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The New Fisheries Act: What Miners Need to Know

 This article was prepared by David Hunter, Nalin Sahni and George McKibbon (McKibbon Wakefield Inc.)

The repeal and enactment of the Canadian Environmental Assessment Act (“CEAA”) and amendments to other federal legislation is the most significant change in federal environmental assessment (EA) since the legislation was enacted. The amendments are aimed at increasing investment in extractive industries by encouraging certainty, reducing regulatory duplication and reducing delays. The implications of these changes are vast and it is too early to determine their impacts on the mining industry.

This is the fourth article in our series on changes to the federal environmental assessment regime and what that means for mining in Ontario. Our first article provided a general overview while our second article addressed changes in CEAA related to Aboriginal consultation. Our third article discussed what the new Aboriginal consultation regime meant for mining in Ontario. In this article we discuss the Fisheries Act amendments, their implications for Aboriginal consultation and other matters relevant to miners taking into account further Fisheries Act revisions proposed in Bill C-45.

Prior to the recent amendments, the Fisheries Act was a powerful environmental and resource management tool of general application. It was applied with force to protected fish habitat across the country. The changes to the Fisheries Act enacted last year and the proposed revisions in Bill C-45 limit the focus from the protection of almost all fish habitat to only the protection of “fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support that fishery”. The Fisheries Act will apply less often and in more narrow circumstances. It is no longer a statute of general application across Canada but one that will apply only to a limited number of lakes and rivers in limited parts of Canada.

The transition to the new Fisheries Act will occur in two phases. The first amendments to the Fisheries Act were made this past summer. Some of these amendments are placeholders enabling Federal-Provincial negotiations on agreements and protocols and the drafting of new regulations and definitions critical to implementation.

For example, Bill C-38 included two amendments each to Sections 35 and 37 of the Fisheries Act. The first set of amendments that came into force this past summer, maintain the emphasis on protecting almost all fish habitat by expanding the prohibition from only “works and undertakings” that damage fish habitat to include all activities that damage fish habitat as well. The second set of revisions limits the application of the Fisheries Act to only commercial, recreational and aboriginal fisheries or fish that support these fisheries. The second set of revisions will come in to force on a date ordered by federal cabinet, presumably when Federal-Provincial negotiations for new agreements and protocols are complete.

While waiting for the changes from federal cabinet, does nothing change in the interim? No, the place holding amendments diminish the current administrative restrictions and override existing protocols on habitat protection by providing for greater administrative discretion. Staffing and administrative resource cuts underscore the effects of these changes. Even though federal cabined has not approved the second set of amendments, Fisheries and Oceans Canada is processing application as if the legislative changes were in force.

While many of the changes to the Fisheries Act were intended to facilitate mining development, they may not have their intended purpose, at least in the short term. Uncertainty as to the Fisheries Act’s application to mining projects may prevail for some time. Fisheries Act implementation has historically involved the participation of Provincial ministries and agencies to shape implementation agreements and develop an accepted scientific body of practice that defined the measures taken to ensure compliance with the habitat protection provisions.

The refocused Fisheries Act requires development of a new scientific body of practice to implement the more limited habitat protection focus. This will take time and much judgment and consultation will be required, particularly where Aboriginal fisheries are concerned. With staffing and budget reductions, especially among scientists, the resources needed to implement the changes effectively may not be there.

For mining projects, there may be three major impacts. Over larger areas, approvals may become quicker and less expensive to obtain. Projects with existing Fisheries Act approvals will be able to apply to have their permit requirements reduced in accordance with the new Act. However, for projects caught by the new approvals requirements, there may be additional uncertainty as the new science and body of practice are developed.

It may take years to implement the new Fisheries Act and re-establish the science and administrative practices needed for competent implementation. The withdrawal of federal protection for most fisheries could in theory be replaced by additional provincial oversight but this is unlikely to happen in Ontario given the budgetary problems and expected staffing reductions at the Ministry of Natural Resources. But the messaging is clear. The Fisheries Act won’t be the powerful decision-making tool it was in the past.

