is completed and its report is issued.

The Minister stressed the importance for the Government to respect the principles relating to the protection of the social environment and the protection of Aboriginal peoples, their societies, their communities and their economy. Aboriginal organizations will therefore be invited to play a significant role in the consultation. The Minister indicated that the BAPE’s study will be conducted in collaboration with the review committees and advisory committees provided for in the James Bay and Northern Québec Agreement, the Northeastern Québec Agreement and the Environment Quality Act.

The Government’s press release is available here (in French only): http://www.mddefp.gouv.qc.ca/infuseur/communique.asp?no=2383

This article was written by Ann Bigué and Dominique Quirk.

The Government of Québec imposes a temporary moratorium on uranium exploration and development

Consultation document for changes to the Québec mining royalties regime now available

Following the announcement that a forum on mining royalties will be held on March 15th, 2013 in Montréal, the Québec Ministries of Finance and Economy and of Natural Resources have made available, on March 8th, a consultation document entitled “Le régime d’impôt minier du Québec”. This document includes information on the mining sector in Québec and on the operation of the current Québec mining tax regime.

The Québec Mining Association and the Québec Mineral Exploration Association as well as several mining companies, groups and experts will be invited to provide their opinion and suggestions on this question. The consultations will culminate in the forum on mining royalties which will be co-presided by Mr. Jacques Fortin (HEC Montréal) and Mr. Pierre Lasserre (UQAM-CIRANO).

The consultation document is available here (in French only): http://www.finances.gouv.qc.ca/documents/autres/fr/AUTFR_RegimeMinier.pdf

This article was written by Ann Bigué and Dominique Quirk.

Consultation document for changes to the Québec mining royalties regime now available

Quebec tightens rules on financial guarantee requirements for rehabilitation and restoration plans

On February 13, 2013, a notice was published in the Gazette officielle du Québec by the Minister of Natural Resources, Martine Ouellet, announcing amendments to the Regulation respecting mineral substances other than petroleum, natural gas and brine (the “Regulation”). All of these amendments pertain to the rules applicable to financial guarantee requirements for rehabilitation and restoration plans under Section 231 and following of the Quebec Mining Act.

The draft regulation amends the Regulation by increasing from 70% to 100% the financial guarantee required to ensure performance of the work required by the rehabilitation and restoration plan and by broadening the scope of the guarantee from being required only for the rehabilitation and restoration of accumulation areas (for mineral substances, overburden, concentrates and tailings), to being required for the rehabilitation and restoration of the entire mine site.

The payment schedule for the financial guarantee will also be amended for companies who are currently engaging in exploration work as well as for those engaging in mining operations or operating a concentration plant.

In the case of companies engaging in exploration work, under the current Regulation, the total guarantee must be submitted within 15 days after the rehabilitation plan is approved, if the exploration work is expected to last 1 year or less, or the financial guarantee can be submitted in annual payments if the exploration work is expected to last more than 1 year. The amendments now provide that every holder of mining rights who engages in exploration work must provide the financial guarantee to the Minister before the beginning of exploration work.

For operators engaging in mining operations in respect of tailings or mineral substances set out in the regulations, or operating a concentration plant, the current Regulation provides that their annual payments will be made according to rules set forth in a table. However, the amendments to the Regulation provide that the guarantee must now be submitted to the Minister in three payments, the first of which would represent 50% of the total guarantee and would be paid in the 90 days after approval of the rehabilitation plan is received. The subsequent payments of 25% each would be made on the anniversary date of approval.

The draft regulation also reviews certain forms of financial guarantee and requires the filing of a restoration plan for the movement of 1000 m3 or more of unconsolidated deposits.

The new amendments will also apply to operators who are currently engaging in mining operations or operating a concentration plant and whose restoration plan has been approved prior to the draft regulation coming into force. These operators will also have to provide the financial guarantee for the restoration of the mine site in three payments, the first payment being required at the latest one year after the draft regulation comes into force.

The draft regulation is set to come into force on February 28, 2013.

The current Regulation is available here:  http://www2.publicationsduquebec.gouv.qc.ca/documents/lr/M_13_1/M13_1R2_A.htm

The draft regulation is available here:http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=1&file=2462.pdf

This article was written by Ann Bigué and Dominique Quirk.

Quebec tightens rules on financial guarantee requirements for rehabilitation and restoration plans

Quebec Government announces Forum on Mining Royalties, March 15th, 2013

Québec Minister of Finance and Economy Nicolas Marceau and Québec Minister of Natural Resources Martine Ouellet announce that a forum on mining royalties will be held on March 15th, 2013 in Montréal, during which the mining industry and groups affected by this issue will be consulted.

This announcement made at the Strategic Forum on natural resources which was held in Montréal on February 8th, 2013, follows the commitments undertaken by the Parti Québécois during the last election campaign to raise mining royalties. The forum will enable the parties to agree on the “best way to get there”, said Minister Marceau.

In his speech announcing the forum on mining royalties, Minister Marceau indicated that the following principles are guiding the Québec Government: royalties must be increased, the extracted mineral must generate royalties in all cases, the most profitable projects must generate more royalties and transformation in Québec must be encouraged. He also indicated that the challenge is to find the balance between maximizing royalties, maximizing investments and maximizing employment in the mining sector.

A consultation document will be made available by March 1st and will be available on the Ministry websites. The document will include information on the mining sector, on the operation of the current Québec mining tax regime and on the total amount of royalties collected from mining companies in Québec.

The Québec Mining Association and the Québec Mineral Exploration Association as well as several mining companies, groups and experts will be invited to provide their opinion and suggestions on this question. These consultations will culminate in the forum on mining royalties which will be co-presided by Mr. Jacques Fortin (HEC Montréal) and Mr. Pierre Lasserre (UQAM-CIRANO).

Minister Marceau also indicated that the Québec Government will be able to announce the details of the new royalty regime in early spring.

The press release is available in French only: http://www.finances.gouv.qc.ca/documents/Communiques/fr/COMFR_20130208.pdf

Minister Marceau’s speech from the Strategic Forum on natural resources is available in French only: http://www.finances.gouv.qc.ca/documents/Communiques/fr/COMFR_Allocution20130208.pdf

This article was written by Ann Bigué and Dominique Quirk

Quebec Government announces Forum on Mining Royalties, March 15th, 2013