The New Fisheries Act: What Miners Need to Know

Ontario’s Public Lands Act: What Miners Need to Know

This article was prepared by David Hunter, Nalin Sahni and George McKibbon (McKibbon Wakefield Inc.)

Many of our mining clients do not appreciate the role of the Ministry of Natural Resources (“MNR”) and the regulation of Crown land through the Public Lands Act. While licenses for advanced prospecting and mine development are secured through the Mining Act, this is not the case with other critical infrastructure. Miners need to manage the requirements of the Public Lands Act that cover the approval of new access roads, electricity generation sites, transmission lines, and other infrastructure indispensible for developing mining operations on Crown land.

Common areas of governmental regulation that miners deal with such as securities, mining and environmental law have well worn rules contained in statutes, regulations or highly prescriptive guidance documents. This is not the case with the MNR and the Public Lands Act. The MNR relies far more on setting broad policy directions through guidance documents and on the discretion of staff in each field office than on prescriptive rules. There are also no appeal provisions under the Public Lands Act so there is no substantial body of legal decisions to help guide future decision-making. Understanding the MNR and the Public Lands Act is the key to obtaining approvals for mine infrastructure on Crown land. This will be especially true in the next few years with the MNR facing substantial staffing and budget cuts.

The MNR uses two main tools to determine what mining infrastructure is allowed in different locations:

1. the Crown Land Use Policy Atlas (the “Atlas”) and
2. the Guide to Crown Land Use Planning (the “Planning Guide”).

The Crown Land Use Policy Atlas
The Atlas sets our the land use designations, permitted uses, and Crown policies that apply to all Crown lands except for the northernmost 42% of Ontario which are governed by the Far North Act (See our July 2012 article on this issue).

The land use designations in the Atlas are divided into the following categories: Provincial Parks, Conservation Reserves, Provincial Wildlife Areas, Forest Reserves, Enhanced Management Areas, Wilderness Areas, and General Use Areas. As these names suggest, the designations represent the MNR’s various legislative and policy mandates. The exception here are General Use Areas that cover all lands not otherwise designated. Miners need to know and cope with the designation of any area where they may wish to develop infrastructure since this will dictate the uses permitted by MNR and any policies that may apply.

The Guide to Crown Land Use Planning
The Planning Guide describes how each of the different designations in the Atlas were developed and how the Atlas is to be applied in dealing with applications for access roads, transmission lines, and other infrastructure. All MNR polices must be consistent with both the Public Lands Act and the Atlas. This is particularly important since MNR staff often vigorously adhere to policies that do not have the force of law but that MNR staff view as binding.

In some circumstances there is an added complication. Regulations under the Public Lands Act require that the older MNR District Land Use Guidelines must be applied together with the Atlas in particular situations such as applications for road construction and servicing. These provisions can make it difficult for miners to know exactly what policy applies in their particular situation. These MNR practices reflect and are a continuation of past MNR policies.

Interaction with Other Legislation
In the real word where miners are applying for different approvals under different Ontario statutes, coordination between Ministries can be difficult. While there are administrative and policy mechanisms in place to enhance coordination between the Mining Act and the Public Lands Act regarding parks and conservation reserves, there is no explicit coordination for the development of access roads, transmission lines, and other mining infrastructure in areas other than the Far North. Further, unlike with municipal official plans, there is no requirement that the Altas conform to the Growth Plan for Northern Ontario. The Atlas is exempt from this requirement and does not interact in this respect with Ontario’s Planning Act.

The legislative and policy silos that exist between mining, economic development and the Public Lands Act will create difficulty for miners in obtaining the necessary approvals from each government ministry.

The FMC Mining Group will prepare a future article on how the Public Lands Act provides for the disposition, occupancy, and use of lands under various approvals such as road construction.

Ontario’s Public Lands Act: What Miners Need to Know

A New Paradigm for Aboriginal Consultation in Ontario: What Miners Need to Know

This article was prepared by David Hunter, Nalin Sahni and George McKibbon (McKibbon Wakefield Inc.)

The repeal and re-enactment of the Canadian Environmental Assessment Act (“CEAA”) and amendments to other federal environmental legislation amounts to the most significant change in federal environmental assessment (“EA”) since the legislation was first created decades ago. These amendments are clearly aimed at increasing investment in extractive industries by encouraging certainty, reducing regulatory duplication and shortening delays. The implications of these changes are vast and their full impact on the mining industry is not known.

This is the third article in our series on the changes to the federal environmental assessment regime and what that means for mining in Ontario. Our first article provided a general overview of the changes and our second article discussed changes in CEAA related to Aboriginal consultation. In this article, we discuss how the new CEAA will interact with several changes to Ontario mining legislation to create a new Aboriginal consultation regime in Ontario.

Since the amendment of the Constitution in 1982 to include recognition of Aboriginal and Treaty rights, Canadian governments have been engaged in a process of reforming laws and policies to recognize these new rights. To prevent conflicts with Aboriginal peoples, the 2007 Ipperwash inquiry identified the regulation and development of natural resources on Aboriginal lands as a key area of reform. Justice Linden concluded that the

management of natural resources must take into account the rights and interests of Aboriginal people more effectively. I believe there are ways of sharing and co-managing natural resources that are consistent with Aboriginal and treaty rights while serving the interests of first nations and the people of Ontario¹.

It is against this backdrop that Ontario has announced new changes to facilitate Aboriginal consultation for mining in Ontario. As described below, the new regulations proposed under Ontario’s Mining Act and the Far North Act amount to a new paradigm for mining and Aboriginal consultation in Ontario. We hope that the requirements for consultation in Ontario will also satisfy CEAA requirements but this is far from certain.

Changes to Ontario’s Mining Act and Regulations
The purpose clause of the Mining Act has been amended. Mineral resources must now be developed in a manner consistent with the recognition and affirmation of existing Treaty and Aboriginal rights including the duty to consult. This change in purpose has led to a new regulatory scheme that is expected to include detailed consultation requirements at each stage in the mine development process from early exploration to mine closure.

Under the proposed regulations, Aboriginal peoples must be notified when mining claims are recorded within their traditional use areas. Exploration plans are required for low impact activities (e.g. surveys that require a power generator) and exploration permits are required for moderate impact activities (e.g. drilling with equipment over 150 kg). For both exploration plans and permits, miners must notify / consult with Aboriginal peoples. Aboriginal peoples will have the ability to make their concerns and objections known at the start of the mining process. While this is likely to reduce conflicts, it could greatly lengthen the mine development process. Further, sites of Aboriginal cultural significance have been withdrawn from claim staking.

The proposed exploration planning and permitting requirements in the Mining Act are not expected to directly interact with the changes to CEAA, a since they operate at different stages in the mine development process. However, Aboriginal consultation requirements for mine production and closure plans could significantly overlap with the Aboriginal consultation requirements under the new CEAA. At present it is unclear if consultation under the Mining Act will count as consultation under the new CEAA regime or if additional consultations will be required. If these two requirements are not harmonized it could lengthen the environmental assessment and Aboriginal consultation process.

The New Far North Act
The Far North Act is essentially a land use planning statute for the northern-most 42% of Ontario. This huge area is home to 24,000 people, 90% of whom are Aboriginal. While half of the 450,000 km2 in the far north must be an interconnected protected area, one of the most important pieces of information for miners is that mines cannot be opened until community-based land use plans are developed for each region in the far north.

The land use planning process must be initiated by Aboriginal peoples in each area and the final plan must be approved by not only the Ontario government but each of the participating First Nation bands in the area. So far, only four land use plans have been developed in the far north and it could be a long-time before a significant portion of the far north is open to mining. The policies used to develop additional land use plans under the Far North Act will strongly influence whether these plans satisfy some or all of the EA and Aboriginal consultation requirements under the new CEAA.

South of the Far North Act area, Crown land use plans may be prepared under s. 12 of the Public Lands Act. Where approved plans exist, activities carried out in the planning area must be consistent with the approved plan. At present, Crown Land Use Planning Guidelines are for the most part silent on addressing mining or the concerns of Aboriginal peoples and do not assess impacts on Aboriginal peoples or the natural environment as required by CEAA.

A New Aboriginal Consultation Paradigm
Between the changes to CEAA, the new Mining Act purpose clause and regulations and the Far North Act, Aboriginal law is now firmly embedded in the mine development process from start to finish. There are now regulatory and Aboriginal consultation requirements for miners in Ontario starting with early exploration plans and ending with mine closure plans. Aboriginal participation and cooperation is now a core part of the CEAA environmental assessment process (see our second article). These changes, taken together, are beginning to operationalize the Aboriginal provisions of the Constitution and give some sense of what these rights mean in practice.

However, many questions remain unanswered. With all of these new Aboriginal consultation requirements at both the federal and provincial levels, it is unclear if there will be sufficient coordination (or harmonization) between the Ontario and the Federal government to make this Aboriginal consultation regime work in practice. Aboriginal consultation at the provincial level must be accepted to meet federal requirements and vice versa. Federal-provincial harmonization of environmental assessments (including Aboriginal consultation) was a key recommendation of the Drummond Report (see our March 2012 article) but it has not yet been implemented into practice.

At a minimum, coordination between federal and provincial governments should include:

  • The sharing and acceptance of information between federal and provincial authorities (including Aboriginal consultation information);
  • Allowing federal and provincial regulatory processes to run concurrently and
  • Timely review by both levels of government.

Otherwise, the new Aboriginal consultation regime will create significant delays for miners and we suspect that governments may be forced to use the highly controversial cabinet override provisions contained in each of the these statues to ensure that projects are not cancelled because of endless delays.

___________________

¹  Linden, Sidney B. Report of the Ipperwash Inquiry. Toronto: Published by Ministry of the Attorney General, Queen’s Printer for Ontario, 2007 at Volume 2, page 44.

A New Paradigm for Aboriginal Consultation in Ontario: What Miners Need to Know

The Drummond Report: What Miners Need to Know

This article was written by David Hunter, Nalin Sahni, and environmental planner George McKibbon of McKibbon Wakefield Inc.

Economist Don Drummond recently released a sweeping report (the “Drummond Report”) on rethinking Provincial governance and Ontario’s economy. Miners should take note: the Drummond Report calls for increased mining taxes and user fees and “a new paradigm for environmental and natural resource programs,” licensing, and services that could both hinder and simplify mining development and operations.

Transformation is an important theme in our continuing series on streamlining the current mine development system. In our last article, we discussed the Draft Class Environmental Assessment for Mining and how the licensing system could be improved (See February 9th posting). Today, we discuss the changes that miners should expect from the Drummond Report, if implemented.

Increased Mining Taxes and User Fees

The Drummond Report recommends that Ontario: scrap the resource tax credit, review the mining tax system to ensure Ontario is appropriately compensated, and charge mines for any water used. Business taxes in Ontario have been significantly reduced and tax credits and reduced mining taxes are no longer necessary to encourage investment. Charging for water withdrawals could raise significant revenue and would encourage water conservation. However, the increased costs from these taxes and fees on the mining industry could be substantial. The Drummond Report also recommends that Ontario consider additional mining taxes dedicated for Aboriginal development if mining companies do not fund Aboriginal peoples’ economic participation in the “Ring of Fire”.

Government Should Recover the Full Cost of Resource Licensing

The Drummond Report recommends that the Ministry of the Environment (the “MOE”) and the Ministry of Natural Resources (the “MNR”) raise fees to fully recover the review and administration costs of environmental, land use, and resource licensing. While this is not likely to be problem for the MOE, it isn’t clear if this can be accomplished for approvals under MNR’s Public Lands Act (the “PLA”) for mine related infrastructure approvals such as roads and transmission lines.

Risk-Based Environmental and Natural Resource Approvals

While the MOE is already moving to a risk-based approvals system, MNR’s approvals continue to be based on policies developed under the PLA. Unlike environmental permitting or municipal land use decision-making, there isn’t a wide body of experience for establishing risk-based policies or approvals under the PLA. Acting on this recommendation will be challenging for MNR.

One Project, One Environmental Assessment

The Drummond Report recommends that there should be only one environmental assessment per project with no duplication between the Federal and Provincial governments. As with current renewable energy approvals, environmental assessments should facilitate development by addressing the other approvals mines require such as roads and transmission lines. A consolidated environmental assessment process could create a win-win for miners and environmentalists by trading minimum environmental standards for mines (good for enviros) for an expedited process that lets mining companies get all the permits they need fast (good for miners). Though not mentioned in the Drummond Report, the Municipal Class Environmental Assessment used for municipal infrastructure could also serve as a useful model that provides for the integration of Planning Act and Environmental Assessment Act approvals provided consistent notice and analytical processes are followed.

In our February 9th posting, we discussed how a “one-stop-shop” approach for mining projects could significantly speed project development while increasing environmental protection but would require significant coordination between government ministries. The challenge for the MNR will be to establish objective, science based principles for issuing approvals.

Increased Used Polluter-Pay Principle for Contaminated Sites

The Drummond Report recommends that Ontario expand the financial assurance system to ensure the funds provided in advance are sufficient to pay for any cleanup required. This could lead to proponents of advanced exploration and mining projects being forced to provide larger sums up front in the form of a bond or letter of credit.

While the polluter-pay principle is enshrined in Ontario law, in practice the Parties that contaminate land or fail to property close mines often go out of business or become insolvent and the government is left to pay for the clean up. The MOE and the Ministry of Northern Development and Mines often require companies to provide financial assurance though the amount required is often insufficient to pay for the full cleanup cost. While the financial assurance system can be improved, it is unlikely to cover all cleanup costs since it is impossible to determine how much a cleanup will cost in advance. The Drummond Report also recommends that Ontario follow the approach of the U.S. Superfund and tax mining and other industries to create a pool of money to cover any unfunded clean up costs.

Conclusion

If fully implemented the Drummond Report could create several new taxes and user fees for mining companies. While creating a “one-stop-shop” for approvals and environmental assessments will require significant coordination between Ontario Ministries, it could greatly speed the mine development process. While we hope this occurs, it should not be expected. We will keep you apprised of the implementation of the Drummond Report’s recommendations in future articles.

Note: The Drummond Report fails mention that oil and chemical tax that paid for the U.S. Superfund has been removed by the U.S. Congress. The Superfund is now paid out of general revenues and is no longer an example of a government recovering cleanup costs from industry as stated by the Drummond Report.

The Drummond Report: What Miners Need to Know

MNDM Releases Draft Mining Class Environmental Assessment for Comment

This article was written by David Hunter, Nalin Sahni, and environmental planner George McKibbon of McKibbon Wakefield Inc.

The Ministry of Northern Development and Mines (“MNDM”) has released the revised Draft Class Environmental Assessment for Mining (the “Mining Class EA”) for public comment until February 21, 2012*. The Mining Class EA replaces two declaration orders on discretionary land tenure decision-making and mine rehabilitation**. While the main purpose behind the Mining Class EA is to reduce the environmental impact of mining, those that hoped this document would help resolve competing land use issues and facilitate mining exploration and development may be disappointed. 

Rather than reducing uncertainty by creating a clear set of workable rules to balance environmental protection and mining development, MNDM has left all major components of the Mining Class EA up to their discretion. Over the next few months we will release a series of articles on whether increased government discretion will advance both environmental protection and mining development, but in the meantime we wanted to discuss Mining Class EA and the basic issues of concern.

The Mining Class EA sets up a system to assess and mitigate the environmental and social impacts of mining projects that are “predictable and manageable”. The Mining Class EA only covers mine rehabilitation activities or actions that require MNDM discretion such as granting: some mining and surface rights, title to Crown lands for mining, or permission for the removal of bulk ore samples for testing. The Mining Class EA does not cover non-discretionary decisions such as prospecting, staking and the granting of mining claims and leases. It is unclear if prospecting, staking and exploration will still be exempt from the Mining Class EA when MNDM issues new regulations on Aboriginal consultation and mining exploration licensing later in 2012 (See our Jan. 12 post).

Since the Mining Class EA is limited only to MNDM discretionary decisions, the environmental assessment may not incorporate all circumstances that exist on the ground. MNDM staff may be tempted to exercise their discretion to broaden their review and look at decisions made under other legislation. This could create an additional risk for miners by bringing in land tenure decisions made under the Public Lands Act or the Planning Act (for organized municipalities) in to the environmental assessment process.

Projects covered by the Mining Class EA are categorized from A to D with environmental effects ranging from none (Category A) to significant (Category D). With larger potential environmental impacts comes a more onerous process with greater consultation requirements and the creation of a detailed Environmental Study Report.

Projects that have high enough impacts that are not “predictable and manageable” cannot be covered under the Mining Class EA. These projects are subject to the more stringent and time-consuming individual environmental assessment under the Environmental Assessment Act (Category E) and any person can request that a project be “bumped-up” from a Mining Class EA to an individual assessment.

The problem with this “predictable and manageable” standard is that mining is inherently unpredictable. Miners won’t know the environmental impact of the tailings or the value of their ore in the ground until they dig it up. It is unclear how MNDM will use their discretion to interpret this “predictable and manageable” standard but given the difference between the shorter Mining Class EA process and the potential large delays with an individual assessment there is the potential for lawsuits on this issue in the near future.

The Mining Class EA represents a real missed opportunity to create a win-win for both environmentalists and miners. This could have been accomplished by limiting government discretion, streamlining the mining development process, and by coordinating the planning and land tenure requirements between the Mining, Public Lands and Planning Acts. A more robust Mining Class EA would trade minimum environmental standards for mines (good for enviros) for an expedited process that lets mining companies get all the permits they need fast (good for miners). Instead, the Mining Class EA creates a new cumbersome process for miners that fails to address the other permits needed for basic mining infrastructure under the Planning Act, the Public Lands Act and the Far North Act.

While creating a “one-stop-shop” for miners would require better communication between MNDM, the Ministry of Natural Resources and others, it would greatly facilitate the mining development process. In the next few months, we will release a series of articles on the current mine development process and how the Ontario government could streamline the system.

*A Class Environmental Assessment for Activities of the Ministry of Northern Development and Mines under the Mining Act – Draft, January 23, 2012. Available at: http://www.mndm.gov.on.ca/mines/mineral_development_and_lands_branch/ea/default_e.asp.

**See Declaration Orders MNDM-3 for Discretionary Mining Land Grants and MNDM-4 for Abandoned Mine Hazard Rehabilitation.

MNDM Releases Draft Mining Class Environmental Assessment for Comment

Ontario Court Halts Exploration After Mining Company Refused to Consult First Nation

This article was written by David Hunter and Nalin Sahni.

The Wahgoshig First Nation (“WFN”) in Northern Ontario has obtained an injunction to temporarily stop Solid Gold Resources Corp. (“Solid Gold”), a junior mining company, from drilling on their First Nation Treaty lands. In a decision released last week (2011 ONSC 7708 (CanLII)), Justice Brown of the Ontario Superior Court halted all exploration activities for at least 120 days after finding that Solid Gold had repeatedly failed to respond to consultation requests from both WFN and the Ontario Government.

While this decision should not come as a surprise to knowledgeable observers, it is important for three reasons:

1. It confirms that as yet there is no Aboriginal veto over mining exploration activities;
2. It highlights problems with the Crown’s practice of delegating the consultation to proponents and
3. It reiterates that the “free entry” mining system in Ontario is limited by Aboriginal consultation.

Companies that are not mindful of Aboriginal concerns will see their business plans delayed or cancelled.

To review the entire article, please click here.

Ontario Court Halts Exploration After Mining Company Refused to Consult First Nation